April 3,  2020

Washington, DC — Representative John Curtis (R-UT) led a letter to the US Department of the Interior Secretary David Bernhardt asking that he temporarily suspend, defer, or reduce royalty rates to help essential industries survive the economic impact of the COVID-19 pandemic.

Royalty payments are paid by certain industries for the development of America’s energy and natural resources on the Outer Continental Shelf and onshore Federal lands. The letter also makes explicit that relief should only come from the portion paid to the federal government, ensuring this action would not impact state revenues.

The Congressman is joined by House Republican Leader Kevin McCarthy (R-CA), Rob Bishop (R-UT), and 27 other members of Congress.

“There are widespread efforts to ensure our economy continues to function amidst this crisis through industry appropriate financial resources and regulatory pathways. We hope the Department of the Interior will strongly consider similar efforts to ensure industries that operate within the federal estate have the appropriate resources and certainty needed to survive the pandemic and continue to provide the American people with the resources they utilize in their daily lives. With this in mind, we encourage you to suspend, defer, or reduce, the federal royalty payments for oil, gas, coal, soda ash, and other minerals to the U.S. Treasury during these uncertain economic times, caused by the COVID-19 outbreak.”

The full text of the letter is below:

The Honorable David Bernhardt
Secretary 
Department of the Interior
1849 C St., NW
Washington, D.C. 20240 

Dear Secretary Bernhardt, 

Thank you for your leadership during this difficult time. As we all consider efforts to maintain the economic drivers of our economy, we ask your support in providing relief within your existing authority, to essential industries impacted as a result of the COVID-19 pandemic, until our nation’s economy gets back on track.

There are widespread efforts to ensure our economy continues to function amidst this crisis through industry appropriate financial resources and regulatory pathways. We hope the Department of the Interior will strongly consider similar efforts to ensure industries that operate within the federal estate have the appropriate resources and certainty needed to survive the pandemic and continue to provide the American people with the resources they utilize in their daily lives. With this in mind, we encourage you to suspend, defer, or reduce, the federal royalty payments for oil, gas, coal, soda ash, and other minerals to the U.S. Treasury during these uncertain economic times, caused by the COVID-19 outbreak.  Ideally, any reduction would allow producers working on the federal estate to forgo the federal portion of required royalty payments while preserving the portion that is returned to the states so as not to negatively impact state revenues.

As Secretary, notwithstanding section 102(a)(9) of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1701(a)(9)), section 39 of the Mineral Leasing Act (30 U.S.C. 209) specifically allows you to “waive, suspend or reduce” royalty payments. While economic conditions will improve over time, providing this necessary action now will ensure America continues its international energy dominance. Additionally, this could help save essential industry jobs, many of which are located in heavily impacted rural communities. 

These essential industries are seeking to continue production rather than a bailout and should be given due recognition as such. There is no playbook for the situation we find ourselves in and we must utilize every existing authority to enable them to withstand the economic impacts of this pandemic, which is no fault of their own. 

Given these considerations, we urge you to provide necessary relief during this national emergency in the form of a suspension, or reduction, in federal royalties paid to the U.S. Treasury. Such action will allow a stronger fossil fuel industry to emerge, maintaining America’s energy dominance and national security. 

 

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