Recommendation: The Director of BLM should evaluate its temporary royalty relief program, including the extent to which the policy met BLM's objectives—conserving oil and gas resources from becoming unrecoverable—and likely costs, such as forgone revenues—to inform any royalty relief decisions it may make in the future under the ongoing regulatory authority. (Recommendation 1)

Agency: Department of the Interior: Bureau of Land Management
Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: The Director of BLM should update BLM's 1995 royalty handbook to provide specific, consistent, and transparent policies and procedures for royalty relief. (Recommendation 2)

Agency: Department of the Interior: Bureau of Land Management
Status: Open

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Recommendation: The Acting Director of BLM should develop a documented process to consistently implement the APD prioritization process outlined in Instruction Memorandum 2013-104 at all field offices. (Recommendation 1)

Agency: Department of the Interior: Bureau of Land Management
Status: Open

Comments: The Department of the Interior, on behalf of BLM, did not concur with this recommendation. As of August 2020, BLM has not taken steps to address this recommendation.

Recommendation: The Acting Director of BLM should instruct agency staff to document formal change management processes for the rollout of future AFMSS II modules consistent with leading software development practices. (Recommendation 2)

Agency: Department of the Interior: Bureau of Land Management
Status: Open

Comments: The Department of the Interior, on behalf of BLM, did not concur with this recommendation--although, it did state that it agreed with the premise of the need to further improve its formal change management procedures. As of August 2020, BLM has not taken actions to address this recommendation.

Recommendation: The Acting Director of BLM should document and implement an action plan that identifies potential corrective actions based on previous lessons learned to address any challenges with the rollout of future AFMSS II modules. (Recommendation 3)

Agency: Department of the Interior: Bureau of Land Management
Status: Open

Comments: The Department of the Interior, on behalf of BLM, agreed with this recommendation. In its agency comment letter, the Department said that the BLM AFMSS team would implement adjustments and improvement based on the collected lessons learned. They also stated that upon completion of the last Field Office implementation and conversion to AFMSS II, BLM will conduct a formal program review and an annual operational assessment, which will also present opportunities for annual corrective actions and additional lessons learned considerations. As of August 2020, BLM has not taken actions to address this recommendation.

Recommendation: The BOEM director should develop a documented plan for determining whether and how to develop a progressive royalty structure that clearly defines what is to be achieved, who is to achieve it, how it will be achieved, and the time frames for achievement. (Recommendation 1)

Agency: Department of the Interior: Bureau of Ocean Energy Management
Status: Open

Comments: Interior agreed and indicated that BOEM will develop such a plan.

Recommendation: The BOEM director should enlist an independent third party to examine the extent to which the bureau's use of delayed valuations assures the receipt of fair market value, and make changes—such as terminating the use of delayed valuations or amending its model's assumptions—as appropriate. (Recommendation 2)

Agency: Department of the Interior: Bureau of Ocean Energy Management
Status: Open
Priority recommendation

Comments: Interior stated it did not agree with our characterization of BOEM's delayed valuations and stated that BOEM believes it is neither necessary nor cost effective to enlist an independent third party. However, BOEM agreed to (1) examine its delayed value calculation, particularly as it relates to the impact of biannual lease sales, (2) develop a plan to perform a comprehensive internal review of delayed value calculations and make appropriate changes, and (3) institute a peer-review process for all potential changes.

Recommendation: The BOEM director should take steps to ensure that BOEM's bid valuation process is not biased toward adjusting valuations downward based on their proximity to bids. (Recommendation 3)

Agency: Department of the Interior: Bureau of Ocean Energy Management
Status: Open
Priority recommendation

Comments: Interior partially agreed. Specifically, Interior stated it agreed with the recommendation, but did not agree with our characterization of BOEM's bid valuation process.

