Another Congressman Speaks Out Against Give Aways to Big Oil

Before they left for Christmas, the Bush administration snuck one last $10 billion present under the tree for their friends at the big petroleum companies who are draining the resources from our public lands. Fortunately at least one Congressman noticed. Well done Rep. Markey.

A rule change proposed by the U.S. Interior Department could cost taxpayers $10 billion in lost royalty payments from oil and natural gas companies, a lawmaker says.

"The Bush administration couldn't leave town for the holidays without giving one last taxpayer-funded gift to Big Oil," Rep. Edward Markey, D-Mass., said Friday in a statement. The total loss in revenue would be over 26 years, according to the statement.

The Minerals Management Service, which oversees royalty payments for the Interior Department, issued a proposed rule Friday that it said would conform payments for leases in the Outer Continental Shelf to a 2004 federal court ruling.

The court found leases couldn't be excluded from royalty relief if they were part of a field that was producing before the 1995 act went into effect. That legislation offered relief from royalty payments for companies drilling in deep waters of the Gulf of Mexico in an effort to spur development.

The rule is open for public comment until Feb. 19.

The rule change is unrelated to an Oct. 30 court ruling the department lost to Kerr-McGee, a subsidiary of Anadarko Petroleum Corp.

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Rep. Bruce Braley Speaks Out on Oil Accountability

This morning Iowa Congressman Bruce Braley addressed the House of Representatives on oil accountability. Transcript follows video.

Madam Speaker I rise today to express my serious concerns that inadequate oversight, efficient procedures, and unethical lapses at the Department of Interior Minerals Management Services are costing to federal government millions of dollars each year. The MMS is responsible for negotiating, implementing and overseeing all federal leases for resources removed by private companies from public lands. And is supposed to be a guarding of our nation's precious public resources.

Unfortunately evidence suggests that the cozy relationships between MMS officials and oil and gas companies have allowed these companies to underreport the resources they remove from federal lands and underpay the royalties they owe to the federal government. Evidence that MMS has failed to detect and pursue these violations by oil and gas companies is especially troubling as gas prices continue to rise, corporations make record profits and average American are struggling to fill their gas tanks and make ends meet. Most hard working tax paying Americans would be outraged to know that these companies are cheating the government out of this royalties, which are a critical source of revenue for the U.S. treasury and which would allow us to invest in another priorities.

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Oil Accountability Report Card -- Can We Count on Our Candidates?

Oil Accountability Scorecard
Today we get the news that the House has sent the President a new energy bill. That bill whatever its virtues and vices, is absolutely silent on one of the biggest issues facing the public today - the ongoing fleecing of taxpayers by the big oil companies.

The U.S. needs tougher penalties on the companies who cheat Americans by not paying their full royalties.  It will apparently take a Democratic Administration to crack down on Big Oil fleecers. But can we be sure that our candidates will do the right thing?

Last week Jerome posted about MyDD's partnership with the Oil Accountability Project and their work in exposing the enormous amounts of money being looted from the public coffers by oil companies who suck petroleum off our public lands and then don't pay the royalties the government is owed.

In his post, Jerome called on the Democratic campaigns to promise to do the right thing and crack down on oil companies who don't pay what they owe for petroleum pumped from public lands. So far the answer has been silence.

We've been researching the reasons that some of our candidates may be playing it coy and we'll be rolling out some of that information in coming posts but hopefully our candidates will step up and do the right thing. It seems like a no brainer but nothing is simple in Washington DC when there are millions of dollars involved.

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Oil Accountability Project

Today, the GOP blocked the energy bill because it included new taxes on oil companies. It was blocked because it included billions of dollars in new taxes on the biggest oil companies.

The Democratic leaders fell one vote short, 59-40, in getting the 60 votes needed to overcome a GOP filibuster. And in order to move the bill forward, Democrats said they would strip the taxes from the legislation. Reid of Nevada revised energy package would include the first increase in automobile fuel efficiency in three decades and massive increases in the use of ethanol as a motor fuel, but it will "eliminate the tax title."

And thus, the Republican leader Mitch McConnell of Kentucky predicted the revised bill would be approved with wide bipartisan support.

Here are is the list of compromises already made to the bill:

  • Senate Democrats earlier dropped a House-passed provision that would have required investor-owned utilities nationwide to generate 15 percent of their electricity from solar, wind and other renewable sources.

  • The mandate was fought by the electric utility industry and, especially the Atlanta-based Southern Co. They argued that the mandate would lead to higher electricity costs, especially in regions that do not have an abundance of wind or solar energy, such as the Southeast.

  • The oil companies had pressed lawmakers to oppose repeal of the $13.5 billion in tax breaks provided them by Congress in 2004 and 2005. They argued the tax relief was essential as an incentive for domestic oil and gas production and refinery expansion and that rolling back the tax breaks would lead to higher energy prices.

Democrats released a report by the Joint Economic Committee on Wednesday that concluded that rescinding the tax breaks would have no impact on production decisions or "have any effect on consumer prices for oil and gas."

There's a website up called the Oil Accountability Project that MyDD is partnering with to dive into and expose the issue.

It's exposed that last year's Abramoff/Safavian/Ney scandal revealed a number of massive scandals in the Department of Interior. But they were just the tip of the iceberg. Even though the spotlight has faded a bit, the litanies of scandals, rip-off and handout to big oil continues. Especially at the Minerals Management Service -- the part of the DOI that is supposed to collect royalties from oil companies who are extracting resources from our public lands.

However, for the past six years, government whistleblowers have alleged that a lack of oversight, deficient procedures, and cozy industry ties between MMS officials and oil and gas companies have created a system that allows the companies to underpay the federal government for scarce resources extracted from public lands.

On September 19th, DOI Inspector General Earl Devaney echoed these concerns in his report "Minerals Management Service (MMS): False Claims Allegations." The report describes a process systemically plagued by ethical lapses, process failures, mismanagement and conflicts of interest. The IG report highlights the need for vigorous oversight of the oil and gas industry with an eye towards real accountability.

Taxpayers for Common Sense and Project on Government Oversight assert the MMS's closeness with its clients taints its mission to pursue uncollected royalties for the Treasury. This has been especially true, they say, in the six years since the Bush administration instituted a new process called "compliance review." Beth Daley, an investigator for Project on Government Oversight, said there has been a fundamental change with auditors being told not to audit oil companies that hold federal leases: "It was never a great culture, but it has taken a turn for the worse." Before, the agency relied more on auditing to determine whether proper royalties were being levied and paid.

As a result of these alleged abuses, whistleblowers have brought forth legal actions claiming oil and gas companies systematically undervalue the amount and value of resources removed from public and Native American lands, with one case (Burlington Resources) recently settling for more than $97 million. Evidence in these cases suggests oil companies prefer to risk federal penalties rather than pay the actual amounts owed since the prospect of real penalties (particularly under this Administration) stands so remote.

The question to ask is if we have any reason to believe things will be any different under a Democratic president? Of course we all hope so, but will the candidates go on the record pledging to end the sloppy and corrupt practices at the DOI that are costing us all millions and millions of dollars?

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