Markey and Van Hollen: Drilling for Deficit Dollars from Oil Companies is Part of Fiscal Responsibility

New Legislation Would Recover up to $54 Billion in Lost Royalties from Faulty Drilling Leases

As President Barack Obama steps up measures to decrease the U.S. budget deficit, Reps. Edward J. Markey (D-Mass.) and Chris Van Hollen (D-Md.) today introduced legislation that could recover up to $54 billion from oil companies that have been drilling for free on public lands due to faulty agreements made by the government.

"Instead of oil companies drilling for free on public land, we should be drilling for deficit dollars by fixing this taxpayer rip-off," said Rep. Markey, chair of the Select Committee on Energy Independence and Global Warming. "This legislation would protect American taxpayers and reduce our budget deficit by up to $54 billion."

"As Congress works with President Obama to put the nation's fiscal house in order, it is vitally important that we pay as much attention to closing costly, special interest loopholes as we do to scrutinizing wasteful spending," said Congressman Van Hollen. "The Royalty Relief for American Consumers Act does just that by ensuring taxpayers get a fair return when private corporations profit from public resources. It's common sense reform and should be enacted promptly."

The legislation, the Royalty Relief for American Consumers Act of 2010, would correct errors in the law that allowed oil companies holding drilling rights in the Gulf of Mexico to avoid paying royalties to the federal government from leases granted by the Interior Department between 1996 and 2000. By recovering lost royalties, the federal government could take in up to $54 billion, according to a study by the Government Accountability Office.

The legislation would provide a strong incentive for companies holding faulty leases to renegotiate by preventing them from signing new lease agreements unless they renegotiate the old, free-drilling proposals. The Congressional Research Service has concluded that the legislation would protect the federal government from losses relating to royalty-free drilling. Similar versions of the legislation authored by Rep. Markey have repeatedly passed the House of Representatives in 2006, 2007 and 2008.

"Half of our trade deficit in 2008 was from buying foreign oil, and $54 billion of our national budget deficit could be solved by keeping oil companies honest," said Rep. Markey. "The minerals below our public lands belong to the American people and no company should be allowed to exploit them for free."

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