Originally Posted by
Andy
Source?
While current Federal royalty rates are lower than 'market' at 12.5% (a rate that has remained constant since Warren G Harding was President), it's not excessively lower than what oil companies pay to state and private landholders. There's a recent GAO report that proposed different royalty rates, the top being 22.5%. Still, calling 12.5% 'next to nothing' is an exaggeration.
The decline in federal royalties from mineral rights over the last decade is due to lower energy prices which has decreased production on federal lands; it's not due to any change in royalty percentages.
It's not the "rate" that we were discussing, it's the fact that the US FEDS tend to spend every cent (plus borrow more to spend) as it comes in vice what the Norwegians have accomplished by setting up a trust fund that now tops $1 Trillion USD and will continue to spin off income for the Norwegians to enjoy for the future generations.
The rest of the world, US included, spends everything and then some on current expenses.
That ship has sailed since the '50's though and our future generations will have to pick up the tab.