William Perry Pendley

The Constitution provides, "The Senators and Representatives… shall be bound by oath or affirmation, to support this Constitution…." Thus, every other January, the U.S. House of Representatives and one-third of the Senate proclaim:

I do solemnly swear that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; [] and that I will well and faithfully discharge the duties of the office on which I am about to enter.

Apparently there is a difference between taking this oath and taking it seriously.

Last January, the House of Representatives passed H.R. 6, the “CLEAN (Creating Long-term Energy Alternatives for the Nation) Energy Act of 2007,” which includes: the “Ending Subsidies for Big Oil Act of 2007,” the “Royalty Relief for American Consumers Act of 2007,” and an untitled section, under which revenues generated by Sections I and II will be spent on yet-to-be-determined “alternative” energy sources. This is typical: in the 1980s, after creation of a commission to recover “$1 million a day” purportedly lost in “unpaid oil and gas royalties,” Congress promptly spent an additional $365 million.

In 1995, Congress, to encourage exploration in the Gulf of Mexico’s deep water, granted some royalty relief for operators brave enough to go where none had gone before. Last summer that bore fruit with the discovery, 175 miles offshore in 7,000 feet of water, of 3 billion to 15 billion barrels of oil. Congress also gave the Department of the Interior (DOI) discretionary authority, but not a mandate, to limit the relief depending on oil and gas prices. The Clinton Administration adopted limits for most years; however, in 1998 and 1999, it did not. No skullduggery was involved; in fact, the DOI’s Inspector General wrote that industry officials reported the “mistake.”

Now Congress plans a “gun to the head” of anyone with an interest in the 1,032 deep- water leases from 1998 and 1999, demanding they “renegotiate”—an ironic term given the “take it or leave it” nature of federal contracts—those leases: 20 producing leases must pay between $158 million and $788 million each; 526 leases being explored or developed owe $9,375 to $21,600 each. If they refuse, they will be barred from new Gulf of Mexico leases.

William Perry Pendley

William Perry Pendley is President and Chief Legal Officer at the Mountain States Legal Foundation.

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