Tucson, Ariz. – In a new letter to Principal Deputy Assistant Secretary of the Interior Casey Hammond, Chair Raúl M. Grijalva (D-Ariz.) thoroughly rebuts the Department of the Interior’s (DOI) arguments for giving away more than $177 million to soda ash producers, a recently announced decision with no discernible public benefit that will cost taxpayers and private landowners for years to come. The giveaways, part of a constant Trump-era pattern, come in the form of a new rule called the Non-Energy Solid Leasable Minerals Royalty Rate Reduction Process, which cuts royalties for soda ash, potash and other leasable minerals on public lands.
Among other issues Grijalva raises in the letter, he cites a 2011 DOI report to Congress mandated by the Soda Ash Royalty Reduction Act of 2006, which found that a similar giveaway to soda ash producers “does not appear to have contributed in a significant way to the creation of new jobs within the industry, to increased exports, or to a notable increase in capital expenditures to enhance production.”
As Grijalva points out, the report found that “domestic employment in the industry has dropped about 10 percent since [fiscal year] 2006,” the royalty reduction resulted in an estimated $150 million revenue loss over five years, “five times the loss in royalty revenues that was anticipated by Congress,” and states ended up losing more than $62 million as a result.
Grijalva also points out that the legal basis of the rule is transparently flawed and suffers from many of the same issues Grijalva raised previously in an April 6 letter to Secretary of the Interior David Bernhardt on unilaterally reducing oil and gas royalties. As Grijalva writes today, “It is not enough to argue that a royalty reduction would be beneficial for an industry. Of course it would. The question is whether it is beneficial for the nation and whether it is necessary. The royalty reduction rule makes it clear that BLM is not interested in answering that.”
A landmark 1986 ruling by the Interior Board of Land Appeals (IBLA), which has never been overruled or modified, found that under existing law, financial benefit to an industry alone cannot justify royalty cuts, which must be based on demonstrable public benefit. In today’s letter Grijalva asks the Bureau of Land Management (BLM) to “provide the Committee with a more comprehensive legal justification for the Rule, including a legal analysis of whether BLM believes the 1986 IBLA case was wrongly decided.”
The letter is available at https://bit.ly/2F4vmUd.
Media Contact: Adam Sarvana
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