So far, this is not the case, and oil companies only pay royalties on production. This is another area under scrutiny in the MMS scandal. There are reports, dating back to 2008, that the royalty offices of the MMS, located in Denver, routinely accepted oil company numbers on the amount of oil they produced, rather than independently auditing the numbers. No one knows how much lost revenue to the government that practice resulted in, and there is no way of finding out now. Clearly, future policy formation on the industry needs to include more oversight, more regulations, and a much less cozy relationship between the regulators and the companies they are regulating.

Future policy formation on other energy sources

The Gulf spill has helped to change public opinion on oil and its production, and on how it is regulated. It seems much clearer after the spill that we are a...
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