Gutting oil audit ability

Oil lobbyist J. Bennett Johnston defends Big Oil’s surge in profits in his Jan. 24 BDN op-ed piece as simply reflecting “the natural laws of supply and demand.” This ignores the clandestine boost from the Bush administration to this profit surge.

Since 2001, despite increased production from gas production offshore and on federal land, and a doubling of the wellhead price of natural gas, Big Oil’s royalty payments to the government for gas production on federal lands and offshore production have been declining. This is because the Bush administration early on gutted the Department of the Interior’s ability to audit the oil companies, enabling them to keep two sets of books. They have been reporting lower prices and revenues to the Department of the Interior and substantially higher prices and revenues from the gas production to their stockholders.

Deliberate gutting? Indeed!

See Edmund Andrews, “As profits soar companies pay U.S. less for gas rights,” in the Jan. 23 issue of The New York Times for gory details: weakened auditing rules, reduced budgets, expulsion of resisting auditors.

In sum, a repeat of the FEMA and Forest Service treatment, stemming this time from Vice President Cheney’s clandestine energy task force. “Natural” K-Street conniving?

Perhaps, but not the textbook law of supply and demand at work.

David Felix

Orono