Conservation Groups Move To Protect Royalties Regulation

Aug 7, 2019

Credit Duncan Harris, Flickr Creative Commons

A collection of conservation groups announced that it will fight against a move to reduce federal regulations regarding mineral royalties. The current regulations greatly increase the amount energy companies pay to the federal government.

When energy companies extract coal, oil, or natural gas from federal or tribal lands, they pay royalties meant to reimburse taxpayers for the use of public land.

Until recently, energy companies could sell their minerals to an affiliated company for a price below its market value and pay royalties based on that lower figure. But in 2016, a new federal rule made it so that energy companies have to pay royalties based on the first sale of its minerals to a company they are not affiliated with.

Now, energy companies have launched a lawsuit to overturn the 2016 rule and some conservation groups are jumping into the fray to keep it intact.

The Powder River Basin Resource Council's Bob LeResche said this is an important issue.

"Minerals are public assets and should be paying for schools and roads and things like that rather than for high executive salaries and corporate profits," LeResche said.

The National Resources Defense Council, the Northern Plains Resource Council and the Wilderness Society are also joining the suit.

The Department of the Interior estimates that the 2016 rule brings in an additional $70 million in royalties from energy companies every year.