U.S. Drops Bid Over Royalties From Chevron

[onehandle]

WASHINGTON, Oct. 30 — The Interior Department has dropped claims that the Chevron Corporation systematically underpaid the government for natural gas produced in the Gulf of Mexico, a decision that could allow energy companies to avoid paying hundreds of millions of dollars in royalties.

The agency had ordered Chevron to pay $6 million in additional royalties but could have sought tens of millions more had it prevailed. The decision also sets a precedent that could make it easier for oil and gas companies to lower the value of what they pump each year from federal property and thus their payments to the government.

Interior officials said on Friday that they had no choice but to drop their order to Chevron because a department appeals board had ruled against auditors in a separate case.

But state governments and private landowners have challenged the company over essentially the same practices and reached settlements in which the company has paid $70 million in additional royalties.

http://www.nytimes.com/2006/10/31/business/31royalties.html

[ixion]

1. so they take public land, take OUR natural gas for themselves

and then balk when asked to pay 'royalties' :eyes: :grr:

[indepat]

10. How 'pukes play the game

[HereSince1628]

2. Just another thing requiring fixing...

There's a lot of fixin needing to be done.

[1932]

3. I guess asking for a tiny of fraction of what was due was the first sign the

Republicans in federal gov't weren't so interested in getting money owed to taxpayers.

[Kagemusha]

4. I recall the other case auditors lost. They had no choice now.

In other words, things are f'd up as they are and no amount of whining now would have changed this...

[gratuitous]

5. So who's sacrificing in the so-called war on terror?

I see the oil companies ringing up quarterly profits in excess of anything ever seen before. And yet Tony Snow's number topped 100 dead soldiers this month. When do the oil companies start sharing the burden?

Oh well, at least the country is so flush with money that we can easily forego these gas royalties.

[yurbud]

6. In other countries, people vote and march in streets about this stuff

In South America and the Middle East, people actually vote on issues how much they charge oil, coal and other companies for taking those natural resources, and we have overthrown and tried to overthrow governments that fought too vigorously to get their people a fair share. When the Bush administration planned to privatize Iraq's oil so they could cheat Iraqis out of more of their oil income, General Jay Garner who was sent to run Iraq said that would incite an insurgency. He was right.

In America, we vote based on which party seems to have the least pedophiles or adulterers, whether we want a flag burning amendment, or whether we think gay marriage will make homosexuality more contagious.

Bush could stop collecting royalties on our oil, coal, trees, uranium, copper, gold, natural gas, and even public airwaves, and 95% of Americans would not notice.

Maybe we should take a break from teaching other people democracy and see if there's anything we can learn from them. Or we can pass a constitutional amendment requiring the police to find JonBenet Ramsey's real killer, and argue about whether you can drive in the car pool lane if you put a yard gnome in the passenger seat.

[seafan]

7. .."the Bush administration is incapable of preventing big oil companies from cheating taxpayers,”...

U.S. Drops Bid Over Royalties From Chevron


(More from this eye-popping article; all emphasis is added.)

The reversal in the case, which involves Chevron’s accounting of natural gas sales to a company it partly owned, has renewed criticism that the Bush administration is reluctant to confront oil and gas companies and is lax in collecting royalties.
“The government is giving up without a fight,” said Richard T. Dorman, a lawyer representing private citizens suing Chevron over its federal royalty payments. “If this decision is left standing, it would result in the loss of tens of millions, if not hundreds of millions, of dollars in royalties owed by other companies.”

snip


In return for the right to drill on federal lands and in federal waters, energy companies are required to pay the government a share of their proceeds. Last year, businesses producing natural gas paid $5.15 billion in government royalties.
But the Bush administration has come under fire on Capitol Hill for its record on collecting payments. While the Interior Department has sweetened incentives for exploration and pushed to open wilderness areas for drilling, it has also cut back on full-scale audits of companies intended to make sure they are paying their full share.
Administration officials knew that dozens of companies had incorrectly claimed exemptions from royalties since 2003, but they waited until December 2005 to send letters demanding about $500 million in repayments.


In February, the Interior Department acknowledged that oil companies could escape more than $7 billion in payments because of mistakes in leases signed in the 1990s.
--snip
In addition, four government auditors last month publicly accused the Interior Department of blocking their efforts to recover more than $30 million from the Shell Oil Corporation, the Kerr-McGee Corporation and other major companies.
--snip
....said Representative Edward J. Markey of Massachusetts, a senior Democrat on the House Committee on Resources. “The public has been systematically fleeced out of royalties that these companies owe for the privilege of drilling for oil and gas on lands belonging to all of us.”

snip


From 2001 to 2003, after detailed audits of several Chevron leases, the Interior Department said the company was reducing its “sales value” by exaggerating processing costs at six of Dynegy’s many plants. At one plant, auditors estimated Chevron had claimed five times the actual costs.
At first glance, the suspected underpayments seemed trivial: about $6 million out of hundreds of millions in royalties. But the audits were limited to only a handful of plants. Had the Interior Department pressed its claims successfully, it could have recovered money tied to all the other plants, and for other years.
Chevron paid the $6 million but appealed. The file in that case now runs more than 900 pages, most of it still off-limits to the public.

snip


On July 11, three weeks before the department dropped its case against Chevron, Mr. Dorman and other lawyers involved in a Texas lawsuit against Chevron wrote to Interior Department officials. The lawyers, who represent a whistle-blower seeking to recover money for the federal government,...
--snip
Getting no response, the lawyers sent a copy by U.P.S. Six days later, it was returned. The reason, according to the U.P.S. label: “Receiver did not want, refused delivery.”

The agency confirmed in a statement that it knew of the lawyers’ case. Asked why it refused to accept their letter, the Minerals Management Service said it could not comment “because these matters are the subject of pending litigation.”

[Miss Chybil]

8. Ah, they can just make up the difference by taxing the richest people in the

country more - like oil execs. (Silly, I know.)

[ShockediSay]

9. crooks, liars, spin meisters and lobbyists