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Project on Government Oversight




U.S. Government Among Lowest Recipients of Drilling Fees

June 1, 2007 


A report released today by the Government Accountability Office (GAO) found that the U.S. government ranks among the lowest in terms of the drilling fees it receives from companies extracting oil and gas from public lands. According to the report, studies have found numerous foreign governments including Angola, Australia, Norway, the U.K, Egypt, and Trinidad and Tobago, collect more from oil companies than the U.S. does.

“Congress must take action to ensure that the American taxpayer and Native Americans are fairly compensated for their natural resources,” said Beth Daley, Director of Investigations at the Project On Government Oversight (POGO). “Left to its own devices, the federal government will continue to allow the taxpayers to be shortchanged.”

The Minerals Management Service of the Department of Interior is responsible for collecting oil and gas drilling fees, some of which are known as royalties. The agency is currently the target of numerous investigations, including a Justice Department inquiry. Under a cloud of scandal, MMS Director Johnnie Burton and another high ranking official resigned last month.

According to the GAO report: 

“Based on results of a number of studies, the U.S. federal government receives one of the lowest government takes in the world….Other government-take studies issued in 2006 and prior years similarly show that the United States has consistently ranked low in government take compared to other governments. For example, a study completed in 2006 for MMS showed that the U.S. federal government take in the Gulf of Mexico deepwater and shallow water was lower than 29 and 26, respectively, of the 31 fiscal systems analyzed.”


Oil and Gas Royalties: A Comparison of the Share of Revenue Received from Oil and Gas Production by the Federal Government and Other Resource Owners. GAO-07-676R, May 1.

Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO's investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.

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