Interior to phase out troubled royalty program
The Interior Department will phase out a controversial oil and gas royalty program that has come under fire in recent years.

Interior Secretary Ken Salazar said the royalty-in-kind program at the Minerals Management Service was not benefiting taxpayers. Reports from the department's Inspector General and the Government Accountability Office have shown the federal government has lost out on millions of dollars.

“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 said at a hearing before the House Natural Resources Committee on Wednesday.

The program allows energy companies to pay the government in oil and gas rather than cash. It's responsible for about half of the $12 billion collected from development on federal lands, according to the Associated Press.

Employees of the program routinely engaged in inappropriate relationships with energy industry officials, according to reports from Interior's inspector general.

Get the Story:
Interior ends troubled oil royalty program (AP 9/16)
U.S. Ending Oil-Royalty Program After Scandal (The New York Times 9/17)

OIG Reports:
Gregory W. Smith | MMS Oil Marketing Group - Lakewood | Federal Business Solutions Contracts

GAO Documents:
Federal Oil And Gas Management: Opportunities Exist to Improve Oversight | MMS Could Do More to Improve the Accuracy of Key Data Used to Collect and Verify Oil and Gas Royalties | Royalty-In-Kind Program: MMS Does Not Provide Reasonable Assurance It Receives Its Share of Gas, Resulting in Millions in Forgone Revenue

House Natural Resources Committee Hearings:
Full Committee Legislative Hearing On H.R. 3534, The CLEAR Act (Part 1) | Full Committee Legislative Hearing On H.R. 3534, The CLEAR Act (Part 2)