Washington, DC–(ENEWSPF)–June 26, 2014. Statement of Rep. Earl Blumenauer (OR-03) on his amendment to HR 4899, the “Lowering Gasoline Prices to Fuel an America that Works Act of 2014” that would strongly incentivize oil companies to renegotiate drilling leases and end their holiday from paying royalties to the American people.
In 2013, the big five oil companies earned a combined total of $93 billion in profits, making them some of the most profitable companies in the world.
Yet, despite this breath-taking profit, many oil companies are currently not paying any royalties to the American people for offshore drilling leases on public lands in the Gulf of Mexico that were issued between 1996 and 2000.
A report issued last year by Natural Resources Committee Democrats showed that roughly 25 percent of the oil currently produced in the Gulf of Mexico is not subject to royalty payments. That report also showed that more than 100 oil and gas companies fully or partially own more than 200 royalty-free leases for deep-water drilling in the Gulf, and that this royalty-free drilling will cost an estimated $15.5 billion in foregone revenue over the next 10 years.
The original intent behind this royalty relief was to encourage drilling in the Gulf of Mexico despite low oil prices. This is simply no longer relevant with oil prices currently at over $100 a barrel. Furthermore, a large number of these leases are held by state-owned or partially state-owned foreign firms. It is unacceptable that we are allowing foreign governments to drill on American public lands without paying a dime in royalties to the American people.
My amendment would give these free-loading oil companies a strong incentive to renegotiate their leases and to pay their fair share of royalty taxes. It would offer them a choice: either continue to produce without paying royalties in the Gulf of Mexico, but not be able to receive any new leases on public lands, or agree to pay their fair share and be able to bid on new offshore areas.