Last-Minute Congressional Gift to Big Oil: Fired and Retired Members’ Votes Determined the Outcome

*Updated Dec. 12, 2006

Dec. 11, 2006

Last-Minute Congressional Gift to Big Oil: Fired and Retired Members’ Votes Determined the Outcome

WASHINGTON, D.C. – A major energy policy decision made by a two-vote margin by lame-duck lawmakers in the final hours of the legislative session was a last gift to big-money campaign contributors and should be reversed by the new Congress, Public Citizen said today.

During Friday’s debate on H.R. 6111, the massive tax-trade-health care bill, the lame-duck House of Representatives voted 207-205 against recovering at least $10 billion in lost royalty payments to the U.S. Treasury due to a loophole involving Gulf of Mexico oil and natural gas leases.

Recently fired or retired lawmakers cast the deciding votes that defeated the recovery proposal, which was contained in an amendment to H.R. 6111. Seventeen lame-duck lawmakers voted to continue allowing oil companies to enjoy their multibillion-dollar royalty break, which will accumulate over the life of the leases.

“It is unconscionable that at a time when the largest five oil companies posted profits of $93 billion in just the first nine months of 2006, Congress, with the help of recently fired lawmakers, voted to protect oil companies at the expense of the American taxpayer,” said Tyson Slocum, director of Public Citizen’s Energy Program. “We urge the new Congress to fulfill its pledge to reform the oil royalty program and demand that oil companies pay their fair share.”

There were 47 lame-duck House members in the congressional session that ended this weekend. Eight did not vote on the oil royalty measure. Of the remaining lawmakers, 28 voted in favor of protecting the oil company interests (all Republicans) and only 11 (6 Republicans and 5 Democrats) voted to hold oil companies accountable.

Meanwhile, only $37 million of the $3.9 billion in energy tax breaks in H.R. 6111 – or less than one percent – are available to individuals interested in promoting energy efficiency to help break America’s oil addiction. The rest of the tax breaks are allotted to corporations, including $350 million in new tax breaks to help oil companies clean up polluted sites and $176 million for companies producing oil and natural gas from marginal wells.

“Once again, the $65 million in campaign contributions from the oil industry since 2001, with 81 percent going to Republicans, dominates the agenda on Capitol Hill,” said Slocum. “Rather than roll back the billions of dollars in oil company tax breaks enacted in the Energy Policy Act of 2005 or fixing the $10 billion royalty loophole, Congress instead awarded $525 million in new giveaways to the oil industry.”

The recovery amendment was an attempt to correct a royalty loophole that has existed since late in the Clinton administration, when leases were offered royalty-free with no price ceiling. This enabled oil companies to extract oil from federal land without paying taxpayers for its use, even as prices have shot up by $45 to more than $60 per barrel. The failed amendment also would have required oil companies receiving the billion-dollar break to renegotiate their sweetheart deals to win new leases.

H.R. 6111 also opens 8.3 million acres of the Gulf of Mexico to oil and natural gas drilling, which won’t do anything to break America’s addiction to oil because it does nothing to curb oil consumption.

“America is already the third biggest oil producer in the world,” said Slocum. “The problem isn’t that we produce too little oil – it’s that we consume too much, using one of every four barrels of oil in the world each day. The smartest way to break our reliance on oil is to increase fuel economy standards and invest in energy efficiency measures and mass transit. Left to their own devices, oil companies will just keep drilling in environmentally sensitive federal land and offshore areas, and fueling their corporate wealth in the process.”

The Senate originally passed legislation authorizing expanded offshore drilling on   Aug. 1.

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