MMS: 2007 RIK produced $63 million in benefits
The US federal oil and gas royalty-in-kind (RIK) program produced more than $63 million in benefits during fiscal 2007, the US Minerals Management Service said in an annual report to Congress.
WASHINGTON, DC, Sept. 8 -- The US federal oil and gas royalty-in-kind (RIK) program produced more than $63 million in benefits during fiscal 2007, the US Minerals Management Service said in an annual report to Congress.
The program, which began more than 10 years ago, allows the US Department of the Interior division to take royalties as oil and gas which can then be resold competitively on the open market instead of as royalty-in-value cash payments.
MMS said additional revenue from open market sales beyond what it would have received as cash payments accounted for $56.5 million of the $63 million figure during fiscal 2007. The program also generated $3.5 million in administrative savings and $3 million in what it called the "Time Value of Money" by receiving receipts several days earlier than with cash payments.
"This report demonstrates that the RIK program continues to demonstrate solid and measurable benefits through increased financial returns to the American public, decreased administrative costs, and shortened compliance cycles," MMS Director Randall B. Luthi said. The program's performance continues to outpace its goals, he added.
But the program has been attacked by US House Natural Resources Committee Chairman Nick J. Rahall (D-W.Va.) and other members of Congress who have said that it is not being run properly.
Luthi said the RIK program aims to make government more efficient, reduce regulatory costs and reporting requirements, shorten the compliance cycle, and ensure a fair return on resource production on public land. "The program is meeting those objectives," he maintained.
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