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Washington • Utah’s Republican members of Congress are joining their Western colleagues in asking the Interior Department to waive or reduce federal royalty payments on oil, gas and coal production on federal lands because they argue the coronavirus outbreak is hurting the industry.
But they want the government to keep collecting the share that goes to states, including Utah.
In letters to Interior Secretary David Bernhardt, Utah’s senators and GOP congressmen say that the energy producers face unprecedented challenges because of the virus and economic slowdown and helping the industry is important to protect thousands of jobs, energy sources and national security.
“These essential industries are seeking to continue production rather than a bailout and should be given due consideration as such,” Sens. Mike Lee and Mitt Romney of Utah and 10 fellow GOP senators wrote to Bernhardt. “There is no playbook for the situation we find ourselves in and we must utilize every existing authority to enable them to come out the other side of this hardship intact.”
Similarly, Reps. Rob Bishop, John Curtis and Chris Stewart, all Utah Republicans, joined fellow GOP House members to ask Bernhardt to waive or reduce federal fees during the “national emergency.”
“These essential industries are seeking to continue production rather than a bailout and should be given due recognition as such,” the House Republicans wrote. “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.”
The letters from the GOP members comes after the coal industry attempted — and failed — to get concessions in the latest stimulus measure from Congress to help Americans, the health care industry and small and big businesses affected by the outbreak. That $2.2 trillion bill did not specifically address the coal industry.
Last year, the federal government took in about $155 million in royalties from the oil, gas and coal operators on public land in Utah, according to Headwaters Economics.
About 48% of that money is returned to the state of Utah, and the Republican members of Congress say in their letters that Interior should still flow back to the states where the drilling and mining is happening.
Utah’s portion of the royalties — adding up to $438 million in the last five years — goes into the Permanent Community Impact Fund. It is intended to mitigate expenses in areas heavily impacted by mining and drilling on federal lands. In recent years, though, Utah has been using an increasing amount to fuel economic development projects tied to the natural resources extraction industries.
While the GOP members argue the industry is not looking for a bailout, critics say that's exactly what they're asking for — all amid a crisis that isn't directly impacting mineral extraction.
“Americans are dying, health care workers are putting their lives on the line, and these twelve senators are spending their time trying to get oil and coal companies out of paying royalties? It’s embarrassing and irresponsible,” said Matt Lee-Ashley, a senior fellow at the left-leaning Center for American Progress.
“The main priorities for the Interior Department right now should be helping get emergency health care resources to tribal nations and doing everything in its power to stop the spread of the virus – period. Secretary Bernhardt should make absolutely clear that now is not the time to field oil industry bailout requests, let alone holding oil and gas lease sales— as he has been doing.”
Steve Bloch, legal director for the Southern Utah Wilderness Alliance, said the Republican members of Congress are “asking Interior Secretary Bernhardt to allow private oil, gas and coal companies in Utah and across the country to produce and sell federal commodities for private benefit and without compensating the federal taxpayer.”
“That’s astonishing,” Bloch said. “And it comes a time when these same companies are nominating and then buying hundreds of thousands of acres of leases across much of West’s remaining wild landscapes. Rather than prop up the fossil fuel industry, this is the time for the administration to lay the foundation for a speedy and just transition to a renewables driven, clean energy economy.”
The Interior Department did not respond to a request for comment.
Brian Somers, the president of the Utah Mining Association, says the oil, gas and coal industries are critical sectors that “must stay in operation, especially during a time of crisis.”
He noted that 84% of electricity in Utah comes from coal-fired or natural gas-fueled power plants.
“How much worse off would our state be if 84% of the power which is being provided to hospitals, homes, stores, critical manufacturers and more was threatened?” Somers said.
“Fossil fuel producers are facing major challenges — which are especially acute in capital intensive industries like mining — from worker absences and economic disruptions from the COVID-19 pandemic. The request made to the secretary of Interior is in no way a ‘bailout.’ It is a request for a temporary delay in making payments to the federal government in order to preserve the capital they need to keep operating and providing Utahns the fuel and power they use every day.”
Utah's GOP members of Congress have all taken large sums of money from the energy sector for their campaigns and leadership political action committees over their careers, according to summaries by the Center for Responsive Politics.
The industry has contributed $358,000 to Lee since he took office in 2011. Romney took in about $114,000 from mining interests in his Senate campaign.
Stewart has taken $296,000 and Curtis about $55,000 from the industry.
Correction: The federal government took in nearly $155 million in royalties last year from public lands in Utah, with about 48% of that returned to state coffers.