WASHINGTON – Texas congressmen are asking the Interior Secretary to reduce royalty collections on oil and natural gas produced in the Gulf of Mexico.
The combined effect of the coronavirus pandemic and the price war led by Saudi Arabia and Russia has crashed oil prices, leaving many U.S. producers vulnerable, Rep. Dan Crenshaw, R-Kingswood, said in a letter to Interior Secretary David Bernhardt.
“We do not believe the American energy sector needs a bailout from Congress. However the Department of 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,” he wrote. “We urge you to consider the viability of a temporary reduction in royalties.”
Last year the U.S. government collected $3.4 billion in royalty payments, sending almost $215 million to Gulf states like Texas for coastal restoration projects.
While that is a small fraction of the revenues generated by offshore production in the Gulf of Mexico, members of Texas’s congressional delegation are suggesting that cutting royalties would help avoid layoffs along the Gulf.
“As a part of a strong and diverse offshore energy system, thousands upon thousands of U.S. companies write paychecks to hundreds of thousands U.S. workers, supporting communities throughout the Gulf Coast and in many other areas of the country,” Crenshaw said.
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