BIg Oil Denounces House Plan To Cut Incentives, Reinvest In Renewables - NYT

WASHINGTON, Jan. 12 — The nation’s oil and gas companies, hoping to fend off an attack by Congress on their tax breaks and subsidies, angrily denounced an effort by House Democratic leaders Friday that would repeal billions of dollars worth of incentives and plow the money into renewable energy projects.

“This bill takes capital from U.S. oil and natural gas companies that otherwise would be spent on domestic energy exploration,” said Barry Russell, president of the Independent Petroleum Association of America, which represents about 5,000 smaller oil and gas producers. “If the goal is to lessen our dependence on foreign oil, then this bill falls far short.” The giant integrated oil companies, like Chevron and Exxon Mobil, have been more resigned about losing some of their tax breaks but are quietly resisting pressure to renegotiate leases that allow them to pump billions of dollars worth of oil and gas from publicly owned waters without paying royalties to the government.

House Democratic leaders unveiled a bill on Friday that could raise more than $10 billion by repealing half a dozen incentives created in the last several years by the Republican-led Congress or by the Bush administration.

One measure would pressure companies to give up a lucrative loophole that the government inadvertently included in offshore drilling leases for the Gulf of Mexico. The leases, signed in 1998 and 1999, allow companies drilling in deepwater to escape royalty payments on as much as 87.5 million barrels of oil per lease. Because of an error that officials ignored for six years, the leases omitted a standard escape clause that eliminates the incentives if oil prices climb above $34 a barrel. Government officials have estimated that the mistake could cost the Treasury $10 billion over the next five years. The Bush administration has asked companies to voluntarily renegotiate, but only five companies have signed new agreements.

EDIT

http://www.nytimes.com/2007/01/13/business/13royalty.html?_r=1&oref=slogin

"How dare they threaten our sacred subsidies?" the cry rises up in oil baron boardrooms.

"a lucrative loophole that the government inadvertently included in offshore drilling leases for the Gulf of Mexico."

Uh, well, hmmmm.... nope. I don't buy the 'inadvertently included' nonsense. The corruption and collusion that keeps the Kleptocracy running is entirely 'vertent'.

Fuck you, Big Oil.