The estimates for the cost of royalty relief are largely due to a 1995 law.
A recent TV ad attacks U.S. Sen. Elizabeth Dole for voting to extend the royalty relief program for deepwater drilling on federal lands in the Gulf of Mexico.
The ad cites a New York Times editorial that pegs the cost of royalty relief at $7 billion.
But the bulk of that cost estimate comes from royalty waivers granted under the Deep Water Royalty Relief Act of 1995 and under the Clinton administration in 1998 and 1999 — long before Dole was elected.
A separate New York Times article makes clear that $7 billion in lost revenue (on $65 billion worth of oil) came from the earlier royalty relief efforts:
The Clinton administration waived those price limitations for leases awarded in 1998 and 1999, however, and the Interior Department estimates that those leases will account for most of the $65 billion in royalty-free oil and gas pumped over the next five years.
To be sure, the Energy Policy Act of 2005 (which Dole supported) extended the royalty relief program, costing the federal government revenue, but not the $7 billion figure cited in the ad.
Dome is still searching for a cost estimate of the 2005 bill.
Blog RSS feed
