Dynamic Homes
Advertise:   ads@blueearthmarketing.com   712.224.5420

Trust
New Standard: Oil giant tries to cheat tribes of money


Note: The case is BP America Production Co. v. Burton, No. 05-669. The briefs can be found here. The October 4 oral argument transcript has been posted by the Supreme Court.

"A case pending before the US Supreme Court may determine whether the oil industry can cast off millions in debts incurred while exploiting natural resources on Indian lands in the Southwest�s

Tribes, along with federal and state authorities, are seeking to hold oil giant BP America liable for unpaid royalties from energy development. While BP seeks protection from its payment obligations under a statute of limitations on royalty claims, the Jicarilla Apache Nation, which relies heavily on revenues from oil and gas extraction on its lands, has rallied against what it views as an end-run around the industry�s payment obligations.

From 1989 to 1996, BP America Production, then known as Amoco, sucked coal-bed methane gas from the San Juan Basin, which spans New Mexico and Colorado. Under land leases negotiated with the US government, the company was obligated to pay royalties to the Interior Department, at a standard rate of 12.5 percent, to be distributed to governments and tribes.

But a New Mexico state audit showed that BP�s calculation method significantly under-estimated the market value of the gas. The audit determined that BP's payments had fallen $4 million short, and subsidiary Atlantic Richfield owed more than $780,000."

Get the Story:
Oil Giant Tries to Shirk Royalty Payments to Indians (The New Standard 10/11)

Relevant Documents:
Devaney Testimony | Hearing Information

Related Stories:
Interior won't seek to recover billions in royalties (9/22)
Auditors say DOI suppressed royalty collection (9/21)
Editorial: 'Anything goes' at Interior Department (9/18)
Interior comes under fire for royalty giveaway (9/15)
Norton shielded Griles despite ethics probe (9/15)
House committee to consider DOI 'irresponsibility' (9/12)
MMS reduces role of tribal-state royalty panel (9/12)
DOI accused of hindering probe into oil and gas royalties (08/04)
Accounting firm defends social relations with OST (7/27)
OST contract tied to favors to top officials (7/25)
OST officials awarded $6.6M contract to friends (7/24)
Tribes, states weigh lawsuits against oil companies (5/8)
Norton denies fraud or major problem with trust (3/29)
GAO report warns of billions in lost oil, gas royalties (3/29)
Tribes, states object to Interior's lack of audits (03/01)
Pombo starts investigation of DOI royalty program (2/16)
Bush, Democrats oppose $7B royalty giveaway (2/15)
Interior to give away $7B in oil and gas royalties (2/14)
Oil companies fall behind on royalty payments (2/10)