IPAA backs Senate passage of Royalty Resiliency Act

(WO) — The Independent Petroleum Association of America (IPAA) has expressed support for the U.S. Senate’s passage of H.R. 7377, the "Royalty Resiliency Act." Sponsored by Congressman Wesley Hunt (TX-38), the bill seeks to address outdated federal reporting processes related to oil and natural gas production on federal lands.

IPAA COO Dan Naatz praised the legislation, saying, "The Independent Petroleum Association of America applauds Congressman Hunt for passage of H.R. 7377, the 'Royalty Resiliency Act,' and appreciates his leadership in fixing reporting issues and closing loopholes in the federal royalty assessment and payment process. IPAA member companies are committed to finding creative solutions to problems that exist within the scope of oil and natural gas production on federal lands."

The bill, passed by the House in July, mandates timely determinations of royalties owed on federal lands. Under current law, the Department of the Interior has flexibility to exceed the 120-day deadline for royalty determinations, often leading to overpayment by producers. The "Royalty Resiliency Act" closes this loophole, ensuring companies aren't overcharged while waiting for communization agreement approvals.

Naatz testified in support of the bill at a House Natural Resources Committee hearing in March. The IPAA believes that the Office of Natural Resources Revenue (ONRR), which oversees royalty payments, needs an overhaul, but this legislation is a step toward a more equitable system.