Recommendation: The BOEM director should implement a systematic process for comprehensively evaluating its tract valuations, such as by expanding the scope of the bureau's "lookback studies" effort, and remediating any identified deficiencies. (Recommendation 4)

Agency: Department of the Interior: Bureau of Ocean Energy Management
Status: Open

Comments: Interior partially agreed. Specifically, Interior stated it agreed with the recommendation, but did not agree with our characterization of BOEM's bid tract evaluation process and review procedures.

Recommendation: Congress should consider giving BLM the authority to obtain funds from operators to reclaim orphaned wells, and requiring BLM to implement a mechanism to obtain sufficient funds from operators for reclaiming orphaned wells. (Matter for Consideration 1)

Agency: Congress
Status: Open

Comments: Congress has not taken action as of April 2020.

Recommendation: The Director of BLM should take steps to adjust bond levels to more closely reflect expected reclamation costs, such as by increasing regulatory minimums to reflect inflation and incorporating consideration of the number of wells on each bond and their characteristics. (Recommendation 1)

Agency: Department of the Interior: Bureau of Land Management
Status: Open

Comments: In a August 2019 letter to GAO, BLM noted Instruction Memorandum 2019-014, "Oil and Gas Bond Adequacy Reviews", related to the agency's response to this recommendation. The Instruction Memorandum does not increase regulatory minimums to reflect inflation or incorporate the consideration of the number of wells on each bond and their characteristics, but BLM is collecting data to determine the effectiveness of this Instruction Memorandum. BLM noted any further action will depend on the results of the data analysis, expected to be continued through the first quarter of Fiscal Year 2021. As of April 2020 this recommendation remains open.

Recommendation: The Director of BLM should identify the reasons internal control reviews were not completed (e.g., human capital and workforce), develop and implement a plan to address those reasons, and monitor state offices' progress toward completing required reviews. (Recommendation 1)

Agency: Department of the Interior: Bureau of Land Management
Status: Open

Comments: In July 2019, BLM's Assistant Secretary for Land and Minerals Management wrote a letter to GAO stating that the bureau agreed that there are additional opportunities to improve the Inspection and Enforcement program's internal control reviews and that policies should be updated and widely circulated. Specifically, BLM wrote that by early August 2020, the bureau will issue updated guidance and procedures for conducting internal control reviews and that this guidance would take the form of a manual, handbook or Instruction Memorandum. BLM also wrote that it is establishing teams to conduct internal control reviews, monitoring the status of any past-due reviews and actively engaging across its multiple state offices to ensure timely resolution. In late August 2020, BLM's Audit Liaison Officer informed GAO that due to competing workload priorities and key management vacancies, BLM now plans to implement this recommendation by the end of June 2021.

Recommendation: The Director of BLM should develop and document procedures for implementing internal control reviews under the July 2012 oversight policy. (Recommendation 2)

Agency: Department of the Interior: Bureau of Land Management
Status: Open

Comments: In responding to our report, BLM stated that its July 2012 oversight policy, which expired in September 2013, should not have been allowed to lapse and given the importance of internal control reviews, the bureau will continue to use the July 2012 policy to conduct future reviews. In July 2019, BLM's Assistant Secretary for Land and Minerals Management wrote a letter to GAO stating that the bureau agreed that there are additional opportunities to improve the Inspection and Enforcement program's internal control reviews and that policies should be updated and widely circulated. In addition, BLM wrote that by early August 2020, the bureau will issue updated guidance and procedures for conducting internal control reviews and that this guidance would take the form of a manual, handbook, or Instruction Memorandum. In late August 2020. BLM's Audit Liaison Officer informed GAO that due to competing workload priorities and key management vacancies, BLM now plans to implement this recommendation by the end of June 2021.

