Followup on Actions Taken in Response to GAO Recommendations Concerning Interior's March 1979 Shut-In and Flaring Wells Report

EMD-81-23: Published: Nov 25, 1980. Publicly Released: Nov 25, 1980.

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Under the Outer Continental Shelf (OCS) Lands Act Amendments of 1978, the Secretary of the Interior is required to prepare an annual report listing all shut-in oil and gas wells and wells flaring natural gas on OCS leases. In June 1980, GAO was advised by Interior and U.S. Geological Survey officials that the Department's fiscal year 1979 shut-in and flaring well report had been drafted but was not yet issued. The report was issued in October 1980; however, prior to that date, GAO reviewed several areas of continuing weaknesses in the methodology used by the Department in allowing wells to be shut-in or to flare natural gas. GAO was also concerned about the Interior's 6-month delay in issuing the fiscal 1979 report and about questions raised by Department officials regarding whether the report fulfills congressional intent.

In its review, GAO found that the Survey's monitoring efforts regarding shut-in well problems and restoration dates do not provide an independent assessment or periodic questioning of the validity of operator-reported conditions and estimates. In the area of natural gas flaring, the Survey's monitoring efforts are unsystematic and undocumented. The Survey needs more information to decide whether to approve operators' requests for long-term gas flaring, and to determine whether unreported emergency flaring is occuring. The Survey also needs to follow up to ensure that operators suspected of excessive flaring have actually ceased such flaring. The Interior has not complied with its legislated mandate because the report was not issued in the required timeframe, and the actions taken to prepare it leave much to be desired. Based on the manner in which shut-in and flaring data are gathered, monitored, and reported by the Department, the oversight needs of Congress are not being met. In fact, some of the Survey officials charged with the responsibility for preparing the annual report have expressed uncertainty as to the intent and usefulness of the report.

Recommendation for Executive Action

  1. Status:

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of the Interior should review the Department's approach to preparing the annual report on OCS shut-in and flaring wells. If, after such review, the Secretary believes that the annual report does not result in beneficial results at least commensurate with the cost of preparing it, the Department should seek legislative relief from the annual reporting requirement. Meanwhile, as long as the law remains in effect, the Secretary should instruct the Director of the U.S. Geological Survey to: (1) review supporting data used by OCS operators so as to assess the reasonableness and validity of such decisions; (2) obtain justification from operators who continually extend planned restoration dates; (3) require operators desiring approval of long-term gas flaring to submit all of the information required by OCS Order No. 11 as necessary for deciding whether to grant such approval; (4) establish a more systematic and documented approach to monitoring long-term approvals for compliance with approval conditions; (5) follow up on operators suspected of excessive flaring to ensure that such flaring ceases; and (6) implement a followup program to ensure that "no future utility" wells that can be plugged and abandoned are reviewed and, where appropriate, plugged and abandoned, or modify existing regulations if it is believed enforcement of the regulations is inappropriate.

    Agency Affected: Department of the Interior


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