Oil And Gas Development
Increased Permitting Activity Has Lessened BLM's Ability to Meet Its Environmental Protection Responsibilities Gao ID: GAO-05-418 June 17, 2005Rising U.S. energy consumption and concerns about dependency on foreign energy sources have prompted the administration to aggressively pursue domestic oil and gas production, including production on public lands, which in turn has generated concern that the impacts of this activity may compromise the use of public land for other purposes. GAO determined (1) the extent to which the level of oil and gas development on public lands managed by the Bureau of Land Management (BLM) has changed in recent years, and how the change has affected BLM's ability to mitigate impacts; (2) what policy changes related to oil and gas development BLM recently made and how these policies affected BLM's environmental mitigation activities; and (3) what challenges BLM faces in managing its oil and gas program.
BLM's ability to meet its environmental mitigation responsibilities for oil and gas development has been lessened by a dramatic increase in oil and gas operations on federal lands over the past 6 years. Nationwide, the total number of drilling permits approved by BLM more than tripled, from 1,803 in fiscal year 1999 to 6,399 in fiscal year 2004. BLM officials in five out of eight field offices that GAO visited explained that as a result of the increases in drilling permit workloads, staff had to devote increased time to processing drilling permits, leaving less time for mitigation activities, such as environmental inspections and idle-well reviews. BLM made policy revisions over the last 6 years that affected to varying degrees its ability to assess and mitigate the environmental impacts of oil and gas development. The combined effects of these policy changes--some of which were aimed at facilitating and managing increased development, while others were meant to enhance environmental mitigation--were mixed. For example, four of the eight field offices reported that the most significant impact of the policies to expedite and manage oil and gas development was the increased emphasis that some of these policies placed on processing permits, which in turn resulted in shifting staff responsibilities away from mitigation activities. On the other hand, policies to enhance mitigation generally had a positive impact, although increases in the permitting workload have limited their effect. For example, in six field offices, policies for revitalizing BLM's inspection and enforcement program resulted in more inspection staff being hired, although most offices remain understaffed. BLM state and field office staff, and GAO, identified several challenges to managing the agency's oil and gas program, including (1) managing workloads while meeting all of its responsibilities, (2) using workforce planning to effectively identify and communicate its workforce needs, and (3) meeting its oil and gas program resource needs in light of budget constraints. Workload pressure, already high due to increased permitting activity, has been further exacerbated by increased appeals and litigation of BLM decisions and actions, according to BLM staff. In reviewing BLM's efforts to manage increasing workloads, GAO found that some data needed to quantify specific workload activities are either not tracked or not consistently tracked, and that BLM's current workforce planning process does not effectively identify and communicate BLM's staff needs to decision makers. As a result, the process does not provide consistent and readily available information that BLM can use to support budget justifications and make informed resource allocation decisions. BLM is also presented with the challenge of meeting its oil and gas program responsibilities in a period when staffing needs are growing faster than available resources. While BLM has the authority to assess and collect fees for processing oil and gas permits, it has not exercised this authority. BLM has recently taken steps to develop a fee structure for permits.
RecommendationsOur 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: Team: Phone:GAO-05-418, Oil And Gas Development: Increased Permitting Activity Has Lessened BLM's Ability to Meet Its Environmental Protection Responsibilities
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Report to the Ranking Minority Member, Committee on Homeland Security
and Governmental Affairs, U.S. Senate:
June 2005:
Oil And Gas Development:
Increased Permitting Activity Has Lessened BLM's Ability to Meet Its
Environmental Protection Responsibilities:
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-418]:
GAO Highlights:
Highlights of GAO-05-418, a report to the Ranking Minority Member,
Committee on Homeland Security and Governmental Affairs, U.S. Senate:
Why GAO Did This Study:
Rising U.S. energy consumption and concerns about dependency on foreign
energy sources have prompted the administration to aggressively pursue
domestic oil and gas production, including production on public lands,
which in turn has generated concern that the impacts of this activity
may compromise the use of public land for other purposes.
GAO determined (1) the extent to which the level of oil and gas
development on public lands managed by the Bureau of Land Management
(BLM) has changed in recent years, and how the change has affected
BLM‘s ability to mitigate impacts; (2) what policy changes related to
oil and gas development BLM recently made and how these policies
affected BLM‘s environmental mitigation activities; and (3) what
challenges BLM faces in managing its oil and gas program.
What GAO Found:
BLM‘s ability to meet its environmental mitigation responsibilities for
oil and gas development has been lessened by a dramatic increase in oil
and gas operations on federal lands over the past 6 years. Nationwide,
the total number of drilling permits approved by BLM more than tripled,
from 1,803 in fiscal year 1999 to 6,399 in fiscal year 2004. BLM
officials in five out of eight field offices that GAO visited explained
that as a result of the increases in drilling permit workloads, staff
had to devote increased time to processing drilling permits, leaving
less time for mitigation activities, such as environmental inspections
and idle-well reviews.
BLM made policy revisions over the last 6 years that affected to
varying degrees its ability to assess and mitigate the environmental
impacts of oil and gas development. The combined effects of these
policy changes”some of which were aimed at facilitating and managing
increased development, while others were meant to enhance environmental
mitigation”were mixed. For example, four of the eight field offices
reported that the most significant impact of the policies to expedite
and manage oil and gas development was the increased emphasis that some
of these policies placed on processing permits, which in turn resulted
in shifting staff responsibilities away from mitigation activities. On
the other hand, policies to enhance mitigation generally had a positive
impact, although increases in the permitting workload have limited
their effect. For example, in six field offices, policies for
revitalizing BLM‘s inspection and enforcement program resulted in more
inspection staff being hired, although most offices remain
understaffed.
BLM state and field office staff, and GAO, identified several
challenges to managing the agency‘s oil and gas program, including (1)
managing workloads while meeting all of its responsibilities, (2) using
workforce planning to effectively identify and communicate its
workforce needs, and (3) meeting its oil and gas program resource needs
in light of budget constraints. Workload pressure, already high due to
increased permitting activity, has been further exacerbated by
increased appeals and litigation of BLM decisions and actions,
according to BLM staff. In reviewing BLM‘s efforts to manage increasing
workloads, GAO found that some data needed to quantify specific
workload activities are either not tracked or not consistently tracked,
and that BLM‘s current workforce planning process does not effectively
identify and communicate BLM‘s staff needs to decision makers. As a
result, the process does not provide consistent and readily available
information that BLM can use to support budget justifications and make
informed resource allocation decisions. BLM is also presented with the
challenge of meeting its oil and gas program responsibilities in a
period when staffing needs are growing faster than available resources.
While BLM has the authority to assess and collect fees for processing
oil and gas permits, it has not exercised this authority. BLM has
recently taken steps to develop a fee structure for permits.
What GAO Recommends:
GAO recommends, among other things, that BLM should (1) ensure that its
staffing needs are accurately reflected in its workforce plans and (2)
finalize and implement a fee structure to recover the cost of
processing oil and gas permits.
Interior agreed with all of GAO‘s recommendations and said the report
generally does much to capture the many demands involved in managing
BLM‘s oil and gas program.
www.gao.gov/cgi-bin/getrpt?GAO-05-418.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Anu Mittal at (202) 512-
3841 or mittala@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Dramatic Increases in Oil and Gas Permitting Activity Have Lessened
BLM's Ability to Ensure That Environmental Impacts Are Mitigated:
Recent BLM Policy Changes Have Had Mixed Impacts on Environmental
Mitigation Activities for Oil and Gas Development:
BLM Faces Several Major Challenges in Implementing Its Oil and Gas
Program:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Resource Monitoring:
Appendix III: Comments from the Department of the Interior:
GAO Comments:
Appendix IV: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Increases in Oil and Gas Drilling Permits Approved by Eight
BLM Field Offices in Fiscal Years 1999 and 2004:
Table 2: Number of Abandoned Wells That Still Needed Approved Final
Abandonment Notices for Eight BLM Field Offices, as of February 17,
2005:
Table 3: Status of the Energy-Related Expedited Resource Management
Plans for Eight BLM Field Offices as of March 2005:
Table 4: Policy Changes to Improve and Streamline the Processing of
Drilling Permits:
Table 5: Nature of Resource Monitoring Plans That Address Impacts from
Oil and Gas Development across Broad Geographic Areas:
Figures:
Figure 1: Oil Drilling Site with Access Road:
Figure 2: Fragmentation of Wildlife Habitat by Multiple Oil and Gas
Sites:
Figure 3: Typical Oil and Gas Site Subject to an Environmental
Inspection:
Figure 4: BLM State and Field Offices Visited:
Figure 5: Number of Oil and Gas Drilling Permits Approved by BLM for
Fiscal Years 1999 through 2004:
Figure 6: Cumulative Percentage Change in Drilling Permits Approved,
BLM's Oil and Gas Program Budget, and Staff Resources for the Oil and
Gas Program for Fiscal Years 1999 through 2005:
Abbreviations:
AFMSS: Automated Fluids Mineral Support System:
AIRS: Automated Inspection Record System:
BLM: Bureau of Land Management:
EA: environmental assessment:
EIS: environmental impact statement:
EPA: Environmental Protection Agency:
EPCA: Energy Policy and Conservation Act:
FLPMA: Federal Land Policy and Management Act:
FTE: full-time equivalent:
IOAA: Independent Offices Appropriations Act:
NEPA: National Environmental Policy Act:
TA: temporarily abandoned:
Letter June 17, 2005:
The Honorable Joseph I. Lieberman:
Ranking Minority Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
Dear Senator Lieberman:
American families, communities, and businesses all depend on reliable
and affordable energy for their health, safety, and livelihood. Energy
is necessary for a myriad of things that affect peoples' daily lives,
including transportation, communication, food production, medical
services, air-conditioning, and heating. As our nation's energy
consumption continues to rise and concerns about dependency on foreign
energy sources heighten, the administration has aggressively pursued
options for increasing domestic oil and gas production, including
production on public lands. This, in turn, has generated concern among
some state and local government officials, sportsmen, conservationists,
and others that this activity may compromise the use of public land for
other purposes.
The Bureau of Land Management (BLM), an agency of the Department of the
Interior, is responsible for managing 261 million surface acres of
public land, which is roughly one-eighth of the United States. BLM is
also responsible for issuing leases for oil and gas resources that are
on or under federal lands as well as private lands for which the
federal government retains mineral rights--amounting to roughly 700
million acres.[Footnote 1] In fiscal year 2004, oil and gas valued at
roughly $14.5 billion was produced from these leases and the government
collected approximately $1.6 billion in royalty payments, which are
based on a percentage of the value of the oil and gas produced.
The guiding legislation for BLM's management of public lands and
mineral estates is the Federal Land Policy and Management Act of 1976,
as amended (FLPMA).[Footnote 2] Congress declared in FLPMA that it was
U.S. policy to manage public lands for multiple use and sustained
yield.[Footnote 3] "Multiple use" is defined, in part, as "the
management of the public lands and their various resource values so
that they are utilized in the combination that will best meet the
present and future needs of the American people."[Footnote 4]
"Sustained yield" is defined as the "achievement and maintenance in
perpetuity of a high-level annual or regular periodic output of the
various renewable resources of the public lands consistent with
multiple use."[Footnote 5] BLM carries out these requirements by
continuously balancing a variety of competing land uses, including
cattle grazing, habitat protection for threatened and endangered
species, wilderness preservation, recreational use, and oil and gas
development.
BLM is also responsible for protecting the environment by mitigating
the impacts of oil and gas development occurring on lands managed by
the agency.[Footnote 6] This requires BLM to undertake a number of
activities to ensure that adverse impacts on the land as well as other
resources--such as air, water, vegetation, and wildlife--are properly
avoided or mitigated. The Federal Oil and Gas Royalty Management Act of
1982,[Footnote 7] as amended, establishes the authority for BLM's
program for inspecting oil and gas sites to make sure operators are in
compliance with all restrictions and requirements outlined in their
leases and drilling permits--including those designed to protect the
environment. The act requires the Secretary of the Interior to develop
guidelines setting forth the coverage and the frequency of such
inspections. Relatedly, various BLM regulations and policies form the
basis for monitoring the long-term impacts of oil and gas production;
tracking nonproducing wells, also referred to as "idle" wells, to make
sure that, among other things, they do not fall into disrepair and
become a liability to the federal government; and ensuring that lands
affected by oil and gas production are being properly reclaimed. The
protection of other resources that may be affected by oil and gas
activity is governed by resource-specific laws, such as the Clean Air
Act, the Clean Water Act, and the Endangered Species Act.
In January 2001, the President established the National Energy Policy
Development Group for the purpose of developing a national energy
policy. In May 2001, this group issued the National Energy Policy
Report, which included recommendations for facilitating the production
of oil and gas resources on public lands. While Congress is still
considering comprehensive energy policy legislation in response to the
National Energy Policy Development Group, BLM has been administratively
implementing some of its recommendations. Specifically, BLM has focused
its efforts on streamlining its administration and management of the
various stages of oil and gas production through a number of policy and
procedural changes that seek to minimize delays in approving drilling
permits and increase production while also protecting the environment.
In this context, you asked us to determine (1) the extent to which the
level of oil and gas development on public lands managed by BLM has
changed over the past 6 years and how these changes have affected, if
at all, BLM's ability to assess and mitigate environmental impacts; (2)
what policy changes BLM has made in the past 6 years related to
facilitating and managing oil and gas development and how these changes
have affected, if at all, BLM's ability to assess and mitigate
environmental impacts; and (3) what challenges BLM faces in managing
its oil and gas program.
To respond to these objectives, we obtained data from BLM on the number
of oil and gas drilling permits approved in the past 6 years and the
number of environmental inspections performed. We met with officials
from BLM's Fluid Minerals Group to discuss the agency's
responsibilities for managing its oil and gas program. We also met with
the Director and Deputy Director of BLM's National Energy Office to
discuss the agency's efforts to implement recommendations in the
National Energy Policy specifically affecting BLM's oil and gas
program. In addition, we visited a nonprobability sample of BLM field
offices and used a structured interview guide to assist in collecting
information about how each field office manages its oil and gas
program, including staffing and workload issues.[Footnote 8] We
selected field offices that experienced some of the greatest increases
in oil and gas permitting activity for fiscal years 1999 through 2003
(at the time of site selection, fiscal year 2004 data were not
available). Additional criteria for selection included offices that
vary in their ability to meet BLM's goals for inspecting oil and gas
wells and offices that either are or are not expediting the update of
resource management plans because the plans involve energy development
issues. We focused on these offices because of concern that the
expedited time frames for updating these plans could compromise the
environmental analyses associated with the plans. Using these criteria,
we selected eight field offices to visit: in Glenwood Springs,
Colorado;[Footnote 9] Miles City, Montana; Carlsbad and Farmington, New
Mexico;[Footnote 10] Vernal, Utah; and Buffalo, Rawlins, and Pinedale,
Wyoming. Using a structured interview guide, we also interviewed
officials from each of the five BLM state offices--in Colorado,
Montana, New Mexico, Utah, and Wyoming--that have oversight authority
for these field offices.[Footnote 11] The officials we interviewed at
these offices, including state and field office managers, were
responsible for the day-to-day administration of BLM's oil and gas
program. We also met with officials from industry groups, environmental
and citizen-based groups, and state governments. We collected and
analyzed documents related to BLM's management of its oil and gas
program, including instructional memoranda, resource management plans,
BLM's National Energy Policy Implementation Plan, and relevant laws and
regulations. A more detailed description of our scope and methodology
can be found in appendix I. We conducted our work from February 2004
through April 2005 in accordance with generally accepted government
auditing standards.
Results in Brief:
A dramatic increase in oil and gas development on federal lands over
the past 6 years has lessened BLM's ability to meet its environmental
protection responsibilities. Nationwide, the total number of oil and
gas drilling permits approved by BLM more than tripled, from 1,803 to
6,399 for fiscal years 1999 through 2004.[Footnote 12] Much of the
increased oil and gas activity was concentrated in five intermountain
states--Colorado, Montana, New Mexico, Utah, and Wyoming. In fiscal
year 2004, the offices under the jurisdiction of these five BLM state
offices collectively approved 6,204 drilling permits, or more than 95
percent of the nationwide total.[Footnote 13] For the eight BLM field
offices we visited, the increase in the number of drilling permits
approved in fiscal year 2004 versus the number approved in fiscal year
1999 ranged from 70 in the Miles City, Montana, field office to 2,151
in the Buffalo, Wyoming, field office.[Footnote 14] Overall, BLM
officials in the majority of the field offices we visited said that
staff had to devote increasing amounts of time to processing drilling
permits, leaving less time to mitigate the environmental impacts of oil
and gas development. For example, the Buffalo, Wyoming, and Vernal,
Utah, field offices--the two field offices with the largest increases
in permitting activity--were each able to meet their annual
environmental inspection goals only once in the past 6 years.
