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Panel recommends Zinke cut offshore drilling royalty rates by a third

Panel recommends Zinke cut offshore drilling royalty rates by a third

A federal advisory panel voted Wednesday to recommend that the Trump administration cut royalty rates for offshore drillers by one third.

Oil and gas produced offshore would be assessed at a 12.5 percent royalty rate, down from 18.75 percent, through 2024 under recommendations from the Interior Department’s Royalty Policy Committee.

The panel of officials representing energy companies, state governments, tribes and Interior officials made the recommendation to Interior Secretary Ryan ZinkeRyan Keith Zinke5 major ways that Interior slashed protections for wildlife  Trump extends Florida offshore drilling pause, expands it to Georgia, South Carolina Conspicuous by their absence from the Republican Convention MORE at a Houston meeting in an attempt to incentivize more production of oil and gas.

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The lower rate would apply to the value of oil and gas from drilling-rights leases sold starting later this year.

Zinke has the final say over whether to adopt the lower royalty rate.

Mineral production, both offshore and on federal land, is the second biggest contributor to the federal treasury, next to taxes.

Top congressional Democrats warned Zinke on Tuesday ahead of the vote against adopting the panel's recommendation.

“This proposal would amount to a giveaway to some of the most profitable companies in the world and rob taxpayers of potentially billions of dollars of revenues over the life of the leases,” wrote Rep. Raúl Grijalva (Ariz.) and Sen. Maria CantwellMaria Elaine CantwellZuckerberg to express openness to Section 230 reform Democrats seem unlikely to move against Feinstein Hillicon Valley: Senate panel votes to subpoena Big Tech executives | Amazon says over 19,000 workers tested positive for COVID-19 | Democrats demand DHS release report warning of election interference MORE (Wash.), the top Democrats on the committees overseeing Interior.

“Selling off public land and resources as quickly as possible at fire-sale prices is not good stewardship; it’s a shell game where the oil, gas and coal industries win and the American taxpayers lose,” the said.

The royalty panel also voted to recommend that Zinke hold a drilling-rights sale in the Arctic National Wildlife Refuge as soon as practical, increase the offshore areas available for drilling and give coal mining companies more leeway in setting the rates that are used to calculate royalties.