Washington, DC— Congresswoman Diane E. Watson, Ranking Member of the Government Reform Subcommittee on Energy and Resources, today queried oil company executives about the lack of price thresholds in deep water leases executed in 1998 and 1999.   

The Subcommittee has been investigating the Department of Interior’s implementation of the Deep Water Royalty Relief Act of 1995 and the missing price thresholds since March of this year.  The absence of price thresholds (used to trigger royalty payments to the federal government when oil rises above a specified price) is forecast to cost the federal government and taxpayers $10 billion in revenue over the next 25 years.

“The American consumer is suffering while the oil and gas industry is recording the largest profits in America’s history,” said Congresswoman Watson in her opening remarks.  “This is an unacceptable situation.  This should not be happening.  Hasn’t Enron taught us a lesson?”

Attorneys from the Department of Interior’s Solicitor’s office claimed that the missing price thresholds were a surprise to them.  However, oil company witnesses testified that they were aware of the omission of price threshold triggers in 1998 and 1999 and did not believe it was a mistake.

“Congress has an oversight duty to the American taxpayer,” said Congresswoman Watson.  “One of our responsibilities is to ensure that companies do not exploit public assets.  The abuse of the royalty relief program during 1998 and 1999 is unacceptable and will be corrected.”

The Subcommittee plans to hold future hearings on the issue.