"Big Break for Big Oil, Larger Burden for Taxpayers"

"When Occidental Petroleum Corp. late last month agreed to pay $2 million to settle a whistleblower’s claim that it underpaid the Interior Department for fuels extracted from public lands, it was a special moment for U.S. taxpayers.

Since 2000, there have been 19 such moments – settlements with oil and gas companies in which the government has been able to recapture more than a half billion dollars owed in royalties, thanks only to the allegations raised by whistleblowers in sporadic cases. Interior Department audits have resulted in recovery, on average, of another $90 million annually over the last three years.

But federal officials tell iWatch News there’s much more where that came from – it’s just that the Interior Department is not effectively drilling for it. The collection system is in such disarray and so reliant on voluntary information from oil and gas companies that investigators can’t even determine how much the energy industry owes the Treasury.

Even as leaders grapple with the nation’s fiscal troubles and urge expanded drilling for natural resources, their failure to remedy the decades-old systemic shortcomings at the Interior Department may have allowed billions of dollars in royalties to slip away, increasing the burden on taxpayers because of the government’s failure to fully protect their interests."

Aaron Mehta reports for the Center for Public Integrity April 15, 2011.


Source: Center for Public Integrity, 04/19/2011