August 5, 2006
The offshore gas exploration leases have their sweetheart clauses – according to this AP story: Congressmen Question Oil Windfall.
The Congressmen asking the questions are Rep. Tom Davis, R-Va – chairman of the House Government Reform Committee- and Rep. Darrell Issa, R-Calif. – chairman of its investigations subcommittee.
They believe someone at the Interior Department may have deliberately removed provisions from offshore drilling contracts, giving oil companies a multibillion-dollar windfall.
Congressional Budget Office estimates we have already lost $2 billion in royalties and stand to lose another $8 billion over the life of the leases because the department’s Minerals Management Service (Clinton Administration) failed to include a provision in the 1998-99 leases that would have required payment of royalties on oil or gas taken if the market price reached a certain point.