Issues Surrounding Continuation of the Noncompetitive Oil and Gas Lottery System

RCED-85-88: Published: Apr 4, 1985. Publicly Released: Apr 24, 1985.

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Pursuant to a congressional request, GAO reviewed problems with the Department of the Interior's administration of the oil and gas leasing system, and its ability to correct them.

GAO found that: (1) procedures for screening lands prior to leasing were weak; (2) geologic data were often not analyzed in setting boundaries of known geologic structures (KGS); (3) KGS were not established in some surrounding areas because of inadequate coordination, communication, organizational difficulties, and administrative errors. GAO also found that: (1) 14 leases might have been competitive had KGS been established; (2) while the occurrence of questionable lease issuances is not high, the monetary effects of such issuances can be significant; and (3) in the case of one major deposit, a competitive sale could have realized substantially more revenues. GAO believes that, while the Bureau of Land Management procedures should reduce the likelihood of improper lease issuances, legislation might be desirable to clarify current congressional expectations for oil and gas leasing.

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