The Government Accountability Office found that slipshod operations at the Department of Interior's Minerals Management Service have hampered the agency's ability to keep track of how much energy companies are extracting from public lands, including those in eastern Utah.
Accurate production reports are necessary for proper collection of royalties. The GAO said that because the computerized accounting systems at Denver-based MMS are inadequate, billions of dollars may be slipping through bureaucratic fingers.
But how much taxpayer money might have been lost cannot be calculated because the accounting programs don't allow for that kind of backtracking, GAO spokesman Frank Rusco said Monday.
As part of its investigation, GAO conducted telephone interviews with Bureau of Land Management officials in Vernal; Meeker, Colo.; Farmington, N.M.; and Pinedale and Buffalo, Wyo.
Field office officials said they have found errors in energy companies' reports on how much oil and gas they have mined. BLM's Vernal field office manager, Bill Stringer, said Monday his office double-checks those reports and notifies MMS of any inaccuracies.
But the BLM is not responsible for the ultimate accounting of royalty payments, he said.
"We've kicked the dirt, we've followed every pipe to see where it goes. We do take corrective action," Stringer said. "But we don't track the dollars; we track the volumes. As long as you know the volume, you run it through the program and the money comes out the other end."
The GAO, however, found that even if the BLM did report discrepancies to MMS, the information didn't necessarily get to the person responsible for recalculating what energy companies owe the U.S. treasury.
GAO officials said their research wasn't related to the $5.3 million investigation by Interior's inspector general that found MMS workers in Denver's royalty-collection office partying, having sex, using drugs and accepting gifts from energy companies engaged in business with the government.
A separate GAO report took a broader look at U.S. royalty collections. Rusco said the investigation found that the United States charges relatively little for energy companies to mine public lands and waters.
"It's not clear at all," he said, "whether we are collecting the fair-market value of these public resources."
Since 2002, as oil and gas prices have skyrocketed, along with company profits, the nation has seen a 113 percent jump in energy drilling, compared with 18 percent in the rest of the world, Rusco said.
And despite royalty fees ranking among the lowest among 104 nations, states and other agencies surveyed by the GAO, Interior has for 20 years resisted moves to charge more.
