Taxpayers Could Lose Up to $53 Billion Without Markey Legislation; Recovered Funds Fully Directed to Deficit Reduction
WASHINGTON (July 14, 2010) – Legislation authored by Rep. Edward J. Markey (D-Mass.) to recover upwards of $53 billion in lost oil drilling royalties in the Gulf of Mexico passed the Natural Resources Committee today, putting the legislation on a path towards fixing a 15-year-old legislative flaw. The recovered money would go directly to deficit reduction efforts.
“Instead of drilling for free in the Gulf of Mexico, we will finally drill for deficit dollars from these profit-rich companies,” said Rep. Markey. “This was an easy choice between standing with BP and the other oil companies that are drilling for free, or standing with American taxpayers and reducing our deficit. My colleagues chose today to stand with the American people.”
The amendment, which passed by a voice vote, would offer the dozens of oil companies currently drilling for free in the Gulf of Mexico a simple choice – they can continue to drill for free on public lands no matter how high oil prices climb, but if they do so, they will not be able to purchase new leases from the federal government.
Because of an oil company court challenge to the 1995 Deep Water Royalty Relief Act authored by the then-Republican majority along with faulty leases offered by the Interior Department in 1998 and 1999, the Interior Department is currently being forced to refund more than $2.1 billion in royalty payments that oil companies had already made from these leases, including $240 million to BP. In addition, the Government Accountability Office (GAO) has estimated that taxpayers could lose an additional $53 billion over the next 25 years as a result of royalty-free drilling when oil prices are high.
Similar legislation has repeatedly passed the House of Representatives in 2006, 2007 and 2008 with bipartisan support.
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