Mineral Revenues:

Shortcomings in Onshore Federal Oil and Gas Production Verification

RCED-90-99: Published: Jun 26, 1990. Publicly Released: Jul 26, 1990.

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Pursuant to a congressional request, GAO evaluated the Department of the Interior's inspection and enforcement program responsibility for onshore federal and Indian oil and gas lease production verification.

GAO found that: (1) while the Bureau of Land Management (BLM) has improved the inspection and enforcement program since assuming responsibility for it, allegations of oil and gas theft continue; (2) since 1986, BLM has conducted production verification inspections on less than 3 percent of the 15,000 federal and Indian leases; (3) BLM relies on its checklist inspections to identify potential production underreporting; (4) BLM oversight and implementation of its inspection and enforcement is inadequate and inconsistent; (5) there were variances in BLM supervisory controls, staff levels, use of production verification inspections, enforcement actions, and the certification program; (6) BLM has not evaluated the inspection and enforcement program since January 1987; (7) BLM expects state offices to formally review and evaluate their field offices, but not all offices conducted such reviews; (8) there were many inaccuracies in the program inspection data which limited the data's usefulness; (9) program enforcement data were incomplete; and (10) data inaccuracies have occurred in part because there is little central guidance and control on certain program procedures.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: BLM initiated coordination activities internally between the inspector program and the law enforcement program, and externally with MMS. Such action should result in greater recognition of enforcement actions in the inspection program. However, no directive was issued to specifically implement the recommendation.

    Recommendation: The Secretary of the Interior should require the Director, BLM, to make all enforcement actions involving federal or Indian leases a part of compliance histories recorded in AIRS.

    Agency Affected: Department of the Interior

  2. Status: Closed - Implemented

    Comments: BLM issued guidance aimed at improving AIRS data accuracy.

    Recommendation: The Secretary of the Interior should require the Director, BLM, to reconsider adding edits to AIRS to further ensure the accuracy of AIRS data.

    Agency Affected: Department of the Interior

  3. Status: Closed - Implemented

    Comments: BLM issued guidance on AIRS procedures that, if implemented, will ensure greater consistency. BLM also established an AIRS user group to help facilitate greater consistency.

    Recommendation: The Secretary of the Interior should require the Director, BLM, to monitor field office compliance with the minimum requirements and procedures to ensure consistent implementation.

    Agency Affected: Department of the Interior

  4. Status: Closed - Implemented

    Comments: BLM issued guidance aimed at improving AIRS data accuracy.

    Recommendation: The Secretary of the Interior should require the Director, BLM, to develop and issue guidance providing minimum Automated Inspection Record System (AIRS) requirements and procedures, including procedures to open and close inspection records and to verify the accuracy of data entered into AIRS.

    Agency Affected: Department of the Interior

  5. Status: Closed - Implemented

    Comments: The BLM revised inspection strategy takes into account existing resources and, for fiscal year 1991, has requested 12 additional FTE to provide 1,000 additional on-site inspections.

    Recommendation: To ensure that the BLM inspection and enforcement program is consistently implemented, the Secretary of the Interior should require the Director, BLM, to strengthen program oversight by evaluating current program staffing and develop staffing standards.

    Agency Affected: Department of the Interior

  6. Status: Closed - Implemented

    Comments: BLM announced plans to develop a training course for inspection program managers.

    Recommendation: To ensure that the BLM inspection and enforcement program is consistently implemented, the Secretary of the Interior should require the Director, BLM, to strengthen program oversight by establishing minimum standards for supervisory responsibilities, expectations, review, and documentation.

    Agency Affected: Department of the Interior

  7. Status: Closed - Implemented

    Comments: BLM announced plans to increase inspection program oversight through comprehensive program evaluations.

    Recommendation: To ensure that the BLM inspection and enforcement program is consistently implemented, the Secretary of the Interior should require the Director, BLM, to strengthen program oversight by developing standard guidelines for state offices' program reviews and conduct such reviews annually.

    Agency Affected: Department of the Interior

  8. Status: Closed - Implemented

    Comments: BLM adopted a revised inspection strategy for the purpose of increasing the frequency, coverage, and depth of its inspections.

    Recommendation: Because BLM does not ensure accurate reporting of production, the Secretary of the Interior should require the Director, BLM, to determine whether, using available resources, alternative inspection strategies would better identify significant underreporting of production. Such a determination should explore using production verification inspections on randomly selected leases. If Interior determines that such probability sampling would be more efficient than inspecting all high-priority leases annually, as required by the Federal Oil Gas Royalty Management Act of 1982 (FOGRMA), Interior should ask Congress to amend FOGRMA accordingly.

    Agency Affected: Department of the Interior

  9. Status: Closed - Implemented

    Comments: BLM and MMS jointly reviewed the memorandum of understanding.

    Recommendation: The Secretary of the Interior should require the Directors, BLM and Minerals Management Service (MMS), to jointly evaluate whether the current memorandum of understanding adequately addresses BLM concerns regarding timeliness and law enforcement.

    Agency Affected: Department of the Interior

 

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