Since Royalty in Kind became a priority for the oil and gas industry in the late 1990s, a handful of Wyomingites have played key roles in making in-kind royalties part of the nation’s policy for minerals taken from federal lands and seas.
Diemer True
Casper oilman and former legislator Diemer True, scion of the legendary True oil and gas empire, was an early public champion of Royalty in Kind on both the state and national levels. In 1995, True told the U.S. House Resources Subcommittee on Energy and Mineral Resources, “If the federal government is truly sincere about reinventing government, it should take royalty in kind.” Long Wyoming’s GOP kingmaker, True represented the Independent Petroleum Association of America supporting Wyoming’s U.S. Rep. Barbara Cubin’s 1998 legislation to force collection of all federal royalties in kind. True is a close boyhood friend of Dick Cheney, and put Cheney’s name up for the vice presidency in 1999. As Independent Petroleum Association chairman in 2002, True was a major supporter of the appointment of Republican politician and former oil industry spokeswoman Rejane Medinger “Johnnie” Burton of Wyoming to the $168,000-a-year job heading the federal Minerals Management Service.
Governor Jim Geringer
Wyoming Governor Jim Geringer (Republican, 1994-2002), who also chaired the Interstate Oil and Gas Compact Commission, aggressively pushed for Wyoming to be the nation’s first big onshore oil Royalty-in-Kind pilot project (1998-2006). In 1995, Geringer appointed Rejane “Johnnie” Burton to head the Wyoming Department of Revenue, responsible for valuing minerals and collecting state severance taxes. In 1997, he named Cynthia Lummis interim director of Wyoming Lands and Investments. Both Burton and Lummis went on to play major roles in Royalty in Kind. In 1998, Geringer sent his new State Lands director, Stephen Reynolds, to Washington, D.C. to testify for the governor in favor of RIK.
Jim Magagna
In April 1997, Jim Magagna, Geringer’s first State Lands director and also director of Federal Land Policy for the state of Wyoming under Geringer, went to Alberta, Canada to inspect its oil Royalty-in-Kind program and report back to Geringer and the state’s five-member Board of Land Commissioners. Testifying before Congress in July 1997, Magagna, a Rock Springs sheep rancher who is now executive vice president of the Wyoming Stock Growers Association, encouraged the federal government to choose Wyoming for a large-scale pilot program in Royalty in Kind. “Wyoming stands ready to assist you in moving forward with this initiative,” Magagna testified. “We as a state are prepared to assume those risks that are associated with the private sector in the marketplace and that are necessary if you are to achieve the rewards.”
Eli D. Bebout
In 1997, Riverton oilman Eli Bebout (Nucor Oil and Gas, NEW Corporation), then a Republican state representative (earlier, he was a Democrat), sponsored the Federal Mineral Royalties Taking in Kind Act that empowered the Wyoming governor to accept the state’s share of federal royalties “in kind.” The bill’s Senate sponsor was Casper oilman Bill Hawks, who had been a partner of Guy C. Burton, Jr., Johnnie Burton’s husband, in the drilling company Burton/Hawks Inc. (became Hawks Industries). Governor Geringer signed the bill, one of the first of its kind, into law in March 1997. Bebout, who failed in his 2002 run for governor after Geringer was timed out of office, is now a Republican state senator from Riverton.
Rejane Medinger “Johnnie” Burton
French Algeria refugee Johnnie Burton and her husband, geologist Guy C. Burton, Jr., owned a Casper oil exploration and drilling company, among other interests, and she ran her own oil and gas industry data collection and reporting service. A former state representative (1982-86), Burton was Governor Geringer’s director of the Department of Revenue beginning in 1995. In early 1997 she participated in several meetings between Geringer and representatives of the federal Minerals Management Service about establishing a Royalty in Kind pilot program in Wyoming. In 2002, Interior Secretary Gale Norton announced Burton’s appointment to the $168,000-a-year directorship of Mineral Management Service, which handles leasing and royalties collections on and offshore. Under Burton’s leadership, RIK expanded rapidly and now accounts for about a third of federal royalties. In 2005, Burton met with the five Wyoming state land commissioners in Cheyenne to urge putting Wyoming’s share of gas royalties into a new federal natural gas RIK program. On the motion of the state treasurer, Cynthia Lummis, the board agreed in a 4-1 vote, only Governor Dave Freudenthal dissenting. In 2007, Burton resigned as Minerals Management director after the Interior Department’s inspector general found widespread corruption in the Royalty in Kind office, and questions were raised in Congress about Burton’s handling of offshore leases for which (due to an error in lease language issued in the Clinton administration) some companies paid no federal royalties. Burton now is a $49,000-a-year aide to Wyoming U.S. Representative Cynthia Lummis in the congresswoman’s Cheyenne office.
