Americans are paying record high prices at the pump and the price of oil continues to skyrocket. But thanks to energy policies put forward by President Bush and the previous Republican-led Congresses, oil companies are making tens of billions of dollars in record profits. According to news reports, a new draft report from the Government Accountability Office estimates oil companies will avoid paying roughly $53 billion in royalty payments to taxpayers for deep water drilling contracts on public lands in the Gulf of Mexico. These contracts were awarded between 1996 and 2000 after the Republican-led Congress passed the “Deep Water Royalty Relief Act” in 1995.
- $17.82: Price of barrel of oil in 1995 [EIA, Historical Tables, 11/8/95]
- $124.33: Price of barrel of oil yesterday [6/3/08]
- 598%: Percent increase from 1995 to today
- $1.07: Gallon of regular unleaded gasoline in 1995 [EIA, Historical Tables, 11/8/95]
- $3.98: Gallon of regular unleaded gasoline today [AAA, 6/4/08]
- 272%: Percent increase from 1995 to today
- $123.3 billion: Oil Company profits, 2007
- $36.9 billion: Oil Company profits - 1st Quarter this year
For years, Democrats in Congress have fought to roll back some of the royalty relief given to Big Oil companies, while Republicans have blocked these efforts. In the first 100 hours of the New Direction Congress, the House passed H.R. 6 to require oil companies, which have not paid royalties for deepwater drilling contracts in the Gulf region as a result of the 1998 and 1999 leases, to pay their fair share in order to be eligible for new federal leases for drilling. That provision was also included in the House version of the Energy Independence bill but did not make it into the final House-Senate passed package due to Republican opposition.
This “holiday” from paying royalties was supposed to end when the price of oil reached about $40 a barrel. Instead, the Bush Administration has continued to provide royalty-free oil from public lands, as the price of oil has now risen to over three times the intended trigger.
The New Direction Congress is committed to bringing real relief to hardworking Americans struggling with high gas prices and putting the needs of families before the interests of the oil companies. Below is a list of action the Democratic-led Congress has taken so far:
PASSED THIS SPRING
Strategic Petroleum Reserve Fill Suspension and Consumer Protection Act - Congress has enacted legislation to suspend the fill of the Strategic Petroleum Reserve, starting June 30th and through the end of the year, as long as the price of crude oil remains above $75 per barrel. This is a critical first step for hardworking families, businesses and the economy, which in the past has brought gas prices down. The President, who was previously opposed, suspended shipments and signed the bill because of overwhelming bipartisan support in Congress.
Renewable Energy and Job Creation Act -This legislation will extend and expand tax incentives for renewable energy, retain and create hundreds of thousands of green jobs, spur American innovation and business investment, and cut taxes for millions of Americans. These provisions are critical to creating and preserving hundreds of thousands of good-paying green collar American jobs. A recent study showed that allowing the renewable energy incentives to expire would lead to about 116,000 jobs being lost in the wind and solar industries alone through the end of 2009.
The OPEC and Big Oil companies accountability bill - This bill will combat record gas prices by authorizing lawsuits against oil cartel members for oil price fixing, and creating an Antitrust Task Force to crack down on oil companies engaged in anticompetitive behavior or market manipulation. President Bush has threatened to veto this bill.
OTHER RECENT ACTION
- Energy Independence and Security Act in 2007 - Historic energy legislation with provisions to combat oil market manipulation, increase fuel efficiency to 35 miles per gallon in 2020 - the first congressional increase in more than three decades, and promote the use of more affordable American biofuels. The initial version of this bill included a provision to rollback the royalty relief given to Big Oil companies for deepwater drilling contracts in the Gulf region. Unfortunately, this provision did not make it into the final House-Senate passed package. Signed into law on December 19, 2007. Under new requirements in the Energy Independence Law and pressure from Congress, the FTC announced in May it would begin the rulemaking process to implement the market manipulation provision.
- Reduces our dependence on foreign oil - cutting our consumption of oil by 2.9 million barrels per year in 2030 - more than what we currently import from all Persian Gulf countries combined.
- Lowers energy costs for consumers with oil prices projected to decline from more than $100 per barrel to $57 per barrel in 2016 (in 2006 dollars) in part due to the new energy law.
- The new fuel standard for cars and truck will save American families $700 to $1,000 per year at the pump.
- Reduces global warming emissions by 2030 by up to 24 percent of what the U.S needs to do to help save the planet.
- Building, appliance, and lighting efficiency standards will save consumers $400 billion through 2030.
- Renewable Energy and Energy Conservation Tax Act - This legislation would end unnecessary subsidies to Big Oil companies, invest in clean, renewable energy and energy efficiency, and help reduce global warming. The bill includes provisions that will generate hundreds of thousands of green jobs including an estimated 70,000 solar energy jobs, more than 20,000 biodiesel jobs, and protect an additional 75,000 wind industry jobs. President Bush has threatened to veto this bill.
- Energy Price Gouging Prevention Act - This bill will provide immediate relief to consumers by giving the Federal Trade Commission (FTC) the authority to investigate and punish those who artificially inflate the price of energy. It will ensure the federal government has the tools it needs to adequately respond to energy emergencies and prohibit price gouging - with a priority on refineries and big oil companies. President Bush has threatened to veto this bill.
- No Oil Producing and Exporting Cartels (NOPEC) Act - Legislation to enable the Department of Justice to take legal action against foreign nations for participating in oil cartels that drive up oil prices globally and in the United States. President Bush has threatened to veto this bill.
- Energy Market Manipulation Prevention - The new Farm Bill increases Commodity Futures Trading Commission oversight authority to detect and prevent manipulation of energy prices. President Bush vetoed this bill, but the Congress has overridden that veto.