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Lessened BLM's Ability to Meet Its Environmental Protection 
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Report to the Ranking Minority Member, Committee on Homeland Security 
and Governmental Affairs, U.S. Senate: 

June 2005: 

Oil And Gas Development: 

Increased Permitting Activity Has Lessened BLM's Ability to Meet Its 
Environmental Protection Responsibilities: 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-418]: 

GAO Highlights: 

Highlights of GAO-05-418, a report to the Ranking Minority Member, 
Committee on Homeland Security and Governmental Affairs, U.S. Senate: 

Why GAO Did This Study: 

Rising U.S. energy consumption and concerns about dependency on foreign 
energy sources have prompted the administration to aggressively pursue 
domestic oil and gas production, including production on public lands, 
which in turn has generated concern that the impacts of this activity 
may compromise the use of public land for other purposes. 

GAO determined (1) the extent to which the level of oil and gas 
development on public lands managed by the Bureau of Land Management 
(BLM) has changed in recent years, and how the change has affected 
BLM’s ability to mitigate impacts; (2) what policy changes related to 
oil and gas development BLM recently made and how these policies 
affected BLM’s environmental mitigation activities; and (3) what 
challenges BLM faces in managing its oil and gas program. 

What GAO Found: 

BLM’s ability to meet its environmental mitigation responsibilities for 
oil and gas development has been lessened by a dramatic increase in oil 
and gas operations on federal lands over the past 6 years. Nationwide, 
the total number of drilling permits approved by BLM more than tripled, 
from 1,803 in fiscal year 1999 to 6,399 in fiscal year 2004. BLM 
officials in five out of eight field offices that GAO visited explained 
that as a result of the increases in drilling permit workloads, staff 
had to devote increased time to processing drilling permits, leaving 
less time for mitigation activities, such as environmental inspections 
and idle-well reviews. 

BLM made policy revisions over the last 6 years that affected to 
varying degrees its ability to assess and mitigate the environmental 
impacts of oil and gas development. The combined effects of these 
policy changes—some of which were aimed at facilitating and managing 
increased development, while others were meant to enhance environmental 
mitigation—were mixed. For example, four of the eight field offices 
reported that the most significant impact of the policies to expedite 
and manage oil and gas development was the increased emphasis that some 
of these policies placed on processing permits, which in turn resulted 
in shifting staff responsibilities away from mitigation activities. On 
the other hand, policies to enhance mitigation generally had a positive 
impact, although increases in the permitting workload have limited 
their effect. For example, in six field offices, policies for 
revitalizing BLM’s inspection and enforcement program resulted in more 
inspection staff being hired, although most offices remain 
understaffed. 

BLM state and field office staff, and GAO, identified several 
challenges to managing the agency’s oil and gas program, including (1) 
managing workloads while meeting all of its responsibilities, (2) using 
workforce planning to effectively identify and communicate its 
workforce needs, and (3) meeting its oil and gas program resource needs 
in light of budget constraints. Workload pressure, already high due to 
increased permitting activity, has been further exacerbated by 
increased appeals and litigation of BLM decisions and actions, 
according to BLM staff. In reviewing BLM’s efforts to manage increasing 
workloads, GAO found that some data needed to quantify specific 
workload activities are either not tracked or not consistently tracked, 
and that BLM’s current workforce planning process does not effectively 
identify and communicate BLM’s staff needs to decision makers. As a 
result, the process does not provide consistent and readily available 
information that BLM can use to support budget justifications and make 
informed resource allocation decisions. BLM is also presented with the 
challenge of meeting its oil and gas program responsibilities in a 
period when staffing needs are growing faster than available resources. 
While BLM has the authority to assess and collect fees for processing 
oil and gas permits, it has not exercised this authority. BLM has 
recently taken steps to develop a fee structure for permits. 

What GAO Recommends: 

GAO recommends, among other things, that BLM should (1) ensure that its 
staffing needs are accurately reflected in its workforce plans and (2) 
finalize and implement a fee structure to recover the cost of 
processing oil and gas permits. 

Interior agreed with all of GAO’s recommendations and said the report 
generally does much to capture the many demands involved in managing 
BLM’s oil and gas program. 

www.gao.gov/cgi-bin/getrpt?GAO-05-418. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Anu Mittal at (202) 512-
3841 or mittala@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Dramatic Increases in Oil and Gas Permitting Activity Have Lessened 
BLM's Ability to Ensure That Environmental Impacts Are Mitigated: 

Recent BLM Policy Changes Have Had Mixed Impacts on Environmental 
Mitigation Activities for Oil and Gas Development: 

BLM Faces Several Major Challenges in Implementing Its Oil and Gas 
Program: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Resource Monitoring: 

Appendix III: Comments from the Department of the Interior: 

GAO Comments: 

Appendix IV: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Increases in Oil and Gas Drilling Permits Approved by Eight 
BLM Field Offices in Fiscal Years 1999 and 2004: 

Table 2: Number of Abandoned Wells That Still Needed Approved Final 
Abandonment Notices for Eight BLM Field Offices, as of February 17, 
2005: 

Table 3: Status of the Energy-Related Expedited Resource Management 
Plans for Eight BLM Field Offices as of March 2005: 

Table 4: Policy Changes to Improve and Streamline the Processing of 
Drilling Permits: 

Table 5: Nature of Resource Monitoring Plans That Address Impacts from 
Oil and Gas Development across Broad Geographic Areas: 

Figures: 

Figure 1: Oil Drilling Site with Access Road: 

Figure 2: Fragmentation of Wildlife Habitat by Multiple Oil and Gas 
Sites: 

Figure 3: Typical Oil and Gas Site Subject to an Environmental 
Inspection: 

Figure 4: BLM State and Field Offices Visited: 

Figure 5: Number of Oil and Gas Drilling Permits Approved by BLM for 
Fiscal Years 1999 through 2004: 

Figure 6: Cumulative Percentage Change in Drilling Permits Approved, 
BLM's Oil and Gas Program Budget, and Staff Resources for the Oil and 
Gas Program for Fiscal Years 1999 through 2005: 

Abbreviations: 

AFMSS: Automated Fluids Mineral Support System: 

AIRS: Automated Inspection Record System: 

BLM: Bureau of Land Management: 

EA: environmental assessment: 

EIS: environmental impact statement: 

EPA: Environmental Protection Agency: 

EPCA: Energy Policy and Conservation Act: 

FLPMA: Federal Land Policy and Management Act: 

FTE: full-time equivalent: 

IOAA: Independent Offices Appropriations Act: 

NEPA: National Environmental Policy Act: 

TA: temporarily abandoned: 

Letter June 17, 2005: 

The Honorable Joseph I. Lieberman: 
Ranking Minority Member:
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

Dear Senator Lieberman: 

American families, communities, and businesses all depend on reliable 
and affordable energy for their health, safety, and livelihood. Energy 
is necessary for a myriad of things that affect peoples' daily lives, 
including transportation, communication, food production, medical 
services, air-conditioning, and heating. As our nation's energy 
consumption continues to rise and concerns about dependency on foreign 
energy sources heighten, the administration has aggressively pursued 
options for increasing domestic oil and gas production, including 
production on public lands. This, in turn, has generated concern among 
some state and local government officials, sportsmen, conservationists, 
and others that this activity may compromise the use of public land for 
other purposes. 

The Bureau of Land Management (BLM), an agency of the Department of the 
Interior, is responsible for managing 261 million surface acres of 
public land, which is roughly one-eighth of the United States. BLM is 
also responsible for issuing leases for oil and gas resources that are 
on or under federal lands as well as private lands for which the 
federal government retains mineral rights--amounting to roughly 700 
million acres.[Footnote 1] In fiscal year 2004, oil and gas valued at 
roughly $14.5 billion was produced from these leases and the government 
collected approximately $1.6 billion in royalty payments, which are 
based on a percentage of the value of the oil and gas produced. 

The guiding legislation for BLM's management of public lands and 
mineral estates is the Federal Land Policy and Management Act of 1976, 
as amended (FLPMA).[Footnote 2] Congress declared in FLPMA that it was 
U.S. policy to manage public lands for multiple use and sustained 
yield.[Footnote 3] "Multiple use" is defined, in part, as "the 
management of the public lands and their various resource values so 
that they are utilized in the combination that will best meet the 
present and future needs of the American people."[Footnote 4] 
"Sustained yield" is defined as the "achievement and maintenance in 
perpetuity of a high-level annual or regular periodic output of the 
various renewable resources of the public lands consistent with 
multiple use."[Footnote 5] BLM carries out these requirements by 
continuously balancing a variety of competing land uses, including 
cattle grazing, habitat protection for threatened and endangered 
species, wilderness preservation, recreational use, and oil and gas 
development. 

BLM is also responsible for protecting the environment by mitigating 
the impacts of oil and gas development occurring on lands managed by 
the agency.[Footnote 6] This requires BLM to undertake a number of 
activities to ensure that adverse impacts on the land as well as other 
resources--such as air, water, vegetation, and wildlife--are properly 
avoided or mitigated. The Federal Oil and Gas Royalty Management Act of 
1982,[Footnote 7] as amended, establishes the authority for BLM's 
program for inspecting oil and gas sites to make sure operators are in 
compliance with all restrictions and requirements outlined in their 
leases and drilling permits--including those designed to protect the 
environment. The act requires the Secretary of the Interior to develop 
guidelines setting forth the coverage and the frequency of such 
inspections. Relatedly, various BLM regulations and policies form the 
basis for monitoring the long-term impacts of oil and gas production; 
tracking nonproducing wells, also referred to as "idle" wells, to make 
sure that, among other things, they do not fall into disrepair and 
become a liability to the federal government; and ensuring that lands 
affected by oil and gas production are being properly reclaimed. The 
protection of other resources that may be affected by oil and gas 
activity is governed by resource-specific laws, such as the Clean Air 
Act, the Clean Water Act, and the Endangered Species Act. 

In January 2001, the President established the National Energy Policy 
Development Group for the purpose of developing a national energy 
policy. In May 2001, this group issued the National Energy Policy 
Report, which included recommendations for facilitating the production 
of oil and gas resources on public lands. While Congress is still 
considering comprehensive energy policy legislation in response to the 
National Energy Policy Development Group, BLM has been administratively 
implementing some of its recommendations. Specifically, BLM has focused 
its efforts on streamlining its administration and management of the 
various stages of oil and gas production through a number of policy and 
procedural changes that seek to minimize delays in approving drilling 
permits and increase production while also protecting the environment. 

In this context, you asked us to determine (1) the extent to which the 
level of oil and gas development on public lands managed by BLM has 
changed over the past 6 years and how these changes have affected, if 
at all, BLM's ability to assess and mitigate environmental impacts; (2) 
what policy changes BLM has made in the past 6 years related to 
facilitating and managing oil and gas development and how these changes 
have affected, if at all, BLM's ability to assess and mitigate 
environmental impacts; and (3) what challenges BLM faces in managing 
its oil and gas program. 

To respond to these objectives, we obtained data from BLM on the number 
of oil and gas drilling permits approved in the past 6 years and the 
number of environmental inspections performed. We met with officials 
from BLM's Fluid Minerals Group to discuss the agency's 
responsibilities for managing its oil and gas program. We also met with 
the Director and Deputy Director of BLM's National Energy Office to 
discuss the agency's efforts to implement recommendations in the 
National Energy Policy specifically affecting BLM's oil and gas 
program. In addition, we visited a nonprobability sample of BLM field 
offices and used a structured interview guide to assist in collecting 
information about how each field office manages its oil and gas 
program, including staffing and workload issues.[Footnote 8] We 
selected field offices that experienced some of the greatest increases 
in oil and gas permitting activity for fiscal years 1999 through 2003 
(at the time of site selection, fiscal year 2004 data were not 
available). Additional criteria for selection included offices that 
vary in their ability to meet BLM's goals for inspecting oil and gas 
wells and offices that either are or are not expediting the update of 
resource management plans because the plans involve energy development 
issues. We focused on these offices because of concern that the 
expedited time frames for updating these plans could compromise the 
environmental analyses associated with the plans. Using these criteria, 
we selected eight field offices to visit: in Glenwood Springs, 
Colorado;[Footnote 9] Miles City, Montana; Carlsbad and Farmington, New 
Mexico;[Footnote 10] Vernal, Utah; and Buffalo, Rawlins, and Pinedale, 
Wyoming. Using a structured interview guide, we also interviewed 
officials from each of the five BLM state offices--in Colorado, 
Montana, New Mexico, Utah, and Wyoming--that have oversight authority 
for these field offices.[Footnote 11] The officials we interviewed at 
these offices, including state and field office managers, were 
responsible for the day-to-day administration of BLM's oil and gas 
program. We also met with officials from industry groups, environmental 
and citizen-based groups, and state governments. We collected and 
analyzed documents related to BLM's management of its oil and gas 
program, including instructional memoranda, resource management plans, 
BLM's National Energy Policy Implementation Plan, and relevant laws and 
regulations. A more detailed description of our scope and methodology 
can be found in appendix I. We conducted our work from February 2004 
through April 2005 in accordance with generally accepted government 
auditing standards. 

Results in Brief: 

A dramatic increase in oil and gas development on federal lands over 
the past 6 years has lessened BLM's ability to meet its environmental 
protection responsibilities. Nationwide, the total number of oil and 
gas drilling permits approved by BLM more than tripled, from 1,803 to 
6,399 for fiscal years 1999 through 2004.[Footnote 12] Much of the 
increased oil and gas activity was concentrated in five intermountain 
states--Colorado, Montana, New Mexico, Utah, and Wyoming. In fiscal 
year 2004, the offices under the jurisdiction of these five BLM state 
offices collectively approved 6,204 drilling permits, or more than 95 
percent of the nationwide total.[Footnote 13] For the eight BLM field 
offices we visited, the increase in the number of drilling permits 
approved in fiscal year 2004 versus the number approved in fiscal year 
1999 ranged from 70 in the Miles City, Montana, field office to 2,151 
in the Buffalo, Wyoming, field office.[Footnote 14] Overall, BLM 
officials in the majority of the field offices we visited said that 
staff had to devote increasing amounts of time to processing drilling 
permits, leaving less time to mitigate the environmental impacts of oil 
and gas development. For example, the Buffalo, Wyoming, and Vernal, 
Utah, field offices--the two field offices with the largest increases 
in permitting activity--were each able to meet their annual 
environmental inspection goals only once in the past 6 years. 
Furthermore, the Buffalo, Wyoming, field office was able to achieve 
only 27 percent of its required environmental inspection goals in 
fiscal year 2004. BLM staff in four of the eight field offices we 
visited acknowledged similar difficulties in trying to keep up with 
their environmental protection responsibilities. Four of the eight 
field offices had a backlog of past due idle-well reviews and seven of 
the eight field offices had a backlog of reclamation inspections. BLM 
staff from each of the field offices that had experienced difficulties 
in meeting their environmental protection responsibilities attributed 
the problem, to varying degrees, to staff spending more time processing 
drilling permits and less time performing environmental mitigation 
activities. 

During the past 6 years, BLM made several policy changes that have 
impacted to varying degrees its ability to assess and mitigate the 
environmental impacts of oil and gas development on public lands. While 
a number of these policies were aimed at facilitating and managing 
increased development, others were intended to improve environmental 
mitigation efforts. For example, the policy changes that helped 
facilitate and manage oil and gas development included (1) reviewing 
restrictions on oil and gas development to ensure that they are the 
least restrictive possible while still protecting the environment; (2) 
expediting the update of certain resource management plans, including 
those that involve energy development issues; and (3) streamlining the 
process for permitting oil and gas development. Similarly, recent 
policy changes intended to improve mitigation activities included those 
(1) enhancing BLM's oil and gas inspection capabilities, (2) improving 
management of idle wells, and (3) encouraging the use of best 
management practices for oil and gas development. However, the combined 
effects of both types of policy changes on BLM's ability to assess and 
mitigate environmental impacts have been mixed. For example, staff from 
four of the eight field offices told us that policies that streamlined 
the permitting process also increased the emphasis on processing 
permits, which in turn resulted in shifting staff away from their 
environmental mitigation responsibilities. On the other hand, the 
policies issued to revitalize inspection and enforcement activities 
impacted BLM's mitigation activities positively because they resulted 
in six of the eight field offices obtaining greater resources to hire 
more inspection staff. 

