The Department of the Interior (DOI) oversees the onshore mineral estate, spanning approximately 714 million acres, on behalf of American taxpayers. In return for granting private companies the right to extract and privately profit from these resources, taxpayers are owed a fair return.

The Office of Natural Resources Revenue (ONRR) collects, verifies, and distributes over $18 billion each year from the federal energy and mineral leasing system. Proper enforcement of reporting and payment requirements is crucial to ensuring taxpayers receive the revenue we are owed. A new report from the DOI’s Office of Inspector General (OIG) finds that ONRR is failing to do that job, allowing violations to persist, penalties to go uncollected, and taxpayers to be shortchanged—potentially by millions of dollars.

The OIG audit, dated January 21, 2026, found that ONRR “did not appropriately identify, assess, issue, and collect penalties related to mineral and energy leases, and it did not effectively enforce laws and regulations to ensure the timely reporting and collection of royalties and revenues from those leases.” Specifically, ONRR failed to make timely referrals of violations, did not pursue enforcement actions even when warranted, and did not consistently verify compliance before closing cases.

Delays in taking formal enforcement actions cost taxpayers twice over. They defer revenue that is legally owed and allow noncompliance to compound, making cases more difficult to resolve and, in some instances, impossible to pursue once statutory deadlines expire. On average, ONRR took 1,327 days—more than three and a half years—to refer noncompliance cases for enforcement. Only four of the 34 cases reviewed by OIG were referred within one year of the first violation. In at least one case, investigators were forced to pursue a lesser violation because the time limit for pursuing more serious violations was close to expiration.

OIG also found that ONRR routinely failed to assess penalties or pursue the most egregious violations. Of the 40 cases reviewed, enforcement actions in 25 cases “were not ultimately sufficient to address the nature or type of violation.” Rather than escalating consequences for repeat or willful noncompliance, ONRR often relied on prolonged informal compliance efforts, allowing companies to continue violating the rules without meaningful deterrence.

Compounding these failures, ONRR frequently closed cases without confirming that problems had been fully resolved or that no additional violations existed. Even when investigators documented repeated noncompliance or a pattern of ignored compliance efforts, ONRR did not escalate enforcement. As OIG concluded, “ONRR is unable to ensure that operators and payors are fulfilling their obligations to report and pay royalties for mineral resources extracted from federal lands.”

ONRR reported collecting an average of $3.2 million annually in civil penalty revenue from fiscal years 2021 through 2023. While OIG could not calculate the full amount of lost penalty revenue due to incomplete case files, the audit makes clear that delayed enforcement and poor documentation likely allowed taxpayer losses to compound into the millions.

This is not the first time federal watchdogs have dinged ONRR for insufficient oversight and enforcement. The Government Accountability Office (GAO) has placed federal oil and gas resource management on its biennial High Risk List for eight consecutive cycles, warning that DOI “may not be collecting the government’s fair share from oil and gas produced on federal lands and waters.”

GAO has also criticized ONRR for incomplete data on royalty violations. In one review, GAO identified violations that went unreported, including a compliance case that ultimately recovered more than $11.7 million in unpaid royalties. GAO further found that ONRR’s compliance data systems do not align with other internal databases and that data was lost during a recent system transition. The absence of complete, reliable data—and the inability to compare information across systems—prevents ONRR from identifying patterns of noncompliance and targeting audits where taxpayer risk is greatest.

Taxpayers deserve to be fairly compensated for resources extracted from public lands. Without timely enforcement, credible penalties, and reliable compliance data, the federal government cannot ensure that producers are paying what they owe. The result is a system that quietly shifts risk and cost onto taxpayers while private companies pocket billions in profit.