Dear Senator,
Taxpayers for Common Sense Action (TCS Action), a non-partisan budget watchdog organization, urges you to oppose S. 3711, the Gulf of Mexico Energy Security Act of 2006. TCS Action is alarmed by provisions in the bill which alter existing federal-state revenue sharing provisions for royalty payments. Royalty payments represent the second largest source of federal revenues after federal taxes. These provisions will siphon off billions of dollars that would have gone to the Treasury, further straining the nation’s fiscal health.
TCS Action is not opposed to off-shore oil and gas exploration and development. However, federal waters are owned by all U.S. taxpayers and the public has a right to receive a fair return for the resources they own. Oil and gas resources located within federal waters should not be converted into cash cows benefiting only four Gulf coast states. Gulf coast states currently receive significant royalty payments from waters within 6 miles of their coastline. In fact, under current policy, Louisiana received nearly a billion in revenue from oil and gas royalty payments from 1986-2003.
This legislation would dramatically deplete federal revenue generated by leases in lease sale 181 and 181 south and all leases that are issued after enactment of the bill. Currently royalties from these waters would return entirely to the federal government. Moreover, lease sale 181 would likely be opened in the next several years regardless of this legislation. Despite attempts to disguise this legislation as a revenue generator, opening these tracts of off-shore waters under the proposed royalty-sharing provisions with the four Gulf coast states would have detrimental long-term effects on the federal budget. The Administration has also raised similar concerns to changes in revenue-sharing on current leases and their cost to federal taxpayers.
With the federal debt mounting and oil and gas prices nearing record highs, reducing the federal earnings on our natural resource royalties does not make fiscal sense. We urge you to vote against the S. 3711 and return some fiscal sanity to our nation’s energy policy. If you have any questions, please contact Autumn Hanna at (202) 546- 8500.
Sincerely,
Steve Ellis
Vice President of Programs
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