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MMS Pays States Record $2.2B in Production Revenues

The Interior Department's Minerals Management Service (MMS) said Tuesday it disbursed a record $2.2 billion to 34 states during fiscal year 2006 for oil and natural gas and other mineral development on federal lands within the states' borders and on offshore tracts near their coastlines.

The $2.2 billion is nearly 25% more than the fiscal year 2005 payments of approximately $1.7 billion, according to MMS. The state of Wyoming again led all states by receiving more than $1 billion as its share of revenues collected from mineral production. New Mexico's share was $573 million, while the state of Utah received $173 million. Other energy-producing states sharing revenues included Colorado with $147 million; California with more than $57.5 million; Montana with $38.2 million; Louisiana with $33.2 million; Alaska at $25.7 million; and Texas with $22 million.

A state is entitled to a share of the mineral revenues collected from federal lands located within the state's boundaries. For the majority of onshore federal lands, states receive 50% of the revenues while the other 50% goes to various funds of the U.S. Treasury. Alaska is the exception. It receives a 90% share as required by the Alaska Statehood Act.

In addition, coastal states with producing federal offshore tracts adjacent to their seaward boundaries receive 27% of those mineral royalties. The bulk of the offshore revenues collected by MMS go to the federal government.

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