e don’t much like to have to defend giant oil companies. But a deal is a deal.

Some members of Congress are chafing that some oil and gas from deep waters off the Gulf Coast should yield a royalty to the government like all other hydrocarbons from federal lands and waters, in spite of a 1996 law that called for leases in that area from 1996 through 2000 to be royalty-free. Wells drilled under those leases are just beginning full production.

On the oil and gas in question, royalties would be about $7 billion over the next five years if oil is $50 a barrel and gas is $7 per thousand cubic feet, somewhat below current prices.

In 1996, oil was flirting with $10 a barrel. Producers were uninterested in spending money on new wells, especially the new challenges involved in drilling as deep as 10,000 feet below the ocean’s surface. The incentive legislation was backed by the Clinton administration and passed with support of both parties.

The Interior Department then issued regulations that would require royalties to the government once oil got to $35 a barrel and gas got to $4 per thousand cubic feet.

Because few companies were biting, the Clinton administration suspended those thresholds for 1998 and 1999 leases. It’s those that won’t yield the $7 billion mentioned above.

Most companies are paying royalties on their other 1996-2000 leases, in accord with the regulations. But one producer, Kerr-McGee Co., is paying nothing on the grounds that Congress never authorized royalties to be restored by price thresholds. Kerr-McGee has filed notice of a lawsuit. If it wins, the lost government revenue over the next five years becomes $35 billion, not $7 billion.

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