U.S. Has Royalty Plan to Give Windfall to Oil Companies $7 Bil over 5 yrs

[JohnWxy]

THis should be of particular interest to those concerned about tax relief for energy providers.


http://www.nytimes.com/2006/02/14/business/14oil.html?ex=1297573200&en=87dc413fa6add582&ei=5088&partner=rssnyt&emc=r

New YOrk Times
By EDMUND L. ANDREWS
Published: February 14, 2006

WASHINGTON, Feb. 13 — The federal government is on the verge of one of the biggest giveaways of oil and gas in American history, worth an estimated $7 billion over five years.

Royalty-Free Oil and Gas New projections, buried in the Interior Department's just-published budget plan, anticipate that the government will let companies pump about $65 billion worth of oil and natural gas from federal territory over the next five years without paying any royalties to the government.

Based on the administration figures, the government will give up more than $7 billion in payments between now and 2011. The companies are expected to get the largess, known as royalty relief, even though the administration assumes that oil prices will remain above $50 a barrel throughout that period.

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Moreover, the projected largess could be just the start. Last week, Kerr-McGee Exploration and Development, a major industry player, began a brash but utterly serious court challenge that could, if it succeeds, cost the government another $28 billion in royalties over the next five years.

In what administration officials and industry executives alike view as a major test case, Kerr-McGee told the Interior Department last week that it planned to challenge one of the government's biggest limitations on royalty relief if it could not work out an acceptable deal in its favor. If Kerr-McGee is successful, administration projections indicate that about 80 percent of all oil and gas from federal waters in the Gulf of Mexico would be royalty-free.

"It's one of the greatest train robberies in the history of the world," said Representative George Miller, a California Democrat who has fought royalty concessions on oil and gas for more than a decade. "It's the gift that keeps on giving."

Republican lawmakers are also concerned about how the royalty relief program is working out.

"I don't think there is a single member of Congress who thinks you should get royalty relief at $70 a barrel" for oil, said Representative Richard W. Pombo, Republican of California and chairman of the House Resources Committee.


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[hankthecrank]

1. Bushie's Dad did this also!

Gave the oil company a free ride for whole year or more as his last act in office.

This is our money they are giving away. Or Bushshits plan its your children money.

This really gets me mad but I guess no one care's.

Also not mentioned when drilling in Anwar's is put forward. No money back to the people

[jpak]

2. and Kay Bailey Hutchison is the biggest cheerleader...

When oil prices are low, she bawls "We needs a Royalty Holiday!"

When oil prices are high, she hollers "We needs a Royalty Holiday!"

The Breck Girl knows how to tart-it-up for them Houston Boys...

[JohnWxy]

3. I guess it pays well, if you don't mind missing a soul.