-Caveat Lector-
From
http://wwws.house.gov/search97cgi/s97_cgi?action=View&VdkVgwKey=http%3A%2
F%2Fwww%2Ehouse%2Egov%2Fmarkey%2Fiss%5Farctic%5Fpr020709%2Ehtm&
DocOffset=3&DocsFound=3&QueryZip=Alaska%27s+North+Slope&SourceQueryZip
=vdkvgwkey+%3Csubstring%3E+%22%2Fmarkey%2F%22+OR+vdkvgwkey+%3Cs
ubstring%3E%22%2Fma07%22&Collection=members&ViewTemplate=memberview
%2Ehts
}}}>Begin
[Previous Doc in Result List]
News from Ed Markey
United States Congress
Massachusetts Seventh District
FOR IMMEDIATE RELEASE
July 9, 2002
CONTACT: Israel Klein or David Moulton
(202) 225-2836
GAO FINDS OIL COMPANIES ARE NOT DISCLOSING UP TO $6 BILLION IN
CLEANUP LIABILITIES ON NORTH SLOPE OF ALASKA
Markey Calls on SEC Chairman Pitt, Interior Secretary Norton to Warn Investors of
and Protect Taxpayers from Huge Potential Losses from Environmental Degradation
WASHINGTON, D.C. --
Congressman Markey (D-MA) today released a report by the General Accounting
Office (GAO) finding that oil company liability for removing existing oil and gas
infrastructure and restoring the tundra on the North Slope of Alaska may run as high
as $6 billion, but existing industry bonds will cover only a fraction of that cleanup.
"Hiding $6 billion in cleanup liabilities is a world-class accounting scandal in the
same
league as WorldCom or ENRON," said Markey. "The report makes clear that oil
companies are refusing to disclose the soaring cost of their existing liability on the
North Slope, a potentially massive accounting issue that needs to be addressed
before it is sprung on unsuspecting investors, workers and the public. In addition, the
report is a powerful indictment of the existing federal and state permitting process,
which allows private oil and gas development on public lands using permits that are
so vague and financial assurances so inadequate that the public interest in restoring
these lands may never be redeemed."
The lawmaker also released two letters he is sending today in response to the report
seeking action from the Department of Interior and from the Securities and Exchange
Commission (SEC).
In the letter to SEC Chairman Harvey Pitt, Markey noted how recent experience had
reminded everyone of the costs of failing to be vigilant when accounting gimmicks
are used to hide a company´s true financial condition, and he asked the SEC to
demand a true accounting of the size and scope of the dismantlement, removal and
restoration (DR&R) cleanup liability of each of the oil companies active on the North
Slope of Alaska.
In Markey´s letter to Interior Secretary Norton, he demanded that the Department of
Interior undertake the actions recommended by the GAO report to reform the
bonding system. These reforms would ensure that the oil and gas industry, not the
public taxpayer, shoulders the risk of failing to set aside the resources to do the
necessary restoration of our public land following oil and gas development.
The GAO report raised new concerns about the state of the dismantlement, removal
and restoration (DR&R) activities on the state-owned lands in the Prudhoe Bay area.
Although the inadequacies of these DR&R activities have long been recognized, the
Army Corps of Engineers largely defers to the state regarding permits and
restoration requirements on federally-permitted wetlands. Moreover, of immediate
concern to Rep. Markey as well as the GAO, are how DR&R the new federal leases
on federal land in the 23-million acre National Petroleum Reserve-Alaska (NPRA) will
be overseen and ensured. New leasing began there in 1999, and the Bush
Administration just issued a second round of leases in NPRA on June 3, 2002.
"It is clear from this report that the Interior Department has delegated its public
responsibilities to a few giant oil companies when it comes to restoring public lands,"
Markey continued. "Both the Department and the industry have a very lax definition
of what will be required and how much they will have to pay. The failure to impose
those requirements in the leases we are issuing today could guarantee permanent
damage on these ecologically- sensitive public lands for centuries to come."
In recommendations for Executive action, the GAO urges the Secretary of Interior to
instruct the Bureau of Land Management (BLM) to issue specific dismantlement,
removal and restoration (DR&R) requirements and to review the adequacy of its
financial assurance program "in order to ensure that the lands of the National
Petroleum Reserve-Alaska are properly restored after oil and gas activities cease."
(page 78)
In recommendations for Congressional action, the GAO notes that any future
decision to open up new federal lands to oil and gas activities should consider
including specific restoration goals and specific financial assurances sufficient to
meet those goals. (page 79)
Specific findings of the report include:
FEDERALLY-PERMITTED STATE-OWNED LANDS
· None of the five oil companies on the North Slope were willing to provide their
estimated DR&R liability, saying the estimates were "for accounting purposes only,"
not for public review. (page 50)
· The U.S. Army Corps of Engineers issues permits for wetlands, including wetlands
on the Prudhoe Bay lands owned by the State of Alaska. "Almost the entire North
Slope is designated wetland." (page 30) Nevertheless, the Army Corps "prefers" that
the State have primary responsibility with respect to DR&R requirements and less
than one percent of the 1,100 permits issued by the Corps on the North Slope
include specific restoration requirements. (pages 34,40-41)
· Even though the DR&R requirements have been deferred to the State of Alaska,
the State´s requirements "offer no specifics", are not fixed, and are largely
discretionary. (pages 33-35)
· Two oil companies - BP and Phillips petroleum - expressed a preference for more
specific DR&R guidance to relieve uncertainty regarding their obligations (page 44).
