Government May Lose Billions in Oil, Gas Royalties Because of 1995 Law
February 15, 2006 ?- By H. Josef Hebert, Associated Press
WASHINGTON ?- Despite record profits, oil and gas producers may avoid billions of dollars in royalty payments to the government because of a decade-old law designed to spur production when energy prices are low.
The Interior Department estimates that as much as $66 billion worth of oil and natural gas taken from the deep waters of the Gulf of Mexico between now and 2011 will be exempt from government royalty payments.
That could amount to the government losing an estimated $7 billion to $9.5 billion based on anticipated production and current price projections for oil and gas, according to an analysis in the department's five-year budget plan.
The analysis assumes oil prices will hover around $50 a barrel and natural gas in the $8 to $9 per thousand cubic feet range between now and 2012.
Johnnie Burton, head of the department's Minerals Management Service, said Tuesday the actual revenue losses would be subject to many variables, but that more than $7 billion was "in the range" of probability.
The industry windfall was first reported by The New York Times.
The disclosure prompted calls in Congress on Tuesday to curtail or end the royalty relief that lawmakers made available in 1995.
"The American people are getting stood up and hung out to dry by an administration that favors sweetheart deals with Big Oil," said Rep. Ed Markey, D-Mass., one of six Democrats who said they planned to introduce legislation to end the royalty relief.
Sen. John Kerry, D-Mass., said he planned to introduce a resolution putting the Senate on record against the royalty break. "No one in their right mind think oil companies turning record high profits and squeezing Americans at the pump should now get to keep $7 billion," Kerry said.
Although Kerry was among those who voted for the royalty relief in 1995, his spokeswoman said that the relief is no longer needed when oil prices are near $60 a barrel.
Oil cost an average of $18.43 a barrel in 1995, according to the Energy Department. At the time there was a widespread view that incentives were needed to spur production in the deep-water Gulf region.
Like Markey, Rep. George Miller, D-Calif., opposed the 1995 "royalty holiday" for oil companies.
"It's one of the most egregious giveaways of taxpayer money in our history and it can and should be stopped," said Miller.
Republicans also have expressed second thoughts about the royalty relief. Rep. Richard Pombo, R-Calif., chairman of the House Resources Committee, told the Times: "I don't think there's a single member of Congress who thinks you should get royalty relief at $70 a barrel."
Oil prices reached that level briefly in recent months.
The 1995 law includes a provision that if oil and natural gas prices pass a certain level -- $34.71 a barrel for oil and $4.34 per thousand cubic feet for gas -- royalties will be imposed even in leases covered by the royalty relief.
According to the Interior Department, those annual thresholds were exceeded repeatedly over the last five years for natural gas and in the last two years for oil.
Last December, the department sent letters to the companies demanding royalty payments, and $425 million was collected from 38 of 41 companies, according to Walter Cruickshank, deputy director of the Minerals Management Service.
But Cruickshank said nine companies have challenged the legality of the price threshold on leases issued between 1996 and 2000. Kerr-McGee, a major gas producer, has said it will fight the issue in court.
Cruickshank, in a Feb. 9 department memo, said that the department needs to "carefully consider how to approach this issue" because an adverse court ruling could "place more than $500 million of past royalties and an undetermined amount of future royalties at risk."
Even with the price threshold, millions of barrels of oil and billions of cubic feet of natural gas will not be subject to royalty payments.
The 1995 law exempted leases issued in 1998 and 1999 from the price threshold, accounting for about two-thirds of the royalty-free gas and millions of barrels of oil.
Last year an estimated 247 billion cubic feet of natural gas and 16.5 million barrels of oil were taken from the Gulf without royalties having been paid either because they were exempt from the threshold or because "companies have chosen not to pay even though the (price) thresholds have been exceeded," Cruickshank wrote in another memo.
duh
Bush Budget Triples Money from Alaska Oil Drilling
February 07, 2006 ?- By Reuters
WASHINGTON ?- The Bush administration Monday again asked Congress to allow oil drilling in Alaska's Arctic National Wildlife Refuge (ANWR), but almost tripled its estimate for the amount of money that would be collected in leasing fees from energy companies.
In its proposed budget for the 2007 spending year, the White House said it assumed the initial tracts in the refuge could be leased in 2008 and bring in $7 billion in new revenues, half of which would be shared with the state of Alaska.
That is almost triple the $2.4 billion the administration said in last year's budget it thought could be raised from the first round of ANWR leasing.
The administration did not explain what was behind its higher estimate for leasing fees, but it presumably reflects the jump in oil prices.
The refuge, which is home to a variety of wildlife such as polar bears and migratory birds, stretches across 19 million acres (7.7 million hectares) in the northeast corner of Alaska. But the White House only wants to offer 1.5 million acres (607,000 hectares) in the refuge's coastal plain for oil and natural gas exploration leases.
The administration has failed every year to convince Congress to give energy companies access to the refuge, which is a key part of the White House's national energy plan.
