US looks to simplify oil royalties

The initiative is aimed at streamlining the process by using negotiated regional market prices to determine royalty payments. Under the current system, royalty payments are determined on a transaction-by-transaction basis, with transportation costs and contract particulars worked into the calculations. The Interior Department says the overhaul would make the process more transparent and would reduce administrative costs for energy companies. “Regulations that were initially developed in the 1980s have not kept pace with the significant changes that have occurred in the oil and natural gas markets,” Interior Secretary Ken Salazar said in a statement...more