BLM state and field office staff and GAO identified several challenges 
that BLM faces in managing its oil and gas program, including, but not 
limited to, (1) managing workloads to meet all of its responsibilities, 
(2) using workforce planning to effectively identify and communicate 
its workforce needs, and (3) meeting its oil and gas program resource 
needs in light of budget constraints. Workload pressure, which was 
already at a high level due to the increases in permitting activity, 
has been further exacerbated by increases in public challenges to BLM's 
decisions and actions, according to BLM staff. Heavy workloads have led 
to high stress levels and low morale among some staff. In reviewing 
BLM's efforts to manage increasing workloads, we found that three field 
offices and four state offices did not effectively identify and 
communicate their workforce needs to either their respective BLM state 
office or BLM headquarters. BLM's current workforce planning process 
does not identify all of BLM's staffing needs, in large part because 
BLM headquarters directs state and field offices to identify only those 
needs for which funding is available. As a result, the current 
workforce planning process does not provide consistent and readily 
available information that state and headquarters decision makers can 
use to support budget justifications and make informed resource 
allocation decisions. Furthermore, some data needed to quantify 
workloads--including idle-well reviews and reclamation-related 
workloads--are either not tracked or not consistently tracked in a 
centralized database, making it difficult to identify and prioritize 
staffing needs for these responsibilities. Lastly, but perhaps most 
significantly, staffing needs are growing faster than available 
resources. While many federal agencies are facing tight budget 
constraints, BLM is in an unusual position because it has authority, 
which it has not exercised, to generate additional revenues to cover 
the costs of its program activities by assessing and collecting fees 
for various services that it provides. In its budget justification for 
fiscal year 2006, BLM proposed to impose fees for issuing oil and gas 
permits and said it is drafting a rule establishing a fee structure. 
According to the budget justification, the cost recovery fees would 
generate a net increase of $7.6 million, which would allow BLM to 
maintain its current staffing level and use a portion of its 
appropriated funds to fund other program priorities such as ensuring 
proper inspection and enforcement actions. 

We are recommending that the Secretary of the Interior take steps to 
ensure that BLM's staffing needs are accurately reflected in its 
workforce plans and considered by key decision makers. We are also 
recommending that the Secretary direct BLM to finalize and implement a 
fee structure to cover the costs of processing oil and gas drilling 
permits. In responding to a draft of this report, Interior generally 
agreed with our recommendations. See appendix III for Interior's 
comment letter. Also, see the "agency comments and our evaluation" 
section and appendix III for our evaluation of these comments. 

Background: 

In recent years, both rising energy prices and new technologies have 
led to an increased emphasis on developing oil and gas resources on 
public lands. First, higher prices have created greater economic 
incentives to drill for oil and gas. According to the Energy 
Information Administration, the average of daily New York Mercantile 
Exchange futures prices for crude oil increased from $19.30 per barrel 
in 1999 to $41.47 per barrel in 2004.[Footnote 15] Similarly, average 
wellhead prices for natural gas in the United States have increased 
significantly in the past 6 years, increasing from an average of $2.19 
per thousand cubic feet in 1999 to an average of $5.49 per thousand 
cubic feet in 2004. Second, advances in technology have made it more 
profitable to drill for oil and gas. For example, advances in 
directional drilling and new techniques for putting wells into 
production have made it possible to economically produce oil and gas 
from reservoirs that were previously considered to be uneconomic. 

Several other events in the past 6 years have also increased the 
emphasis on developing oil and gas resources on public lands. First, 
the Energy Act of 2000 directed the Secretary of the Interior, in 
consultation with the Secretaries of Agriculture and Energy, to prepare 
a report that provides an inventory of oil and natural gas resources 
beneath federal lands and to identify the extent and nature of any 
restrictions or impediments to the development of such 
resources.[Footnote 16] Second, the National Energy Policy Report, 
issued on May 16, 2001, contained many recommendations that were 
intended to diversify and increase energy supplies, encourage 
conservation, and ensure energy distribution. For example, this report 
included recommendations directing the Secretary of the Interior to 
expedite the ongoing study of impediments to oil and gas development 
and to examine restrictions on oil and gas leasing and modify these 
restrictions where opportunities exist, as long as they were consistent 
with the law, good environmental practice, and balanced use of 
resources. The National Energy Policy Report also recommended that the 
President issue an executive order to "rationalize permitting for 
energy production in an environmentally sound manner by directing 
federal agencies to expedite permits and other federal actions 
necessary for energy related project approvals on a national basis." 
Accordingly, the President signed Executive Order 13212 (Actions to 
Expedite Energy-Related Projects) on May 18, 2001, which incorporated 
these recommendations and established an interagency task force to 
monitor and assist the agencies in their efforts. Lastly, an oil and 
gas inventory, which is commonly referred to as the Energy Policy and 
Conservation Act (EPCA) Report,[Footnote 17] was issued in January 
2003. The EPCA Report included estimates of oil and gas resources and 
reserves in five major geologic basins in the interior West and a 
description of the extent and nature of any restrictions to the 
development of these resources and reserves. These five basins contain 
much of the onshore oil resources and the bulk of the onshore natural 
gas under federal ownership in the contiguous United States. 

In response to these events, BLM developed a National Energy Policy 
Implementation Plan that outlined 54 specific tasks intended to 
facilitate the implementation of the President's National Energy 
Policy. A subset of these tasks dealt with BLM's management of its oil 
and gas program, including mitigating the environmental impacts of oil 
and gas development. This subset of tasks formed the basis for a series 
of BLM instructional memoranda, which among other things, directed BLM 
field managers to (1) use the results of the EPCA Report to review 
their restrictions on oil and gas development to make sure they are 
still relevant and that they were the least restrictive while 
protecting the environment, (2) improve and streamline the processing 
of drilling permits for oil and gas wells, and (3) expedite the update 
of certain resource management plans, including those that are time 
sensitive because of energy development issues. This subset of tasks 
also incorporated the agency's ongoing efforts to enhance its oil and 
gas inspections and enforcement capabilities, improve its management of 
idle wells, and encourage the use of best management practices for oil 
and gas development. 

Environmental Impacts of Oil and Gas Development: 

If not properly mitigated, the environmental impacts of oil and gas 
development could compromise BLM's responsibility for protecting the 
environment. These environmental impacts range from being site 
specific--for example, removing several acres of vegetation at an 
individual well pad--to those that affect a much larger area, such as 
fragmenting tens of thousands of acres of crucial winter range for mule 
deer. (See figs. 1 and 2.) Air and water quality are also two resources 
that can be affected by oil and gas development. Air quality can be 
degraded by increased dust from newly graded roads, and visibility can 
be affected in the immediate area and downwind. Air quality can also be 
degraded by increased nitrogen oxides from diesel engines and 
compressors used at drilling sites. Surface water quality can be 
degraded by increased sediment, salt, and other pollutants either from 
water draining off newly graded surfaces and roads or from the 
accidental discharge of oil or water produced during oil and gas 
production. Shallow aquifers can be polluted if required protective 
measures are not in place, and coal bed methane gas production can 
deplete shallow aquifers that serve as domestic water sources. Visual 
resources can also be degraded by a high density of drilling and 
production equipment that in extreme situations can change the 
appearance of the landscape from a natural setting to an industrial 
zone. In addition, the noises, smells, and lights from trucks, drilling 
and construction equipment, and production facilities can disturb 
wildlife and people living nearby. 

Figure 1: Oil Drilling Site with Access Road: 

[See PDF for image]

[End of figure]

Figure 2: Fragmentation of Wildlife Habitat by Multiple Oil and Gas 
Sites: 

[See PDF for image]

[End of figure]

BLM's Land Use Planning: 

The primary method BLM uses to balance resource use and environmental 
protection is the development of land use plans (called resource 
management plans) under FLPMA. During the planning process, BLM 
determines, among other things, which parcels of land will be available 
for oil and gas development. BLM then publishes a notice that bids will 
be accepted for leases on these lands. Before approving an oil and gas 
lease, BLM conducts a review to determine if any restrictions--or 
stipulations--are necessary to mitigate the impacts from oil and gas 
production. As provided by BLM regulations, if stipulations are 
necessary, they are incorporated into the lease.[Footnote 18] Before an 
oil and gas company can drill on leased lands, it must submit an 
application for a drilling permit with BLM.[Footnote 19] BLM then 
evaluates the operator's proposal for drilling to ensure that it 
conforms to the land use plan and applicable laws and regulations. In 
approving a specific drilling permit, BLM inspects the proposed 
drilling site and may add site-specific conditions of approval deemed 
necessary to protect the environment. In addition, BLM must meet the 
requirements of the National Environmental Policy Act of 1969 (NEPA). 
NEPA requires federal agencies to prepare an environmental impact 
statement (EIS) for major federal actions that may have a significant 
affect on the quality of the human environment.[Footnote 20] When an 
agency is not sure whether an activity will have significant impact on 
the environment, the agency prepares a less detailed environmental 
assessment (EA).[Footnote 21] If an environmental assessment determines 
that the activity will significantly affect the environment, the agency 
then prepares an EIS. With regard to oil and gas leasing and 
development, BLM implements NEPA during both the preparation of the 
resource management plan and at the drilling permit application 
stage.[Footnote 22]

BLM's Environmental Inspection and Monitoring Activities: 

After BLM approves a drilling permit, the operator can drill the well 
and commence production. To ensure compliance with all stipulations in 
the lease and conditions of approval in the permit, as well as 
applicable laws and regulations, BLM has an inspection and enforcement 
program that is designed to verify that the operator remains in 
compliance with the various restrictions at a well site. The authority 
for inspecting wells is derived from the Federal Oil and Gas Royalty 
Management Act of 1982, as amended. This act requires the Secretary of 
the Interior to develop guidelines that specify the coverage and 
frequency of inspections.[Footnote 23] Although the driver of BLM's 
inspection program is to verify the volumes of oil and gas produced to 
ensure the federal government is receiving the required royalty 
payments, the inspection program has evolved over time to include 
various environmental inspections, as well. BLM tracks data on oil and 
gas wells and environmental inspections in its centralized database. 

Environmental Inspections: 

Environmental inspections are BLM's primary mechanism to ensure that 
operators are complying with various environmental laws and lease 
stipulations. BLM staff conduct environmental inspections in order to 
protect the surface and subsurface environments. BLM's natural resource 
specialists, who generally also have some responsibilities for 
processing drilling permits, conduct environmental inspections by 
visiting an individual well or group of wells to assess compliance with 
lease stipulations and conditions of approval that are written into the 
drilling permit.[Footnote 24] (See fig. 3.) BLM managers determine 
which wells are to be inspected each year through a ranking process 
that places wells or groups of wells into either high-or low-priority 
categories, with high-priority wells requiring an annual 
inspection.[Footnote 25] Environmental inspection priorities are based 
on several criteria, including the proximity to an area of special 
environmental concern, whether noncompliance with lease stipulations or 
conditions of approval could have a significant impact on the 
environment, history of noncompliance, or sites that need BLM approval 
for successful reclamation. If the natural resources staff determine 
that a violation occurred or is occurring, they can take one of several 
enforcement actions, including issuance of a verbal or written 
"incident of noncompliance." The enforcement actions may carry fines, 
depending on the severity of the infraction. 

Figure 3: Typical Oil and Gas Site Subject to an Environmental 
Inspection: 

[See PDF for image]

[End of figure]

Resource and Environmental Monitoring Activities: 

Another means for BLM to mitigate the impacts of oil and gas 
development is through monitoring programs that are designed to measure 
the effectiveness of mitigation measures over a period of time. 
According to current BLM land use policy, each field office must 
develop a monitoring schedule in their land use plans to periodically 
(annually is recommended) revisit land use plan decisions and track 
progress toward their implementation. The land use plan may also 
identify intervals and standards for monitoring resources, such as air, 
water, soils, vegetation, and fish and wildlife; this type of 
monitoring is referred to as resource monitoring. Since 2003, when the 
Office of Management and Budget identified, among other things, BLM's 
resource monitoring activities as an area that needed improvement, BLM 
has been developing a National Monitoring Strategy. This is a multiyear 
approach that will develop an integrated data collection and assessment 
strategy to inform and guide land management decisions, including 
protocols for periodically reporting on resource conditions and the 
effectiveness of management actions at the local, regional, and 
national levels. 

With respect to oil and gas development, BLM recognizes two types of 
monitoring as important: (1) land use plan monitoring and (2) resource 
monitoring. Land use plan monitoring can alert the agency as to whether 
the magnitude of the overall environmental impacts resulting from oil 
and gas development are within the acceptable level projected in the 
resource management plan. BLM's policy calls for tracking the number of 
oil and gas wells drilled and then converting that number into a total 
amount of surface acres disturbed. Resource monitoring can reveal how 
critical resources, such as air quality, groundwater, surface water, 
and wildlife are directly impacted from oil and gas development over 
time. Scientists accomplish this by establishing a baseline condition 
for each resource, determining the change in this baseline condition 
over time, and attributing this change to a specific activity, such as 
oil and gas development. Land managers can then determine the 
effectiveness of stipulations and conditions of approval and decide 
whether these measures need to be modified, strengthened, or 
eliminated. Resource monitoring generally involves assessing cumulative 
impacts to resources over broad geographic areas and can be 
incorporated into resource management plans or environmental impact 
statements for large-scale oil and gas projects. 

Monitoring Idle Wells: 

BLM also has monitoring responsibilities for idle wells. Once the 
operator demonstrates to BLM that the well can no longer produce oil or 
gas economically or has no other use, the well must be plugged. 
However, the operator may delay plugging the well and instead allow the 
well to remain idle for various reasons, including the anticipation of 
higher oil and gas prices that may once again make the well economic to 
operate or possibly using the well for secondary recovery operations 
(for example, using the well to inject water into the oil reservoir and 
push any remaining oil to operating wells). 

BLM has policies that require it to periodically review the status of 
these idle wells to ensure that legitimate reasons exist for allowing 
the wells to remain idle. According to BLM, the primary purpose of idle-
well reviews are to ensure that an operator does not walk away from a 
nonproducing well, thereby leaving the federal government with the 
responsibility of plugging the well and reclaiming the site. According 
to BLM, idle-well reviews also help mitigate impacts from oil and gas 
developments by ensuring that well sites are reclaimed in a timely 
manner. 

Idle wells consist of both temporarily abandoned and shut-in wells. BLM 
defines temporarily abandoned wells as wells that are physically or 
mechanically incapable of producing oil or gas of sufficient value to 
exceed direct operating costs but may have value for a future use. 
Operators must receive BLM approval prior to placing a well in 
temporarily abandoned status for more than 30 days. This approval, 
which lasts for up to 12 months, can be renewed annually at BLM's 
discretion. All temporarily abandoned wells must have current approval 
after the initial 30 days.[Footnote 26] BLM policy defines shut-in 
wells as wells that are physically and mechanically capable of 
producing oil or gas in paying quantities but have not produced for 1 
month. According to BLM, operators do not have to obtain BLM approval 
to place wells in shut-in status. BLM field office staff are directed 
to identify the number of idle wells and to review the justification 
for their idle status.[Footnote 27] Although idle-well review policies 
vary by field office, BLM policy suggests that field office staff 
initiate the review when a well has not produced for 12 months. Staff 
then review well files to determine if the information submitted by the 
operator supports the idle status. If the justification is 
insufficient, BLM will require the operator to submit a plan that 
allows for a number of actions, including bringing the well back into 
production or plugging the well and reclaiming the site. 

When an operator determines, and BLM agrees, that a well has no further 
economic value, the operator must follow an agreed-upon final 
reclamation plan that includes removing all visual evidence of the well 
and pad, recontouring the affected land, and revegetating the site with 
native plant species. In general, the goal is to reclaim the well site 
so that it matches the surrounding natural environment to the extent 
possible. BLM would then inspect the site to monitor the success of the 
reclamation, a process that typically takes several years. Once BLM 
determines that reclamation efforts have been successful, BLM approves 
a Final Abandonment Notice. 

Inspecting and Monitoring Reclamation Efforts: 

Two types of reclamation may occur during the life cycle of an oil and 
gas well. The first type is interim reclamation. Interim reclamation is 
the practice of reclaiming unnecessary surface disturbance after a well 
has been drilled. For example, operators may need a 10-acre drill pad 
to safely drill a series of wells. However, once the wells are drilled, 
operators may only need 4 acres to safely service the well over its 
lifetime. In this case, interim reclamation would require the reseeding 
and regrading of 6 acres of the initial pad that are no longer needed. 
While this practice is not a general requirement in all permits issued 
by BLM, the agency may choose to add it as a requirement in drilling 
permits for specific oil and gas developments. The other type of 
reclamation occurs when the operator plugs the well and initiates the 
final reclamation process, as described in the previous section. This 
type of reclamation is a requirement and the terms of the reclamation 
are included in the terms of the lease and the drilling permit. 

Dramatic Increases in Oil and Gas Permitting Activity Have Lessened 
BLM's Ability to Ensure That Environmental Impacts Are Mitigated: 

Oil and gas development on BLM-managed lands has increased dramatically 
over the past 6 years, resulting in staff spending more time processing 
drilling permits and less time mitigating the environmental impacts of 
the development.[Footnote 28] Nationwide, the total number of oil and 
gas drilling permits approved by BLM more than tripled, from 1,803 to 
6,399 for fiscal years 1999 through 2004. Much of the increased oil and 
gas activity was concentrated in five intermountain states--Colorado, 
Montana, New Mexico, Utah, and Wyoming. In fiscal year 2004, the 
offices under the jurisdiction of these five BLM state offices 
collectively approved 6,204 drilling permits, more than 95 percent of 
the national total. BLM officials in most of the field offices that we 
visited stated that the increased permitting workload has led to less 
staff time being available for performing environmental mitigation 
activities. These mitigation efforts include conducting environmental 
inspections of oil and gas wells, implementing monitoring programs, 
tracking idle wells and reviewing justifications for why these wells 
are in idle status, and ensuring reclamation efforts are successful. 

