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Chair Grijalva Spotlights Trump Administration's "Beyond the Pale" Economic Favoritism for Fossil Fuel Companies Over Proposed Royalty Payment Delays

Tucson, Ariz. – Chair Raúl M. Grijalva today wrote to White House Office of Management and Budget Acting Director Russell Vought urging him to reject the Department of the Interior (DOI) Office of Natural Resources Revenue (ONRR) proposed rule allowing oil and gas companies to delay paying royalties for drilling on public lands. The letter is available online at https://bit.ly/3db1jGW.

The Trump administration proposal, which has not yet been finalized, would hurt multiple states whose budgets rely partially on fossil fuel royalties – and some of that damage has already been done. As Grijalva points out, the proposed final rule comes on top of dozens of already approved but unjustified site-specific royalty cuts, and is not connected with economic support for more sustainable industries: “While the administration is doing little to support clean energy companies struggling through the pandemic, DOI is already approving dozens, if not hundreds, of requests by oil and gas companies to reduce the royalty rates they must pay.”

The Bureau of Land Management (BLM) has refused to answer the Committee’s questions about those site-specific royalty cuts at the staff level, Grijalva writes. On May 20, he requested a Government Accountability Office review of BLM’s process for reviewing royalty cut applications.

The larger issue, he writes to Vought, is that fossil fuel companies’ current financial struggles are fundamental to their business model, and reducing royalty payments will not solve them:

Companies experiencing cash flow problems would certainly benefit from a lengthy delay in making royalty payments, but the financial issues facing fossil fuel companies are endemic to the industry and largely not due to the current pandemic. It is unclear why the public should accept the industry’s demands for special treatment at face value, or why this administration thinks now is a reasonable time to institute a blanket delay in payments.

Grijalva writes that the royalty delay is especially egregious because of the Trump administration’s simultaneous refusal to slow or halt other rulemaking proposals during the pandemic. Pushing through environmental deregulation and economic favors to the fossil fuel industry while it is difficult for the public to review or comment is “irresponsible and intentionally dismissive of the public interest,” he writes.

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