Furthermore, the Buffalo, Wyoming, field office was able to achieve
only 27 percent of its required environmental inspection goals in
fiscal year 2004. BLM staff in four of the eight field offices we
visited acknowledged similar difficulties in trying to keep up with
their environmental protection responsibilities. Four of the eight
field offices had a backlog of past due idle-well reviews and seven of
the eight field offices had a backlog of reclamation inspections. BLM
staff from each of the field offices that had experienced difficulties
in meeting their environmental protection responsibilities attributed
the problem, to varying degrees, to staff spending more time processing
drilling permits and less time performing environmental mitigation
activities.
During the past 6 years, BLM made several policy changes that have
impacted to varying degrees its ability to assess and mitigate the
environmental impacts of oil and gas development on public lands. While
a number of these policies were aimed at facilitating and managing
increased development, others were intended to improve environmental
mitigation efforts. For example, the policy changes that helped
facilitate and manage oil and gas development included (1) reviewing
restrictions on oil and gas development to ensure that they are the
least restrictive possible while still protecting the environment; (2)
expediting the update of certain resource management plans, including
those that involve energy development issues; and (3) streamlining the
process for permitting oil and gas development. Similarly, recent
policy changes intended to improve mitigation activities included those
(1) enhancing BLM's oil and gas inspection capabilities, (2) improving
management of idle wells, and (3) encouraging the use of best
management practices for oil and gas development. However, the combined
effects of both types of policy changes on BLM's ability to assess and
mitigate environmental impacts have been mixed. For example, staff from
four of the eight field offices told us that policies that streamlined
the permitting process also increased the emphasis on processing
permits, which in turn resulted in shifting staff away from their
environmental mitigation responsibilities. On the other hand, the
policies issued to revitalize inspection and enforcement activities
impacted BLM's mitigation activities positively because they resulted
in six of the eight field offices obtaining greater resources to hire
more inspection staff.
BLM state and field office staff and GAO identified several challenges
that BLM faces in managing its oil and gas program, including, but not
limited to, (1) managing workloads to meet all of its responsibilities,
(2) using workforce planning to effectively identify and communicate
its workforce needs, and (3) meeting its oil and gas program resource
needs in light of budget constraints. Workload pressure, which was
already at a high level due to the increases in permitting activity,
has been further exacerbated by increases in public challenges to BLM's
decisions and actions, according to BLM staff. Heavy workloads have led
to high stress levels and low morale among some staff. In reviewing
BLM's efforts to manage increasing workloads, we found that three field
offices and four state offices did not effectively identify and
communicate their workforce needs to either their respective BLM state
office or BLM headquarters. BLM's current workforce planning process
does not identify all of BLM's staffing needs, in large part because
BLM headquarters directs state and field offices to identify only those
needs for which funding is available. As a result, the current
workforce planning process does not provide consistent and readily
available information that state and headquarters decision makers can
use to support budget justifications and make informed resource
allocation decisions. Furthermore, some data needed to quantify
workloads--including idle-well reviews and reclamation-related
workloads--are either not tracked or not consistently tracked in a
centralized database, making it difficult to identify and prioritize
staffing needs for these responsibilities. Lastly, but perhaps most
significantly, staffing needs are growing faster than available
resources. While many federal agencies are facing tight budget
constraints, BLM is in an unusual position because it has authority,
which it has not exercised, to generate additional revenues to cover
the costs of its program activities by assessing and collecting fees
for various services that it provides. In its budget justification for
fiscal year 2006, BLM proposed to impose fees for issuing oil and gas
permits and said it is drafting a rule establishing a fee structure.
According to the budget justification, the cost recovery fees would
generate a net increase of $7.6 million, which would allow BLM to
maintain its current staffing level and use a portion of its
appropriated funds to fund other program priorities such as ensuring
proper inspection and enforcement actions.
We are recommending that the Secretary of the Interior take steps to
ensure that BLM's staffing needs are accurately reflected in its
workforce plans and considered by key decision makers. We are also
recommending that the Secretary direct BLM to finalize and implement a
fee structure to cover the costs of processing oil and gas drilling
permits. In responding to a draft of this report, Interior generally
agreed with our recommendations. See appendix III for Interior's
comment letter. Also, see the "agency comments and our evaluation"
section and appendix III for our evaluation of these comments.
Background:
In recent years, both rising energy prices and new technologies have
led to an increased emphasis on developing oil and gas resources on
public lands. First, higher prices have created greater economic
incentives to drill for oil and gas. According to the Energy
Information Administration, the average of daily New York Mercantile
Exchange futures prices for crude oil increased from $19.30 per barrel
in 1999 to $41.47 per barrel in 2004.[Footnote 15] Similarly, average
wellhead prices for natural gas in the United States have increased
significantly in the past 6 years, increasing from an average of $2.19
per thousand cubic feet in 1999 to an average of $5.49 per thousand
cubic feet in 2004. Second, advances in technology have made it more
profitable to drill for oil and gas. For example, advances in
directional drilling and new techniques for putting wells into
production have made it possible to economically produce oil and gas
from reservoirs that were previously considered to be uneconomic.
Several other events in the past 6 years have also increased the
emphasis on developing oil and gas resources on public lands. First,
the Energy Act of 2000 directed the Secretary of the Interior, in
consultation with the Secretaries of Agriculture and Energy, to prepare
a report that provides an inventory of oil and natural gas resources
beneath federal lands and to identify the extent and nature of any
restrictions or impediments to the development of such
resources.[Footnote 16] Second, the National Energy Policy Report,
issued on May 16, 2001, contained many recommendations that were
intended to diversify and increase energy supplies, encourage
conservation, and ensure energy distribution. For example, this report
included recommendations directing the Secretary of the Interior to
expedite the ongoing study of impediments to oil and gas development
and to examine restrictions on oil and gas leasing and modify these
restrictions where opportunities exist, as long as they were consistent
with the law, good environmental practice, and balanced use of
resources. The National Energy Policy Report also recommended that the
President issue an executive order to "rationalize permitting for
energy production in an environmentally sound manner by directing
federal agencies to expedite permits and other federal actions
necessary for energy related project approvals on a national basis."
Accordingly, the President signed Executive Order 13212 (Actions to
Expedite Energy-Related Projects) on May 18, 2001, which incorporated
these recommendations and established an interagency task force to
monitor and assist the agencies in their efforts. Lastly, an oil and
gas inventory, which is commonly referred to as the Energy Policy and
Conservation Act (EPCA) Report,[Footnote 17] was issued in January
2003. The EPCA Report included estimates of oil and gas resources and
reserves in five major geologic basins in the interior West and a
description of the extent and nature of any restrictions to the
development of these resources and reserves. These five basins contain
much of the onshore oil resources and the bulk of the onshore natural
gas under federal ownership in the contiguous United States.
In response to these events, BLM developed a National Energy Policy
Implementation Plan that outlined 54 specific tasks intended to
facilitate the implementation of the President's National Energy
Policy. A subset of these tasks dealt with BLM's management of its oil
and gas program, including mitigating the environmental impacts of oil
and gas development. This subset of tasks formed the basis for a series
of BLM instructional memoranda, which among other things, directed BLM
field managers to (1) use the results of the EPCA Report to review
their restrictions on oil and gas development to make sure they are
still relevant and that they were the least restrictive while
protecting the environment, (2) improve and streamline the processing
of drilling permits for oil and gas wells, and (3) expedite the update
of certain resource management plans, including those that are time
sensitive because of energy development issues. This subset of tasks
also incorporated the agency's ongoing efforts to enhance its oil and
gas inspections and enforcement capabilities, improve its management of
idle wells, and encourage the use of best management practices for oil
and gas development.
Environmental Impacts of Oil and Gas Development:
If not properly mitigated, the environmental impacts of oil and gas
development could compromise BLM's responsibility for protecting the
environment. These environmental impacts range from being site
specific--for example, removing several acres of vegetation at an
individual well pad--to those that affect a much larger area, such as
fragmenting tens of thousands of acres of crucial winter range for mule
deer. (See figs. 1 and 2.) Air and water quality are also two resources
that can be affected by oil and gas development. Air quality can be
degraded by increased dust from newly graded roads, and visibility can
be affected in the immediate area and downwind. Air quality can also be
degraded by increased nitrogen oxides from diesel engines and
compressors used at drilling sites. Surface water quality can be
degraded by increased sediment, salt, and other pollutants either from
water draining off newly graded surfaces and roads or from the
accidental discharge of oil or water produced during oil and gas
production. Shallow aquifers can be polluted if required protective
measures are not in place, and coal bed methane gas production can
deplete shallow aquifers that serve as domestic water sources. Visual
resources can also be degraded by a high density of drilling and
production equipment that in extreme situations can change the
appearance of the landscape from a natural setting to an industrial
zone. In addition, the noises, smells, and lights from trucks, drilling
and construction equipment, and production facilities can disturb
wildlife and people living nearby.
Figure 1: Oil Drilling Site with Access Road:
[See PDF for image]
[End of figure]
Figure 2: Fragmentation of Wildlife Habitat by Multiple Oil and Gas
Sites:
[See PDF for image]
[End of figure]
BLM's Land Use Planning:
The primary method BLM uses to balance resource use and environmental
protection is the development of land use plans (called resource
management plans) under FLPMA. During the planning process, BLM
determines, among other things, which parcels of land will be available
for oil and gas development. BLM then publishes a notice that bids will
be accepted for leases on these lands. Before approving an oil and gas
lease, BLM conducts a review to determine if any restrictions--or
stipulations--are necessary to mitigate the impacts from oil and gas
production. As provided by BLM regulations, if stipulations are
necessary, they are incorporated into the lease.[Footnote 18] Before an
oil and gas company can drill on leased lands, it must submit an
application for a drilling permit with BLM.[Footnote 19] BLM then
evaluates the operator's proposal for drilling to ensure that it
conforms to the land use plan and applicable laws and regulations. In
approving a specific drilling permit, BLM inspects the proposed
drilling site and may add site-specific conditions of approval deemed
necessary to protect the environment. In addition, BLM must meet the
requirements of the National Environmental Policy Act of 1969 (NEPA).
NEPA requires federal agencies to prepare an environmental impact
statement (EIS) for major federal actions that may have a significant
affect on the quality of the human environment.[Footnote 20] When an
agency is not sure whether an activity will have significant impact on
the environment, the agency prepares a less detailed environmental
assessment (EA).[Footnote 21] If an environmental assessment determines
that the activity will significantly affect the environment, the agency
then prepares an EIS. With regard to oil and gas leasing and
development, BLM implements NEPA during both the preparation of the
resource management plan and at the drilling permit application
stage.[Footnote 22]
BLM's Environmental Inspection and Monitoring Activities:
After BLM approves a drilling permit, the operator can drill the well
and commence production. To ensure compliance with all stipulations in
the lease and conditions of approval in the permit, as well as
applicable laws and regulations, BLM has an inspection and enforcement
program that is designed to verify that the operator remains in
compliance with the various restrictions at a well site. The authority
for inspecting wells is derived from the Federal Oil and Gas Royalty
Management Act of 1982, as amended. This act requires the Secretary of
the Interior to develop guidelines that specify the coverage and
frequency of inspections.[Footnote 23] Although the driver of BLM's
inspection program is to verify the volumes of oil and gas produced to
ensure the federal government is receiving the required royalty
payments, the inspection program has evolved over time to include
various environmental inspections, as well. BLM tracks data on oil and
gas wells and environmental inspections in its centralized database.
Environmental Inspections:
Environmental inspections are BLM's primary mechanism to ensure that
operators are complying with various environmental laws and lease
stipulations. BLM staff conduct environmental inspections in order to
protect the surface and subsurface environments. BLM's natural resource
specialists, who generally also have some responsibilities for
processing drilling permits, conduct environmental inspections by
visiting an individual well or group of wells to assess compliance with
lease stipulations and conditions of approval that are written into the
drilling permit.[Footnote 24] (See fig. 3.) BLM managers determine
which wells are to be inspected each year through a ranking process
that places wells or groups of wells into either high-or low-priority
categories, with high-priority wells requiring an annual
inspection.[Footnote 25] Environmental inspection priorities are based
on several criteria, including the proximity to an area of special
environmental concern, whether noncompliance with lease stipulations or
conditions of approval could have a significant impact on the
environment, history of noncompliance, or sites that need BLM approval
for successful reclamation. If the natural resources staff determine
that a violation occurred or is occurring, they can take one of several
enforcement actions, including issuance of a verbal or written
"incident of noncompliance." The enforcement actions may carry fines,
depending on the severity of the infraction.
Figure 3: Typical Oil and Gas Site Subject to an Environmental
Inspection:
[See PDF for image]
[End of figure]
Resource and Environmental Monitoring Activities:
Another means for BLM to mitigate the impacts of oil and gas
development is through monitoring programs that are designed to measure
the effectiveness of mitigation measures over a period of time.
According to current BLM land use policy, each field office must
develop a monitoring schedule in their land use plans to periodically
(annually is recommended) revisit land use plan decisions and track
progress toward their implementation. The land use plan may also
identify intervals and standards for monitoring resources, such as air,
water, soils, vegetation, and fish and wildlife; this type of
monitoring is referred to as resource monitoring. Since 2003, when the
Office of Management and Budget identified, among other things, BLM's
resource monitoring activities as an area that needed improvement, BLM
has been developing a National Monitoring Strategy. This is a multiyear
approach that will develop an integrated data collection and assessment
strategy to inform and guide land management decisions, including
protocols for periodically reporting on resource conditions and the
effectiveness of management actions at the local, regional, and
national levels.
With respect to oil and gas development, BLM recognizes two types of
monitoring as important: (1) land use plan monitoring and (2) resource
monitoring. Land use plan monitoring can alert the agency as to whether
the magnitude of the overall environmental impacts resulting from oil
and gas development are within the acceptable level projected in the
resource management plan. BLM's policy calls for tracking the number of
oil and gas wells drilled and then converting that number into a total
amount of surface acres disturbed. Resource monitoring can reveal how
critical resources, such as air quality, groundwater, surface water,
and wildlife are directly impacted from oil and gas development over
time. Scientists accomplish this by establishing a baseline condition
for each resource, determining the change in this baseline condition
over time, and attributing this change to a specific activity, such as
oil and gas development. Land managers can then determine the
effectiveness of stipulations and conditions of approval and decide
whether these measures need to be modified, strengthened, or
eliminated. Resource monitoring generally involves assessing cumulative
impacts to resources over broad geographic areas and can be
incorporated into resource management plans or environmental impact
statements for large-scale oil and gas projects.
Monitoring Idle Wells:
BLM also has monitoring responsibilities for idle wells. Once the
operator demonstrates to BLM that the well can no longer produce oil or
gas economically or has no other use, the well must be plugged.
However, the operator may delay plugging the well and instead allow the
well to remain idle for various reasons, including the anticipation of
higher oil and gas prices that may once again make the well economic to
operate or possibly using the well for secondary recovery operations
(for example, using the well to inject water into the oil reservoir and
push any remaining oil to operating wells).
BLM has policies that require it to periodically review the status of
these idle wells to ensure that legitimate reasons exist for allowing
the wells to remain idle. According to BLM, the primary purpose of idle-
well reviews are to ensure that an operator does not walk away from a
nonproducing well, thereby leaving the federal government with the
responsibility of plugging the well and reclaiming the site. According
to BLM, idle-well reviews also help mitigate impacts from oil and gas
developments by ensuring that well sites are reclaimed in a timely
manner.
Idle wells consist of both temporarily abandoned and shut-in wells. BLM
defines temporarily abandoned wells as wells that are physically or
mechanically incapable of producing oil or gas of sufficient value to
exceed direct operating costs but may have value for a future use.
Operators must receive BLM approval prior to placing a well in
temporarily abandoned status for more than 30 days. This approval,
which lasts for up to 12 months, can be renewed annually at BLM's
discretion. All temporarily abandoned wells must have current approval
after the initial 30 days.[Footnote 26] BLM policy defines shut-in
wells as wells that are physically and mechanically capable of
producing oil or gas in paying quantities but have not produced for 1
month. According to BLM, operators do not have to obtain BLM approval
to place wells in shut-in status. BLM field office staff are directed
to identify the number of idle wells and to review the justification
for their idle status.[Footnote 27] Although idle-well review policies
vary by field office, BLM policy suggests that field office staff
initiate the review when a well has not produced for 12 months. Staff
then review well files to determine if the information submitted by the
operator supports the idle status. If the justification is
insufficient, BLM will require the operator to submit a plan that
allows for a number of actions, including bringing the well back into
production or plugging the well and reclaiming the site.
