House Dem Calls for BP to Pay Royalties for Leaked Oil
Politico’s Jake Sherman reports that Rep. Nick Rahall (D-W.Va.), the head of the House Natural Resources Committee, has asked the Justice Department to consider forcing BP — responsible for the Deepwater Horizon disaster leaking thousands of barrels of crude oil into the Gulf of Mexico daily — to repay the federal government for the spilled petroleum.
Rahall wrote a letter to Attorney General Eric Holder asking for the government to take “legal action to recover damages owed to the United States for lost royalties.”
The issue of royalties has largely been left aside in the flurry of congressional action since the spill. When a company drills in U.S. waters, it signs a lease with the government and pays royalties for the oil it draws from the ground. Rahall says that the government’s lease with BP stipulates an 18.75 percent royalty.
The challenge will be to figure out precisely how much oil has spilled, and thereby how much money the government lost as a result of the spill.
“Although there is no precise figure for the amount of oil and gas flowing from the well, recent government estimates indicate that at least 500,000 barrels of oil and hundreds of millions of cubic feet of natural gas have been lost, which are currently wreaking havoc on the ocean and coastal environment in the Gulf of Mexico,” Rahall wrote to Holder.
The 18.75 percent royalty would work out to somewhere between $10 and $40 million for oil spilled thus far, depending on the spill estimate used.