Paula Dittrick
Senior Staff Writer
HOUSTON, Feb. 20 -- Rep. Joe Barton (R-Tex.), House Energy and Commerce Committee chair, has disputed a media report that federal royalty relief in the deepwater Gulf of Mexico will cost the US government billions of dollars.
A Feb. 14 New York Times article said royalty relief could cost the US more than $7 billion in royalties from about $65 billion in production from federal offshore leases during the next 5 years under the Deep Water Royalty Relief Act of 1995 (OGJ Online, Feb. 16, 2005).
The newspaper said it based the estimate on US Minerals Management Service projections that royalty-free oil production could reach 112 million bbl at an assumed average price of $50/bbl, and royalty-free gas could reach 1.2 tcf by 2011 at an average $7/Mcf price.
"I think the reporter got that wrong," Barton told a Feb. 17 Institute for Energy Law conference in Houston. "I don't think he used the right database."
On another topic, Barton said he believes the oil and gas industry could do a better job of relating with the US public.
"If I were the chief executive officer of a major integrated oil company, I would really try to do something to show the American people that I care," said the congressman, who addressed the conference by telephone from his Ennis, Tex., office because weather prevented his trip to Houston. "At a minimum, I would look at refinery expansion. I would take some of my profits and try to expand a refinery or maybe even build a new refinery."
Last year, Barton sponsored a refinery and pipeline construction bill that the House narrowly passed. The Senate version of the bill, S 1772, was sent to committee and was not reported out of committee (OGJ, Oct. 17, 2005, p. 22).
Proponents said HR 3893, the Gasoline for America's Security Act, would reform cumbersome siting procedures by requiring the Department of Energy to coordinate refinery permitting.
While promoting the bill, Baron noted that 324 refineries operated in the US during 1981, compared with 148 during 2005.
Contact Paula Dittrick at [email protected].
