US Govt Considers Increasing Onshore O&G Royalty Rate

The Obama Administration will decide later this year on whether to raise fees on the oil and gas industry as Congressional Democrats are circulating a proposal to increase the current royalty rate of 12.5% to 18.75% for onshore leases, Dow Jones reports.

Outlined in the House Natural Resources Committee's summary, the proposal would increase the current rate by 50%, the report said.

Congressional members are also suggesting to end the royalty-in-kind program (RIK), which provides the Government with the option of receiving production royalty payments either in value or in kind -- that is, in the form of oil or gas production.

The proposal is an initial step as the Interior Department takes a "comprehensive look" at royalty rates for oil and gas drilling, according to Dow Jones.

Interior Secretary Ken Salazar told reporters earlier this year that rate reductions were unlikely, saying, "I do not believe that we should be subsiding the oil and gas industry."


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Eddie | May. 29, 2009
Well our government GIVES all kind of outragous funds to ALL other industries in the USA and they talk about all of the people in the auto industry, aircraft industry and so so many others that have been laid off.

BUT.... you NEVER hear about all of the thousands of displaced oil and gas employees that are standing in line in the unemployment offices and are struggling to make ends meet. BY ALL MEANS don't give the one industry any help that supplies domestic energy products to the local and national economy. The general public is still hung up on the profits that the so-called BIG oil companies make.

Nothing was ever said about the BIG 3 auto groups UNTIL the economy went under THEN all their nasty little habits came to the surface. WE NEED AS MUCH HELP AS THE AUTO MAKERS DO.

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