KLTV 7 News Tyler, Longview, Jacksonville |Interior ends troubled oil royalty program
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Associated Press - September 16, 2009 12:45 PM ET
WASHINGTON (AP) - The U.S. is ending a program that let companies give the government in-kind payments -- not cash -- for oil and natural gas taken from federal land and waters.
The Interior Department today announced an end to the program, which had been favored by the oil industry.
The program was criticized for lax enforcement. It also was at the center last year of a sex and drug scandal involving employees of the office in charge of Interior's offshore energy leasing.
Under the system -- instead of cash -- companies provide the government a comparably valued amount of oil or gas. The government then sells the products on the open market.
The U.S. in fiscal 2008 collected more than $12 billion in royalties from oil and gas production in coastal waters -- mostly in the western Gulf of Mexico. About $6.6 billion came through the royalty-in-kind program.
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