Minerals Management:

Costs for Onshore Minerals Leasing Programs in Three States

RCED-97-31: Published: Feb 27, 1997. Publicly Released: Mar 7, 1997.

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Pursuant to a congressional request, GAO reviewed whether the costs borne by Wyoming, New Mexico, and California for managing federal minerals were comparable to these states' own programs, focusing on: (1) how much the three states paid to the federal government for managing minerals on federal lands within their boundaries; (2) the costs to the three states for their own minerals management programs; (3) a comparison of these federal and state program costs; and (4) the activities that are associated with the federal and state programs.

GAO found that: (1) in fiscal year (FY) 1996, Wyoming, New Mexico, and California received almost $358 million in revenues from federal onshore leasable minerals and they will pay almost $14.6 million in FY 1997 for a portion of the federal government's FY 1996 onshore mineral leasing program; (2) Wyoming's share of the $14.6 million is $7.02 million, New Mexico's is $5.94 million, and California's is $1.65 million; (3) these amounts were computed on the basis of allocations of the federal appropriations for all activities conducted by the Forest Service, the Bureau of Land Management, and the Minerals Management Service related to managing federal onshore leasable minerals; (4) onshore mineral development on Wyoming's, New Mexico's, and California's state-owned land generated combined royalties, rents, and bonuses of $148 million in FY 1996; (5) the states' combined costs for managing onshore mineral development, which includes development on state and private lands, totalled about $19 million; (6) specifically, the costs for Wyoming's minerals management program were $2.4 million in FY 1996, while New Mexico's were $7.2 million and California's costs were $9.9 million; (7) because of differences between federal and state programs, the states' costs for these programs cannot be meaningfully compared; (8) federal decisions about mineral leasing must involve land-use planning and environmental analysis; (9) the three states GAO reviewed do not have similar land-use planning processes; (10) furthermore, neither Wyoming nor New Mexico requires an environmental analysis similar to that performed by the federal government; (11) according to California State Lands Commission officials, California laws require an environmental analysis and the protection of state lands; (12) other differences are state-specific and can be attributed to a program's size and regulatory scope and number of mineral operations managed; and (13) for example, California's oil and gas conservation agency devotes about 95 percent of its resources to managing mineral development on privately owned land and other lands not owned by the state or federal government.

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