GAO report criticizes system of collecting oil and gas royalties

Sept. 12, 2008

The United States is not earning its fair share of profits from domestic oil and gas production due to flawed tracking practices and an outmoded royalty system, say two federal audit reports released Friday.

The reports from the Government Accountability Office come on the heels of a two-year investigation by the inspector general of the Interior Department documenting a "culture of ethical failure" at offices of the Minerals Management Service, the agency that oversees offshore drilling. Three reports released by the inspector general this week revealed a cozy relationship between the energy industry and federal regulators, who allegedly received gifts and other special treatment from Big Oil executives. Some MMS officials also allegedly steered lucrative agency contracts to a company in which they held a financial interest.


Full Story on Nola.com