When an operator determines, and BLM agrees, that a well has no further
economic value, the operator must follow an agreed-upon final
reclamation plan that includes removing all visual evidence of the well
and pad, recontouring the affected land, and revegetating the site with
native plant species. In general, the goal is to reclaim the well site
so that it matches the surrounding natural environment to the extent
possible. BLM would then inspect the site to monitor the success of the
reclamation, a process that typically takes several years. Once BLM
determines that reclamation efforts have been successful, BLM approves
a Final Abandonment Notice.
Inspecting and Monitoring Reclamation Efforts:
Two types of reclamation may occur during the life cycle of an oil and
gas well. The first type is interim reclamation. Interim reclamation is
the practice of reclaiming unnecessary surface disturbance after a well
has been drilled. For example, operators may need a 10-acre drill pad
to safely drill a series of wells. However, once the wells are drilled,
operators may only need 4 acres to safely service the well over its
lifetime. In this case, interim reclamation would require the reseeding
and regrading of 6 acres of the initial pad that are no longer needed.
While this practice is not a general requirement in all permits issued
by BLM, the agency may choose to add it as a requirement in drilling
permits for specific oil and gas developments. The other type of
reclamation occurs when the operator plugs the well and initiates the
final reclamation process, as described in the previous section. This
type of reclamation is a requirement and the terms of the reclamation
are included in the terms of the lease and the drilling permit.
Dramatic Increases in Oil and Gas Permitting Activity Have Lessened
BLM's Ability to Ensure That Environmental Impacts Are Mitigated:
Oil and gas development on BLM-managed lands has increased dramatically
over the past 6 years, resulting in staff spending more time processing
drilling permits and less time mitigating the environmental impacts of
the development.[Footnote 28] Nationwide, the total number of oil and
gas drilling permits approved by BLM more than tripled, from 1,803 to
6,399 for fiscal years 1999 through 2004. Much of the increased oil and
gas activity was concentrated in five intermountain states--Colorado,
Montana, New Mexico, Utah, and Wyoming. In fiscal year 2004, the
offices under the jurisdiction of these five BLM state offices
collectively approved 6,204 drilling permits, more than 95 percent of
the national total. BLM officials in most of the field offices that we
visited stated that the increased permitting workload has led to less
staff time being available for performing environmental mitigation
activities. These mitigation efforts include conducting environmental
inspections of oil and gas wells, implementing monitoring programs,
tracking idle wells and reviewing justifications for why these wells
are in idle status, and ensuring reclamation efforts are successful.
BLM's Oil and Gas Permitting Activity Has More Than Tripled in the Past
6 Years:
Over the past 6 years, the total number of drilling permits approved by
BLM nationwide has more than tripled from 1,803 to 6,399. The permits
approved under the jurisdictions of five BLM states offices--Colorado,
Montana, New Mexico, Utah, and Wyoming--provided the bulk of the
nationwide increase in permitting activity and accounted for over 95
percent of all the permits approved in fiscal year 2004. The eight BLM
field offices we visited in these five states accounted for 77 percent
of the total permits approved nationwide in fiscal year 2004. (See
figs. 4 and 5.)
Figure 4: BLM State and Field Offices Visited:
[See PDF for image]
[End of figure]
Figure 5: Number of Oil and Gas Drilling Permits Approved by BLM for
Fiscal Years 1999 through 2004:
[See PDF for image]
Note: These numbers are as of April 2004.
[End of figure]
Specifically, the eight BLM field offices we visited approved 4,911
drilling permits in fiscal year 2004, an increase of 3,803 over the
number approved in fiscal year 1999. The increases among the eight BLM
field offices we visited ranged from 70 in the Miles City, Montana,
field office to 2,151 in the Buffalo, Wyoming, field office. (See table
1.)
Table 1: Increases in Oil and Gas Drilling Permits Approved by Eight
BLM Field Offices in Fiscal Years 1999 and 2004:
BLM field office: Miles City, Montana;
Drilling permits approved in fiscal year 1999: 26;
Drilling permits approved in fiscal year 2004: 96;
Difference: 70.
BLM field office: Rawlins, Wyoming;
Drilling permits approved in fiscal year 1999: 74;
Drilling permits approved in fiscal year 2004: 212;
Difference: 138.
BLM field office: Glenwood Springs, Colorado;
Drilling permits approved in fiscal year 1999: 8;
Drilling permits approved in fiscal year 2004: 179;
Difference: 171.
BLM field office: Carlsbad, New Mexico;
Drilling permits approved in fiscal year 1999: 242;
Drilling permits approved in fiscal year 2004: 436;
Difference: 194.
BLM field office: Pinedale, Wyoming;
Drilling permits approved in fiscal year 1999: 124;
Drilling permits approved in fiscal year 2004: 323;
Difference: 199.
BLM field office: Farmington, New Mexico;
Drilling permits approved in fiscal year 1999: 313;
Drilling permits approved in fiscal year 2004: 690;
Difference: 377.
BLM field office: Vernal, Utah;
Drilling permits approved in fiscal year 1999: 133;
Drilling permits approved in fiscal year 2004: 636;
Difference: 503.
BLM field office: Buffalo, Wyoming;
Drilling permits approved in fiscal year 1999: 188;
Drilling permits approved in fiscal year 2004: 2,339;
Difference: 2,151.
Total;
Drilling permits approved in fiscal year 1999: 1,108;
Drilling permits approved in fiscal year 2004: 4,911;
Difference: 3,803.
Source: BLM.
Note: For additional information, see appendix I.
[End of table]
The increases in the number of drilling permits approved in the
Buffalo, Wyoming, and Miles City, Montana, field offices, according to
BLM staff, were due primarily to extensive coal-bed methane
developments in the Powder River Basin. In 2003, a congressional
conference committee considering the 2004 appropriations bill for the
Department of the Interior stated in its report that "[b]ased on the
recently completed environmental impact statement for the Powder River
Basin and increased staffing for the Buffalo and Miles City field
offices, the managers expect more than 3,000 drilling permits will be
issued in 2004."[Footnote 29] The two offices actually approved 2,435
permits in fiscal year 2004. Drilling for natural gas was primarily
responsible for the increases in permits approved in the Rawlins and
Pinedale, Wyoming, the Farmington, New Mexico, and the Glenwood
Springs, Colorado, field offices, while increases in the Carlsbad, New
Mexico, and Vernal, Utah, field offices were due to increases in
drilling for both oil and natural gas.
Increased Oil and Gas Permitting Activity Has Decreased Staff Resources
Available for Environmental Mitigation Activities:
BLM officials in five of the eight field offices we visited reported
that they had to shift staff from activities designed to mitigate the
impacts of oil and gas development--such as environmental inspections,
monitoring, idle-well reviews, and reclamation--to those associated
with processing drilling permits. While some staff have had joint
responsibilities for processing permits and performing environmental
mitigation activities, according to BLM officials, staff have spent an
increasing amount of time processing permits, leaving less time for
mitigation activities. For example, the Buffalo, Wyoming, field office,
which has the highest drilling permit workload, was able to meet its
annual environmental inspection goal only once in the past 6 years, and
achieved only 27 percent of its environmental inspection goal in fiscal
year 2004.[Footnote 30] BLM staff also acknowledged difficulties in
developing and implementing monitoring plans due, in part, to the
increased permitting workload. Furthermore, BLM's ability to conduct
idle-well reviews--which, according to BLM, help prevent nonproducing
wells from becoming a liability to the federal government--has also
been impacted. According to staff from four of the eight field offices
we visited, backlogs of idle-well reviews currently exist because staff
who would normally be available to do these reviews have spent more
time processing permits. Finally, staff at seven of the eight field
offices we visited said they currently have a backlog of reclamation
work. These backlogs are due, in part, to fewer staff available to
inspect reclaimed sites as the result of permit-processing workloads.
Several BLM Field Offices with Large Increases in Permitting Activity
Have Not Met Their Environmental Inspection Goals:
BLM officials in four of the eight field offices we visited said that
staff are spending increasing amounts of time processing permits,
resulting in less time to conduct environmental inspections. The
routine environmental inspection of well sites is BLM's primary
mechanism for ensuring that operators are complying with various
environmental conditions and stipulations. Detecting violations of
environmental requirements and ensuring that any violation is promptly
corrected by the operator is a key component of BLM's process for
mitigating the environmental impacts of oil and gas development. Taken
as a whole, the eight BLM field offices we visited met their annual
environmental inspection goals only about half of the time during the
past 6 years (from fiscal years 1999 through 2004), due in part to
staff spending an increasing amount of time processing drilling
permits. Specifically, two field offices--Glenwood Springs,
Colorado,[Footnote 31] and Carlsbad, New Mexico--were able to meet
their environmental inspection goals during the entire 6-year span. The
success of the remaining six field offices ranged from achieving their
annual environmental inspection goals in 5 out of the 6 years in the
Pinedale, Wyoming, field office,[Footnote 32] to only once being able
to achieve their annual goal in the 6-year period in both the Buffalo,
Wyoming, and Vernal, Utah, field offices--the two field offices with
the largest increases in permitting activity. These two field offices
last met their annual environmental inspection goals in fiscal years
2000 and 1999, respectively. Furthermore, the Buffalo, Wyoming, field
office--the field office with the highest drilling permit workload--was
able to complete only 27 percent of its environmental inspection goals
in fiscal year 2004. By not performing these inspections, the field
offices have not ensured that the wells in their jurisdictions are
being operated in compliance with applicable environmental
requirements.
Although meeting annual goals for environmental inspections continues
to be a challenge for some BLM field offices, BLM has been actively
trying to address this issue in the last few years. As we discuss in
more detail later in the report, BLM initiated efforts to revitalize
its oil and gas inspection and enforcement program in February 2000.
However, BLM's progress in strengthening its inspections capabilities
has been somewhat undercut by the ever-increasing number of drilling
permits that, in turn, continues to drive a corresponding increase in
the various types of inspections that need to be performed.
Resource Monitoring Plan Development Has Lagged Partly Because of
Increased Permitting Activity:
Four of the eight BLM field offices we visited had not developed any
resource monitoring plans for various reasons, including that staff
that could have been used to develop such plans had been busy with
processing drilling permits.[Footnote 33] Monitoring plans help track
management decisions to determine if desired outcomes are achieved,
including those related to mitigating the environmental impacts of oil
and gas development. Officials in the four BLM field offices that had
developed resource monitoring plans also expressed concerns about their
ability to implement their monitoring plans given resource constraints.
For example, the heavy workload associated with processing drilling
permits in the Wyoming portion of the Powder River Basin has slowed the
development of a groundwater monitoring plan, and BLM officials in the
Pinedale and Rawlins, Wyoming, field offices reported that personnel
have been diverted from monitoring activities to processing drilling
permits. Appendix II contains additional information on resource
monitoring, the role of federal and state governments in monitoring,
the resource management plans and environmental impact statements we
reviewed, and how budget constraints are affecting monitoring.
Idle-Well Reviews Have Been Impacted by Increased Permitting Activity:
Officials from four of the eight BLM field offices we visited said
their offices had a backlog of idle-well reviews. According to the BLM
database containing idle-well information, only 44 percent of the wells
in temporarily abandoned status had all of the data needed to determine
whether idle-well reviews were being performed in a timely fashion.
However, for those wells in temporarily abandoned status that had the
necessary information, 65 percent of the idle-well reviews were past
due.
Due in large part to the increased drilling permit workload, BLM
officials in four of the eight field offices we visited indicated they
had not been able to complete their idle-well reviews in a timely
manner. However, staff from a fifth field office told us while they had
diverted staff from idle-well reviews to processing drilling permits,
this diversion had not impacted their ability to do idle-well reviews.
As with environmental inspections, completing the necessary idle-well
reviews remains a challenge for some BLM offices. As we discuss in more
detail later, BLM initiated a concentrated effort in May 2000 to reduce
the total number of idle wells. In part as a result of this effort--and
also because increases in oil and gas prices resulted in more idle
wells being brought back into production--the total number of idle
wells in four of the five states we visited (excluding Montana)
decreased from fiscal years 1999 through 2003. Of the five states we
reviewed, Wyoming appeared to have the greatest decrease in idle wells,
while Utah appeared to have the smallest decrease.[Footnote 34] Despite
progress in reducing the total number of idle wells, the percentage of
wells in idle status for more than 5 years, which, according to BLM,
represents a greater financial risk to the federal government,
increased in four of the five states.
A Backlog of Reclamation Reviews Exists Partly Because of Increased
Permitting Activity:
BLM officials in seven of the eight field offices we visited stated
that the workload associated with processing drilling permits has
affected their ability to complete their reclamation work. The
reclamation backlog consists of several activities, including visiting
well sites to verify the success of efforts to partially reclaim
drilling-well pads--called interim reclamation--as well as visiting
well sites where the well bore has been plugged and the entire well pad
has been reclaimed--called final reclamation. BLM officials in five of
the seven field offices responded that they have interim reclamation
backlogs (the Carlsbad, New Mexico, field office does not have any well
sites with interim reclamation requirements). Interim reclamation is
important because it mitigates adverse visual and environmental impacts
quickly. Since more acreage is needed for drilling a well than for its
ongoing operations once it is brought into production, the opportunity
exists to reclaim some of the drilling-well pad soon after drilling has
been completed. The purpose of an interim reclamation site visit is to
ensure that the interim reclamation was performed in accordance with
any applicable environmental requirements.
BLM officials in seven of the eight field offices largely attributed
their final reclamation backlogs to their significant workloads
associated with processing drilling permits. The final reclamation
backlog at these field offices consists of site inspections that needed
to be performed to assess the status of final reclamation efforts. If
done correctly, final reclamation should mostly remove any visible
evidence that an oil or gas well was ever on the site. BLM staff told
us that final reclamation typically takes anywhere from 2 to 6 years,
depending on precipitation and other factors. Our review of BLM data
showed that there were 1,975 wells in the eight field offices that were
abandoned over 4 years ago that did not have an approved Final
Abandonment Notice as of February 17, 2005.[Footnote 35] (See table 2.)
Table 2: Number of Abandoned Wells That Still Needed Approved Final
Abandonment Notices for Eight BLM Field Offices, as of February 17,
2005:
BLM field office: Glenwood Springs, Colo;
Number of abandoned wells prior to September 30, 2000: 28;
Number of abandoned wells from October 1, 2000, through September 30,
2004: 12.
BLM field office: Miles City, Mont;
Number of abandoned wells prior to September 30, 2000: 43;
Number of abandoned wells from October 1, 2000, through September 30,
2004: 43.
BLM field office: Rawlins, Wyo;
Number of abandoned wells prior to September 30, 2000: 68;
Number of abandoned wells from October 1, 2000, through September 30,
2004: 75.
BLM field office: Carlsbad, N. Mex;
Number of abandoned wells prior to September 30, 2000: 105;
Number of abandoned wells from October 1, 2000, through September 30,
2004: 241.
BLM field office: Pinedale, Wyo;
Number of abandoned wells prior to September 30, 2000: 154;
Number of abandoned wells from October 1, 2000, through September 30,
2004: 43.
BLM field office: Vernal, Utah;
Number of abandoned wells prior to September 30, 2000: 168;
Number of abandoned wells from October 1, 2000, through September 30,
2004: 60.
BLM field office: Buffalo, Wyo;
Number of abandoned wells prior to September 30, 2000: 492;
Number of abandoned wells from October 1, 2000, through September 30,
2004: 157.
BLM field office: Farmington, N. Mex;
Number of abandoned wells prior to September 30, 2000: 917;
Number of abandoned wells from October 1, 2000, through September 30,
2004: 119.
Total;
Number of abandoned wells prior to September 30, 2000: 1,975;
Number of abandoned wells from October 1, 2000, through September 30,
2004: 750.
Source: BLM.
[End of table]
An official at the Buffalo, Wyoming, field office said that
approximately 40 percent the Final Abandonment Notices could be
approved for sites where they have been submitted if staff had time to
verify that final reclamation had occurred and was successful. However,
due to the significant increase in permitting workloads, staff have
been unable to visit these sites.
Recent BLM Policy Changes Have Had Mixed Impacts on Environmental
Mitigation Activities for Oil and Gas Development:
The policy changes BLM made in the past 6 years to help facilitate and
manage increased oil and gas development and to enhance environmental
mitigation efforts have had mixed impacts on the agency's environmental
mitigation activities. Specifically, while most of BLM's recent policy
changes to help facilitate and manage increased oil and gas development
have had little overall impact on environmental mitigation activities,
some have had a negative impact. Because some of these policies placed
greater emphasis on processing drilling permits, the effect of these
policies was to cause field office staff to spend more time processing
permits and less time performing environmental mitigation activities.
