[Congressional Record Volume 143, Number 10 (Thursday, January 30, 1997)]
[Senate]
[Page S830]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




[[Page S830]]



                        ROYALTIES FROM CRUDE OIL

  Mrs. BOXER. Mr. President, I want to brief the Senate on an issue 
that is gaining steam in my home State of California, because, if it is 
resolved, it will result in about $80 million going directly into the 
school system in California to help the children there.
  This issue involves the underestimation by oil companies of royalties 
that they owe the Federal Government from crude oil that they have 
pumped. They have underestimated these royalties and have been sent a 
bill by the Department of the Interior, and they have not yet paid.
  At this point the amount owed is $385 million. We expect it will go 
up to $440 million.
  Ten oil companies, the largest one being Shell, have been sent their 
bills. Shell Oil's bill is over $100 million. Those funds will go to 
the U.S. Treasury, and then a portion of those funds will go to the 
States in which the oil was pumped. California is the place where most 
of that oil comes from; and California will get between $75 and $80 
million from the Federal Government when those funds are collected.
  In California we have a law that the royalties all go to the State 
Schools Fund. I really hate to see years of protracted litigation, Mr. 
President, on this matter.
  The oil companies are not cooperating. Many of them have refused the 
subpoenas. They are disregarding the subpoenas sent to them. The 
Justice Department is now involved. I hope that instead of being 
deadbeat oil companies, they will pay up. If they feel they have a case 
that the bills are too high, they can fight that out. They can try to 
settle it. But they should at least cooperate and begin paying some of 
what is owed.
  Mr. President, I can tell you, the $75 to $80 million to California 
schools would mean that we could hire an additional 1,000 teachers or 
buy 40,000 computers. The children deserve that.
  For Orange County alone the underpayments total more than $5 million; 
for Los Angeles, $18 million; for San Diego, $5 million; for Fresno, 
$2.25 million.
  So I appeal to these oil companies, do right for our children, pay 
what you owe. Be good citizens, cooperate in this investigation, make 
some payments, work with us so that our children can get a better 
education.
  I hope the people of this country will write to the CEO of Shell, 
will write to the CEO of Oryx, of Marathon, of Mobil and tell those 
CEO's that we are all in this together and that when an individual 
family gets a bill, when they do not pay it, they cannot stall, they 
cannot afford to hire lawyers. If, in fact, the individual says, 
``Well, I paid it,'' you know what you would do as a family member; you 
would say, ``Here's my canceled check. I've paid this,'' or, ``Come and 
look at this. This is a mistake.''
  That is not what these oil companies are doing. Three of them 
complied with the subpoenas, but five are fighting them. So I feel, Mr. 
President, this is an issue that deserves attention.
  I am very pleased that Cynthia Quarterman, the Director of the 
Mineral Management Services, and Bob Armstrong are working on this 
case. They are going forward to collect these sums. They have written a 
new rule so that in the future there will not be any confusion about 
what is owed.
  So I look forward to a successful conclusion, and I really do think 
if the people of this country and citizens of California write to these 
oil companies, maybe we will see some of these payments.
  Thank you very much, Mr. President. I yield the floor and suggest the 
absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. GRAMM. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Ms. Collins). Without objection, it is so 
ordered.

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