POGO Supports Rep. Maloney's Legislation to Study Oil/Gas Royalty Collections

Dear Representative Maloney:

The Project On Government Oversight (POGO), Taxpayers for Common Sense (TCS) and Friends of the Earth (FOE) wholeheartedly support your legislation to commission research that would determine whether the federal government is using best practices in the collection of oil and gas royalties from companies drilling on federal and Native American lands.

We have spoken to engineers who agree that the Congress and the public are in the dark about whether proper protections are in place to prevent the theft of the nation's oil and gas. Your legislation is in an effort to engage experts at the National Academies of Engineering to work on behalf of the taxpayer in order to assess practices that may allow oil and gas theft on federal and Native American leases.

To our knowledge, a comprehensive analysis of this type has not been done in the past twenty five years since the landmark Linowes Commission which documented oil and gas theft on federal and Native American lands. Yet, private sector standards for measuring, collecting, verifying and delivering oil and gas evolve on a constant basis. Your legislation will ensure that the federal government is keeping up with these private sector standards and practices.

The research is particularly needed given billions of dollars in lawsuit jury verdicts and settlements that have been reached in recent years over allegations that oil and gas companies shortchanged private royalty owners, states, the federal government and tribes. Industry documents surfaced in some of this litigation have confirmed that oil and gas companies tinker with pipeline measurement systems in order to cheat royalty owners.

POGO, TCS, and FOE thank you for your tireless efforts to ensure that the American taxpayers' precious oil and gas resources are protected from waste, fraud and abuse.