Document Type
Student Article
Abstract
In 2022, the Inflation Reduction Act took marked steps toward changing the course of the oil and gas industry for the first time in over 100 years, requiring that all federal oil and gas leases issued for the following decade have a minimum royalty rate of 16.67%. This paved the way for a major adjustment in the oil and gas industry, which has seen a 12.5% minimum royalty for the past century. In 2023, the Department of the Interior proposed to permanently codify these changes, citing purposes of ensuring a fair return to taxpayers and protecting the environment.
This Article argues that the royalty provision in DOI’s proposal, if passed through Congress, will lead to harmful effects on the economy and production while failing to fulfill its purpose of protecting the environment. Instead of raising the minimum royalty, which will inevitably stunt the growth of the domestic oil and gas industry, agencies should regulate strategically to both promote domestic production and reduce the industry’s emissions footprint on the environment
DOI
10.37419/JPL.V10.I4.2
First Page
473
Last Page
517
Recommended Citation
Royalty Wars: The Dark Side to Raising the Minimum Royalty Rate for Oil and Gas Leasing on Federal Land,
10
Tex. A&M J. Prop. L.
473
(2024).
Available at:
https://doi.org/10.37419/JPL.V10.I4.2