BLM's Oil and Gas Permitting Activity Has More Than Tripled in the Past 
6 Years: 

Over the past 6 years, the total number of drilling permits approved by 
BLM nationwide has more than tripled from 1,803 to 6,399. The permits 
approved under the jurisdictions of five BLM states offices--Colorado, 
Montana, New Mexico, Utah, and Wyoming--provided the bulk of the 
nationwide increase in permitting activity and accounted for over 95 
percent of all the permits approved in fiscal year 2004. The eight BLM 
field offices we visited in these five states accounted for 77 percent 
of the total permits approved nationwide in fiscal year 2004. (See 
figs. 4 and 5.)

Figure 4: BLM State and Field Offices Visited: 

[See PDF for image] 

[End of figure] 

Figure 5: Number of Oil and Gas Drilling Permits Approved by BLM for 
Fiscal Years 1999 through 2004: 

[See PDF for image]

Note: These numbers are as of April 2004. 

[End of figure]

Specifically, the eight BLM field offices we visited approved 4,911 
drilling permits in fiscal year 2004, an increase of 3,803 over the 
number approved in fiscal year 1999. The increases among the eight BLM 
field offices we visited ranged from 70 in the Miles City, Montana, 
field office to 2,151 in the Buffalo, Wyoming, field office. (See table 
1.)

Table 1: Increases in Oil and Gas Drilling Permits Approved by Eight 
BLM Field Offices in Fiscal Years 1999 and 2004: 

BLM field office: Miles City, Montana; 
Drilling permits approved in fiscal year 1999: 26; 
Drilling permits approved in fiscal year 2004: 96; 
Difference: 70. 

BLM field office: Rawlins, Wyoming; 
Drilling permits approved in fiscal year 1999: 74; 
Drilling permits approved in fiscal year 2004: 212; 
Difference: 138. 

BLM field office: Glenwood Springs, Colorado; 
Drilling permits approved in fiscal year 1999: 8; 
Drilling permits approved in fiscal year 2004: 179; 
Difference: 171. 

BLM field office: Carlsbad, New Mexico; 
Drilling permits approved in fiscal year 1999: 242; 
Drilling permits approved in fiscal year 2004: 436; 
Difference: 194. 

BLM field office: Pinedale, Wyoming; 
Drilling permits approved in fiscal year 1999: 124; 
Drilling permits approved in fiscal year 2004: 323; 
Difference: 199. 

BLM field office: Farmington, New Mexico; 
Drilling permits approved in fiscal year 1999: 313; 
Drilling permits approved in fiscal year 2004: 690; 
Difference: 377. 

BLM field office: Vernal, Utah; 
Drilling permits approved in fiscal year 1999: 133; 
Drilling permits approved in fiscal year 2004: 636; 
Difference: 503. 

BLM field office: Buffalo, Wyoming; 
Drilling permits approved in fiscal year 1999: 188; 
Drilling permits approved in fiscal year 2004: 2,339; 
Difference: 2,151. 

Total; 
Drilling permits approved in fiscal year 1999: 1,108; 
Drilling permits approved in fiscal year 2004: 4,911; 
Difference: 3,803. 

Source: BLM. 

Note: For additional information, see appendix I. 

[End of table]

The increases in the number of drilling permits approved in the 
Buffalo, Wyoming, and Miles City, Montana, field offices, according to 
BLM staff, were due primarily to extensive coal-bed methane 
developments in the Powder River Basin. In 2003, a congressional 
conference committee considering the 2004 appropriations bill for the 
Department of the Interior stated in its report that "[b]ased on the 
recently completed environmental impact statement for the Powder River 
Basin and increased staffing for the Buffalo and Miles City field 
offices, the managers expect more than 3,000 drilling permits will be 
issued in 2004."[Footnote 29] The two offices actually approved 2,435 
permits in fiscal year 2004. Drilling for natural gas was primarily 
responsible for the increases in permits approved in the Rawlins and 
Pinedale, Wyoming, the Farmington, New Mexico, and the Glenwood 
Springs, Colorado, field offices, while increases in the Carlsbad, New 
Mexico, and Vernal, Utah, field offices were due to increases in 
drilling for both oil and natural gas. 

Increased Oil and Gas Permitting Activity Has Decreased Staff Resources 
Available for Environmental Mitigation Activities: 

BLM officials in five of the eight field offices we visited reported 
that they had to shift staff from activities designed to mitigate the 
impacts of oil and gas development--such as environmental inspections, 
monitoring, idle-well reviews, and reclamation--to those associated 
with processing drilling permits. While some staff have had joint 
responsibilities for processing permits and performing environmental 
mitigation activities, according to BLM officials, staff have spent an 
increasing amount of time processing permits, leaving less time for 
mitigation activities. For example, the Buffalo, Wyoming, field office, 
which has the highest drilling permit workload, was able to meet its 
annual environmental inspection goal only once in the past 6 years, and 
achieved only 27 percent of its environmental inspection goal in fiscal 
year 2004.[Footnote 30] BLM staff also acknowledged difficulties in 
developing and implementing monitoring plans due, in part, to the 
increased permitting workload. Furthermore, BLM's ability to conduct 
idle-well reviews--which, according to BLM, help prevent nonproducing 
wells from becoming a liability to the federal government--has also 
been impacted. According to staff from four of the eight field offices 
we visited, backlogs of idle-well reviews currently exist because staff 
who would normally be available to do these reviews have spent more 
time processing permits. Finally, staff at seven of the eight field 
offices we visited said they currently have a backlog of reclamation 
work. These backlogs are due, in part, to fewer staff available to 
inspect reclaimed sites as the result of permit-processing workloads. 

Several BLM Field Offices with Large Increases in Permitting Activity 
Have Not Met Their Environmental Inspection Goals: 

BLM officials in four of the eight field offices we visited said that 
staff are spending increasing amounts of time processing permits, 
resulting in less time to conduct environmental inspections. The 
routine environmental inspection of well sites is BLM's primary 
mechanism for ensuring that operators are complying with various 
environmental conditions and stipulations. Detecting violations of 
environmental requirements and ensuring that any violation is promptly 
corrected by the operator is a key component of BLM's process for 
mitigating the environmental impacts of oil and gas development. Taken 
as a whole, the eight BLM field offices we visited met their annual 
environmental inspection goals only about half of the time during the 
past 6 years (from fiscal years 1999 through 2004), due in part to 
staff spending an increasing amount of time processing drilling 
permits. Specifically, two field offices--Glenwood Springs, 
Colorado,[Footnote 31] and Carlsbad, New Mexico--were able to meet 
their environmental inspection goals during the entire 6-year span. The 
success of the remaining six field offices ranged from achieving their 
annual environmental inspection goals in 5 out of the 6 years in the 
Pinedale, Wyoming, field office,[Footnote 32] to only once being able 
to achieve their annual goal in the 6-year period in both the Buffalo, 
Wyoming, and Vernal, Utah, field offices--the two field offices with 
the largest increases in permitting activity. These two field offices 
last met their annual environmental inspection goals in fiscal years 
2000 and 1999, respectively. Furthermore, the Buffalo, Wyoming, field 
office--the field office with the highest drilling permit workload--was 
able to complete only 27 percent of its environmental inspection goals 
in fiscal year 2004. By not performing these inspections, the field 
offices have not ensured that the wells in their jurisdictions are 
being operated in compliance with applicable environmental 
requirements. 

Although meeting annual goals for environmental inspections continues 
to be a challenge for some BLM field offices, BLM has been actively 
trying to address this issue in the last few years. As we discuss in 
more detail later in the report, BLM initiated efforts to revitalize 
its oil and gas inspection and enforcement program in February 2000. 
However, BLM's progress in strengthening its inspections capabilities 
has been somewhat undercut by the ever-increasing number of drilling 
permits that, in turn, continues to drive a corresponding increase in 
the various types of inspections that need to be performed. 

Resource Monitoring Plan Development Has Lagged Partly Because of 
Increased Permitting Activity: 

Four of the eight BLM field offices we visited had not developed any 
resource monitoring plans for various reasons, including that staff 
that could have been used to develop such plans had been busy with 
processing drilling permits.[Footnote 33] Monitoring plans help track 
management decisions to determine if desired outcomes are achieved, 
including those related to mitigating the environmental impacts of oil 
and gas development. Officials in the four BLM field offices that had 
developed resource monitoring plans also expressed concerns about their 
ability to implement their monitoring plans given resource constraints. 
For example, the heavy workload associated with processing drilling 
permits in the Wyoming portion of the Powder River Basin has slowed the 
development of a groundwater monitoring plan, and BLM officials in the 
Pinedale and Rawlins, Wyoming, field offices reported that personnel 
have been diverted from monitoring activities to processing drilling 
permits. Appendix II contains additional information on resource 
monitoring, the role of federal and state governments in monitoring, 
the resource management plans and environmental impact statements we 
reviewed, and how budget constraints are affecting monitoring. 

Idle-Well Reviews Have Been Impacted by Increased Permitting Activity: 

Officials from four of the eight BLM field offices we visited said 
their offices had a backlog of idle-well reviews. According to the BLM 
database containing idle-well information, only 44 percent of the wells 
in temporarily abandoned status had all of the data needed to determine 
whether idle-well reviews were being performed in a timely fashion. 
However, for those wells in temporarily abandoned status that had the 
necessary information, 65 percent of the idle-well reviews were past 
due. 

Due in large part to the increased drilling permit workload, BLM 
officials in four of the eight field offices we visited indicated they 
had not been able to complete their idle-well reviews in a timely 
manner. However, staff from a fifth field office told us while they had 
diverted staff from idle-well reviews to processing drilling permits, 
this diversion had not impacted their ability to do idle-well reviews. 

As with environmental inspections, completing the necessary idle-well 
reviews remains a challenge for some BLM offices. As we discuss in more 
detail later, BLM initiated a concentrated effort in May 2000 to reduce 
the total number of idle wells. In part as a result of this effort--and 
also because increases in oil and gas prices resulted in more idle 
wells being brought back into production--the total number of idle 
wells in four of the five states we visited (excluding Montana) 
decreased from fiscal years 1999 through 2003. Of the five states we 
reviewed, Wyoming appeared to have the greatest decrease in idle wells, 
while Utah appeared to have the smallest decrease.[Footnote 34] Despite 
progress in reducing the total number of idle wells, the percentage of 
wells in idle status for more than 5 years, which, according to BLM, 
represents a greater financial risk to the federal government, 
increased in four of the five states. 

A Backlog of Reclamation Reviews Exists Partly Because of Increased 
Permitting Activity: 

BLM officials in seven of the eight field offices we visited stated 
that the workload associated with processing drilling permits has 
affected their ability to complete their reclamation work. The 
reclamation backlog consists of several activities, including visiting 
well sites to verify the success of efforts to partially reclaim 
drilling-well pads--called interim reclamation--as well as visiting 
well sites where the well bore has been plugged and the entire well pad 
has been reclaimed--called final reclamation. BLM officials in five of 
the seven field offices responded that they have interim reclamation 
backlogs (the Carlsbad, New Mexico, field office does not have any well 
sites with interim reclamation requirements). Interim reclamation is 
important because it mitigates adverse visual and environmental impacts 
quickly. Since more acreage is needed for drilling a well than for its 
ongoing operations once it is brought into production, the opportunity 
exists to reclaim some of the drilling-well pad soon after drilling has 
been completed. The purpose of an interim reclamation site visit is to 
ensure that the interim reclamation was performed in accordance with 
any applicable environmental requirements. 

BLM officials in seven of the eight field offices largely attributed 
their final reclamation backlogs to their significant workloads 
associated with processing drilling permits. The final reclamation 
backlog at these field offices consists of site inspections that needed 
to be performed to assess the status of final reclamation efforts. If 
done correctly, final reclamation should mostly remove any visible 
evidence that an oil or gas well was ever on the site. BLM staff told 
us that final reclamation typically takes anywhere from 2 to 6 years, 
depending on precipitation and other factors. Our review of BLM data 
showed that there were 1,975 wells in the eight field offices that were 
abandoned over 4 years ago that did not have an approved Final 
Abandonment Notice as of February 17, 2005.[Footnote 35] (See table 2.)

Table 2: Number of Abandoned Wells That Still Needed Approved Final 
Abandonment Notices for Eight BLM Field Offices, as of February 17, 
2005: 

BLM field office: Glenwood Springs, Colo; 
Number of abandoned wells prior to September 30, 2000: 28; 
Number of abandoned wells from October 1, 2000, through September 30, 
2004: 12. 

BLM field office: Miles City, Mont; 
Number of abandoned wells prior to September 30, 2000: 43; 
Number of abandoned wells from October 1, 2000, through September 30, 
2004: 43. 

BLM field office: Rawlins, Wyo; 
Number of abandoned wells prior to September 30, 2000: 68; 
Number of abandoned wells from October 1, 2000, through September 30, 
2004: 75. 

BLM field office: Carlsbad, N. Mex; 
Number of abandoned wells prior to September 30, 2000: 105; 
Number of abandoned wells from October 1, 2000, through September 30, 
2004: 241. 

BLM field office: Pinedale, Wyo; 
Number of abandoned wells prior to September 30, 2000: 154; 
Number of abandoned wells from October 1, 2000, through September 30, 
2004: 43. 

BLM field office: Vernal, Utah; 
Number of abandoned wells prior to September 30, 2000: 168; 
Number of abandoned wells from October 1, 2000, through September 30, 
2004: 60. 

BLM field office: Buffalo, Wyo; 
Number of abandoned wells prior to September 30, 2000: 492; 
Number of abandoned wells from October 1, 2000, through September 30, 
2004: 157. 

BLM field office: Farmington, N. Mex; 
Number of abandoned wells prior to September 30, 2000: 917; 
Number of abandoned wells from October 1, 2000, through September 30, 
2004: 119. 

Total; 
Number of abandoned wells prior to September 30, 2000: 1,975; 
Number of abandoned wells from October 1, 2000, through September 30, 
2004: 750. 

Source: BLM. 

[End of table]

An official at the Buffalo, Wyoming, field office said that 
approximately 40 percent the Final Abandonment Notices could be 
approved for sites where they have been submitted if staff had time to 
verify that final reclamation had occurred and was successful. However, 
due to the significant increase in permitting workloads, staff have 
been unable to visit these sites. 

Recent BLM Policy Changes Have Had Mixed Impacts on Environmental 
Mitigation Activities for Oil and Gas Development: 

The policy changes BLM made in the past 6 years to help facilitate and 
manage increased oil and gas development and to enhance environmental 
mitigation efforts have had mixed impacts on the agency's environmental 
mitigation activities. Specifically, while most of BLM's recent policy 
changes to help facilitate and manage increased oil and gas development 
have had little overall impact on environmental mitigation activities, 
some have had a negative impact. Because some of these policies placed 
greater emphasis on processing drilling permits, the effect of these 
policies was to cause field office staff to spend more time processing 
permits and less time performing environmental mitigation activities. 
In contrast, most of BLM's policy changes to enhance environmental 
mitigation activities have had some positive impacts on the ability of 
the field office staff to conduct such activities. However, the effect 
of these policies has been somewhat constrained by increases in the 
permitting workload. 

Some BLM Policy Changes to Help Facilitate and Manage Oil and Gas 
Development Indirectly Limited BLM's Ability to Meet Its Mitigation 
Responsibilities: 

For the eight field offices visited, most of the recent BLM policy 
changes that were designed to facilitate and manage oil and gas 
development have, thus far, had little direct impact on environmental 
mitigation activities, but some have indirectly limited BLM's ability 
to carry out its mitigation responsibilities. For example, BLM's policy 
changes that required field offices to review restrictions on oil and 
gas development had little impact on environmental mitigation 
activities because they generally did not result in any revisions to 
lease stipulations or conditions of permit approval. Similarly, the 
policy changes that expedited the completion of revised energy-related 
resource management plans had little impact on environmental mitigation 
activities, because the completion of these plans has been delayed for 
various reasons, including to allow more time for key stakeholders to 
comment on the plans and for necessary environmental reviews. In 
contrast, BLM's policy changes to improve and streamline the processing 
of drilling permits have indirectly had a negative impact on 
environmental mitigation activities, because they have reinforced 
processing drilling permits as a top priority. Consequently, these 
policies have resulted in staff spending less time performing 
environmental mitigation activities. 

