Congressional proponents of royalty in-kind legislation aredrawing large sums of political action committee donations, softmoney and individual contributions from the oil and gas industry,according to a consumer action group which notes the bill couldcost taxpayers $367 million more per year, according to theMinerals Management Service. The bill would force the government toassume the cost of transporting and marketing its royalty portionof oil and gas production.

Transportation costs have never been included in royaltycalculations. Producers claim everyone will save court and auditingcosts if the current royalty collection system which was outdatedwhen the price of gas at the wellhead was deregulated 13 years agois brought into conformance with the market.

Sen. Don Nickles (R-OK), chairman of the Senate subcommitteewith oversight over the oil and gas industry and a strong proponentof RIK, replaced Sen. Kay Bailey Hutchison (R-TX) as the top Senaterecipient last month, according to the report by the Center forResponsive Politics. Nickles received more than $173,000 in the1997-98 election cycle for his re-election bid this fall, whileHutchinson fell to second place with $168,250.

Last month, Hutchinson was in the lead after she inserted alast-minute amendment in an emergency spending bill that preventedthe Minerals Management Service from changing the benchmarks forcalculating the value of oil. This week, Nickles’ subcommittee isscheduled to hold oversight hearings on MMS regulations.

On June 18, a House Resources Subcommittee will debate royaltyin-kind bill H.R. 3334. The legislation, introduced by Rep. MacThornberry (R-TX), received a boost last week when Rep. Wes Watkins(R-OK), who is the top House recipient of contributions from oiland gas interests backing the proposal, signed on as a co-sponsor.Watkins received nearly $57,000 in PAC and individual contributionsfrom the industry, and Thornberry got $15,550.

Other congressmen topping the list include Sens. John B. Breaux(D-LA) – $128,471, Christopher S. Bond (R-MO) – $67,800, Frank H.Murkowski (R-AK) – $53,500, and Alphonse M. D’Amato (R-NY) -$51,520, and Reps. Joe L. Barton (R-TX) – $38,858, Dan Schaefer(R-CO) – $36,091, Todd Tiahrt (R-KS) – $31,750 and Kay Granger(R-TX) – $31,450.

In total, oil and gas companies lobbying to change the federalroyalty system have contributed $7.4 million to federal candidatesand political parties so far in the 1997-98 election cycle, 74% ofwhich went to Republicans.

Rocco Canonica

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