The Hill: Lawmakers ask Trump administration to help Gulf oil and gas producers
by Rachel Frazin
A group of 14 lawmakers is asking the Trump administration to help out the offshore energy industry amid a decline in oil prices linked to international disputes and the coronavirus pandemic.
The 13 Republicans and one Democrat sent a letter on Friday to Interior Secretary David Bernhardt asking him to reduce or waive royalties for oil and gas leases in the Gulf of Mexico.
“The Department of the Interior has existing authority to temporarily reduce or eliminate royalties set forth in the leases in the Western and Central Planning Areas of the Gulf of Mexico and other lease areas,” the lawmakers wrote.
“We urge you to examine the viability of a temporary reduction in royalties as domestic energy producers weather this combination of an [Organization of the Petroleum Exporting Countries]-driven price war and an epidemic that is driving millions of people around the world into quarantines of one kind or another,” they added. “Such an action in the short term will help mitigate a price war that is sinking prices and decreasing production.”
Their letter follows a separate action by the Trump administration that boosts the oil industry at large.
On Thursday, the Energy Department announced that it will buy 30 million barrels of oil from producers to be stored in the Strategic Petroleum Reserve.
The Friday letter was signed by Reps. Dan Crenshaw (R-Texas), Randy K. Weber (R-Texas), Clay Higgins (R-La.), Mike Johnson (R-La.), Bill Flores (R-Texas), Chip Roy (R-Texas), Bruce Westerman (R-Ark.), Ralph Abraham (R-La.), Kevin Hern (R-Okla.), Jeff Duncan (R-S.C.), Brian Babin (R-Texas), Michael C. Burgess (R-Texas), Michael Cloud (R-Texas) and Lizzie Fletcher (D-Texas).
“This call for royalty relief on offshore oil and gas will help ensure that the cost of production isn’t more than the price of the commodities. This is especially important for America’s smaller producers – many of whom are based in Texas – who feel the burden of these royalties the most,” Crenshaw's office said a statement about the letter.
The idea of reducing royalties for fossil fuels leases, however, came under fire from some Democrats even before the lawmakers sent their letter.
Last week, Sens. Bernie Sanders (I-Vt.), Jeff Merkley (D-Ore.) and Ed Markey (D-Mass.) introduced legislation aiming to prevent the administration from reducing royalty rates for coal, oil or gas recovery.
“We shouldn’t be producing these dirty fossil fuels at all, much less providing billions of dollars in taxpayer subsidies to the industry every year,” Sanders said in a statement at the time.
The three senators also wrote a letter to President Trump last week, saying that giving federal assistance to oil companies “would be a wasteful misuse of government resources that would exacerbate the climate crisis.”
Industry, however, praised the action.
"Royalty relief will help preserve American energy competitiveness, while ensuring a fair return to taxpayers," National Ocean Industries Association President Erik Milito said in a statement.
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