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The Drill, Baby, Drill Scandal

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"The Drill, Baby, Drill Scandal"

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Our guest blogger is Daniel J. Weiss, a Senior Fellow and Director of Climate Strategy at the Center for American Progress Action Fund.

Sex, Drugs, And OilDuring the Republican National Convention, delegates repeatedly demonstrated their obsession with offshore oil drilling by chanting “drill, baby, drill!” It turns out they were literally describing the relationship between Department of Interior royalty collectors and the oil industry.

Multiple reports released on September 10 by the Department of Interior Inspector General found that the Mineral Management Service officials responsible for collecting royalties from oil and gas producers are accused of accepting gifts, trips, and special favors from producers. The report described “A culture of ethical failure… [and] a culture of substance abuse and promiscuity.” These government overseers also abused alcohol and cocaine with officials from energy companies that they were supposed to collect royalties from, and “had sexual relationships with oil and gas company representatives.”

The MMS employees are responsible for collecting royalties from producers for oil and gas produced on public lands, which can be paid in cash or “royalty in kind.” The latter allows the producer to pay its royalties by delivering oil and gas to the federal government, which is either stored in government reserves or sold on the open market. The total royalty tab is about $10 billion annually, and is one of the largest sources of federal revenue aside from taxes.

The DOI Inspector General previously found that the Department under collected billions of dollars of revenue owed the U.S. taxpayer from oil companies that produce and sell oil and gas from public lands and waters. The IG found that DOI provides mediocre oversight of oil and gas companies to ensure that they are paying the full royalties owed to the U.S. treasury. The result was billions of dollars of uncollected royalties owed to the federal government. These officials, in effect, helped subsidize oil companies already engorged with record profits that averaged $236 per driver over the past year.

This “sex, drugs, and oil” agency is the same one that would oversee the expansion of offshore oil drilling into protected ocean areas. No wonder coastal businesses that depend on clean beaches and ocean are so worried about the potential for harm from expansion of offshore oil drilling from Malibu to Miami to Maine. The federal watchdogs are in bed with the oil companies that they are supposed to oversee.

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