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 Officials have for years considered boosting the royalty rate for
onshore oil and gas development as a way to protect taxpayers' stake
in a domestic energy boom.
But the U.S. Department of the Interior has lately decided to drop
those plans, according to a report from the Government
Accountability Office, the investigative arm of Congress.
"According to Interior officials, the department does not have
enough information to determine how to adjust onshore royalty
rates," the GAO said in a study of royalty collections on fossil
fuels.
Senator Ron Wyden, an Oregon Democrat and chairman of the Senate
Energy and Natural Resources Committee, requested the study.
Advances in drilling technology have unlocked vast fossil fuel
deposits in North Dakota, east Texas and elsewhere in recent years,
pushing domestic oil and gas production up sharply.
U.S. crude oil output is surging faster than expected and will touch
a historic high by 2016, according to data released on Monday by the
U.S. Energy Information Administration, part of the Department of
Energy.
Drillers now pay a 12.5 percent royalty on oil and gas pulled from
federal land. Since 2009, Interior officials have contemplated
increasing the government's take to match global standards,
according to the GAO report.
Officials last year drafted plans for an 18.75 percent royalty for
onshore oil production but decided to put those plans on ice,
according to the GAO report.
In Texas, the royalty rate is 25 percent.
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President George W. Bush twice increased royalty rates for drilling
in the Gulf of Mexico, and Ken Salazar, President Barack Obama's
first Interior secretary, said in 2011 that a boost to onshore
royalties was due.
In his 2014 budget proposal, Obama said "adjusting onshore royalty
rates" was a priority.
About a third of U.S. oil and gas comes from federal land managed
by the Interior Department, and its oversight of energy development
has been singled out by the GAO among agencies most vulnerable to
fraud, waste or abuse.
Current Interior Secretary Sally Jewell has said taxpayers must be
protected in sales of fossil fuels that come from federal land.
An Interior Department official did not immediately respond to a
request for comment.
(Reporting by Patrick Rucker; editing by
Lisa Von Ahn)
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