Policy Changes on Reviewing Restrictions on Oil and Gas Development 
Have Had Little Impact on Environmental Mitigation Activities: 

BLM officials from the eight field offices we visited stated that 
recent policy changes on reviewing restrictions on oil and gas 
development have had little or no impact thus far on their 
environmental mitigation activities. In April and July 2003, BLM issued 
policy changes that provided direction to BLM state and field offices 
on ways to incorporate the findings of the EPCA Report into the 
agency's land use planning process and into oil and gas use 
authorizations (such as leases and drilling permits). These polices 
were aimed at reducing or eliminating impediments to oil and gas 
leasing on BLM land while continuing to protect resources. These 
policies directed BLM land use planners to evaluate the necessity of 
existing constraints on energy development in high-potential oil and 
gas areas--including such environmental mitigation measures as lease 
stipulations and conditions of permit approval. 

Since these policy changes generally did not result in revisions to 
stipulations in existing land use plans or revisions to existing lease 
stipulations or conditions of permit approval for the eight BLM field 
offices we visited, they have had little impact thus far on the field 
offices' environmental mitigation activities. Seven of the eight field 
offices reported making no revisions to land use plan stipulations or 
to existing lease stipulations or conditions of approval as a result of 
these policy changes, while one field office reported making a 
significant revision to stipulations in a land use plan. Specifically, 
the Farmington, New Mexico, field office revised stipulations for the 
Negro Canyon area from "no leasing" to "no surface occupancy" with 
seasonal drilling restrictions, noise standards, and designated bald 
eagle resource areas. This modification allowed an operator to lease 
Negro Canyon and drill directionally from land adjacent to the canyon. 
The field office staff said this revision allowed BLM to collect 
additional royalties and prevented the oil and gas from being drained 
by drilling activity on private and state land adjacent to the canyon. 
With this new oil and gas development, staff in the Farmington field 
office will need to perform additional environmental inspections to 
ensure compliance with the new lease stipulations. 

In addition, three of the eight BLM field offices reported that these 
policy changes may result in modifications to their future 
environmental mitigation activities as resource management plans are 
updated. For example, staff from the Vernal, Utah, field office said 
that as a result of these recent policy changes, standardized lease 
stipulations would be adopted in the current revision of the Vernal 
Resource Management Plan. According to these staff, so far, this has 
involved clarifying stipulations as opposed to revising them. Since 
this resource management plan is still being drafted, any final changes 
to lease stipulations and their subsequent potential impact on 
environmental mitigation activities have yet to be determined. Also, 
staff from the Glenwood Springs, Colorado, field office said these 
policies may result in modifications to stipulations in the amendment 
under development for the Roan Plateau Resource Management Plan. The 
staff are performing an in-depth analysis to determine if less- 
restrictive stipulations can be used. For example, currently there is a 
5-month restriction in the Roan Plateau area on oil and gas drilling 
activity to protect winter range habitat for deer and elk. The field 
office staff are looking at the impacts of reducing this restriction to 
2 months or dropping it altogether. This resource management plan 
amendment is also still in draft form, and it is too early to determine 
what, if any, impact any revisions may have on environmental mitigation 
activities. Similarly, staff from the Miles City, Montana, field office 
said the EPCA policies will likely impact the stipulations in an 
upcoming land use plan revision that is scheduled to begin in fiscal 
year 2005. 

Policy Changes to Expedite Energy-Related Resource Management Plans 
Have Had Little Impact on Environmental Mitigation Activities: 

Overall, staff from the seven BLM field offices we visited that were 
responsible for developing time-sensitive energy-related resource 
management plans (Carlsbad, New Mexico, was not) said the recent policy 
changes to expedite these plans have had little or no impact on their 
environmental mitigation activities. In February and August 2002, BLM 
issued policy changes that placed a high priority on expediting the 
update of 21 resource management plans, including 10 energy-related 
plans.[Footnote 36] Many of these plans had not been updated in several 
years and did not contain the latest available information needed to 
make land use and resource protection decisions. The February 2002 
policy noted that BLM had received increased funding for updating and 
preparing these plans. With respect to environmental issues, the 
concern was that the environmental analyses associated with these 
updated plans would be compromised in the rush to complete them within 
their expedited time frames. However, for the expedited plans being 
developed by the BLM field offices we visited, none have been completed 
on time--only 4 of the plans have been completed, ranging from 7 months 
to 1 year past their original deadlines--and there was time to complete 
the necessary environmental analyses. 

The seven BLM field offices we visited that were developing energy- 
related expedited plans were responsible for eight of these plans (the 
Pinedale, Wyoming, field office had two plans). (See table 3.) BLM 
officials from these field offices said the original deadlines were too 
optimistic. Among the reasons cited for why the deadlines were not met 
for several of these plans were because time frames had to be extended 
to allow key stakeholders more time to comment on the plans and to 
accommodate required environmental reviews, including public comment 
periods. Thus, staff from four of the seven field offices believed the 
environmental analyses associated with their plans were not affected by 
these policy changes. Staff from two field offices felt the policies 
slightly improved the quality of their environmental analyses. For 
example, staff from the Glenwood Springs field office said that because 
their plan was time sensitive, it was deemed high profile and received 
more scrutiny than usual. Staff from one field office said the policies 
may have had a slightly negative impact on the environmental analysis 
supporting their expedited plan because, among other things, time was 
not sufficient to allow some stakeholders to participate as much as 
they would have liked. Consequently, overall, the field staff believed 
these policy changes had little or no impact on environmental 
mitigation activities. 

Table 3: Status of the Energy-Related Expedited Resource Management 
Plans for Eight BLM Field Offices as of March 2005: 

BLM field office: Carlsbad, N. Mex; 
Energy-related expedited resource management plan: None; 
Date originally scheduled for completion: Not applicable; 
Status: Not applicable. 

BLM field office: Miles City, Mont; 
Energy-related expedited resource management plan: Powder 
River/Billings Plan Amendment; 
Date originally scheduled for completion: June 2002; 
Status: Completed April 2003. 

BLM field office: Buffalo, Wyo; 
Energy-related expedited resource management plan: Buffalo/Powder River 
Resource Management Plan; 
Date originally scheduled for completion: September 2002; 
Status: Completed April 2003. 

BLM field office: Farmington, N. Mex; 
Energy-related expedited resource management plan: Farmington Resource 
Management Plan; 
Date originally scheduled for completion: September 2002; 
Status: Completed September 2003. 

BLM field office: Pinedale, Wyo; 
Energy-related expedited resource management plan: Snake River Resource 
Management Plan; 
Date originally scheduled for completion: June 2003; 
Status: Completed April 2004. 

BLM field office: Glenwood Springs, Colo; 
Energy-related expedited resource management plan: Roan Plateau Area 
Plan Amendment; 
Date originally scheduled for completion: September 2003; 
Status: Draft resource management plan and draft EIS released for 
comment in November 2004; public comment period ends in April 2005. 

BLM field office: Vernal, Utah; 
Energy-related expedited resource management plan: Vernal Resource 
Management Plan Revision; 
Date originally scheduled for completion: March 2004; 
Status: Draft resource management plan and draft EIS released for 
comment in January 2005; public comment period ends in April 2005. 

BLM field office: Pinedale, Wyo; 
Energy-related expedited resource management plan: Pinedale Resource 
Management Plan; 
Date originally scheduled for completion: October 2004; 
Status: Draft resource management plan and draft EIS to be released for 
comment in November 2005. 

BLM field office: Rawlins, Wyo; 
Energy-related expedited resource management plan: Rawlins Resource 
Management Plan; 
Date originally scheduled for completion: October 2004; 
Status: Draft resource management plan and draft EIS released for 
public comment in December 2004; public comment period ends in March 
2005. 

Source: BLM. 

[End of table]

Policy Changes to Improve and Streamline the Processing of Drilling 
Permits Have Indirectly Had a Negative Impact on Environmental 
Mitigation Activities: 

Overall, BLM officials from four of the eight field offices we visited 
stated that the most significant impact of the recent policy changes 
for streamlining the processing of drilling permits was that the 
policies re-emphasized that processing permits was BLM headquarters' 
top priority. As a result, for these four offices, the emphasis on 
processing permits has indirectly limited environmental mitigation 
activities by shifting staff resources from performing environmental 
mitigation activities to processing drillings permits. In April 2003, 
BLM issued five policy changes that were aimed at improving procedures 
for processing drilling permits. (See table 4.) However, only two of 
the five policies were to be implemented immediately. 

Table 4: Policy Changes to Improve and Streamline the Processing of 
Drilling Permits: 

Policy change: Comprehensive strategies to more efficiently and 
effectively process drilling permit applications, including; 
* multiple drilling permit application package with a master drilling 
plan; 
* geographic area development plan; 
* standard operating practice agreement; 
* geographic area NEPA; Purpose: 
* Provide for the simultaneous processing and completion of 
environmental analyses on multiple permit applications with similar 
characteristics; 
* Implement a geographic area development plan approach for an oil and 
gas field or limited area within a field, designed to meet BLM's 
environmental goals while addressing the operator's business needs; 
* Develop standard operating agreements to identify the drilling and 
surface practices operators will use for an entire oil and gas field or 
geologic formation; 
* Provide for NEPA analysis of an entire oil and gas field or a logical 
portion of a field, covering multiple wells, access routes, production 
facilities, utilities, etc; 
Status: Field offices asked to implement policy. 

Policy change: Cultural resources; 
Purpose: Allow, as an alternative to the traditional "linear" approach, 
a "block" survey of cultural resources to cover larger areas, resulting 
in a more thorough survey and greater flexibility in planning; 
Status: Field offices asked to implement policy. 

Policy change: Condition of approval; 
Purpose: Collect information on current use of conditions of approval 
and use this information to develop future guidance on how to ensure 
that conditions of approval are consistent and of high quality; 
Status: Information collected, guidance drafted but not finalized. 

Policy change: Revise Onshore Oil and Gas Order No. 1; 
Purpose: Revise the established procedures for completing drilling 
permits; 
Status: Draft completed but not finalized. 

Policy change: Revise Oil and Gas "Gold Book"; 
Purpose: Initiate a working group to revise and update a brochure 
formally known as Oil and Gas Surface Operating Standards for Oil and 
Gas Development; 
the purpose of updating and revising the brochure is to help industry 
better understand BLM's surface operating standards; 
Status: Draft completed but not finalized. 

Source: BLM. 

[End of table]

Despite the general overall sense of several of the field office staff 
with whom we spoke that these five policy changes collectively have had 
an indirect negative impact on their environmental mitigation 
activities, the direct impact of the two policy changes that have been 
implemented has been mixed. For the first policy change, BLM officials 
from six of the eight field offices stated that some of the strategies 
in the policy on efficiently and effectively processing drilling 
permits have had some positive impacts on their environmental 
mitigation activities. For example, four of the eight field offices 
successfully used the strategy of encouraging companies to bundle 
together multiple drilling permits that share certain characteristics 
and submit them for review together. This strategy is most suitable for 
use in areas of intense drilling activity or where it is certain that 
drilled wells can be put into production immediately. Among other 
benefits, this strategy can encourage companies to plan their drilling 
operations more carefully and help BLM better assess the cumulative 
environmental impacts of drilling activities. 

For the second policy change, BLM officials from the eight field 
offices said the policy on ways to reduce the time needed to identify 
and protect cultural resources has had limited or no impact on their 
environmental mitigation activities. This policy recommended strategies 
for (1) identifying cultural resources early, and (2) using "block" 
surveys to allow all of the components of a proposed project to be 
sited and to help better facilitate the protection of both 
environmental and cultural resources. According to BLM, where block 
surveys are used, the cultural resources of concern can be readily 
identified and companies can have more flexibility to move project 
components around without additional surveys. Staff from four field 
offices said this policy has had a slightly positive impact on their 
environmental mitigation activities. For example, staff from the 
Glenwood Springs field office said using block surveys has helped them 
improve the quality of their environmental analyses. Staff from two 
field offices said this policy has had no impact because they were 
already using these practices before the policy was issued. Staff from 
two other field offices said the policy has had no impact because they 
were having difficulties getting companies to use the strategies. For 
example, staff from one of these field offices said companies were 
hesitant to use block surveys because they believe they incur higher 
costs than if they use more traditional "piecemeal" cultural surveys. 

BLM Policy Changes to Enhance Environmental Mitigation Activities Have 
Had Some Positive Impacts: 

Two of the three policy changes BLM issued to enhance certain 
environmental mitigation activities have had some positive impacts, 
although increases in the permitting workload have limited their 
usefulness. The first policy change, to enhance BLM's inspection and 
enforcement capabilities, has had a positive impact on environmental 
mitigation activities because it resulted in additional resources to 
hire new staff. However, BLM staff in many of the eight field offices 
we visited still do not have the necessary resources to perform their 
required environmental inspections. The second policy change, to 
address the large inventory of idle wells, has had a limited impact on 
environmental mitigation activities by helping somewhat reduce the 
number of idle wells.[Footnote 37] However, increases in the permitting 
workload have resulted in staff having less time to perform idle-well 
reviews and to make sure that their justification for being in idle 
status is valid. The third policy change, on encouraging the use of 
best management practices for oil and gas development, has had no 
impact on environmental mitigation activities because the eight field 
offices we visited were already using these practices. 

Policy Change to Enhance Oil and Gas Inspection Capabilities Has Had a 
Positive Impact on Environmental Mitigation Activities: 

BLM officials from six of the eight field offices we visited said that 
the policy change to enhance their inspection and enforcement 
capabilities has had a positive impact on their environmental 
mitigation activities. In February 2000, BLM initiated efforts to 
revitalize its oil and gas inspection and enforcement program. BLM 
continued this effort by incorporating goals for enhancing inspection 
and enforcement capabilities in its National Energy Policy 
Implementation Plan. For example, two of these goals were to (1) 
increase the resources needed to conduct the required number of 
inspections, and (2) establish a method for ensuring that inspection 
personnel maintain the knowledge, skills, and ability to conduct high- 
quality inspections. 

Six of the eight field offices we visited reported they were able to 
obtain the additional resources to hire 44 new enforcement personnel. 
The number of additional staff hired ranged from 15 in the Farmington, 
New Mexico, field office to 1 in the Glenwood Springs, Colorado, 
office. According to BLM, funding for additional enforcement staff was 
secured through additional appropriations. Although the additional 
staff have been helping field offices deal with their inspection 
workloads, a majority of the field offices indicated that they were 
still understaffed. In addition to hiring more personnel, this policy 
change has also resulted in the development of a National Certification 
Program for BLM's inspection and enforcement staff. All new inspection 
staff are required to complete this course to be certified to conduct 
inspections. However, BLM officials from five of the eight field 
offices stated that the new certification course cannot accommodate all 
of the new inspectors that need to be trained and, as a result, some of 
their inspection personnel have not been able to complete the course 
and are not yet certified. 

Policy Changes to Improve the Management of Idle Wells Have Generally 
Had a Limited Impact on Environmental Mitigation Activities: 

BLM officials from the eight field offices stated that the policy 
changes on reducing the number of idle wells have generally had a 
limited impact on environmental mitigation activities. In May 2000 and 
May 2001, BLM issued policies that established an agencywide program to 
help manage its significant inventory of idle wells and help prevent 
these wells from becoming abandoned, falling into disrepair, causing 
environmental damage, and becoming a liability to the federal 
government. Certain aspects of this effort were incorporated into BLM's 
National Energy Policy Implementation Plan. Specifically, the policy 
changes required each BLM state office that administers an oil and gas 
program to establish a plan that outlines procedures--including roles 
and responsibilities for conducting idle-well reviews--to help ensure 
that every well without a viable future use is properly plugged and 
abandoned. 

Staff from four of the eight field offices indicated that the effect of 
the policies has been hampered by increases in permitting workloads, 
which has not allowed staff time to perform idle-well reviews. In 
contrast, staff from the Miles City, Montana, field office stated that 
the policies have had a moderately significant impact in reducing the 
number of idle wells in their jurisdiction, because they made a 
concentrated effort to contact operators and notify them that all wells 
capable of production must be returned to production or evaluated for 
plugging and abandonment. Similarly, staff from the Carlsbad, New 
Mexico, field office said the policy changes had greatly reduced the 
number of idle wells in their jurisdiction because they successfully 
used it in discussions with operators to convince them to bring wells 
back into production or plug them. They believe this policy has helped 
them plug 450 to 500 wells in the last 3 years. Also, they said the 
increased emphasis on the need to address idle wells has encouraged 
operators to plug wells without BLM directing them to do so. 

Policy Change on Using Best Management Practices Has Had No Impact on 
Environmental Mitigation Activities: 

BLM officials from each of the eight field offices stated that the 
policy change on using best management practices has had no impact on 
their environmental mitigation activities because they were already 
using these practices. In June 2004, BLM issued a policy that required 
all of its field offices to consider incorporating best management 
practices for oil and gas development into drilling permits. In 
particular, this policy encouraged BLM staff to meet with oil and gas 
operators prior to the submission of a drilling permit application to 
plan for development, identify resources to be protected, and discuss 
the use of appropriate best management practices. Among other things, 
those practices included the interim reclamation of well locations and 
access roads soon after the well is put into production; painting all 
new oil and gas facilities a color that best blends with the 
surrounding environment; reusing old roads and pads, if possible; and 
finalizing reclamation of all disturbed areas, including access roads, 
to the original contour or a contour that blends with the surrounding 
topography. 

