Though market prices for natural gas have ballooned recently, royalty payments are essentially the same as they were five years ago. The Times reported that the oil and gas companies used a “byzantine set of federal regulations” to report to the government lower sales than they report to their shareholders. This allowed the companies pay less in royalties than market prices would suggest.

Rep. Carolyn Maloney (D-NY), a member of the House Government Reform Committee, Rep. Henry A. Waxman (D-CA), Ranking Member of the Government Reform Committee, Rep. George Miller (D-CA), a member of the Resources Committee, and Rep. Ed Markey (D-MA), a member of the Resources Committee, and Rep. Rahm Emanuel (D-IL) today urged the Chairmen of the Resources Committee and the Government Reform Committee to arrange the hearings to investigate the matter (view PDF document).

“As Americans pay huge gas bills this winter to heat their homes, they are going to be furious that the oil and gas companies are skipping out on paying the bill they owe the American taxpayer,” said Maloney. “These companies are making billions upon billions off of land that belongs to the American taxpayers, and it’s sickening that they would cheat the taxpayers. It’s time that Congress brings the oil companies in for real hearings - and this time, they need to be sworn in.”

“These giveaways to the oil and gas companies are stupefying in their magnitude and inexcusable in their impact on the budget,” said Waxman.

“This is exactly what we mean when we describe the Republican Culture of Corruption - it is about one party running Washington for the benefit of the wealthy few at the expense of the rest of America,” said Miller. “Because Congress has granted the President unchecked power, there is no oversight and no accountability. That’s why we are calling for hearings now and why we need to end the culture of corruption.”

“Thanks to the Republican leadership, the big oil companies are drowning in record profits and the American people are paying the price twice - consumers are socked with astronomical bills at the pump and are subsidizing big industry through the tax giveaways that the Republican leadership dished up for energy companies,” said Markey. “I have introduced a bill that would impose a 50 percent tax on oil companies for oil sold at prices above $40 a barrel and return half of the generated revenue to consumers who have been bearing the brunt of high gas prices by giving an income tax rebate.”

Rep. Markey is the author of the Windfall Profit and Consumer Assistance Act of 2005 which would also exempt profits that are reinvested by oil companies to increase refinery capacity or invest in new production.

According to the Times, prices for natural gas were almost twice as much in 2005 as they were in 2001, but the federal government collected only $5.15 billion in gas royalties in 2005, compared to $5.35 billion in 2001.

Last year, according to the New York Times, Burlington Resources admitted that it had underpaid approximately $76 million in royalties during the 1990s. In 2003, an Alabama jury determined that Exxon had failed to pay $63.6 million in royalties from gas wells. In the late 1990s, Congress led investigations into companies who were cheating the government out of oil royalties. Yet since 2000, Congress has failed to provide sufficient oversight of this program despite two General Accountability Office (GAO) studies.

According to Resources Committee staff, the committee has conducted no oversight on oil and gas auditing and compliance of royalty payments since 2001, when it did a hearing on the RIK (Royalty in Kind) program. In 2000, Chairman Don Young did hold a hearing on the subject, but the purpose was to investigate POGO (Project on Government Oversight) and attempt to hold them in contempt of Congress.

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