In contrast, most of BLM's policy changes to enhance environmental
mitigation activities have had some positive impacts on the ability of
the field office staff to conduct such activities. However, the effect
of these policies has been somewhat constrained by increases in the
permitting workload.
Some BLM Policy Changes to Help Facilitate and Manage Oil and Gas
Development Indirectly Limited BLM's Ability to Meet Its Mitigation
Responsibilities:
For the eight field offices visited, most of the recent BLM policy
changes that were designed to facilitate and manage oil and gas
development have, thus far, had little direct impact on environmental
mitigation activities, but some have indirectly limited BLM's ability
to carry out its mitigation responsibilities. For example, BLM's policy
changes that required field offices to review restrictions on oil and
gas development had little impact on environmental mitigation
activities because they generally did not result in any revisions to
lease stipulations or conditions of permit approval. Similarly, the
policy changes that expedited the completion of revised energy-related
resource management plans had little impact on environmental mitigation
activities, because the completion of these plans has been delayed for
various reasons, including to allow more time for key stakeholders to
comment on the plans and for necessary environmental reviews. In
contrast, BLM's policy changes to improve and streamline the processing
of drilling permits have indirectly had a negative impact on
environmental mitigation activities, because they have reinforced
processing drilling permits as a top priority. Consequently, these
policies have resulted in staff spending less time performing
environmental mitigation activities.
Policy Changes on Reviewing Restrictions on Oil and Gas Development
Have Had Little Impact on Environmental Mitigation Activities:
BLM officials from the eight field offices we visited stated that
recent policy changes on reviewing restrictions on oil and gas
development have had little or no impact thus far on their
environmental mitigation activities. In April and July 2003, BLM issued
policy changes that provided direction to BLM state and field offices
on ways to incorporate the findings of the EPCA Report into the
agency's land use planning process and into oil and gas use
authorizations (such as leases and drilling permits). These polices
were aimed at reducing or eliminating impediments to oil and gas
leasing on BLM land while continuing to protect resources. These
policies directed BLM land use planners to evaluate the necessity of
existing constraints on energy development in high-potential oil and
gas areas--including such environmental mitigation measures as lease
stipulations and conditions of permit approval.
Since these policy changes generally did not result in revisions to
stipulations in existing land use plans or revisions to existing lease
stipulations or conditions of permit approval for the eight BLM field
offices we visited, they have had little impact thus far on the field
offices' environmental mitigation activities. Seven of the eight field
offices reported making no revisions to land use plan stipulations or
to existing lease stipulations or conditions of approval as a result of
these policy changes, while one field office reported making a
significant revision to stipulations in a land use plan. Specifically,
the Farmington, New Mexico, field office revised stipulations for the
Negro Canyon area from "no leasing" to "no surface occupancy" with
seasonal drilling restrictions, noise standards, and designated bald
eagle resource areas. This modification allowed an operator to lease
Negro Canyon and drill directionally from land adjacent to the canyon.
The field office staff said this revision allowed BLM to collect
additional royalties and prevented the oil and gas from being drained
by drilling activity on private and state land adjacent to the canyon.
With this new oil and gas development, staff in the Farmington field
office will need to perform additional environmental inspections to
ensure compliance with the new lease stipulations.
In addition, three of the eight BLM field offices reported that these
policy changes may result in modifications to their future
environmental mitigation activities as resource management plans are
updated. For example, staff from the Vernal, Utah, field office said
that as a result of these recent policy changes, standardized lease
stipulations would be adopted in the current revision of the Vernal
Resource Management Plan. According to these staff, so far, this has
involved clarifying stipulations as opposed to revising them. Since
this resource management plan is still being drafted, any final changes
to lease stipulations and their subsequent potential impact on
environmental mitigation activities have yet to be determined. Also,
staff from the Glenwood Springs, Colorado, field office said these
policies may result in modifications to stipulations in the amendment
under development for the Roan Plateau Resource Management Plan. The
staff are performing an in-depth analysis to determine if less-
restrictive stipulations can be used. For example, currently there is a
5-month restriction in the Roan Plateau area on oil and gas drilling
activity to protect winter range habitat for deer and elk. The field
office staff are looking at the impacts of reducing this restriction to
2 months or dropping it altogether. This resource management plan
amendment is also still in draft form, and it is too early to determine
what, if any, impact any revisions may have on environmental mitigation
activities. Similarly, staff from the Miles City, Montana, field office
said the EPCA policies will likely impact the stipulations in an
upcoming land use plan revision that is scheduled to begin in fiscal
year 2005.
Policy Changes to Expedite Energy-Related Resource Management Plans
Have Had Little Impact on Environmental Mitigation Activities:
Overall, staff from the seven BLM field offices we visited that were
responsible for developing time-sensitive energy-related resource
management plans (Carlsbad, New Mexico, was not) said the recent policy
changes to expedite these plans have had little or no impact on their
environmental mitigation activities. In February and August 2002, BLM
issued policy changes that placed a high priority on expediting the
update of 21 resource management plans, including 10 energy-related
plans.[Footnote 36] Many of these plans had not been updated in several
years and did not contain the latest available information needed to
make land use and resource protection decisions. The February 2002
policy noted that BLM had received increased funding for updating and
preparing these plans. With respect to environmental issues, the
concern was that the environmental analyses associated with these
updated plans would be compromised in the rush to complete them within
their expedited time frames. However, for the expedited plans being
developed by the BLM field offices we visited, none have been completed
on time--only 4 of the plans have been completed, ranging from 7 months
to 1 year past their original deadlines--and there was time to complete
the necessary environmental analyses.
The seven BLM field offices we visited that were developing energy-
related expedited plans were responsible for eight of these plans (the
Pinedale, Wyoming, field office had two plans). (See table 3.) BLM
officials from these field offices said the original deadlines were too
optimistic. Among the reasons cited for why the deadlines were not met
for several of these plans were because time frames had to be extended
to allow key stakeholders more time to comment on the plans and to
accommodate required environmental reviews, including public comment
periods. Thus, staff from four of the seven field offices believed the
environmental analyses associated with their plans were not affected by
these policy changes. Staff from two field offices felt the policies
slightly improved the quality of their environmental analyses. For
example, staff from the Glenwood Springs field office said that because
their plan was time sensitive, it was deemed high profile and received
more scrutiny than usual. Staff from one field office said the policies
may have had a slightly negative impact on the environmental analysis
supporting their expedited plan because, among other things, time was
not sufficient to allow some stakeholders to participate as much as
they would have liked. Consequently, overall, the field staff believed
these policy changes had little or no impact on environmental
mitigation activities.
Table 3: Status of the Energy-Related Expedited Resource Management
Plans for Eight BLM Field Offices as of March 2005:
BLM field office: Carlsbad, N. Mex;
Energy-related expedited resource management plan: None;
Date originally scheduled for completion: Not applicable;
Status: Not applicable.
BLM field office: Miles City, Mont;
Energy-related expedited resource management plan: Powder
River/Billings Plan Amendment;
Date originally scheduled for completion: June 2002;
Status: Completed April 2003.
BLM field office: Buffalo, Wyo;
Energy-related expedited resource management plan: Buffalo/Powder River
Resource Management Plan;
Date originally scheduled for completion: September 2002;
Status: Completed April 2003.
BLM field office: Farmington, N. Mex;
Energy-related expedited resource management plan: Farmington Resource
Management Plan;
Date originally scheduled for completion: September 2002;
Status: Completed September 2003.
BLM field office: Pinedale, Wyo;
Energy-related expedited resource management plan: Snake River Resource
Management Plan;
Date originally scheduled for completion: June 2003;
Status: Completed April 2004.
BLM field office: Glenwood Springs, Colo;
Energy-related expedited resource management plan: Roan Plateau Area
Plan Amendment;
Date originally scheduled for completion: September 2003;
Status: Draft resource management plan and draft EIS released for
comment in November 2004; public comment period ends in April 2005.
BLM field office: Vernal, Utah;
Energy-related expedited resource management plan: Vernal Resource
Management Plan Revision;
Date originally scheduled for completion: March 2004;
Status: Draft resource management plan and draft EIS released for
comment in January 2005; public comment period ends in April 2005.
BLM field office: Pinedale, Wyo;
Energy-related expedited resource management plan: Pinedale Resource
Management Plan;
Date originally scheduled for completion: October 2004;
Status: Draft resource management plan and draft EIS to be released for
comment in November 2005.
BLM field office: Rawlins, Wyo;
Energy-related expedited resource management plan: Rawlins Resource
Management Plan;
Date originally scheduled for completion: October 2004;
Status: Draft resource management plan and draft EIS released for
public comment in December 2004; public comment period ends in March
2005.
Source: BLM.
[End of table]
Policy Changes to Improve and Streamline the Processing of Drilling
Permits Have Indirectly Had a Negative Impact on Environmental
Mitigation Activities:
Overall, BLM officials from four of the eight field offices we visited
stated that the most significant impact of the recent policy changes
for streamlining the processing of drilling permits was that the
policies re-emphasized that processing permits was BLM headquarters'
top priority. As a result, for these four offices, the emphasis on
processing permits has indirectly limited environmental mitigation
activities by shifting staff resources from performing environmental
mitigation activities to processing drillings permits. In April 2003,
BLM issued five policy changes that were aimed at improving procedures
for processing drilling permits. (See table 4.) However, only two of
the five policies were to be implemented immediately.
Table 4: Policy Changes to Improve and Streamline the Processing of
Drilling Permits:
Policy change: Comprehensive strategies to more efficiently and
effectively process drilling permit applications, including;
* multiple drilling permit application package with a master drilling
plan;
* geographic area development plan;
* standard operating practice agreement;
* geographic area NEPA; Purpose:
* Provide for the simultaneous processing and completion of
environmental analyses on multiple permit applications with similar
characteristics;
* Implement a geographic area development plan approach for an oil and
gas field or limited area within a field, designed to meet BLM's
environmental goals while addressing the operator's business needs;
* Develop standard operating agreements to identify the drilling and
surface practices operators will use for an entire oil and gas field or
geologic formation;
* Provide for NEPA analysis of an entire oil and gas field or a logical
portion of a field, covering multiple wells, access routes, production
facilities, utilities, etc;
Status: Field offices asked to implement policy.
Policy change: Cultural resources;
Purpose: Allow, as an alternative to the traditional "linear" approach,
a "block" survey of cultural resources to cover larger areas, resulting
in a more thorough survey and greater flexibility in planning;
Status: Field offices asked to implement policy.
Policy change: Condition of approval;
Purpose: Collect information on current use of conditions of approval
and use this information to develop future guidance on how to ensure
that conditions of approval are consistent and of high quality;
Status: Information collected, guidance drafted but not finalized.
Policy change: Revise Onshore Oil and Gas Order No. 1;
Purpose: Revise the established procedures for completing drilling
permits;
Status: Draft completed but not finalized.
Policy change: Revise Oil and Gas "Gold Book";
Purpose: Initiate a working group to revise and update a brochure
formally known as Oil and Gas Surface Operating Standards for Oil and
Gas Development;
the purpose of updating and revising the brochure is to help industry
better understand BLM's surface operating standards;
Status: Draft completed but not finalized.
Source: BLM.
[End of table]
Despite the general overall sense of several of the field office staff
with whom we spoke that these five policy changes collectively have had
an indirect negative impact on their environmental mitigation
activities, the direct impact of the two policy changes that have been
implemented has been mixed. For the first policy change, BLM officials
from six of the eight field offices stated that some of the strategies
in the policy on efficiently and effectively processing drilling
permits have had some positive impacts on their environmental
mitigation activities. For example, four of the eight field offices
successfully used the strategy of encouraging companies to bundle
together multiple drilling permits that share certain characteristics
and submit them for review together. This strategy is most suitable for
use in areas of intense drilling activity or where it is certain that
drilled wells can be put into production immediately. Among other
benefits, this strategy can encourage companies to plan their drilling
operations more carefully and help BLM better assess the cumulative
environmental impacts of drilling activities.
For the second policy change, BLM officials from the eight field
offices said the policy on ways to reduce the time needed to identify
and protect cultural resources has had limited or no impact on their
environmental mitigation activities. This policy recommended strategies
for (1) identifying cultural resources early, and (2) using "block"
surveys to allow all of the components of a proposed project to be
sited and to help better facilitate the protection of both
environmental and cultural resources. According to BLM, where block
surveys are used, the cultural resources of concern can be readily
identified and companies can have more flexibility to move project
components around without additional surveys. Staff from four field
offices said this policy has had a slightly positive impact on their
environmental mitigation activities. For example, staff from the
Glenwood Springs field office said using block surveys has helped them
improve the quality of their environmental analyses. Staff from two
field offices said this policy has had no impact because they were
already using these practices before the policy was issued. Staff from
two other field offices said the policy has had no impact because they
were having difficulties getting companies to use the strategies. For
example, staff from one of these field offices said companies were
hesitant to use block surveys because they believe they incur higher
costs than if they use more traditional "piecemeal" cultural surveys.
BLM Policy Changes to Enhance Environmental Mitigation Activities Have
Had Some Positive Impacts:
Two of the three policy changes BLM issued to enhance certain
environmental mitigation activities have had some positive impacts,
although increases in the permitting workload have limited their
usefulness. The first policy change, to enhance BLM's inspection and
enforcement capabilities, has had a positive impact on environmental
mitigation activities because it resulted in additional resources to
hire new staff. However, BLM staff in many of the eight field offices
we visited still do not have the necessary resources to perform their
required environmental inspections. The second policy change, to
address the large inventory of idle wells, has had a limited impact on
environmental mitigation activities by helping somewhat reduce the
number of idle wells.[Footnote 37] However, increases in the permitting
workload have resulted in staff having less time to perform idle-well
reviews and to make sure that their justification for being in idle
status is valid. The third policy change, on encouraging the use of
best management practices for oil and gas development, has had no
impact on environmental mitigation activities because the eight field
offices we visited were already using these practices.
Policy Change to Enhance Oil and Gas Inspection Capabilities Has Had a
Positive Impact on Environmental Mitigation Activities:
BLM officials from six of the eight field offices we visited said that
the policy change to enhance their inspection and enforcement
capabilities has had a positive impact on their environmental
mitigation activities. In February 2000, BLM initiated efforts to
revitalize its oil and gas inspection and enforcement program. BLM
continued this effort by incorporating goals for enhancing inspection
and enforcement capabilities in its National Energy Policy
Implementation Plan. For example, two of these goals were to (1)
increase the resources needed to conduct the required number of
inspections, and (2) establish a method for ensuring that inspection
personnel maintain the knowledge, skills, and ability to conduct high-
quality inspections.
Six of the eight field offices we visited reported they were able to
obtain the additional resources to hire 44 new enforcement personnel.
The number of additional staff hired ranged from 15 in the Farmington,
New Mexico, field office to 1 in the Glenwood Springs, Colorado,
office. According to BLM, funding for additional enforcement staff was
secured through additional appropriations. Although the additional
staff have been helping field offices deal with their inspection
workloads, a majority of the field offices indicated that they were
still understaffed. In addition to hiring more personnel, this policy
change has also resulted in the development of a National Certification
Program for BLM's inspection and enforcement staff. All new inspection
staff are required to complete this course to be certified to conduct
inspections. However, BLM officials from five of the eight field
offices stated that the new certification course cannot accommodate all
of the new inspectors that need to be trained and, as a result, some of
their inspection personnel have not been able to complete the course
and are not yet certified.
Policy Changes to Improve the Management of Idle Wells Have Generally
Had a Limited Impact on Environmental Mitigation Activities:
BLM officials from the eight field offices stated that the policy
changes on reducing the number of idle wells have generally had a
limited impact on environmental mitigation activities. In May 2000 and
May 2001, BLM issued policies that established an agencywide program to
help manage its significant inventory of idle wells and help prevent
these wells from becoming abandoned, falling into disrepair, causing
environmental damage, and becoming a liability to the federal
government. Certain aspects of this effort were incorporated into BLM's
National Energy Policy Implementation Plan. Specifically, the policy
changes required each BLM state office that administers an oil and gas
program to establish a plan that outlines procedures--including roles
and responsibilities for conducting idle-well reviews--to help ensure
that every well without a viable future use is properly plugged and
abandoned.
