News - Category 'Obama's "Oil Spill Crisis"'

Pecuniary Oil Interest - Open Letter

23 Jun : 16:08 Category: Obama's "Oil Spill Crisis"


Pecuniary Government Oil Interest: An Open Letter



This letter is submitted as a blog post for those in the Gulf States to take up with their Congressmen, Senators, Governors, and State Attorneys General.


ďTo Whom It May Concern:


According to the Deepwater Oil lease agreements posted at the Minerals Management Service, there is a mutual royalty paid to the United States government. To expedite this letter I havenít had a chance to attempt to FOIA the exact amount of royalties paid by BP according to this agreement, however, I have looked up what I can. The low average is 12.5% royalty on all that is pumped out, an amount assessed at the wellhead by the owner of the land (http://geology.com/articles/mineral-rights.shtml), in this case the United States. Estimates of the amount of oil spilling per day range from 504,000 to 4.2 million gallons per day according to PBS (http://www.pbs.org/newshour/rundown/2010/05/despite-video-extent-of-oil-spill-remains-unclear.html).

In terms of barrels, the amount is between 12,000 and 100,000 barrels a day, this means that in the last 45 days (roughly) thereís been between 540,000 barrels (22,680,000) and 4,500,000 barrels (189,000,000 gallons)

Now with the spot price of oil running around $60 a barrel, this would mean the United States government will receive between $4,050,000 and $33,750,000 in royalties for the oil that is lost or spilled as BP has claimed it is responsible for this spill, at least this is the estimate according to this provision of a document from MMS entitled ďUNITED STATES DEPARTMENT OF THE INTERIOR MINERALS MANAGEMENT SERVICE OIL AND GAS LEASE OF SUBMERGED LANDS UNDER THE OUTER CONTINENTAL SHELF LANDS ACTĒ and referred to as ďMMS Form MMS-2005 (October 2009),Ē which states under ďSec. 6 Royalty on ProductionĒ :

ď(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.Ē (Emphasis mine, and the form is available here http://www.gomr.mms.gov/homepg/mmsforms/formmms-2005.pdf.)

This begs the question why the United States Government hasnít spent a dime of this royalty money if the Oil Company is on the hook for paying royalties even for the oil that is sitting in the Gulf of Mexico.

As you are a representative of my state in an official capacity I ask you to please demand the government spend these reimbursable royalty funds on this clean up, not only from the royalties from this well but, from the total average royalties for all oil wells in the United States.

According to the governmentís own website, http://www.eia.doe.gov/basics/quickoil.html, ďU.S. Crude Oil ProductionĒ is ď4,950,000 barrels/dayĒ or, at 12.5% royalty, $37,125,000 a day that the United States takes in. Just taking these royalty amounts, times the last 45 days, would be $1,670,625,000 that would have been spent to help clean up the situation in the Gulf. It appears to me that this expenditure would have been a very good thing to authorize on day 1, yet was not done.

Please make sure the National Government doesnít get off the hook for their pecuniary interest in our nationís oil wells.


Thank you and hoping for your earnest action in regard to this matter,


/s/nameĒ


Please, if you have a website do use this calculator there, to remind people how bad Obama and the United States Government have let this situation get while they party with Sir Paul McCartney. The Embed code is available here - http://www.pbs.org/newshour/rundown/2010/05/despite-video-extent-of-oil-spill-remains-unclear.html
Thank you for reading,


Toddy Littman

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U.S. Government Oil Royalties Of $37,125,000 A Day

23 Jun : 16:00 Category: Obama's "Oil Spill Crisis"
What I am explaining here I urge you to tell any and every one you know who lives in the Gulf Coast. Please urge them to contact their City, County or Parish, and State governments, as well as their House Representatives, and Senators.

According to the governmentís own website, http://www.eia.doe.gov/basics/quickoil.html, ďU.S. Crude Oil ProductionĒ is ď4,950,000 barrels/dayĒ or, at 12.5% royalty, $37,125,000 a day that the United States takes in.

This analysis is very simple. According to http://geology.com/articles/mineral-rights.shtml, the low average royalty to the owner of land is 12.5% on all oil that is pumped out of that land, and this amount is assessed at the wellhead by the owner of the land.

First this means that the United States Government legally has a pecuniary interest in the output of oil wells. There is an amount of revenue being had by the United States government as a partner by royalty charged on the production from every well drilled.