Since staff from the eight field offices we visited said they were 
already following the best management practices described in the policy 
change to the extent possible, the policy has had no impact on their 
environmental mitigation activities. For example, staff from the 
Rawlins, Wyoming, field office said they have been encouraging 
practices such as interim reclamation and use of appropriate paint 
color for years, and that they meet annually with oil and gas operators 
to discuss and encourage the use of these practices. Also, staff from 
the Buffalo field office said they were using these practices long 
before this policy was issued and have found them to be beneficial in 
mitigating the environmental impacts of oil and gas activity. 

BLM Faces Several Major Challenges in Implementing Its Oil and Gas 
Program: 

BLM state and field office staff and GAO identified several challenges 
that BLM faces to effectively manage its oil and gas program, 
including, but not limited to, (1) managing growing workloads to meet 
all of its responsibilities, (2) using workforce planning and workload- 
related data to effectively identify and communicate its workforce 
needs, and (3) meeting its oil and gas program resource needs in light 
of budget and funding constraints. According to BLM staff, workload 
pressure, which was already at a high level due to the increases in 
permitting activity, has been further exacerbated by increases in 
public challenges[Footnote 38] to BLM's decisions and actions. Further, 
in reviewing their efforts to manage increasing workloads, we found 
that BLM's current workforce planning process does not allow all of 
BLM's staffing needs to be effectively communicated to BLM state and 
headquarters decision makers for use in supporting budget 
justifications and resource allocation decisions and that some data 
needed to quantify workloads are either not tracked or not consistently 
tracked. Moreover, BLM is faced with managing the oil and gas program 
at a time when increases in program resources are greatly outpaced by 
workload activities necessary to manage the rapidly expanding oil and 
gas permitting activity. While many federal agencies are facing tight 
budget constraints, BLM is in an unusual position because it has 
authority, which it has not exercised, to generate additional revenues 
to cover its oil and gas program activities. 

Managing Increasing Oil and Gas Workload: 

As previously discussed, the recent upswing in oil and gas permitting 
activity has made it increasingly difficult for BLM to manage its 
workloads and meet all of its oil and gas program responsibilities. 
According to some of the BLM state and field office staff with whom we 
spoke, these workload management issues have been exacerbated by an 
increase in public challenges to BLM decisions about oil and gas 
development. Generally, such challenges stem from differing views on 
how public lands should be managed, and the perception by some groups 
and individuals that BLM is not adequately protecting the environment 
and is not achieving the appropriate balance among the multiple ways 
land can be used (for example, oil and gas development versus 
recreation). BLM officials from each of the five state offices and each 
of the eight BLM field offices we visited identified public challenges 
to agency decisions as an issue their office faces, with staff from 
four of the five state offices and six of the eight field offices 
anticipating the workload associated with public challenges to 
moderately or greatly increase over the next 5 years. One BLM official 
explained that attending to these challenges consumes the time of 
specialists who would otherwise be processing drilling permits or 
conducting inspections. A few BLM staff also explained that as leasing 
and permitting increasingly encroach upon residential and 
environmentally sensitive areas, public challenges will likely 
increase. 

In addition to affecting BLM's ability to meet its oil and gas program 
responsibilities, heavy workloads have also led to high stress levels 
and low morale among BLM field office staff, according to several BLM 
staff with whom we spoke. Several BLM managers expressed concern over 
staff burnout and that staff turnover could require offices to spend 
more time hiring and training new employees. One field office employee 
substantiated this concern by explaining that a few employees in the 
office, who used to spend their days in the field conducting 
environmental inspections, now spend all of their time in offices 
processing drilling permits and are under pressure to approve the 
permits quickly. Consequently, these staff are considering retiring 
earlier than they had planned to, which would leave the office with a 
severe gap in experience during a critical period of high workload. 

Effectively Identifying and Communicating Workforce Needs: 

When asked to identify actions necessary to minimize the impacts of 
workload management and other challenges their offices face, BLM 
officials consistently cited the need to secure budgets and staff that 
could adequately sustain the increasing workloads associated with oil 
and gas program responsibilities. However, during the course of our 
review, we found that BLM's current workforce planning process, a 
crucial tool in managing workload and associated staff needs, is not 
effective in identifying and communicating all BLM state and field 
office needs to the decision makers at headquarters. In addition, BLM 
does not consistently track certain data types in a way that provides 
an accurate assessment of workloads. Collectively, these shortfalls 
make it difficult for BLM to effectively manage and prioritize 
workloads and staffing decisions and meet the agency's strategic goals 
within constrained budgets. 

BLM's Workforce Planning Process Is Not Effective in Identifying and 
Communicating Needs: 

The way BLM utilizes the workforce planning process limits the ability 
of the agency to use the information gathered to support informed oil 
and gas workload management decisions. As described by the Department 
of the Interior's Workforce Planning Instruction Manual, one of the key 
applications of the workforce planning process is to determine the 
workforce required to meet strategic goals and use this information to 
present a strong justification to appropriators. In making workforce 
requirement determinations through the workforce planning process, it 
is widely recognized that an agency must identify any workforce gaps, 
or the difference between forecasted staff needs and future staff 
supply. Our December 2003 report on this subject specifically states 
that it is essential that agencies determine the skills and 
competencies that are critical to successfully achieving their missions 
and goals, especially as changes in factors such as budget constraints 
change the environment within which the agencies operate.[Footnote 39] 
Once a gap is identified, workforce planning dictates that management 
must prioritize the gap by determining the staff needs that are most 
critical in attaining organizational goals, and then, as our 2003 
report highlights, they can develop strategies tailored to address the 
gaps. 

We found that BLM's current workforce planning process does not 
effectively identify all of BLM's staffing needs, or its workforce gap, 
in large part because BLM headquarters directs state and field offices 
to identify only those needs for which funding is available. While five 
out of the eight field office managers we interviewed reported 
communicating their full staffing needs to their respective state 
offices, regardless of funding expectations, three of the eight field 
office managers acknowledged that they factor the budget into the needs 
they communicate, and therefore forward only a subset of the field 
offices' workforce gap to the state office. For example, in its most 
recent workforce planning document, the Farmington field office 
included only half of the staff needs they identified to us. Similarly, 
the Buffalo field office included only a quarter of its needs in its 
most recent workforce planning document. In addition, officials in the 
Wyoming state BLM office, which oversees three of the eight field 
offices we visited, explained that the needs for their state that they 
reported to us were actually lower than what was needed because they 
directed field office managers in their state to submit needs based on 
flat or restricted budgets. 

Even when actual needs are effectively communicated from the field 
offices to their respective state offices, the state offices are not 
communicating these needs to BLM headquarters, where key budget 
decisions are made. In fact, four out of the five state offices we 
interviewed indicated needing more staff for the oil and gas program 
than was reflected in the workforce planning documents they submitted 
to headquarters. Specifically, these four state offices included in 
their workforce plans less than half of the workforce needs they 
identified during our interviews. Collectively, of the roughly 174 full-
time equivalents (FTE) identified during our interviews, the states 
included only 50 FTEs in their workforce plans. When asked to provide a 
reason for the discrepancy, all four offices cited BLM headquarters' 
direction to only include in their workforce plan the needs that the 
office expects to have funding to support. In one instance, this 
direction resulted in a state office deciding not to forward workforce 
planning documents to headquarters because they were aware that BLM was 
anticipating budget cuts and consequently did not believe there was any 
reason to identify positions that could not be funded. 

Because BLM's workforce planning process does not effectively 
communicate all of the critical workforce needs of its field offices to 
the state offices and ultimately to BLM headquarters, the process does 
not provide agency officials responsible for making key management 
decisions with consistent and readily available information capable of 
supporting budget justifications and resource allocation decisions. In 
fact, one BLM headquarters workforce planning official stated that BLM 
faces a dilemma when assessing needs between programs through the 
current workforce planning process. In order to assess, compare, and 
prioritize needs, BLM decision makers need to have complete and 
consistent information describing the gap among all of the state and 
field offices. While it is reasonable that budget considerations must 
come into play when managing workloads and making workforce decisions, 
workforce planning is designed to help an agency meet its 
organizational goals by assessing all of its needs, which in turn helps 
ensure key management decisions are fully informed. 

Data Needed to Identify Some Workload Needs Are Either Not Tracked or 
Not Consistently Tracked: 

The lack of readily available and consistent data to measure some of 
BLM's oil and gas program activities has limited the agency's ability 
to effectively manage program workloads. Specifically, in our efforts 
to determine the extent to which the recent increase in permitting 
activity has affected BLM's ability to assess and mitigate 
environmental impacts, we attempted to gather data that conveyed 
workloads and the related work accomplishments for environmental 
inspections, idle-well reviews, interim reclamation inspections, and 
final reclamation inspections. While we found that BLM generally had 
suitable data to measure the workloads and progress in attaining 
workload goals for environmental inspections,[Footnote 40] we found 
that data on idle-well reviews, final reclamation inspections, and 
interim reclamation inspections were incomplete or inconsistent, 
incomparable, or not tracked at all, respectively, making it difficult 
to determine for each field office the workloads and related 
accomplishments for these activities. 

According to one of the administrators of the BLM database containing 
idle-well information, the database is already capable of accepting the 
idle-well data that we attempted to gather, which included the number 
of idle wells that needs to be reviewed within a given year and the 
corresponding number of those idle wells actually reviewed. However, he 
explained that field office staff are not consistently entering the 
information into the database because it is not required, and all staff 
are not aware of the capability. Many staff, however, have opted to use 
their own tracking systems. Out of the eight field offices we 
interviewed, six reported relying on their own systems to track idle 
wells. As a result, queries from the database do not provide complete 
information on the workload and related work accomplishments for idle- 
well reviews for each field office. 

The database is also capable of tracking the final reclamation data we 
attempted to gather, including the number of final reclamation 
inspections planned and completed. However, we found that the criteria 
used to determine the number of planned inspections vary among the 
field offices. For example, an official in one field office told us 
that staff in that office used the estimated number of wells that will 
be plugged in the coming year as the planned number of reclamation 
inspections. This is inconsistent with the criteria used in another 
field office, which, according to an official in that office, plans the 
number of reclamation inspections for the upcoming year based on the 
total number of wells in abandoned status. This variation precludes 
senior BLM staff from gathering accurate and comparable data on the 
final reclamation workloads for each field office. 

The database does not, however, have the capacity to track data that 
measure the workload and related accomplishments associated with 
interim reclamation inspections. While the database tracks a number of 
different types of inspections, it does not currently provide a means 
to track interim reclamation inspections as a separate inspection type. 
Consequently, as a senior BLM official explained, BLM is unable to 
separately plan and track workloads for interim reclamation 
inspections. This official indicated that it would be helpful to have 
this capacity in order to better manage these workloads. 

Without consistent and readily available data, BLM state and 
headquarters offices cannot easily determine if field offices are 
completing all of their necessary idle-well reviews--a key action in 
achieving the agency's strategic goals--and they cannot assess the 
interim and final reclamation workloads or their progress in addressing 
these workloads to ensure timely surface restoration. Moreover, without 
these critical data, BLM state and headquarters offices do not have the 
information necessary to make appropriate staffing and budget decisions 
to ensure that these key mitigation and reclamation activities are 
accomplished. 

In addition to mitigation and reclamation data, BLM also lacks 
consistent, readily available data on the extent to which public 
challenges to agency decisions are affecting agency workloads. Our 
November 2004 report on this subject, which sought to determine the 
extent to which BLM gathers and uses public challenges data to manage 
its onshore oil and gas program, found that BLM does not systematically 
gather and use nationwide information on public challenges in a way 
that helps the agency manage the program.[Footnote 41] While a number 
of BLM state and field office staff we interviewed indicated that an 
increase in public challenges has exacerbated their office's oil and 
gas program workloads, our previous review found that the system state 
offices use to collect data on public challenges does not provide 
consistent information that BLM headquarters can use to assess workload 
impacts on its state offices and to make staffing and funding resource 
allocation decisions. Specifically, we reported that the system does 
not provide useful data to headquarters because state offices use the 
system inconsistently (due to a lack of clear guidance from 
headquarters on which data to enter) and because the system tracks 
challenges only during leasing, rather than challenges at all four 
stages of oil and gas development--planning, exploration, leasing, and 
operations. Our November 2004 report recommended that the Secretary of 
the Interior direct BLM to (1) include public challenge data in BLM's 
new agencywide automated system for selling leases, and (2) issue clear 
guidance on how public challenge data should be entered into the new 
system. In its response to our report, BLM stated that it does plan to 
design the system in a way that allows BLM to track public challenge 
data on lease sales. 

Meeting Oil and Gas Program Resource and Staffing Needs in a Period of 
Declining Budgets: 

Lastly, but perhaps most significantly, BLM is presented with the 
challenge of meeting its oil and gas program resource and staffing 
needs in a period when these needs are growing faster than available 
resources. Although the percent change in the number of approved 
drilling permits increased by roughly 255 percent from fiscal years 
1999 through 2004, and the need for several other activities, such as 
inspections, rose along with permit approval increases, the percentage 
changes in BLM's oil and gas management budget and staff levels, as 
measured in authorized FTEs, rose only 64 percent and 21 percent, 
respectively. (See fig. 2.) In addition, according to BLM budget 
justification documents, budget levels and authorized FTEs decreased 
slightly for fiscal year 2005 compared with the previous year, despite 
the expected continuing increase in approved drilling permits and 
corresponding mitigation and reclamation responsibilities. 

Figure 6: Cumulative Percentage Change in Drilling Permits Approved, 
BLM's Oil and Gas Program Budget, and Staff Resources for the Oil and 
Gas Program for Fiscal Years 1999 through 2005: 

[See PDF for image]

[End of figure]

However, as reflected in BLM's fiscal year 2006 Budget Justification, 
the agency is considering steps to improve the disparity between needed 
and available resources. Since it is unlikely, given current and 
anticipated federal fiscal conditions, that BLM will receive budget 
increases commensurate with its oil and gas program workloads, BLM is 
considering other options for generating additional revenues. Under 
FLPMA, BLM has the authority to assess and collect fees for various 
services that it provides.[Footnote 42] FLPMA provides specific 
authority to the Department of the Interior, through BLM, to "establish 
reasonable filing and service fees and reasonable charges"[Footnote 43] 
FLPMA further provides that the funds received (1) must be deposited in 
a special account in the U.S. Treasury and (2) are authorized to be 
appropriated and made available until expended. In December 2000, BLM 
proposed collecting fees associated with processing documents for oil 
and gas, mining, geothermal, and nonenergy activities, but this 
proposal, which was never finalized, did not include collecting fees to 
recover costs associated with issuing oil and gas permits.[Footnote 44] 
According to BLM headquarters officials, BLM has recently decided to 
revisit this proposal and incorporate a fee structure to recover the 
costs of processing drilling permits. In commenting on this report, BLM 
stated that this revised fee collection structure, which BLM plans to 
issue as a final rule, is currently being reviewed by the 
Administration. BLM's fiscal year 2006 Budget Justification includes 
language describing BLM's intent to publish regulations that would 
require industry to pay more of the recoverable costs of processing new 
applications for drilling permits as well as documents associated with 
oil and gas lease transactions. BLM estimates that the cost recovery 
fees would generate a net increase of $7.6 million, which would allow 
the agency to maintain its FTE level and shift a portion of its 
appropriated funds to other program priorities such as ensuring proper 
inspection and enforcement actions, assuming that more of the fees are 
not used to reduce BLM's appropriation. 

During our interviews at BLM state and field offices, staff expressed a 
variety of concerns related to the feasibility of cost recovery 
implementation and its utility in helping offices meet programmatic 
goals and requirements. Among these concerns was the notion that 
industry would be opposed to any cost recovery because many companies 
are already paying for costs for which BLM would otherwise be 
responsible, such as environmental assessments, cultural surveys, and 
wildlife inventories, in addition to lease bonuses, annual lease 
rentals, and royalties. Another concern was that industry might expect 
a reduction in permit approval processing times if cost recovery were 
implemented, even though, in the opinion of a few BLM staff, the 
processing times would likely not change because a large portion the 
time is spent complying with NEPA procedural requirements, which could 
not be shortened. Our discussions with industry groups supported both 
of these concerns. One company official stated that under the current 
BLM permitting structure, any cost recovery measure would be 
unreasonable because the industry already pays for a number of 
expenses, such as those highlighted above. The company official also 
commented that industry might support a cost recovery proposal if the 
fee payment would generate a higher degree of permitting accountability 
within BLM and if industry were guaranteed that a project would be 
permitted within a reasonable time frame (no more than 90 days). 

