No One Anticipated the Breach of the Royalties
U.S. Interior Department knew about drilling loophole for years
We’re beginning to detect a pattern among Bush administration responses to huge fusterclucks. It seems U.S. Interior Department officials who said they’d learned only last year that oil companies were avoiding billions of dollars in royalty payments have (surprise!) known about the problem for a while. Due to a Clinton-era screwup, more than 1,000 offshore drilling contracts don’t include a clause intended to collect royalties when oil prices rise above $34 a barrel. Interior staffers apparently fixed the problem for future contracts in 2000, but Johnnie M. Burton, the official who oversees the program, wasn’t alerted until 2006. Or was she? Thanks to the magic of email and the doggedness of an independent investigator, a new report shows that Burton found out in 2004. Hmm, said Burton, maybe she was told, but she “did not remember putting a great deal of thought into the matter.” Investigators estimate that the feds lost out on $865 million in royalties over the last three years. Oopsy!