Page 11


A Senator Hutchison Louis Dubose MOLLY IVINS Kay’s Oily Principles If you would be good enough to forget the president’s privates for ten minutes, I’ll tell you an amazing story about how government works these days, featuring our very own Senator Kay Bailey Hutchison. And some people say she not all that bright ha! In the lovely blooming middle of a bill created to provide emergency funds for tornado victims and troops in the Middle East, signed into law on May 1, is an itty-bitty provision that saves the oil industry at least hundreds of millions of dollars and costs the taxpayers ditto. Now, the beauty of this provision is that it appeared in neither the Senate nor the House version of the bill, was never debated by Congress at all, and is entirely unknown to most members. Beauty, huh? We owe it all to Our Gal Kay and some very sharp lobbyists for the American Petroleum Institute. Hutchison, incidentally, is the Senate’s top recipient of campaign contributions from the oil industry; she collected nearly $165,000 in donations in 199798 even though she is not up for re-election. According to the Center for Responsive Politics, oil and gas companies gave about $6.2 million in PAC money, soft money and individual donations in the current election cycle 75 percent of it to Republican members. And what a shrewd investment it was. Listen to this: Oil companies constantly drill on federal land our land and pay the government royalties based on an estimated value of the oil decided by the oil companies themselves. Do you love it? No private landowner would buy a royalty deal like that only Old Uncle Sucker. This happy arrangement has not gone unquestioned; the Justice Department charges that majors such as Amoco and Shell have deliberately underpaid the government for years. According to the Project on Government Oversight, a private group, we’re talking in the neighborhood of $2 billion. An excellent article in the May 2 Washington Post by Juliet Eilperin explains how Hutchison’s itty-bitty amendment came to be. The Department of Interior has not been asleep either, at least in this administration. The Minerals Management Service \(also known as the M.M.S. it’s a story about THE BEAUTY OF THIS PROVISION IS THAT IT APPEARED IN NEITHER THE SENATE NOR THE HOUSE VERSION OF THE BILL, WAS NEVER DEBATED BY CONGRESS AT ALL, AND IS ENTIRELY UNKNOWN TO MOST MEMBERS. government, so we have to have obscure base the royalty fees on an independent measure: the world market price of oil. A novel concept, that something like oil might be worth what is paid for it. But all those good capitalists in the oil industry don’t think the magic of the marketplace should apply. “Too vague, uncertain and complicated,” one oil lobster told the Post. The industry wants a “royalty-in-kind” system under which, according to the Post, “companies turn over a portion of their oil to a third party, who sells it and provides the profits to the federal government.” Nothing vague, uncertain or complicated about that. The feds say the royalty-in-kind program would cost them at least $330 million a year, whereas the M.M.S. proposal would increase royalties by about $86 million a year. The M.M.S. announced April 27 that it would issue a final rule in June. The next night, as a House-Senate conference committee got to work on the emergency appropriation for tornado victims, Hutchison put up a li’l ol’ amendment saying that “the See “Molly,” page 21 18 THE TEXAS OBSERVER MAY 22, 1998