September 19, 2000
12:00 AM
WASHINGTON, D.C.– One Senator has decided to hold up the passage of the Strategic Petroleum Reserve re-authorization, and the creation of a Northeast home heating oil reserve. This measure has support from both sides of the aisle. "It is a bi-partisan compromise, but once again there is a Senator putting a roadblock in the way of our energy security," said Chairman Frank H. Murkowski. Sen. Barbara Boxer, D-Calif., objects to a portion of the bill that was requested by the Minerals Management Service on royalty-in-kind. She also objects to another provision that has passed the Senate twice, (March 25, 1999, June 25, 1998). It is a measure that allows power plants smaller than 5-megawatts to be licensed through a state procedure in Alaska. It allows Alaska Natives to have clean, renewable energy rather than the diesel they now have to burn. "I’ll be happy to tell the Natives in Alaska that the Senator from California thinks they don’t need clean power," said Murkowski. " And if they do they are going to have to endure the extended Federal Energy Regulatory Commission re-licensing procedures —appropriate in large scale projects—and the incredible expense. If Sen. Boxer has her way these small communities will have to make a choice between spending millions of dollars for red tape or spending money on education for children." The royalty-in-kind provision has no objections from any other Senator, nor does it have an objection from the Administration. "It is hard to understand the Senator’s objections when the provision simply says that the Secretary of the Interior ‘may’ accept gas and oil in lieu of cash payments. The Department of the Interior has that power now and is using it in pilot projects," explained the Chairman. The provision allows the Interior Secretary more administrative flexibility to actually increase revenues from the government’s oil and gas royalty in-kind program. Under current law, the government has the option of taking its royalty share either as a portion of production, usually one-eighth or one-sixth, or its equivalent in cash. Recent experience with MMS’s royalty-in-kind pilot program has shown that the government can increase the value of its royalty oil and gas by consolidation and bulk sales. Under royalty-in-kind, the government controls and markets its oil without relying on its lessees to act as its agent. This eliminates a number of issues that have resulted in litigation in recent years and allows the government to focus more directly on adding value to its oil and gas. "I am disappointed that the Senator would take this action that is delaying needed relief to the people of the Northeast," said Murkowski. ####