IPAA: Royalty Rate Increase Against 'All the Above' Energy Strategy
The Independent Petroleum Association of America (IPAA) on Friday criticized a proposed plan by Department of the Interior (DOI) Secretary Ken Salazar to raise royalty rates for onshore federal lands by 50 percent, saying the plan "flies in the face of a common sense, 'all the above' energy strategy".
"Time and again, this Administration has offered counterproductive policies," said IPAA President and CEO Barry Russell in a statement, referencing President Obama's discussion of an 'all of the above' energy strategy in his State of the Union address last month. These policies stifle jobs, limit job-creating domestic energy production, and weigh down an already slow economic recovery, Russell noted.
"While Interior is of the impression that an increase in royalty rates will increase revenue generated for the federal government, the reality is that such a motion will deter production, reduce investment and cost the nation millions of dollars in investment opportunity," Russell commented.
An IPAA spokesperson told Rigzone.com that the organization was awaiting official action following Salazar's announcement about the royalty rate increase during a U.S. House of Representatives Appropriations hearing.
DOI has been studying the issue of raising royalty rates for a few years, the spokesperson said, noting that DOI can take action to implement the royalty change without going through Congress.
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