The People of America's Oil and Natural Gas Indusry

The Right Path to More Revenue for Government

Mark Green

Mark Green
Posted July 2, 2013

A post on The Hill’s Congress Blog by the Information Technology and Innovation Foundation’s Matthew Stepp and Megan Nicholson caught our eye:

 “… we suggest Washington policymakers raise at least $1 billion per year in new revenue from increased fees on oil and gas drilling, to be invested in breakthrough clean energy research at the Department of Energy’s Advanced Research Projects Agency-Energy (ARPA-E).

 Now, we’re used to folks wanting to increase taxes and other fees from oil and natural gas to pay for their pet projects. But instead of “increased fees” maybe Washington policymakers should just let us do our jobs. The authors note:

 “According to the Department of the Interior, oil and gas drilling revenue from federal lands increased 56 percent since 2000, averaging $11 billion per year.”

 Which is a little deceiving, because while most of that period did see strong growth, that has not been true lately. For example, from 2005-2008 according to government statistics*, the median oil and gas drilling revenue from federal lands was $11.75 billion per year, in constant 2012 dollars. From 2009-2012 the median had fallen $2.39 billion to $9.36 billion. 

 If policy makers (and policy suggestors) want more revenue from oil and natural gas, the answer isn’t to increase costs. It’s to simply get out of the way. Instead of increasing the costs of oil and natural gas production – and potentially chilling output, the right choice would be to open new public areas for drilling and let increased development generate new revenues for government. Wood Mackenzie’s study estimates this path could raise $127 billion in new, cumulative revenue for government by 2020.

 The oil and natural gas industry pays its fair share to the U.S. Treasury and then some. And it will generate even more revenue for government from new energy development resulting from increased access to reserves, a far better choice than adding on costs to existing production.

 *Use these query options: Data Type: Reported Revenues (Single Year Only); Year Type: Accounting Year; Fiscal Year: FY20XX; Land Category: Federal (Onshore and Offshore); Geographic Area: All States and Offshore Regions).


Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.