Second, there is no excuse for the United States Government, who is making money on resources that belong to the people of this nation, not to spend these royalties on cleaning up an accident related to this resource.

Third, the total estimated amount of royalties received by the United States Government from all oil production across America, at 12.5% royalty, 60 days into this spill, and that could have been spent each day this Oil Spill Crisis in the Gulf has gone on, is at least $2,227,500,000.

Fourth, and why this legal liability rests on the United States Government more than ever, is directly from the United States Governmentís lease agreement:

ďSec. 6 Royalty 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.Ē (Emphasis mine, and the form is available here http://www.gomr.mms.gov/homepg/mmsforms/formmms-2005.pdf.)

Note how the government estimates of the oil flow are going up and up and up? With the government making 12.5% on the oil in the gulf at this time, some 1,845,000 barrels of oil at 60 dollars a barrel, means the government receives $13,837,500 from the oil sitting in the Gulf of Mexico. This monetary amount from the oil that is in the gulf is paltry in comparison to what is needed, but even this amount hasnít been spent by the United States Government to aid the Gulf Coast.

Instead everything has been ďBP is the responsible party....BP will pay for everythingĒ and ďI have my boot on their neck,Ē the unnecessary delay a direct and proximate cause of the exacerbation of this spill, because these statements demonstrate that the United States Government isnít spending a dime of their own money, even though the United States Government holds this direct and actual pecuniary interest in every oil well per their own lease agreements terms.

Thereís been a particular emphasis on the notion of the big oil companies and their huge profits, and how BP abused process and procedure etc., taking unnecessary risks by putting profits before safety.

As a 12.5%, or more interest holder in the well, the United States Government is a responsible party. Minerals Management Service is tantamount to being a building department in a city, looking over building plans to issue permits according to meeting the city governmentís specifications. The United States Government failed to enforce the specifications here, and there is a liability upon government agencies and the particular individuals who failed to provide oversight and guidance to the person applying for a permit, particularly when the worst case disaster scenario occurs, 11 people die and there is no actual means available by design, due to this very lack of oversight, to bring a swift and reasonable end to the disaster. That oil spewing into the Gulf is a daily reminder to the survivors of the deceased, a cruel and unusual punishment to inflict upon them, particularly when the United States Government is sitting on the financial resources the Gulf Needs based on legalities of ďresponsible partyĒ when that same government is legally a stake holder in the Oil Industry.

I ask you, isnít it the United States government, who has received over 2 billion dollars in oil revenues in the last 60 days from our nations oil production across America, also putting royalty profits before the safety of the people of the Gulf, safety to their livelihood, safety to their wildlife, environment, and way of life? And isnít this only an exacerbation of the failure of oversight by the United States government, a negligence that could only contribute to this disaster? Sure seems to me the United States Government put the Life, Liberty and Pursuit of Happiness of the people in the Gulf Coast in jeopardy in exchange for Oil Royalty Revenues.

At least now you know you canít trust this Oil Industry Partner, The United States Government, to do the right thing, apparently the ďsmall peopleĒ perspective, that is the PR whip to beat up on BP and ďbig oil,Ē is so contagious that government is infested with it, I mean, you donít see any legislation being proposed to divert these royalties to the Gulf right? This must be the root to the attitude of corruption that has permeated the entire United States Government.


Thank you for reading,


Toddy Littman

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Governmentís Pre-Nuptial Oil Lease Agreement

05 Jun : 15:19 Category: Obama's "Oil Spill Crisis"
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? Ė ?Central Gulf of Mexico Oil and Gas Lease Sale? ?213,? ?held today in New Orleans,? ?attracted? ?$? ?949,265,959? ?in high bids.? ?The sale was conducted by Interiorís Minerals Management Service? (?MMS?) ?and had? ?77? ?companies submitting? ?642? ?bids on? ?468? ?tracts comprising over? ?2.4? ?million acres offshore Louisiana,? ?Mississippi and Alabama.? ?The sum of all bids received totaled? ?$? ?1,300,075,693.

?ďThe bidding activity at todayís sale speaks to the future of deepwater Gulf in providing vital energy production for the nation,Ē said Lars Herbst, MMS Gulf of Mexico regional director. ďThere was also an increase in interest in shallower waters that offers deep gas potential, which is encouraging.Ē

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 yearís 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 Lessorís 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.Ē

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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