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Statement of Friends of the Earth on Interior Department Inspector General's Testimony on Oil Royalties

Posted Oct. 30, 2008 / Posted by: admin

Contact: Sara Zdeb, 202-222-0728

Washington, DC - Stating that "short of a crime, anything goes at the highest levels of the Department of the Interior," Inspector General Earl Devaney testified today about a contractual blunder that could lead to more than a $10 billion giveaway to oil companies. Drilling contracts issued in 1998 and 1999 mistakenly provided unlimited royalty relief to companies drilling for oil and natural gas in the Gulf of Mexico. Below is a statement from Sara Zdeb, Friends of the Earth's legislative director:

"The Inspector General's blunt testimony today confirms what we've known all along: the Interior Department's culture of cronyism is paying big dividends for Big Oil while taxpayers foot the bill."

"Coming a day after the New York Times revealed that Chevron may escape paying a billion dollars in royalties on a newly discovered oil field, this candid assessment of the department's failures calls out for congressional action.

"In the short term, Congress should ensure that the final Interior Department's spending bill includes language to end the royalty rip-off offered by Rep. Maurice Hinchey and Sens. Dianne Feinstein and Judd Gregg. And over the long term, Congress must overhaul standards governing the Interior Department's ethics and its royalty relief program."

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