Today, House Committee on Natural Resources Chairman Bruce Westerman (R-Ark.), Subcommittee on Oversight and Investigations Chairman Paul Gosar (R-Ariz.) and Subcommittee on Energy and Mineral Resources Chairman Pete Stauber (R-Minn.) sent a letter to Office of Natural Resources Revenue (ONRR) Director Howard Cantor, requesting information regarding ONRR's methodology for calculating federal royalties from energy production on federal lands and waters. In part, the members wrote:

"Recently, the Committee was alerted to a potential lack of internal controls at ONRR. The Committee is concerned that the purported conduct may encourage conflicts of interest and uncertainty in the calculation of federal royalties. Moreover, the Committee is concerned with ONRR’s overall audit goals, lack of commitment to prior audits and guidance provided to energy producers on federal lands, and ONRR’s interpretation of existing regulations...

"Under the Royalty Simplification and Fairness Act (RSFA), ONRR 'shall allow a credit or refund' to a payor when an 'overpayment is identified during an audit.' However, the Committee has received reports that ONRR has repeatedly refused to accept overpayments that were identified during audits on ONRR’s CMP-2014 form, utilized by ONRR to track progress towards ONRR’s goals. Allegedly, ONRR employees may have attempted to skew their audit results to meet ONRR’s enforcement goals. 

"The potential for conflicts of interest are why other federal agencies exclude enforcement results from quantitative compliance goals. Likewise, many states utilize taxpayer bills of rights or statutes that exclude enforcement results from quantitative compliance goals because of the potential for conflicts of interest by auditors. Hence, the Committee is troubled that ONRR’s adoption and implementation of these enforcement-related metrics may encourage auditor malfeasance."

Read the full letter here.