Dems press Interior chief over expected changes to offshore drilling royalty rates

Two Democratic lawmakers are raising concerns over the Interior Department’s expected decision Wednesday to lower royalty rates on oil drilled offshore.

Sen. Maria Cantwell (Wash.) and Rep. Raúl Grijalva (Ariz.), the top Democrats on the Senate and House natural resources committees, respectively, sent a joint letter Tuesday night to Interior Secretary Ryan Zinke pressing him for details on the department’s decision-making process.

Interior’s Royalty Policy Committee (RPC) is expected to vote Wednesday to lower royalty rates from 18.75 percent to 12.5 percent, based on recommendations made by another panel in early February. The lowest rate government is allowed to charge for such leases is 12.5 percent.

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In their letter, the Democratic lawmakers warn that dropping the rates to such a level will have negative effects on the economy. They wrote that the draft recommendations “seem entirely divorced from the goal of ensuring free market value for publicly owned resources.”

The lawmakers said the rate drop would amount to a “giveaway,” likening it to a “fire sale.”

“This proposal would amount to a giveaway to some of the most profitable companies in the world and rob taxpayers of potentially billions of dollars of revenues over the life of the leases,” read the letter.

“Selling off public land and resources as quickly as possible at fire-sale prices is not good stewardship; it’s a shell game where the oil, gas, and coal industries win and the American taxpayers lose.”

In their letter, Cantwell and Grijalva ask Zinke to open up the RPC meetings to the public and allow for public comment. They also ask Zinke to provide more transparency by providing online access to materials and data presented at the meetings.

“At this time, it is the lawmakers’ understanding that the first day of the Houston meeting is closed, with subgroup meetings on the second day open for public viewing and a partial day of questions and answers,” the letter said of the RPC meeting this week. “At minimum the public should have access to the meeting in whole, with sufficient time to address questions and further input.”

The meeting comes at a time where Zinke has been pushing to expand offshore drilling, announcing in January that the department was considering opening up more federal waters to drilling off the coasts. His plans, however, have met pushback, including from Republican governors and senators against opening up drilling near their state’s shores.