Molly Ivins May 10

AUSTIN, Texas — Well now, Sen. Hutchison, someone has some facts wrong in this sorry tale of how an amendment benefiting the oil companies to the tune of hundreds of millions of dollars wound up in a bill providing emergency funds for tornado victims, and it's not me.

Responding to a recent column of mine, Sen. Kay Bailey Hutchison stated in a letter — recently printed by the Austin American-Statesman as well as my own employer, the Fort Worth Star-Telegram — that "a federal agency had tried to change U.S. law through the back door of government regulation. ... Not reported in the column was the fact that, last fall, Congress passed and the president signed legislation that prohibited the agency from issuing such a regulation without first consulting the industry, which had already made substantial investments based on current law. The agency was also required to report to the relevant committees in Congress. The agency ignored this direction and instead tried to slip the new rule through."

Actually, the Minerals Management Service of the Interior Department has spent almost two and half years following a very public process about which there is nothing secret or irregular, and it has consulted the industry at every step. The process began in December 1995 and has included 14 public hearings and workshops in six different states, to all of which the industry was invited and did attend. There are more than 3,000 pages of comments on the proposed rule change, most of them from the industry, and the industry's comments have gradually changed and shaped the proposed rule change over the years.

Also, there was no legislation such as our Texas Republican described; there was only report language attached to an appropriations bill stating that Congress expected MMS to "continue to consult with the industry and report back to the committee prior to finalizing the regulations." Of course, MMS complied with the report language; the comment period closed in early April, and MMS prepared a draft copy of a report to the committees, which cannot now be sent because of the language in Hutchison's amendment.

In addition, MMS has issued several notices in the Federal Register asking for additional comments on the proposed rule change and made additional changes based on points raised by those comments.

This process hardly constitutes trying to "slip" something through the back door.

In addition, Hutchison left the impression that this proposed rule change was something dreamed up by faceless federal bureaucrats who probably know nothing about the Texas oil industry. In fact, the assistant secretary of interior for land and minerals management is none other than our Bob Armstrong, former member of the Texas Legislature, former Texas land commissioner from 1971 to 1981, former Texas Parks and Wildlife commissioner, and the man to whom we owe the most for the preservation of the Big Bend Ranch state park.

Armstrong is notoriously accessible — about the easy-goingest guy to ever serve in high public office. "We are the only ones representing the taxpayer in this thing," said Armstrong. "It's our duty to represent the taxpayer, just like it is for the Land Office to represent the school fund in Texas."

I was further amazed to find Hutchison state: "In fact, I consulted with the Texas Railroad Commission, which collects Texas' royalties, to ensure this amendment was in the best interests of the state, and was told it was."

Now, as even schoolchildren know, the Texas Railroad Commission is a notorious handmaiden of the oil industry, but the commission is certainly as well aware as Hutchison is that the state of Texas collects higher royalties on its oil land than the feds do, all to the benefit of Texas public schools, the University of Texas at Austin, and Texas A&M. If our system is good enough for Texas taxpayers, why isn't it good enough for taxpayers in Nebraska and New Jersey?

Further, according to the General Land Office, since Texas' royalty rate for off-shore is one-quarter — compared to the feds' one-eighth — it hurts the state on a competitive basis. Land Commissioner Garry Mauro maintains that the feds are just giving away royalty money, in addition to selling leases too cheaply. Leases normally run $125 an acre, and the feds currently sell them in the Gulf of Mexico for $25 an acre — and that hurts the states on a competitive basis.

As for the senator's point that MMS was trying to "change U.S. law through the back door," I point out again that according to many experts in the field, the current law contains no language that would prevent a royalty arrangement based on market prices — a point that will be decided in the lawsuit now in federal court in Angelina County, Texas.

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Molly Ivins is a columnist for the Fort Worth Star-Telegram.

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