Royalty Woes

An editorial on oil industry royalty relief in today's New York Times seems worth at least a brief comment. Although I disagreed with their stance and even their portrayal of the royalty relief measures passed during a period of extremely low oil prices in the late 1990s, I concur with the sense of their position on new royalty relief.

When the industry insisted that the federal government live up to its word and continue the promised relief on offshore oil and gas royalties for wells drilled at a time when they couldn't have been justified otherwise, that was appropriate and principled. Legislators seeking to renege on those promises were flat wrong, because changed industry circumstances weren't included as an out when those deals were struck. The go-forward case is quite another matter. Obtaining new relief, unrelated to the 1990s wells, only serves to reinforce the public's perception of an industry driven by avarice. It is unseemly, and companies ought to willingly renegotiate royalty relief provisions included in the recent energy bill, at least to the degree of acceding to a price ceiling beyond which relief is phased out.

The inclusion of such measures in the Energy Policy Act of 2005 came as a surprise to me, as it did to many others. I recently read a suggestion that the text of every law passed in the Congress should be required to be read before a quorum of each house. As impractical as that may be, it would certainly foreclose the possibility of any legislators claiming ignorance of the provisions of bills on which they voted. It might also result in laws that could be read and understood by the public at large.