Analysis of Interior's Administration of the Duck Nest Creek Coal Lease Exchange

In response to a congressional request, GAO analyzed the Department of the Interior's administration of the Duck Nest Creek Coal Lease Exchange to determine whether the exchange was legal and whether Interior's administrative procedures were adequate to ensure that the exchange was properly implemented.

For federally owned coal deposits to qualify for exchange under authorizing legislation, Interior had to determine that, for the foreseeable future, the lands were unlikely to be separately mined efficiently and economically except by incorporation into the existing mining operation of the company proposing the exchange. A GAO analysis of the tract mining conditions, the prevailing market conditions, and potential competitors' need for additional coal showed that the proposed exchange was within the criteria established by law. However, GAO found that problems existed in Interior's administration of the exchange process. Four Interior evaluations of the tract all reached different conclusions, and the evaluators failed to consider criteria established by the statute authorizing the exchange. Furthermore, no formal exchange procedures existed or were established and, in many cases, records of the procedures were not kept. In addition, official accounts of what happened were often vague and conflicting; therefore, GAO was unable to fully determine what took place. GAO also found that the efforts of headquarters and field offices were disorganized and uncoordinated, and the unsupported opinions of Interior officials were treated as if they were fact. GAO believes that current and future exchanges may benefit from a more structured administrative approach in which Interior clearly defines its responsibilities and the means by which they will be discharged.