6 ms·

So if oil is found in Fed land in Alaska, Exxon will get to pump it for "next to nothing"? No special taxes, per barrel fee?

ip26 8y ago
It's not actually free, but my vague memory is that most fees are something like 20% of the going market rate on private land.
r00fus 8y ago
Alaska has a profit sharing deal with its residents so they always get some cash for the exploitation of lands. The rest of the US is a different story.
- planteen 8y ago
  Wyoming has mineral severance taxes to the point that there is no income tax in the state. Over 50% of the state's revenue comes from mineral severance. There is also a permanent trust there. Colorado gets something like $100 million per year from mineral severance. I'd be shocked if other oil producing states didn't collect severance taxes. What state are you referring to that doesn't collect anything?
  - selectodude 8y ago
    Ironically, there's only one state without a mineral severance tax, and it's California.
    - planteen 8y ago
      Wow, today I learned something. I am shocked that deep red states (Alaska, Wyoming, Texas) tax something that a deep blue state (California) does not.
exothermic 8y ago
Land acquisition costs are very low in the US (this is done through a competitive bidding process when new tracts are offered). Royalties to the government are in the 20-30% range on a revenue basis, plus standard CIT. This is for new land for exploration- e.g. no proven reserves at the time of the sale. If there are known reserves, then the price would be much higher but the government is not typically in the business of proving reserves themselves.
- zaroth 8y ago
  I seem to recall reading government reports about proven reserves. I thought we had a geological department that investigated all sorts of mineral / oil / natural gas resources.
  - planteen 8y ago
    Yes, there are tons of geologic maps produced by the government that are used by oil & gas companies. Most states require data from well logs to be reported too. I think what parent is possibly talking about is when the BLM puts up tracts for mineral lease auction that nobody wants (no economically recoverable reserves). https://www.eenews.net/stories/1060099219 https://www.eenews.net/stories/1060099219
- mtnGoat 8y ago
  coal is at 12%(on BLM land), depending on who you lease from, Gold can be under 1%. What is as high as 20-30?
  - exothermic 8y ago
    You are right- I am thinking of the typical royalties paid to private land owners onshore (either 1/8th or 1/4th). Offshore federal royalties are typically ~12.5-18.5% [1] [1] https://www.boem.gov/note07062017/ https://www.boem.gov/note07062017/

ip26 8y ago

It's not actually free, but my vague memory is that most fees are something like 20% of the going market rate on private land.

r00fus 8y ago

Alaska has a profit sharing deal with its residents so they always get some cash for the exploitation of lands. The rest of the US is a different story.

planteen 8y ago
Wyoming has mineral severance taxes to the point that there is no income tax in the state. Over 50% of the state's revenue comes from mineral severance. There is also a permanent trust there. Colorado gets something like $100 million per year from mineral severance. I'd be shocked if other oil producing states didn't collect severance taxes. What state are you referring to that doesn't collect anything?
- selectodude 8y ago
  Ironically, there's only one state without a mineral severance tax, and it's California.
  - planteen 8y ago
    Wow, today I learned something. I am shocked that deep red states (Alaska, Wyoming, Texas) tax something that a deep blue state (California) does not.

exothermic 8y ago

Land acquisition costs are very low in the US (this is done through a competitive bidding process when new tracts are offered). Royalties to the government are in the 20-30% range on a revenue basis, plus standard CIT. This is for new land for exploration- e.g. no proven reserves at the time of the sale. If there are known reserves, then the price would be much higher but the government is not typically in the business of proving reserves themselves.

zaroth 8y ago
I seem to recall reading government reports about proven reserves. I thought we had a geological department that investigated all sorts of mineral / oil / natural gas resources.
- planteen 8y ago
  Yes, there are tons of geologic maps produced by the government that are used by oil & gas companies. Most states require data from well logs to be reported too. I think what parent is possibly talking about is when the BLM puts up tracts for mineral lease auction that nobody wants (no economically recoverable reserves). https://www.eenews.net/stories/1060099219 https://www.eenews.net/stories/1060099219
mtnGoat 8y ago
coal is at 12%(on BLM land), depending on who you lease from, Gold can be under 1%. What is as high as 20-30?
- exothermic 8y ago
  You are right- I am thinking of the typical royalties paid to private land owners onshore (either 1/8th or 1/4th). Offshore federal royalties are typically ~12.5-18.5% [1] [1] https://www.boem.gov/note07062017/ https://www.boem.gov/note07062017/