You Know the Drill Taxpayers aren’t just giving away their natural resources – they’re paying Big Oil to haul them away By Leah McGrath Goodman - Newsweek Flying northwest of Aspen in a small aircraft – a single-engine Cessna Centurion 210 – I discreetly vomit into a bag of candy I find in the side door of the cockpit. The pilot, Bruce Gordon, glances back and nods with approval. You vomit beautifully, he says. Thank you. We are cruising the Roan (pronounced ROE-AHN) Plateau at 180 miles an hour from an altitude of 10,000 feet. It is a wildlife refuge in Colorado teeming with animals. But it is also federal land that is hotly contested by oil and gas drillers. Etched across the mountainous terrain are hundreds of winding paths leading to drill sites. Dotting the high ridges and forests are outbuildings and drill rigs – camouflaged in accordance with a handbook stipulating colors acceptable to federal regulators – as well as dingy wastewater pools left over from the drilling process, which cannot be concealed. The drilling areas are easy to spot. In the past few years, it has totally taken over the landscape, says Gordon, executive director of EcoFlight, a nonprofit that sponsors flights over drill sites, forest clear-cuts and strip mines to educate those who dont get to regularly see the full impact on the land of the energy-extraction process. The pristine areas are so few now, they really catch your eye, he said. You cant fly 30 minutes in any direction without seeing the wreckage. That was 2011, just as America came off its first full year of extracting more than 35 percent of its crude oil and nearly 25 percent of its natural gas from lands and territories owned by the U.S. taxpayer, transforming itself into a net exporter of petroleum products for the first time since 1949. The Roan Plateau figured prominently in that turnaround, reaping the greatest amount ever paid in the lower 48 states to the U.S. Treasury by drillers looking to strike it rich on federal land. Yet the total paid for ground leases came to just over $100 million, a drop in the bucket compared with the revenue oil and gas companies reported in the whole of Colorado that year – well over $9 billion. And therein lies the rub. America owns an enormous swath of the land at the heart of the nations energy boom – stunning wildlife territories like the Roan Plateau, where oil and gas can be found alongside rare plant and animal habitats – but American taxpayers are not very much benefitting financially. The problem traces back to Americas early days, when the concept of manifest destiny spurred President Ulysses S. Grant in 1872 to sign a mining law that allowed wildcatters stabbing westward to exploit resources on federal land at little to no cost – and keep most of what they found without having to share any of it. Obviously, back then they werent even dreaming of drilling for oil or gas, but the post-Civil War era of encouraging Western settlement by giving away natural resources is still reflected in U.S. policy today, says Roger Flynn, who teaches mining and natural resources law at the University of Colorado at Boulder and is director of the Western Mining Action Project, offering legal advice to conservation groups and Native American tribes. In 1920, Congress rejiggered its rules on the heels of the oil rush at the turn of the century, insisting drillers pay a low annual lease rate, revised periodically, for the right to drill on taxpayer-owned lands and requiring them to contribute one eighth of their sales revenue in royalty. Nearly 100 years later, that policy remains the law of the land, robbing Americans of untold billions, even as theyre forced to pay record-high prices at the pump. That is no rash accusation from a tree hugger or a Luddite. It is the verdict of the U.S. Government Accountability Office, a nonpartisan research arm of Congress, after extensive research. Despite the promise that energy independence would benefit everyone, it is looking less likely Americans will be able to afford to enjoy their own energy heyday. Some gripping numbers: In the past five years, more than one third of crude oil and more than one fifth of natural gas have been drilled from territories owned by the U.S. taxpayer and leased to the oil and gas majors. Yet the lease rates Big Oil pays for access to this precious acreage, last updated in 1987, are based on valuations from a year when oil prices averaged around $18 a barrel. Since then, the cost of leases has not budged, even as America has witnessed an energy revolution and oil prices have climbed to more than $100. Why is America lowballing itself? Continued here: mag.newsweek/2013/10/11/soaked.html
Posted on: Thu, 14 Nov 2013 21:04:48 +0000
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