Recommendation: The Director of BLM should implement a risk-informed approach to scheduling and conducting internal control reviews that takes into account the risks to BLM's mission, such as those inherent in field offices' workload and workforce. (Recommendation 3)

Agency: Department of the Interior: Bureau of Land Management
Status: Open

Comments: In July 2019, BLM's Assistant Secretary for Land and Minerals Management wrote a letter to GAO stating that the bureau agreed that there are additional opportunities to improve the Inspection and Enforcement program's internal control reviews and that policies should be updated and widely circulated. Specifically, BLM wrote that by early August 2020, the bureau will issue updated guidance and procedures for conducting internal control reviews and that this guidance would take the form of a manual, handbook, or Instruction Memorandum. In addition, BLM noted that the guidance will help ensure that the bureau completes internal control reviews in a timely manner using a consistent risk-based approach. In late August 2020. BLM's Audit Liaison Officer informed GAO that due to competing workload priorities and key management vacancies, BLM now plans to implement this recommendation by the end of June 2021.

Recommendation: The Director of BLM should systematically and comprehensively track the actual costs BLM incurs when reclaiming orphaned wells and the information, including the number of orphaned wells and inactive wells over time, necessary to determine the agency's potential liabilities. (Recommendation 1)

Agency: Department of the Interior: Bureau of Land Management
Status: Open

Comments: BLM concurred with this recommendation and, in July 2019, the agency developed a new funding code to track the costs incurred when reclaiming orphaned wells and issued written guidance to state and field offices in order to implement the bureau-wide use of the code. Also in July 2019, BLM officials stated that the agency will expand existing reporting capabilities to provide the ability to track orphaned and inactive well records over time. As of September 2020, we are working to confirm what actions BLM has taken to track the number of orphaned and inactive wells over time, and we will provide updated information when we obtain it.

Recommendation: The Director of BLM should develop a resource management plan addressing resources needed for conducting well and bond adequacy reviews and reclaiming orphaned wells. (Recommendation 6)

Agency: Department of the Interior: Bureau of Land Management
Status: Open

Comments: BLM officials stated that the agency conducts annual work planning processes which facilitates the decisions regarding the allocation of agency resources. In July 2019, BLM included additional language in its annual work plan that underscores the importance and relevance of well and bond adequacy reviews. The agency also developed a new fund code to track the actual reclamation costs incurred from reclaiming orphaned wells. The annual work plan also lists identifying and cataloging orphaned wells as a performance goal and the plan states that BLM is working with state regulatory agencies to plug wells within funding levels and state agreements. However, as of September 2020, absent identification of funds needed to reclaim orphaned wells and where those funds will come from, BLM does not have a plan to reclaim wells that are currently orphaned.

Recommendation: The Director of the Bureau of Land Management should develop a policy to ensure that field offices consistently track exception data.

Agency: Department of the Interior: Bureau of Land Management
Status: Open

Comments: In June 2019, BLM issued a memo called "Documentation and Tracking Requirements for Waiver, Exceptions, and Modifications for Fluid Mineral Exploration and Development Activities." The memo states that BLM is updating its guidance for tracking waivers, exceptions, and modifications of fluid minerals stipulations and Conditions of Approval (COA) to ensure that these requests are consistently processed and documented until BLM completes database enhancements to its Automated Fluid Minerals Support System 2 to perform this function. To ensure consistent documentation, BLM has developed an "Exceptions Tracking Sheet" that BLM staff are to use when making decisions. Information captured on the tracking sheet include: field office, state, U.S. well number, exception decision date, COA or lease stipulation (LS) , category of COA or LS (e.g. air, community, wildlife), and the specific COA or LS involved. Additionally, the associated environmental analyses, documents, and authorized officer's decision must be consistent with guidance found in Chapter IV of BLM's Planning for Fluid Mineral Resources Handbook (H-1624-1). In August 2019, GAO requested additional information to support the implementation of the recommendation. In December 2019, Interior officials stated that it would implement the recommendation by August 2020.

Recommendation: The Director of the Bureau of Land Management should develop bureau-wide written procedures for consistently considering and clearly documenting the information and processes used to make exception decisions.

