News from Natural Resources Committee
 
Legislation Would Recover Up To $53 Billion for Deficit Reduction
 
WASHINGTON (April 5, 2011) – Several leading Democrats today introduced legislation that would close a loophole that allows dozens of oil companies to drill for free in the Gulf of Mexico. This loophole will cost American taxpayers $1.5 billion this year, and up to $53 billion over the next couple decades – the legislation today would instead take this lost revenue and direct it to the U.S. Treasury to help reduce the deficit. Similar legislative language was offered as an amendment to the first Republican spending bill, and was voted down by Republicans, despite their calls to reduce the deficit from all angles.
 
The legislation, titled the Deficit Reduction through Fair Oil Royalties Act, is authored by Reps. Edward J. Markey (D-Mass.), Rush Holt (D-N.J.), George Miller (D-Calif.), Jim Moran (D-Va.), Maurice Hinchey (D-N.Y.) and Lois Capps (D-Calif.).
 
The bill would fix a flaw put in place by a Republican-controlled Congress in 1995 and seek to recover funds from faulty drilling leases in the Gulf of Mexico that allow oil companies, including BP, to drill without paying any royalties. The Government Accountability Office (GAO) has estimated that taxpayers could lose up to an additional $53 billion over the next 25 years as a result of royalty-free drilling when oil prices are high. The Interior Department also informed Rep. Markey in February that American taxpayers will lose $1.5 billion just this year from this free drilling.
 
The legislation can be found HERE .
 
“Instead of cutting research to cure cancer or develop renewable energy, we should be ending this ridiculous loophole that robs the taxpayers of more than a billion dollars a year,” said Rep. Markey, the top Democrat on the Natural Resources Committee. “The biggest oil companies are already getting 100 year-old tax breaks to sell $100 a barrel oil to make $100 billion a year in profits. Oil companies don’t need a $53 billion windfall courtesy of American taxpayers that increases our national deficit.”
 
“The country owns this land. The country deserves these royalties. Whether we have not collected these royalties because of a mistake or because of a cozy relationship with the oil companies and the some policymakers, they should be collected,” said Rep. Holt.
 
“The Republican plan to cut the budget? Continue to cheat taxpayers out of billions of dollars owed by the big oil companies. That’s not much of a budget-cutting plan,” said Rep. Miller. “It’s time that we hold giant oil corporations accountable for the right to use the public’s resources.  Oil companies shouldn’t be drilling for free, and in a time of rising gas prices, we need to close this $50 billion loophole.”
 
“These hugely profitable companies are tapping oil and gas reserves that belong to the American People, selling it back to us, and then reaping a massive profit on the backs of middle-class families," said Rep. Hinchey. "But the real kicker is that these oil companies are not paying one red cent to the public for the oil and gas they have extracted from publicly owned resources. They get it for free - and we pick up the $53 billion tab. American taxpayers are getting ripped off. We need this bill to correct the problem.”
 
“It is only fair to ask oil companies to pay royalties on the resources they extract from waters owned by the American people,” said Rep. Moran. “This bill will fix a long-standing loophole for big oil companies that continue to reap enormous profits while middle-class families have seen their salaries and benefits stall while their gas bills go up.”
 
“This should be a no-brainer – make the nation’s biggest oil companies pay to keep drilling on the public’s land, or they won’t be able to buy new leases from the federal government.  Big Oil and their friends in Congress, nearly the entire Republican Conference, continue to stand in the way of fixing the royalty relief law. And as a result, taxpayers keep pouring billions of dollars into already stuffed oil industry coffers.  It’s long past time to end this windfall to protect taxpayers,” said Rep. Capps.
 
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