Energy: Giving Away the Store

The Progress Report

Bush administration officials are ignoring the law and giving away tens of billions of taxpayer dollars to oil companies that are already swimming in cash.



“In a first-of-its-kind alliance that could fundamentally reshape the environmental movement, 20 labor unions with nearly 5 million members are joining forces” with an umbrella group of conservationists — the Theodore Roosevelt Conservation Partnership — “to put pressure on Congress and the Bush administration.”


MISSISSIPPI: The “first lawsuit ever filed by the federal government claiming blacks have denied whites their voting rights” begins today.

VIRGINIA: Service members join peace activists to call for an end to the Iraq war.

LOUISIANA: New Orleans is facing an “unprecedented mental health crisis.”

ECONOMY: The Drum Major Institute’s 2006 Injustice Index.


THINK PROGRESS: Video: Bush says he will send more troops to Iraq no matter what Congress does.

JUAN COLE: ‘Orgy of bombings’ over the weekend in Iraq.

THE HORSE’S MOUTH: Greg Sargent’s excellent blog has a new home.

COALITION FOR DARFUR: Ban Ki-moon’s first U.N. test: genocide.


“Years of pursuing stability to promote peace had left us with neither. So we changed our policies, and committed America’s influence in the world to advancing freedom and democracy as the great alternatives to repression and radicalism.”
— President Bush, 9/11/06, on the danger of promoting “stability” in the Middle East


“[Secretary of State Condoleezza] Rice, who once lectured Egyptians on the need to respect the rule of law, did not address those domestic concerns. … It was clear that the United States — facing chaos in Iraq, rising Iranian influence and the destabilizing Israeli-Palestinian conflict — had decided that stability, not democracy, was its priority, Egyptian political commentators, political aides and human rights advocates said.”
— New York Times, 1/16/07, on Rice’s recent visit to Egypt


Progress Report


Politics with an Attitude: Everyone from Barack Obama to Stephen Colbert talks to Campus Progress. Right-wingers seem scared of us. Find out why here.

 January 16, 2007
Giving Away The Store
Go Beyond The Headlines
Coffee and Donuts Not Included
ThinkProgress.orgFor news and updates throughout the day, check out our blog at
Sign up | Contact us | Permalinks/Archive | Mobile | RSS | Print

Giving Away The Store

Bush administration officials are ignoring the law and giving away tens of billions of taxpayer dollars to oil companies that are already swimming in cash. When oil companies drill on federal land and in coastal waters, they owe royalties to the federal government. The payments are the country’s second-largest source of income, right behind taxes. However, the New York Times reports, “An eight-month investigation by the Interior Department’s chief watchdog has found pervasive problems in the government’s program for ensuring that companies pay the royalties they owe on billions of dollars of oil and gas pumped on federal land and in coastal waters.” According to the report, “the agency’s data are often inaccurate, that its officials rely too heavily on statements by oil companies rather than actual records and that only about 9 percent of all oil and gas leases are being reviewed.” As a result, billions of dollars that could be invested in the development of clean, renewable forms of energy are instead being used to subsidize outrageous compensation packages for oil company executives. Interior Department Inspector General Earl Devaney told Congress “Simply stated, short of a crime, anything goes at the highest levels of the Department of the Interior.” Join the effort to get the Bush administration to stop giving away your money.

INTERIOR DEPARTMENT CONSPIRED TO COVER UP PROBLEMS: A forthcoming report by the Interior Department IG “will allege that Interior Department officials covered up a problem with oil and gas leases after it was discovered in 2000, according to congressional aides.” Also, the IG “has been investigating whether Johnnie Burton, head of the agency that collects royalties, might have been told about the problem earlier than she said in congressional testimony last fall.” Burton told the committee that she first learned about the problems in 2006. She later “revised” her testimony, acknowledging that she learned about the problems in 2005 but didn’t understand their “significance” until 2006.

OILING THE WHEELS: Did the royalty scandal go beyond financial favors? Someone familiar with a separate Justice Department investigation into the royalty payments told the New York Times that “it originally had focused on potentially improper social ties between subordinates of Gregory Smith — director of the royalty-in-kind program at the Minerals Management Service in Denver — “and executives at companies vying for contracts.” The subordinates include two women, including one who is said to be in charge of oil marketing, and a second man.” The Justice Department is also investigating whether Smith was “paid as a consultant for oil companies hoping for contracts” while working for the Interior Department.

FORMER INTERIOR SECRETARY CASHES IN: Gale Norton, who until recently was Bush’s Secretary of the Interior — and was ultimately responsible for overseeing the royalty program — has taken a high-paying position with oil giant Shell. Norton will be “general counsel for exploration, production and unconventional resources.”

GIVEAWAYS TO OIL COMPANIES DON’T INCREASE OIL PRODUCTION: Massive giveaways to oil companies are justified by the need to spur the domestic production of oil. As it turns out, that’s not the case. A study by the Interior Department found that the tens of billions in “inducements” would create “only a tiny increase in production even if they were offered without some of the limitations now in place.” The report found the incentives “would lead to the discovery of only 1.1 percent more reserves than if there had been no incentives at all.” The study also found that “the cost of that additional oil could be as much as $80 a barrel, far more than the government would have to pay if it simply bought the oil on its own.”

IF IT’S BROKE, FIX IT: On Thursday, the House of Representative will take up a bipartisan bill — The Clean Energy Act of 2007 — “aimed at recouping lost royalties and stripping oil and gas companies of other tax incentives.” The bill would also “shift $13 billion into a fund to promote energy efficiency and development of alternative and renewable energy sources.” Learn more about at the bill from our Kick the Oil Habit campaign.