U.S. Representative Barbara Cubin
In her 14 years in Washington ending in 2008, Republican U.S. Rep. Barbara Cubin of Wyoming was Congress’ biggest champion of Royalty in Kind. In 1998, she co-sponsored a bill that would have required the federal government to take all its on- and offshore lease royalties “in kind.” “Did we take advice from the oil and gas industry in its preparation? You bet,” Cubin said of the bill. She supported Wyoming Governor Geringer’s push to put the main federal RIK pilot program in Wyoming. As chairman of the House Resources Energy and Minerals subcommittee, Cubin battled regularly with the Clinton administration Minerals Management Service director and RIK opponent Cynthia Quarterman and enthusiastically welcomed the appointment of Quarterman’s replacement, Johnnie Burton.
Vice President Richard “Dick” Cheney
Nebraska-born, Casper-raised Dick Cheney, who now has a home in Jackson Hole, was White House Chief of Staff under President Gerald Ford (1975-76). In 1978 he was elected to the first of five terms as Wyoming’s sole member of the U.S. House of Representatives. In 1989, President George H.W. Bush named him Secretary of Defense, a post he held during the first Gulf War, “Operation Desert Storm.” From 1995 to 2000, Cheney was CEO of Halliburton, a multinational giant in oil and gas exploration, development and production with extensive operations in Wyoming centered in Rock Springs. During Cheney’s tenure as CEO, Halliburton was criticized for its dealings with hostile regimes in Libya, Iran and Iraq. From 2000-2008, Cheney was vice president of the United States under President George W. Bush. Two weeks into his vice-presidency in early 2001, Cheney created the controversial secret National Energy Policy Development Group. The Independent Petroleum Association of America—led by Cheney’s old friend, Casper oilman Diemer True—and the American Petroleum Institute, lobbied Cheney to make Royalty in Kind “part of a comprehensive national energy strategy.” A March 2001 memo from API vice president James Ford to Cheney’s task force stated the industry’s opposition to paying royalties in cash, recommending legislation to give the federal government “the authority to fully implement RIK and pay for RIK services such as transportation and processing.” Also in March 2001, Cheney’s energy policy group met with another longtime Cheney friend, Riverton oilman and politician Eli D. Bebout, another early advocate of RIK.
U.S. Representative Cynthia Lummis
Cynthia Lummis’ official dealings with Royalty in Kind date to 1996, when Wyoming Governor Jim Geringer appointed her interim director of Wyoming Lands and Investments. In that capacity she attended several meetings with federal and state officials to discuss making Wyoming the site of a federal Royalty in Kind pilot project for oil. With her 1998 election as Wyoming state treasurer, Lummis became a member of the state Board of Land Commissioners, which monitored the pilot RIK oil program in Wyoming. At a 2005 meeting of the Board of Land Commissioners, Lummis championed a proposal by Minerals Management Service Director Johnnie Burton, a longtime friend and legislative colleague, to commit Wyoming’s 50 percent share of natural gas royalties to Royalty in Kind. In 2008, RIK accounted for 53 percent of the $543 million in royalties MMS dispersed to the state. After a corruption scandal surfaced in the Minerals Management Royalty-in-Kind office, and after her friend Burton resigned as MMS director, Lummis was appointed by Bush administration Interior Secretary Dirk Kempthorne to serve on a Minerals Management Service advisory subcommittee of the Royalty Policy Committee to review RIK. The subcommittee was co-chaired by two ex-US senators, but directed by its vice-chairman, former American Petroleum Institute lawyer David Deal. Its report concluded that the royalty program was not “broken” or “dysfunctional,” and that although RIK should be “accountable,” it “needs to be able to operate as an enterprise.” Deal said that critics of RIK do not understand it. Lummis, elected to Congress last November, has since hired Burton as a $49,000-a-year employee in her Cheyenne office.