Saturday 05 June 2010

Government’s Pre-Nuptial Oil Lease Agreement

I'll give you the links for this wonderful copy and paste‭ that‬ I am about to do.‭ ‬I just find it very important that you see it for yourself as soon as possible.‭ ‬If you are from Louisiana or wondering whose making the killing on oil,‭ ‬this should bring clarity,‭ ‬directly‭ ‬from the‭ ‬Minerals Management Service website:

"Central Gulf of Mexico Lease Sale 213
Attracts‭ ‬$‭ ‬949‭ ‬Million in High Bids


"NEW ORLEANS‭ – ‬Central Gulf of Mexico Oil and Gas Lease Sale‭ ‬213,‭ ‬held today in New Orleans,‭ ‬attracted‭ ‬$‭ ‬949,265,959‭ ‬in high bids.‭ ‬The sale was conducted by Interior’s Minerals Management Service‭ (‬MMS‭) ‬and had‭ ‬77‭ ‬companies submitting‭ ‬642‭ ‬bids on‭ ‬468‭ ‬tracts comprising over‭ ‬2.4‭ ‬million acres offshore Louisiana,‭ ‬Mississippi and Alabama.‭ ‬The sum of all bids received totaled‭ ‬$‭ ‬1,300,075,693.

‭“The bidding activity at today’s sale speaks to the future of deepwater Gulf in providing vital energy production for the nation,” said Lars Herbst, MMS Gulf of Mexico regional director. “There was also an increase in interest in shallower waters that offers deep gas potential, which is encouraging.”

A total of‭ ‬151‭ ‬tracts in water depths less than‭ ‬656‭ ‬feet received bids.‭ ‬This represents‭ ‬32‭ ‬percent of all tracts receiving bids,‭ ‬an increase of five percent from last year’s Central Gulf lease sale.

The highest bid received on a tract was‭ ‬$‭ ‬52,560,000‭ ‬submitted by Anadarko E‭ & ‬P Company LP and Mariner Energy,‭ ‬Inc.‭ ‬for Walker Ridge,‭ ‬Block‭ ‬793.

Each high bid on a tract will go through an evaluation process within MMS to ensure the public receives fair market value before a lease is awarded.

Sale statistics for Central Sale‭ ‬213‭ ‬are posted on the MMS website at
http://www.gomr.mms.gov/homepg/lsesale/213/cgom213.html--‭ ‬On MMS Letterhead,‭ ‬here http://www.gomr.mms.gov/homepg/whatsnew/newsreal/2010/100317.pdf


Does this‭ ‬look like a government document to you or what you'd expect from a private business,‭ ‬say an OIL‭ ‬COMPANY or LAND LEASING‭ ‬COMPANY‭? ‬But no,‭ ‬this is your hard earned government dollars at work.‭ ‬See what you read above was actually a PRESS RELEASE‭!

Okay,‭ ‬now to add insult to injury,‭ ‬these are the terms and conditions of leasing from the federal government,‭ ‬pursuant to‭ "‬Oil and Gas Lease of Submerged Lands Under the OCS Lands Act‭ (‬updated October‭ ‬2009‭)‬.‭" ‬Pay close attention to sections‭ ‬5‭ ‬and‭ ‬6,‭ ‬and look for the conspicuous environmental protections as part of the terms,‭ ‬I know it's long,‭ ‬so if you want to just go with the section titles:

‭"Sec. 5. Minimum Royalty. The Lessee shall pay the Lessor, at the expiration of each lease year which commences after the start of royalty-bearing production, and notwithstanding any royalty suspension which may apply, a minimum royalty as shown on the face hereof, or attached addendum, with credit applied for actual royalty paid during the lease year. If actual royalty paid exceeds the minimum royalty requirement, then no minimum royalty payment is due.

‭"Sec. 6. Royalty on Production.
‭(a) The Lessee shall pay a royalty as shown on the face hereof in amount or value of production saved, removed, or sold from the leased area. Gas (except helium) and oil of all kinds are subject to royalty. The Lessee is liable for royalty payments on oil or gas lost or wasted from a lease site when such loss or waste is due to negligence on the part of the operator of the lease, or due to the failure to comply with any rule or regulation, order, or citation issued under the Federal Oil and Gas Royalty Management Act of 1982 or the Act. The Lessor shall determine whether production royalty shall be paid in amount or value.
‭(b) The value of production for purposes of computing royalty on production from this lease shall never be less than the fair market value of the production. The value of production shall be the estimated reasonable value of the production as determined by the Lessor, due consideration being given to the highest price paid for a part or for a majority of production of like quality in the same field or area, to the price received by the Lessee, to posted prices, to regulated prices, and to other relevant matters. Except when the Lessor, in its discretion, determines not to consider special pricing relief from otherwise applicable Federal regulatory requirements, the value of production for the purposes of computing royalty shall not be deemed to be less than the gross proceeds accruing to the Lessee from the sale thereof. In the absence of good reason to the contrary, value computed on the basis of the highest price paid or offered at the time of production in a fair and open market for the major portion of like quality products produced and sold from the field or area where the leased area is situated will be considered to be a reasonable value.
‭(c) When paid in value, royalties on production shall be due and payable monthly on the last day of the month next following the month in which the production is obtained, unless the Lessor designates a later time. When paid in amount, such royalties shall be delivered at pipeline connections or in tanks provided by the Lessee. Such deliveries shall be made at reasonable times and intervals and, at the Lessor’s option, shall be effected either (i) on or immediately adjacent to the leased area, without cost to the Lessor, or (ii) at a more convenient point closer to shore or on shore, in which event the Lessee shall be entitled to reimbursement for the reasonable cost of transporting the royalty substance to such delivery point.

