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Federal taxpayers own significant oil and natural gas reserves on federal lands throughout Wyoming and other Western states. The Bureau of Land Management (BLM) within the Department of the Interior (DOI) manages these reserves and is directed by law to collect fair market value from their development and sale. The agency is failing to ensure taxpayers receive a fair market value for these resources because its land management policies are insufficient and outdated.

Wyoming is a major producer of federally owned oil and natural gas. In 2010, Wyoming produced roughly one-third of all oil and one-half of all natural gas developed from the federal mineral estate. By area, federal leasing in Wyoming is unsurpassed. With 8.9 million acres at the end of fiscal year 2019, Wyoming had twice as much land under federal lease for oil and gas development than the next closest state, New Mexico, and accounted for one third of all onshore federal acres leased.

Unfortunately for the residents of Wyoming, and federal taxpayers, oil and gas companies are paying far less for the right to remove and sell oil and gas from these lands than they pay to state and private interests. This is because neither the Bureau of Land Management nor Congress has updated the royalty rate these companies pay since 1920. Not only do oil-rich states and private landowners frequently charge more than the federal government for drilling on their land, the federal government charges more for drilling in federal waters. If oil and gas producers in Wyoming had paid the federal offshore royalty rate for production on federal lands over the last decade, taxpayers — the owner of these resources — would have collected approximately $4 billion more. Half of this would have gone to the state. Combined with losses from other BLM policies, Wyoming taxpayers have lost out on roughly $2 billion in additional revenue since 2010.

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