For Immediate Release: Contact: Nicolette Nye
Monday, February 14, 2011 (202) 347-6900
Increased Offshore Activity Would Provide More Money to Government than Increased Fees, Says NOIA President Randall Luthi
WASHINGTON, DC – NOIA President Randall Luthi today issued the following statement on the Interior Department’s newly proposed fee increases on offshore oil and gas activities:
“New fees that would drive investment and jobs elsewhere at this time of tremendous uncertainty is simply bad public policy and would not produce the needed revenues for the federal treasury that simply getting folks back to work would. The best way for the federal government to raise more revenue for the treasury would simply be to restart economic activity in the gulf and get folks back to work.
“To imply that the offshore industry does not pay their fair share is simply untrue. It is worth repeating that oil and gas produced from the OCS provides significant revenue to the federal treasury in the form of bonus bids, royalties, rentals, and corporate taxes on overall earnings. The offshore industry turns over almost 20 percent of their sales directly to the federal treasury as royalty payments. They then pay corporate taxes on their overall earnings. In 2008, the offshore industry paid $8.3 billion in royalties, $237 million in rent and $9.4 billion in lease bids. In 2010, the industry paid $4.0 billion in royalties, $245 million in rent and $979 million in lease bids. The $500 million to restructure BOEMRE and to increase personnel could be more than covered by that existing revenue.
“We find it interesting that the administration requests that industry pay even more for the cost of permitting and inspections. It would be far cleaner and avoid any appearance of conflict to use the revenue from lease bids, rents or royalties as appropriated by Congress.
“It is also ironic that the administration proposes a new fee to charge companies for not producing, while the agency itself is not producing the necessary permits for the companies to actually drill. The administration could generate much, if not all the requested revenue just by conducting offshore sales. We have gone from having at least two sales a year to possibly zero in 2011.”
NOIA is the only national trade association representing all segments of the offshore industry with an interest in the exploration and production of both traditional and renewable energy resources on the nation’s outer continental shelf. The NOIA membership comprises more than 275 companies engaged in business activities ranging from producing to drilling, engineering to marine, land and air transport, warehousing and logistics to offshore construction to equipment manufacture and supply, telecommunications to finance and insurance.
The Offshore Oil & Gas Industry could help create 190,000 American
jobs and pump $45 billion into our economy in the next 2 years...
Recovery of American resources leads to the recovery of America's economy.