Washington, D.C. – An amendment proposed by Sen. Ron Wyden, D-OR, would allow oil companies to keep more of their profits than the current law, Senate Energy and Natural Resources Chairman Pete V. Domenici said yesterday.

Wyden offered an amendment to the FY 2006 Supplemental Appropriation Bill that prohibits the Administration from expending any funds to offer royalty relief to oil companies when oil prices are above $55 a barrel.  Current law suspends royalty relief when oil prices rise above $35.86.

The Wyden amendment suggests that if the price of oil drops to $54, oil companies could get royalty relief.  Under current law, they don’t get the relief unless prices below $35.86, Domenici explained.

"Let me say that again. Under the Wyden amendment, oil companies will get more royalty relief, not less,” the senator said in remarks on the Senate floor yesterday. “There are two years of contracts – entered into between 1998 and 1999—when the Clinton Administration dropped the ball by inexplicably failing to include any price cap at all. I don’t understand why the Clinton Administration did that. It is a complete failure of responsibility. But the amendment offered by Sen. Wyden doesn’t do a thing to fix that.”

A report by the General Accounting Office says the federal government could lose up to $10 billion in revenue from oil companies because of the mistake by the Clinton Administration.  The Bush Administration is currently fighting the oil companies in court to ensure that appropriate royalties are paid.  

The Congressional Budget Office has scored the Wyden amendment at zero, which means it won’t bring a single dollar of royalties into the federal coffers, Domenici said.

The Energy Policy Act of 2005 has fixed the Clinton Administration problem for any future oil leases. In addition, Republicans today introduced the Gas Tax Relief and Rebate Act of 2006 which eliminates other, unnecessary tax breaks for oil companies.