American taxpayers lost out on $12.4 billion in revenue from drilling on public lands between 2010 and 2019 due to outdated national fiscal policies, according to the nonpartisan group Taxpayers for Common Sense. Dave Jenkins is president of the organization Conservatives for Responsible Stewardship, and he has been an advocate for fiscal stability and conservation for several decades. KHOL asked him about what’s contributing to that mammoth revenue shortfall. The following transcript has been edited for brevity and clarity.
Dave Jenkins: You know, the minimum bid for securing a lease on our public lands is a measly $2 an acre. And so people are scarfing up this acreage at these ridiculously low prices. And then on top of that, we have the royalty rates. If you drill offshore in the Gulf of Mexico, you’re paying the U.S. Treasury over 18% in royalties. If you do the same thing on public lands out West, you’re only paying a little over 12%. So, there’s no real reason for that disparity. It’s those kinds of numbers that add up over time to really shortchange taxpayers.
Will Walkey: How did all these trends get affected during the Trump administration?
Jenkins: So, the Trump administration went hog wild in terms of oil and gas leasing. They were having huge lease sales every single quarter in all states all across the West. And in fact, during the Trump administration, an area the size of Tennessee was offered up for oil and gas leasing. So when you’re doing that much rushed, throw-caution-to-the-wind, kind of just leasing everything imaginable, these problems that are fiscal in nature become magnified, of course, because you just got more activity under those outdated laws.
Walkey: And so the Biden administration has essentially done a complete reversal by pausing new oil and gas leases on federal lands. What’s your interpretation of this policy? And a few months into the policy, how do you think it’s working out so far?
Jenkins: You know, the key for this is that they use this policy to actually reform the system. And then when we start back up, you know, taxpayers are getting a fair shake. And to that end, there’s quite a few bills in Congress, including bipartisan bills, that are designed to do those reforms.
Just one example: Chuck Grassley and Jacky Rosen—Grassley a Republican and Rosen a Democrat—have introduced the Fair Returns for Public Lands Act. And that would increase that royalty rate we were talking about earlier from that 12.5% to 18.75%, which is the same for offshore [drilling]. And it would increase the minimum bid for oil and gas leases from $2 an acre to $10 an acre and a number of other things. But that’s the kind of thing that we would like to have in place before we crank the leasing back up again.
Walkey: Wyoming’s governor, as well as our two senators and our one representative, Liz Cheney, have all been essentially railing against the Biden administration for this policy, calling it pretty detrimental to the state. From your perspective, how true is that? How detrimental is the current oil and gas leasing pause on a state like Wyoming that relies so much on fossil fuels?
Jenkins: Well, actually, it’s not at all. The people who are claiming this, I don’t know where they’re getting their talking points from, but whoever created the talking points was just making stuff up. The head of Devon Energy and Occidental Petroleum have already said, as soon as the election was over, they said, ‘Oh, we’re not worried about a leasing pause because we’ve got enough stockpiled leases to keep us busy through the entire administration.’
And, you know, the administration hasn’t said they’re going to pause through their entire four years. Initially, this was a six-month pause. Even if it’s extended a little bit, it’s not going to change that dynamic given all the stockpiled leases out there. So given all those things, how can it actually harm the oil and drilling activity in Wyoming in the near term? It doesn’t seem plausible to me.
Walkey Your position is of fiscal common sense and helping the taxpayer. Is that something that you see as being able to convince some of the politicians on the political right, maybe even in a state like Wyoming? And is that a position that you think can potentially make change in the end?
Jenkins: The interesting thing that we see, which is, I think, how we differ from the environmental groups that are more left, is that what we’re saying is the market now favors these cleaner energy sources. So, we can solve climate change and lower energy bills at the same time by leaning into this market. The problem is what we’re seeing on the political right are these people who are somehow so wed to certain energy sources that they are even willing to consider subsidizing and propping up or putting out laws that disadvantage other sources of energy just to protect that one particular industry.
The thing is, energy’s energy. There’s no red energy. There’s no blue energy. There’s no left energy. There’s no right energy. It’s all just energy. And so which one makes sense will vary from time to time. But generally, you know, cheaper is better than expensive, clean is better than dirty and infinite is better than finite. So if we look at this from a market perspective, like conservatives are supposed to do, we will see this change coming and we’ll see that we need to follow the market. We don’t need to be tied to energy sources that are no longer—that are getting less and less economic and eventually are going to disappear.
Walkey: Dave Jenkins, thanks so much for joining me. And thanks so much for talking with KHOL.
Jenkins: Yeah, thanks for having me.