Stop Oil Companies from Taking Money from Taxpayers,
School Children, Native Americans
and the Environment
|
July 21, 1999
Dear Senator: We are writing to express our opposition to the Hutchison-Domenici rider attached to the FY 2000 Interior Appropriations bill and all other anti-environmental riders. The Hutchison-Domenici rider would give away $130 million in royalty write-offs to major oil companies on top of the $72 million that they have received since this rider was first imposed in May, 1998. The rider should also be opposed for the following reasons: -- a former oil executive testified in California court on July 6th that his company misrepresented crude oil prices to avoid paying royalties; -- according to trade press, an oil company {{Chevron}} has offered to settle with the federal government for almost $100 million {{actually 94 million; Platt's Oilgram News, July 1999}} for shorting the U.S. Treasury of royalties; and -- the White House has singled out this rider as one that it strongly opposes in a letter to the Senate Appropriations Committee. According to the Department of Interior, oil companies deprive the U.S. Treasury of $66 million annually in fees known as 'royalties' for drilling oil from public lands {{a gross understatement}}. To prevent further underpayment of royalties, Interior has developed new regulations that will continue to be held hostage under the Hutchison-Domenici rider until July, 2001. The Department of Interior has taken extra care to ensure that the newly-developed regulations adequately balance the interests of industry, the federal government and taxpayers. To that end, Interior has revised the regulations five times, received input during seven open comment periods, organized 17 primarily industry-attended workshops and meetings, and received more than 4,000 pages of public comments. The new regulations would require oil companies to pay royalties on the basis of prices set in the free market rather than on artificial prices set by the oil companies themselves -- the so- called 'posted prices.' Posted prices have become the focus of extensive litigation nationwide due to alleged undervaluing by oil companies. The offenses of the oil companies under current regulations are so egregious that state governments including Alaska, California and Texas have collected close to $5 billion in lawsuit settlements over posted prices. Yet, the federal government has lagged behind in fixing this serious problem. Moreover, this continued underpricing of the public's natural resources contributes to greater environmental harm. As the current royalty valuation rule amounts to a subsidy to the oil industry, the effect will be to further encourage our dependence on fossil fuels, increase environmental damage, particularly global warming, and disadvantage the use and development of cleaner energy alternatives. The oil industry receives over $5 billion each year from the federal government. The new regulations would be a good first step toward eliminating this corporate welfare. The majority of oil royalty revenues go directly to the U.S. Treasury where they may be applied to debt reduction and federal programming. However, oil royalties also help state governments pay for the education of school children, and provide underwriting for the Land and Water Conservation Fund and for Native American nations. The Minerals Management Service calculates that oil royalties have funded more than 37,000 park and recreation projects. For these reasons, we strongly encourage you to oppose the Hutchison-Domenici rider and all other anti-environmental riders. Sincerely,
Brian Talbott, Executive Director American Association of Educational Service Agencies 703-875-0739 |
Updates - November 25 1996 to June 15 1998
The Project on Government Oversight
Bureau of Indian Affairs Site
First Nations/First Peoples Cumulative Index
This site is maintained by JS Dill.
Please provide an opinion regarding this site and it's
material.