Oil & Gas Boom Swells State Revenues and Disbursements

Revenues and disbursements almost double those of FY 2016
By Alan McDonnell
Alan McDonnell
Alan McDonnell
November 20, 2019 Updated: November 21, 2019

According to a statement from U.S. Secretary of the Interior David Bernhardt, the Office of Natural Resources Revenue (ONRR) paid out some $11.69 billion in disbursements from oil & gas production offshore or on federal and Native-American-owned land in Fiscal Year (FY) 2019.

According to the Department of Interior (DOI), this was an increase of $2.76 billion over 2018, and almost double the $6.23 billion in disbursements paid out at the end of the Obama administration (FY 2016).

Resource companies pay bonuses, rents, and royalties to extract minerals, metals, coal, oil and gas from federal and Native American lands. Disbursement is the subsequent distribution of revenue collected from the extraction of such natural resources to agencies, funds, and state and federal governments.

While more than $1 billion was paid out to native American tribes and individuals, $2.44 billion in disbursements was paid to states and some $4.9 billion to the U.S. Treasury. Another $1.76 billion was disbursed to the Reclamation Fund, $1 billion to the Land and Water Conservation Fund (LWCF) and some $150 million to the Historic Preservation Fund.

Epoch Times Photo
This photo shows an oil well on the Fort Berthold Indian Reservation near Mandaree, N.D., on Feb. 26, 2015. (Photo: AP Photo/Matthew Brown, File)

The ONRR disburses 100 percent of all revenue collected from the extraction of resources on Native American lands back to those tribes, nations, and individuals.

“The President believes we can appropriately develop our natural resources and be great stewards of conservation,” said Bernhardt. “The disbursements paid to states and Tribes from energy development revenues go right back to the communities where the energy was produced, providing critical funding for schools, public services, conservation improvements, and infrastructure projects that create good-paying American jobs.”

At approximately $12 billion, revenues collected in FY 2019 increased by 31 percent over 2018. After tax revenue, energy disbursement funds are the second-most-important source of income for states and the federal government, as well as the Land and Water Conservation Fund and others.

The increase in disbursements is due to increased production of oil and gas in FY 2019, while coal production increased slightly. New Mexico received the largest disbursement at $1.17 billion, followed by Wyoming, Colorado, and Louisiana. The ONRR has disbursed some $314.7 billion in revenues since 1982.

The DOI was generous in praising the Trump administration for policies that it says have spurred economic growth across the United States.

According to the DOI, “…the United States is now the world leader in oil and natural gas production with crude oil production having reached a record high last year and is projected to reach another record high this year. Crude oil exports reached a record average of 2 million barrels per day last year, and have averaged a record 2.8 million barrels per day so far this year. Natural gas production is on pace to set a record high in 2019, which would be the third straight year of record production, and in 2018, coal exports reached their highest level in 5 years.”

The DOI claims that President Donald Trump’s removal of “burdensome and unnecessary regulations” is at least partly responsible for the recent boom in exploration and resource utilization. According to the DOI, applications for permits to drill for oil and gas have increased 300 percent since 2016, with the entire process now taking 108 days—less than half the average of 257 days needed under the previous administration.

A key tenet of the Trump administration’s energy policy has been the streamlining of infrastructure and energy project application procedures. One example is that of Executive Order 13807 (‘Presidential Executive Order on Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure’). This order mandates that, e.g., environmental impact statements (EIS) be completed within one year and be comprised of 150 pages or less, with exceptions for unusually complex projects. Other streamlining measures have shaved over a year off EIS production timelines.

The disbursements met with broad approval from Members of both the Senate and Congress.

“I’m glad that revenues from development on federal lands in Alaska are coming in to support our state,” said Alaska Senator, Lisa Murkowski. “$11.69 billion is a tremendous return for our country, and I thank the Trump administration for advancing solid policies that are making the U.S. a global energy production leader and driving revenue growth.”

Arizona Congressman Paul Gosar said that “President Trump has ended the harmful war on American energy, putting Americans back to work, and lowering energy costs. Today’s encouraging announcement shows that under the leadership of President Trump and Secretary Bernhardt, revenues from energy production have doubled since President Obama left office. While radical liberals and serial environmental litigants try to limit energy production, states and tribes are reaping the benefits of President Trump’s energy dominance agenda.”

“President Trump has taken historic action to unleash American energy production, reversing years of bad policy and regulatory overreach,” said Louisiana Congressman, Clay Higgins. “Louisiana understands the importance of the oil and gas industry, which employs thousands of families and provides the state with critical revenue.”

Alan McDonnell
Alan McDonnell