CHEYENNE, Wyo.
Top Wyoming officials are set to vote Thursday on the first substantial update to Wyoming's oil and gas lease form in 29 years to clarify how companies calculate the royalties they pay on oil and gas extracted from state lands.
The Office of State Lands and Investments has been working on the new form since last year. The main goal over the past few months has been to spell out the costs oil and gas companies may deduct from their state royalty payments.
Earlier proposed changes, including a state royalty rate hike from 16.66 percent to 18.75, percent didn't make it into the final document.
"This thing has gone through the ringer. We're pretty anxious to get it settled out," Ryan Lance, director of the Office of State Lands and Investments, said Tuesday.
Interest groups, including the Petroleum Association of Wyoming and the Equality State Policy Center, have weighed in throughout the process.
Nobody got all that they wanted. The policy center pushed for the higher royalty rate.
"The state needs to get the best deal it can and in fact it has a responsibility to get the best deal it can," said Dan Neal, executive director for the group, which advocates for government accountability in Wyoming.
Neal said the policy center will continue to advocate for a higher rate, pointing out that Alaska and Louisiana charge royalties over 20 percent.
"This isn't the end of the discussion," Neal said. "We just shouldn't give away revenues that should go to the public schools."
Other states that charge higher royalties also levy lower severance and ad valorem taxes than does Wyoming, said Bruce Hinchey, president of the Petroleum Association of Wyoming.
The sum of Wyoming's royalty rate and state taxes comes out close to 30 percent of the value of the oil and gas extracted, he said.
"The only other state that is higher than that is Alaska," he said. "Thirty percent is an awfully high rate to say we want to increase the royalties."
The Wyoming Constitution requires state officials to manage state lands for the benefit of public education. Courts have held that means setting grazing fees and royalty rates with a broad view of creating business and jobs, Hinchey said.
Other states' higher royalties, Neal said, haven't driven out oil and gas companies.
The Petroleum Association of Wyoming still has concerns of its own, including that the proposed lease form might require small producers to pay proportionally more sales in royalties than big producers. But, all in all, the association is satisfied.
"It's not everything we would like but it's something I think we can live with," Hinchey said.
A state oil and gas lease sale planned Wednesday was canceled pending the vote by Gov. Matt Mead and the other four statewide elected officials who make up the State Board of Land Commissioners.
The sale won't be rescheduled before the next quarterly lease sale in November.
Top Wyoming officials are set to vote Thursday on the first substantial update to Wyoming's oil and gas lease form in 29 years to clarify how companies calculate the royalties they pay on oil and gas extracted from state lands.
The Office of State Lands and Investments has been working on the new form since last year. The main goal over the past few months has been to spell out the costs oil and gas companies may deduct from their state royalty payments.
Earlier proposed changes, including a state royalty rate hike from 16.66 percent to 18.75, percent didn't make it into the final document.
"This thing has gone through the ringer. We're pretty anxious to get it settled out," Ryan Lance, director of the Office of State Lands and Investments, said Tuesday.
Interest groups, including the Petroleum Association of Wyoming and the Equality State Policy Center, have weighed in throughout the process.
Nobody got all that they wanted. The policy center pushed for the higher royalty rate.
"The state needs to get the best deal it can and in fact it has a responsibility to get the best deal it can," said Dan Neal, executive director for the group, which advocates for government accountability in Wyoming.
Neal said the policy center will continue to advocate for a higher rate, pointing out that Alaska and Louisiana charge royalties over 20 percent.
"This isn't the end of the discussion," Neal said. "We just shouldn't give away revenues that should go to the public schools."
Other states that charge higher royalties also levy lower severance and ad valorem taxes than does Wyoming, said Bruce Hinchey, president of the Petroleum Association of Wyoming.
The sum of Wyoming's royalty rate and state taxes comes out close to 30 percent of the value of the oil and gas extracted, he said.
"The only other state that is higher than that is Alaska," he said. "Thirty percent is an awfully high rate to say we want to increase the royalties."
The Wyoming Constitution requires state officials to manage state lands for the benefit of public education. Courts have held that means setting grazing fees and royalty rates with a broad view of creating business and jobs, Hinchey said.
Other states' higher royalties, Neal said, haven't driven out oil and gas companies.
The Petroleum Association of Wyoming still has concerns of its own, including that the proposed lease form might require small producers to pay proportionally more sales in royalties than big producers. But, all in all, the association is satisfied.
"It's not everything we would like but it's something I think we can live with," Hinchey said.
A state oil and gas lease sale planned Wednesday was canceled pending the vote by Gov. Matt Mead and the other four statewide elected officials who make up the State Board of Land Commissioners.
The sale won't be rescheduled before the next quarterly lease sale in November.
