Klobuchar: Giveaway to Gas Co’s Has $80 Billion Price Tag

01/17/2007

Klobuchar Joins Committee to Announce Push to Eliminate Royalty Relief for Oil and Gas Companies


U.S. Senator Amy Klobuchar today called for ending a giveaway to oil and gas companies that has allowed them to rake in tens of billions of dollars on top of their record profits. Klobuchar joined her fellow members of the Joint Economic Committee in releasing a report that shows that oil and gas royalty relief has cost taxpayers as much as $80 billion but does nothing to reduce U.S. dependence on foreign oil, to create net new jobs, or to lower energy prices for consumers. The report also shows that investing in renewable energy sources would yield a much greater return on investment.

“Minnesotans understand that things like royalty relief are nothing more than straight giveaways. Royalty relief doesn’t increase energy independence in any meaningful way,” said Klobuchar. “It doesn’t reduce prices in any meaningful way. And it takes money – as much as $80 billion – away from our efforts to develop renewable fuels and a renewable energy economy.”

The federal government collects royalties from the sale of oil and gas produced by private companies on federal lands. In 1995, to encourage more domestic production of energy when the price of oil dropped, Congress gave the companies “royalty relief,” exempting them from paying certain royalties. Since then, oil companies have claimed record profits, yet they’ve received tens of billions of dollars of royalty giveaways, many of them unintended.

The Joint Economic Committee, established under the Employment Act of 1946, was created by Congress to review economic conditions and to analyze the effectiveness of economic policy.

To read the full report: CLICK HERE.