Royalty Screwed

Even with fuel prices at all-time highs, oil and gas companies are not paying royalties on many offshore leases in the Gulf of Mexico. So-called "royalty relief" was meant to subsidize production when prices were low, but even with oil at $50 a barrel, energy companies are enjoying the generous subsidies.

The Interior Department now estimates that the government will lose $7 billion in royalties over the next five years. A recent lawsuit could increase that figure four-fold. As if that weren't enough, the energy bill President Bush signed in August contained another $2.6 billion in tax breaks for oil and gas companies and expanded the royalty relief program.

This at the same time that the Interior Department is pushing to sell 800,000 acres of public land in order to fund rural school programs. Go figure.