U.S. House Committee on Natural Resources
CONTACT: Allyson Groff or Blake Androff, 202-226-9019
Washington, D.C. - A new Government Accountability Office (GAO) report made public today estimates that, as a result of erroneous data entered into Minerals Management Service (MMS) databases, American taxpayers may have lost out on approximately $160 million in royalties owed by oil and gas companies that drill on federal lands and in offshore waters, said House Natural Resources Committee Chairman Nick J. Rahall (D-WV).
"Imagine if American taxpayers, who are required to sit down every year and fill out their tax returns, decided to leave some of the spaces blank or fill in incorrect information. This is what the GAO tells us the oil and gas companies are guilty of today. This is unacceptable and insulting to law abiding taxpayers. We owe it to the American people to ensure that these lucrative companies are filing their royalty reports accurately and honestly," said Rahall, who requested the GAO analysis.
The GAO report shows that due to simple data errors, a complex problem has arisen that could cost the Federal Treasury and the American public millions of dollars in royalties duly owed by oil and gas companies. The GAO found significant instances where data was missing or appeared erroneous, as a result of such glaring failures as submitting incorrect data and failing to file needed reports.
The report on mineral royalties is the 2nd report to be released by the GAO this week regarding the state of MMS royalty collection programs. A report made public on Monday, September 15, focused on the MMS Royalty-in-Kind (RIK) program, about which Rahall has consistently raised concerns.
The GAO is expected to discuss the findings of these 2 reports before the Committee on Wednesday, September 16, at a Full Committee hearing on legislation introduced last week by Rahall, the
Consolidated Land, Energy, and Aquatic Resources (CLEAR) Act of 2009 (H.R. 3534). The bill aims to further the Nation's goals of securing a reliable and sustainable supply of American energy. The legislation contains a number of provisions aimed at correcting major flaws in the federal oil and gas royalty collection plan - a response to problems highlighted in these 2 GAO reports, as well as a multitude of reports, audits, and investigations over the years from the Interior Department's Inspector General (IG) and the GAO.
"These GAO investigations add weight to the pile of previous reports verifying the urgent need to reform the federal royalty collection system. The CLEAR Act, which I introduced after a series of hearings in my Committee earlier this year, would eliminate the scandal-ridden Royalty-in-Kind plan to help prevent the loss of even more money owed to the American people for the disposition of our public energy resources," said Rahall.
Rahall will lead the Committee in a two-part hearing on Wednesday, September 16, and Thursday, September 17, on the CLEAR Act. The 1st day will feature testimony from Secretary of the Interior Ken Salazar, National Oceanic and Atmospheric Administration Undersecretary and Administrator Jane Lubchenco, and representatives from the offices of the Interior IG and the GAO. The 2nd day will feature a variety of stakeholder perspectives on the Rahall legislation.
Additional information and a full witness list for the two-part hearing is accessible on the Committee's Web location. The hearing will be webcast live and archived on the Committee's Web location.
