Independent study panel completes DOI mineral royalty review

An independent panel completed its review of DOI's mineral royalty collection program on Dec. 18 and forwarded its findings to the department's royalty policy committee.

Nick Snow
Washington Editor

WASHINGTON, DC, Jan. 2 -- An independent panel completed its review of the US Department of Interior's mineral royalty collection program on Dec. 18 and forwarded its findings and recommendations to the department's royalty policy committee. The committee will review and discuss the panel's findings at a Jan. 17 public meeting.

Secretary Dirk A. Kempthorne formed the panel nine months earlier to assess DOI's mineral revenue collections system. "The panel was given a free hand to scrutinize all key processes, from production accountability and royalty collections to audits, compliance and enforcement," he said.

US House Natural Resources Committee Chairman Nick J. Rahall (D-W.Va.) has been one of the DOI royalties collection system's harshest critics, saying that it is plagued with problems, particularly in its royalty-in-kind (RIK) program.

The panel's co-chairmen, former US Sens. Bob Kerrey (D-Neb.) and Jake Garn (R-Utah), acknowledged in a joint statement that there has been controversy over federal mineral resources management for several years, and that Congress has expressed concern about mineral leasing and revenue collection processes.

They said that within DOI, the inspector general has investigated allegations of ethical lapses by RIK program employees. "We believe the RIK program is an extremely important component of the royalty management program and the recommendations in this report are geared toward ensuring its survival," Kerrey and Garn said.

They said that the panel's report makes more than 100 recommendations to improve the federal mineral resource management program, which provided more than $11 billion of revenue in 2007. "Most of these recommendations can be implemented administratively. Many can be done quickly. Some will require long-term effort and continued vigilance. A few of the recommendations depend on legislative action," they said.

In addition to Kerrey and Garn, the seven-member panel, which functioned as a subcommittee of the royalty policy committee, included David Deal, who was vice-chairman, and members Cynthia Lummis, Perry Shirley, Robert Wenzel, and Mario Reyes. The full committee will review the report at its Jan. 17 meeting before transmitting it to Kempthorne.

Contact Nick Snow at nicks@pennwell.com.

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