Obama’s Budget Would Charge Oil and Gas Drillers New Fees

WASHINGTON -(Dow Jones)- Oil and gas drillers would be charged new fees and royalty rates under President Barack Obama’s 2012 spending plan announced Monday.

The president’s budget proposal, which would cover the fiscal year that begins Oct. 1, would impose the new charges “to receive a fair return from the development of U.S. mineral resources,” according to a budget summary document.

The president would establish “user fees” for the processing of drilling permits and the inspection of drilling operations. A fee would also be imposed on new, nonproducing oil and gas leases “to encourage more timely production.”

The new fees would help pay for expanded oversight of oil and gas drillers, including hiring more inspectors and adding engineers and scientists to review offshore drilling safety plans. A total of $500 million would be set aside for staffing and other changes at the federal offshore drilling regulator, the Bureau of Ocean Energy Management, Regulation and Enforcement.

In addition, royalties related to the extraction of silver, gold and copper in the U.S. would be established.

In sum, the president estimated that proposed changes to the way the U.S. collects on its mineral resources would save the government $3 billion over 10 years.

The president’s proposal is a starting point. In coming months, the House, Senate, and administration will work to reach a compromise on the final budget.

-By Ryan Tracy, Dow Jones Newswires

Subscribe for Daily Maritime Insights

Sign up for gCaptain’s newsletter and never miss an update

— trusted by our 109,107 members