More than 25 percent of America lands are actually owned equally by all Americans as federal public lands. Some of these lands are quite valuable, for their natural resources, such as oil, natural gas, and coal, of which, one might think, since these are public lands, that the extractor of these mineral resources would be a Federally owned company, such as the "Federal Oil Resource" company, but in actual fact when it comes to the extraction of oil, for instance, the government instead of creating its own Federally owned company, typically leases its land to publically held oil corporations, such as Shell Oil or ExxonMobil and similar, and in return for these leases receives royalties from any oil discovered and extracted from these lands. That, on the surface, might seem to be okay, as these mega corporations are very adept at the business of extracting and developing oil resources, but at the same time, they are experts at all the angles, of which there are many angles, of negotiating contracts that favor them as oppose to favoring the American public, that owns the land, and is managed by public employees on behalf of the people.
For instance, royalty contracts vary depending upon whether the State owns the land, such as Texas, North Dakota, and so on, or whether the oil is offshore, that is in the outer continental shelf, or whether it is on Federal land. One State that has a high royalty rate for oil is Texas, which sits at 25%, which is a boon for the people that reside in the State of Texas, than somewhat surprisingly the royalty rate for ocean continental shelf drilling is currently set at 18.75%, whereas the public land based royalty is set at 12.5%, which is the exact same percentage that the royalty has been at since 1920. So then one must ask the basic questions, since 1920, have oil companies gotten bigger or smaller, have oil companies gotten more profitable or less profitable, have oil become a commodity of more importance or less importance, and in each of these instances, the obvious answer is essentially the same, oil is by far the most important commodity in the world, bar none, in addition to the fact that oil companies are amongst the highest stock market capitalization companies, of which the ExxonMobil market capitalization as of October 6, 2017, was $346.21 billion dollars, with its greatest year for sales being 2007 at $404 billion dollars, and their profit in that year being $40.6 billion dollars.
All of the above, would clearly indicate that the royalty fee of 12.5% is far too low, but like any business that is "getting over" on the public, the oil companies have no reason nor do they have any incentive to want to renegotiate such a royalty, and at the same time, since these are public lands and therefore not private, the incentive by our public servants to construct or insist upon a new deal, lacks vigor and energy. The bottom line, though, is that the current construction of leasing, royalties, bonding, and bidding, favors the oil companies at the expense of the people, so that these oil companies profit upon the wealth of the natural resources that the people own, in short, then, the people are being robbed of the wealth that is theirs to begin with, enriching the oil barons at their expense.