As Profits Soar, Companies Pay

U.S. Less for Gas Rights – New York Times By EDMUND L. ANDREWS

At a time when energy prices and industry profits are soaring,

the federal government collected little more money last year than it did five years ago from the companies that extracted more than $60

billion in oil and gas from publicly owned lands and coastal waters.

If royalty payments in fiscal 2005 for natural gas

had risen in step with market prices, the government would have received about $700 million more than it actually did, a three-

month investigation by The New York Times has found.

But an often byzantine set of federal regulations, largely shaped and

fiercely defended by the energy industry itself, allowed companies producing natural gas to provide the Interior Department with much

lower sale prices – the crucial determinant for calculating government royalties – than they reported to their shareholders.

As a

result, the nation’s taxpayers, collectively, the biggest owner of American oil and gas reserves, have missed much of the recent energy

bonanza.

The disparities in gas prices parallel those uncovered just five years ago in a wave of scandals involving royalty

payments for oil. From 1998 to 2001, a dozen major companies, while admitting no wrongdoing, paid a total of $438 million to settle

charges that they had fraudulently understated their sale prices for oil.

Since then, the government has tightened its rules for

oil payments. But with natural gas, the Bush administration recently loosened the rules and eased its audits intended to uncover

cheating. …

Royalties for natural gas have climbed sharply in the last three years. But while prices nearly doubled

from 2001 to 2005, the $5.15 billion in gas royalties for 2005 was less than the $5.35 billion in 2001. When oil and gas are combined,

royalties were about $8 billion in 2005, almost the same as in 2001.

Because much of the information about specific transactions

is kept secret, it remains unclear to what extent, if at all, the weakness in royalty payments stems from deliberate cheating or from

issues with the rules themselves. …

The possible losses to taxpayers in gas could be even higher than the losses tied to the

scandals over oil royalties. For one thing, natural gas production on federal land is worth twice as much as oil. …

“These

companies had knowingly been cheating on oil for years, if not decades,” [Danielle Brian, executive director of the Project on Government

Oversight, a nonprofit watchdog group that exposed many of the oil royalty scandals,] continued. “To ignore the likelihood that the same

thing is happening on the gas side is absurd.” …

In the wake of the scandals, the outgoing Clinton administration pushed through

tough new rules for valuing crude oil, which relied on comparing company reports with an index of spot market prices.

But the Bush

administration did not close any loopholes for valuing natural gas. Indeed, in March 2005 it expanded the list of deductions and decided

against valuing sales at spot-market prices when companies were selling to their own affiliates.

The industry-friendly stance was

intentional.

Rove Offers Republicans A

Battle Plan For Elections By Dan Balz, Washington Post Staff Writer

White House Deputy Chief of Staff Karl Rove offered a

biting preview of the 2006 midterm elections yesterday, drawing sharp distinctions with the Democrats over the campaign against

terrorism, tax cuts and judicial philosophy, and describing the opposition party as backward-looking and bereft of ideas.

“At the

core, we are dealing with two parties that have fundamentally different views on national security,” Rove said. “Republicans have a

post-9/11 worldview and many Democrats have a pre-9/11 worldview. That doesn’t make them unpatriotic — not at all. But it does make

them wrong — deeply and profoundly and consistently wrong.” …

Rove used his platform to excoriate Democrats for “wild and

reckless and false charges” against Bush on the issue of domestic spying ….

“Karl Rove only has a White House job and a security

clearance because President Bush has refused to keep his promise to fire anyone involved in revealing the identity of an undercover CIA

operative,” Dean said in a statement. Dean added: “The truth is, Karl Rove breached our national security for partisan gain and that is

both unpatriotic and wrong.”

It was four years ago this week when Rove, appearing at another meeting of the RNC, said Republicans

would make terrorism a central issue of the 2002 midterm elections. Rove’s remarks infuriated Democrats, who protested that, until then,

Bush had stressed bipartisanship and national unity in response to the Sept. 11, 2001, attacks.

Republicans made historic

gains in 2002, and Bush successfully used the issue again to help secure his reelection in 2004, despite growing public

dissatisfaction with the administration’s handling of the war in Iraq. Yesterday’s speeches by Rove and Mehlman signaled that

the White House and the RNC intend to pursue much the same strategy in a midterm-election year that begins with

Republicans on the defensive.

Wanted: Democrats that can

show some spine By Molly Ivins

What kind of courage does it take, for mercy’s sake? The majority of the American people (55

percent) think the war in Iraq is a mistake and that we should get out. The majority (65 percent) of the American people want single-

payer health care and are willing to pay more taxes to get it. The majority (86 percent) of the American people favor raising the minimum

wage. The majority of the American people (60 percent) favor repealing Bush’s tax cuts, or at least those that go only to the rich. The

majority (66 percent) wants to reduce the deficit not by cutting domestic spending, but by reducing Pentagon spending or raising taxes.

The majority (77 percent) thinks we should do ”whatever it takes” to protect the environment. The majority (87 percent)

thinks big oil companies are gouging consumers and would support a windfall profits tax. That is the center, you fools. Who are you

afraid of?

You may have read about BushCo subpoenaing Google to provide

a massive amount of random data — which could include your queries. Kudos to Google for standing up to the Department of Justice. And

brickbats to Yahoo for giving in without a squeak.

Take a look at what all these fine companies are willing to do to work with China and wonder what they won’t do to stay in business in AmeriCo. mjh

Analysis: Google Case Raises New Questions –

Forbes.com By TOM RAUM

Already on the defensive about its domestic spying program, the Bush administration has alarmed privacy

and free-speech advocates by demanding search information from millions of users of Google and other Internet companies.

The

moves raise questions about how far the government should be allowed to go to probe into American homes. The administration is pushing

back hard, defending its surveillance as helping to protect the nation from terrorism and, to a lesser extent, shield minors from

pornography.

Critics see the moves as an unwarranted expansion of presidential authority.

Yahoo China journalist – Yahoo helped Chinese to prosecute

journalist

China’s tangled Web

U.S. companies enable China censorship, critics say
Have U.S.

high-tech giants helped China bring the Internet to heel?

Microsoft Defends Censoring a Dissident’s

Blog in China