Oil and Gas Companies Should Pay More to Drill on Public Lands and Waters, Interior Department Says
An article in the Washington Post about the Interior Department's new report cites Fellow Brian Prest's public testimony and research.
Raising the royalty rate to 18.75 percent — the rate charged for drilling in deep waters offshore — would generate an additional $1 billion per year between now and 2050, according to research by Brian Prest, an economist at the think tank Resources for the Future. A royalty rate of 25 percent for both on- and offshore drilling would double that number to nearly $2 billion annually. Neither policy would significantly impact energy prices for U.S. households.
But nor would they make much of a dent in greenhouse gas emissions, Prest said in testimony before the House Natural Resources Committee this spring. Less than 10 percent of oil and gas produced in the United States comes from Interior-controlled land, and cuts to U.S. production will be partly offset by increases in other countries. Prest estimated that the reductions from raising the onshore royalty rate to 18.75 percent would amount to just 0.1 percent of U.S. annual emissions.
