On behalf of the Interior Department, spokeswoman Kendra Barkoff responded to six questions from iWatch News reporter Aaron Mehta about the government's collection of royalties from the oil and gas industry.
Does Interior have any estimate about how much the government is losing each year in royalty underpayments? I’m not talking about the royalty relief bill related leases, which aren’t paying anything, but just a general estimate for how much is lost each year. Millions? Tens of millions? Hundreds of millions? A hundred bucks?
The Department has a sophisticated accounting and detection system and a comprehensive risk-based audit and compliance program that rely on source data and third-party data to target underpayments and to ensure that royalties do not go uncollected. In fact, since 1982, the Department’s audit and compliance efforts have uncovered and collected $3.8 billion. And, on average, over the last 3 years, the Department’s audit and compliance program collected payment of approximately $90 million a year from companies. These amounts represent companies' underpayments in their initial voluntary reporting, which were discovered through on-going compliance activities.
If not, why doesn't that estimate exist?
The Department employs a risk-based compliance strategy to target audits and compliance reviews on those properties and companies identified with the highest risk of underpayment. Based on that strategy, we believe that we are collecting the royalties that are due from Federal and Indian mineral leases.
Does Interior agree with experts who say that the government is losing money overall in royalty underpayments?
