HELENA, MT — Today, Western Values Project Director Jayson O’Neill testified before the House Natural Resources Subcommittee on Energy and Mineral Resources’ virtual hearing: Interior’s Royalty Cuts: Thoughtful Policy or Industry Giveaway? The hearing focused on the public costs and lack of public benefits of the royalty cuts the Trump administration has offered oil and gas drillers operating on public lands during the coronavirus pandemic
Western Values Project has composed a detailed report on the Trump administration’s corrupt royalty reductions to Big Oil and the oil and gas industry.
Read the entirety of O’Neill’s remarks below and watch a full recording of the event here.
Remarks as Prepared for Delivery by Western Values Project Director Jayson O’Neill at the Subcommittee on Energy and Mineral Resources: Interior’s Royalty Cuts: Thoughtful Policy or Industry Giveaway?
Tuesday, October 6, 2020
Good afternoon Chairman Lowenthal, Ranking Member Gosar, and members of the subcommittee. I am Jayson O’Neill, I manage Accountable.US’s public lands program, the Western Values Project.
Accountable.US is a non-partisan government watchdog committed to exposing corruption and educating the public about malfeasance across all levels of government.
We have been tracking the Trump administration’s response to the pandemic and ensuing economic crisis with a focus on how extractive resource corporations that were already in dire straits before the pandemic have been buoyed with taxpayer-backed funding through various relief programs, including the decision to grant royalty rate cuts and suspend leases.
I appreciate the opportunity to discuss our findings with the subcommittee today.
In addition to this program, the bailouts awarded to the debt-laden fossil fuel industry by this administration have been striking in their scope and scale.
Through our due diligence, we have not found another sector of the U.S. economy that has received more in taxpayer-funded lifelines from this administration than the extractive and fossil fuel industries. Some even awarded stock bonuses to their wealthy CEOs and top executives after receiving relief funding.
The bailouts for this sector speak volumes about the priorities of this administration. On its watch we’ve seen the doors of well over 100,000 small businesses shutter for good while hundreds of thousands more teeter on the brink with black, minority, and low-income communities being among the most impacted by the administration’s poorly executed bailout scheme.
We sifted through publicly available information but delays in reporting made it difficult to even know the full scope of this program. We did find more than 550 instances of royalty rate reductions, often to as low as 0.5%, and at least 420 lease suspensions across, in total, some 820,000 acres of federal public lands in eight states.
In addition, Interior publicly admitted that it approved a dozen offshore royalty rate cuts as of June 10th. There is no public information on these decisions and, as of this hearing, our April 10th Freedom of Information Act request has not been fulfilled.
State and local governments share revenue to offset the impacts of development and fund essential public services in communities like our roads, local firefighters and schools, but the latest data available from the Interior Department shows a dramatic drop of some $720 million in onshore revenues and a decline of $1.7 billion in offshore revenues. In total, oil and gas revenues are down nearly $2.5 billion compared to this time last year.
The unilateral decision to slash publicly owned natural resources rates is undoubtedly impacting state and local budgets already reeling from the mismanaged response to the ongoing pandemic and economic crisis. To our knowledge, despite the Western Governors Association request, the bureau did not consult governors and no promises have been made to backfill state revenue losses.
Our research shows that the vast majority of onshore relief has been concentrated in the state of Wyoming. Officials have already been forced to make, in the governor’s words, ‘devastating cuts’ to the budget.
Trump administration officials’ close ties to oil and gas interests are undeniable. Interior Secretary David Bernhardt previously represented the Independent Petroleum Association of America (IPAA), a vocal proponent of bailouts for its members, and offshore oil interests. Another former client, Samson Resources, was awarded about one-eighth of the total lease suspensions granted.
Former acting Bureau of Land Management (BLM) Director William Pendley’s prior representation of the Petroleum Association of Wyoming is included on his extensive 17-page recusal list. Astonishingly, the association has even bragged about its influence, claiming on audio to have worked directly with the bureau to develop the template.
A state oil and gas association described the program as a ‘rubber stamp’ for applicants, and we couldn’t agree more.
Bottom line, influential oil and gas corporations secured a raft full of favors during the pandemic, often behind closed doors. Many of the same overleveraged oil and gas corporations awarded bailouts through this program have millions in unpaid tax liabilities, faced billions in environmental fines, and even double- and tripled-dipped into taxpayer-funded relief programs.
We know that many decisions made by this administration will cost taxpayers, states, local communities, and our public lands and waters for generations to come, and this program appears to be no different. Whether that is a legal, wise, and a responsible use of tax dollars in the midst of this ongoing crisis is up to Congress to decide.
Our full analysis has been made available to subcommittee members and the public. Thank you for your time.