Did you know oil companies get our oil for NOTHING???? NO royalties owed.

US lawmaker goes after oil firms in royalty dispute
Thu Apr 8, 2010 5:06pm EDT

* Government may lose $53 billion in oil, gas royalties

* Energy firms may not get access to new drilling areas

* Companies may be hit with special surcharge in dispute

By Tom Doggett

WASHINGTON, April 8 (Reuters) - A U.S. lawmaker wants to make oil companies that he says owe the government billions of dollars in past royalty fees pay up if they want to explore for oil or natural gas in new offshore areas.

Democratic Representative Edward Markey plans to introduce legislation next week requiring oil companies to pay the disputed royalties or be charged a special fee for drilling in Atlantic waters from Delaware to central Florida, as well as the eastern Gulf of Mexico, that the Obama administration recently opened for new energy development.

"If oil companies want to access these newly opened areas, my legislation would ensure that the American taxpayers get the money they are rightfully owed," said Markey, who is chairman of the House Committee on Energy Independence and Global Warming. "It is time to put an end to Big Oil playing Uncle Sam for Uncle Sucker," he added.

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The dispute centers on faulty leases that were issued to energy companies in the 1990s, when oil prices fell to $10 a barrel. To make drilling in the deeper waters of the Gulf of Mexico more economically feasible, royalties were waived on initial oil and natural gas production.

However, the government forgot to include language in the leases that would end the royalty relief if oil and gas prices shot up to high levels, which they did.

The companies still refused to pay past royalties because they said the leases were valid contracts that could not be broken, even if the government made an honest mistake.

"Sending the signal now that America changes its rules mid-game would discourage investment and potentially cost jobs," said Cathy Landry, spokeswoman for the American Petroleum Institute.

She also said the leases were not free, pointing out that energy companies paid the government $4 billion to obtain the leases, $37 billion to develop them and billions more in taxes related to production.

Anadarko Petroleum Corp (APC.N) has led the legal challenge against the government over the royalty dispute.

The Supreme Court last October ruled in the company's favor, a decision that is expected to cost the government $53 billion over the next 25 years in lost royalties from energy companies.

more... http://www.reuters.com/article/idUSN0820402820100408