RAW STORY received today a letter from Representative Henry Waxman (D-CA) to House Speaker Dennis Hastert today regarding a $2.5 billion provision benefiting oil and gas companies, Halliburton, and Sugar Land, Texas, that was inserted into the energy legislation after it had been
closed to further amendment. Writes Waxman:
"The provision at issue is a 30-page subtitle called
"Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum
Resources."[1] This subtitle, which was taken from the House-passed
energy bill, was mysteriously inserted in the final energy legislation
after the legislation was closed to further amendment.
"Obviously, it would be a serious abuse to secretly
slip such a costly and controversial provision into the energy
legislation.
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"Although the name of the subtitle refers to "ultra-deepwater and unconventional natural gas,"it appears that the $2.5 billion fund created by the subtitle can in fact be used for many oil and gas projects."
The text of the letter follows.
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July 27, 2005
The Honorable J. Dennis Hastert
Speaker
U.S. House of Representatives
H232 Capitol
Washington, DC 20515-6501
Dear Mr. Speaker:
I am writing to draw to your attention a provision in the
Energy Conference Report that raises serious procedural and
substantive concerns. At its essence, this provision is a $2.5
billion giveaway to the oil industry, Halliburton, and Sugar Land,
Texas. The provision was inserted into the energy legislation after
the conference was closed, so members of the conference committee had
no opportunity to consider or reject this measure. Before the final
energy legislation is brought to the House floor, this provision
should be deleted.
The provision at issue is a 30-page subtitle called
"Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum
Resources."[1] This subtitle, which was taken from the House-passed
energy bill, was mysteriously inserted in the final energy legislation
after the legislation was closed to further amendment. The conferees
were told that they would have the opportunity to consider and vote on
the provisions in the conference report. But the subtitle was not
included in the base text circulated to conferees, and it was never
offered as an amendment.
Instead, the new subtitle first appeared in the text of
the energy legislation only after Chairman Barton had gaveled the
conference over. Obviously, it would be a serious abuse to secretly
slip such a costly and controversial provision into the energy
legislation.
On the merits, the subtitle is an indefensible giveaway to
one of the most profitable industries in America. The provision
establishes a $2.5 billion fund, up to $550 million of which would be
dedicated direct spending, which is not subject to the normal
congressional appropriations process. Although the name of the
subtitle refers to "ultra-deepwater and unconventional natural gas,"
it appears that the $2.5 billion fund created by the subtitle can in
fact be used for many oil and gas projects. According to the language
of the subtitle, oil and gas companies can apply for funds for a wide
variety of activities, including activities involving "innovative
exploration and production techniques" or "enhanced recovery
techniques."[2] While oil and gas companies could be required to
contribute to the costs of their projects, the subtitle expressly
provides that the Department has discretion to reduce or eliminate any
such contribution.[3]
The subtitle appears to steer the administration of 75% of
the $2.5 billion fund to a private consortium located in the district
of Majority Leader Tom DeLay.[4] Ordinarily, a large fund like this
would be administered directly by the government. The subtitle,
however, directs the Department to "contract with a corporation that
is constructed as a consortium."[5] The leading contender for this
contract appears to be the Research Partnership to Secure Energy for
America (RPSEA) consortium, housed in the Texas Energy Center in Sugar
Land, Texas.[6] Halliburton is a member of RPSEA and sits on the
board, as does Marathon Oil Company.[7] The subtitle provides that
the consortium can keep up to 10% of the funds - in this case, over
$200 million - in administrative expenses.[8]
The subtitle further provides that members of the
consortium, such as Halliburton and Marathon Oil, can receive awards
from the over $2 billion fund administered by the consortium.[9]
In short, the subtitle provides that taxpayers will hire a
private consortium controlled by the oil and gas industry to hand out
over $2 billion to oil and gas companies. There is no conceivable
rationale for this extraordinary largess. The oil and gas industry is
reporting record income and profits. According to one analyst, the
net income of the top oil companies will total $230 billion in
2005.[10] If Congress has an extra $2.5 billion to give away, the
money should be used to help families struggling to pay for soaring
gasoline prices - not to further enrich oil and gas companies that are
rolling in profits.
In recent years, Congress has been repeatedly embarrassed
by the mysterious insertion of provisions in omnibus legislation.
Last year, for example, we learned only after House action that the
3,000 page, $388 billion omnibus spending bill allowed members and
staff of the Appropriations Committee to examine the tax returns of
ordinary Americans.[11] We should not allow this to happen again.
The Energy Conference Report should not be brought to the House floor
until this objectionable provision is deleted and there is ample
opportunity for members to read the legislation and delete any other
problematic provisions.
