Dear Senator:

We are writing to urge you to vote for the Wyden-Sununu Amendment to the energy bill currently being debated by the Senate. The Amendment, which is supported by the Bush Administration, will eliminate offshore drilling incentives, which are simply no longer needed given the high price of oil and gas.

Specifically, this Amendment, will repeal Sections 344 and 345 of the Energy Policy Act of 2005. The Department of Interior (DOI) has urged that the language of the Wyden-Sununu Amendment be adopted by July 1, 2007, in order to ensure its implementation for lease sales in the Gulf of Mexico that are slated for later this year. According to DOI Assistant Secretary C. Stephen Allred: “Repeal of Sections 344 and 345 of the Energy Policy Act would eliminate incentives and royalty relief that we believe are unwarranted in today’s price environment.”

Since the original passage of these provisions in 2005, two new studies have pointed to the need for a Congressional decision to repeal Sections 344 and 345. The first, completed by the Department of Interior, determined that royalty relief like that provided under Sections 344 and 345 provide negligible incentives for oil and gas companies to drill in the Gulf of Mexico.1

The second, completed by the Government Accountability Office found that the U.S. government ranks among the lowest of the world’s nations in terms of revenues it receives from companies extracting oil and gas from public lands. According to the report, studies have found that numerous foreign governments including Angola, Australia, Norway, the U.K, Egypt, and Trinidad and Tobago collect more from oil companies than the U.S. does. In addition, even some state governments collect more in revenues from oil and gas production than the U.S. government does, including Colorado, Wyoming, Texas, Oklahoma, Louisiana and California.2

The American taxpayers deserve to receive fair market value for their oil and gas reserves, particularly at such a time of high energy prices. We must eliminate needless royalty relief which does nothing more than further pad the pockets of Big Oil. We urge you to vote “yes” for the Wyden-Sununu Amendment. For more information, please contact Autumn Hanna of Taxpayers for Common Sense at 202-546-8500 or Beth Daley of Project On Government Oversight at 202-347-1122.

Sincerely,

Ryan Alexander, President
Taxpayers for Common Sense

Danielle Brian, Executive Director
Project On Government Oversight