Washington (March 12, 2025) - Senator Edward J. Markey (D-Mass.), a member of the Environment and Public Works Committee, today reintroduced the Stop Giving Big Oil Free Money Act, legislation that would close the loophole that allows deepwater oil and gas production leases issued from 1996 to 2000 to forgo paying most royalties across their production lifespans. Representative Raúl Grijalva (AZ-07) leads the legislation in the House of Representatives.
This legislation would prohibit the Department of Interior from issuing new oil or gas production leases in the Gulf of Mexico to any company that already holds one or more royalty-free leases unless the company renegotiates them to include a price threshold. This price threshold would ensure companies pay royalties if the price of oil reaches a level at or above what was originally intended to incentivize oil and gas exploration in the Deepwater Royalty Relief Act of 1995.
This loophole has allowed certain oil and gas companies—which are responsible for approximately 20 percent of the oil production in the Outer Continental Shelf—to avoid paying $18 billion through 2018, with an estimated total $29 billion in foregone revenue through 2024 and approximately $1 billion in foregone royalty revenue annually.
“This loophole is literally giving billions in free money to fossil fuel companies who drill in our nation’s oceans. If Republicans were serious about saving costs and lowering the nation’s deficit, they would close this loophole instead of attempting to strip millions of dollars from social services. It’s time to stop treating oil and gas companies like tax royalty and start treating them like the tax liability they are,” said Senator Markey.
“This legislation provides a long-overdue fix to a loophole that the oil industry has taken advantage of for decades, depriving taxpayers of billions in revenue drawn from a public resource, all while fueling climate change,” said Representative Grijalva. “Congress needs to finally close this disastrous loophole and force big oil to pay the American people what they’re owed.”
The Stop Giving Big Oil Free Money Act is cosponsored by Senators Jeff Merkley (D-Ore.), Peter Welch (D-Vt.), Bernie Sanders (I-Vt.), and Chris Van Hollen (D-Md.).
The legislation is endorsed by the Sierra Club, Earthjustice, Center for Biological Diversity, and Earthworks.
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