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DOCUMENT 'AESUME
07096 - [B2681751]
[Royalty Rates Applied to Outer Continental Shelf Leases].
END-78-5I; E-118678. April 25t 1978. 4 pp.
Report to Rep. Elizabeth Holtzman; by Monte Canfield, Jr.
Director* Energy and Hinerals Div.
Issue Area: Energy: Effect of Federal Financial Incentives@ Tax
Policies, and Regulatory Policies on Energy Supply (1610).
Cr,;tact: Energy and Hinerals Div.
Budget Function: Natural Resources, havironsent, and Energy:
Energy (305.
Organization Concerned: Department of the Interior; Department
of Energy.
Congressional Relevance: Rep. Elizabeth Boltzman.
Authority: Outs- Continental Shelf Lands Act (43 U.S.C. 1331).
Energy Policy and Conservation Act (42 U.S.C. 6383).
Oil and natural gas Outer Continental Shelf leases are
awarded through sealed bids on the basis of the highest cash
bonus with a fixed royalty or on a percentage royalty bid with a
fixed cash bonus. The royalty rate has customaxily been over
16%; acne experimenting is now being done with a fixed sliding
scale royalty or with a higher royalty rate with no fixed cash
bonus. Uhile ' -he lease production information needed to
determ!.ne the &o)ilties owed the Government is routinely
collectsi, the Information necessary to make a rate of return
evaluation is r-t. The Securities and Exchange Ccmmissior is in
the process of developing accounting prccedures which will
enable the compilation of reliable petroleum ezfloratt.cn and
production data. (SC)](ViewImageLocal?handle=hein.gao/gaobaaxyk0001&div=1&collection=&method=preview&ext=.png&size=3)