The House Subcommittee on Energy and Mineral Resources Thursdayapproved royalty-in-kind legislation (H.R. 3334) to require thefederal government to take the actual oil or natural gas product asits royalty payment instead of cash for production offshore and onfederal lands. The bill, opposed by the Interior Department’sMinerals Management Service (MMS), included an amendment whichwould allow the government to receive cash for production fromlow-volume producing wells in remote locations.

“We are hopeful that the administration will find this bill tobe a winning solution to the current complex and problematicvaluation system,” a spokesman for the Independent PetroleumAssociation of America said. MMS officials claim the legislationwill significantly cut government royalty revenue.

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