A committee at the US Department of the Interior (DOI) on Wednesday recommended a reduction in federal royalty rates for deep-water oil and gas projects, according to Reuters.
Meeting in Houston, Texas, the Royalty Policy Committee, backed the suggestion of reducing the rate that offshore drilling companies pay the government from 18.75% to 12.5%.
Now the committee’s advice will be considered by Secretary of the Interior, Ryan Zinke.
Backers of the idea say lower rates will spur greater production, in line with policy aim of US President Donald Trump to make the US energy independent.
But in recent days Democratic members of the Senate and House of Representatives natural resources committees wrote expressing concern that the rate cut would deprive taxpayers of billions of dollars in revenue because any output boost would probably not be big enough.
The Royalty Policy Committee also voted to increase the acreage available for offshore oil and gas leasing in the outer continental shelf (OCS).