U. S. government basically owns the Gulf of Mexico

I have had a lot of questions regarding the Gulf disaster, mainly who owns the Gulf of Mexico, and here’s a few bullet points I have been able to come up with.

*The adjoining state has 3 miles out.

*The U. S. Government has the Outer Continental Shelf (OCS) out about 200 miles.

*The oil rig in question was about 40 miles out.

*BP is leasing from the United States government the right to drill in this particular section of the Gulf of Mexico.

*The Mineral Management Service (MMS) is under the Department of the Interior and handles the entire leasing process.  The Secretary of the Department of Interior, Ken Salazar, is appointed by and serves directly under the president of the U. S.,  Barack Obama.

*When a high bid is accepted by MMS, the submitter receives the official lease forms prepared by the MMS for execution.  They, the leasee, must immediately pay 4/5 of “bonus” amount.

*Some of the funds collected under a lease goes directly to MMS and the rest directly into the U. S. Treasury, so to pretend the government is not involved in this up their neck is ridiculous.

*OCS leases are subject to income tax.

*One commenter said that the revenue from these leases is second only to the income tax.  (See comment section for the quote)

*The entire Gulf of Mexico is broken up into many segments, subject to lease.

*BP has a lease on at least the one where the rig was that is involved here.

*The North Sea oil rig was operated by Transocean, a Swiss based drilling contractor, and leased by BP, an entirely separate thing from the lease to drill.

Who owns the Gulf of Mexico?  The federal government.  But I still have at least one question I want to find the answer to and that is who owns the oil that comes from the well?

In April, 2009, the U. S. exempted BP’s drilling from environmental impact study: http://www.washingtonpost.com/wp-dyn/content/article/2010/05/04/AR2010050404118.html

BP’s lease: http://www.gomr.mms.gov/PDFs/2007/2007-059.pdf

Details on how MMS operates:  http://www.mms.gov/ld/PDFs/GreenBook-LeasingDocument.pdf

Posted:  06.13.10  Updated:  Links below added 06.14.10 @9:12 a.m.

Live links to gusher – Day 56:





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7 responses to “U. S. government basically owns the Gulf of Mexico

  1. Pingback: Tweets that mention U. S. government basically owns the Gulf of Mexico « Can I Just Finish My Waffle? -- Topsy.com

  2. bellalu0

    The following is a comment I saw while researching this subject. The commenter is responding to “Mr. Quidd” and seems to shed light on the situation and I think adds to understanding the responsibilites of BP and the fed government, and how it interacts with the State of Louisiana (or any state affected, I would think).

    “”…Mr. Quidd generalizes that conservatives are anti-government or at least for limited government . To understand why Jindal and Vitter want the Feds to do more in the present crisis, notwithstanding their general small government bent, requires a little history.

    “”In addition to other enormous governmental excesses and usurpations, the late twentieth century saw the federal government’s outrageous declaration that it, rather than the individual states, was owner of the hydrocarbon reserves located under the offshore areas beyond ten nautical miles (three in the case of Louisiana) from the coastlines of the various states (the OCS oil and gas leases).

    “”After the Supreme Court affirmed, the result for the Feds was untold billions in lease bonuses, royalties, and additional royalties in lieu of state severance taxes, from OCS leasing and production. Afterwards, governors such as Jindal find themselves essentially emasculated, stripped (in addition to the land itself), of a means of funding and with little voice in what is permitted off their shores beyond three (or twelve) miles. Add to this expansive federal Corps of Engineers’ jurisdiction over the course of the Mississippi and its tributaries, which altered their paths and the annual alluvial soil restorations.

    “”While protecting upriver regions from annual flooding, the Corps work effected enormous erosion of Louisiana’s coastal mainland and adjacent barrier islands located within its boundaries. These formerly served as buffers against mainland damage–such as from Katrina and onshore migrations from runaway (now federally owned) oil. The Mississippi River Gulf Outlet, championed and overseen by that same Corps of Engineers, represented the interests of lessee oil companies and their federal lessor in shortening the distance to their mutual offshore treasures, but at the cost of yet further marshland erosion.

    “”Arguably, it is federal oil (rather than BP’s) already washing up on the shores of Louisiana and Mississippi and an imminent threat to our Alabama coastal areas and beyond. Minerals underlying a lease are “owned” by the lessor who contracts with the oil company lessee. BP as lessee undertakes, in exchange for the right to take in-kind a specified share of all hydrocarbons won and saved, to drill, equip and produce from the lease all at its sole cost, risk and expense. In exchange, BP agrees to make payments to the Feds of the contracted bonus amount upon execution of the lease, plus the stipulated royalty percentage of the oil won and saved. Until it is won and saved, however, any oil and gas from the leases is arguably still “owned” by the federal government as landowner/lessor.

    “”As between the federal government and BP, the Feds (MMS) obviously have claims against BP and it is BP that will ultimately fund the costs of remediation and financially bear the cost of paying those wronged to keep them whole. But Mr. Jindal’s main beef is against the adjacent landowner, who allows this tragedy to occur in such close proximity to his state’s property and who stood by idly for weeks while it encroached LA’s shores. No, when the federal government, through its own arrogation of OCS leases, itself becomes part of “Big Oil” to the extent that its revenues from federal oil and gas leases are second only to its revenues under the income tax, it is at best codependent, and at worst equally culpable for what its invitees do to the property of adjoining landowners.

    “”No, Mr. Jindal’s demands are not grounded in the size of government, but in the rights of a landowner when his property has been damaged by a neighbor or that neighbor’s invitees. Mr. Quidd, you obviously misunderstand conservatives generally and Governor Jindal and Sen. Vitter in particular.””

    (Sorry I did not get the name of the commenter here so I hope he doesn’t mind me copying him.)


  3. Imus tells his guest Dr Roubini to follow the money…always good advice 🙂

    Dr Nouriel Roubini a guest on Imus in the Morning, co wrote Paper Tigers? A Model of Asian crisis.

    Dr Roubini predicted the financial crisis back in 2007 but apparently no one listened to him. He has some insight and enlightenment on our Current Economic Situation, how we got here, and what we can do about it, and what happens if we don’t do anything about it. He explains Whites Swan events and Black Swan events. I really enjoyed the interview very enlightening.



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