NOW

Crude Awakening (2006x24)

: 16, 2006

As oil and gas companies continue to make enormous profits in a time of record-high gas prices, watchdog groups are accusing these companies of shortchanging American taxpayers out of billions of dollars in royalties for drilling rights on public property. Members of Congress are also being blamed for making sweetheart deals with Big Oil engineered to avoid the payment of royalties. "These oil companies along with some members of Congress have really engineered one of the greatest train robberies of all time," says California Congressman George Miller. You might not realize it, but American taxpayers own some very valuable property, some of it located in the deep waters of the Gulf of Mexico. If oil and gas companies want to drill on this territory they are required to lease it out from the U.S. government, which collects royalties from them on the taxpayers' behalf. Big Money It's no paltry sum. Royalties from oil and gas exploration are the government's second largest source of revenue, behind income tax. "I think the American taxpayers are losing billions of dollars," Kevin Gambrell, former director of the Federal Indian Minerals Office in Farmington, New Mexico, told NOW. Gambrell worked for seven years collecting royalties from petroleum companies working on federal and Native American lands in the Four Corners region. "I think oil and gas companies were always trying to figure out how not to pay royalties or to pay as little as possible," Gambrell said. He said he caught many oil and gas companies lying and cheating to avoid paying the full royalties owed. He adds that when he tried to go after a company for the royalties they owed, he received phone calls from Congressional offices leaning on him to side with industry. The Royalty Treatment Back in 1995, Congress passed the Deep Water Royalty Relief Act that reduced the amount of royalties oil and gas companies had to pay. At the time, when gas prices were fairly low, the move wa