Gov't ends troubled oil and gas royalty program; Interior secretary calls it `a blemish'

The Interior Department said Wednesday it is ending a controversial program that allows companies to give the government in-kind payments instead of cash for oil and natural gas taken from federal land and waters.

The royalty-in-kind program has been criticized for lax enforcement that has cost the federal government tens of millions of dollars in royalty payments. It also was at the center last year of a sex and drug scandal involving employees of the office in charge of Interior's offshore energy leasing program.

Interior Secretary Ken Salazar said the program "has been a blemish on the department" and has "created problems and ethical lapses" among those who managed it.