Auditor: U.S. oil-lease flaws cost $10B

WASHINGTON, Jan. 18 (UPI) -- Flaws in federal oil leases could cost taxpayers up to $10 billion in lost royalty revenues, a congressional auditor told the U.S. Senate Thursday.

About $1 billion in lost royalties from an error in drilling leases for the Gulf of Mexico has already been lost, said Mark Gaffigan, an assistant director of the Government Accountability Office, the non-partisan audit and investigative arm of Congress. Congressional auditors and the Interior Department's inspector general have said the mistake was ignored for six years by the Minerals Management Service, the part of the Interior Department that oversees the leasing program.

Interior Inspector General Earl Devaney told the Senate Energy and Natural Resources Committee Thursday the minerals bureau showed "a shockingly cavalier management approach" in dealing with the leasing error, even though it knew of the problem as early as 2000.

It's "a jaw-dropping example of bureaucratic bungling," he said.

House Democrats were poised to approve a $15 billion package of fees, taxes and royalties on oil and gas companies to promote renewable fuels.