Republican Sen. Pete Domenici, chairman of the Senate's energy committee, has said he will try in the spring to add ANWR drilling language to the filibuster-proof budget bill.
The Interior Department estimates the refuge could hold between 5.7 billion and 16 billion barrels of recoverable oil.
If the refuge was opened to drilling, it would take about eight years before the area reached full production of around 800,000 to 1 million barrels per day, according to the Energy Department's analytical arm.
Danon,
I beg to differ with you. It appears that Ramona is still young and vibrant.
Reminder of HWB's past, and present, is fascinating stuff.
Oil lease royalties-----one wonders what Congressional staffers are doing. Why could not someone working closely on energy issues know all of this in advance? Why should it come, apparently, as a surprise to our representatives now?
Making l998-l999 leases exempt, and not going after royalties from those remaining 9 companies which are not exempt....what branch of the government would be responsible for this action/inaction? Other than Bush himself and his cronies, who certainly do set the policies and are ultimately responsible.
And, yeah, duh re budgeted increase for Alaskan oil drilling. They appear to be very confident.
Will go click.
It will take decades to undo the damage caused by this administration.
Sometimes government tools can be put to good use, at least theoretically.
http://www.spacedaily.com/reports/NASA_Satellite_Technology_Helps_Fight_Invasive_Plant_Species.html
"NASA Satellite Technology Helps Fight Invasive Plant Species
by Staff Writers
Greenbelt MD (SPX) Feb 15, 2006
Products based on NASA Earth observations and a new Internet-based decision tool are providing information to help land and water managers combat tamarisk (saltcedar), an invasive plant species damaging precious water supplies in the western United States.
This decision tool, called the Invasive Species Forecasting System (ISFS), is being used at the U.S. Geological Survey (USGS) National Institute of Invasive Species Science in Fort Collins, Colo. It is the result of combining USGS science and NASA Earth observations, software engineering and high-performance computing expertise.
"The ISFS combines NASA satellite data with tens of thousands of field sampling measurements, which are then used to analyze past and present distributions of non-native plants and predict their future growth patterns," said Tom Stohlgren, director of the USGS National Institute of Invasive Science Species. Land managers and others can use it to generate color-coded maps to help predict and manage the spread of troublesome invasive species.
The ISFS uses observations and science data products from NASA's Terra, Aqua and Earth Observing-1 satellites and the USGS-operated Landsat satellites, together with field data from government and non-government contributors. The satellites observe and measure sunlight reflected by plants and their environments. The satellites lock in on unique aspects of the reflected light to determine saltcedar's locations and habitats vulnerable to invasion."
They are saying that they know for sure that the strain of the virus is the same one that developed in Asia.
http://www.nytimes.com/2006/02/16/international/europe/16flu.html?th&emc=th
"The virus was confirmed in mute swans in Greece, Bulgaria and Italy on Saturday, and in Germany on Wednesday. Likely cases were detected in the same species in Slovenia and Croatia on Sunday, Austria on Monday and Denmark on Tuesday.
Health officials had expected wild birds to carry the disease into Europe from Africa in the spring migration. But the swans were probably migrating south to wintering grounds on the Black Sea, officials said, and were driven west by unusually cold weather in Russia and Ukraine."
http://www.nytimes.com/2006/02/16/science/16nasa.html?th&emc=th
February 16, 2006
Call for Openness at NASA Adds to Reports of Pressure
By ANDREW C. REVKIN
"Top political appointees in the NASA press office exerted strong pressure during the 2004 presidential campaign to cut the flow of news releases on glaciers, climate, pollution and other earth sciences, public affairs officers at the agency say.
The disclosure comes nearly two weeks after the NASA administrator, Michael D. Griffin, called for "scientific openness" at the agency. In response to that, researchers and public affairs workers at the agency have described in fresh detail how political appointees altered or limited news releases on scientific findings that could have conflicted with administration policies.
Some examples have been reported to senior scientists and administrators who are assembling complaints as part of a review of communications policies demanded by Dr. Griffin, who became administrator of the National Aeronautics and Space Administration in April. Others have been described or provided to The New York Times."
Yes, sumac, I've addressed this point briefly before. The fact that at the very moment the Allied forces had Bin Laden trapped we backed off is understandable considering the business background and history that the Bush family and the Bin Laden family have. Gen Franks orders were directly from Donald Rumsfeld who received his orders directly from George Bush who more than likely received his from his father. They had to avoid capturing Osama in order to keep the money flowing into the family and their friends coffers. It's still going in their bank accounts.
I was stunned and amazed at the time and even now on how suddenly Bush quit Afganistan and went to war in Irag. It never made sense to me. But, it sure has given billions to certain families.
I'm wondering where all those 85 billions went that were given to Louisiana - now Bush is asking Congress for another almost 5 billion. ??? Almost one million homes could have been built from scratch with that money.
all clicked........
We are saddled with a rogue government, wildclickers.
