API: Taxing onshore oil, gas wrong policy WASHINGTON, Feb. 20 (UPI) -- A proposal to raise royalty rates for onshore oil and natural gas in the United States sends the wrong message about domestic production, trade group API says. U.S. President Barack Obama kept taxes on oil and natural gas production in his budget proposal that some analysts say could push the bill for developers to more than $27 billion during the next decade. Erik Milito, director of upstream activities for the American Petroleum Institute, said Obama's budget represents a 50 percent increase in royalty rates at a time when the administration is calling for an "all-of-the-above" domestic energy policy. "While the president says he wants more domestic oil and natural gas production and the new jobs and government revenues that go along with it, his administration blocks new development at every turn," he said in a statement. The contradiction is clear. In January, the Department of Interior announced plans for 32 onshore oil and gas lease sales in the United States, the same amount as last year. The government said last year's lease sale generated around $256 million in revenue. Milito said the energy sector was one of the most productive sectors in a weak U.S. economy. With some of the largest oil and natural gas deposits in the world, he said Obama is taking action that would "reduce revenues to the government over time, destroy jobs and undermine our energy security."