Gas Royalty Relief – Deep and Shallow Water Gas


Energy - Fossil Fuels

Subsidy Type

Undervalued Asset

Committees of Jurisdiction

House Natural Resources Committee

$88 FY 16 Budget Score (in mil.)
$1,058 FY 16-25 Budget Score (in mil.)

Oil and gas companies that drill on public lands or in federal waters pay royalties for the oil and gas they extract. The amount of royalties they pay depends on the amount extracted, the market price for oil and gas, and the royalty rate. In 2004, the Department of the Interior used its authority under the Outer Continental Shelf Lands Act to waive royalties for natural gas production in wells of at least 15,000 feet subsea depth in Gulf of Mexico waters less than 200 meters deep. Under the Energy Policy Act of 2005 the program was expanded to suspend royalty payments for the first 35 billion cubic feet of production from wells of 20,000 feet subsea depth in waters between 200 and 400 meters deep.

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