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View Full Version : Oil companies get $65 billion in free product and another $7billion just cuz



Uber Commandante
02-14-2006, 02:31 PM
Oil firms may avoid $7 billion in public royalties
By Edmund L. Andrews, New York Times



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

New projections, buried in the Interior Department's just-published budget plan, anticipate the government will let companies pump about $65 billion worth of oil and natural gas from federal territory in 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 oil prices will remain above $50 a barrel in that period.

Administration officials say the benefits are dictated by laws and regulations that date back to 1996, when energy prices were relatively low and Congress wanted to encourage more exploration and drilling in the high-cost, high-risk deep waters of the Gulf of Mexico.

"We need to remember the primary reason that incentives are given," said Johnnie M. Burton, director of the Minerals Management Service. "It's not to make more money, necessarily. It's to make more oil, more gas, because production of fuel for our nation is essential to our economy and essential to our people."

But what seemed to be modest incentives 10 years ago have ballooned to levels that have alarmed even ardent supporters of the oil and gas industry.

"It's one of the greatest train robberies in the history of the world," said Rep. George Miller, D-Calif., who has fought royalty concessions on oil and gas for more than a decade.

Republican lawmakers are also concerned about the royalty relief program. "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 Rep. Richard W. Pombo, R-Calif., chairman of the House Resources Committee.

The original law, known as the Deep Water Royalty Relief Act, had bipartisan support and was intended to promote exploration and production in deep waters of the outer continental shelf.

At the time, oil and gas prices were comparatively low and few companies were interested in the high costs and high risks of drilling in water thousands of feet deep.

Based on the government's assumptions about future prices — that oil will hover at about $50 a barrel and natural gas will average about $7 per thousand cubic feet — the total value of the free oil and gas over the next five years would be about $65 billion, and the foregone royalties would total more than $7 billion.

Uber Commandante
02-14-2006, 02:32 PM
This makes me want to throw up.

Uber Commandante
02-14-2006, 02:34 PM
Not ONLY don't they have to pay the $7billion royalty, but they are being GIVEN free oil and gas??!! (to the tune of $65 BILLION!!!)

I don't get it - doesn't that oil and gas belong to the people of the United States (when it is located on federal property).

Does this mean that if I start a convience store that the federal governemtn will stock it for me for free and then not even make me pay taxes????

AAAAAAAAAAAAAAAAAAAAAHHHHHHHHHHHHHHHHHHHHHHHHHHHHH HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH HHHHHHHHHHHHH!

Gold9472
02-14-2006, 02:39 PM
Not ONLY don't they have to pay the $7billion royalty, but they are being GIVEN free oil and gas??!! (to the tune of $65 BILLION!!!)

I don't get it - doesn't that oil and gas belong to the people of the United States (when it is located on federal property).

Does this mean that if I start a convience store that the federal governemtn will stock it for me for free and then not even make me pay taxes????

AAAAAAAAAAAAAAAAAAAAAHHHHHHHHHHHHHHHHHHHHHHHHHHHHH HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH HHHHHHHHHHHHH!

Only if you give millions of dollars in campaign contributions.

PhilosophyGenius
02-14-2006, 05:47 PM
That's it! I'm hiring a lobbyist.

First order of buisness, get Jack Abramoff out of prison and onto my payroll.

Holla!

Uber Commandante
02-14-2006, 11:15 PM
That's it! I'm hiring a lobbyist.

First order of buisness, get Jack Abramoff out of prison and onto my payroll.

Holla!

You might just have to wait for the presidential pardon in 2008...

And then Abramoff can probably get a job with the Jeb whitehouse as the Director of Land Managment (which oversees the bureau of Indian Affairs)

Ok, Ok....so this was a lame attempt at a joke using probably obscure references to current Bush secretaries of such and such who were convicts during the Iran Contra affair, but are now in charge of the country.

PhilosophyGenius
02-15-2006, 01:21 AM
Hmmmm... Then I gotta holla at someone else in Washington. Buy a few lunches for certain people and I'm in the club.

:fuckyou:

Partridge
02-15-2006, 01:11 PM
I don't get it - doesn't that oil and gas belong to the people of the United States

That sounds suspiciously like COMMUNISM!!!!!!!!!

Uber Commandante
02-15-2006, 02:26 PM
That sounds suspiciously like COMMUNISM!!!!!!!!!

More like Socialism, yes (though I get that you were joking) - very distinct from communism which disavows the idea of private property, class, and so on. A more realistic view of Socialism doesn't go that far, but instead has an idea of collective wealth, as well as private property.(ie, you get to keep your hummer, but we would all get universal healthcare, education through bacherlor's degrees, wealth from natural resources goes into the collective kity to pay a portion of these costs, etc).

Oh yea, spending money on education and healthcare would probably also cut down on killing innocent people around the world.

Of course, the capitolists have always like to equate the two in order to make people afraid. And hey! it works.

Gold9472
02-15-2006, 02:35 PM
Can I have a hummer?

PhilosophyGenius
02-15-2006, 06:00 PM
I don't get it - doesn't that oil and gas belong to the people of the United States

I belongs to the companies and countries of orgin until it's sold to the people. Once you pay for it and the gas is in your tank, then it's yours.

Uber Commandante
02-16-2006, 09:45 AM
I belongs to the companies and countries of orgin until it's sold to the people. Once you pay for it and the gas is in your tank, then it's yours.

Thats the way it works, but its not exactly just. According to US laws, a corporate entity has the same legal status as a real human entity. In the eyes of the law (and therefore in the eyes of the US, if we are still a nation of laws) both an individual entity and corporate entity are equals - in fact, this is one of the very foundations of corporate law - that equality.

What I'm gettting at is, if we are all equal, why do SOME entities have free access to the natural resource wealth of the nation, while others do not?

It is exactly what was happening the the American colonists leading up to the revolution: raw materials were shipped from the colonies back to England, where they would be manufactured into finished goods and then sold back to the colonists at extraordinary prices. And no, this wasn't an arrangement by choice of the colonists - there were laws in place regarding the manufacturing of certain textiles.

PhilosophyGenius
02-16-2006, 05:19 PM
Thats the way it works, but its not exactly just. According to US laws, a corporate entity has the same legal status as a real human entity. In the eyes of the law (and therefore in the eyes of the US, if we are still a nation of laws) both an individual entity and corporate entity are equals - in fact, this is one of the very foundations of corporate law - that equality.

What I'm gettting at is, if we are all equal, why do SOME entities have free access to the natural resource wealth of the nation, while others do not?

It is exactly what was happening the the American colonists leading up to the revolution: raw materials were shipped from the colonies back to England, where they would be manufactured into finished goods and then sold back to the colonists at extraordinary prices. And no, this wasn't an arrangement by choice of the colonists - there were laws in place regarding the manufacturing of certain textiles.

It's just the way capatilsm is. Also the energy companies held closed door meetings with Cheney and actually helped right the energy laws which give them huge tax cuts and so forth. It's fucked up but since the laws passed (and many more since then), they're not breaking the law. Which sucks.