Staff from four of the eight field offices indicated that the effect of
the policies has been hampered by increases in permitting workloads,
which has not allowed staff time to perform idle-well reviews. In
contrast, staff from the Miles City, Montana, field office stated that
the policies have had a moderately significant impact in reducing the
number of idle wells in their jurisdiction, because they made a
concentrated effort to contact operators and notify them that all wells
capable of production must be returned to production or evaluated for
plugging and abandonment. Similarly, staff from the Carlsbad, New
Mexico, field office said the policy changes had greatly reduced the
number of idle wells in their jurisdiction because they successfully
used it in discussions with operators to convince them to bring wells
back into production or plug them. They believe this policy has helped
them plug 450 to 500 wells in the last 3 years. Also, they said the
increased emphasis on the need to address idle wells has encouraged
operators to plug wells without BLM directing them to do so.
Policy Change on Using Best Management Practices Has Had No Impact on
Environmental Mitigation Activities:
BLM officials from each of the eight field offices stated that the
policy change on using best management practices has had no impact on
their environmental mitigation activities because they were already
using these practices. In June 2004, BLM issued a policy that required
all of its field offices to consider incorporating best management
practices for oil and gas development into drilling permits. In
particular, this policy encouraged BLM staff to meet with oil and gas
operators prior to the submission of a drilling permit application to
plan for development, identify resources to be protected, and discuss
the use of appropriate best management practices. Among other things,
those practices included the interim reclamation of well locations and
access roads soon after the well is put into production; painting all
new oil and gas facilities a color that best blends with the
surrounding environment; reusing old roads and pads, if possible; and
finalizing reclamation of all disturbed areas, including access roads,
to the original contour or a contour that blends with the surrounding
topography.
Since staff from the eight field offices we visited said they were
already following the best management practices described in the policy
change to the extent possible, the policy has had no impact on their
environmental mitigation activities. For example, staff from the
Rawlins, Wyoming, field office said they have been encouraging
practices such as interim reclamation and use of appropriate paint
color for years, and that they meet annually with oil and gas operators
to discuss and encourage the use of these practices. Also, staff from
the Buffalo field office said they were using these practices long
before this policy was issued and have found them to be beneficial in
mitigating the environmental impacts of oil and gas activity.
BLM Faces Several Major Challenges in Implementing Its Oil and Gas
Program:
BLM state and field office staff and GAO identified several challenges
that BLM faces to effectively manage its oil and gas program,
including, but not limited to, (1) managing growing workloads to meet
all of its responsibilities, (2) using workforce planning and workload-
related data to effectively identify and communicate its workforce
needs, and (3) meeting its oil and gas program resource needs in light
of budget and funding constraints. According to BLM staff, workload
pressure, which was already at a high level due to the increases in
permitting activity, has been further exacerbated by increases in
public challenges[Footnote 38] to BLM's decisions and actions. Further,
in reviewing their efforts to manage increasing workloads, we found
that BLM's current workforce planning process does not allow all of
BLM's staffing needs to be effectively communicated to BLM state and
headquarters decision makers for use in supporting budget
justifications and resource allocation decisions and that some data
needed to quantify workloads are either not tracked or not consistently
tracked. Moreover, BLM is faced with managing the oil and gas program
at a time when increases in program resources are greatly outpaced by
workload activities necessary to manage the rapidly expanding oil and
gas permitting activity. While many federal agencies are facing tight
budget constraints, BLM is in an unusual position because it has
authority, which it has not exercised, to generate additional revenues
to cover its oil and gas program activities.
Managing Increasing Oil and Gas Workload:
As previously discussed, the recent upswing in oil and gas permitting
activity has made it increasingly difficult for BLM to manage its
workloads and meet all of its oil and gas program responsibilities.
According to some of the BLM state and field office staff with whom we
spoke, these workload management issues have been exacerbated by an
increase in public challenges to BLM decisions about oil and gas
development. Generally, such challenges stem from differing views on
how public lands should be managed, and the perception by some groups
and individuals that BLM is not adequately protecting the environment
and is not achieving the appropriate balance among the multiple ways
land can be used (for example, oil and gas development versus
recreation). BLM officials from each of the five state offices and each
of the eight BLM field offices we visited identified public challenges
to agency decisions as an issue their office faces, with staff from
four of the five state offices and six of the eight field offices
anticipating the workload associated with public challenges to
moderately or greatly increase over the next 5 years. One BLM official
explained that attending to these challenges consumes the time of
specialists who would otherwise be processing drilling permits or
conducting inspections. A few BLM staff also explained that as leasing
and permitting increasingly encroach upon residential and
environmentally sensitive areas, public challenges will likely
increase.
In addition to affecting BLM's ability to meet its oil and gas program
responsibilities, heavy workloads have also led to high stress levels
and low morale among BLM field office staff, according to several BLM
staff with whom we spoke. Several BLM managers expressed concern over
staff burnout and that staff turnover could require offices to spend
more time hiring and training new employees. One field office employee
substantiated this concern by explaining that a few employees in the
office, who used to spend their days in the field conducting
environmental inspections, now spend all of their time in offices
processing drilling permits and are under pressure to approve the
permits quickly. Consequently, these staff are considering retiring
earlier than they had planned to, which would leave the office with a
severe gap in experience during a critical period of high workload.
Effectively Identifying and Communicating Workforce Needs:
When asked to identify actions necessary to minimize the impacts of
workload management and other challenges their offices face, BLM
officials consistently cited the need to secure budgets and staff that
could adequately sustain the increasing workloads associated with oil
and gas program responsibilities. However, during the course of our
review, we found that BLM's current workforce planning process, a
crucial tool in managing workload and associated staff needs, is not
effective in identifying and communicating all BLM state and field
office needs to the decision makers at headquarters. In addition, BLM
does not consistently track certain data types in a way that provides
an accurate assessment of workloads. Collectively, these shortfalls
make it difficult for BLM to effectively manage and prioritize
workloads and staffing decisions and meet the agency's strategic goals
within constrained budgets.
BLM's Workforce Planning Process Is Not Effective in Identifying and
Communicating Needs:
The way BLM utilizes the workforce planning process limits the ability
of the agency to use the information gathered to support informed oil
and gas workload management decisions. As described by the Department
of the Interior's Workforce Planning Instruction Manual, one of the key
applications of the workforce planning process is to determine the
workforce required to meet strategic goals and use this information to
present a strong justification to appropriators. In making workforce
requirement determinations through the workforce planning process, it
is widely recognized that an agency must identify any workforce gaps,
or the difference between forecasted staff needs and future staff
supply. Our December 2003 report on this subject specifically states
that it is essential that agencies determine the skills and
competencies that are critical to successfully achieving their missions
and goals, especially as changes in factors such as budget constraints
change the environment within which the agencies operate.[Footnote 39]
Once a gap is identified, workforce planning dictates that management
must prioritize the gap by determining the staff needs that are most
critical in attaining organizational goals, and then, as our 2003
report highlights, they can develop strategies tailored to address the
gaps.
We found that BLM's current workforce planning process does not
effectively identify all of BLM's staffing needs, or its workforce gap,
in large part because BLM headquarters directs state and field offices
to identify only those needs for which funding is available. While five
out of the eight field office managers we interviewed reported
communicating their full staffing needs to their respective state
offices, regardless of funding expectations, three of the eight field
office managers acknowledged that they factor the budget into the needs
they communicate, and therefore forward only a subset of the field
offices' workforce gap to the state office. For example, in its most
recent workforce planning document, the Farmington field office
included only half of the staff needs they identified to us. Similarly,
the Buffalo field office included only a quarter of its needs in its
most recent workforce planning document. In addition, officials in the
Wyoming state BLM office, which oversees three of the eight field
offices we visited, explained that the needs for their state that they
reported to us were actually lower than what was needed because they
directed field office managers in their state to submit needs based on
flat or restricted budgets.
Even when actual needs are effectively communicated from the field
offices to their respective state offices, the state offices are not
communicating these needs to BLM headquarters, where key budget
decisions are made. In fact, four out of the five state offices we
interviewed indicated needing more staff for the oil and gas program
than was reflected in the workforce planning documents they submitted
to headquarters. Specifically, these four state offices included in
their workforce plans less than half of the workforce needs they
identified during our interviews. Collectively, of the roughly 174 full-
time equivalents (FTE) identified during our interviews, the states
included only 50 FTEs in their workforce plans. When asked to provide a
reason for the discrepancy, all four offices cited BLM headquarters'
direction to only include in their workforce plan the needs that the
office expects to have funding to support. In one instance, this
direction resulted in a state office deciding not to forward workforce
planning documents to headquarters because they were aware that BLM was
anticipating budget cuts and consequently did not believe there was any
reason to identify positions that could not be funded.
Because BLM's workforce planning process does not effectively
communicate all of the critical workforce needs of its field offices to
the state offices and ultimately to BLM headquarters, the process does
not provide agency officials responsible for making key management
decisions with consistent and readily available information capable of
supporting budget justifications and resource allocation decisions. In
fact, one BLM headquarters workforce planning official stated that BLM
faces a dilemma when assessing needs between programs through the
current workforce planning process. In order to assess, compare, and
prioritize needs, BLM decision makers need to have complete and
consistent information describing the gap among all of the state and
field offices. While it is reasonable that budget considerations must
come into play when managing workloads and making workforce decisions,
workforce planning is designed to help an agency meet its
organizational goals by assessing all of its needs, which in turn helps
ensure key management decisions are fully informed.
Data Needed to Identify Some Workload Needs Are Either Not Tracked or
Not Consistently Tracked:
The lack of readily available and consistent data to measure some of
BLM's oil and gas program activities has limited the agency's ability
to effectively manage program workloads. Specifically, in our efforts
to determine the extent to which the recent increase in permitting
activity has affected BLM's ability to assess and mitigate
environmental impacts, we attempted to gather data that conveyed
workloads and the related work accomplishments for environmental
inspections, idle-well reviews, interim reclamation inspections, and
final reclamation inspections. While we found that BLM generally had
suitable data to measure the workloads and progress in attaining
workload goals for environmental inspections,[Footnote 40] we found
that data on idle-well reviews, final reclamation inspections, and
interim reclamation inspections were incomplete or inconsistent,
incomparable, or not tracked at all, respectively, making it difficult
to determine for each field office the workloads and related
accomplishments for these activities.
According to one of the administrators of the BLM database containing
idle-well information, the database is already capable of accepting the
idle-well data that we attempted to gather, which included the number
of idle wells that needs to be reviewed within a given year and the
corresponding number of those idle wells actually reviewed. However, he
explained that field office staff are not consistently entering the
information into the database because it is not required, and all staff
are not aware of the capability. Many staff, however, have opted to use
their own tracking systems. Out of the eight field offices we
interviewed, six reported relying on their own systems to track idle
wells. As a result, queries from the database do not provide complete
information on the workload and related work accomplishments for idle-
well reviews for each field office.
The database is also capable of tracking the final reclamation data we
attempted to gather, including the number of final reclamation
inspections planned and completed. However, we found that the criteria
used to determine the number of planned inspections vary among the
field offices. For example, an official in one field office told us
that staff in that office used the estimated number of wells that will
be plugged in the coming year as the planned number of reclamation
inspections. This is inconsistent with the criteria used in another
field office, which, according to an official in that office, plans the
number of reclamation inspections for the upcoming year based on the
total number of wells in abandoned status. This variation precludes
senior BLM staff from gathering accurate and comparable data on the
final reclamation workloads for each field office.
The database does not, however, have the capacity to track data that
measure the workload and related accomplishments associated with
interim reclamation inspections. While the database tracks a number of
different types of inspections, it does not currently provide a means
to track interim reclamation inspections as a separate inspection type.
Consequently, as a senior BLM official explained, BLM is unable to
separately plan and track workloads for interim reclamation
inspections. This official indicated that it would be helpful to have
this capacity in order to better manage these workloads.
Without consistent and readily available data, BLM state and
headquarters offices cannot easily determine if field offices are
completing all of their necessary idle-well reviews--a key action in
achieving the agency's strategic goals--and they cannot assess the
interim and final reclamation workloads or their progress in addressing
these workloads to ensure timely surface restoration. Moreover, without
these critical data, BLM state and headquarters offices do not have the
information necessary to make appropriate staffing and budget decisions
to ensure that these key mitigation and reclamation activities are
accomplished.
In addition to mitigation and reclamation data, BLM also lacks
consistent, readily available data on the extent to which public
challenges to agency decisions are affecting agency workloads. Our
November 2004 report on this subject, which sought to determine the
extent to which BLM gathers and uses public challenges data to manage
its onshore oil and gas program, found that BLM does not systematically
gather and use nationwide information on public challenges in a way
that helps the agency manage the program.[Footnote 41] While a number
of BLM state and field office staff we interviewed indicated that an
increase in public challenges has exacerbated their office's oil and
gas program workloads, our previous review found that the system state
offices use to collect data on public challenges does not provide
consistent information that BLM headquarters can use to assess workload
impacts on its state offices and to make staffing and funding resource
allocation decisions. Specifically, we reported that the system does
not provide useful data to headquarters because state offices use the
system inconsistently (due to a lack of clear guidance from
headquarters on which data to enter) and because the system tracks
challenges only during leasing, rather than challenges at all four
stages of oil and gas development--planning, exploration, leasing, and
operations. Our November 2004 report recommended that the Secretary of
the Interior direct BLM to (1) include public challenge data in BLM's
new agencywide automated system for selling leases, and (2) issue clear
guidance on how public challenge data should be entered into the new
system. In its response to our report, BLM stated that it does plan to
design the system in a way that allows BLM to track public challenge
data on lease sales.
Meeting Oil and Gas Program Resource and Staffing Needs in a Period of
Declining Budgets:
Lastly, but perhaps most significantly, BLM is presented with the
challenge of meeting its oil and gas program resource and staffing
needs in a period when these needs are growing faster than available
resources. Although the percent change in the number of approved
drilling permits increased by roughly 255 percent from fiscal years
1999 through 2004, and the need for several other activities, such as
inspections, rose along with permit approval increases, the percentage
changes in BLM's oil and gas management budget and staff levels, as
measured in authorized FTEs, rose only 64 percent and 21 percent,
respectively. (See fig. 2.) In addition, according to BLM budget
justification documents, budget levels and authorized FTEs decreased
slightly for fiscal year 2005 compared with the previous year, despite
the expected continuing increase in approved drilling permits and
corresponding mitigation and reclamation responsibilities.
Figure 6: Cumulative Percentage Change in Drilling Permits Approved,
BLM's Oil and Gas Program Budget, and Staff Resources for the Oil and
Gas Program for Fiscal Years 1999 through 2005:
[See PDF for image]
[End of figure]
However, as reflected in BLM's fiscal year 2006 Budget Justification,
the agency is considering steps to improve the disparity between needed
and available resources. Since it is unlikely, given current and
anticipated federal fiscal conditions, that BLM will receive budget
increases commensurate with its oil and gas program workloads, BLM is
considering other options for generating additional revenues. Under
FLPMA, BLM has the authority to assess and collect fees for various
services that it provides.[Footnote 42] FLPMA provides specific
authority to the Department of the Interior, through BLM, to "establish
reasonable filing and service fees and reasonable charges"[Footnote 43]
FLPMA further provides that the funds received (1) must be deposited in
a special account in the U.S. Treasury and (2) are authorized to be
appropriated and made available until expended. In December 2000, BLM
proposed collecting fees associated with processing documents for oil
and gas, mining, geothermal, and nonenergy activities, but this
proposal, which was never finalized, did not include collecting fees to
recover costs associated with issuing oil and gas permits.[Footnote 44]
According to BLM headquarters officials, BLM has recently decided to
revisit this proposal and incorporate a fee structure to recover the
costs of processing drilling permits. In commenting on this report, BLM
stated that this revised fee collection structure, which BLM plans to
issue as a final rule, is currently being reviewed by the
Administration. BLM's fiscal year 2006 Budget Justification includes
language describing BLM's intent to publish regulations that would
require industry to pay more of the recoverable costs of processing new
applications for drilling permits as well as documents associated with
oil and gas lease transactions. BLM estimates that the cost recovery
fees would generate a net increase of $7.6 million, which would allow
the agency to maintain its FTE level and shift a portion of its
appropriated funds to other program priorities such as ensuring proper
inspection and enforcement actions, assuming that more of the fees are
not used to reduce BLM's appropriation.
