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RIK management, not concept, led to program's demise

09/28/2009
By Bob Tippee
If the US government can't manage oil and gas royalties taken in kind, how can anyone expect it to handle a shady market for greenhouse-gas emission credits?Interior Sec. Ken Salazar plans to kill the federal royalty-in-kind (RIK) program. A leasing reform bill in the House would do the same thing. That's bad news for oil and gas producers, for whom the program offers a clear advantage: It precludes fights over valuation. When the government takes its royalty in kind, few questions can arise over sticky issues such as valuation points and price proxies.With RIK, the government receives its share of production and either sells or stores it. What can be simpler? With government, nothing's s...
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