Feds nab $14.2 billion from energy development

WASHINGTON — The federal government collected a near-record haul in fees and royalty payments from oil and gas drilling on public lands and U.S. waters during the last fiscal year, the Interior Department announced Tuesday.

All told, the Interior Department collected and disbursed more than $14.2 billion in revenue tied to energy development on public lands and waters during the fiscal year that ended on Sept. 30 –marking the second-highest level ever and a $2 billion boost over the previous year.

The surge in revenues partially reflects a surge of interest in drilling in both the Gulf of Mexico and onshore, as energy companies use hydraulic fracturing and horizontal drilling to access previously inaccessible oil and gas reserves.

But the increase also is connected to the way the federal government recorded bonus bids from three auctions of Gulf of Mexico oil and gas leases over the past two years, including two that took place during fiscal 2013. The government’s $2.8 billion take in the bonus bids includes those from a third auction that took place in fiscal 2012 but effectively did not hit the books until later, in fiscal 2013.

The government also hiked offshore royalty rates six years ago — a decision that might begin to pay off in coming years as energy companies begin producing oil and gas from leases sold under the new fee structure.

Interior Secretary Sally Jewell stressed that the drilling dollars helped support conservation programs and local governments.

“Domestic energy production infuses funding into communities across the United States that creates American jobs, fosters land and water conservation efforts, improves critical infrastructure and supports education,” Jewell said in a statement. ”The funding reflects significant energy production from public resources in the United States and serves as a critical revenue stream for federal and state governments and tribal communities.”

Related story: Royalty sharing plan carries high pricetag

For instance, $895.6 million was steered to the Land and Water Conservation Fund, which helps states and local governments secure land and water ownership or easements for boating, swimming and other recreational uses.

More than $2 billion of the fiscal 2013 energy revenues ended up in 35 states with oil, gas and mineral production inside their borders or along their coastlines. Four Gulf Coast states, including Texas, also received $297,985 in the federal revenues.

Inland states generally claim 50 percent of the revenue from oil and gas production on federal lands within their borders. Gulf Coast states take in 27 percent of the revenues from oil and gas activities three miles from their shores and claim 37.5 percent of all revenues from development in a specific 8.3-million-acre region in the eastern Gulf of Mexico.

Under a seven-year-old law known as the Gulf of Mexico Energy Security Act, beginning in 2017, those four states will be able to collect 37.5 percent of all revenues from leases in other Gulf areas — with the money capped at $375 million each year. Legislation pending in the Senate would gradually phase out that limit and allow the program to start immediately.

According to the Office of Natural Resources Revenue, the government returned the most oil, gas and mineral dollars to the state of Wyoming, which collected $933 million. Other top-earning states were New Mexico, which collected $479 million; Utah, which got $138 million; and Colorado, which nabbed $130 million. Texas, which does not have much federal land, received $17 million.