The oil companies haven't paid for the Valdez oil leak - have been given a zillion dollars in tax breaks, report the largest profits ever, and NOW - to give Alaskas family government monopoly more money, they outright lie about profits from drilling ANWR. <even Norton said it would take more than 11 years to see any sort of oil yield from ANWR> but hey, whats a few bridges to nowhere gonna matter, right?
We also paid dearly for bushco attacking Afghanistan, with royalties and outsourcing to India for the sham attempt at getting ben laden, and bringing "demorcracy" to Afghanistan. The Talilban have resumed control. Remember the 'religious police'? fatheads
Instead of enforcing the law, putzes such as Pompo declares the oil companies should pay, but the same guy is attempting to gut the endangered species act, and his buddy bushco, says 'sell off lands from Nationl Forests", and the money will go directly to the U.S. Treasury - and for what?
And today - In Defense of Animals sent me a notification stating the USDA granted slaughterhouses their petition to PAY the USDA for inspections so they can continue slaughtering horses for oversees consumers. Again, by the time Congress passes the Slaughterhouse ban - and we close the loophole that allowed the USDA to sell out our horses, again - thousands of animals will die.
In Alaska, three out of four wolves will be slaughtered by illegal trophy "hunters".
Every day - nine men and woman return from Iraq in body bags.
Bushco in response to the question "How many servicemen and woman have died...." - "oh, about 3000, give or take..." said Americas courageous leader.
I have no doubt America will recover from the antics of the bush league, sumac. The wheels of Justice are gaining momentum - driving straight toward the White House.
At the moment, and for some time in the near past, we have been a rogue nation, in addition to having a rogue government.
You have a great deal of faith in the will and ability of any Congress to act correctly, Stradee.
I also wonder to what extent the desire for Bush to be a wartime president, for some time in the future, factored into the decision to let bin Laden slip through. Cynical, I know, but politics is politics.
http://www.nytimes.com/2006/02/16/science/16cnd-ice.html?_r=1&pagewanted=print&oref=slogin
February 16, 2006
More Greenland Ice Flowing Into Sea, in Sign of Warming
By ANDREW C. REVKIN
"The amount of ice flowing into the sea from large glaciers in southern Greenland has almost doubled in the last 10 years, possibly requiring scientists to increase estimates of how much seas could rise under the influence of global warming, according to a study to be published Friday in the journal Science.
The authors said there is evidence that the rise in flows will soon spread to glaciers farther north on the vast island of Greenland, which is covered with an ancient ice sheet nearly two miles high in places that holds enough water to raise global sea levels 20 feet or more should it all flow into the ocean."
sumac,
great links and articles..... I especially liked the tree kangaroo.
That much water will give you a problem.
This March is election time - what we desperately need is to stop the GOP in its tracks. That will temper the Bush onslaught until he is out of office. I can see where he is currently trying to spend as much of our tax dollars as he possibly can before he is out of absolute power. Hopefully, after the March elections he will not be able to do that.
Anyone going to call dibs on the 68th rainforest thread?
~~~~~~~~~~~~~
aktbird57 -
You and your 289 friends have supported 2,239,585.7 square feet!
Marine Wetlands habitat supported: 99,005.9 square feet.
You have supported: (0.0)
Your 289 friends have supported: (99,005.9)
American Prairie habitat supported: 47,916.8 square feet.
You have supported: (11,564.5)
Your 289 friends have supported: (36,352.2)
Rainforest habitat supported: 2,092,663.0 square feet.
You have supported: (168,707.2)
Your 289 friends have supported: (1,923,955.8)
~~~~~~~~~~~~~~
1 Aktbird57 .. 1374 51.410 acres
sumac, i have faith in the will of the people - and their ability to oust a government pent on destruction.
I do not have faith in a Congress that follows their goat like a bunch of sheep to slaughter.
I do know for a fact that there are people who have the ability and utilize their talents in postitive ways for the betterment of society, all life, and the enviornment. Thats what i have faith in.
and the law of universal justice that no person or nation is exempt from
"Wilderness is not a luxury but a necessity of the human spirit"
"A patriot must always be ready to defend his country against his government"
-Edward Abbey
Editorial by Donald Kennedy
Science 17 February 2006:
Vol. 311. no. 5763, p. 917
The New Gag Rules
...These two incidents are part of a troublesome pattern to which the Bush administration has become addicted: Ignore evidence if it doesn't favor the preferred policy outcome. Above all, don't let the public get an idea that scientists inside government disagree with the party line. The new gag rules support the new Bush mantra, an interesting inversion of Secretary of Defense Donald Rumsfield's view on war: "You don't make policy with the science you have. You make policy with the science you WANT." But the late-breaking good news is that NASA Administrator Griffin has said that there will be no more of this nonsense, and Deutsch, the 24-year-old Bush appointee sent to muzzle Hansen, has left the agency abruptly after his résumé turned out to be falsified. A change of heart? Stay tuned.....
ehBeth, I will try to find something for #68
ul,
A very interesting article, thanks. I hadn't heard the Rumsfeld view on war - it is interesting to read and explains a lot about the administrations policy making.
History will surely make hash of the Bush family.
All clicked for MA 'n Me.
