02 March 2006

Inexplicable Error Benefits Oil & Gas Industry

The Interior Department disclosed Wednesday that a provision was mysteriously deleted from hundreds of federal drilling leases in the late 1990s that would have required producers to pay royalties, once prices reached a certain level, on oil or gas taken from deep waters of the Gulf of Mexico.

While providing no specific number, Cruickshank said the government already has lost "several hundred million" dollars in royalty payments from the 1998-99 leases because they lacked the threshold language. If prices remain high, lost royalties "will be in the billions of dollars," he acknowledged.


Huge profits. Huge tax breaks. Huge mistakes.

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