Oil and natural gas companies that drill on U.S. government-owned land are spending less for access after the Trump administration invoked the coronavirus crisis to slash the royalties they pay.

About 300 million barrels of the U.S.’s 4.5 billion barrels of oil production last year came from wells on federal lands, while another 700 million barrels was pumped in offshore federal waters. Energy production yielded $12 billion in direct revenue for Washington in fiscal 2019.

The collapse in oil prices as the pandemic set in forced companies to suspend drilling and in some cases close wells. Seeking to keep wells from abandonment, the U.S. Interior Department on April 21 declared that oil and gas operators could seek lower royalty rates. WTI crude had plunged below $0/bbl for the first time the day before.

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