Is the U.S. Interior Department wrongly withholding information that will reveal whether taxpayers are being ripped off in a controversial oil and gas royalty program? Public Employees for Environmental Responsibility (PEER) seem to think so, according to a lawsuit they filed today. Interior claims that disclosure of bidding and contracting information about its Royalty-In-Kind (RIK) sales would reveal oil company trade secrets.
The Royalty-In-Kind Program is responsible for managing Minerals Revenue Management’s (MRM) commercial oil and gas sales activity. The RIK Program is currently selling over 800,000 MM-Btu of natural gas per day and over 150,000 barrels of crude oil per day.
Simply put, Interior acts as an oil broker, selling this oil and gas in order to obtain its shares. Royalty payments on oil and gas from offshore tracts and public lands are one of the federal government’s greatest sources of non-tax revenues, making over $4 billion in 2007. RIK allows companies to pay federal royalties in the form of oil or natural gas rather than cash.
An investigation last September found that Interior employees (19 RIK marketers and other RIK employees – approximately 1/3 of the entire RIK staff) were engaging in sex and drug parties with oil officials, and 8 of the 19 employees received gifts exceeding the allowable limit.