A bipartisan pair of senators have introduced legislation seeking to adjust royalty rates for oil and gas leases on public lands.

Iowa Republican Chuck Grassley and New Mexico Democrat Tom Udall introduced the Fair Returns for Public Lands Act Tuesday, saying in a joint release that the bill would “update the nation’s antiquated public lands royalty system and ensure that taxpayers get fair returns on leases of public lands for oil and gas production.”

Grassley called the current structure a “loophole” that equates to “corporate welfare” and said oil leasing needs to be brought “into the 21st century.” Udall says the current rate structure was instituted in 1920, and “it is high time for real reform.”

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“Public lands and their natural resources belong to the American people, and it’s only fair to ask those who profit from them to return a fair share to taxpayers. Oil and gas companies are paying significantly higher royalty rates offshore and on many state and private lands, and there is no need to give federal onshore producers a sweetheart deal at a time of record U.S. production along with rising climate change and habitat impacts,” he said.

The Renewable Fuels Association cheered the move. In a release, RFA President and CEO Geoff Cooper said the measure would help end “hidden subsidies, write-offs, incentives, and other giveaways. If oil producers and refiners truly want a 'free market' in the energy sector, they should start by giving up the subsidies and tax preferences that have robbed state and federal coffers for 100 years or more.”

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