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Friday, May 19, 2006

A first stand against Big Energy

Whatever one might say about today's Congressional leadership, every once in a while they do show an uncanny ability to stick their fingers in the air and figure out which way the winds of public sentiment are gusting.

Yesterday, the House took up several measures to re-consider billions in taxpayer give-aways to Big Energy. And the results were a modest but important rollback of the staggering sums the public shovels to oil and gas interests each year. The NY Times reports:
* On a vote of 252-165 and "over the objections of Republican leaders," the House repealed $7 billion in give-aways for oil and gas companies drilling in publicly owned waters.

* "In a separate defeat for energy companies, the House voted 279 to 141 to reject a provision that would lift a 25-year ban on oil drilling in coastal areas outside the western Gulf of Mexico."
How did Big Energy get the big windfall for public drilling in the first place?

It started, the Times says, with some 1,000 leases the Clinton Administration signed in 1998 and 1999. To speed up drilling, Clinton let the companies skip paying their standard 12-16 royalties in public waters.

But the idea was that this major break would stop once oil prices started to rise. Under Bush, that didn't happen:
For reasons that are now being investigated, the Interior Department omitted the restriction in 1,000 leases it signed in 1998 and 1999. In addition, the Bush administration offered extra "royalty relief" to companies that drilled very deep wells in very shallow water.

The lost royalties are just beginning to hit the government's bottom line.

The Government Accountability Office, the investigative arm of Congress, estimated in March that the royalty incentives could cost the government $20 billion over the next 25 years.
And that doesn't include another $80 billion energy companies hope to extract from public coffers through lawsuits demanding "royalty relief."

How long will this new-found, bi-partisan courage to stand up to Big Energy last -- and how far will it go?
posted by Chris Kromm at 9:38 AM | Email this post | Post a Comment
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CHRIS KROMM blogs three days a week for Facing South. Chris is Executive Director of the Institute for Southern Studies and publisher of the Institute’s award-winning magazine, Southern Exposure.

SUE STURGIS blogs four days a week for Facing South. Sue is the Institute’s Editorial Director and a former reporter for The Independent Weekly and The Raleigh News & Observer.

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