Washington, D.C.  -  The Interior Department should immediately investigate why over one thousand Federal drilling leases signed in the late 1990s did not contain a requirement that oil companies pay royalties to the Federal government, Congressman Mike Rogers said today.

On Wednesday, a Minerals Management Service official said in testimony the royalty requirement was “inadvertently dropped” from a group of agreements signed in the late 1990s. Rogers said in times of rising energy prices the error could cost the Federal government billions in additional revenue, and give some of the nation’s oil companies an additional financial windfall during times of record-setting profits.

“Whether or not this was an honest mistake, the oil companies involved should not be given a pass on paying these royalties,” Rogers said. “The Department did the right thing by reporting these omissions, and I hope they will investigate why this happened in the first place.”

In his letter to the Department’s Inspector General, Rogers said the provision was omitted from more than 1,100 Federal oil and gas drilling leases for 1998 and 1999. “Given the rising price of oil, it is estimated the omission of this provision from these leases may cost the Federal Treasury billions of dollars in lost royalty payments,” he wrote.

Rogers said he didn’t know if the leases could be changed to add the requirement. “Either way, this should be investigated. The price of oil is certainly at a level where these provisions would apply,” he added.

Rogers said oil has been trading at or above $60 a barrel recently. “Folks across Alabama are still suffering because of rising gas and energy prices. We should, at very least, ensure these oil companies pay their fair share.”

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