Interior's Report of Shut-In or Flaring Wells Unnecessary, but Oversight Should Continue

Gao ID: RCED-83-10 October 5, 1982

GAO reported on the methodology used by the Secretary of the Interior in allowing Outer Continental Shelf (OCS) wells to be shut-in or flaring natural gas, as required by law.

GAO found, as it did in three previous annual reports, that the Department of the Interior's Mineral Management Service (MMS) should continue to improve its monitoring of shut-in and flaring wells while discontinuing its annual report. Congress' primary concern in initially requiring an annual OCS shut-in and flaring wells report was to determine whether OCS operators were deliberately withholding production in anticipation of higher prices in the future. GAO found that Interior's methodology and reporting has not been adequate to make this determination, and GAO believes that recent decontrol makes it unlikely that operators would deliberately withhold production. GAO concluded that abolishing the report would be the most cost-effective solution, and that MMS could direct Interior's post-lease management functions in a more effective manner.

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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