National parks, national forests, wildlife refuges, and recreation areas, as well as the minerals beneath them, belong to all Americans. The federal government holds these lands and resources in trust and is supposed to manage them for our benefit and the benefit of future generations.
One need look no further than the paychecks of top oil and gas company CEOs to realize who the real beneficiaries of drilling America’s public lands are. Over the past ten years, oil and gas companies drilling on public lands – which include some of the largest, most profitable corporations like Exxon Mobil, Chevron, ConocoPhillips, EOG Resources and QEP Resources – have raked over $500 billion in profits. And because the federal government’s fiscal terms for public lands drilling are woefully outdated and extremely favorable to the industry, American taxpayers are only recouping just a fraction of these profits in royalties and taxes even though it’s the American people’s shared resource.
Together, Exxon Mobil, Chevron, ConocoPhillips, EOG Resources and QEP Resources hold about 14,300 federal oil and gas leases. This amounts to about 35% of all federal leases, as there were 40,150 at the end of FY 2016.
Public Lands – Major Oil and Gas Leaseholders
|Company||Profits: 2007 – 2016 (Billions)||# of Leases*||Acres Leased*|
|*Data obtained from LR2000 public federal leasing database.|
Excessive Executive Pay
Executive pay at these companies is staggering. Among the five corporations, average CEO compensation topped $15 million in 2016. Last year, Rex Tillerson, then CEO of Exxon Mobil, received $25.1 million in executive pay, a combination of salary, bonuses, stock and other incentives. J.S. Watson, of Chevron, made a cool $18.8 million. Profits from public land oil and gas development are making some of the wealthiest corporate executives even richer.
CEO Pay – 2016
|Company||CEO||Total Compensation (Millions)|
|Exxon Mobil||R. W. Tillerson||$25.1|
|EOG Resources||William R. Thomas||$10.5|
|QEP Resources||C.B. Stanley||$6.4|
Short-changing Taxpayers and Local Communities
These corporate windfalls are also coming at the expense of taxpayers and local communities. At a rate of 12.5%, the BLM takes only a small share of federal lands oil and gas royalty revenues, far less than what Western state governments and private leaseholders charge, let alone what the companies themselves collect. In FY 2016, companies operating on federal lands gained some $11.6 billion selling oil and gas from public lands, but BLM collected only $1.4 billion in royalties.
BLM shares half of its public land oil and gas revenues with state governments based on where the minerals are extracted. These state governments then devote this money to fund basic and essential services, like schools, libraries, roads, and infrastructure. Inflated corporate profits from public land oil and gas development do more than shortchange taxpayers in the abstract – it comes directly at the expense of local taxpayers and local communities.
In fact, many states that depend on federal oil and gas revenues to fund essential services are struggling to make ends meet. In March, Wyoming, which normally funds 30% of its education spending with federal mineral royalties, cut nearly $35 million from its K-12 account. In May, New Mexico suspended public works projects and borrowed more than $70 million to address its deficit. Spending levels for K-12 education in Colorado are also at risk.
Inadequate royalty rates, huge subsidies and antiquated policies have turned public lands into a playground for corporate profits and excessive executive pay. While many western states are cutting funding for education and other essential programs, top corporate federal leaseholders are making hundreds of billions of dollars. National public lands and resources belong to all Americans, not just oil companies and their executives. Taxpayers and local communities deserve a fair share in return for access to our lands and minerals.