During our interviews at BLM state and field offices, staff expressed a
variety of concerns related to the feasibility of cost recovery
implementation and its utility in helping offices meet programmatic
goals and requirements. Among these concerns was the notion that
industry would be opposed to any cost recovery because many companies
are already paying for costs for which BLM would otherwise be
responsible, such as environmental assessments, cultural surveys, and
wildlife inventories, in addition to lease bonuses, annual lease
rentals, and royalties. Another concern was that industry might expect
a reduction in permit approval processing times if cost recovery were
implemented, even though, in the opinion of a few BLM staff, the
processing times would likely not change because a large portion the
time is spent complying with NEPA procedural requirements, which could
not be shortened. Our discussions with industry groups supported both
of these concerns. One company official stated that under the current
BLM permitting structure, any cost recovery measure would be
unreasonable because the industry already pays for a number of
expenses, such as those highlighted above. The company official also
commented that industry might support a cost recovery proposal if the
fee payment would generate a higher degree of permitting accountability
within BLM and if industry were guaranteed that a project would be
permitted within a reasonable time frame (no more than 90 days).
In discussing the utility of cost recovery, staff in some of the BLM
state and field offices we visited asserted that the usefulness of cost
recovery would largely depend upon whether the fee would be an offset
or an addition to existing appropriations. Some of the staff with whom
we spoke stated that cost recovery fees would not be helpful if the
revenues offset a decrease in appropriations, rather than providing
additional funds to help meet programmatic responsibilities. BLM's cost
recovery proposal for fiscal year 2005 was to implement a fee structure
that would generate approximately $3 million in revenues and a
corresponding $3 million reduction in the Oil and Gas Management
Program. However, the proposal was not implemented. BLM's cost recovery
proposal for fiscal year 2006 has addressed the offset concerns
expressed by the state and field office staff with whom we spoke. Under
the current proposal, BLM estimates that about $9.7 million in revenue
would be generated and that $7.6 million of this revenue would be used
to supplement BLM's budget rather than offset a corresponding decrease
in their annual appropriation.
Conclusions:
Processing drilling permits, while always a priority of BLM's oil and
gas program, has received renewed emphasis following publication of the
National Energy Policy Report. The emphasis on processing permits
reflects, in part, the desire to reduce the country's dependence on
foreign sources of oil and gas. While an important goal, BLM
recognizes, and the public demands, that the development of federal oil
and gas resources be done in an environmentally responsible manner.
Over the past 6 years, BLM has experienced a significant increase in
applications for drilling permits and has struggled to deal with this
increase in permitting activities while carrying out its environmental
mitigation responsibilities during a time of austere federal budgets.
In field offices that have experienced the greatest increases in
applications for drilling permits, staff that once had more time for
conducting environmental inspections now find their days filled with
processing drilling permits.
BLM's ability to respond to increasing workload demands brought on by
increasing applications for drilling permits is hampered by its
ineffective workforce planning process, lack of key data on workload
activities, and lack of resources. Relying on a workforce planning
process that is not open and transparent is ultimately not particularly
instructive or useful for informing key management decisions, such as
staffing and resource allocation determinations. For workforce planning
to be effective, it must incorporate and reflect actual staffing needs.
While budgetary considerations are clearly important factors in the
decision-making process, effective resource allocation decisions can
only be based on complete information on what staffing gaps exist
beyond those positions for which funding is available.
Further, BLM must have reliable and consistent data on the workload
activities related to oil and gas development--specifically the
staffing required to carry out environmental mitigation
responsibilities, in order to accurately reflect this information in
its management decisions and resource allocations. While BLM's
centralized database has a wealth of information on BLM's oil and gas
program activities, without complete and accurate workload data
covering the entire life cycle of oil and gas wells, BLM will be unable
to develop comprehensive and useful workforce plans.
Finally, it is unlikely in the current fiscal environment that BLM will
be able to obtain adequate appropriations to meet all of its needs.
Therefore, BLM should pursue every opportunity to generate additional
revenues that could potentially be used to meet these needs. Currently,
BLM is not exercising its statutory authority to recover the cost of
processing applications for drilling permits. Implementing such a fee
structure, as proposed in BLM's fiscal year 2006 Budget Justification,
would help BLM obtain the resources it needs to perform environmental
mitigation duties.
Recommendations for Executive Action:
We recommend that the Secretary of the Interior take the following four
actions.
To ensure that BLM's staffing needs are accurately reflected in its
workforce plans and considered by key decision makers, we recommend
that the Secretary direct BLM to:
* reflect in its workforce plans the staffing levels needed to perform
the necessary number of environmental inspections and other mitigation
activities in addition to those positions that the agency expects to be
funded;
* determine the data necessary to track workloads associated with idle-
well reviews and reclamation inspections; and:
* ensure that the field offices consistently enter the data on idle-
well reviews and reclamation inspections into BLM's centralized
database.
To generate additional revenues that could potentially help BLM better
respond to its increased workload due to the significant increase in
oil and gas production on public lands, we recommend that the Secretary
direct BLM to finalize and implement a fee structure to recover BLM's
costs for processing applications for drilling permits.
Agency Comments and Our Evaluation:
We provided a draft of this report to the Department of the Interior
for review and comment. Overall, Interior agreed with our
recommendations and stated that the report generally does much to
capture the many demands placed on BLM's oil and gas program.
Specifically regarding the recommendation for fee collection, BLM
stated a draft fee collection rule is currently being reviewed by the
Administration. Interior also commented that our report does not
support the conclusion that BLM policy changes have had a negative
impact on mitigation activities. We disagree with BLM's comment because
it mischaracterizes the information presented in our report. Our report
concludes that the six BLM policy changes that we analyzed had varying
impacts on mitigation activities. We found, for example, that the
policies that streamlined the permitting process had an indirect
negative impact on mitigation activities because the policies also
increased the emphasis on processing permits, which in turn resulted in
shifting staff away from their environmental mitigation
responsibilities. On the other hand, our report points out that BLM
policies issued to revitalize inspection and enforcement activities
impacted BLM's mitigation activities positively because they resulted
in six of the eight field offices obtaining greater resources to hire
more staff. We found the remaining four policy changes had little or no
impact on BLM's mitigation activities.
Interior also commented that we used the term "environmental mitigation
activities" in this report for a range of activities that are only part
of the mitigation process. According to Interior, environmental
mitigation also encompasses other activities, including NEPA analysis,
conditions of approval in drilling permits, and best management
practices, and that these methods help BLM moderate its dependence on
reclamation. We agree that the NEPA analysis performed by BLM during
the land use planning, leasing, and permitting stages of oil and gas
development; the conditions of approval placed on oil and gas permits;
and use of best management practices are critical parts of the
environmental mitigation framework, along with other activities, such
as inspections and monitoring. However, the main focus of this report
was on whether BLM was adequately conducting activities meant to ensure
that oil and gas operators are complying with the environmental
mitigation requirements and conditions of their permits. Based on the
information we gathered, we found that increases in permitting activity
are compromising the agency's ability to conduct certain mitigation
activities--such as inspections and idle-well reviews--because staff
responsibilities are being shifted away from these important activities
to process permits.
Interior also provided technical comments and editorial suggestions
that we have incorporated throughout the report, as appropriate.
As arranged with your office, unless you publicly announce the contents
of this report earlier, we plan no further distribution of this report
until 30 days after the date of this letter. At that time, we will send
copies to other interested congressional committees. In addition, we
will send copies of this report to the Secretary of the Interior and
the Director of BLM. We will also make copies available at no charge on
the GAO Web site at [Hyperlink, http://www.gao.gov].
If you or your staff have questions about this report, please contact
me at (202) 512-3841 or [Hyperlink, mittala@gao.gov]. Contact points
for our Offices of Congressional Relations and Public Affairs may be
found on the last page of this report. Key contributors to this report
are listed in the appendix IV.
Sincerely yours,
Signed by:
Anu K. Mittal:
Director, Natural Resources and Environment:
[End of section]
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
We were asked us to address several issues concerning the Bureau of
Land Management's (BLM) management of its oil and gas programs.
Specifically, we were asked to determine (1) the extent to which the
level of oil and gas production on public lands managed by BLM has
changed over the past 6 years and how these changes have affected, if
at all, BLM's ability to assess and mitigate environmental impacts; (2)
what policies BLM has issued in the past 6 years related to
facilitating and managing oil and gas production and how these policies
have affected, if at all, BLM's ability to assess and mitigate
environmental impacts; and (3) what challenges BLM faces in managing
its oil and gas program.
To obtain BLM headquarters' insights on all three objectives, we met
with officials from BLM's Fluid Minerals Group to discuss the agency's
responsibilities for managing its oil and gas program. Through these
discussions, we obtained an array of documents and high-level
perspectives related to all three objectives. We also met with
officials from BLM's National Energy Office to discuss the agency's
efforts to implement the National Energy Policy, and spoke with leaders
and other staff assigned to relevant tasks in BLM's National Energy
Policy Implementation Plan. Through these efforts, we obtained
documents and information related to policies issued in recent years,
as well as high-level perspectives of the impacts of these policies and
related management challenges.
To obtain on-the-ground perspectives regarding all three objectives, we
visited a nonprobability sample of BLM field offices.[Footnote 45] We
selected field offices that experienced some of the greatest increases
in oil and gas permitting activity from fiscal years 1999 through 2003
(at the time of site selection, fiscal year 2004 data were not
available). Additional criteria for selection included offices with and
without energy-related time-sensitive plans and offices that vary in
their ability to meet inspection and enforcement requirements. Using
these criteria, we selected eight offices to visit: the Glenwood
Springs field office in Colorado;[Footnote 46] the Miles City field
office in Montana; the Carlsbad and Farmington field offices in New
Mexico;[Footnote 47] the Vernal field office in Utah; and the Buffalo,
Rawlins, and Pinedale field offices in Wyoming.
We developed a structured interview guide to assist in collecting
information about how each of the eight field offices manages its oil
and gas program, including staffing and workload issues. We developed
another structured interview guide to assist in collecting information
from officials in each of the five BLM state offices--in Colorado,
Montana, New Mexico, Utah, and Wyoming--that have oversight authority
for the eight field offices we visited. The officials we interviewed at
these state and field offices, including the state and field office
managers, were responsible for the day-to-day administration of BLM's
oil and gas program. The structured interview guides were developed
between May 2004 and September 2004.
The practical difficulties of administering a structured interview
guide may introduce errors, commonly referred to as nonsampling errors.
For example, difficulties may arise in how a particular question is
interpreted or from differences in experience and information available
to respondents in answering a question. We took steps in the
development, administration, and analysis of our structured interview
guides to minimize these nonsampling errors. We conducted pretests of
the structured interview guides with two state offices in Montana and
Utah and four field offices--the Glenwood Springs, Colorado, field
office; Miles City, Montana, field office; Vernal, Utah, field office;
and Buffalo, Wyoming, field office--to ensure that (1) the questions
were clear and unambiguous, (2) terminology was used correctly, and (3)
the guide was comprehensive and unbiased. We made changes to the
content and the format of the final structured interview guides based
on the pretests. The guides were also internally reviewed by one of our
survey methodologists. To ensure that the information from the
interview guides was analyzed correctly, 100 percent of the data and
formulas used were internally and independently checked and verified.
In addition to BLM officials, we also contacted officials from industry
groups, environmental and citizen-based groups, and state governments,
in order to gain outside perspectives on the three objectives. Industry
group participants included the Colorado Oil and Gas Association, New
Mexico Oil and Gas Association, and Public Lands Advocacy.
Environmental and citizen-based group participants included Colorado
Environmental Coalition, Natural Resources Defense Council, Northern
Plains Resource Council, Powder River Basin Resource Council, Southern
Utah Wilderness Alliance, The Wilderness Society, and Wyoming Outdoor
Council. State government participants included Colorado Department of
Public Health and Environment's Air Pollution Control Division and
Water Quality Control Division; Colorado Oil and Gas Conservation
Commission; Montana Board of Oil and Gas Conservation; Montana
Department of Environmental Quality Air Resources Management Bureau;
New Mexico Energy, Minerals, and Natural Resources Department's Oil
Conservation Division; New Mexico Office of the Governor; Utah Division
of Oil, Gas, and Mining; Wyoming Department of Environmental Quality's
Air Quality Division and Water Quality Division; Wyoming Game and Fish
Department; Wyoming Office of the Governor; and Wyoming Oil and Gas
Conservation Commission.[Footnote 48]
To respond to the first objective and provide context to the second and
third objectives, we gathered data on levels of oil and gas production
on public lands managed by BLM from fiscal year 1999 through fiscal
year 2004 as well as other workload-related data from staff responsible
for managing BLM's Automated Fluid Minerals Support System (AFMSS) and
from individual field office records. Specifically, we gathered
information on (1) approved drilling permits, (2) environmental
inspections, (3) temporarily abandoned idle wells, and (4) abandoned
wells that do not have an approved final abandonment notice. To assess
the reliability of the data for purposes of our report, we interviewed
agency officials with knowledge of the data and the AFMSS system;
reviewed related documentation, including software user guides, the
data element dictionary, and training manuals; and corroborated the
data with other sources to the maximum extent possible. We obtained
responses from a key database official to a series of data reliability
questions covering issues such as data entry, access, quality control
procedures, and the accuracy and completeness of the data. Follow-up
questions were added when necessary. Agency officials knowledgeable
about AFMSS provided the following views on the accuracy and
completeness of the data in AFMSS:
* Approved drilling permit data. An agency official knowledgeable about
AFMSS commented that approved drilling permit data are generally
accurate and complete because there are so many checks on those data.
To corroborate these numbers to the maximum extent possible, we
presented these numbers to the eight BLM field offices during our site
visits and asked them to verify or, where applicable, to correct the
numbers.[Footnote 49] Of these eight field offices, two offices
confirmed that the numbers were correct, and one of the field offices
indicated that the data provided by the central AFMSS contact included
only one of the two counties under the field office's jurisdiction (and
would have matched if queried correctly). In the other five field
offices, we found that AFMSS is generally underreporting the data the
field offices have, in one case by as much as 34.9 percent. As a
result, the numbers in AFMSS are likely understated. Field offices
reported two primary reasons for the differences in the numbers: (1)
the inability to enter data during the Internet shutdowns related to
the lawsuit concerning Indian trust lands, and (2) the cancellation of
approved drilling permits in AFMSS when drilling does not occur. As a
result of the steps taken to assess the reliability of the approved
drilling permit data, we have determined that the data are adequate to
provide a conservative, or minimum, indication of the numbers of
approved drilling permits.
* Environmental inspections data. An agency official knowledgeable
about AFMSS also told us that there are many checks on the
environmental inspections data and, as a result, that they are also
generally accurate and complete. In our efforts to corroborate these
data, we asked the five BLM state and eight BLM field offices we
visited to provide data on the total number of required, planned, and
completed federal inspections in their jurisdiction for fiscal years
1999 through 2003.[Footnote 50] We then compared the federal
environmental inspection completed numbers provided by the field
offices to numbers from the AFMSS inspection roll-up reports by fiscal
year for each of the field and state offices. Of the five state
offices, one office provided numbers that matched and another office
provided numbers that matched in all but one fiscal year, where AFMSS
underestimated the numbers the state office reported by 21 percent. In
the remaining three offices, the numbers matched once data on Indian-
well inspections were removed. Of the eight field offices, five offices
provided numbers that matched,[Footnote 51] and one office matched in
all but one fiscal year, where AFMSS overestimated the numbers the
field office reported by 22 percent. In another office, the variation
could not be explained, and AFMSS underestimated the inspections
between 1 percent and 20 percent across the five years. Finally, in one
instance, the field office jointly planned inspections with another
field office, which was not among those we reviewed. Because of this
joint planning, there was no way to disaggregate the inspections. As a
result of our work to assess the accuracy and completeness of the
environmental inspections data, we have determined that the data are
adequate to provide a conservative, or minimum, indication of the
number of environmental inspections.
* Temporarily abandoned idle wells. To determine the total number of
federal temporarily abandoned (TA) wells, TA wells with both approval
and expiration dates entered, and TA wells with current approval, we
asked an AFMSS manager to provide an AFMSS report on temporarily
abandoned wells (SNT.59). To calculate the number of federal wells in
TA status with both approval and expiration dates entered, we manually
counted the entries for the eight field offices. Finally, to determine
the number of federal TA wells that had current approval, we manually
counted only those federal TA wells with both an approval and
expiration date that had not expired. However, interviews with the
responsible officials in the eight field offices indicated that in six
of the eight field offices, officials had concerns about operators
properly reporting TA status to BLM. For example, officials expressed
concern that operators were misreporting wells in shut-in status (which
does not require BLM approval) rather than in temporarily abandoned
status (which does require BLM approval). The effect of this
mischaracterization would be an underreporting of temporarily abandoned
wells. As a result of our work to assess the accuracy and completeness
of the federal TA data, we have determined that the data are adequate
to provide a conservative, or minimum, indication of the numbers of
temporarily abandoned wells.
