Collaboration in Civic Spheres

Public Data Ferret On KOMO 1000: Oversight Of Federal Resource Lands Lax, Says Watchdog Agency

by July 28th, 2010

Today on my regular weekly segment with “Nine2Noon” co-anchors Brian Calvert and Nancy Barrick on Seattle’s KOMO-AM 1000 highlighting the work of our Public Data Ferret project, we talked about testimony delivered recently by a government watchdog agency that the U.S. Department of the Interior has been lax in managing federal resource lands leased to energy companies for oil and natural gas production. Here’s the audio of today’s radio segment, and here’s my original Ferret write-up of the testimony. The radio transcript follows.

Brian Calvert: “As crews continue to cap spills and clean up oil along the Gulf Coast, Congress is being reminded of major reforms that are long overdue. Matt Rosenberg, with, joins us. Matt, in testimony last week, Congress actually heard some specifics from the Government Accountability Office. Let’s talk about these specifics. The Government Accountability Office was pretty critical when it came to the fact that regular environmental inspections aren’t performed.”

Matt Rosenberg: “They were indeed, Brian, and the Government Accountability Office is kind of the conscience of Congress and the nation and they’ve issued 27 reports since 2004 with suggestions (on oil and gas lease regulation) and last week they reminded a House committee of what needs to be done. For one thing, the rates that are charged are too low, on the royalties paid by private companies that lease federal lands to produce natural gas and oil. Also, late payments go undetected. GAO pointed out the Department of Interior is the oversight agency here, and their IT system can’t even tell if the lease payments are coming in late. The environmental oversight is poor. Inspections too often just haven’t been done for onshore oil and gas leases, partly because department staff at Interior were too busy processing drilling permits. On top of that, the metering equiment is not checked, so they can’t really tell if the lease payments being made are for the right amount. And then, this is the one that really got me, guys. There’s a fudge factor. The current law allows the leaseholders to independently change their previously entered data on production levels and royalties owed. So in essence they can fudge the figures if they want. It’s just a real head-scratcher.”

Brian Calvert: “Matt, I want to go back to one of the first things you said that the GAO was not happy with, and that is, they said that the rates the companies are paying to lease the land where they’re producing this oil are way too low. That’s an interesting comment and really the first comment with teeth I’ve heard after years and years of hearing these companies report billion dollar profits while we’re getting soaked at the pump.”

Matt Rosenberg: “Well, and it’s not a market rate situation, according to GAO. And again, they’re not just piggybacking on the recent news, they’ve been at this for a good six years at least, looking at the programs and they say that, yeah, Interior has collected more than $9 billion (per year) in royalties, rents and purchase bids for oil and gas production on federal lands and waters, but that compared to private owners of resource lands, and compared to other nations, we’re giving this stuff away at practically bargain basement prices. And GAO goes on to say, you know, this affects the federal fiscal bottom line.”

Nancy Barrick: “And Matt, this seems to point out something that I imagine as Public Data Ferret, you come across all the time. You can have all the regulations on the books, but they don’t do any good unless they’re enforced.”

Matt Rosenberg: ‘Well, you know, I’ve taken to saying sometimes – and I love to be wrong about this – but accountability is like the weather. Everyone talks about it but nobody does anything about it. And yeah, we’ve got all kinds of well-intentioned programs out there and in some cases they run just the way they should and the proper balance is struck between economic development, which is tremendously important, and protecting the environment and playing by fair rules. But it seems like in this case, you know, the regulatory impetus just hasn’t been there. And I think this would be a win-win if Congress and the President said, ‘look, enough research, enough reports already’ – that’s kind of what GAO is saying – ‘let’s implement these common sense reforms and it’s going to be win-win for everybody except maybe some of the energy companies which have been getting way too sweet of a deal.'”

Brian Calvert: “Matt Rosenberg has more on this. You can check out his notes on this report at the Web site”

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