The latest in a NYT series on how well the federal government treats the oil and gas industry shows just how wasteful this nice treatment is.

The article focuses on an Interior Department study that found almost no benefit to giving energy companies a royalty break for drilling on public property. Over 40 years, these breaks will cost around $48 billion- and probably won't produce a drop of oil that wouldn't have otherwise been pumped.

The report estimates that the current incentives would have a tiny impact that is far exceeded by swings in market prices.

The report predicted that the current incentives would lead to the discovery of only 1.1 percent more reserves than if there had been no incentives at all. Total oil production from 2003 to 2042 would be about 300 million barrels more, or less than 1 percent, than it would have been anyway. Natural gas production would be 0.6 percent greater than it would have been otherwise.

But the cost of those royalty incentives would be high: about $48 billion less in royalty payments over the 40-year period. That loss would be offset by a slight increase in the prices that companies pay when bidding for leases in government auctions, but analysts said the net cost would still be above $40 billion.

What a great study. Could the government do one of these studies on every revenue break we give to businesses? That could give the 110th Congress much more "low-hanging fruit" to pay for programs under PAYGO. We might even get a better government out of it, too.

The establishment of an independent, outside Office of Public Integrity to review and investigate ethics charges against members of Congress is "definitely on the table," Democratic leadership aide told Congress Daily ($$) today, confirming a report in today's New York Times that "House Democrats are seriously exploring the creation of an independent ethics arm to enforce new rules on travel, lobbying, gifts and other issues."

Such an office, "if approved, would be a major break with tradition," the Times reported. But "some lawmakers have said an independent entity could be unconstitutional," which may or may not be an impediment to action by Congress -- expected in the spring.

This morning, we witnessed a remarkable moment in American history: a sitting President's policy castigated and condemned in person by members of a highly-respected bipartisan group -- including a former Supreme Court Justice, former Secretaries of State, and former Presidential Chiefs of Staff -- over military policy relating to one of the five or six major wars ever undertaken by this country.

And to think, that group, the Iraq Study Group, was created by a tiny earmark inserted into a war supplemental bill by a rank-and-file Republican member of the House.

As the New York Times put it:

One never knows what some lawmaker will insert into a spending bill without public scrutiny: a remote bridge, or maybe a bike path. Then there is the Iraq Study Group, better known as the Baker-Hamilton commission.

...

Representative Frank R. Wolf, Republican of Virginia, created the commission single-handedly last year when he inserted a $1 million earmark into a supplemental spending bill for the war.

But why did Wolf introduce this as an obscure earmark? “The fact is that there were members of Congress who would have opposed it... Should I have allowed that to stop me from doing what was in the best interest of the country?”

The Washington Post had a truly appalling front page article over the weekend on efforts by the administrator of the General Services Administration to undermine oversight and investigation into contracts by the agency's Inspector General (IG).

WP: GSA Chief Seeks to Cut Budget For Audits

Posted by Adam Hughes, 10:53:06 AM

Friday, December 01, 2006