As reported last week, a Federal court ruling in a lawsuit brought by Kerr-McGee could cost the U.S. Treasury more than $60 billion in lost revenues. Kerr-McGee (now owned by Anadarko) had argued that specific amounts of oil and gas produced from public lands in the Gulf of Mexico should be royalty free, regardless of price.
The decision has the effect of giving tens of billions of dollars of public property to the industry, for free. Even if crude oil wasn’t bumping $100 a barrel, and even if oil companies weren’t banking billions in profits, Sen. Bingaman believes that this ruling, as a matter of law, is just wrong. Clearly, the industry does not need this incentive to pump oil at today’s prices; equally clear is the fact that America does need this royalty revenue to pay for critical national priorities, including funding our military, providing health care for poor children and paying down a $9 trillion national debt. That’s why a bipartisan group of 43 senators today asked the President how the Administration plans to address this serious new problem.
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