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.
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“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 CrenshawDaniel CrenshawLawmakers ask Trump administration to help Gulf oil and gas producers Annual Congressional Dinner pushed back to June amid coronavirus concerns Pete Davidson noticeably absent from ‘SNL’ after complaints about show MORE (R-Texas), Randy K. Weber (R-Texas), Clay HigginsGlen (Clay) Clay HigginsLawmakers ask Trump administration to help Gulf oil and gas producers Louisiana church defies coronavirus recommendations to hold service for 300 The five dumbest things said about impeachment so far MORE (R-La.), Mike JohnsonJames (Mike) Michael JohnsonLawmakers ask Trump administration to help Gulf oil and gas producers Roberts wrestles with abortion law in high-stakes Louisiana case White House, Republicans blast Pelosi for ripping up copy of Trump speech MORE (R-La.), Bill FloresWilliam (Bill) Hose FloresLawmakers ask Trump administration to help Gulf oil and gas producers Texas kicks off critical battle for House control Democrats push to end confidentiality for oil companies that don’t add ethanol MORE (R-Texas), Chip RoyCharles (Chip) Eugene RoyLawmakers ask Trump administration to help Gulf oil and gas producers House Republicans oppose remote voting during crisis Top GOP post on Oversight draws stiff competition MORE (R-Texas), Bruce WestermanBruce Eugene WestermanLawmakers ask Trump administration to help Gulf oil and gas producers Increased competition, lower costs: A prescription to address medications PRICED out of reach Overnight Energy: New Interior rule would limit scientific studies agency can consider | Panel battles over tree-planting bill | Trump to resume coal leases on public lands MORE (R-Ark.), Ralph Abraham (R-La.), Kevin HernKevin HernConservatives call on Pelosi to cancel August recess Here are the lawmakers who will forfeit their salaries during the shutdown MORE (R-Okla.), Jeff DuncanJeffrey (Jeff) Darren DuncanLawmakers ask Trump administration to help Gulf oil and gas producers House Republicans add Jordan to Intel panel for impeachment probe House votes to block drilling in Arctic refuge MORE (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.
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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 SandersBernie SandersBloomberg spent over 0M on presidential campaign Congressional Hispanic Caucus campaign arm endorses Biden Hillicon Valley: Senators press Amazon over workplace safety amid outbreak | Lyft expands to deliveries | Dems seek election security funds in stimulus package MORE (I-Vt.), Jeff MerkleyJeffrey (Jeff) Alan MerkleyLawmakers ask Trump administration to help Gulf oil and gas producers Overnight Energy: Trump prepares to buy 30M barrels of oil amid industry slump | Coronavirus offers reprieve from air pollution | Energy regulators split on delaying actions amid outbreak Trump administration prepares to buy 30M barrels of oil amid industry slump MORE (D-Ore.) and Ed MarkeyEdward (Ed) John MarkeyLawmakers ask Trump administration to help Gulf oil and gas producers Overnight Energy: Trump prepares to buy 30M barrels of oil amid industry slump | Coronavirus offers reprieve from air pollution | Energy regulators split on delaying actions amid outbreak Trump administration prepares to buy 30M barrels of oil amid industry slump MORE (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 TrumpDonald John TrumpSenate negotiators near agreement on keeping rebates in coronavirus stimulus package Intel reports going back to January warned of coronavirus threat Congressional Hispanic Caucus campaign arm endorses Biden MORE 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.