Offshore Oil and Gas:

Views on Interior's Comments to GAO Reports on Leasing Offshore Lands

RCED-86-78BR: Published: Mar 14, 1986. Publicly Released: Apr 21, 1986.

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Pursuant to a congressional request, GAO evaluated the Department of the Interior's: (1) responses to a series of GAO report recommendations and congressional questions; and (2) analysis of its tract selection and areawide leasing programs.

GAO found that: (1) while Interior has not estimated the extent to which areawide leasing has decreased its revenues, it has questioned the GAO estimate of that extent; (2) it disagreed with Interior that the lost revenues would be offset by faster receipt of bids and future rent, royalties, and corporate income taxes because of accelerated leasing; (3) Interior used unrealistic assumptions about the discount rate and corporate income taxes in formulating its estimate; (4) by the time Interior completes its regional tract-mapping program in the Gulf of Mexico, it will have held 11 areawide sales in that region; (5) it could not determine the adequacy of Interior's assessment of the adequacy of tract-leasing data; (6) Interior has adopted portions of recommendations to ensure that it has adequate tract data and to extend bid acceptance periods to provide more time to gather data; (7) Interior does not plan to follow a recommendation that it change its bid-acceptance procedures to better ensure that it receives a fair price for leases; (8) Congress enacted legislation requiring Interior to pay companies only the reasonable cost of reproducing, but not processing, geological and geophysical data used to evaluate tracts; and (9) Interior has not complied with a legislative requirement that it annually report the cumulative effects of offshore leasing on human, marine, and coastal environments.

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