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Mr. HOLT. Mr. Chair, much of this bill deals with new giveaways to Big Oil. The issue that I'm raising right now is to deal with a continuing longstanding giveaway.
The Big Five oil companies made a record profit of $137 billion last year; and in the first quarter of this year, they continued to capitalize on the pain that Americans are feeling at the pump, raking in $368 million in profits per day.
Oil companies are not paying any royalties to the American people on oil produced in the Gulf of Mexico from leases issued between 1996 and 2000. Zero. No royalties. They're pumping this oil for free without paying the taxpayers a single dime. Now they got this giveaway because of an incentive back in 1995 to companies to drill for oil when oil was selling for less than $20 a barrel.
In recent years, the amount of free oil these companies have been pumping has gone through the roof as more of these faulty leases have gone into production. In fact, right now, more than 25 percent of all oil produced offshore on Federal lands is produced royalty-free, no payments to the taxpayers for the use of their land. These oil companies are getting a complete windfall on 25 percent of all the oil they produce offshore in the United States. They do not pay the American people one penny for this right, regardless of the fact that now oil is selling at about $80 a barrel.
The number one entitlement program that should be on the chopping block for Congress shouldn't be Medicare. It shouldn't be Social Security. It shouldn't be health care for children. It should be the free drilling entitlement that oil companies are enjoying on public lands.
According to the Interior Department, American taxpayers stand to lose about $9.5 billion over the next 10 years from this giveaway alone, this giveaway to Big Oil. The Government Accountability Office projects that all of this free drilling will cost us as much as $53 billion over the life of these leases. My amendment would recover those revenues because they belong to the American people. These oil giants already receive $4 billion a year in tax subsidies. They don't need an additional $1 billion or more per year in free drilling.
The amendment would offer oil companies a choice: they can choose either to continue to produce royalty-free oil in the gulf but not be able to receive new leases, or they can agree to pay their fair share and be able to bid on new leases under this bill. And this amendment would not force companies to give up their leases. It would just simply impose a condition on future leases.
The Congressional Research Service has agreed repeatedly that this amendment would not be an abrogation of contracts or constitute a takings, as some of my colleagues have suggested it might. As CRS has stated:
As a general matter, the United States has broad discretion in setting the qualifications of those with whom it contracts.
These oil companies are the most profitable companies in the history of the world; yet they receive, as I said--and it's worth repeating--$4 billion a year in taxpayer subsidies. They don't need to be drilling for free on public lands as well.
If my colleagues on the other side of the aisle are serious about paying down the deficit and realistically financing necessary investments in this Nation, then there is no excuse for not supporting this amendment to recover roughly $1 billion a year that is rightfully owed to the American people.
It's time to end this taxpayer rip-off, this giveaway to Big Oil.
I reserve the balance of my time.
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Mr. HOLT. I thank the Chair.
Mr. Chair, this amendment breaks no contracts. We are here because the Congress, well over a decade ago when prices were less than $20 a barrel, decided this giveaway made sense. If it made sense then, it certainly does not make sense now.
Oil companies drill one-quarter of all offshore oil for free. If the other side is serious about addressing the deficit, this is revenue that should be received.
Please support this amendment.
I yield back the balance of my time.
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