The Daily Outrage: U.S. fails to collect royalties for gas production

WHO: U.S. Minerals Management Service

WHAT: The federal government could lose millions of dollars owed from natural gas production on public lands because it does not promptly determine and collect when it gets shortchanged. The Government Accountability Office reported Monday that Minerals Management Service does not have the tools or staff necessary to check that companies are paying the government what it’s owed in royalties.

WHY: Under the royalty-in-kind program, companies producing gas on federal lands and offshore pay the government with fuel rather than cash. The government then sells the gas.

HOW BAD: GAO estimates that $21 million is owed. But it could be much more, because the government is not verifying how much gas companies produce and has not determined when interest should accrue on unpaid royalties. The U.S. receives much less percentagewise than what other governments collect from their oil and gas production.

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