Agency: Department of the Interior: Bureau of Land Management
Status: Open

Comments: In June 2019, BLM issued a memo called "Documentation and Tracking Requirements for Waiver, Exceptions, and Modifications for Fluid Mineral Exploration and Development Activities." The memo states that BLM is updating its guidance for tracking waivers, exceptions, and modifications of fluid minerals stipulations and Conditions of Approval (COA) to ensure that these requests are consistently processed and documented until BLM completes database enhancements to its Automated Fluid Minerals Support System 2 to perform this function. To ensure consistent documentation, BLM has developed an "Exceptions Tracking Sheet" that BLM staff are to use when making decisions. Information captured on the tracking sheet include: field office, state, U.S. well number, exception decision date, COA or lease stipulation (LS) , category of COA or LS (e.g. air, community, wildlife), and the specific COA or LS involved. Additionally, the associated environmental analyses, documents, and authorized officer's decision must be consistent with guidance found in Chapter IV of BLM's Planning for Fluid Mineral Resources Handbook (H-1624-1). In August 2019, GAO requested additional information to support the implementation of the recommendation. In December 2019, Interior officials stated that it would implement the recommendation by August 2020.

Recommendation: The Director of the Bureau of Land Management should direct field offices to make the results of exception request decisions available to the public, such as on BLM's public website.

Agency: Department of the Interior: Bureau of Land Management
Status: Open

Comments: In July 2019, Interior officials stated that the BLM does not intend to make an exception tracking spreadsheet available to the public. According to Interior officials, the regulations at 43 CFR 3101.1-4 do not require it, and public posting is only applicable to waivers and modifications, not exceptions. Interior's position has been that the public can ask for this information in a Freedom of Information Act (FOIA) request. Interior officials explained that the main concern in making an exception tracking spreadsheet available to the public is that a single consolidated tracking spreadsheet would require constant updates and posting to Interior's website. Since the numbers can change daily, any posted updates would only provide a brief snap shot which will not be meaningful. Interior officials stated that the BLM will aim to address this item in future database design enhancements in order to obtain a permanent tracking solution. We will update this recommendation when we have additional information from BLM.

Recommendation: The Director of the Bureau of Land Management should clarify guidance related to documentation of environmental inspections to ensure that inspections are documented in a manner that indicates whether all permit requirements were checked as part of the inspection.

Agency: Department of the Interior: Bureau of Land Management
Status: Open

Comments: In August 2016, Interior officials stated that three of six corrective actions are substantially complete and that efforts are ongoing to clarify guidance related to documentation of environmental inspections with a target date for implementation of December 31, 2018. In May 2020, Interior officials stated the revised target date for implementation is September 30, 2020, at which time BLM will issue updated policies and procedures.

Recommendation: The Director of the Bureau of Land Management should provide additional guidance to field offices on how to collect and use data collected during monitoring inspections and, in doing so, determine and implement an approach for using the data to assess the effectiveness of the agency's mitigation efforts, including its best management practices.

Agency: Department of the Interior: Bureau of Land Management
Status: Open

Comments: In August 2018, Interior officials stated that efforts to provide guidance to field offices on how to collect and use date are ongoing with correction actions 10 percent complete. In May 2020, officials stated that they have a target date for implementation of December 31, 2020.

Recommendation: The Secretary of the Interior should direct the Assistant Secretary for Land and Minerals Management, who oversees BSEE, to establish a mechanism for BSEE management to obtain and incorporate input from bureau personnel and any external parties, such as Argonne, that can affect the bureau's ability to achieve its objectives.

Agency: Department of the Interior
Status: Open
Priority recommendation

Comments: In its June 9, 2017, response to our report, Interior indicated that BSEE is developing new strategies to improve trust and foster greater collaboration for consideration by the new Director. In September 2018, Interior provided documentation of several BSEE actions, including establishing an Employee Engagement Council, an Innovation Program, and Ombudsman position within the bureau. As of August 2020, BSEE indicated that these efforts remain ongoing. However, this recommendation remains open because BSEE has not yet demonstrated that these actions represent an enduring institutionalization of improved communication throughout the bureau.

