The Office of State Lands and Investments, the state agency that oversees Wyoming’s royalty rate for oil and gas leases on state lands will soon look at upping the rate. Currently, the state receives 16-and-two-thirds percent, and a proposal is on the table to bump that to a maximum rate of 18-point-75. Dan Neal with the Equality State Policy Center says it’s no secret that Laramie County just leased some of its oil and gas assets under a royalty rate of 18-point-75 percent, and rates in the private market are even higher.
The Office of State Lands and Investments met recently without examining a rate increase, but it's expected to be debated at the next meeting late this summer, along with a discussion about allowable deductions before charging the royalty. Neal says there a lot of pressure from the oil and gas industry not to make changes, but he points out that there is also a responsibility to make adjustments in the best interest of residents.
On the other side of the debate are assertions that raising the royalty will lead to less production. Neal points out that past rate reductions didn’t lead to increased production, and he says it’s clear that production is directly connected to demand, not royalty adjustments.