Trump administration says no widespread royalty cuts for public lands drilling

The Interior Department apparently confirmed to the House on Friday that it does not plan to issue widespread royalty cuts for companies that drill for oil and gas on public lands and waters. 

Instead, the department said in a letter to House Natural Resources Committee Chairman Raúl Grijalva (D-Ariz.) that it will continue to use “long-standing regulatory tools” like allowing companies to apply for royalty relief on a case-by-case basis. 

The letter, written by acting Assistant Secretary for Land and Minerals Management Casey Hammond, said that in a meeting with stakeholders, members of Congress and governors, there had been “interest in relief that would require a modification of our existing practices.”

However Hammond said that if companies want to obtain relief, the department recommends that they “submit an application for relief to the appropriate bureau program” pursuant to its current procedures. 

Bloomberg had previously reported that President Trump had expressed opposition to widespread royalty cuts. 

Grijalva and other lawmakers had previously written to the administration warning of “tight legal restrictions that exist on unilateral action” for reducing royalties.

Prior to that letter, a group of more than 40 House Republicans had written to the White House pushing for cuts as oil producers faced both a Russia-Saudi production standoff and reduced demand because of the coronavirus. 

On Friday, Trump said the U.S. would reduce its oil production as part of a tentative deal to lessen global output.