Interior orders mineral royalty reforms after report

Nick Snow
Washington Editor

WASHINGTON, DC, Jan. 30 -- US Interior Secretary Dirk A. Kempthorne, after receiving the final report of an independent study panel on Jan. 25, ordered immediate implementation of recommended mineral management reforms that can be carried out administratively.

The report, having more than 100 recommendations, came from a bipartisan panel the secretary formed last year which was cochaired by former US senators Bob Kerrey (D-Neb.) and Jake Garn (R-Utah). "Where it is within our power to do so, the responsible officials will take action to rectify identified problems. However, other recommendations may require further study or legislative action," Kempthorne said.

His directive to Minerals Management Service Director Randall B. Luthi and Bureau of Land Management Director James L. Caswell also orders the two agencies to develop action plans based on the report's recommendations and submit a progress report within 30 days.

The recommendations, to be implemented immediately, include additional ethics training for all MMS employees, especially those who deal with oil, gas, and other lessees in a regulatory, collections, or enforcement role.

MMS also is upgrading its communication and coordination to ensure the accuracy of lease and royalties collections, the Department of the Interior said. It indicated that the agency also recently issued an Indian Oil Valuation Rule to provide added certainty to the valuation of oil produced from American Indian lands, a key issue that the study panel identified.

Kempthorne said some of the panel's recommendations need further exploration through consultations with state and Indian tribal officials and, in some cases, industry organizations before they can be adequately implemented.

Contact Nick Snow at nicks@pennwell.com.

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