The Bush/Cheney administration is 'taking care of business' by lowering royalty fees on energy extracted from public lands, by easing the rules governing these company operations on public lands, AND by cutting back on audits intended to find energy company cheating on royalty payments! The New York Times has the story in Monday's paper.
Here's how the story begins:
WASHINGTON, Jan. 22 - At a time when energy prices and industry profits are soaring, the federal government collected little more money last year than it did five years ago from the companies that extracted more than $60 billion in oil and gas from publicly owned lands and coastal waters.Who loses? Why taxpayers, that's who:
If royalty payments in fiscal 2005 for natural gas had risen in step with market prices, the government would have received about $700 million more than it actually did, a three-month investigation by The New York Times has found.
As a result, the nation's taxpayers, collectively, the biggest owner of American oil and gas reserves, have missed much of the recent energy bonanza.This is no accident. This is, in fact, the example of the only policy of the Bush/Cheney administration that is working as designed — energy policy (PDF):
The disparities in gas prices parallel those uncovered just five years ago in a wave of scandals involving royalty payments for oil. From 1998 to 2001, a dozen major companies, while admitting no wrongdoing, paid a total of $438 million to settle charges that they had fraudulently understated their sale prices for oil.It's open feeding at public trough courtesy of the Bush/Cheney administration. 'Leave your campaign contributions in the box at the doors, boys!' Here's more:
Since then, the government has tightened its rules for oil payments. But with natural gas, the Bush administration recently loosened the rules and eased its audits intended to uncover cheating.
The possible losses to taxpayers in gas could be even higher than the losses tied to the scandals over oil royalties. For one thing, natural gas production on federal land is worth twice as much as oil.Oh, and the Department of the Interior is totally confounded by the vast complexity of it all:
Moreover, the Interior Department has scaled back on full audits, pushed out a couple of its more aggressive auditors and been criticized by its own inspector general for the audits that it did pursue.
"We are talking about the same issues and in many cases the same players as before," said Danielle Brian, executive director of the Project on Government Oversight, a nonprofit watchdog group that exposed many of the oil royalty scandals.
"These companies had knowingly been cheating on oil for years, if not decades," Ms. Brian continued. "To ignore the likelihood that the same thing is happening on the gas side is absurd."
Johnnie M. Burton, director of the Interior Department's Minerals Management Service, said the disparities were mostly the result of deductions that the regulations let companies take, reducing the sale prices they report to the government.Hey, wasn't Jack Abramoff on the Bush/Cheney transition team for the Department of the Interior? Yep. Think he was the only person bribing people there for clients? Nope.
But Ms. Burton said she had not known and could not explain why companies were reporting higher sale prices to their shareholders and to the Securities and Exchange Commission than to her office.
Turns out that there was a royalty payment scandal involving energy from public lands in the 1990s and the Clinton administration (Remember them? The folks who actually made government work?) imposed some tough accounting rules. Well, the energy companies (like Enron) who met with Dick Cheney's still secret energy task force back in 2001 said these rules imposed a fearsome burden on these poor little energy companies and could Big Dick and King George do something to help 'em?
The New York Times explains:
In the wake of the scandals, the outgoing Clinton administration pushed through tough new rules for valuing crude oil, which relied on comparing company reports with an index of spot market prices.There's much more to the story; you really should read it. But, let's summarize the irresponsible fiscal and energy policies Bush/Cheney and their rubber-stamp Republican Congressional pals have put in place:
A Pro-Industry Approach
But the Bush administration did not close any loopholes for valuing natural gas. Indeed, in March 2005 it expanded the list of deductions and decided against valuing sales at spot-market prices when companies were selling to their own affiliates.
The industry-friendly stance was intentional. Mr. Bush and top White House officials also placed a top priority on promoting domestic energy production. Vice President Dick Cheney's energy task force called for giving lucrative new incentives to companies that drill in the Gulf of Mexico and other high-risk areas.
The Bush administration also took a much more relaxed approach to auditing and fraud prevention. In 2003, the Interior Department's inspector general declared that the auditing process was "ineffective" and "lacked accountability" and that many of the auditors were unqualified.
In one instance, inspectors discovered that auditors had lost the working papers for an important audit and tried to cover up their blunder by creating and back-dating false documents. Rather than punish anybody, the inspector general recounted, the minerals service gave the employee who produced the new documents a financial bonus for "creativity."
Administration officials said last week that they had addressed most of the criticisms and that the inspector general had since said its corrective actions were "sufficient."
- They began by giving away to the most wealthy Americans the surplus that the Clinton administration left in 2000.
- They created an energy policy designed to pump up the profits of oil and gas companies, thereby gouging middle class and working Americans.
- As a phony effort to show concern about the deficits their tax cuts and their war in Iraq have created, Bush/Cheney et al are cutting programs for the middle and working classes.
- They engineered an Energy bill that gives more tax breaks to energy companies that are already awash in profits partly, it seems, due to the fact that these companies have been invited to rob the U.S. Treasury through schemes to under-report royalties owed on energy extracted from public lands.