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Empty Tank: Expanding Drilling Without Holding Big Oil Accountable on Royalties Is Bad Deal for Taxpayers

Statement of Tyson Slocum, Director, Public Citizen’s Energy Program

WASHINGTON - The Obama administration should not lift the moratorium on offshore
drilling that has been in place since 1982. Offshore drilling does not
solve our nation’s energy needs and is a dangerous distraction from real

Making a bad situation worse, President Barack Obama’s plan to pursue
a broad expansion of offshore drilling while failing to hold Big Oil
accountable on royalty reform will leave taxpayers shortchanged by
billions of dollars.
This would have been bad energy policy in the 1980s; it is intolerable
in 2010.

In his first budget, Obama proposed a new excise tax on offshore oil
and gas drilling that would have raised $6 billion over 10 years, but
Congress never approved it. Obama dropped the idea from his 2011 budget,
unveiled in February.
The oil industry has long avoided royalty payments to the U.S. Treasury
for pumping oil, a bureaucratic oversight that will save Big Oil from
paying billions of dollars it owes taxpayers in foregone revenue over
the life of the leases.
Allowing new oil and gas drilling to proceed without holding current
leases accountable constitutes a massive taxpayer rip-off.
Environmentally, Obama’s proposal fails to address the country’s energy
needs and realities. Increasing oil and gas drilling poses risks to
coastal communities and ecosystems while encouraging more fossil fuel
burning – undercutting the administration’s goal of addressing climate
And opening these areas to drilling won’t save Americans much at the
pump: According to the Department of Energy, keeping the offshore
drilling moratorium in place will result in gasoline prices being only 3
cents higher than allowing drilling and its attendant dangers to the
environment. While consumers still cringe remembering gas prices
exceeding $4 a gallon, the three cents saved if drilling is permitted
would hardly justify the damage to our country’s coasts and the
pollution accompanying drilling.
This proposal is wrong on many levels. The administration should rethink


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Public Citizen is a national, nonprofit consumer advocacy organization founded in 1971 to represent consumer interests in Congress, the executive branch and the courts.

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