Department of Interior officials seem to take sadistic pleasure in badgering oil companies. The latest example involves a new agency created to levy untold millions of dollars in fines if companies don’t kowtow to the new bureaucracy. The agency’s head gave the tasteless warning: “If they cut corners they could end up paying enough to quickly take care of the federal deficit.”
The oil industry now pays $37 million a day in royalties. That’s over $13 billion a year for our near empty U.S. Treasury and other state and special accounts. The comment about collecting royalties enough to pay off the federal deficit might have been said in jest. But petroleum officials aren’t laughing. Allison Nyholm, a royalty expert and policy adviser at the American Petroleum Institute told me: “We want a positive approach, not an adversarial process. There’s a lot of discretion in how fines are imposed. It’s really in the best interest of the companies to expedite payments.”
The sadistic jokester at Interior is Gregory J. Gould, new director of the new Office of Natural Resources Revenue (ONRR). It is one of three agencies that will replace the Minerals Management Service (MMS), which was blamed for being too chummy with the energy industry in its royalty collection operation. The new ONRR will collect and disburse energy-produced revenue from federal and American Indian lands onshore and from the U.S. Outer Continental Shelf offshore.
In announcing the new agency, Interior Secretary Ken Salazar called it “a major step in our overall reorganization.” Just to make sure there’s enough bureaucracy, three agencies will replace one.
The Office of Natural Resources Revenue opened its Denver office Oct. 1 where it will use new computer facilities to assure that government gets what it’s owed, Director Gould commented. Energy royalties are collected like income taxes. Companies self-report what they owe.
In the past, a few companies have cheated—just as some taxpayers do. The big oil companies have federal auditors at oil companies to check correct counting. But to be sure government gets every dime owed, Gould has hired 19 more auditors, bring the total to 164. Previously, only the big companies faced audits. The total ONNR employees will number 600.
The disdain for oil companies, of course, comes from the top. Obama has made clear he can’t stand profit-making, especially by oil companies. It’s a case of trickle-down hate. It dripped down to Interior Secretary Ken Salazar during the Gulf oil spill last spring. That’s when Salazar promised that the Administration would “keep its boot on the throat” of energy giant British Petroleum until the oil gusher stopped and the spill was cleaned up.
In the period during which Salazar had imposed a moratorium on drilling in the Gulf of Mexico, the Interior Secretary continued his brazen talk. “We will only lift the moratorium when I, as Secretary of Interior, am comfortable that we have significantly reduced those risks. So the moratorium dragged on–hurting jobs, drilling, and tourism.
“If they cut corners they could end up paying enough to quickly take care of the federal deficit.”
This was about fines for doing bad things like destroying the environment. Remember the BP oil spill..I know it was a long time ago…but you know…stuff like that.
It was not a comment about royalties. So you can't even get through your opening without being dishonest.
"The oil industry now pays $37 million a day in royalties."
Good…they are sucking out America's natural resources…of course they should pay for it. Oil companies as victims though…really Tait?
You are so full of it. Of all the dumbest most ignorant f*&ktwits that post here you take first place because you are too stupid to even suspect you are stupid. Oil and gas companies earned a total of $730 billion in post-tax profits between 1977 and 2008. Tax Foundation economists estimate that companies paid $818 billion in corporate income taxes to federal and state governments during the same period and this does not even consider revenues from royalties and excise taxes.
They can pay for the privilege like everyone else, doofus.
And that money, coupled with plentiful stooges they have in place in our government, means they have had unparalleled access to U.S. power, essentially crafting and legislating our energy policy for at least a generation–yet another huge industry that doesn't really care which country it needs to exploit. To spell it out for you–they run a huge sector of our economy with no compelling interest in this country's future outside minimum stability required to generate profit. So yeah lets cry for these poor "producers."
Do you have any reading comprehension skills? Oil companies making a profit of 4% on a gallon of gas are obscene but the government taxing the same gallon of gas at 15% isn't. So, they used that unparalleled power and access to make sure they paid $818 in corporate income taxes and other royalties. Oh, I'm sure part of their scheme was to make sure wind and solar companies got tax payer subsidies too, right? They run a huge sector of our economy because they support a large sector of the economy by supplying a product that people use, and pay for voluntarily. They also invest their own money to keep it going, not to mention to start it in the first place and they create jobs. Only a lazy economic illiterate would think that having to work for a living is "exploitation". And yes, they do have a compelling interest in this country's future because they need other businesses and individuals to succeed to be able to buy their product.
How come the defenders of these international conglomerates are so angry?
The fossil fuel giants are OK. Where does the urgency and anger come from?
Where does that 4% figure come from? I mean, we know there is sales tax on a gallon of gas like everything else. States get that mostly. Maybe it's the retailer profit or some other way to juggle the numbers to make the victim case for these super rich and powerful entities (that aren't Americans). You and Sniper should go bowling and discuss where to get "reports" that make you feel like you wanna.
You're probably on the Tax Foundation's e-mail list. You wouldn't want to wait for their next breathtaking "report". You can't even stand me not thinking they are victims. You have to stand up and insist that they are….
Now go empty your bedpan.
And you go change you diapers.
"Good…they are sucking out America's natural resources…of course they should pay for it."
What the hell do you think they are doing with those natural resources??? stock piling them for their own use? Do you have a bicycle hooked up to your computer to power it? Are you typing this by candlelight???
So give it to them? What crawled up your arse?
