Reform

House Government Reform Committee officials Tuesday let the Interior Department know in no uncertain terms that the agency’s decision not to recoup billions of dollars in back royalties on oil and natural gas production from the flawed 1998 and 1999 deepwater leases was unacceptable.

A House Government Reform subcommittee will hold another hearing Thursday to explore why some of the largest producers have managed to avoid paying royalties on production from deepwater oil and natural gas leases that were issued by the federal government in 1998 and 1999.

To revive his stagnant reform agenda, Mexican President Vicente Fox has reshuffled his Cabinet and replaced Energy Minister Ernesto Martens with Felipe Calderon, a former leader of the ruling National Action Party, or PAN, which now controls Congress.

To revive his stagnant reform agenda, Mexican President Vicente Fox has reshuffled his Cabinet and replaced Energy Minister Ernesto Martens with Felipe Calderon, a former leader of the ruling National Action Party, or PAN, which now controls Congress.

A House Government Reform subcommittee investigating the absence of price thresholds in deepwater oil and natural gas leases negotiated in 1998 and 1999 said it has uncovered a “trail of irresponsibility and gross mismanagement” by the Department of Interior that led to the omissions, and an apparent “cover-up” that served to only worsen the problem.

The Alaska Senate completed action Tuesday on its bill to reform state taxes on oil and natural gas, picking up two more affirmative votes on reconsideration for a 16-4 endorsement of a 22.5% net production tax on oil and 7.5%, or one-third of that, for natural gas. The bill has gone to the Finance Committee in the Alaska House and is expected to make it to the House floor by Monday.

A House Government Reform subcommittee is probing why oil and natural 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 Outer Continental Shelf.

The initiative proposed by FERC in December to reform pricing policies to promote more natural gas storage development in the United States may help to encourage development of new capacity that otherwise would not be built, but the changes could “chill” financing for new projects, a lawyer who has long represented natural gas and electricity marketers said Thursday.

Reversing their traditional adversarial roles, Pacific Gas and Electric Co. and The Utility Reform Network (TURN) utility watchdog group announced Thursday they are cooperating on a winter bill mitigation program in the face of skyrocketing wholesale natural gas prices in the aftermath of the recent violent hurricanes in the Gulf of Mexico. The utility announced two major new initiatives it has developed in conjunction with TURN.