Nuff said?
Chevron Could Avoid Huge Royalties From Oil Find in the Gulf A group of companies led by Chevron could avoid more than $1 billion in royalty payments to the federal government.
Actually, Chevron loves the DLC Democrats, too.
A spokesman for Chevron, Don Campbell, said Monday that “any conjecture about forgone royalties” would be “pure speculation and an academic exercise.”The Chevron leases are the biggest, but hardly the only leases that allow oil companies to avoid royalties regardless of how high energy prices climb.
Even before Chevron and its partners confirmed the discovery last week, the Government Accountability Office, the investigative arm of Congress, had estimated that the Treasury could lose as much as $20 billion over the next 25 years.
On Wednesday, the House Committee on Government Reform will begin two days of hearings on how the original calculation came to be. Republicans have been eager to blame the Clinton administration, which was in office when the leases were signed.
But the Interior Department’s inspector general is expected to testify that the Bush administration may be in danger of making exactly the same move on new leases.
According to Congressional aides, the inspector general has uncovered evidence that midlevel Interior Department officials warned as recently as July that a new batch of leases could cost the government billions of dollars beyond the original misstep.
Republican lawmakers are also angry about the Interior Department’s response to the problem, which was first disclosed by The New York Times in March.
Representative Thomas M. Davis III of Virginia, chairman of the Committee on Government Reform, complained of “systematic delays” and said the Interior Department had withheld large volumes of “critical information” from Congressional investigators.
Chevron’s huge potential savings highlight a dispute about how to remedy the leases signed in the late 1990’s. The Bush administration and many Republican leaders argue that those leases are binding contracts that cannot be changed except through an agreement by the companies.
Democrats acknowledge that the contracts are binding, but support a measure that would punish companies that refuse to renegotiate their contracts by prohibiting them from acquiring additional oil and gas leases.