BP is now getting hammered for past issues that had been settled. The administration sees the oil companies as not only revenue generating spigots, but also as entities to demonize for political effect. Oil, were it not for the speculation allowed by our elected officials, and high taxes, would be quite cheap. It's plentiful, and in our western world, relatively pollution free. Oil has been politicized endlessly, at considerable cost to the taxpayer. A lot of people continue to be duped by the myth of "evil oil." I even had one leftist, an artistic shallow thinker, talk about a conspiracy to start the Iraq war involving automobile companies.
Gee, I'm really weeping for Big Oil right now, especially BP and Halliburton. Interesting that FPM has yet to run A SINGLE ARTICLE that actually condemns the actions and pervasive malfeasance that led to the oil spill. Shame on you, David Horowitz
Yeah the actions and pervasive malfeasance of illegal regulations.
thank you coyotebot3000
Not articles scum…"blog posts". This isn't a magazine or newspaper if it ever was one.
Do the demos want us to buy all our oil needs from potential enemies ?
Looks like it. We need to end the demo party as it is now. Think we will make it ? California, the worst-off state, has re-elected career demo politicians. NO bailout for Calif.
Gov does not take any risks exploring, drilling and dilivering a product that drives our economy, provides heat for our homes and jobs for thousands of people,not to mention pay the salaries of the pompous and incompetent breaucrats who do nothing to produce anything of value. In fact, gov bureacrats stand in the way of American progress and freedom.
“Oil Industry Taxes: A Cash Cow for Government”
http://www.taxfoundation.org/files/sr183.pdf
“Indeed, since 1981, when the failed windfall profits tax was first enacted, federal, state, and local governments in the U.S. have collected more in taxes from the oil industry than the industry has earned in actual profits for its shareholders. For example, after adjusting for inflation, the combined net earnings (net of taxes and expenses) for the largest petroleum companies between 1981 and 2008 totaled $1.4 trillion. By contrast, the total amount of taxes collected by U.S. governments from the oil companies topped $1.95 trillion, roughly 40 percent more than the industry’s combined profits. Tax collections exceeded company profits in 23 of the 27 years surveyed.”
This administration and the EPA are hostile to oil, oil shale, gas and coal, liquid coal. What did candidate Obama say, that his Cap & Trade system would bankrupt the coal industry.?
As a country we are blessed with these resources to the point that we could be energy independent. Radical Enviromentalists have stymied any movement toward energy independence. You say wind and solar – some environmental groups stopped a solar plant in the Mojave to protect desert turtles, potential wind farms have been sued because the turbines would kill birds.
THE US IS HELD HOSTAGE TO THE ENVIRONMENTAL LEFT and this administration seems to enjoy catering to this interest group, whose demands wind up punishing the people of this country.
We need to replace these natural resources with other infinite options for oil and fuels as soon as we can.
You said you didn't mind paying taxes to help "Johnny" in rural AL read. I guess you don't even mind if you use my money, as well as yours, to do so. Let's say my "cause" would be helping oppressed and victimized companies. I have a probem with both of them forms of "help". But for the sake of arguement. What makes "Johnny" a superior cause?
The lack of logic, knowledge of economics, American history and the fundamentals of how America became the great nation it WAS before your highness the ANNOINTED one came to be….. absolutely mind boggling. Bubba, you better ask for a refund if you did attend college. You are ignorant and an incognito socialist….(YOU don't know it, we do). When is the American left going to openly admit that they are after all "means of production" because their main objective, in following the progressive left represented by our adolescent rookie president is to overtake them, bleed them and then redistribute the wealth they produce via an onerous, usurious taxation system……..anyone who doesn't comprehend the benefits that oil exploitation, production and distribution has brought to the WHOLE world is plain stupid and ignorant. Darn Saudi's wouldn't be where they are either……
madness on top of total madness, you got to love this nation of total fools.
Just read your reply, Bubba4. What I object to is the EPA's regulation-making efforts that go beyond its Congressional mandate. It is trying to backdoor the issue of Cap & Trade since it didn't pass the Congress. This is what really bothers me.
This current EPA is hostile to fossil fuels. It is in the hands of Leftist Environmentalists. Obama believes in their cause. Here's Obama on the effects of his Cap & Trade system in his words:
“Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket.”
http://washingtonexaminer.com/op-eds/2009/04/obam…
Necessarily skyrocket??? Now? During a recession? Such a plan can put us into a depression. Such a plan will hurt every American & affect every industry.
I do believe in clean air, clean water. I want a clean environment free of industrial pollution. Companies, if let alone will pollute without any concern for the environment, so I do recognize the need for regulation. Companies must reduce pollution but in a reasonable way, because in the end the consumer will suffer.
We need ENERGY INDEPENDENCE. I'm all for wind and solar, but it can't carry the load. Hydrogen, while excellent, is in the future. Nuclear and Natural Gas would be good options, but we need to make a commitment to them to power our transportation and industry. Algae-farms have really caught my interest.
http://www.americanenergyindependence.com/algaefa…
Clean coal, and oil need to be used but if we start moving in these other areas, the US will start to break its addiction. We can also make things powered by coal & gas more efficient. This can’t be done in the draconian manner the EPA proposes. It needs to be phased in as the other options are coming on line.
The big key for me is government using its power to create more rules and regulations. While most would question what the rules do, I question their purpose is. What is the government really after? I believe it is power, plain and simple and that the environmental agenda is just another means to an end.
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