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Letter to Secretary Salazar and Director Bromwich

Letter

By:
Date:
Location: Washington, DC

U.S. Sen. David Vitter today sent a letter to the Obama administration highlighting the total drop-off in federal revenue coming in due to the administration's energy policy on conducting offshore drilling lease sales. U.S. Sens. Kay Bailey Hutchison (R-Texas), Richard Shelby (R-Ala.) and John Cornyn (R-Texas) signed on to Vitter's letter.

"Under the Obama administration's management, revenue from our offshore lease sale program has gone from $10 billion to nothing in just three years," Vitter said. "Revenue cannot be generated from lease sales that do not happen, and jobs cannot be created on leases that private industry cannot acquire. We're in a severe fiscal crisis and we're facing significant economic challenges related to job creation, yet the administration continues to neglect our offshore resources."

Vitter's letter to Interior Secretary Ken Salazar and Bureau of Ocean Energy Management Regulation and Enforcement Director Michael Bromwich shows that due to the administration's decision to not hold offshore lease sales, there has been zero dollars of federal revenue in 2011. This is in contrast to 2008, when $10 billion was earned from lease sales alone.

A copy of the letter is below.

September 28, 2011

The Honorable Ken Salazar
Secretary, Department of Interior
1849 C St., NW
Washington, DC 20240

Director Michael Bromwich
Director, Bureau of Ocean Energy Management Regulation and Enforcement
1849 C St., NW
Washington, DC 20240

Dear Secretary Salazar and Director Bromwich:

We would like to bring to your attention the steep decrease in revenue from bonus bids that result from zero Outer Continental Shelf lease sales in FY2011. In FY2008, revenue from bonus bids on offshore leases was approximately $10 billion. For FY2011, the amount is $0.

Our country faces a severe fiscal crisis as well as significant economic challenges related to private industry job creation. Revenue cannot be generated from lease sales that do not occur, and jobs cannot be created on leases that private industry cannot acquire.

Revenue from the offshore lease sale program has dropped from $10 billion to nothing in just three years. As a result, the revenue that Gulf States can anticipate from their share of bonus bids under GOMESA is $0 for FY2011. This is clear evidence that the financial scope of these decisions reach beyond the Federal Treasury.

The 100 percent falloff in bonus bid revenue from 2008 to 2011 will also have long-term economic impacts that include lost jobs, lost royalties, and lost rental fees--all of which have a negative impact on our employment and fiscal challenges. If companies continue to face challenges in obtaining permits, future lease sales revenue will be negatively impacted by that uncertainty. No company wants to own a lease if there is not a reasonable expectation that its exploration plan or permits will be approved.

In order to better understand the direction the agency is headed with federal offshore leasing we ask that you provide the status of all anticipated lease sales for FY2012, as well as current planning areas under review for inclusion in the next 5-year plan.

Sincerely,

David Vitter Kay Bailey Hutchison
United States Senate United States Senate

Richard Shelby John Cornyn
United States Senate United States Senate


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