Editorial: Drilling for the truth

Wednesday, Sept. 13, 2006 | 7:16 a.m.

The U.S. Interior Department has flubbed the wording of oil and natural gas drilling leases that could result in the forfeiture of billions in royalty payments due the federal government.

Congress is investigating the problem that has been brought to the forefront by Chevron's recent discovery of a giant oil field in the Gulf of Mexico, The New York Times reports.

Chevron and two international companies have six leases in the field - two of which allow companies to avoid paying royalties. That benefit is supposed to be suspended if oil prices rise above $36 a barrel, but the restriction was mistakenly omitted when the Interior Department signed Chevron's two leases on the Jack oil field in 1998 and 1999.

While Republicans are giddy that this gaffe happened during President Bill Clinton's tenure, the Interior Department's inspector general has said the blunders have continued under President Bush. Interior officials were warned in July that about 1,000 new leases repeated the error, potentially costing the government billions, the Times reports. The only solution is to renegotiate the leases.

The House passed a measure earlier this year that would prohibit granting new leases to companies that refuse to renegotiate. The Senate Appropriations Committee added a similar provision to its spending bill, but that legislation remains stalled.

Congress must get tough with Interior Department officials who have continued making this mistake and also with energy companies that refuse to play fair. These gas deposits are natural resources taken from public lands and waters, and private interests should not be the only ones to profit.