In discussing the utility of cost recovery, staff in some of the BLM 
state and field offices we visited asserted that the usefulness of cost 
recovery would largely depend upon whether the fee would be an offset 
or an addition to existing appropriations. Some of the staff with whom 
we spoke stated that cost recovery fees would not be helpful if the 
revenues offset a decrease in appropriations, rather than providing 
additional funds to help meet programmatic responsibilities. BLM's cost 
recovery proposal for fiscal year 2005 was to implement a fee structure 
that would generate approximately $3 million in revenues and a 
corresponding $3 million reduction in the Oil and Gas Management 
Program. However, the proposal was not implemented. BLM's cost recovery 
proposal for fiscal year 2006 has addressed the offset concerns 
expressed by the state and field office staff with whom we spoke. Under 
the current proposal, BLM estimates that about $9.7 million in revenue 
would be generated and that $7.6 million of this revenue would be used 
to supplement BLM's budget rather than offset a corresponding decrease 
in their annual appropriation. 

Conclusions: 

Processing drilling permits, while always a priority of BLM's oil and 
gas program, has received renewed emphasis following publication of the 
National Energy Policy Report. The emphasis on processing permits 
reflects, in part, the desire to reduce the country's dependence on 
foreign sources of oil and gas. While an important goal, BLM 
recognizes, and the public demands, that the development of federal oil 
and gas resources be done in an environmentally responsible manner. 
Over the past 6 years, BLM has experienced a significant increase in 
applications for drilling permits and has struggled to deal with this 
increase in permitting activities while carrying out its environmental 
mitigation responsibilities during a time of austere federal budgets. 
In field offices that have experienced the greatest increases in 
applications for drilling permits, staff that once had more time for 
conducting environmental inspections now find their days filled with 
processing drilling permits. 

BLM's ability to respond to increasing workload demands brought on by 
increasing applications for drilling permits is hampered by its 
ineffective workforce planning process, lack of key data on workload 
activities, and lack of resources. Relying on a workforce planning 
process that is not open and transparent is ultimately not particularly 
instructive or useful for informing key management decisions, such as 
staffing and resource allocation determinations. For workforce planning 
to be effective, it must incorporate and reflect actual staffing needs. 
While budgetary considerations are clearly important factors in the 
decision-making process, effective resource allocation decisions can 
only be based on complete information on what staffing gaps exist 
beyond those positions for which funding is available. 

Further, BLM must have reliable and consistent data on the workload 
activities related to oil and gas development--specifically the 
staffing required to carry out environmental mitigation 
responsibilities, in order to accurately reflect this information in 
its management decisions and resource allocations. While BLM's 
centralized database has a wealth of information on BLM's oil and gas 
program activities, without complete and accurate workload data 
covering the entire life cycle of oil and gas wells, BLM will be unable 
to develop comprehensive and useful workforce plans. 

Finally, it is unlikely in the current fiscal environment that BLM will 
be able to obtain adequate appropriations to meet all of its needs. 
Therefore, BLM should pursue every opportunity to generate additional 
revenues that could potentially be used to meet these needs. Currently, 
BLM is not exercising its statutory authority to recover the cost of 
processing applications for drilling permits. Implementing such a fee 
structure, as proposed in BLM's fiscal year 2006 Budget Justification, 
would help BLM obtain the resources it needs to perform environmental 
mitigation duties. 

Recommendations for Executive Action: 

We recommend that the Secretary of the Interior take the following four 
actions. 

To ensure that BLM's staffing needs are accurately reflected in its 
workforce plans and considered by key decision makers, we recommend 
that the Secretary direct BLM to: 

* reflect in its workforce plans the staffing levels needed to perform 
the necessary number of environmental inspections and other mitigation 
activities in addition to those positions that the agency expects to be 
funded;

* determine the data necessary to track workloads associated with idle- 
well reviews and reclamation inspections; and: 

* ensure that the field offices consistently enter the data on idle- 
well reviews and reclamation inspections into BLM's centralized 
database. 

To generate additional revenues that could potentially help BLM better 
respond to its increased workload due to the significant increase in 
oil and gas production on public lands, we recommend that the Secretary 
direct BLM to finalize and implement a fee structure to recover BLM's 
costs for processing applications for drilling permits. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to the Department of the Interior 
for review and comment. Overall, Interior agreed with our 
recommendations and stated that the report generally does much to 
capture the many demands placed on BLM's oil and gas program. 
Specifically regarding the recommendation for fee collection, BLM 
stated a draft fee collection rule is currently being reviewed by the 
Administration. Interior also commented that our report does not 
support the conclusion that BLM policy changes have had a negative 
impact on mitigation activities. We disagree with BLM's comment because 
it mischaracterizes the information presented in our report. Our report 
concludes that the six BLM policy changes that we analyzed had varying 
impacts on mitigation activities. We found, for example, that the 
policies that streamlined the permitting process had an indirect 
negative impact on mitigation activities because the policies also 
increased the emphasis on processing permits, which in turn resulted in 
shifting staff away from their environmental mitigation 
responsibilities. On the other hand, our report points out that BLM 
policies issued to revitalize inspection and enforcement activities 
impacted BLM's mitigation activities positively because they resulted 
in six of the eight field offices obtaining greater resources to hire 
more staff. We found the remaining four policy changes had little or no 
impact on BLM's mitigation activities. 

Interior also commented that we used the term "environmental mitigation 
activities" in this report for a range of activities that are only part 
of the mitigation process. According to Interior, environmental 
mitigation also encompasses other activities, including NEPA analysis, 
conditions of approval in drilling permits, and best management 
practices, and that these methods help BLM moderate its dependence on 
reclamation. We agree that the NEPA analysis performed by BLM during 
the land use planning, leasing, and permitting stages of oil and gas 
development; the conditions of approval placed on oil and gas permits; 
and use of best management practices are critical parts of the 
environmental mitigation framework, along with other activities, such 
as inspections and monitoring. However, the main focus of this report 
was on whether BLM was adequately conducting activities meant to ensure 
that oil and gas operators are complying with the environmental 
mitigation requirements and conditions of their permits. Based on the 
information we gathered, we found that increases in permitting activity 
are compromising the agency's ability to conduct certain mitigation 
activities--such as inspections and idle-well reviews--because staff 
responsibilities are being shifted away from these important activities 
to process permits. 

Interior also provided technical comments and editorial suggestions 
that we have incorporated throughout the report, as appropriate. 

As arranged with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution of this report 
until 30 days after the date of this letter. At that time, we will send 
copies to other interested congressional committees. In addition, we 
will send copies of this report to the Secretary of the Interior and 
the Director of BLM. We will also make copies available at no charge on 
the GAO Web site at [Hyperlink, http://www.gao.gov]. 

If you or your staff have questions about this report, please contact 
me at (202) 512-3841 or [Hyperlink, mittala@gao.gov]. Contact points 
for our Offices of Congressional Relations and Public Affairs may be 
found on the last page of this report. Key contributors to this report 
are listed in the appendix IV. 

Sincerely yours,

Signed by: 

Anu K. Mittal: 
Director, Natural Resources and Environment: 

[End of section]

Appendixes: 

Appendix I: Objectives, Scope, and Methodology: 

We were asked us to address several issues concerning the Bureau of 
Land Management's (BLM) management of its oil and gas programs. 
Specifically, we were asked to determine (1) the extent to which the 
level of oil and gas production on public lands managed by BLM has 
changed over the past 6 years and how these changes have affected, if 
at all, BLM's ability to assess and mitigate environmental impacts; (2) 
what policies BLM has issued in the past 6 years related to 
facilitating and managing oil and gas production and how these policies 
have affected, if at all, BLM's ability to assess and mitigate 
environmental impacts; and (3) what challenges BLM faces in managing 
its oil and gas program. 

To obtain BLM headquarters' insights on all three objectives, we met 
with officials from BLM's Fluid Minerals Group to discuss the agency's 
responsibilities for managing its oil and gas program. Through these 
discussions, we obtained an array of documents and high-level 
perspectives related to all three objectives. We also met with 
officials from BLM's National Energy Office to discuss the agency's 
efforts to implement the National Energy Policy, and spoke with leaders 
and other staff assigned to relevant tasks in BLM's National Energy 
Policy Implementation Plan. Through these efforts, we obtained 
documents and information related to policies issued in recent years, 
as well as high-level perspectives of the impacts of these policies and 
related management challenges. 

To obtain on-the-ground perspectives regarding all three objectives, we 
visited a nonprobability sample of BLM field offices.[Footnote 45] We 
selected field offices that experienced some of the greatest increases 
in oil and gas permitting activity from fiscal years 1999 through 2003 
(at the time of site selection, fiscal year 2004 data were not 
available). Additional criteria for selection included offices with and 
without energy-related time-sensitive plans and offices that vary in 
their ability to meet inspection and enforcement requirements. Using 
these criteria, we selected eight offices to visit: the Glenwood 
Springs field office in Colorado;[Footnote 46] the Miles City field 
office in Montana; the Carlsbad and Farmington field offices in New 
Mexico;[Footnote 47] the Vernal field office in Utah; and the Buffalo, 
Rawlins, and Pinedale field offices in Wyoming. 

We developed a structured interview guide to assist in collecting 
information about how each of the eight field offices manages its oil 
and gas program, including staffing and workload issues. We developed 
another structured interview guide to assist in collecting information 
from officials in each of the five BLM state offices--in Colorado, 
Montana, New Mexico, Utah, and Wyoming--that have oversight authority 
for the eight field offices we visited. The officials we interviewed at 
these state and field offices, including the state and field office 
managers, were responsible for the day-to-day administration of BLM's 
oil and gas program. The structured interview guides were developed 
between May 2004 and September 2004. 

The practical difficulties of administering a structured interview 
guide may introduce errors, commonly referred to as nonsampling errors. 
For example, difficulties may arise in how a particular question is 
interpreted or from differences in experience and information available 
to respondents in answering a question. We took steps in the 
development, administration, and analysis of our structured interview 
guides to minimize these nonsampling errors. We conducted pretests of 
the structured interview guides with two state offices in Montana and 
Utah and four field offices--the Glenwood Springs, Colorado, field 
office; Miles City, Montana, field office; Vernal, Utah, field office; 
and Buffalo, Wyoming, field office--to ensure that (1) the questions 
were clear and unambiguous, (2) terminology was used correctly, and (3) 
the guide was comprehensive and unbiased. We made changes to the 
content and the format of the final structured interview guides based 
on the pretests. The guides were also internally reviewed by one of our 
survey methodologists. To ensure that the information from the 
interview guides was analyzed correctly, 100 percent of the data and 
formulas used were internally and independently checked and verified. 

In addition to BLM officials, we also contacted officials from industry 
groups, environmental and citizen-based groups, and state governments, 
in order to gain outside perspectives on the three objectives. Industry 
group participants included the Colorado Oil and Gas Association, New 
Mexico Oil and Gas Association, and Public Lands Advocacy. 
Environmental and citizen-based group participants included Colorado 
Environmental Coalition, Natural Resources Defense Council, Northern 
Plains Resource Council, Powder River Basin Resource Council, Southern 
Utah Wilderness Alliance, The Wilderness Society, and Wyoming Outdoor 
Council. State government participants included Colorado Department of 
Public Health and Environment's Air Pollution Control Division and 
Water Quality Control Division; Colorado Oil and Gas Conservation 
Commission; Montana Board of Oil and Gas Conservation; Montana 
Department of Environmental Quality Air Resources Management Bureau; 
New Mexico Energy, Minerals, and Natural Resources Department's Oil 
Conservation Division; New Mexico Office of the Governor; Utah Division 
of Oil, Gas, and Mining; Wyoming Department of Environmental Quality's 
Air Quality Division and Water Quality Division; Wyoming Game and Fish 
Department; Wyoming Office of the Governor; and Wyoming Oil and Gas 
Conservation Commission.[Footnote 48]

To respond to the first objective and provide context to the second and 
third objectives, we gathered data on levels of oil and gas production 
on public lands managed by BLM from fiscal year 1999 through fiscal 
year 2004 as well as other workload-related data from staff responsible 
for managing BLM's Automated Fluid Minerals Support System (AFMSS) and 
from individual field office records. Specifically, we gathered 
information on (1) approved drilling permits, (2) environmental 
inspections, (3) temporarily abandoned idle wells, and (4) abandoned 
wells that do not have an approved final abandonment notice. To assess 
the reliability of the data for purposes of our report, we interviewed 
agency officials with knowledge of the data and the AFMSS system; 
reviewed related documentation, including software user guides, the 
data element dictionary, and training manuals; and corroborated the 
data with other sources to the maximum extent possible. We obtained 
responses from a key database official to a series of data reliability 
questions covering issues such as data entry, access, quality control 
procedures, and the accuracy and completeness of the data. Follow-up 
questions were added when necessary. Agency officials knowledgeable 
about AFMSS provided the following views on the accuracy and 
completeness of the data in AFMSS: 

* Approved drilling permit data. An agency official knowledgeable about 
AFMSS commented that approved drilling permit data are generally 
accurate and complete because there are so many checks on those data. 
To corroborate these numbers to the maximum extent possible, we 
presented these numbers to the eight BLM field offices during our site 
visits and asked them to verify or, where applicable, to correct the 
numbers.[Footnote 49] Of these eight field offices, two offices 
confirmed that the numbers were correct, and one of the field offices 
indicated that the data provided by the central AFMSS contact included 
only one of the two counties under the field office's jurisdiction (and 
would have matched if queried correctly). In the other five field 
offices, we found that AFMSS is generally underreporting the data the 
field offices have, in one case by as much as 34.9 percent. As a 
result, the numbers in AFMSS are likely understated. Field offices 
reported two primary reasons for the differences in the numbers: (1) 
the inability to enter data during the Internet shutdowns related to 
the lawsuit concerning Indian trust lands, and (2) the cancellation of 
approved drilling permits in AFMSS when drilling does not occur. As a 
result of the steps taken to assess the reliability of the approved 
drilling permit data, we have determined that the data are adequate to 
provide a conservative, or minimum, indication of the numbers of 
approved drilling permits. 

* Environmental inspections data. An agency official knowledgeable 
about AFMSS also told us that there are many checks on the 
environmental inspections data and, as a result, that they are also 
generally accurate and complete. In our efforts to corroborate these 
data, we asked the five BLM state and eight BLM field offices we 
visited to provide data on the total number of required, planned, and 
completed federal inspections in their jurisdiction for fiscal years 
1999 through 2003.[Footnote 50] We then compared the federal 
environmental inspection completed numbers provided by the field 
offices to numbers from the AFMSS inspection roll-up reports by fiscal 
year for each of the field and state offices. Of the five state 
offices, one office provided numbers that matched and another office 
provided numbers that matched in all but one fiscal year, where AFMSS 
underestimated the numbers the state office reported by 21 percent. In 
the remaining three offices, the numbers matched once data on Indian- 
well inspections were removed. Of the eight field offices, five offices 
provided numbers that matched,[Footnote 51] and one office matched in 
all but one fiscal year, where AFMSS overestimated the numbers the 
field office reported by 22 percent. In another office, the variation 
could not be explained, and AFMSS underestimated the inspections 
between 1 percent and 20 percent across the five years. Finally, in one 
instance, the field office jointly planned inspections with another 
field office, which was not among those we reviewed. Because of this 
joint planning, there was no way to disaggregate the inspections. As a 
result of our work to assess the accuracy and completeness of the 
environmental inspections data, we have determined that the data are 
adequate to provide a conservative, or minimum, indication of the 
number of environmental inspections. 

* Temporarily abandoned idle wells. To determine the total number of 
federal temporarily abandoned (TA) wells, TA wells with both approval 
and expiration dates entered, and TA wells with current approval, we 
asked an AFMSS manager to provide an AFMSS report on temporarily 
abandoned wells (SNT.59). To calculate the number of federal wells in 
TA status with both approval and expiration dates entered, we manually 
counted the entries for the eight field offices. Finally, to determine 
the number of federal TA wells that had current approval, we manually 
counted only those federal TA wells with both an approval and 
expiration date that had not expired. However, interviews with the 
responsible officials in the eight field offices indicated that in six 
of the eight field offices, officials had concerns about operators 
properly reporting TA status to BLM. For example, officials expressed 
concern that operators were misreporting wells in shut-in status (which 
does not require BLM approval) rather than in temporarily abandoned 
status (which does require BLM approval). The effect of this 
mischaracterization would be an underreporting of temporarily abandoned 
wells. As a result of our work to assess the accuracy and completeness 
of the federal TA data, we have determined that the data are adequate 
to provide a conservative, or minimum, indication of the numbers of 
temporarily abandoned wells. 

* Wells in abandoned status. To determine the number of wells in 
abandoned status, we asked our central AFMSS contact to provide AFMSS 
reports on the number of federal wells, by field office, in abandoned 
status in 4-year increments starting in fiscal year 1980. AFMSS was 
fully implemented in all 31 offices in October 1997. Prior to that 
date, there was no automated system that tracked the historical status 
of a well. The previous database, Automated Inspection Records System 
(AIRS), was in place before AFMSS, and any data related to abandoned 
wells were transferred to AFMSS at the system's implementation. A BLM 
official stated that because of the transfer, the total number of wells 
in abandoned status in AFMSS may be underestimated. As a result of our 
work to assess the accuracy and completeness of these data, we have 
determined that the data are adequate to provide a conservative, or 
minimum, indication of the numbers of wells in abandoned status. 

