Potential for fuel, and for fraud


The Interior Department announced today that more than 190 million acres of federal land are now open for geothermal energy projects.

Last month, you’ll remember, Congress declined to renew the ban on oil shale development before it adjourned. And the lapsed ban on offshore drilling means a huge swath of land is now open for leasing.

All this adds up to a massive expansion of responsibilities at a few federal agencies — including one that doesn’t have a stellar track record: the Interior Department’s Minerals Management Service, lambasted by the department’s IG last month for a “pervasive culture of exclusivity” in its royalty program, which collects money from oil companies operating on federal lands.

The sordid tales of sex and drugs grabbed headlines, but the real issue documented by the IG is the threat to the taxpayer when federal agencies collude with energy companies. With such a big expansion in energy projects regulated by MMS (and by the Bureau of Land Management, which oversees the oil shale and geothermal projects), there’s a risk that contracts will be signed hastily, and taxpayers will suffer.

And the agencies probably won’t get much help for their increased workload. MMS’ budget, adjusted for inflation, has been basically flat since 1999; staffing levels are equally unchanged. And BLM has actually lost more than 1,000 staffers since the ’90s.

Still, MMS says it has cleaned up its act: the employees cited in the IG’s report have been disciplined or left government service, and the agency is reorganizing its royalty program. Staffers at both agencies also said it will take years to research and sign the final leases, so don’t expect any headlines (good or bad) in the near future.


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