Under the Radar

IRAQ — BUSH SAYS HE WILL IGNORE WILL OF CONGRESS, AMERICAN PEOPLE ON IRAQ ESCALATION PLAN: Newsweek reports, “The White House was surprised when even pro-war senators, including Sam Brownback (R-KS) and Lisa Murkowski (R-AK), came out against” Bush’s plan for escalation in Iraq. U.S. News adds Senate Majority Leader Harry Reid has “lined up as many as a dozen Republicans for a resolution opposing what he branded ‘escalation.'” With opposition in Congress growing, Bush said this weekend that he believes he has the authority to ignore the will of Congress and send more troops to Iraq. A USA Today/Gallup Poll released this week found “more than 6 of 10 people back the idea of a non-binding congressional resolution expressing opposition to Bush’s plan to commit an additional 21,500 U.S. troops to Iraq.” A former senior Bush aide who is still close to the White House says that if the situation in Iraq continues to slide, “a delegation of [conservative] senators could one day show up in the Oval Office to tell Bush that the party is no longer with him and the war must end — much like Sen. William Fulbright’s forcefully urging Lyndon Johnson to bring the Vietnam War to a close.”

ENVIRONMENT – FUNDING CUT FOR GLOBAL WARMING RESEARCH: Last year was the hottest on record. The National Oceanic and Atmospheric Administration (NOAA) last week sent out a press release confirming the link between the warm temperatures and human-induced global warming, stating that a “contributing factor to the unusually warm temperatures throughout 2006 also is the long-term warming trend, which has been linked to increases in greenhouse gases.” This acknowledgment came despite President Bush’s refusal to admit a link between human activities and climate change. A new study by the National Academy of Sciences (NAS) concludes that the government’s “ability to understand and predict hurricanes, drought and climate changes of all kinds is in danger because of deep cuts facing many Earth satellite programs and major delays in launching some of its most important new instruments.” NASA’s earth science budget has declined 30 percent under the Bush administration and the NOAA, “meanwhile, has experienced enormous cost overruns and schedule delays with its premier weather and climate mission.” NAS co-chairman Richard Anthes noted, “If things aren’t reversed, we will have passed the high-water mark for our Earth observations. … We need to know more, not less, about long-term aspects of climate change.” While Bush has neglected his campaign pledge to reduce carbon dioxide emissions, Sen. Bernie Sanders (I-VT) will today introduce a bill to “cut greenhouse gas emissions by 80 percent by the middle of the century.” Sanders’s legislation has the backing of 13 leading environmental and government watchdog groups.

CORPORATE RESPONSIBILITY — REPORT BLASTS BP FOR FAULTY SAFETY PROCEDURES: Safety problems, including the discovery last year of pipeline corrosion in Alaska, have tarnished BP’s “carefully-crafted ‘Beyond Petroleum’ image.” In 2005, an explosion at BP’s Texas City refinery killed 15 people, leading the Occupational Safety and Health Administration (OSHA) to fine the company a record $21.4 million for more than 300 alleged violations. In response, the U.S. Chemical Safety and Hazard Investigation Board “urged BP to create an independent panel to review the corporate safety culture after finding evidence that management may have a lax attitude toward process.” Today, the panel, chaired by former Secretary of State James Baker, will release its “harshly worded and highly critical report.” The report accuses BP of “failing to provide adequate resources to ensure safety at its US refineries.” BP has “not always ensured that it identified and provided the resources required for strong process safety performance at its US refineries,” the report says. “The finding is certain to be used against the company in the many outstanding civil cases against BP” and could add to questions about whether BP “was actually the environmentally friendly company that [former CEO John Browne] said it was.”

Think Fast

“There is almost no scientific evidence to back up the U.S. intelligence community’s use of controversial interrogation techniques in the fight against terrorism, and experts believe some painful and coercive approaches could hinder the ability to get good information, according to a new report from an intelligence advisory group.”

“The U.S. military has sold forbidden equipment at least a half-dozen times to middlemen for countries — including Iran and China — who exploited security flaws in the Defense Department’s surplus auctions,” the AP reports.

“Lt. Gen. Karl Eikenberry, the top U.S. commander in Afghanistan, said in an interview that Taliban attacks surged by 200 percent in December, and a U.S. military intelligence officer said that since the peace deal went into effect Sept. 5 the number of attacks in the border area has grown by 300 percent.”

Secretary of State Condoleezza Rice “conveniently ignored Egypt’s internal problems during her visit, which include charges of corruption and torture, to name a few. Rice basically thanked Egypt for its cooperation in the region making it clear that, for the United States, ‘stability, not democracy‘ is the priority.”

34,452: Number of Iraqi civilians killed in 2006, according to the United Nations. More than 36,000 Iraqi civilians were wounded last year.

Rebellion is brewing among conservatives over President’s Bush’s attempt to “impose” Sen. Mel Martinez (R-FL) as “general chairman” of his political party due to Martinez’s support for “amnesty” for illegal aliens.

Under an ethics reform proposal the House is likely to take up and pass this week, “lawmakers who commit crimes in office may no longer be able to rely on a federal pension to pad their fall from grace.”

Senate Judiciary Chairman Patrick Leahy (D-VT) and others argue the Bush administration is “using a little-noticed clause in the Patriot Act to circumvent Senate confirmation” of federal U.S. attorneys. Senators are working to overturn the provision, which “for the first time gave the attorney general, rather than local federal courts, authority to appoint interim U.S. attorneys.”

And finally: The Decider still really likes making decisions. In his interview with 60 minutes, President Bush said “decision” twenty-four times in nine minutes. The chart here “shows how often he said the word during each of the interview’s nine minutes, including two times when he practically shouted it.”

The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.