House subcommittee backs White House call for more US production

By the OGJ Online Staff

WASHINGTON, DC, Feb. 5 -- Rep. Barbara Cubin (R-Wyo.), chairman of the House Resources Subcommittee on Energy and Mineral Resources, Tuesday said her agenda for this year will complement the White House's energy blueprint.

She said her subcommittee's priorities include plans to look into improving coal, gas, and geothermal energy development.

Lobbyists see Cubin as a frontrunner to replace House Committee on Resources Chairman James Hansen (R-Utah), who is retiring at the end of this congressional term.

Other issues Cubin plans to explore are Outer Continental Shelf royalties and the Bush administration's plans for offshore oil and gas lease sales.

Cubin said two-thirds of the OCS is off-limits to oil and gas leasing. In a related matter, the subcommittee plans to revisit the contentious oil royalty issue. She said the subcommittee will "oversee and encourage (the) Mineral Management Service to institute more efficient collections of the royalties, possibly including a royalty in-kind program."

Interior dramatically expanded its RIK program last year, giving many offshore leaseholders the option to pay federal royalties by shipping crude to the Strategic Petroleum Reserve instead of giving MMS cash payments.

Industry wants to expand RIK to all federal leases, and the energy policy bill the House passed last August directs the Department of the Interior to move in that direction. But MMS officials continue to resist mandated RIK, saying they want to continue to have the option of cash payments.

They say some onshore leases are not near market centers and using RIK may cost the government the true value of the oil or gas. Interior Sec. Gale Norton has not signaled if she might accept a royalty system that was exclusively in-kind instead of in-cash.