* Wells in idle status. To determine the total number of federal wells 
in idle status, we asked the five BLM state and eight BLM field offices 
we visited to provide data on the total number of federal idle wells 
for fiscal year 1999 through 2003. All five state offices and all eight 
field offices indicated AFMSS as the source of the idle-well data they 
provided. A knowledgeable official indicated that although the primary 
idle-well report in AFMSS is retrieving data in an accurate manner at 
this time, questions have been raised as to the consistency of data 
used for the report. At this time, there is no formal guidance from BLM 
Headquarters making it mandatory to enter that data into AFMSS. Also, 
officials in five of the eight field offices stated they did not 
believe that their current idle-well inventory was accurate. As a 
result of our work to assess the accuracy and completeness of these 
data, we have determined that the data are of uncertain reliability. 
These data, along with information from knowledgeable officials, are 
used in this report to illustrate the problems with the idle-well data. 

In summary--with the exception of the data describing wells in idle 
status--although there are definite limitations associated with the 
data describing approved permits, environmental inspections, 
temporarily abandoned wells, and wells in abandoned status, these data 
are sufficient to provide indications of general trends, given the 
magnitude of the changes occurring over time. 

We conducted our work from February 2004 through April 2005 in 
accordance with generally accepted government auditing standards. 

[End of section]

Appendix II: Resource Monitoring: 

Resource monitoring generally involves assessing cumulative impacts to 
resources over broad geographic areas and can be incorporated into 
resource management plans or environmental impact statements for large- 
scale oil and gas projects. BLM managers stated that it is important to 
assess cumulative impacts to air quality, groundwater, surface water, 
and wildlife and its habitat over broad geographic areas. When issues 
are raised about the extent of impacts or the effectiveness of 
mitigation measures, federal managers may propose to design and 
implement a resource monitoring plan. However, in different geographic 
areas, certain resources are more susceptible to the impacts of oil and 
gas development and, hence, more important to monitor than in other 
areas. For example, in the Powder River Basin of Wyoming and Montana, 
groundwater is very susceptible to the impacts of coal-bed methane gas 
production because production entails the simultaneous pumping of both 
gas and groundwater out of shallow aquifers, lowering the aquifers' 
pressure and decreasing the amount of groundwater that can be used to 
supply homes and ranches. Because of this impact, BLM is developing a 
monitoring plan for groundwater in the Powder River Basin. In contrast, 
the proper extraction of gas in northwestern Colorado does not impact 
shallow groundwater resources to this degree because these shallow 
aquifers are sealed off during drilling and gas is extracted from much 
deeper zones. Hence, BLM resource managers did not believe that a 
detailed groundwater monitoring plan was necessary for the Glenwood 
Springs Field Office. 

The responsibility for monitoring the cumulative impacts of oil and gas 
production on air quality, surface water, groundwater, and wildlife and 
its habitat across broad geographic areas is shared by federal, state, 
and local governments. However, much of the implementation of programs 
to protect and monitor impacts to these resources is carried out by 
state governments.[Footnote 52] While some state agencies conduct broad-
scale efforts to monitor cumulative impacts to air quality, surface 
water, groundwater, and wildlife in the West, these efforts are seldom 
comprehensive enough or involve enough monitoring stations to relate 
changes in baseline conditions directly to impacts from oil and gas 
development. For example, in Colorado, the state Department of Public 
Health and Environment, Air Pollution Control Division has established 
a network of air quality monitoring stations, but these stations are 
more concentrated along the highly populated Front Range, which 
includes the cities of Denver, Boulder, Fort Collins, and Colorado 
Springs, while oil and gas development on federal lands in Colorado is 
more concentrated in the less populated northwestern part of the state, 
where there are fewer monitoring stations. Also, the Clean Water Act 
provides for states to establish a list of waters that are impaired by 
specific pollutants.[Footnote 53] This list contains known waters that 
have been polluted by various contaminants and are to be monitored by 
the states for changes in these pollutants. However, because of the 
diverse sources and types of pollutants within the watersheds that 
these rivers and streams drain, it is difficult under most 
circumstances to attribute changes in the baseline levels of pollutants 
directly to oil and gas development. With respect to groundwater, 
states generally do not have an extensive network of groundwater 
monitoring wells, although groups of monitoring wells have been 
identified in the Powder River Basin of Montana and Wyoming that are 
being used to develop a network for monitoring the impacts of oil and 
gas development. Monitoring the impacts of oil and gas on wildlife is 
even more of a challenge because responsibility for managing the 
wildlife and habitats may be divided among different government 
agencies. 

Of 16 resource management plans and environmental impact statements 
prepared in the eight BLM field offices we visited, only six documents 
called for detailed plans for monitoring the environmental impacts of 
oil and gas development. A BLM official explained that detailed written 
plans for monitoring resources were not included in some of the 
resource management plans because these plans are old, having been 
written in the 1980s--when the need for monitoring was not fully 
appreciated and when the number of oil and gas wells was less than it 
is today. Furthermore, BLM officials explained that they have not 
developed plans for monitoring resources for some of the more recently 
developed resource management plans for various reasons, including that 
BLM staff (1) have concentrated more on processing drilling permits, 
(2) have been diverted from monitoring to address litigation concerns, 
(3) believe monitoring to be more of a responsibility for state 
government, or (4) simply have not tied together a number of disjointed 
monitoring efforts. 

We found detailed written resource monitoring plans for addressing oil 
and gas impacts only in amendments to the resource management plans 
developed for the Buffalo, Wyoming and Miles City, Montana, field 
offices in 2003. In the Pinedale and Rawlins field offices, where the 
resource management plans currently in effect were published in 1988 
and 1990, respectively, monitoring plans are also included in the 
environmental impact statements prepared for major oil and gas 
developments at the Jonah Gas Field and the Continental Divide/ 
Wamsutter Natural Gas Project, and requirements for drafting a 
monitoring plan also exist in the environmental impact statement for 
the Pinedale Anticline. Monitoring plans for Buffalo, Miles City, 
Rawlins, and the Pinedale Anticline require the monitoring of impacts 
to air quality, groundwater, surface water, and wildlife and its 
habitat, while monitoring plans for the Jonah Gas Field and the 
Continental Divide/Wamsutter Project contain monitoring plans only for 
wildlife and its habitat. Table 5 describes the monitoring plans 
associated with the 16 resource management plans and environmental 
impact statements we examined. 

Table 5: Nature of Resource Monitoring Plans That Address Impacts from 
Oil and Gas Development across Broad Geographic Areas: 

BLM field office: Glenwood Springs, Colo; 
Resource management plan or EIS: Oil and Gas Leasing and Development, 
Record of Decision and Resource Management Plan Amendment; 
Date of record of decision: March 1999; 
Nature of resource monitoring plan: No resource monitoring plan 
included in the resource management plan amendment. 

BLM field office: Glenwood Springs, Colo; 
Resource management plan or EIS: Roan Plateau Planning Area, Resource 
Management Plan and draft EIS; 
Date of record of decision: Draft EIS dated November 2004; 
Nature of resource monitoring plan: No resource monitoring plan in 
draft EIS. The final EIS and the Record of Decision are yet to be 
released. 

BLM field office: Miles City, Mont; 
Resource management plan or EIS: Big Dry Resource Management 
Plan/Environmental Impact Statement; 
Date of record of decision: April 1996; 
Nature of resource monitoring plan: No resource monitoring plan for oil 
and gas impacts, but the final EIS calls for some general monitoring of 
big game and nongame species and for surface water quality. 

BLM field office: Miles City, Mont; 
Resource management plan or EIS: Record of Decision for the Final 
Statewide Oil and Gas EIS and Proposed Amendment of the Powder River 
and Billings Resource Management Plans; 
Date of record of decision: April 2003; 
Nature of resource monitoring plan: The Record of Decision calls for 
monitoring plans for air quality, surface water, aquatic resources, 
groundwater, and wildlife and wildlife habitat. However, implementation 
of the plans is dependent upon funding. The Record of Decision 
delegates responsibility for developing monitoring plans to the Powder 
River Basin Interagency Work Groups, which have developed detailed 
plans for surface water, groundwater, aquatics, and wildlife and 
wildlife habit, but not for air quality. 

BLM field office: Carlsbad, N. Mex; 
Resource management plan or EIS: Carlsbad Resource Management Plan; 
Date of record of decision: Resource management plan dated September 
1988; 
Nature of resource monitoring plan: No resource monitoring plan 
included in the resource management plan. 

BLM field office: Farmington, N. Mex; 
Resource management plan or EIS: Farmington Resource Management Plan 
with Record of Decision; 
Date of record of decision: September 2003; 
Nature of resource monitoring plan: No detailed monitoring plan but 
recognizes some limited historical monitoring of wildlife and wildlife 
habitat, which are not tied to oil and gas development. 

BLM field office: Vernal, Utah; 
Resource management plan or EIS: Vernal Field Office Draft Resource 
Management Plan and draft EIS; 
Date of record of decision: Draft resource management plan and draft 
EIS dated January 2005; 
Nature of resource monitoring plan: No resource monitoring plan. 
Replaces the Book Cliffs Resource Management Plan (1985) and the 
Diamond Mountain Resource Management Plan (1993), neither of which had 
resource monitoring plans. The final EIS and the Record of Decision for 
the Vernal Resource Management Plan are yet to be released. 

BLM field office: Vernal, Utah; 
Resource management plan or EIS: Draft EIS for Castle Peak and 
Eightmile Flat Oil and Gas Expansion Project, Inland Resources Inc; 
Date of record of decision: Draft EIS dated September 2004; 
Nature of resource monitoring plan: No resource monitoring plan. 

BLM field office: Buffalo, Wyo; 
Resource management plan or EIS: Record of Decision and Resource 
Management Plan Amendments for the Powder River Basin Oil and Gas 
Project; 
Date of record of decision: April 2003; 
Nature of resource monitoring plan: The Record of Decision calls for 
monitoring plans for air quality, surface water, aquatic resources, 
groundwater, and wildlife and wildlife habitat. However, implementation 
of the plans depends on funding. The Record of Decision delegates 
responsibility for developing monitoring plans to Powder River Basin 
Interagency Work Groups, which have developed detailed plans for 
surface water, aquatics, and wildlife and wildlife habit, but not for 
groundwater and air quality. 

BLM field office: Pinedale, Wyo; 
Resource management plan or EIS: Pinedale Resource Management Plan; 
Date of record of decision: December 1988, with amendments in 2000 for 
oil and gas activity; 
Nature of resource monitoring plan: No resource monitoring plan for oil 
and gas impacts but contains a rangeland monitoring plan. 

BLM field office: Pinedale, Wyo; 
Resource management plan or EIS: Record of Decision for the Pinedale 
Anticline Oil and Gas Exploration and Development Project EIS; 
Date of record of decision: July 2000; 
Nature of resource monitoring plan: The Record of Decision calls for 
oil and gas operators to pay for monitoring impacts to air quality, 
surface water, groundwater, and wildlife and wildlife habitat, and it 
authorized and established the Pinedale Anticline Working Group to 
advise BLM on the creation of monitoring plans for these resources. 
Formal monitoring plans have not yet been drafted, although surface 
water and wildlife monitoring has occurred. 

BLM field office: Pinedale (and Rock Springs), Wyo; 
Resource management plan or EIS: Record of Decision for the Jonah Field 
II Natural Gas Development Project EIS; 
Date of record of decision: April 1998; 
Nature of resource monitoring plan: Includes detailed monitoring plan 
for wildlife. 

BLM field office: Pinedale (and Rock Springs), Wyo; 
Resource management plan or EIS: Draft EIS, Jonah Infill Drilling 
Project, Sublette County, Wyoming; 
Date of record of decision: Draft EIS released February 2005; 
Nature of resource monitoring plan: Calls for establishing in the 
Record of Decision (yet to be released) a Jonah Infill Working Group 
that will oversee the development and implementation of monitoring 
plans for various resources. 

BLM field office: Rawlins (and Rock Springs), Wyo; 
Resource management plan or EIS: Record of Decision for EIS on 
Continental Divide/Wamsutter II Natural Gas Project, Sweetwater and 
Carbon Counties, Wyoming; 
Date of record of decision: May 2000; 
Nature of resource monitoring plan: Includes detailed monitoring plan 
for wildlife. 

BLM field office: Rawlins, Wyo; 
Resource management plan or EIS: Great Divide Resource Area Record of 
Decision and approved resource management plan; 
Date of record of decision: November 1990; 
Nature of resource monitoring plan: No resource monitoring plan. 

BLM field office: Rawlins, Wyo; 
Resource management plan or EIS: Rawlins Resource Management Plan, 
draft EIS; 
Date of record of decision: Draft EIS released December 2004; 
Nature of resource monitoring plan: Calls for generalized monitoring of 
air quality, wildlife, surface water, and groundwater but does not 
include detailed resource monitoring plans. The final EIS and the 
Record of Decision are yet to be released. 

Source: GAO analysis of BLM Resource Management Plans and EISs. 

[End of table]

BLM officials have expressed concerns about obtaining the necessary 
appropriations to implement their monitoring plans. Specifically, BLM 
officials estimate that about $2.3 million per year in additional 
funding is necessary for implementing monitoring programs for wildlife, 
groundwater, and surface water in the Powder River Basin of Wyoming and 
Montana over the next 3 to 10 years. According to the resource 
management plans for the Buffalo and Miles City field offices, 
implementation of these monitoring plans is dependent on the 
availability of federal funding. BLM personnel expressed uncertainty 
over whether BLM would be able to obtain in future years the federal 
funding for its share of the surface water and the wildlife monitoring 
plans. Similarly, a BLM official also reported uncertainty in funding 
future groundwater monitoring in the Powder River Basin. However, BLM 
officials with whom we spoke did report some success in designing and 
implementing resource monitoring plans in those locations where 
industry primarily paid for the costs of monitoring. For example, an 
operator on the Pinedale Anticline has been tracking the movements of 
mule deer through radio collars in an effort to determine the impacts 
of wintertime drilling, and a Montana operator of coal-bed methane 
wells paid for monitoring the impacts of discharging produced water 
into the Tongue River. 

In an effort to place more emphasis on monitoring, BLM announced in 
January 2005 that it is developing a National Monitoring Strategy. BLM 
cited the need to develop this strategy because it had previously 
identified monitoring as a weakness in its restoration activities and 
because the Office of Management and Budget identified the need for 
improving BLM's baseline data collection, resource monitoring, and 
effectiveness monitoring. BLM intends to develop four work groups to 
identify issues at the national, regional, and local levels related to 
land health, assess whether current data collection efforts address 
these issues, identify other data sources that may address land health, 
and determine what else needs to be done to provide land health 
information. One of the work groups will be tasked with addressing 
energy issues at the regional level, and thus could address monitoring 
the impacts of oil and gas development on critical resources. 

[End of section]

Appendix III: Comments from the Department of the Interior: 

United States Department of the Interior:
OFFICE OF THE SECRETARY: 
Washington, D.C. 20240: 

MAY 26 2005: 

Ms. Anu Mittal:
Director, Natural Resources and Environment: 
Government Accountability Office:
441 G Street, N.W.: 
Washington, DC 20548-0001: 

Dear Ms. Mittal: 

Thank you for the opportunity to review the U.S. Government 
Accountability Office (GAO) Draft Audit Report, OIL AND GAS 
DEVELOPMENT, Increased Permitting Activity Has Lessened BLM's Ability 
to Meet Its Environmental Protection Responsibilities (GAO-05-418). 

The draft report generally does much to capture the myriad demands on 
the Oil and Gas Program of the Bureau of Land Management (BLM). It 
needs to be repeated that the Administration is committed to managing 
the BLM lands for multiple use and sustained yield, in accordance with 
the requirements of the Federal Land Policy and Management Act. This 
includes providing for orderly energy development in an environmentally 
responsive manner. Permit demand, however, is not driven by the 2001 
National Energy Policy - demand for energy from public lands is driven 
by American consumers and high prices. The Administration is working to 
respond to that demand and the National Energy Policy Report provides a 
comprehensive strategy to address it. 

Our general and specific comments follow for you to consider 
incorporating into the final report. 

Recommendation #1: Reflect in its workforce plans the staffing levels 
needed to perform the necessary number of environmental inspections and 
other mitigation activities in addition to those positions that the 
agency expects to be funded. 

The BLM annually conducts workforce planning for all its programs at 
the State and Field Office level. During the next round of workforce 
plans and relevant to the number of environmental inspections and other 
mitigation activities, the field offices will be instructed to provide 
workforce needs with and without funding limitations so that the BLM 
management can ascertain the level of unmet demand for these types of 
activity. As you noted on page 34, BLM is working to hire and train 
additional enforcement personnel and to develop a National Monitoring 
Strategy. 

Recommendation #2: Determine the data necessary to track workloads 
associated with idle well reviews and reclamation inspections. 

