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Norton Resigns as Secretary of Interior Department

March 13, 2006
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Interior Secretary Gale Norton, the first woman to head the department, announced Friday she will resign at the end of the month after five years of service in the Bush administration.

In a two-page letter to President Bush on Thursday, Norton said it was a "difficult decision, but the time has come to submit my resignation effective at the end of this month." During her term, "this department has climbed the mountaintop in terms of achieving the goals we set out to accomplish...Now I feel it is time for me to leave this mountain you gave me to climb, catch my breath, then set my sights on new goals to achieve in the private sector. Hopefully, my husband and I will end up closer to the mountains we love in the West," she wrote.

Norton indicated that the partisanship in Washington, DC also had factored into her decision. "As a person deeply committed to bipartisan and civil public discourse, one aspect of Washington I will not miss is the divisiveness that too often prevails." Her announcement elicited a number of plaudits about her performance from Capitol Hill lawmakers who have worked closely with her over the years.

Sen. Pete Domenici (R-NM), chairman of the Senate Energy and Natural Resources Committee, called Norton "a steady hand on a range of extremely difficult issues." He said he expected her successor to be named soon, and added that he would work hard to ensure quick confirmation of the nominee.

House Resources Committee Chairman Richard Pombo (R-CA) said he was "saddened" by Norton's announced departure. "The secretary held one of the most difficult Cabinet positions and did so with grace and composure. For too long the important missions of the department, to facilitate access to and development of natural resources...and stewarding our nation's resources for future generations to enjoy, have been portrayed as mutually exclusive. Gale recognized that need not be the case and worked to find solutions."

Rep. John Peterson (R-PA), a strong proponent of offshore drilling, said Norton was "especially adroit at striking the difficult, but necessary, balance between protecting our environment and securing the energy needed to keep our country competitive." He noted that Norton "[has] heard plenty from me over the past several months as I've continued to make the case for opening up vital and abundant reserves of deep-sea natural gas -- which seems to run contrary to the administration's position."

It's unclear what impact, if any, Norton's resignation will have on the department's proposed five-year leasing plan (2007-2012) for the Outer Continental Shelf (OCS), which seeks to open additional acreage of Lease 181 in the eastern Gulf of Mexico.

Her resignation comes at a time when Interior has come under attack from Capitol Hill and in the press for the method it uses to calculate royalties for oil and natural gas production on federal lands. A New York Times article, published in late January, alleged that out-dated royalty regulations -- which require the agency to value royalties based on lower wellhead prices rather than the higher market prices -- prevented the federal government from taking advantage of the bonanza in natural gas prices in fiscal year 2005.

The newspaper estimated that Interior's Minerals Management Service could have collected an additional $700 million in gas royalties last year for the federal coffers had royalties been calculated using the higher market prices for gas instead of the wellhead price.

In response to the Times' story, House Democrats in late February introduced legislation that would, at current high prices, put an end to much of the royalty relief for oil and gas production on federal lands. The bill, sponsored by Rep. Edward Markey (D-MA) and six other House lawmakers, calls on the Interior secretary to renegotiate existing oil and gas leases to ensure that producers are paying the required amount of royalties for energy development on federal property.

More recently, a House Government Reform Subcommittee has begun investigating why oil and gas leases negotiated between the Interior Department and producers in 1998 and 1999 did not include price thresholds -- a move that the panel estimates could cost the federal government as much as $7 billion in royalties on production from the OCS.

Leases negotiated in 1996, 1997 and 2000 contained price caps as authorized by the Deep Water Royalty Relief Act of 1995, but the thresholds were omitted in the 1998 and 1999 leases, according to the House Energy and Resources Subcommittee. "The amount of revenue lost to the U.S. government [as a result of the omission]-- up to $7 billion -- is staggering," said Subcommittee Chairman Darrell Issa (R-CA) during a recent hearing.

The royalty-relief law called for price thresholds to be included in the leases to prevent producers from benefiting twice when oil and gas prices escalated -- once from the royalty relief, and again from the higher energy prices.

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