DOI to assemble royalty policies review panel

Nick Snow
Washington Correspondent

WASHINGTON, DC, Nov. 15 -- The US Department of the Interior is forming an independent panel to examine royalty policies and procedures on federal and Indian lands, the federal department announced on Nov. 14.

The Subcommittee on Royalty Management will operate under the Royalty Policy Committee, an independent advisory board that the Interior secretary appoints to advise the US Minerals Management Service on royalty management and other mineral-related policies.

"Recently, there has been much interest regarding the accuracy and effectiveness of the minerals management program within [MMS]," said C. Stephen Allred, assistant Interior secretary for land and minerals management.

"We have decided that a review of the procedures and policies surrounding management of mineral revenue at [DOI] is in order," he wrote in a letter to incoming Royalty Policy Committee Chairman Daniel Reimer.

MMS attracted heavy criticism earlier this year following the discovery that price thresholds were omitted from federal deepwater oil and gas leases issued in 1998-99. Thomas M. Davis (R-Va.), chairman of the House Government Reform Committee, and Darrell E. Issa (R-Calif.), chairman of the committee's energy subcommittee, have asked the Government Accountability Office for an investigation.

Allred said that the panel specifically would review:

-- The extent to which existing reporting and accounting procedures and processes are sufficient to assure that MMS receives the correct amount.

-- MMS audit, compliance, and reporting procedures to ensure that lessees comply with existing statutes, terms, and regulations governing royalties.

-- Operations of the royalty in-kind program to assure that adequate policies, procedures, and controls are in place.

Subcommittee members will be announced soon, Allred said. He added that the group would spend 6 months on its review before reporting to the full Royalty Policy Committee and Interior Sec. Dirk A. Kempthorne.

Contact Nick Snow at nsnow@cox.net.

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