* Wells in abandoned status. To determine the number of wells in
abandoned status, we asked our central AFMSS contact to provide AFMSS
reports on the number of federal wells, by field office, in abandoned
status in 4-year increments starting in fiscal year 1980. AFMSS was
fully implemented in all 31 offices in October 1997. Prior to that
date, there was no automated system that tracked the historical status
of a well. The previous database, Automated Inspection Records System
(AIRS), was in place before AFMSS, and any data related to abandoned
wells were transferred to AFMSS at the system's implementation. A BLM
official stated that because of the transfer, the total number of wells
in abandoned status in AFMSS may be underestimated. As a result of our
work to assess the accuracy and completeness of these data, we have
determined that the data are adequate to provide a conservative, or
minimum, indication of the numbers of wells in abandoned status.
* Wells in idle status. To determine the total number of federal wells
in idle status, we asked the five BLM state and eight BLM field offices
we visited to provide data on the total number of federal idle wells
for fiscal year 1999 through 2003. All five state offices and all eight
field offices indicated AFMSS as the source of the idle-well data they
provided. A knowledgeable official indicated that although the primary
idle-well report in AFMSS is retrieving data in an accurate manner at
this time, questions have been raised as to the consistency of data
used for the report. At this time, there is no formal guidance from BLM
Headquarters making it mandatory to enter that data into AFMSS. Also,
officials in five of the eight field offices stated they did not
believe that their current idle-well inventory was accurate. As a
result of our work to assess the accuracy and completeness of these
data, we have determined that the data are of uncertain reliability.
These data, along with information from knowledgeable officials, are
used in this report to illustrate the problems with the idle-well data.
In summary--with the exception of the data describing wells in idle
status--although there are definite limitations associated with the
data describing approved permits, environmental inspections,
temporarily abandoned wells, and wells in abandoned status, these data
are sufficient to provide indications of general trends, given the
magnitude of the changes occurring over time.
We conducted our work from February 2004 through April 2005 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: Resource Monitoring:
Resource monitoring generally involves assessing cumulative impacts to
resources over broad geographic areas and can be incorporated into
resource management plans or environmental impact statements for large-
scale oil and gas projects. BLM managers stated that it is important to
assess cumulative impacts to air quality, groundwater, surface water,
and wildlife and its habitat over broad geographic areas. When issues
are raised about the extent of impacts or the effectiveness of
mitigation measures, federal managers may propose to design and
implement a resource monitoring plan. However, in different geographic
areas, certain resources are more susceptible to the impacts of oil and
gas development and, hence, more important to monitor than in other
areas. For example, in the Powder River Basin of Wyoming and Montana,
groundwater is very susceptible to the impacts of coal-bed methane gas
production because production entails the simultaneous pumping of both
gas and groundwater out of shallow aquifers, lowering the aquifers'
pressure and decreasing the amount of groundwater that can be used to
supply homes and ranches. Because of this impact, BLM is developing a
monitoring plan for groundwater in the Powder River Basin. In contrast,
the proper extraction of gas in northwestern Colorado does not impact
shallow groundwater resources to this degree because these shallow
aquifers are sealed off during drilling and gas is extracted from much
deeper zones. Hence, BLM resource managers did not believe that a
detailed groundwater monitoring plan was necessary for the Glenwood
Springs Field Office.
The responsibility for monitoring the cumulative impacts of oil and gas
production on air quality, surface water, groundwater, and wildlife and
its habitat across broad geographic areas is shared by federal, state,
and local governments. However, much of the implementation of programs
to protect and monitor impacts to these resources is carried out by
state governments.[Footnote 52] While some state agencies conduct broad-
scale efforts to monitor cumulative impacts to air quality, surface
water, groundwater, and wildlife in the West, these efforts are seldom
comprehensive enough or involve enough monitoring stations to relate
changes in baseline conditions directly to impacts from oil and gas
development. For example, in Colorado, the state Department of Public
Health and Environment, Air Pollution Control Division has established
a network of air quality monitoring stations, but these stations are
more concentrated along the highly populated Front Range, which
includes the cities of Denver, Boulder, Fort Collins, and Colorado
Springs, while oil and gas development on federal lands in Colorado is
more concentrated in the less populated northwestern part of the state,
where there are fewer monitoring stations. Also, the Clean Water Act
provides for states to establish a list of waters that are impaired by
specific pollutants.[Footnote 53] This list contains known waters that
have been polluted by various contaminants and are to be monitored by
the states for changes in these pollutants. However, because of the
diverse sources and types of pollutants within the watersheds that
these rivers and streams drain, it is difficult under most
circumstances to attribute changes in the baseline levels of pollutants
directly to oil and gas development. With respect to groundwater,
states generally do not have an extensive network of groundwater
monitoring wells, although groups of monitoring wells have been
identified in the Powder River Basin of Montana and Wyoming that are
being used to develop a network for monitoring the impacts of oil and
gas development. Monitoring the impacts of oil and gas on wildlife is
even more of a challenge because responsibility for managing the
wildlife and habitats may be divided among different government
agencies.
Of 16 resource management plans and environmental impact statements
prepared in the eight BLM field offices we visited, only six documents
called for detailed plans for monitoring the environmental impacts of
oil and gas development. A BLM official explained that detailed written
plans for monitoring resources were not included in some of the
resource management plans because these plans are old, having been
written in the 1980s--when the need for monitoring was not fully
appreciated and when the number of oil and gas wells was less than it
is today. Furthermore, BLM officials explained that they have not
developed plans for monitoring resources for some of the more recently
developed resource management plans for various reasons, including that
BLM staff (1) have concentrated more on processing drilling permits,
(2) have been diverted from monitoring to address litigation concerns,
(3) believe monitoring to be more of a responsibility for state
government, or (4) simply have not tied together a number of disjointed
monitoring efforts.
We found detailed written resource monitoring plans for addressing oil
and gas impacts only in amendments to the resource management plans
developed for the Buffalo, Wyoming and Miles City, Montana, field
offices in 2003. In the Pinedale and Rawlins field offices, where the
resource management plans currently in effect were published in 1988
and 1990, respectively, monitoring plans are also included in the
environmental impact statements prepared for major oil and gas
developments at the Jonah Gas Field and the Continental Divide/
Wamsutter Natural Gas Project, and requirements for drafting a
monitoring plan also exist in the environmental impact statement for
the Pinedale Anticline. Monitoring plans for Buffalo, Miles City,
Rawlins, and the Pinedale Anticline require the monitoring of impacts
to air quality, groundwater, surface water, and wildlife and its
habitat, while monitoring plans for the Jonah Gas Field and the
Continental Divide/Wamsutter Project contain monitoring plans only for
wildlife and its habitat. Table 5 describes the monitoring plans
associated with the 16 resource management plans and environmental
impact statements we examined.
Table 5: Nature of Resource Monitoring Plans That Address Impacts from
Oil and Gas Development across Broad Geographic Areas:
BLM field office: Glenwood Springs, Colo;
Resource management plan or EIS: Oil and Gas Leasing and Development,
Record of Decision and Resource Management Plan Amendment;
Date of record of decision: March 1999;
Nature of resource monitoring plan: No resource monitoring plan
included in the resource management plan amendment.
BLM field office: Glenwood Springs, Colo;
Resource management plan or EIS: Roan Plateau Planning Area, Resource
Management Plan and draft EIS;
Date of record of decision: Draft EIS dated November 2004;
Nature of resource monitoring plan: No resource monitoring plan in
draft EIS. The final EIS and the Record of Decision are yet to be
released.
BLM field office: Miles City, Mont;
Resource management plan or EIS: Big Dry Resource Management
Plan/Environmental Impact Statement;
Date of record of decision: April 1996;
Nature of resource monitoring plan: No resource monitoring plan for oil
and gas impacts, but the final EIS calls for some general monitoring of
big game and nongame species and for surface water quality.
BLM field office: Miles City, Mont;
Resource management plan or EIS: Record of Decision for the Final
Statewide Oil and Gas EIS and Proposed Amendment of the Powder River
and Billings Resource Management Plans;
Date of record of decision: April 2003;
Nature of resource monitoring plan: The Record of Decision calls for
monitoring plans for air quality, surface water, aquatic resources,
groundwater, and wildlife and wildlife habitat. However, implementation
of the plans is dependent upon funding. The Record of Decision
delegates responsibility for developing monitoring plans to the Powder
River Basin Interagency Work Groups, which have developed detailed
plans for surface water, groundwater, aquatics, and wildlife and
wildlife habit, but not for air quality.
BLM field office: Carlsbad, N. Mex;
Resource management plan or EIS: Carlsbad Resource Management Plan;
Date of record of decision: Resource management plan dated September
1988;
Nature of resource monitoring plan: No resource monitoring plan
included in the resource management plan.
BLM field office: Farmington, N. Mex;
Resource management plan or EIS: Farmington Resource Management Plan
with Record of Decision;
Date of record of decision: September 2003;
Nature of resource monitoring plan: No detailed monitoring plan but
recognizes some limited historical monitoring of wildlife and wildlife
habitat, which are not tied to oil and gas development.
BLM field office: Vernal, Utah;
Resource management plan or EIS: Vernal Field Office Draft Resource
Management Plan and draft EIS;
Date of record of decision: Draft resource management plan and draft
EIS dated January 2005;
Nature of resource monitoring plan: No resource monitoring plan.
Replaces the Book Cliffs Resource Management Plan (1985) and the
Diamond Mountain Resource Management Plan (1993), neither of which had
resource monitoring plans. The final EIS and the Record of Decision for
the Vernal Resource Management Plan are yet to be released.
BLM field office: Vernal, Utah;
Resource management plan or EIS: Draft EIS for Castle Peak and
Eightmile Flat Oil and Gas Expansion Project, Inland Resources Inc;
Date of record of decision: Draft EIS dated September 2004;
Nature of resource monitoring plan: No resource monitoring plan.
BLM field office: Buffalo, Wyo;
Resource management plan or EIS: Record of Decision and Resource
Management Plan Amendments for the Powder River Basin Oil and Gas
Project;
Date of record of decision: April 2003;
Nature of resource monitoring plan: The Record of Decision calls for
monitoring plans for air quality, surface water, aquatic resources,
groundwater, and wildlife and wildlife habitat. However, implementation
of the plans depends on funding. The Record of Decision delegates
responsibility for developing monitoring plans to Powder River Basin
Interagency Work Groups, which have developed detailed plans for
surface water, aquatics, and wildlife and wildlife habit, but not for
groundwater and air quality.
BLM field office: Pinedale, Wyo;
Resource management plan or EIS: Pinedale Resource Management Plan;
Date of record of decision: December 1988, with amendments in 2000 for
oil and gas activity;
Nature of resource monitoring plan: No resource monitoring plan for oil
and gas impacts but contains a rangeland monitoring plan.
BLM field office: Pinedale, Wyo;
Resource management plan or EIS: Record of Decision for the Pinedale
Anticline Oil and Gas Exploration and Development Project EIS;
Date of record of decision: July 2000;
Nature of resource monitoring plan: The Record of Decision calls for
oil and gas operators to pay for monitoring impacts to air quality,
surface water, groundwater, and wildlife and wildlife habitat, and it
authorized and established the Pinedale Anticline Working Group to
advise BLM on the creation of monitoring plans for these resources.
Formal monitoring plans have not yet been drafted, although surface
water and wildlife monitoring has occurred.
BLM field office: Pinedale (and Rock Springs), Wyo;
Resource management plan or EIS: Record of Decision for the Jonah Field
II Natural Gas Development Project EIS;
Date of record of decision: April 1998;
Nature of resource monitoring plan: Includes detailed monitoring plan
for wildlife.
BLM field office: Pinedale (and Rock Springs), Wyo;
Resource management plan or EIS: Draft EIS, Jonah Infill Drilling
Project, Sublette County, Wyoming;
Date of record of decision: Draft EIS released February 2005;
Nature of resource monitoring plan: Calls for establishing in the
Record of Decision (yet to be released) a Jonah Infill Working Group
that will oversee the development and implementation of monitoring
plans for various resources.
BLM field office: Rawlins (and Rock Springs), Wyo;
Resource management plan or EIS: Record of Decision for EIS on
Continental Divide/Wamsutter II Natural Gas Project, Sweetwater and
Carbon Counties, Wyoming;
Date of record of decision: May 2000;
Nature of resource monitoring plan: Includes detailed monitoring plan
for wildlife.
BLM field office: Rawlins, Wyo;
Resource management plan or EIS: Great Divide Resource Area Record of
Decision and approved resource management plan;
Date of record of decision: November 1990;
Nature of resource monitoring plan: No resource monitoring plan.
BLM field office: Rawlins, Wyo;
Resource management plan or EIS: Rawlins Resource Management Plan,
draft EIS;
Date of record of decision: Draft EIS released December 2004;
Nature of resource monitoring plan: Calls for generalized monitoring of
air quality, wildlife, surface water, and groundwater but does not
include detailed resource monitoring plans. The final EIS and the
Record of Decision are yet to be released.
Source: GAO analysis of BLM Resource Management Plans and EISs.
[End of table]
BLM officials have expressed concerns about obtaining the necessary
appropriations to implement their monitoring plans. Specifically, BLM
officials estimate that about $2.3 million per year in additional
funding is necessary for implementing monitoring programs for wildlife,
groundwater, and surface water in the Powder River Basin of Wyoming and
Montana over the next 3 to 10 years. According to the resource
management plans for the Buffalo and Miles City field offices,
implementation of these monitoring plans is dependent on the
availability of federal funding. BLM personnel expressed uncertainty
over whether BLM would be able to obtain in future years the federal
funding for its share of the surface water and the wildlife monitoring
plans. Similarly, a BLM official also reported uncertainty in funding
future groundwater monitoring in the Powder River Basin. However, BLM
officials with whom we spoke did report some success in designing and
implementing resource monitoring plans in those locations where
industry primarily paid for the costs of monitoring. For example, an
operator on the Pinedale Anticline has been tracking the movements of
mule deer through radio collars in an effort to determine the impacts
of wintertime drilling, and a Montana operator of coal-bed methane
wells paid for monitoring the impacts of discharging produced water
into the Tongue River.
In an effort to place more emphasis on monitoring, BLM announced in
January 2005 that it is developing a National Monitoring Strategy. BLM
cited the need to develop this strategy because it had previously
identified monitoring as a weakness in its restoration activities and
because the Office of Management and Budget identified the need for
improving BLM's baseline data collection, resource monitoring, and
effectiveness monitoring. BLM intends to develop four work groups to
identify issues at the national, regional, and local levels related to
land health, assess whether current data collection efforts address
these issues, identify other data sources that may address land health,
and determine what else needs to be done to provide land health
information. One of the work groups will be tasked with addressing
energy issues at the regional level, and thus could address monitoring
the impacts of oil and gas development on critical resources.
[End of section]
Appendix III: Comments from the Department of the Interior:
United States Department of the Interior:
OFFICE OF THE SECRETARY:
Washington, D.C. 20240:
MAY 26 2005:
Ms. Anu Mittal:
Director, Natural Resources and Environment:
Government Accountability Office:
441 G Street, N.W.:
Washington, DC 20548-0001:
Dear Ms. Mittal:
Thank you for the opportunity to review the U.S. Government
Accountability Office (GAO) Draft Audit Report, OIL AND GAS
DEVELOPMENT, Increased Permitting Activity Has Lessened BLM's Ability
to Meet Its Environmental Protection Responsibilities (GAO-05-418).
The draft report generally does much to capture the myriad demands on
the Oil and Gas Program of the Bureau of Land Management (BLM). It
needs to be repeated that the Administration is committed to managing
the BLM lands for multiple use and sustained yield, in accordance with
the requirements of the Federal Land Policy and Management Act. This
includes providing for orderly energy development in an environmentally
responsive manner. Permit demand, however, is not driven by the 2001
National Energy Policy - demand for energy from public lands is driven
by American consumers and high prices. The Administration is working to
respond to that demand and the National Energy Policy Report provides a
comprehensive strategy to address it.
Our general and specific comments follow for you to consider
incorporating into the final report.
Recommendation #1: Reflect in its workforce plans the staffing levels
needed to perform the necessary number of environmental inspections and
other mitigation activities in addition to those positions that the
agency expects to be funded.
The BLM annually conducts workforce planning for all its programs at
the State and Field Office level. During the next round of workforce
plans and relevant to the number of environmental inspections and other
mitigation activities, the field offices will be instructed to provide
workforce needs with and without funding limitations so that the BLM
management can ascertain the level of unmet demand for these types of
activity. As you noted on page 34, BLM is working to hire and train
additional enforcement personnel and to develop a National Monitoring
Strategy.
