[Congressional Record (Bound Edition), Volume 155 (2009), Part 6]
[Extensions of Remarks]
[Pages 7291-7292]
[From the U.S. Government Publishing Office, www.gpo.gov]




  INTRODUCTION OF THE ``STUDY OF WAYS TO IMPROVE THE ACCURACY OF THE 
 COLLECTION OF FEDERAL OIL, CONDENSATE, AND NATURAL GAS ROYALTIES ACT''

                                 ______
                                 

                        HON. CAROLYN B. MALONEY

                              of new york

                    in the house of representatives

                        Thursday, March 12, 2009

  Mrs. MALONEY. Madam Speaker, I am pleased to reintroduce the ``Study 
of Ways to Improve the Accuracy of the Collection of Federal Oil, 
Condensate, and Natural Gas Royalties Act,'' which would commission a 
study by the National Academy of Engineering to examine the policies 
and procedures for ensuring the oil and gas from federal lands is 
appropriately measured for the purposes of paying royalties.
  The bill has two components. The first calls on the National Academy 
of Engineering to study specific ways to improve the accuracy of the 
collection of royalties on oil and natural gas from Federal and Tribal 
lands. The study is needed because current methods used in the United 
States for collecting, measuring, valuing, and storing oil and natural 
gas may not lead to royalty payments that are as accurate as they could 
be.
  Lawsuits have been filed alleging that energy companies are 
underpaying billions of dollars in royalties because of these 
inaccuracies--or possibly because of outright manipulation--in the 
process for determining royalty payments.
  Many of these lawsuits have been settled, and we're talking about a 
lot of money here:
  In 2000 and 2001, major oil companies settled with the Justice 
Department for over half a billion dollars in two False Claims Act 
lawsuits over oil and royalty underpayments.
  In 2004, Chevron paid out $111 million to the State of Louisiana for 
underpayments.

[[Page 7292]]

  In 2005, BP owned up to the tune of $233 in a Colorado case.
  And, in a case still pending, Exxon Mobil may owe up to $3.6 billion 
or much more to the State of Alabama for underpayments in royalties 
there.
  Certainly, for this kind of money, we can afford to ask the experts 
who understand the technical issues here to study the major underlying 
problems.
  The second part of the bill is a review of royalty payments. It 
provides for a comparison of royalty payments made under federal oil 
and gas lease provisions to data supplied to the Federal Energy 
Regulatory Commission. This is to determine whether such payments were 
adequate under the terms of the oil and gas leases. With completion of 
these studies, the Congress, Minerals Management Service, and the 
Bureau of Land Management will have a better understanding of changes 
that should be undertaken to make the process more accurate and 
transparent, and American taxpayers will have a better chance of 
getting all the oil and gas royalties that they are owed.

                          ____________________