- TO:
- The Honorable J. Dennis Hastert
- Speaker, US House of Representatives
- H232 Capitol
- Washington, DC 20515-6501
-
- FROM:
- Henry A. Waxman
- Ranking Minority Member
- US House of Representatives
-
- 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 $1.5 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." 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 $1.5 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 $1.5 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." 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.
-
- The subtitle appears to steer the administration of 75%
of the $1.5 billion fund to a private consortium located in the district
of Majority Leader Tom DeLay. 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." 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. Halliburton is
a member of RPSEA and sits on the board, as does Marathon Oil Company.
The subtitle provides that the consortium can keep up to 10% of the funds--in
this case, over $100 million--in administrative expenses.
-
- The subtitle further provides that members of the consortium,
such as Halliburton and Marathon Oil, can receive awards from the over
$1 billion fund administered by the consortium.
-
- In short, the subtitle provides that taxpayers will hire
a private consortium controlled by the oil and gas industry to hand out
over $1 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. If Congress has an extra
$1.5 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. 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.
-
- Thank you for your attention to this problem.
-
- Sincerely,
-
- Henry A. Waxman
- Ranking Minority Member
-
- cc: The Honorable Nancy Pelosi
-
- http://www.baltimorechronicle.com/072805Waxman.html
|