Annual Report on Outer Continental Shelf Shut-In or Flaring Wells Is No Longer Needed

Gao ID: EMD-82-17 November 19, 1981

As required by the Outer Continental Shelf Lands Act Amendments of 1978, GAO examined the methodology that the Department of the Interior used to allow Outer Continental Shelf (OCS) wells to be shut-in or to flare natural gas. In the last report, GAO questioned whether the Interior report fulfilled the intent of Congress and whether continuing to require a report served a useful purpose. A primary concern of Congress in enacting the annual reporting requirement was to oversee whether OCS operators were deliberately withholding production in anticipation of higher prices.

As in the last report, GAO again found that the Interior report does not satisfy the primary intent of Congress. Furthermore, recent legislation and administrative actions decontrolling the price of oil and natural gas make concern over deliberate withholding less of an issue. GAO believes legislative relief from the OCS shut-in and flaring wells reporting requirement is appropriate. Abolishing the report would not affect the Interior's continuing responsibilities for inspecting and monitoring OCS lease activities to ensure efficient development of oil and gas resources.

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.

Director: John W. Sprague Team: General Accounting Office: Energy and Minerals Division Phone: (202) 512-7783


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