Could Offshore Drilling Reduce the Deficit?
Sen. David Vitter (R-La.) wants the Obama administration to provide Congress with data on the federal government’s offshore drilling revenue — information that would show just how much President Obama’s anti-drilling policies are impacting the budget.
Based on recent projections from the U.S. Energy Information Administration, production in the Gulf of Mexico is expected to drop this year by 220,000 barrels per day. With oil currently at $90 a barrel and the government’s royalty rate at 18.75 percent, that equals $3.7 million in lost federal revenue each day.
Last fall Vitter asked the Interior Department to share revenue figures, but Interior Secretary Ken Salazar ignored the request. Now, Vitter is taking his case directly to the White House.
In a letter to Office of Management and Budget Director Jacob Lew, Vitter and Rep. Jeff Landry (R-La.) called attention to recent reports that credit rating agencies are keeping a close eye on the U.S. government.
They also asked Lew to respond to seven questions related to domestic energy production:
- In terms of revenue generation year over year from domestic offshore energy production — considering bonus bids and royalty revenue, as well as rents and taxes from income — what has been the net revenue each year from 2007, 2008, 2009, and 2010? And what is OMB projecting to be the revenue in 2011, 2012, 2013, 2014 and 2015?
- Is OMB projecting revenue from lease sales in 2011 and 2012, and what is the projected revenue from those lease sales? Please also provide net revenue from lease sales in 2008, 2009, and 2010.
- How does OMB account for, and what methodologies does OMB use to measure, future revenue from all sources of domestic energy? Can these numbers be broken down by the type of energy resource?
- What has been the revenue generation from renewable energy for FY 2007, 2008, 2009 and 2010, and what is OMB projecting to be the revenue in 2011, 2012, 2013, 2014 and 2015? Also, what has been the total amount of grants and subsidies paid out to renewable energy each year, and what are the projections for the noticed years?
- What companies and Venture Capital firms (including their start-up investments) are the top 10 recipients of federal grants, loans and subsidies for renewable energy, and what is the dollar figure for each firm from years 2007 through 2010?
- How does OMB account for a fundamental transition from wealth-generating energy industries to massively-subsidized energy industries in its analysis of revenue generation and our fiscal situation?
- For the American Recovery and Reinvestment Act, what was the total number of projects that received categorical exclusions or reduced environmental review under the Act? What is the percentage of total projects?
Vitter said months ago that lost revenue from offshore drilling is exacerbating the federal deficit. With a debate looming over the debt ceiling, he’s now pressing his case.
“As the United States rapidly approaches its debt ceiling, we appreciate your timely response to this letter to inform all members of Congress how the federal government is harnessing or limiting its energy sector’s ability to contribute to our overall economy,” Vitter and Landry wrote in their letter to Lew. “These figures and statistics would go a long way to helping us all make a clearer, more informed decision.”