· Alaska's lack of guidance is not unique, although New Mexico, Oklahoma,
Pennsylvania and Wyoming appear to be much more specific. (page 47)
· Available evidence suggests that the total liability for DR&R is in the billions of
dollars. (49) Estimates based on investment level and cost percentage yield a DR&R
estimate of $2.7 billion to $6 billion. (page 51)
· Alaska's bonding requirements, while higher than other oil-producing states (58),
are woefully insufficient. Bonding requirements sufficient to cover a single oil well
are
accepted as sufficient for entire oil fields. (page 55)
FEDERALLY OWNED LANDS
· DR&R responsibilities on federally-owned lands are managed by at least three
different subagencies of the Department of Interior, each with different and
inconsistent DR&R requirements: The National Petroleum Reserve-Alaska (NPR-A)
is managed by Interior's Bureau of Land Management (BLM); the Outer Continental
Shelf (OCS) is, managed by Interior's Minerals Management Service (MMS); and the
Arctic National Wildlife Refuge (where oil and gas development is prohibited) is
managed by Interior's Fish and Wildlife Service (FWS.) (page 62)
· BLM has yet to develop DR&R requirements for oil production in the NPR-A. (page
63)
· MMS requires specific well-plugging and abandonment plans for offshore wells, as
well as restoration, including the removal of all obstructions in the water. (page 64)
· Only MMS has implemented a general bonding structure that provides for higher
bond amounts as the scope of oil industry activity increases. (page 69)
· FWS requires removal of all structures and equipment from wildlife refuges and
restoration of the area to its original condition. HR 4, the House Energy bill pending
in
conference committee, would "compromise" this guidance by adding the phrase "or
to a higher and better use." (page 68)
· It will cost more than $100 million just to plug abandoned Navy wells from the 40s
and 50s in the NPR-A. (page 73)
· DR&R requirements the for Trans-Alaska Pipeline, for abandoned surface mines,
and for abandoned nuclear powerplants are much more specific and explicit for
these industries than for the oil and gas industry on the North Slope.(pages 74-76)
CONCLUSIONS
· "The need for federal dismantlement, removal and restoration requirements and
assurances that funds will be available to implement those requirements, is
becoming increasingly important. (page 77)
· "The BLM and the FWS need to ensure that their financial guarantees are adequate
in case a company is unwilling or unable to pay for returning the land to whatever
standard has been established. To do otherwise would leave the taxpayer with an
unacceptable risk." (page 78)
The entire 107-page GAO report, "Alaska's North Slope: Requirements for Restoring
Lands After Oil Production Ceases (GAO-02-357)," is available both on Rep.
Markey´s website at www.house.gov/Markey and the GAO website at www.gao.gov.
# # #
[Previous Doc in Result List]
End<{{{
~~~~~~~~~~~~~~~
Forwarded as information only; no automatic endorsement
+ + + + + + + + + + + + + + + + + + + + + + + + + + + +
In accordance with Title 17 U.S.C. section 107, this material
is distributed without charge or profit to those who have
expressed a prior interest in receiving this type of information
for non-profit research and educational purposes only.
+ + + + + + + + + + + + + + + + + + + + + + + + + + + + +
"Do not believe in anything simply because you have heard it. Do not believe
simply because it has been handed down for many generations. Do not
believe in anything simply because it is spoken and rumored by many. Do
not believe in anything simply because it is written in Holy Scriptures. Do not
believe in anything merely on the authority of Teachers, elders or wise men.
Believe only after careful observation and analysis, when you find that it
agrees with reason and is conducive to the good and benefit of one and all.
Then accept it and live up to it."
The Buddha on Belief, from the Kalama Sutta
+ + + + + + + + + + + + + + + + + + + + + + + + + + + +
"Always do sober what you said you'd do drunk. That will
teach you to keep your mouth shut."
--- Ernest Hemingway
<A HREF="http://www.ctrl.org/";>www.ctrl.org</A>
DECLARATION & DISCLAIMER
==========
CTRL is a discussion & informational exchange list. Proselytizing propagandic
screeds are unwelcomed. Substance—not soap-boxing—please! These are
sordid matters and 'conspiracy theory'—with its many half-truths, mis-
directions and outright frauds—is used politically by different groups with
major and minor effects spread throughout the spectrum of time and thought.
That being said, CTRLgives no endorsement to the validity of posts, and
always suggests to readers; be wary of what you read. CTRL gives no
credence to Holocaust denial and nazi's need not apply.
Let us please be civil and as always, Caveat Lector.
========================================================================
Archives Available at:
http://peach.ease.lsoft.com/archives/ctrl.html
<A HREF="http://peach.ease.lsoft.com/archives/ctrl.html";>Archives of
[EMAIL PROTECTED]</A>
http:[EMAIL PROTECTED]/
<A HREF="http:[EMAIL PROTECTED]/";>ctrl</A>
========================================================================
To subscribe to Conspiracy Theory Research List[CTRL] send email:
SUBSCRIBE CTRL [to:] [EMAIL PROTECTED]
To UNsubscribe to Conspiracy Theory Research List[CTRL] send email:
SIGNOFF CTRL [to:] [EMAIL PROTECTED]
Om
