Democrats Drop Ball on Energy Production, Oversight of MMS Oil and Natural Gas Royalties Collection

Press Release

Congressman Darrell Issa today said the single most important issue facing Congress this month is lifting the moratorium on drilling for oil and natural gas on federal lands. "We must open America's domestic energy resources to drilling; we must pass the American Energy Act," Issa said. "At the same time, we must also collect the royalties owed to the American people by oil and natural gas companies. Unfortunately, the Democrat led Congress has dropped the ball on all fronts."

Issa blasted Democrats and, in particular, House Oversight and Government Reform Committee Chairman Henry Waxman for failing to continue the Republican-led investigation of the Interior Department's Minerals Management Service (MMS). In 2006, Chairman Tom Davis and Issa conducted an in-depth investigation into the absence of royalty price thresholds in deepwater leases between MMS and oil and natural gas producing companies signed in 1998 and 1999. In 2006, the Government Accountability Office estimated that the lack of price thresholds had already cost the government $2 billion in foregone royalties, and may cost the taxpayers upwards of tens of billions of dollars over the life of the leases - and that was when the cost of oil was $66 per barrel - and this is just the tip of an iceberg that could be tens of billions more.

"The Interior Department breached its fiduciary duty to the American people. It is charged with holding our natural resources in trust, but instead, it has squandered billions," Issa said.

Issa continued, "We have had two years of inaction by the Democrats over a government program that brings in tens of billions of dollars in revenue. We knew two years ago that the office was corrupted with severe ethical lapses and that it did not exercise accountability over revenues due to federal government. We knew then that MMS did not have the ability even to track how much oil was being produced or the revenues due the American taxpayer. The Democrats couldn't care less."

Issa argued, "The American people must get every dime that is due from the leases on federal government property but we have no assurance that is happening today because a corrupt and dysfunctional federal agency administers the program."

"Chairman Davis and I have continually pressed Mr. Waxman and other Democrats since they took over the Congress in 2007 to continue the investigation of MMS. We demanded both orally and in writing that he continue this investigation. Chairman Waxman and the Democratic leadership have paid nothing but lip service, including the issue in the Committee's Oversight Plan, but taking no action to investigate what we know to be a dysfunctional organization with serious ethical problems."

An often overlooked fact is that the royalties from increased domestic production of oil and gas will bring a huge financial boon to the taxpayer. We are now transferring $700 billion a year overseas because of our imports of oil and gas. If we assume a 12 to 15 percent royalty by substituting domestic production for that $700 billion, we would accrue revenues to the United States upwards of $140 billion a year. That's not chump change.

A copy of the May 17, 2007, letter Reps. Davis and Issa sent to Reps. Henry Waxman and Rep. Dennis Kucinich calling for a resumption of the MMS investigation is attached.

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