Approprations Committee Adopts Domenici Amendment on Royalty Payments
Authorizes Interior to negotiate for royalty payments on '98, '99 leases, affirms congressional intent on price threshold
June 29, 2006
03:24 PM
Washington, D.C. -- The Senate Appropriations Committee today adopted an amendment offered by Energy & Water Subcommittee Chairman Pete Domenici which instructs Interior to aggressively negotiate with oil companies for payment of royalties on 1998 and 1999 leases and affirms Congress’s intent that oil companies pay royalties on all leases when oil prices reach a certain level.
The committee also adopted an amendment offered by Senator Dianne Feinstein which prohibits oil companies who have not paid royalties on the 1998 and 1999 leases from bidding on new oil and gas leases in FY07.
In remarks to the full committee, Domenici urged the senators to give the Department of the Interior a year to negotiate this matter with the oil companies. If, in that time, the oil companies do not agree to pay the royalties the Administration believes they owe, then Congress can come back and prohibit the recalcitrant companies from bidding for future leases or take other steps to recoup federal losses. At that time, Domenici said, he would lead the charge.
Chairman Domenici today issued the following statement:
“My amendment seeks to address this very serious royalty problem but I want to do it in a way that doesn’t make the federal government seem like an unreliable business partner. I’m gratified the Appropriations Committee adopted my amendment, but I’m disappointed the Committee also chose to also adopt Sen. Feinstein’s amendment. We all want to get to the same place. We all want to recoup money owed to the federal government and we want to make sure this problem doesn’t happen again. I believe we can get there without engaging in this kind of coercion. If next year the oil companies are still balking, then I’m prepared to mete out a penalty but to do that now is just bad business. We’ll sort this out in conference, but I hope sincerely that in the meantime the companies will continue to step forward – as many already have – and renegotiate with the Interior Department.”
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