President Obama’s Secretary of the Interior, Ken Salazar, didn’t waste any time diving into his work the moment his new job began. Offshore drilling, oil shale mining, royalty payments, land leases, and wildlife protection are all tasks that the former U.S. senator from Colorado has to face as he helps set the stage for the Obama administration’s handling of domestic energy issues.
Although he has only been on the job for about two months, Salazar has already made several important and controversial decisions. He delayed the opening of coastal areas for offshore drilling, revoked land leases in the Rocky Mountain West granted for the purpose of oil shale mining, and canceled 77 oil and gas leases around Utah’s national parks granted by the Bush administration. All of those decisions were cheered by environmentalists and lamented by oil companies, but the new interior secretary considers himself a pragmatist, and also supports the development of clean coal and increased production of oil and natural gas. Salazar has also supported resource exploration on public lands by backing a compromise that allowed energy companies to drill for natural gas in certain areas of the Roan Plateau located in northwestern Colorado. Salazar also irked environmentalists by deciding to remove the Rocky Mountain gray wolf from the Endangered Species lists of both Montana and Idaho.
Despite criticisms that have been thrown his way, Salazar doesn’t seem to be flinching much. When he spoke with Newsweek in February 2009, he said the following when questioned about his critics: “I’m not here to please the environmental groups or the oil and gas industries. I’m here to do the right thing. The fact that there’s criticism from the left and the right is something I’m very used to.”
But before the secretary is able to accomplish all of his goals, he’s said that he first needs to take care of internal issues at the Interior Department. Salazar spoke with Tim Dickinson of Rolling Stone magazine on that subject, saying that he is closely investigating policies put into place by the Interior Department during the Bush administration. These policies allegedly benefited some of the country’s largest energy companies at the expense of American taxpayers.
Issues within the previous administration’s Interior Department first came to light in 2006. In December of that year, the New York Times reported that the Interior’s inspector general claimed that the department was losing billions of dollars due to mistakes and underpayments. He stated that the auditing of energy deals dropped by 22 percent and that 15 percent of the agency’s auditors had been fired. The Inspector General also criticized a system of “compliance reviews” that used computerized fact-checking dependent upon the honestly of the energy companies being audited.
Salazar’s internal reviews are currently focused on the Mineral Management Service, a federal office based in Denver, CO that collects money owed to taxpayers from oil and gas companies in the form of royalties. In 2001, royalty payments fell from $300 million to below $50 million; the drop has been attributed to system of payment breaks called “royalty relief.” The secretary is also investigating the “Royalty in Kind” (RIK) office, which allows oil businesses to make payments in raw oil instead of actual cash. RIK then sells the oil on the open market, sometimes earning upwards of $4 billion a year. But because RIK doesn’t own its own pipelines or refineries, the office contracts private companies to take care of those needs, resulting in large bills that take away a significant portion of royalty revenue.
Because so little time has passed thus far, it’s difficult to know how successful Salazar will be in reorganizing the Interior Department and asserting the Obama Administration’s energy priorities. But if there’s one thing that is apparent, it’s that Salazar is determined to make some big changes. The HEAT Zone will continue to watch and report on the new secretary and his agenda.
This B2B blog post originally appeared on Heat USA’s Heat Zone blog.
