Issues in Leasing Offshore Lands for Oil and Gas Development

Up to 60 percent of the nation's undiscovered oil and gas resources are believed to be contained in the Outer Continental Shelf (OCS). Over the past 10 years, Congress and three administrations have attempted to accelerate the leasing of these areas for oil and gas exploration and development. OCS leasing and development increased significantly during the 1970-80 period. The number of sales increased by more than 50 percent, and sales were held for the first time in seven new OCS frontier areas. These increases were achieved during a time when sales were continuously delayed by lawsuits. However, the planned goals of the 1970's were never achieved, only about 60 percent of the planned sales were held, the amount of land leased was only a small fraction of what was planned, and nine frontier areas were not opened for leasing.

Environmental concern and limited industry interest in the areas proposed for leasing appear to be the two major factors that have affected achievement of the leasing goals of the 1970's. Public concern and the need to develop more information about the environmental aspects of offshore development have led to an extension in the time needed to plan for lease sales, resulting in numerous lease sales being delayed or cancelled. Concern as to whether the government is receiving a fair monetary return on OCS resources, the restriction of OCS leasing in offshore national defense areas, and boundary disputes have also had an impact on the leasing goals. Because of these, about 25 million acres of OCS are not currently available for leasing. The majority of this acreage is thought to have good resource potential. Legislation enacted in 1978 seems to be working toward expediting the leasing and developing of OCS lands, but it is not leading to a timely resolution of the problems being surfaced. Numerous groups involved in the OCS program, including the Department of the Interior, have developed their individual perceptions of how the law is to be implemented. Also, there is considerable disagreement between federal and state governments on how state and local governments are to participate in the OCS decisions. Judicial decisions have significantly affected the policies and direction of offshore development as well as the administrative procedures of Interior. Interior is considering proposals to streamline the prelease process and to increase offshore leasing.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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