US Royalties to Big Oil Give a New ($100 Billion) Meaning to "Black Gold"

Thu, 2006-03-30 08:45Ross Gelbspan
Ross Gelbspan's picture

US Royalties to Big Oil Give a New ($100 Billion) Meaning to "Black Gold"

Incentives for oil and gas companies that drill in the Gulf of Mexico will cost the federal government at least $20 billion over the next 25 years, according to the draft of a Congressional report obtained on Tuesday.

The new estimates, prepared by the Government Accountability Office, also warn that $80 billion in revenue could be lost over the same period if oil and gas companies win a new lawsuit that seeks a further reduction in their royalty payments.

The report, delivered in a private briefing late Monday to House and Senate staff members, startled some of the program's longtime supporters and infuriated some critics.

The report is the first attempt by a government agency to calculate the soaring costs of a 10-year-old program that was created to encourage deepwater drilling when energy prices were low.

 
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A U.S. District Court judge ruled on June 27 that the Bureau of Land Management (BLM) and Forest Service both wrongly approved expansion of the West Elk coal mine in Somerset, Colo., because they failed to take into account the economic impacts greenhouse gas emissions from the mining would have.
 
The federal agencies said it was impossible to quantify such impacts, but the court pointed out a tool is...
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