Former House Speaker and Republican presidential candidate Newt Gingrich , watching the failed attempt of the Congressional Super Committee last year to find an additional US $1.5 trillion in debt savings over 10 years, pondered the possibility that oil and gas development might be a solution offering long-term national security benefits. He also recognized the fact that the federal government holds mineral rights to 279 million acres.
Gingrich called Noble Royalties Inc. founder, president, and CEO Scott Noble and posed this question: “If the federal government were to manage the American people’s land with a fiduciary attitude comparable to that of a private firm, how much royalty would you generate, and in the process of that economic activity, how much in taxes would be generated?” It turns out the amount was larger than the Super Committee was looking for.
Taking on the task, the Noble team discovered that cumulative acres leased on federal lands have declined by 66% since the Reagan administration, from 126 million in 1984 to 39 million in 2010 and by 86% for average acres leased per year, from 9 million annually to 1.4 million.
Basing the premise on returning to 1984 levels of leasing activity on federal lands both onshore and offshore and with the aid of Netherland, Sewell & Associates Inc., Noble determined the government is leaving $785 billion in unrealized royalty revenues over a 30-year period.
Gingrich and Noble presented their findings at Hart Energy ’s A&D Strategies and Opportunities conference in Dallas in September. Together they discussed this and energy policy in America with Hart Energy in an exclusive interview.
What role does energy play in the upcoming election?
Gingrich: Energy is extraordinarily important. It is the number one plank in [Republican candidate Mitt] Romney’s plan for the middle class. It is something people instinctively believe represents opportunity. They identify it with jobs and economic growth, with national security, and