Mineral Revenues: Implementation of the Federal Onshore Oil and Gas Leasing Reform Act of 1987
RCED-89-108
Published: May 08, 1989. Publicly Released: May 31, 1989.
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Highlights
In response to a congressional request, GAO reviewed the Bureau of Land Management's (BLM) implementation of the Federal Onshore Oil and Gas Leasing Reform Act, focusing on: (1) BLM development of implementing regulations; (2) how BLM conducted oil and gas lease test sales, and the sales' results; and (3) the effect of royalty rate changes for competitively issued oil and gas leases.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| Congress may wish to consider authorizing the Secretary of the Interior to conduct additional oil and gas lease test sales specifically to evaluate the effects of making competitive and noncompetitive lease terms the same (for example, either 5 years or 10 years). |
Closed – Not Implemented
|
The House Subcommittee on Mining's staff director told GAO that test sales will not be sought. The Subcommittee chairman introduced a bill to make all lease terms the same, at 5 years, on October 31, 1989; however, no action was taken on the bill, and the matter is not currently a priority for the subcommittee. |
| Congress may wish to consider authorizing the Secretary of the Interior to conduct additional oil and gas lease test sales specifically to evaluate the effects of making minimum bonus bids the same for all leases. |
Closed – Not Implemented
|
The House Subcommittee on Mining's staff director told GAO that test sales will not be sought. |
| Congress may wish to consider authorizing the Secretary of the Interior to conduct additional oil and gas lease test sales specifically to evaluate the effects of using sealed bidding to auction all leases. |
Closed – Not Implemented
|
The House Subcommittee on Mining's staff director stated that test sales will not be sought. |
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Interior | To improve BLM internal controls over the federal onshore oil and gas leasing system, the Secretary of the Interior should direct the Director, BLM, to require that bidders register before auctions. |
Closed – Implemented
Individual BLM field offices have discretion to implement this recommendation. Some have and some have not implemented action. There will be no directive from BLM headquarters.
|
| Department of the Interior | To improve BLM internal controls over the federal onshore oil and gas leasing system, the Secretary of the Interior should direct the Director, BLM, to require that winning bidders deposit 20 percent of their bonus bids or $2 per acre, whichever is greater, at the auctions. |
Closed – Not Implemented
Interior's formal response states that it disagrees with the recommendation.
|
| Department of the Interior | To improve BLM internal controls over the federal onshore oil and gas leasing system, the Secretary of the Interior should direct the Director, BLM, to enforce the regulatory requirement for full payment on competitive leases within 10 days of the auctions. |
Closed – Implemented
BLM headquarters directed the field offices to require full payment within 10 days.
|
| Department of the Interior | To improve BLM internal controls over federal onshore oil and gas leasing system, the Secretary of the Interior should direct the Director, BLM, to formalize procedures for implementing the leasing system, such as when to accept noncompetitive lease applications after auctions. |
Closed – Implemented
Interior constantly revises its leasing requirements. GAO cannot document which changes are directly due to the recommendation.
|
| Department of the Interior | The Secretary of the Interior should direct the Director, BLM, to delete the nomination option from its regulations governing federal onshore oil and gas leasing and offer all leases at auctions. |
Closed – Not Implemented
Interior's formal response states that it sees no advantage to implementing the recommendation. The BLM Chief told GAO that although it is not currently using the nomination option, it does not intend to delete it from its procedures.
|
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