Catastrophe - Dick Morris [126]
Lawyers for the Interior Department were livid. They told the media, “If the court’s interpretation of Congress’s action in 1995 is correct, certain leaseholders will be able to produce massive amounts of oil and gas without paying royalties to the United States without regard to the price, perhaps amounting to one of the biggest giveaways of federal resources by Congress in modern history.”503
That’s the problem, folks. According to the New York Times, the Government Accountability Office—the congressional watchdog agency—estimated in January 2007 that the government would lose roughly $60 billion over twenty-five years under the court ruling.504
So the decision of the genius lawyers in the Clinton administration—that they could simply insert the price threshold into the Gulf drilling leases without asking Congress to approve the price threshold—turned out to be another mistake.
This time it was a $60 billion mistake!
Naturally, the politicians were furious at their own collective stupidity. Congressman Edward Markey (D-MA), who was in Congress when the original royalty exemption was passed, condemned the court decision in strong language. Speaking in 2007, he said:
At a time when oil prices are hovering close to ninety-five dollars per barrel, it is unconscionable that [the energy companies] would continue to push forward with this brazen attempt to rob the American people in broad daylight.505
The congressman’s outrage was not diminished by the inconvenient fact that it was Congress that left the door open by passing their sloppy 1995 bill.
Senator Jeff Bingaman (D-NM), the chairman of the Senate Energy Committee, also attacked the court decision, saying that it “will result in the oil and gas industry being able to tap billions of dollars of the public’s natural resources for free, with none of their resulting income shared with the American public.”506
In July 2007, in a bid to cover itself, the House acted to undo its own incompetence by voting to impose a “conservation of resources” fee on oil and gas taken out of the gulf under the 1998–99 leases.507 Typically, the provision was inserted in a farm bill at the last minute on its way through the House. But the Senate failed to approve the amendment—and to this day the government is still being deprived of the royalty revenue.
The new Obama administration and Congress will probably revisit the issue and seek to recoup the royalty revenues through a conservation fee. The power of the federal government to impose taxes is pretty broad, and the courts might uphold such legislation. Or they might conclude—correctly—that the law is simply a retroactive end run around the leases that have already been signed with the energy companies.
In either case, nothing Obama or the Congress can do will recoup the tens of billions of dollars that the government has already lost in royalties on gulf oil and gas—all lost because some knuckleheads on the legal staff of Clinton’s Interior Department failed to ask Congress for price threshold legislation—and because others on the contract-writing staff forgot to insert the requirements into two years of leases.
It looks as though we don’t always have to worry about government officials being bought off by Big Oil. Sometimes they manage to give away our money without even getting any personal favors in return!
15
TARMAC HOSTAGES
How Airlines Imprison You on the Runway
What do American Airlines, Delta Air Lines, Continental Airlines, United Airlines, and US Airways have in common?
All five airlines went to court—through their trade group, the Air Transport Association—to block you, the consumer (and their customer), from having any rights at all when you’re trapped in their planes on airport run-ways for hours and hours at a time.
In December 2007, the Coalition for an Airplane Passengers’ Bill of Rights (http://www.flyersrights.org) persuaded the New York State legislature