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Following Unusual White House Meeting With Big Oil, Chair Grijalva and 15 House Democrats Urge Sec. Bernhardt to Reject Calls for Royalty Cuts

04.06.20

Washington, D.C. – Chair Raúl M. Grijalva (D-Ariz.) and 15 other House Democrats wrote to Interior Secretary David Bernhardt today urging him to reject Republican and fossil fuel industry calls for royalty cuts on oil and gas taken from federal lands and waters. Such a move, the authors write, would be illegal, unnecessary, and disconnected from the realities the country faces during the COVID-19 pandemic.

The full letter is available at https://bit.ly/2UNdWRC.

Regardless of the Trump administration’s policy preferences, the authors write, Bernhardt cannot decree across-the-board royalty cuts because of a landmark 1986 decision by the Interior Board of Land Appeals, which found that that the Bureau of Land Management can only cut the royalty rate at a specific natural resource extraction site if a corporation can demonstrate that the cut is necessary for that particular site to keep operating. It is not sufficient to demonstrate that a cut would benefit the company financially.

“Note that it is the interests of the Government, and the taxpayers it represents, that are critical here, not the interests of individual oil and gas companies,” the lawmakers write today. “These two sets of interests are not synonymous.”

Even if the clear legal restrictions were somehow overcome, the lawmakers write, cutting royalties across the board

would do nothing but cheat the American taxpayer of potentially billions of dollars in revenue that will be needed to help struggling workers, rebuild stockpiles of medical supplies, and recover from the current crisis. Ill-considered offshore royalty cuts passed by a Republican Congress in 1995 have already resulted in an $18 billion (and growing) loss for taxpayers – money that should be going to important national needs but instead is simply padding the profits of Big Oil at no discernible benefit to the public.

The letter follows President Trump’s unusual and inconclusive White House meeting last Friday with oil and gas industry leaders. Chair Grijalva said after the roundtable that rather than meeting with any of the millions of Americans now filing for unemployment, Trump is “spending his time calculating how much taxpayer money he can stuff in fossil fuel corporations’ pockets in the name of economic recovery.”

The letter is signed by Reps. Deb Haaland (N.M.), Alan Lowenthal (Calif.), Jared Huffman (Calif.), Joe Cunningham (S.C.), Mike Levin (Calif.), Nanette Diaz Barragán (Calif.), Darren Soto (Fla.), Mike Quigley (Ill.), A. Donald McEachin (Va.), Nydia Velázquez (N.Y.), James McGovern (Mass.), Grace Napolitano (Calif.), Joe Neguse (Colo.), Ilhan Omar (Minn.) and David Price (N.C.).

Haaland is Vice Chair of the Natural Resources Committee. Lowenthal chairs the Subcommittee on Energy and Mineral Resources and Huffman chairs the Subcommittee on Water, Oceans, and Wildlife.

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