Annual Report on Outer Continental Shelf Shut-In or Flaring Wells Is No Longer Needed

EMD-82-17: Published: Nov 19, 1981. Publicly Released: Nov 19, 1981.

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As required by the Outer Continental Shelf Lands Act Amendments of 1978, GAO examined the methodology that the Department of the Interior used to allow Outer Continental Shelf (OCS) wells to be shut-in or to flare natural gas. In the last report, GAO questioned whether the Interior report fulfilled the intent of Congress and whether continuing to require a report served a useful purpose. A primary concern of Congress in enacting the annual reporting requirement was to oversee whether OCS operators were deliberately withholding production in anticipation of higher prices.

As in the last report, GAO again found that the Interior report does not satisfy the primary intent of Congress. Furthermore, recent legislation and administrative actions decontrolling the price of oil and natural gas make concern over deliberate withholding less of an issue. GAO believes legislative relief from the OCS shut-in and flaring wells reporting requirement is appropriate. Abolishing the report would not affect the Interior's continuing responsibilities for inspecting and monitoring OCS lease activities to ensure efficient development of oil and gas resources.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: The GAO annual report on shut-in and flaring wells, RCED-83-10, October 5, 1982, repeats this recommendation. Because of the repetition, no followup is required for this report.

    Matter: Congress should repeal section 15(1)(D) of the Outer Continental Shelf Lands Act, as amended, and sections 601(a) and (b) of the Outer Continental Shelf Lands Act Amendments of 1978.

Recommendation for Executive Action

  1. Status: Closed - Not Implemented

    Comments: In the followon 1982 annual review of shut-in wells, GAO verified that the first two parts of the recommendation were implemented. GAO repeated the third part in RCED-83-10.

    Recommendation: The Secretary of the Interior should direct the U.S. Geological Survey to: (1) selectively review and monitor supporting data used by the Outer Continental Shelf operators to ensure its reasonableness and validity; (2) aggressively follow up on "no future utility" wells and, when appropriate, require the plugging and abandonment of those wells, including the removal of any useless and unused structures and equipment; and (3) follow up on suspected excessive gas flaring to ensure that such flaring ceases if appropriate.

    Agency Affected: Department of the Interior

 

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