The Automated Fluid Minerals Support System (AFMSS) data base currently 
has data fields for idle wells and final reclamation inspections, but 
not for intermediate reclamation inspections. 

The BLM has evaluated AFMSS and has identified that the addition of an 
inspection type field will allow us to track intermediate reclamation 
inspections. 

Recommendation #3: Ensure that field offices consistently enter the 
data on idle well reviews and reclamation inspections into BLM's 
centralized data base. 

Once the new inspection type under Recommendation #2 has been 
developed, the BLM will issue guidance on the data entry of idle well 
reviews and intermediate and final reclamation inspections. 

Recommendation #4: To generate additional revenues that could 
potentially help BLM better respond to its increased workload due to 
the significant increase in oil and gas production on public lands, we 
recommend that the Secretary direct BLM to finalize and implement a fee 
structure to recover BLM's costs for processing applications for 
drilling permits. 

Fees to cover Applications for a Permit to Drill (APD) were not 
included in the 2000 cost recovery proposal; 
however, the BLM has decided to include APD fees in its current 
proposed cost recovery rule. This draft rule is being reviewed by the 
Office of Management and Budget. The BLM proposes to phase in the APD 
fees, beginning with a fixed fee. The BLM would implement any fee 
increases through future rulemaking. Comment will be invited on whether 
this initial fixed fee is appropriate, or whether it should be higher 
or lower. 

The BLM has the following specific comments: 

The number of APDs approved in Fiscal Year 1999 should be 1,759 (not 
1803) and for FY 2004, 6,452 (not 6,399). [GAO Highlights, page 5 and 
page 18]. The percentage of APDs for the five states should be adjusted 
to 89 percent (page 5). 

--p. 9, lines 17 and 19: In the discussion of the EPCA report, insert 
"resources and" before the word "reserves" for more appropriate use of 
technical terms. 

--p. 13: The Secretary is responsible to ensure oil and gas operations 
are in compliance with all laws and regulations governing Federal and 
Indian oil and gas operations: 1) to protect the surface and subsurface 
environment and public health and safety, 2) to ensure that the 
public's oil and gas resources are properly developed in a manner that 
maximizes recovery while minimizing waste, and 3) to ensure production 
from Federal and Indian lands is properly handled, measured and 
reported correctly. As noted in Appendix 2,_p 58, however, much of the 
implementation permitting and monitoring for environmental impacts is 
carried out by state governments operating via delegation from the 
Environmental Protection Agency. 

--p. 16, line 12: Change to: "The BLM policy defines shut-in wells as 
oil and gas wells which are physically and mechanically capable of 
producing oil and/or gas in paying quantities."

--p. 17: It would be rare for a lease to contain "specific terms" of 
reclamation. Those are set forth in an onshore order, in conditions of 
approval on drilling permits, and in the review of the abandonment 
plans submitted when the operator is preparing to commence abandonment 
(i.e. reclamation). 

--p. 27: The report does not support its conclusion that BLM policy 
changes have had a negative impact on mitigation activities. GAO 
suggests that since April 2003, "policy changes to improve and 
streamline processing of drilling permits has [sic] indirectly had a 
negative impact on environmental mitigation activities. . .". It is 
unclear, however, how this reconciles with comments on p. 33, that 
correctly note a streamlining strategy to bundle permit applications 
"can encourage companies to plan their drilling operations more 
carefully and help BLM better assess the cumulative environmental 
impacts of drilling activities." Nor does it seem consistent with BLM 
field office comments that, "where block surveys are used, the cultural 
resources of concern can be readily identified and companies can have 
more flexibility to move project components around without additional 
surveys." (p. 33). Half of the offices felt this improved their 
environmental mitigation activities and one said it improved the 
quality of environmental analysis. 

--p. 35: While various field offices have been and are using best 
management practices (BMPs), the BLM intends to build on lessons 
learned in those offices, and to expand the use of them to other field 
offices. 

Overall comment - GAO uses the term "environmental mitigation 
activities" (p. 18) for a range of activities, such as monitoring and 
enforcement, that is only a part of mitigation. Environmental 
mitigation encompasses proactive activities, including NEPA analysis, 
APD conditions of approval, and best management practices. Using these 
methods, the BLM moderates its dependence on reclamation. It may be 
true that increased oil and gas activity means that the BLM needs more 
resources to keep up with all of its responsibilities, and the 
President's Budget proposes to do this through increased cost 
recoveries, but that's not the same as saying that "increased 
permitting has lessened BLM's ability to meet its environmental 
protection responsibilities" (GAO-05-418). 

Again, thank you for the opportunity to review and comment on this 
report. If you have any questions, please contact Tim Spisak, Group 
Manager, Fluid Mineral Group, on 202-452-5061, or Andrea Nygren, BLM 
Audit Liaison Officer, on 202-452-5153. 

Sincerely,

Signed for: 

Rebecca W. Watson: 
Assistant Secretary: 
Land and Minerals Management: 

The following are GAO's comments on the Department of the Interior's 
letter dated May 26, 2005. See the "agency comments and our evaluation" 
section for additional responses to BLM's comments. 

GAO Comments: 

1. We asked BLM to provide documentation for the revised drilling 
permit numbers for fiscal years 1999 and 2004. Because the AFMSS 
database was unavailable due to security concerns, we could not 
establish why our previous permit numbers differed from the revised 
numbers. As a result, we did not make any changes. However, we 
clarified that the permit numbers in figure 5 are as of April 2004. 

2. We asked BLM for support for the sentence describing the Secretary 
of Interior's responsibilities for managing oil and gas operations. 
Because the support provided was incomplete, we did not make any 
changes. However, we do describe BLM's responsibilities for mitigating 
the environmental impacts of oil and gas production in the report. 

[End of section]

Appendix IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Anu K. Mittal, (202) 512-3841: 

Staff Acknowledgments: 

In addition to those named above, Ronald Belak, Glenn C. Fischer, Laura 
Gatz, Jeff Malcolm, and Lisa Turner made key contributions to this 
report. Also contributing to the report were Christine Bonham, John 
Delicath, Doreen Feldman, Julian Klazkin, Rob Martin, Mary Mohiyuddin, 
Marmar Nadji, Judy Pagano, and Lisa Shames. 

(360430): 

FOOTNOTES

[1] The Mineral Leasing Act of 1920 (Pub. L. No. 66-146 (1920)), as 
amended, and the Mineral Leasing Act for Acquired Lands (Pub. L. No. 80-
382 (1947)), as amended, provide the legislative authority for federal 
oil and gas leasing. BLM's oil and gas leasing regulations are located 
at 43 C.F.R. pt. 3100. BLM cannot issue leases for National Forest 
System lands over the objection of the Forest Service. 43 C.F.R. § 
3101.7-1(c). Generally, for lands administered by other agencies, BLM 
must either obtain the consent of (for acquired lands), or consult with 
(for public domain lands), the agency responsible. 43 C.F.R. § 3101.7- 
1 (a), (b). 

[2] Pub. L. No. 94-579 (1976), 90 Stat. 2743, codified at 43 U.S.C. § 
1701 et seq. 

[3] 43 U.S.C. § 1701(a)(7). 

[4] 43 U.S.C. § 1702(c). 

[5] 43 U.S.C. § 1702(h). 

[6] When we refer to BLM's environmental protection responsibilities, 
we are including BLM's responsibilities to protect the land as well as 
other resources, such as air, water, vegetation, fish, and wildlife. 

[7] Pub. L. No. 97-451(1983), 96 Stat. 2447, codified at 30 U.S.C. § 
1701 et seq. 

[8] Results from nonprobability samples cannot be used to make 
inferences about a population, because in a nonprobability sample, some 
elements of the population being studied have no chance or an unknown 
chance of being selected as part of the sample. 

[9] The Glenwood Springs, Colorado, field office shares oil and gas 
program staff with the Grand Junction, Colorado, field office. The 
information we collected represents the contributions of staff from 
both offices to managing oil and gas activities that occur within the 
jurisdiction of the Glenwood Springs, Colorado, field office. 

[10] The Carlsbad, New Mexico, field office shares oil and gas program 
staff with the Roswell, New Mexico, field office and the Hobbs, New 
Mexico, field station. The information we collected represents the 
contributions of staff from all of these offices in managing oil and 
gas activities that occur within the jurisdiction of the Carlsbad, New 
Mexico, field office. 

[11] The jurisdictions for the New Mexico and Montana state offices 
include some neighboring states. The New Mexico state office also has 
jurisdiction over Kansas, Oklahoma, and Texas. The Montana state office 
also has jurisdiction over North Dakota and South Dakota. The data 
presented in this report for the New Mexico and Montana state offices 
include data for all of the states under their jurisdiction. 

[12] Data as reported from BLM's Automated Fluid Minerals Support 
System. 

[13] Data as reported from BLM's Automated Fluid Minerals Support 
System. 

[14] Data as reported from BLM's Automated Fluid Minerals Support 
System and corrected by BLM field office officials. For additional 
information, please see appendix I. 

[15] The New York Mercantile Exchange futures contract is a widely used 
benchmark for buying and selling crude oil. This contract is an 
agreement through the New York Mercantile Exchange for a future 
purchase or sale of 1,000 barrels of sweet crude oil, similar in 
quality to West Texas Intermediate oil. These prices represent the 
contract for delivery during the next month. 

[16] Pub. L. No. 106-469 § 604 (2000), 114 Stat. 2029, 2041-42, 
codified at 42 U.S.C. § 6217. 

[17] Departments of the Interior, Agriculture and Energy, Scientific 
Inventory of Onshore Federal Lands' Oil and Gas Resources and Reserves 
and the Extent and Nature of Restrictions or Impediments to Their 
Development: The Paradox/San Juan, Uinta/Piceance, Greater Green River 
and Powder River Basins and the Montana Thrust Belt (January 2003). 
This report is a portion of the inventory of onshore oil and gas 
resources underlying federal lands required by section 604 of the 
Energy Act of 2000. The inventory will be expanded in the future to 
include additional federal lands and resources. 

[18] 43 C.F.R. § 3101.1-3. 

[19] 43 C.F.R. § 3162.3-1. 

[20] 42 U.S.C. § 4332(2)(C)(i). 

[21] 40 C.F.R. §§1501.3, 1508.9. 

[22] 43 C.F.R. §§ 1601.0-6, 3162.5-1(a). 

[23] Pub. L. No. 97-451 §§ 101, 108, codified at 30 U.S.C. §§ 1711, 
1718. 

[24] Another mechanism BLM employs to ensure environmental compliance 
is through environmental compliance inspections conducted by a 
petroleum engineer technician. This type of inspection is completed as 
a component of another type of inspection, such as production or 
drilling. If a petroleum engineer technician determines a possible 
environmental violation, the technician will then notify the natural 
resources staff responsible for its resolution. 

[25] In general, low-priority wells are supposed to be inspected every 
three years. 

[26] 43 C.F.R. § 3162.3-4(c). 

[27] Justification to support continued idle status may include, for 
example, the use of the well for injection to recover additional oil or 
gas or for subsurface disposal of produced water. 43 C.F.R. § 3162.3- 
4(a). 

[28] This report focuses on the impacts of increased oil and gas 
permitting activity that occurred for fiscal years 1999 through 2004. 
While there is evidence from prior studies that BLM did not meet its 
goals for certain program activities before fiscal year 1999, we did 
not attempt to make comparisons in this report between activity before 
fiscal year 1999 and activity occurring for fiscal years 1999 through 
2004. These reports include Department of the Interior, Office of 
Inspector General, Audit Report: Inspection and Enforcement Program and 
Selected Related Activities, Bureau of Land Management, Report No. 196- 
I-1267 (Washington, D.C., September 1996); Department of the Interior, 
Bureau of Land Management, Potential Government Liability for Plugging 
Oil and Gas Wells (Washington, D.C., November 1990); and Department of 
the Interior, Office of Inspector General, Audit Report: Inspection and 
Enforcement Program and Selected Related Activities, Bureau of Land 
Management, Report No. 90-18 (Washington, D.C., November 1989). 

[29] H.R. Conf. Rep. No. 108-330, at 1314 (2003). 

[30] We did not include environmental inspection goals for wells on 
Indian lands. 

[31] The Glenwood Springs, Colorado, field office jointly plans and 
conducts its inspections with the Grand Junction, Colorado, field 
office. As a result, we were unable to desegregate the inspection 
numbers for the Glenwood Springs field office. For additional 
information, see appendix I. 

[32] In fiscal years 2001 and 2002 the Pinedale, Wyoming, field office 
set a goal of zero for its required environmental inspections. However, 
in both years, they did conduct environmental inspections. 

[33] Other reasons why BLM field offices had not developed resource 
monitoring plans included the following: (1) key staff have been 
diverted from monitoring to address litigation concerns; (2) they 
believe monitoring to be more of a responsibility for state government; 
or (3) they simply have not tied together a number of disjointed 
monitoring efforts. 

[34] Knowledgeable officials have voiced concerns about the consistency 
with which data describing idle wells is collected. For more 
information, please see appendix I. 

[35] In some cases, BLM allows operators to not submit a Final 
Abandonment Notice, but retain the site in order to redrill a new well 
at a future date. However, BLM still requires the operator to reclaim 
the site. 

[36] The February 2002 policy indicated the other 11 resource 
management plans were designated time sensitive because they respond to 
nationally significant lawsuits or have legislatively mandated time 
frames. 

[37] As mentioned previously in this report, some idle wells have been 
brought back into production because of the increase in oil and gas 
prices. 

[38] During each of the four stages of oil and gas development, the 
public can make one or more of the following types of challenges to BLM 
decisions: protests, requests for state director review, appeals, and 
litigation. Through protests and requests for state director review, 
challengers essentially ask BLM to reconsider a decision. An appeal is 
a request to the Interior Board of Land Appeals--a body of 
administrative judges within the Department of Interior--to review a 
BLM decision. In this report, we use the term "litigation" to mean a 
challenge to an agency or departmental decision that is brought in 
federal court. 

[39] GAO, Human Capital: Key Principles for Effective Strategic 
Workforce Planning, GAO-04-39 (Washington, D.C.: Dec. 11, 2003). 

[40] Environmental inspections take place at different stages of well 
activity, including prior to drilling, during production, and after 
abandonment/reclamation. According to a BLM official, the abandonment/ 
reclamation inspections are inspections where a natural resource 
specialist visits a site to inspect the progress of final reclamation. 

[41] GAO, Oil and Gas Development: Challenges to Agency Decisions and 
Opportunities for BLM to Standardize Data Collection, GAO-05-124 
(Washington, D.C.: Nov. 30, 2004). 

[42] BLM also has authority under the Independent Offices Appropriation 
Act of 1952 (also referred to as IOAA or the user charge statute), 
which provides generally for cost recovery by federal agencies. Under 
IOAA, funds collected are deposited into the general fund of the 
Treasury. 

[43] 43 U.S.C. § 1734(a). 

[44] "Oil and Gas Leasing; Geothermal Resources Leasing; Coal 
Management; Management of Solid Minerals Other than Coal; Mineral 
Materials Disposal; and Mining Claims Under the General Mining Laws," 
65 Fed. Reg. 78440 (2000). 

[45] Results from nonprobability samples cannot be used to make 
inferences about a population, because in a nonprobability sample, some 
elements of the population being studied have no chance or an unknown 
chance of being selected as part of the sample. 

[46] The Glenwood Springs, Colorado, office shares oil and gas program 
staff with the Grand Junction, Colorado, field office. The information 
we collected represents the contributions of staff from both offices to 
managing oil and gas activities that occur within the jurisdiction of 
the Glenwood Springs office. 

[47] The Carlsbad, New Mexico, office shares oil and gas program staff 
with the Roswell, New Mexico, field office and the Hobbs, New Mexico, 
field station. The information we collected represents the 
contributions of staff from all of these offices to managing oil and 
gas activities that occur within the jurisdiction of the Carlsbad 
office. 

[48] We also attempted to contact representatives of other state 
agencies/divisions in Utah, five other industry groups, and one other 
environmental group, but were unable to obtain responses from these 
contacts. 

[49] Field offices only verified/corrected approved drilling permit 
data for fiscal years 1999 through 2003. Fiscal year 2004 data were not 
available at the time of our site visits. As a result, the numbers 
presented in our report are those verified by the field offices for 
fiscal years 1999 through 2003, and those provided by our central AFMSS 
contact for 2004. 

[50] Data for fiscal year 2004 was only provided by the central AFMSS 
contact because GAO's field and state office site visits took place 
prior to the end of that reporting period. 

[51] Data for three of the field offices matched after they were 
adjusted--Indian-well inspection records were removed from two, and 
another jurisdiction's inspections were removed from the third. 

[52] For example, under the Clean Air Act, the Environmental Protection 
Agency (EPA) sets national ambient air quality standards, and states 
are responsible for achieving these standards. Under the Clean Water 
Act, EPA may approve state pollution discharge permit programs, 
authorizing states to carry out duties that would otherwise be 
performed by EPA. 

[53] 33 U.S.C. § 1313 (d). 

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