WASHINGTON – U.S. Senator Pete Domenici, the ranking member of the Senate Energy and Natural Resources Committee, today said that he will propose a three-year extension of the Gulf of Mexico oil and gas leases as a way to address errors that were made by the Clinton Administration that could cost the federal government up to $10 billion in lost royalties.
During a Senate Interior Appropriations hearing today with Interior Secretary Dirk Kempthorne, Domenici said that while he’s open to ideas to bring companies to the table to renegotiate the leases, he believes that offering a three-year extension in exchange for new thresholds is a viable solution worth a closer look.
“I am committed to addressing the 1998/1999 lease situation in a fair, reasonable manner that will withstand legal challenges. It will be my proposal to provide the Secretary of Interior the authority to extend leases for a period of three years in exchange for the application of price thresholds on the 1998/1999 leases effective on the date of enactment,” said Domenici, who is also a senior member of the Senate Appropriations Committee.
“I recognize that this will not entirely solve the problem and make the Treasury 100 percent whole, but the bottom line is that this was a major mistake by the Clinton Administration that has already cost the government nearly $1 billion dollars. As I have said, I am open to other reasonable options that are likely to withstand potential legal challenges, but we must act soon,” Domenici continued.
At the hearing, Secretary Kempthorne pledged to work with Domenici and other Senators on a solution, and also pledged that the mistake would not be repeated by the Bush Administration.