Recommendation: The Secretary of the Interior should direct the Assistant Secretary for Land and Minerals Management, who oversees BSEE, to address leadership commitment deficiencies within BSEE, including by implementing internal management initiatives and ongoing strategic initiatives (e.g., Enterprise Risk Management and performance measure initiatives) in a timely manner.

Agency: Department of the Interior
Status: Open

Comments: In its June 2017 response to our report, Interior indicated that BSEE will incorporate lessons learned from its first enterprise risk management cycle in future cycles and that BSEE will incorporate a performance management dashboard in fiscal year 2018. In August 2019, BSEE provided documentation regarding actions it has taken to implement and institutionalize its enterprise risk management and performance measure initiatives. In August 2020, BSEE indicated that implementation of these processes remains ongoing. However, this recommendation remains open because BSEE has not yet demonstrated that these actions represent an enduring institutionalization of improved internal management initiatives and ongoing strategic initiatives throughout the bureau.

Recommendation: The Secretary of the Interior should direct the BSEE Director to address trust concerns that exist between headquarters and the field, BSEE should expand the scope of its employee engagement strategy to incorporate the need to communicate quality information throughout the bureau.

Agency: Department of the Interior
Status: Open

Comments: In its June 2017 response to our report, Interior indicated that BSEE's response to this recommendation would be incorporated into its corrective actions for recommendation one. In September 2018, Interior provided documentation of several BSEE actions, including establishing an Employee Engagement Council, an Innovation Program, and Ombudsman position within the bureau. As of August 2020, BSEE indicated that these efforts remain ongoing. However, this recommendation remains open because BSEE has not yet demonstrated that these actions represent an enduring institutionalization of expanded employee engagement throughout the bureau.

Recommendation: To help ensure Interior can hire, retain, and train staff it needs to provide effective oversight of oil and gas activities on federal lands and waters, the Secretary of the Interior should direct the Assistant Secretary for Policy, Management and Budget to annually evaluate the bureaus' training programs, including: (1) staff training needs, (2) training effectiveness, and (3) potential opportunities for the bureaus to share training resources.

Agency: Department of the Interior
Status: Open

Comments: In January 2017, Interior officials said the bureaus were developing, or had developed, the means by which they would assess their training needs and review, evaluate, and update their training programs for technical staff. Interior also told GAO that as part of its quarterly review of performance data, the Assistant Secretary for Policy, Management and Budget will ensure that BLM, BSEE and BOEM are coordinating their training needs. Interior officials said that their Office of Strategic Employment and Organizational Development will validate the bureaus' active engagement in this activity and provide support in the fulfillment of this recommendation where needed. In February 2018, Interior officials said the agency had examined results from the Federal Employee Viewpoint Survey to gauge how the bureaus' training program activities were being perceived by their workforce. In July 2019, Interior officials said they were looking at opportunities to share training resources, and that they would add in their scope an evaluation of training needs and effectiveness. However, as of March 2020, Interior had not provided us with evidence that it has conducted an evaluation of training needs, training effectiveness and sharing training resources.

Recommendation: To help improve reporting of emissions data on the OGOR, the Secretary of the Interior should direct BLM to provide additional guidance on how to estimate natural gas emissions from federal oil and gas leases.

Agency: Department of the Interior
Status: Open

Comments: In November 2018, BLM's "Waste Prevention, Production Subject to Royalties, and Resource Conservation; Rescission or Revision of Certain Requirements" rule (43 C.F.R. 3179.301) took effect, revising the 2016 rule. According to BLM in July 2020, the revision satisfies the intent of the recommendation because the rule specifies the acceptable means of estimation or measurement of vented or flared gas. The rule says the operator may estimate or measure vented gas in accordance with applicable state or tribal regulatory agency rules or regulations, estimate using the gas to oil ratio (GOR) test (which, during GAO's review, some BLM officials said was not accurate), or to "measure" the volume of the flared gas. We do not believe the revised rule provides sufficient additional specificity on how natural gas emissions should be estimated by operators.

