WASHINGTON –- The federal government isn’t doing enough to ensure it collects a “fair return” for the oil and gas that companies produce from public lands, in part due to policies on revenues for onshore drilling that are nearly a century old,
according to a critical report on the Department of the Interior released Tuesday.
The Government Accountability Office, the federal government’s internal watchdog, dinged the Interior Department for a continued lack of clear, updated procedures on the collection of royalties on oil and gas that come from public lands. Tuesday’s report comes after previous GAO research found that the U.S. government has one of the lowest return rates for federal leases, and that Interior had not updated its assessment of the policy in 25 years.
The latest report notes that Interior has updated its terms for offshore leasing since its last report and has considered — but not made — changes to its onshore terms. But the department still does not have a system in place for making sure such updates happen on a regular basis. It has “discontinued its efforts to pursue revised regulations” for onshore drilling, arguing that it “does not have enough information to determine how to adjust onshore royalty rates.”