‭"Sec. 7. Payments. The Lessee shall make all payments (rentals, royalties and any other payments required by this lease) to the Lessor by electronic transfer of funds, check, draft on a solvent bank, or money order unless otherwise provided by regulations or by direction of the Lessor. Rentals, royalties, and any other payments required by this lease shall be made payable to the Minerals Management Service and tendered to the Director. Determinations made by the Lessor as to the amount of payment due shall be presumed to be correct and paid as due.

‭"Sec. 8. Bonds. The Lessee shall maintain at all times the bond(s) required by regulation prior to the issuance of the lease and shall furnish such additional security as may be required by the Lessor if, after operations have begun, the Lessor deems such additional security to be necessary.

‭"Sec. 9. Plans. The Lessee shall conduct all operations on the leased area in accordance with approved exploration plans and approved development and production plans as are required by regulations. The Lessee may depart from an approved plan only as provided by applicable regulations.

‭"Sec. 10. Performance. The Lessee shall comply with all regulations and Orders. After due notice in writing, the Lessee shall drill such wells and produce at such rates as the Lessor may require in order that the leased area or any part thereof may be properly and timely developed and produced in accordance with sound operating principles.”

I will save you the trouble of looking for anything with environment in it,‭ ‬remember these are in the first‭ ‬5‭ ‬terms and conditions of the lease.‭ ‬The first‭ ‬4‭ ‬said nothing about the environment either.

Alas,‭ ‬there is some mention of the environment:

‭"Sec. 12. Safety and Inspection Requirements. The Lessee shall:
‭(a) maintain all places of employment within the leased area in compliance with occupational safety and health standards and, in addition, free from recognized hazards to employees of the Lessee or of any contractor or subcontractor operating within the lease area;
(b‭) ‬maintain all operations within the leased area in compliance with regulations or orders intended to protect persons,‭ ‬property and the environment on the Outer Continental Shelf‭; ‬and
(c‭) ‬allow prompt access,‭ ‬at the site of any operation subject to safety regulations,‭ ‬to any authorized Federal inspector and shall provide any documents and records which are pertinent to occupational or public health,‭ ‬safety,‭ ‬or environmental protection as may be requested.‭" (‬Emphasis mine.‭)

I've never seen anything so compulsory before.‭ ‬Such strong and absolute language,‭ ‬I am just beside myself with the staunch environmental stance taken by MMS in giving out these leases,‭ ‬it's true Change We Can Believe In once more.‭ ‬I am sure the environmentalists will be proud of this one.


And what's so awesome is how BP is still on the hook for the royalties for all the oil in the gulf,‭ ‬per sec‭ ‬6,‭ (‬a‭)‬:

‭"(a) The Lessee shall pay a royalty as shown on the face hereof in amount or value of production saved, removed, or sold from the leased area. Gas (except helium) and oil of all kinds are subject to royalty. The Lessee is liable for royalty payments on oil or gas
lost or wasted from a lease site when such loss or waste is due to negligence on the part of the operator of the lease,‭ ‬or due to the failure to comply with any rule or regulation,‭ ‬order,‭ ‬or citation issued under the Federal Oil and Gas Royalty Management Act of‭ ‬1982‭ ‬or the Act.‭ ‬The Lessor shall determine whether production royalty shall be paid in amount or value.‭"

Before I forget,‭ ‬the contract with these terms is located here:‭ ‬http://www.gomr.mms.gov/homepg/mmsforms/formmms-2005.pdfGotta hand it to the government to maintain control over their royalties.‭ ‬You seen any rebates from Oil and Gas leases lately being wired to your bank account‭? ‬I mean here we are,‭ ‬the ones paying as debtors to a national debt owned by foreigners and engaged in by Washington,‭ ‬yet we don't see a dime from the foreigners who use our land to get oil or anything else for that matter that belongs to We The People as Sovereign of this nation,‭ ‬but our government sure makes sure to collect their piece of pie,‭ ‬to get money from them,‭ ‬from us,‭ ‬from everything it can‭! ‬Seems our servant is holding out on us,‭ ‬but hey,‭ ‬we can't fight City Hall right‭? ‬Gotta let them have their way,‭ ‬reverse the roles and be the footstool of government and‭ ‬its actors.‭ ‬Yeah,‭ ‬that explains the Right to bear arms‭!

They‭ ‬do have the best deal,‭ ‬maintaining our nation‭ ‬as‭ ‬broke while being paid out of debt‭ ‬177k and more per year,‭ ‬employed term after term,‭ ‬while many of us are not,‭ ‬and yet some how,‭ ‬as though David Copperfield were President,‭ ‬we're always liable to them for the costs imposed by their‭ ‬bad‭ ‬decisions.‭

Say it with me‭ "‬We're such saps‭!" ‬Yes and we're losing our country at the same time.‭ ‬When will we realize the entire mechanism of government has become a business,‭ ‬nothing more‭? ‬And it's all The People's fault for letting it happen‭? ‬I believe the answers to these questions are located next to the data that proves man-made‭ ‬CO2‭ ‬causes global warming.


Thank you for reading,


Toddy Littman


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