Recommendation #2: Determine the data necessary to track workloads
associated with idle well reviews and reclamation inspections.
The Automated Fluid Minerals Support System (AFMSS) data base currently
has data fields for idle wells and final reclamation inspections, but
not for intermediate reclamation inspections.
The BLM has evaluated AFMSS and has identified that the addition of an
inspection type field will allow us to track intermediate reclamation
inspections.
Recommendation #3: Ensure that field offices consistently enter the
data on idle well reviews and reclamation inspections into BLM's
centralized data base.
Once the new inspection type under Recommendation #2 has been
developed, the BLM will issue guidance on the data entry of idle well
reviews and intermediate and final reclamation inspections.
Recommendation #4: To generate additional revenues that could
potentially help BLM better respond to its increased workload due to
the significant increase in oil and gas production on public lands, we
recommend that the Secretary direct BLM to finalize and implement a fee
structure to recover BLM's costs for processing applications for
drilling permits.
Fees to cover Applications for a Permit to Drill (APD) were not
included in the 2000 cost recovery proposal;
however, the BLM has decided to include APD fees in its current
proposed cost recovery rule. This draft rule is being reviewed by the
Office of Management and Budget. The BLM proposes to phase in the APD
fees, beginning with a fixed fee. The BLM would implement any fee
increases through future rulemaking. Comment will be invited on whether
this initial fixed fee is appropriate, or whether it should be higher
or lower.
The BLM has the following specific comments:
The number of APDs approved in Fiscal Year 1999 should be 1,759 (not
1803) and for FY 2004, 6,452 (not 6,399). [GAO Highlights, page 5 and
page 18]. The percentage of APDs for the five states should be adjusted
to 89 percent (page 5).
--p. 9, lines 17 and 19: In the discussion of the EPCA report, insert
"resources and" before the word "reserves" for more appropriate use of
technical terms.
--p. 13: The Secretary is responsible to ensure oil and gas operations
are in compliance with all laws and regulations governing Federal and
Indian oil and gas operations: 1) to protect the surface and subsurface
environment and public health and safety, 2) to ensure that the
public's oil and gas resources are properly developed in a manner that
maximizes recovery while minimizing waste, and 3) to ensure production
from Federal and Indian lands is properly handled, measured and
reported correctly. As noted in Appendix 2,_p 58, however, much of the
implementation permitting and monitoring for environmental impacts is
carried out by state governments operating via delegation from the
Environmental Protection Agency.
--p. 16, line 12: Change to: "The BLM policy defines shut-in wells as
oil and gas wells which are physically and mechanically capable of
producing oil and/or gas in paying quantities."
--p. 17: It would be rare for a lease to contain "specific terms" of
reclamation. Those are set forth in an onshore order, in conditions of
approval on drilling permits, and in the review of the abandonment
plans submitted when the operator is preparing to commence abandonment
(i.e. reclamation).
--p. 27: The report does not support its conclusion that BLM policy
changes have had a negative impact on mitigation activities. GAO
suggests that since April 2003, "policy changes to improve and
streamline processing of drilling permits has [sic] indirectly had a
negative impact on environmental mitigation activities. . .". It is
unclear, however, how this reconciles with comments on p. 33, that
correctly note a streamlining strategy to bundle permit applications
"can encourage companies to plan their drilling operations more
carefully and help BLM better assess the cumulative environmental
impacts of drilling activities." Nor does it seem consistent with BLM
field office comments that, "where block surveys are used, the cultural
resources of concern can be readily identified and companies can have
more flexibility to move project components around without additional
surveys." (p. 33). Half of the offices felt this improved their
environmental mitigation activities and one said it improved the
quality of environmental analysis.
--p. 35: While various field offices have been and are using best
management practices (BMPs), the BLM intends to build on lessons
learned in those offices, and to expand the use of them to other field
offices.
Overall comment - GAO uses the term "environmental mitigation
activities" (p. 18) for a range of activities, such as monitoring and
enforcement, that is only a part of mitigation. Environmental
mitigation encompasses proactive activities, including NEPA analysis,
APD conditions of approval, and best management practices. Using these
methods, the BLM moderates its dependence on reclamation. It may be
true that increased oil and gas activity means that the BLM needs more
resources to keep up with all of its responsibilities, and the
President's Budget proposes to do this through increased cost
recoveries, but that's not the same as saying that "increased
permitting has lessened BLM's ability to meet its environmental
protection responsibilities" (GAO-05-418).
Again, thank you for the opportunity to review and comment on this
report. If you have any questions, please contact Tim Spisak, Group
Manager, Fluid Mineral Group, on 202-452-5061, or Andrea Nygren, BLM
Audit Liaison Officer, on 202-452-5153.
Sincerely,
Signed for:
Rebecca W. Watson:
Assistant Secretary:
Land and Minerals Management:
The following are GAO's comments on the Department of the Interior's
letter dated May 26, 2005. See the "agency comments and our evaluation"
section for additional responses to BLM's comments.
GAO Comments:
1. We asked BLM to provide documentation for the revised drilling
permit numbers for fiscal years 1999 and 2004. Because the AFMSS
database was unavailable due to security concerns, we could not
establish why our previous permit numbers differed from the revised
numbers. As a result, we did not make any changes. However, we
clarified that the permit numbers in figure 5 are as of April 2004.
2. We asked BLM for support for the sentence describing the Secretary
of Interior's responsibilities for managing oil and gas operations.
Because the support provided was incomplete, we did not make any
changes. However, we do describe BLM's responsibilities for mitigating
the environmental impacts of oil and gas production in the report.
[End of section]
Appendix IV: GAO Contact and Staff Acknowledgments:
GAO Contact:
Anu K. Mittal, (202) 512-3841:
Staff Acknowledgments:
In addition to those named above, Ronald Belak, Glenn C. Fischer, Laura
Gatz, Jeff Malcolm, and Lisa Turner made key contributions to this
report. Also contributing to the report were Christine Bonham, John
Delicath, Doreen Feldman, Julian Klazkin, Rob Martin, Mary Mohiyuddin,
Marmar Nadji, Judy Pagano, and Lisa Shames.
(360430):
FOOTNOTES
[1] The Mineral Leasing Act of 1920 (Pub. L. No. 66-146 (1920)), as
amended, and the Mineral Leasing Act for Acquired Lands (Pub. L. No. 80-
382 (1947)), as amended, provide the legislative authority for federal
oil and gas leasing. BLM's oil and gas leasing regulations are located
at 43 C.F.R. pt. 3100. BLM cannot issue leases for National Forest
System lands over the objection of the Forest Service. 43 C.F.R. §
3101.7-1(c). Generally, for lands administered by other agencies, BLM
must either obtain the consent of (for acquired lands), or consult with
(for public domain lands), the agency responsible. 43 C.F.R. § 3101.7-
1 (a), (b).
[2] Pub. L. No. 94-579 (1976), 90 Stat. 2743, codified at 43 U.S.C. §
1701 et seq.
[3] 43 U.S.C. § 1701(a)(7).
[4] 43 U.S.C. § 1702(c).
[5] 43 U.S.C. § 1702(h).
[6] When we refer to BLM's environmental protection responsibilities,
we are including BLM's responsibilities to protect the land as well as
other resources, such as air, water, vegetation, fish, and wildlife.
[7] Pub. L. No. 97-451(1983), 96 Stat. 2447, codified at 30 U.S.C. §
1701 et seq.
[8] Results from nonprobability samples cannot be used to make
inferences about a population, because in a nonprobability sample, some
elements of the population being studied have no chance or an unknown
chance of being selected as part of the sample.
[9] The Glenwood Springs, Colorado, field office shares oil and gas
program staff with the Grand Junction, Colorado, field office. The
information we collected represents the contributions of staff from
both offices to managing oil and gas activities that occur within the
jurisdiction of the Glenwood Springs, Colorado, field office.
[10] The Carlsbad, New Mexico, field office shares oil and gas program
staff with the Roswell, New Mexico, field office and the Hobbs, New
Mexico, field station. The information we collected represents the
contributions of staff from all of these offices in managing oil and
gas activities that occur within the jurisdiction of the Carlsbad, New
Mexico, field office.
[11] The jurisdictions for the New Mexico and Montana state offices
include some neighboring states. The New Mexico state office also has
jurisdiction over Kansas, Oklahoma, and Texas. The Montana state office
also has jurisdiction over North Dakota and South Dakota. The data
presented in this report for the New Mexico and Montana state offices
include data for all of the states under their jurisdiction.
[12] Data as reported from BLM's Automated Fluid Minerals Support
System.
[13] Data as reported from BLM's Automated Fluid Minerals Support
System.
[14] Data as reported from BLM's Automated Fluid Minerals Support
System and corrected by BLM field office officials. For additional
information, please see appendix I.
[15] The New York Mercantile Exchange futures contract is a widely used
benchmark for buying and selling crude oil. This contract is an
agreement through the New York Mercantile Exchange for a future
purchase or sale of 1,000 barrels of sweet crude oil, similar in
quality to West Texas Intermediate oil. These prices represent the
contract for delivery during the next month.
[16] Pub. L. No. 106-469 § 604 (2000), 114 Stat. 2029, 2041-42,
codified at 42 U.S.C. § 6217.
[17] Departments of the Interior, Agriculture and Energy, Scientific
Inventory of Onshore Federal Lands' Oil and Gas Resources and Reserves
and the Extent and Nature of Restrictions or Impediments to Their
Development: The Paradox/San Juan, Uinta/Piceance, Greater Green River
and Powder River Basins and the Montana Thrust Belt (January 2003).
This report is a portion of the inventory of onshore oil and gas
resources underlying federal lands required by section 604 of the
Energy Act of 2000. The inventory will be expanded in the future to
include additional federal lands and resources.
[18] 43 C.F.R. § 3101.1-3.
[19] 43 C.F.R. § 3162.3-1.
[20] 42 U.S.C. § 4332(2)(C)(i).
[21] 40 C.F.R. §§1501.3, 1508.9.
[22] 43 C.F.R. §§ 1601.0-6, 3162.5-1(a).
[23] Pub. L. No. 97-451 §§ 101, 108, codified at 30 U.S.C. §§ 1711,
1718.
[24] Another mechanism BLM employs to ensure environmental compliance
is through environmental compliance inspections conducted by a
petroleum engineer technician. This type of inspection is completed as
a component of another type of inspection, such as production or
drilling. If a petroleum engineer technician determines a possible
environmental violation, the technician will then notify the natural
resources staff responsible for its resolution.
[25] In general, low-priority wells are supposed to be inspected every
three years.
[26] 43 C.F.R. § 3162.3-4(c).
[27] Justification to support continued idle status may include, for
example, the use of the well for injection to recover additional oil or
gas or for subsurface disposal of produced water. 43 C.F.R. § 3162.3-
4(a).
[28] This report focuses on the impacts of increased oil and gas
permitting activity that occurred for fiscal years 1999 through 2004.
While there is evidence from prior studies that BLM did not meet its
goals for certain program activities before fiscal year 1999, we did
not attempt to make comparisons in this report between activity before
fiscal year 1999 and activity occurring for fiscal years 1999 through
2004. These reports include Department of the Interior, Office of
Inspector General, Audit Report: Inspection and Enforcement Program and
Selected Related Activities, Bureau of Land Management, Report No. 196-
I-1267 (Washington, D.C., September 1996); Department of the Interior,
Bureau of Land Management, Potential Government Liability for Plugging
Oil and Gas Wells (Washington, D.C., November 1990); and Department of
the Interior, Office of Inspector General, Audit Report: Inspection and
Enforcement Program and Selected Related Activities, Bureau of Land
Management, Report No. 90-18 (Washington, D.C., November 1989).
[29] H.R. Conf. Rep. No. 108-330, at 1314 (2003).
[30] We did not include environmental inspection goals for wells on
Indian lands.
[31] The Glenwood Springs, Colorado, field office jointly plans and
conducts its inspections with the Grand Junction, Colorado, field
office. As a result, we were unable to desegregate the inspection
numbers for the Glenwood Springs field office. For additional
information, see appendix I.
[32] In fiscal years 2001 and 2002 the Pinedale, Wyoming, field office
set a goal of zero for its required environmental inspections. However,
in both years, they did conduct environmental inspections.
[33] Other reasons why BLM field offices had not developed resource
monitoring plans included the following: (1) key staff have been
diverted from monitoring to address litigation concerns; (2) they
believe monitoring to be more of a responsibility for state government;
or (3) they simply have not tied together a number of disjointed
monitoring efforts.
[34] Knowledgeable officials have voiced concerns about the consistency
with which data describing idle wells is collected. For more
information, please see appendix I.
[35] In some cases, BLM allows operators to not submit a Final
Abandonment Notice, but retain the site in order to redrill a new well
at a future date. However, BLM still requires the operator to reclaim
the site.
[36] The February 2002 policy indicated the other 11 resource
management plans were designated time sensitive because they respond to
nationally significant lawsuits or have legislatively mandated time
frames.
[37] As mentioned previously in this report, some idle wells have been
brought back into production because of the increase in oil and gas
prices.
[38] During each of the four stages of oil and gas development, the
public can make one or more of the following types of challenges to BLM
decisions: protests, requests for state director review, appeals, and
litigation. Through protests and requests for state director review,
challengers essentially ask BLM to reconsider a decision. An appeal is
a request to the Interior Board of Land Appeals--a body of
administrative judges within the Department of Interior--to review a
BLM decision. In this report, we use the term "litigation" to mean a
challenge to an agency or departmental decision that is brought in
federal court.
[39] GAO, Human Capital: Key Principles for Effective Strategic
Workforce Planning, GAO-04-39 (Washington, D.C.: Dec. 11, 2003).
[40] Environmental inspections take place at different stages of well
activity, including prior to drilling, during production, and after
abandonment/reclamation. According to a BLM official, the abandonment/
reclamation inspections are inspections where a natural resource
specialist visits a site to inspect the progress of final reclamation.
[41] GAO, Oil and Gas Development: Challenges to Agency Decisions and
Opportunities for BLM to Standardize Data Collection, GAO-05-124
(Washington, D.C.: Nov. 30, 2004).
[42] BLM also has authority under the Independent Offices Appropriation
Act of 1952 (also referred to as IOAA or the user charge statute),
which provides generally for cost recovery by federal agencies. Under
IOAA, funds collected are deposited into the general fund of the
Treasury.
[43] 43 U.S.C. § 1734(a).
[44] "Oil and Gas Leasing; Geothermal Resources Leasing; Coal
Management; Management of Solid Minerals Other than Coal; Mineral
Materials Disposal; and Mining Claims Under the General Mining Laws,"
65 Fed. Reg. 78440 (2000).
[45] Results from nonprobability samples cannot be used to make
inferences about a population, because in a nonprobability sample, some
elements of the population being studied have no chance or an unknown
chance of being selected as part of the sample.
[46] The Glenwood Springs, Colorado, office shares oil and gas program
staff with the Grand Junction, Colorado, field office. The information
we collected represents the contributions of staff from both offices to
managing oil and gas activities that occur within the jurisdiction of
the Glenwood Springs office.
[47] The Carlsbad, New Mexico, office shares oil and gas program staff
with the Roswell, New Mexico, field office and the Hobbs, New Mexico,
field station. The information we collected represents the
contributions of staff from all of these offices to managing oil and
gas activities that occur within the jurisdiction of the Carlsbad
office.
[48] We also attempted to contact representatives of other state
agencies/divisions in Utah, five other industry groups, and one other
environmental group, but were unable to obtain responses from these
contacts.
[49] Field offices only verified/corrected approved drilling permit
data for fiscal years 1999 through 2003. Fiscal year 2004 data were not
available at the time of our site visits. As a result, the numbers
presented in our report are those verified by the field offices for
fiscal years 1999 through 2003, and those provided by our central AFMSS
contact for 2004.
[50] Data for fiscal year 2004 was only provided by the central AFMSS
contact because GAO's field and state office site visits took place
prior to the end of that reporting period.
[51] Data for three of the field offices matched after they were
adjusted--Indian-well inspection records were removed from two, and
another jurisdiction's inspections were removed from the third.
[52] For example, under the Clean Air Act, the Environmental Protection
Agency (EPA) sets national ambient air quality standards, and states
are responsible for achieving these standards. Under the Clean Water
Act, EPA may approve state pollution discharge permit programs,
authorizing states to carry out duties that would otherwise be
performed by EPA.
[53] 33 U.S.C. § 1313 (d).
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