Sens. Chuck Grassley (R-IA) and Tom Udall (D-NM) introduced legislation this week to update the nation’s antiquated public lands royalty system and ensure that taxpayers get fair returns on leases of public lands for oil and gas production.

Introducing the bipartisan Fair Returns for Public Lands Act of 2020, Grassley said, “Low royalty rates on oil produced on federal lands has deprived the federal treasury of billions of dollars. Today marks 100 years since Congress passed the Mineral Leasing Act of 1920. Since then, the royalty rate has not been addressed. This is just one example of Big Oil saying it wants a free market, but lobbying for taxpayer-funded corporate welfare. It’s time for my colleagues in Congress to end this oil company loophole, end the corporate welfare and bring oil leasing into the 21st century.”

Renewable Fuels Association President and CEO Geoff Cooper says the bipartisan legislation takes a step toward leveling the playing field for all transportation fuel producers. “Study after study show that the oil and gas industry benefits each year from billions of dollars in hidden subsidies, write-offs, incentives, and other giveaways. If oil producers and refiners truly want a ‘free market’ in the energy sector, they should start by giving up the subsidies and tax preferences that have robbed state and federal coffers for 100 years or more. We hope this bill sets lawmakers on a path toward comprehensive energy tax policy reform, and that the end result is a fair and open market that offers true competition and consumer choice.”

According to studies by the Congressional Budget Office (CBO) and Government Accountability Office (GAO), modernizing public lands royalty rates for oil and gas could increase federal revenues by as much as $200 million over the next decade with little to no impact on overall production.