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Big oil and the Interior Department

September 11, 2008 - Steve Murch
It’s the stuff of a Hollywood movie, one where the government corruption just seems too over the top to be real. Or even believable. For the Interior Department it looks like life imitating a Hollywood movie (I wouldn’t use the word art when drugs and indiscriminate sex are involved). The scandal had it all — drug use, sex, gifts, ski trips and golf outings. And it involved some big names in oil, including Shell and Chevron.

Word came out Wednesday that between 2002 and 2006, workers — government workers — at the Minerals Management Service’s royalty collection office were living it up on the dime of energy companies that did business with the government. Of course the timing couldn’t be worse as the nation struggles with and debates our future energy use.

Forget for a minute the implications of what that may or may not mean in relationship to oil, just look at the money. According to the Associated Press, the Interior Department agency “handled $4.3 billion in royalty-in-kind payments from energy companies drilling on federal lands. Under the program oil companies give the government oil in lieu of cash and the MMS office in turn sells the oil on the open market.”

With all that money floating around, you know the energy companies want their fair share. However, the money that is more important to the public is $5.3 million. While that figure is just over 1 percent of the billions from royalty-in-kind, it’s what the department’s investigation cost taxpayers.

We’re getting pinched at the pump right now. Getting stuck with an investigation bill was the last thing we needed on the energy front. Fortunately, there was an investigation that revealed improprieties. How that plays out in the long run will be worth watching, and the timing couldn’t be any more interesting.

Next week Congress is supposed to vote on whether to expand offshore drilling.


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