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Vol. 12, No. 50 Week of December 16, 2007
Providing coverage of Alaska and northern Canada's oil and gas industry

BLM seeks right of way rental fee changes

On Dec. 11, the U.S. Bureau of Land Management proposed revising the rental fees it charges for rights of way on federal lands to adequately reflect changes in land values over the past 20 years. BLM said it is undertaking this effort in accordance with Section 367 of the Energy Policy Act of 2005, which directs the U.S. Department of the Interior to revise the existing rental fee schedule for linear rights of way to reflect current land values.

A 60-day public comment period on the regulatory proposal began Dec. 11.

The rent schedule covers most linear rights of way granted under the Mineral Leasing Act and the Federal Land Policy and Management Act. Both laws require the holder of a right of way to pay fair-market value to occupy, use, or traverse public lands for such facilities as power lines, fiber-optic lines, pipelines, roads and ditches.

The proposed revised rental fee schedule would also be adopted by the U.S. Forest Service for National Forest lands, consistent with existing practices and as required by the Energy Policy Act.

Since 1987, when rental fees for linear rights of way were last updated, there have been substantial changes in public land values. The result is that the federal government may be receiving inadequate compensation for the use of these lands. The proposed regulations would update the fee schedule based on current land values and would adjust these values, whether up or down, every five years.

“The American taxpayer deserves to be compensated fairly for the use of public lands for commercial enterprises,” said BLM Director Jim Caswell. “This proposed new rule would ensure that the federal government receives an adequate return for right of way rentals now and into the future.”

The proposed set of regulations also contains provisions not directly related to the rent schedule. These cover such topics as flexible rental payment periods and reimbursements of processing and monitoring fees for leases and permits.

There are currently more than 96,000 right of way grants on BLM lands, of which about half are subject to rent, generating more than $20 million annually in revenue. Revenue from right of way rentals goes to the U.S. Treasury, along with a share to the states, as required by the Mineral Leasing Act and the Federal Land Policy and Management Act.

—Petroleum News



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