Suspending Oil & Gas Royalty Payments is Not a Legitimate COVID-19 Response

StatementSuspending Oil & Gas Royalty Payments is Not a Legitimate COVID-19 Response

Energy & Natural Resources,  | Analysis
Apr 16, 2020  | 3 min read | Print Article

Conservatives for Responsible Stewardship (CRS) and Taxpayers for Common Sense (TCS) are calling on the Trump Administration to reject appeals by the oil and gas industry and some in Congress for royalty relief. Even though the president, wanting to avoid the appearance of a bailout, rejected a blanket waiver of royalties, the Department of the Interior is poised to provide that royalty relief—more quietly—under existing authority.

As our nation racks up massive debt in response to the COVID-19 pandemic, it makes no sense to also burden taxpayers with a bailout to the oil and gas industry and give away our nation’s valuable natural resources for free—especially when the market is already flooded with the biggest oil glut in history.

The federal royalty rate for oil and gas is already much lower than what’s charged on most state and private lands. In fact, that rate has not changed in more than a century and is denying the American taxpayer a fair return on production.

Waiving royalty payments now is not a legitimate COVID-19 response. It would worsen the oil glut and saddle taxpayers with a huge and unnecessary corporate bailout.

“Sadly, this administration is stuck on big oil giveaways instead of adopting real solutions to the nation’s unprecedented challenges,” said TCS president, Steve Ellis.

“So called royalty relief will bring real pain to U.S. taxpayers. Charging producers less for taxpayer-owned oil and gas will not alter market headwinds facing the industry but it will costing taxpayers billions of dollars in revenue,” Ellis added.

Why on earth would the administration incentivize oil production, which is the effect of waiving royalties, during an oil glut at the same time it is begging other countries to cut production? It defies all logic and is the exact opposite of what is needed,” said CRS president David Jenkins.

With the pandemic crashing global demand for oil and creating so much uncertainty about the future, conserving our domestic reserves is the prudent choice, not depleting them,” Jenkins added.


Taxpayers for Common Sense (TCS) is a nonpartisan budget watchdog that has served as an independent voice for the American taxpayer since 1995. TCS works to ensure that taxpayer dollars are spent responsibly and that government operates within its means.

Conservatives for Responsible Stewardship (CRS) is a grassroots organization, with 20,000 members nationwide, dedicated to the original conservative philosophy that compels us to be good stewards of our natural heritage.

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