A clause that was supposed to be included in leases given to oil
companies for drilling in the Gulf of Mexico has mysteriously gone missing, and
it could ultimately cost the U.S. billions of dollars in royalties.
The Associated Press reported that the error was disclosed by the U.S. Department of the Interior
and involves leases given out to oil companies in 1998 and 1999.
The leases exempted the oil companies from paying royalties to the
government, but they were supposed to contain a clause that reinstated the
royalties if the market price of oil reached a certain level.
However, The AP reported
that the clause was somehow dropped from an addendum that was attached to more
than 1,100 leases issued in 1998 and 1999.
Walter Cruickshank, deputy director of the Interior Department’s
Minerals Management Service, told a House Government Reform Subcommittee on
Wednesday, March 1, that officials have not yet determined what happened, but
that they were certain it was a human act rather than a computer glitch.
Cruickshank said the government has already lost several hundred
million dollars in royalty payments because high oil prices have been above the
threshold for quite some time.
The AP reported
that the threshold price changes yearly, but the most recent setting was at
about $34 per barrel for oil. With the price of oil hovering steadily above $60
a barrel and not expected to go below $50 anytime soon, the missing documents
could cost the U.S. government untold billions of dollars.