Interior Secretary Ryan Zinke on Tuesday declined to cut the amount that oil and gas companies pay for offshore drilling deep in federal waters.
Zinke rejected the advice of the Interior Department’s Royalty Policy Committee, an advisory board that unanimously recommended that he lower the royalty rate companies pay on offshore drilling from 18.75 percent to 12.5 percent in federal waters deeper than 200 meters.
The proposed amount was the lowest rate the government can charge for offshore leases.
He said lowering the rate is not necessary to attract industry interest in drilling deep offshore.
“The pilot light of American energy has been re-lit by President Trump, and the president’s energy dominance strategy is paying off,” Zinke said. “Right now, we can maintain higher royalties from our offshore waters without compromising the record production and record exports our nation is experiencing. The administration is grateful for the committee’s hard work on these significant energy issues.”
Top congressional Democrats had warned Zinke not to lower the royalty rate, arguing the proposal would prevent the government from claiming billions of dollars in revenue and contending the advisory committee is stacked with energy industry officials.
Zinke appointed members to the advisory committee, selecting members from the Interior Department, states, tribes, as well as oil, natural gas, and coal companies. He revived the committee after former President Barack Obama let it lapse during his second term.
The Trump administration has made offshore drilling a major priority, proposing a plan to make 90 percent of total acres in federal waters available for leasing from 2019 to 2024.
The Interior Department has already lowered royalty rates for shallow water drilling, from 18.75 percent to 12.5 percent.
