Oil, natural gas, and coal mining operations on federal lands in Colorado generated more than $393 million in lease and fee revenues in 2022 for the federal and state governments — the most in 14 years.
A combination of increased oil production, higher commodity prices, and new royalty rates and fees led to a 64% surge in revenue in Colorado compared to 2021, according to figures from the U.S. Department of Interior.
In April, the Biden administration increased the royalty rate for new oil, natural gas, and coal leases to 18.75% from 12.5%, and the federal Bureau of Land Management, which oversees mineral leasing, raised the fees for dozens of types of applications, permits, and renewals.
“One of the big improvements we’ve seen in this past year was raising the royalty rate,” said Kris Smith, a researcher at Headwaters Economics, a nonprofit research group.
“The 12.5% rate has been around since the 1920s, so this is an important change that will help the federal government and states capture more revenue,” Smith said.