WASHINGTON (AP) — Despite record profits, oil and gas producers may avoid billions of dollars in royalty payments to the government because of a decade-old law designed to spur production when energy prices are low.

The Interior Department estimates that as much as $66 billion worth of oil and natural gas taken from the deep waters of the Gulf of Mexico between now and 2011 will be exempt from government royalty payments.

That could amount to the government losing an estimated $7 billion to $9.5 billion based on anticipated production and current price projections for oil and gas, according to an analysis in the department’s five-year budget plan.
nytimes.com

This entry was posted on Wednesday, February 15th, 2006 at 7:48 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.