A year after the Bush-era scandal that rocked the previously obscure U.S. Minerals Management Service—where employees were accused of rigging oil contracts, accepting gifts, and even hopping into bed and doing drugs with industry reps—Interior Secretary Ken Salazar is pulling the plug on a royalties program.

Salazar told a House committee yesterday that the program, which allows oil companies to pay the government in oil and gas rather than cash to drill on federal land, would be phased out, writes The New York Times. The move comes in the wake of audits showing the feds failed to collect tens of millions of dollars in royalties.

“Clearly, the department’s energy leasing and royalty programs have not been working as they should, and the American people have not been receiving the full benefits from these valuable assets,” Salazar told the House Natural Resources Committee.

Congress’ investigative arm, the Government Accountability Office, issued a report yesterday, stating that royalties were not always paid but that oil companies occasionally found it difficult to determine how exactly to calculate them.

Meanwhile, another report finds that the Bureau of Land Management failed to follow the law when it allowed more than 6,500 oil-and-gas drilling operations in several Western states, including Colorado, without the appropriate prior environmental reviews–a situation that contributed to air-quality problems, reports The Denver Post.

Posted 9/17/2009 at 2:00 pm by Michael de Yoanna
Business, Natural Resources, Panorama, Politics :: Permalink :: Comments

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