To: J_F_Shepard who wrote (128660 ) 7/14/2008 7:47:11 AM From: Brumar89 Read Replies (1) | Respond to See if you can understand this - I've bolded the key points for you:In fiscal year 2006, oil and gas companies received over $77 billion from the sale of oil and gas produced from federal lands and waters, and the Minerals Management Service (MMS), the Department of the Interior’s (Interior) agency responsible for collecting royalties, reported that these companies paid the federal government about $10 billion in oil and gas royalties.When the government grants royalty relief, it typically specifies the amounts of oil and gas production that will be exempt from royalties and may also specify that royalty relief is applicable only if oil and gas prices remain below certain levels, known as “price thresholds.” For example, the Outer Continental Shelf Deep Water Royalty Relief Act of 1995, also known as the Deep Water Royalty Relief Act (DWRRA), mandated royalty relief for oil and gas leases issued in the deep waters of the Gulf of Mexico from 1996 to 2000. These deep water regions are particularly costly to explore and develop. However, as production from these leases has grown, and as oil and gas prices have risen far above 1995 levels, serious questions have been raised about the extent to which taxpayer interests have been protected. These concerns were brought into stark relief when it was learned that MMS issued leases in 1998 and 1999 that failed to include in the lease contracts the price thresholds above which royalty relief would no longer be applicable, making large volumes of oil and natural gas exempt from royalties and significantly affecting the amount of royalty revenues collected by the federal government. energy.senate.gov
