The Interior Department will scrap a scandal-plagued “royalty-in-kind” program that lets energy companies drilling on public land provide oil and gas to the federal government as payment, Interior Secretary Ken Salazar told a congressional committee Wednesday.

In testimony before the House Natural Resources Committee, Salazar said he intends to phase out the program as a first step in a series of broader reforms of oil and gas royalty collection.

Democrats have criticized the leasing programs for years as being too closely aligned with the oil and gas industry, and House Natural Resources Chairman Nick J. Rahall, D-W. Va., has introduced a bill aimed at overhauling the entire program, including an end to the royalty-in-kind program.

The agency that manages the program came under scrutiny last year after an inspector general’s report found that employees responsible for regulating royalty payments were engaging in sexual contact and illegal drug use with oil industry employees.

“The royalty-in-kind program has been a blemish on this department, especially after the revelations of sex and drugs,” Salazar told the Natural Resources panel. “But as I terminate the royalty-in-kind program, it’s only one thing we have to do as we address the whole issue of royalties on public lands.”

Rahall cheered the announcement.

“Bravo, bravo, bravo. I salute you for ending that program,” Rahall responded to Salazar. “I have been calling for the end of that program for years. It will end the opportunity for mischief and temptation and provide a more a decent return for the American taxpayer.”