The US love of energy has been supported by subsidies and protection of the oil industry. Last month the administration took a step to reducing those subsidies in a new energy bill. And now a report confirms the collusion and apathy among regulators and the industry. A report has unsurprisingly declared that the Interior Department’s program to collect billions of dollars annually from oil and gas companies that drill on federal lands is troubled by mismanagement, ethical lapses and fears of retaliation against whistle-blowers. And this was an internal report! The yearlong investigation and concluding report grew out of complaints by four auditors at the agency, who said that senior administration officials had blocked them from recovering money from oil companies that underpaid the government.
While the report stopped short of accusing top agency officials of wrongdoing this may have been pragmatism owing to insufficient specific evidence. It offered a sharp description of failures at the Minerals Management Service, the agency within the Interior Department responsible for collecting about $10 billion a year in royalties on oil and gas. Investigators also softened their internal critique by saying that the whistle-blowers were sometimes unaware of other efforts under way to recover the missing money and that they sometimes simply disagreed with top management. Nevertheless it notes that the agency is too cozy with oil companies and that internal critics had good reason to fear punishment. This article from the NYT offers some juicy illustrations.
None of this is surprising to those who have seen the cynical approach of oil companies to pollution, environmental degradation and energy security (including alternative energy). Given the history of collusion we are not hopeful of immediate change, but the report is another sign that oil is not the panacea it has been sold as and the carelessness of the industry is being brought to light.
Coincidentally, BusinessWeek reported on the intransigence of big oil to introducing ethanol mix in its forecourts. Despite receiving billions in subsidies to provide ethanol it is using overt and covert tactics to keep E85 (85% ethanol 16% petrol, which directly substitutes for petrol) out of drivers’ tanks. It is another page in the tales of deception by big oil.
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