Throughout my career at the Bureau of Land Management and the U.S. Forest Service, I was incredibly proud of the work our agencies did in balancing the needs of all types of federal public land users in Montana and across the nation. These users included hunters, anglers and all types of recreationists, as well as ranchers who grazed their cattle and energy companies who leased parcels for development. Oftentimes these interests were at odds, but the agencies always strived to strike an appropriate balance for all parties involved and the long-term health of the public’s land.

That being said, I’m disappointed to see that many of the policies and practices regarding energy development and leasing, which were in need of updates during my time with BLM, are still in place to this day, unchanged in the face of a drastically different world than the one for which they were first written. In some cases, there are regulations governing oil and gas leasing on federal public lands which haven’t been changed in a century.

Such outdated energy policies are in dire need of updating for the 21st century. We are past the time when fossil fuel extraction should be subsidized. The annual per-acre rental rates to develop oil and gas on public lands are as low as just $1.50, and were last updated in 1987, and maybe most troubling of all, the royalty rate for oil and gas production on public lands sits at 12.5%, a number which has not changed since 1920.

It doesn’t take an economist to realize that the federal numbers are shockingly low, and that the end result is the American taxpayer, you and me, being shorted while companies profit from our shared public natural resources. Our rural counties struggle to pay for and maintain their roads and schools systems. In fact, if federal rental and royalty rates for drilling on public lands matched those used in Montana for state-owned lands, millions — and perhaps billions — would have been generated to provide much-needed funds for public programs. That’s because in Montana, our rate is 33% higher than the federal royalty rate.

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Since 1988, drilling activity on federal lands has more than doubled, while these rates have remained stagnant. This deprives the public of resources that could be used to fund critical services like education and transportation, which could benefit greatly from modernized policies. When the Department of the Interior collects royalties from oil and gas drilling, half of that money goes back to the states and counties, where the funds can have the most direct impact on affected communities. In the last decade, our state and federal taxpayers have lost out on millions because of these policies.

States in the West count on this revenue as a source of financial resources, and to keep in place royalty and rental rates that are decades or even a century old shortchanges students and countless others who rely on services funded by development of public lands.

Every day of my career, I took pride in the work the BLM did to protect and effectively use our public lands, a critical role of all agencies within the Interior Department. At the end of the day, my bosses were the American taxpayers, and they deserve commonsense, updated policies that protect both their pocketbooks and their lands.

As the person entrusted with the stewardship of our lands, Interior Secretary David Bernhardt should update these policies. It’s long past time for modernization, and with greater oil and gas production on public lands than ever, inaction is costing taxpayers dearly.

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During his decades-long career in public lands management, Mike Penfold worked as the Bureau of Land Management state director for Alaska and for Montana, North and South Dakota. He also served as the national BLM assistant director for Land and Renewable Resources.


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