States stand to lose an estimated $42.5 million in oil and natural gas revenues in 2008 as a result of a provision in an omnibus spending bill President Bush signed in late December that gives the federal government a greater share of royalties, according to a spokesman for the Interstate Oil and Gas Compact Commission (IOGCC).

The Bush administration-supported provision “slipped under the major opponents’ radar screen,” said IOGCC spokesman Kevin Bliss. The measure raises the current 50% revenue split for the federal government to 52%, and reduces the states’ share to 48%.

The 2% decrease for the states will mean they will get millions of dollars less in royalty revenues in 2008, Bliss said. Western states will be particularly affected. He noted that the biggest annual revenue losers will be Wyoming ($21.4 million), New Mexico ($11.47 million), Utah ($3.4 million) and Colorado ($2.9 million).

Bliss said most of the principal opponents to the revenue-split change, such as Sens. Pete Domenici (R-NM), Jeff Bingaman (D-NM), Ken Salazar (D-CO) and Michael Enzi (R-WY), were blind-sided by the provision.

He noted that the 52-48 split is not permanent and will be debated again next year. The IOGCC intends to fight to change the split back to 50-50 when it comes up again during the appropriations process in late 2008, Bliss said.

This “latest…action poses a significant threat to states and state programs,” said Alaska Gov. Sarah Palin, chairman of the IOGCC, which represents 30 oil- and gas-producing states.

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