This morning, Interior Secretary Salazar announced that he will end the mismanaged and wasteful Minerals Management Service’s (MMS) Royalty-in-Kind Program (RIK), which enables companies drilling on public lands and waters to forgo cash royalty payments and instead pay with oil and gas. The program has been riddled with scandal and in 2007, TCS called for an end to RIK in testimony before the Natural Resources Committee. The controversy culminated last fall when a federal investigation revealed that several RIK employees were involved in illicit behavior with oil and gas executives. 

TCS President Ms. Ryan Alexander commented, “We applaud Secretary Salazar for ending the wasteful Royalty-in-Kind program. Instead of compensating taxpayers for their assets, royalty-in-kind became a rip-off. After all the scandal and waste it was just common sense to end to the program.” TCS also commends Chairman Rahall and the House Natural Resources Committee for their diligent work calling for the repeal of RIK and the reform of the Minerals Management Service. 

But ending RIK must be just the tip of the iceberg. Secretary Salazar noted that this is one of many steps that have to be taken to reform the culture of mismanagement that thrived at the MMS under previous Administrations. The Government Accountability Office and the Office of Inspector General have reported on significant gaps in royalty collection , transparency, accountability and Secretary Salazar noted that he and his team intend to move forward to reforming these practices. 

TCS is pleased to hear these long overdue reforms are now on track and look forward to seeing these proposals move forward.

Other selected Taxpayer resources on the Royalty-in-Kind Program and MMS:

NEW ANALYSIS: Royalty-in-Kind Program Costing Taxpayers Millions

Royalty-in-Kind: A Costly Complication

Written Testimony Royalties at Risk Hearing before House Natural Resources Committee

New Report Raises Concerns with Royalty-In-Kind Program

Sex, Drugs, and Mismanagement at the Department of the Interior

Big Error Nets Billions for Big Oil

Additional Resources

OIG Investigations of MMS Employees, September 9, 2008

Investigative Report of MMS Oil Marketing Group – Lakewood, August 19, 2008

Investigative Report of Gregory W. Smith, August 7, 2008

Energy and Natural Resources Committee Letter to Inspector General Earl E. Devaney, April 19, 2007