Recommendation: To help improve reporting of emissions data on the OGOR, the Secretary of the Interior should direct ONRR to provide additional guidance on how to differentiate between combusted and noncombusted lease use volumes reported on the OGOR, which could assist Interior in measuring its progress toward greenhouse gas reduction goals.

Agency: Department of the Interior
Status: Open

Comments: In July 2020, ONRR reported that it developed and implemented two disposition codes--one for the royalty-bearing flaring of gas and another for the royalty-bearing venting of gas volumes. ONRR did not develop additional disposition codes because, according to BLM, other disposition codes would not be required due to BLM's 2018 revision of the methane rule. However, we do not believe the measurement provisions in the revised methane rule contain any specific provisions requiring reporting for combusted and non-combusted lease use gas. Gas could be used on lease in pneumatic valves, which is released into the atmosphere as methane; or combusted to power up generators, where it's released as carbon dioxide. Knowing whether the emissions are in the form of methane or carbon dioxide is critical to helping Interior accurately estimate greenhouse gas emissions.

Recommendation: The Secretary of the Interior should direct the Director of the Bureau of Land Management to identify and take necessary steps to ensure communitization agreements are reviewed within required time frames.

Agency: Department of the Interior
Status: Open

Comments: This recommendation is similar to recommendations in GAO-16-553 regarding the timely review and approval of Indian communitization agreements (CAs). In September 2018, Interior added a tracking module for Indian CAs, as well as other mineral lease agreements, to its Trust Asset and Accounting Management System (TAAMS). Then in February 2019, BIA officials told us the agency had drafted suggested time frames for the review and approval of Indian CAs for both BIA and BLM. BIA was revising the Onshore Energy and Mineral Lease Management Interagency Standard Operating Procedures to include these time frames. The officials also said that the Indian Energy and Minerals Steering Committee (IEMSC) would meet to discuss the proposed time frames. IEMSC is a committee within Interior that includes senior managers from BIA, BLM, and other agencies with a focus on Indian trust energy and mineral policies and issues. As of February 2020, we were told that BIA officials are still working collaboratively with BLM officials to fully address our recommendation, and that they may be able to provide documentation in April 2020.

Recommendation: To improve Interior's oversight of offshore oil and gas activities in the Gulf of Mexico, the Secretary of the Interior should enhance Interior's capacity for identifying and evaluating offshore oil and gas drilling operations according to risk, thereby allowing it to adjust and evaluate its oversight accordingly by (1) identifying and systematically collecting and maintaining reliable data on risk factors associated with drilling operations, (2) providing operators with clear definitions for significant events in the weekly well activity reports and developing a way to characterize and record these events systematically and reliably, and (3) using the risk factors and significant events data to develop a risk-based approach with clear criteria to prospectively evaluate and categorize drilling operations according to risk and retrospectively to evaluate the performance of oversight and risk mitigation activities in avoiding significant events.

Agency: Department of the Interior
Status: Open
Priority recommendation

Comments: Interior has taken steps to identify and evaluate drilling risks, and its work is ongoing. For example, according to BSEE officials, BSEE's SafeOCS program is one effort through which data is collected on risk factors associated with drilling. BSEE expanded the SafeOCS program in 2016 to include required reporting of well control equipment and barrier failure incidents. Additionally, in 2017, BSEE completed two retrospective analyses of factors associating with risk, however, according to BSEE officials, both analyses were limited by the quality of the data. In December 2019, Interior officials stated that the Gulf of Mexico Region's Office of District Operations Support (DOS) has been developing an approach to apply a secondary review to drilling permits deemed to be "high risk." According to these officials, this secondary review will be performed by pre-selected subject matter experts, identified because of their experience with certain aspects of drilling operations. To determine what drilling permits should receive a secondary review, DOS explored a variety of approaches before settling on a two-prong method. Because efforts remain ongoing, it is too soon to assess the extent to which these efforts will be successful. Until such policies are fully implemented and shown to be effective, Interior may not be able to adjust and evaluate its oversight--including inspections--in a cost-effective manner.