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WASHINGTON, DC, February 16, 2007 (ENS) - Senate Democrats on Thursday turned up the heat on the Interior Department's oversight of oil and gas royalties. They called for a congressional investigation of a program that allows the federal government to collect royalty payments in the form of oil and gas rather than cash.
The royalty-in-kind program is already under criminal investigation by the U.S. Justice Department and is the subject of an investigation by the Interior Department's Office of the Inspector General.
Under the program, Interior's Minerals Management Service, MMS, collects oil and gas in lieu of royalties and sells the commodities on the open market.
The Bush administration wants to double the size of the royalty-in-kind program, which currently collects some $4 billion annually, by 2009. If the program is doubled, it would cover about 80 percent of offshore royalties, mostly from federal leases in the Gulf of Mexico.
That "defies logic," said Senator Ron Wyden, an Oregon Democrat.
Wyden and Senator Jeff Bingaman, a New Mexico Democrat who chairs the Senate Energy Committee, have asked for an investigation by the Government Accountability Office, GAO, the independent investigative arm of Congress.
The Minerals Management Service has been under increased scrutiny by lawmakers because of concerns with the royalty-in-kind program, as well as errors with offshore leases under the Clinton administration that could cost the federal government some $10 billion in lost royalties.
The hearing was Kempthorne's first appearance before the committee since his confirmation, and he faced criticism for several parts of the Bush administration's proposed $10.7 billion budget for the Interior Department in FY 2008.
The budget, for the second year running, includes a provision to sell some $350 million of public land held by the Bureau of Land Management, another agency within the Interior Department.
The spending plan for the U.S. Forest Service budget, which is part of the U.S. Agriculture Department, also contains language to sell off some $800 million of federal forestland. Both provisions were rejected by Congress last year and sparked considerable controversy.
During his confirmation hearing last year, Kempthorne told senators he opposed the concept of selling public lands to reduce the deficit - something Colorado Democratic Senator Ken Salazar reminded him of Thursday.
"There was a bipartisan push against that," Salazar said. "[It] is the wrong way to go and something I will oppose very strongly."
Administration officials have implied the difference in this year's provision is that not all the funds are targeted for deficit reduction. Still, Kempthorne appeared to say that land sales provision was not of his doing.
"We did have that discussion and I still believe as I did then," Kempthorne told Salazar. "I don't agree with selling land for the purposes of deficit reduction."
Western senators also took issue with the administration's plan to cut some $42 million from the payment in lieu of taxes, PILT, program, which provides money to local counties that contain large tracts of federal land.
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