Implementation of the Federal Onshore Oil and Gas Leasing Reform Act of 1987

T-RCED-89-69: Published: Sep 28, 1989. Publicly Released: Sep 28, 1989.

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GAO discussed the Bureau of Land Management's (BLM) and the Forest Service's implementation of legislation concerning those agencies' administration of oil and gas leases on public lands. GAO noted that: (1) although both BLM and the Service determined that they needed to study potential environmental impacts and satisfy all environmental requirements before issuing oil and gas leases or approving drilling permits, 75 of 82 land-use plans, which the agencies heavily relied on in making such determinations, did not adequately identify or address essential potential environmental impacts; (2) both agencies have begun work to improve the information they use in making lease decisions, but are also continuing to approve drilling permits before they obtain the necessary information; (3) the Service's January 1989 proposed regulations for implementing its legislatively required responsibilities did not clearly address bonding requirements, introduced lease development uncertainties, and improperly separated oil and gas leasing decisions from the normal land-use plans and environmental studies process; (4) BLM implementation of its responsibilities resulted in a substantial increase in the percentage of competitively leased land and per-acre revenues; and (5) BLM retained a lease-sale procedure which could reduce competition and revenues.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Forest Service is currently reviewing and revising its land-use plans. The Forest Service has drafted more detailed guidance as to how the regional offices should complete environmental studies prior to leasing decisions. It plans to publish this guidance in October 1991 in the Federal Register. It has also conducted training sessions for all field staff involved in oil and gas.

    Recommendation: The Forest Service should improve its information on the environmental impacts of oil and gas leasing and development on its lands so that informed decisions can be made before a lease is issued, thereby negating the need to deny subsequent development.

    Agency Affected: Department of Agriculture: Forest Service

  2. Status: Closed - Not Implemented

    Comments: Because the Forest Service completed action to respond to GAO concerns about how it implements bonding requirements, this recommendation is no longer necessary.

    Recommendation: The Forest Service should remove bonding from the current rulemaking and propose a new bonding regulation after completing an appropriate study.

    Agency Affected: Department of Agriculture: Forest Service

  3. Status: Closed - Implemented

    Comments: The Forest Service obtained a Memorandum of Understanding with BLM. The memo stated that existing BLM bonding amounts will be used to cover Forest Service lands. Forest Service final regulations reflect this agreement.

    Recommendation: Given the uncertainty of what adequate bond amounts should be, and the possibility that amounts larger than current BLM requirements may seriously impede oil and gas leasing, the Forest Service should study the need for and availability of larger bond amounts before issuing bonding regulations.

    Agency Affected: Department of Agriculture: Forest Service

  4. Status: Closed - Implemented

    Comments: The Forest Service obtained a Memorandum of Understanding with BLM. The memo stated that existing BLM bonding practices will be used to cover Forest Service lands. Forest Service final regulations reflect this agreement.

    Recommendation: The Forest Service should confer with BLM in order to establish clear responsibilities for bonding to cover subsurface environmental impacts and nonpayment of royalties on Service lands.

    Agency Affected: Department of Agriculture: Forest Service

  5. Status: Closed - Implemented

    Comments: Forest Service final regulations do not contain the suitability determination process.

    Recommendation: Unless the Forest Service can ensure that its proposed suitability determination process is consistent with its regulations and would be cheaper and faster than using existing land-use planning procedures, the Service should use its existing planning process, rather than establishing a new one, to determine which lands should be available for leasing.

    Agency Affected: Department of Agriculture: Forest Service

 

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