In the late 1990s the government wanted to encourage oil and gas companies to explore in the Gulf of Mexico. Since this was a very risky proposition and the price of oil and gas was a heck of a lot lower than it is today, the government waived its 12% royalty on any discoveries. Well, oil and gas were discovered and are being pumped today when the price of oil and gas is approaching the stratosphere. Some companies say that they are not claiming refief from paying the royalty, but many companies are not.
The government made a deal that so happens to be a large benefit to the energy industry. Should it renege on it? Or, should it try to work out a new deal? It's an important question, as payment of royalties at current energy prices would amount to at least $7 billion (and maybe $42 billion) in five years.
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