February 14, 2006- 'Big Oil' Giveaways: Unless Congress Acts, Taxpayers Will Lose Another $7 Billion

WASHINGTON, D.C. – Congressional Democrats will introduce legislation this week to save taxpayers billions of dollars now slated to go directly to large oil and gas companies earning record profits.

The Democrats’ “Royalty Relief for American Consumers Act of 2006” would require oil and gas companies to pay royalties to the federal treasury for drilling on public lands.  Without the Democrats’ bill, taxpayers stand to lose at least $7 billion on oil and gas retrieved from federal lands, according to a report in the New York Times published today. 

Historically, oil and gas companies had to pay royalties for the right to drill on federal lands.  But beginning in 1995 and continuing into just last year, Congress has exempted those companies from paying royalties, despite record high prices and earnings.  The Times report said that the exemptions, or “royalty holiday”, will cost taxpayers at least $7 billion by the year 2012.   Critics of the royalty holiday say that the private market provides enough incentive to explore and drill for oil and gas and that royalty holidays simply gives away federal resources to private companies with no economic benefit to the nation and at great cost to the taxpayer.

The new bill will be introduced by Reps. Ed Markey (D-MA), Carolyn Maloney (D-NY), George Miller (D-CA), Rahm Emanuel (D-IL), Jay Inslee (D-WA) and Henry Waxman (D-CA).
 
“The American people are getting stood up and hung out to dry by an Administration that favors sweet heart deals with Big Oil over the needs of working Americans,” said Markey.  “Across the country, Americans can’t afford Valentine’s roses and chocolates, because they are getting squeezed at the pump for every last nickel and dime they have – meanwhile the Bush Administration is giving its sweet hearts in the oil industry $7 billion dollars that rightfully belongs to America’s taxpayers.”

“The Bush Administration doesn’t need the secret musings of the Cheney Energy Task Force, now they are getting away with ripping-off the American public in plain view,” said Rep. Markey.  “The President’s own budget directs the Department of Interior to allow companies to pump nearly $65 billion worth of oil and natural gas without paying royalties.  These funds should be in the pockets of Americans not in the accounts of oil executives who are already rolling in profits by drilling on public lands.”

Miller, who like Markey opposed the royalty holiday when it was first proposed in 1995, chastised Congress for catering to the special interests.  “This is the cost of Congress letting oil companies write public policy,” Miller said. “The oil and gas royalty holiday is one of the most egregious giveaways of taxpayer money in our history and it can and should be stopped.  This program is not justified, period.  But it is even more outrageous coming at a time when Congress is cutting food stamps, home heating assistance and college loans for poor and middle class families.  You just cannot justify giving away $7 billion in tax dollars to oil companies recording the largest profits ever in corporate history.”

In 2005, Exxon Mobil broke U.S. records for the highest annual and quarterly profits this year ($9.9 billion- ExxonMobil Corporation quarterly (3rdquarter) profits), $36.1 billion annually).

“Americans are paying huge prices at the pump and record high heating bills, but oil and gas companies are skipping out on paying the bill they owe the American taxpayer. As the industry rolls in its record profits, it can also look forward to billions in government handouts. They have American taxpayers over a barrel," said Maloney, a long time advocate of revamping the oil and gas royalties system and member of the Government Reform Committee.

"Energy companies spent $87 million lobbying Congress in the first six months of last year.  They got a $7 billion free pass and consumers got a 78% increase in price at the pump,” said Emanuel.  “As my grandmother used to say, ‘such a deal.’”

For more information on Democrats vision for America’s Energy future check out:
http://markey.house.gov/ 
http://www.house.gov/maloney/issues/oil/index.html
http://www.house.gov/georgemiller/
http://www.house.gov/emanuel/

Rep. Markey Statement of Introduction, February 14, 2006


FOR IMMEDIATE RELEASE
February 14, 2006


 

CONTACT: Tara McGuiness(Markey) 202.225.2836
Andrea Purse (Miller) 202.225.2095
Kathleen Connery (Emanuel) 202.226.7639
Christine Hanson (Inslee) 202.226.7040