Wednesday, August 6, 2008

The Great Oil Give-Away

The recent hysteria over drilling is a thinly veiled attempt to give the public's assets to private corporations.

Some of the oil companies' defenders have claimed that the royalties paid by the oil companies are fair compensation for the damage they do and the fortune they reap from the public lands. But the GAO reports that government giveaways to the oil companies have cost the taxpayers billions of dollars.

If we actually give the oil companies access to additional lands for exploitation, we need to ensure that:

  • Fair compensation is paid

  • Adequate environmental protections are enforced

  • Use it or lose it rules are in place

As the GAO report pointed out, the Dept of the Interior has broad latitude in writing those leases. I don't think it is much of a stretch to say that the oil companies are desperate to have their buddies in the lame duck Bush administration write exceedingly favorable terms into the leases for ANWR and OCS.

We have lost tons of money to outright fraud by the oil companies. The US government has screwed up lease contracts, giving away billions of dollars of royalties. Inadequate auditing has allowed sloppy paperwork to cheat taxpayers out of royalty payments. Lobbyists in the great Washington revolving door have arranged for subsidies and sweetheart deals for their corporate masters.

But last month, the Bush administration confirmed that it expected the government to waive about $7 billion in royalties over the next five years, even though the industry incentive was expressly conceived of for times when energy prices were low. And that number could quadruple to more than $28 billion if a lawsuit filed last week challenging one of the program's remaining restrictions proves successful.

"The big lie about this whole program is that it doesn't cost anything," said Representative Edward J. Markey, a Massachusetts Democrat who tried to block its expansion last July. "Taxpayers are being asked to provide huge subsidies to oil companies to produce oil — it's like subsidizing a fish to swim."