February 16, 2006- Democrats Call For Hearings on Royalty Relief

WASHINGTON, D.C. – Today, Representative Edward J. Markey (D-MA), a senior Member of the House Resources and Energy and Commerce Committees sent a letter to Resources Chairman Richard Pombo (R-CA) requesting a legislative hearing and markup on H.R. 4749, the “Royalty Relief for American Consumers Act of 2006.”  The letter was sent from Reps. Miller, Waxman, Maloney, Emanuel, Gijalva and Inslee all co-sponsors of H.R. 4749 which would require oil and gas companies to pay royalties to the federal treasury for drilling on public lands.

“The American people expect the Congress to be creating an energy policy that reduces energy costs for consumers and our nation’s dependence on foreign oil,” said Rep. Markey. “At a time when oil and gas prices are through the roof and big oil companies are reporting record profits we must act to ensure that American taxpayers receive the money they are owed for the privilege of drilling on public land. It is time to end the Bush Administration’s policy of ‘leave no oil company behind’ while leaving American consumers holding the bill.”

Rep. Markey, along with Reps. Maloney, Miller, Emanuel, Waxman, Inslee, Pallone and Grijalva introduced H.R. 4749 after the New York Times revealed on Monday that big oil stands to receive future royalty giveaways of nearly $7 billion dollars. This legislation would prohibit royalty relief on any future oil and gas leases when the price of oil and gas is high, call for a renegotiation of current leases that are giving royalty relief, and prohibit the purchasing of new leases by those companies that refuse to renegotiate. Oil and gas companies pay a fraction of the value of the oil and gas produced on federal land as a royalty to the federal government.

Rep. Markey continued, “The American people deserve immediate hearings and legislative action on this issue of whether oil companies are paying their fair share.”

The letter also noted Chairman Pombo’s own quote in the Times article that, “I don’t think there is a single member of Congress who thinks you should get royalty relief at $70 a barrel.” The original co-sponsors of H.R. 4749, Reps. Maloney, Miller, Emanuel, Waxman, Inslee, Pallone and Grijalva also signed the letter to Chairman Pombo. 

Royalty relief was a critical part of the Bush Energy policy plan and was detailed extensively in the report released by the National Energy Policy Report of the National Energy Policy Development Group (NEPD).  For more information on the President’s policy on royalty relief see the fact sheet below.

For a copy of the letter or more information on Rep. Markey’s work on energy policy check out http://markey.house.gov/

Copy of Letter to Resources Chairman Richard Pombo Requesting a Hearing on Royalty Relief Copy of Letter to Resources Chairman Richard Pombo Requesting a Hearing on Royalty Relief (148.83 KB)

# # #

THE BUSH ADMINISTRATION: FOR ROYALTY RELIEF BEFORE THEY WERE AGAINST IT
Current Administration Claims don’t Match Their Record

Bush Administration Claim: “First of all, the President has made very clear what his view is. Oil companies should not be receiving incentives when the price of oil is where it is. The President has spoken out very clearly about that for some time. When the price of oil is as high as it is, he doesn't think we need to be providing additional incentives to oil companies.”
-Scott McLellan, 2/14/05 Press Briefing
http://www.whitehouse.gov/news/releases/2006/02/20060214-1.html#h

FACT: "The NEPD Group recommends that the President direct the Secretary of the Interior to consider economic incentives for environmentally sound offshore oil and gas development where warranted by specific circumstances: explore opportunities for royalty reductions, consistent with ensuring a fair return to the public where warranted for enhanced oil and gas recovery; for reduction of risk associated with production in frontier areas or deep gas formations; and for development of small fields that would otherwise be uneconomic.”
-National Energy Policy Report of the National Energy Policy Development Group, 5/01, p. 5-7 (emphasis added)

Bush Administration Claim: “…When we came into office, we limited and imposed triggers at the beginning of the administration to cut off relief once oil and gas prices reached a certain point. Secretary Norton and the Department of Interior undertook that initiative.”
-Scott McLellan, 2/14/05 Press Briefing
http://www.whitehouse.gov/news/releases/2006/02/20060214-1.html#h

FACT: “With demand for natural gas climbing as more American families and businesses choose this clean-burning fuel, we must provide incentives for development of known resources that are harder to reach.”
-Secretary of Interior Gale Norton, Interior Department Press Release, 1/23/04
http://www.gomr.mms.gov/homepg/whatsnew/newsreal/2004/040123hq.html

FACT: In January of 2004, when Secretary Norton made this statement, the price of Natural Gas was at its highest January price in two years, and was the second highest January price on record at that point (and one year later, the January 2005 price set a new all time record)
-Energy Information Administration, U.S. Natural Gas Residential Price
http://tonto.eia.doe.gov/dnav/ng/hist/n3010us3m.htm
 
Bush Claim: “On January 24, 2004, Interior Secretary Gale Norton, as part of my administration's Deep Gas Initiative, announced new incentives for natural gas development in hard-to-reach areas of the Gulf of Mexico. Those incentives will save American consumers an estimated $570 million a year, create as many as 26,000 jobs and help to ensure the nation's energy security by boosting domestic production. Additionally, in March, the Interior Department offered Central Lease Sale 190, which is comprised of 4,324 tracts and approximately 23 million acres offshore from Alabama, Louisiana and Mississippi. This lease sale, combined with deepwater royalty relief, will enable industry to increase production of deep gas in shallow waters.”
-Interview with President Bush, July 2004 issue of American Gas Magazine
American Gas Magazine

FACT: The price of residential natural gas prices went up every month between Secretary Norton’s announcement and the issue date of this publication, begging the question of when exactly these “triggers” that would suspend the royalty relief actually kick in.
-Energy Information Administration, U.S. Natural Gas Residential Price
http://tonto.eia.doe.gov/dnav/ng/hist/n3010us3m.htm

FOR IMMEDIATE RELEASE
February 16, 2006


 

CONTACT: Tara McGuiness
Morgan Gray
202.225.2836