03-11-06

The Government Accountability Office, the watchdog agency for Congress, is beginning a broad investigation into potential deficiencies in how the government collects billions of dollars in royalties from companies that produce oil and gas on federal territory.
Investigators will scrutinize an Interior Department decision to drop claims against Chevron, which is drilling for oil off Louisiana, said the report.

Republican lawmakers said they had worries about the management of the entire royalty program by the Interior Department, including its regulations and enforcement practices and the accuracy of basic information.
"They don't know how much oil is coming out of the ground," said Representative Darrell E. Issa, Republican of California and chairman of the committee's subcommittee on energy. "If an oil company were to give them the right number, they would take it. If they were to give them the wrong number, they would take it."

The investigation reflects a growing anger in Congress about the Interior Department's vast oil and gas leasing program, under which the government collects as much as $ 10 bn a year on oil and gas produced on federal land and in federal waters, said the report.
The Minerals Management Service of the Interior Department, which oversees royalty collections, has come under growing criticism from lawmakers in both parties for losing track of billions of dollars in royalties. The agency has been under fire since February for errors on offshore leases that could cost the government more than $ 7 bn over the next five years, as well as for its sluggish response.