Department of the Interior
Major Management Challenges Gao ID: GAO-09-425T March 3, 2009The Department of the Interior is responsible for managing much of the nation's vast natural resources. Its agencies implement an array of programs intended to protect these precious resources for future generations while also allowing certain uses of them, such as oil and gas development and recreation. In some cases, Interior is authorized to collect royalties and fees for these uses. Over the years, GAO has reported on challenges facing Interior as it implements its programs. In addition to basic program management issues, Interior faces difficult choices in balancing its many responsibilities, and in improving the condition of the nation's natural resources and the department's infrastructure, in light of the federal deficit and long-term fiscal challenges facing the nation. This testimony highlights some of the major management challenges facing Interior today. It is based on prior GAO reports.
As GAO's previous work has shown, the Department of the Interior faces major management challenges in the following six areas: (1) Strengthening resource protection; (2) Strengthening the accountability of Indian and island community programs; (3) Improving federal land acquisition and management; (4) Reducing Interior's deferred maintenance backlog; (5) Ensuring the accurate collection of royalties; and (6) Enhancing other revenue collections and financial assurances. Interior has not yet developed a cohesive strategy to address wildland fire issues, as GAO recommended in 1999 and 2005. In addition, Interior faces challenges in managing oil and gas operations on federal lands, adapting to climate change, and resolving natural resource conflicts through collaborative management. Having a land base is important to Indian tribes. Concerns remain about delays in decisions about land that Interior will take into trust status. In addition, programs for seven island communities--four U.S. territories and three sovereign island nations--continue to have financial and program management deficiencies. As the steward of more than 500 million acres of federal land, land consolidation through sales and acquisitions and land management are important functions for the department. The Federal Land Transaction Facilitation Act has had limited success and Interior's U.S. Fish and Wildlife Service is unlikely to achieve its goals to protect certain migratory bird habitat and it is generally not managing a majority of its farmlands. While Interior has improved inventory and asset management systems, the dollar estimate of the deferred maintenance backlog has continued to grow. The 2008 estimate of between $13.2 billion and $19.4 billion is more than 60 percent higher than the 2003 estimate. The funds for Interior in the recently enacted stimulus package may reverse this trend. GAO and others have found many material weaknesses in their numerous evaluations of federal oil and gas management and revenue collection processes. These weaknesses place an unknown but significant proportion of royalties and other oil and gas revenues at risk and raise questions about whether Interior is collecting an appropriate amount of revenue for the rights to explore for, develop, and produce oil and gas from federal lands and waters. Additional revenues or financial assurances could be generated by (1) amending the General Mining Act of 1872 to collect federal royalties on gold, silver, copper, and other valuable minerals belonging to the United States, (2) requiring adequate financial assurances from hardrock mining operations to fully cover estimated reclamation costs, and (3) increasing the grazing fee for public lands managed by Interior's Bureau of Land
GAO-09-425T, Department of the Interior: Major Management Challenges
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Testimony:
Before the Subcommittee on Interior, Environment, and Related Agencies,
Committee on Appropriations, House of Representatives:
United States Government Accountability Office:
GAO:
For Release on Delivery:
Expected at 9:30 a.m. EST:
Tuesday, March 3, 2009:
Department Of The Interior:
Major Management Challenges:
Statement of:
Robin M. Nazzaro, Director:
Natural Resources and Environment:
Frank Rusco, Director:
Natural Resources and Environment:
GAO-09-425T:
GAO Highlights:
Highlights of GAO-09-425T, a testimony before the Subcommittee on
Interior, Environment, and Related Agencies, Committee on
Appropriations, House of Representatives.
Why GAO Did This Study:
The Department of the Interior is responsible for managing much of the
nation‘s vast natural resources. Its agencies implement an array of
programs intended to protect these precious resources for future
generations while also allowing certain uses of them, such as oil and
gas development and recreation. In some cases, Interior is authorized
to collect royalties and fees for these uses. Over the years, GAO has
reported on challenges facing Interior as it implements its programs.
In addition to basic program management issues, Interior faces
difficult choices in balancing its many responsibilities, and in
improving the condition of the nation‘s natural resources and the
department‘s infrastructure, in light of the federal deficit and long-
term fiscal challenges facing the nation.
This testimony highlights some of the major management challenges
facing Interior today. It is based on prior GAO reports.
What GAO Found:
As GAO‘s previous work has shown, the Department of the Interior faces
major management challenges in the following six areas.
* Strengthening resource protection. Interior has not yet developed a
cohesive strategy to address wildland fire issues, as GAO recommended
in 1999 and 2005. In addition, Interior faces challenges in managing
oil and gas operations on federal lands, adapting to climate change,
and resolving natural resource conflicts through collaborative
management.
* Strengthening the accountability of Indian and island community
programs. Having a land base is important to Indian tribes. Concerns
remain about delays in decisions about land that Interior will take
into trust status. In addition, programs for seven island
communities”four U.S. territories and three sovereign island
nations”continue to have financial and program management deficiencies.
* Improving federal land acquisition and management. As the steward of
more than 500 million acres of federal land, land consolidation through
sales and acquisitions and land management are important functions for
the department. The Federal Land Transaction Facilitation Act has had
limited success and Interior‘s U.S. Fish and Wildlife Service is
unlikely to achieve its goals to protect certain migratory bird habitat
and it is generally not managing a majority of its farmlands.
* Reducing Interior‘s deferred maintenance backlog. While Interior has
improved inventory and asset management systems, the dollar estimate of
the deferred maintenance backlog has continued to grow. The 2008
estimate of between $13.2 billion and $19.4 billion is more than 60
percent higher than the 2003 estimate. The funds for Interior in the
recently enacted stimulus package may reverse this trend.
* Ensuring the accurate collection of royalties. GAO and others have
found many material weaknesses in their numerous evaluations of federal
oil and gas management and revenue collection processes. These
weaknesses place an unknown but significant proportion of royalties and
other oil and gas revenues at risk and raise questions about whether
Interior is collecting an appropriate amount of revenue for the rights
to explore for, develop, and produce oil and gas from federal lands and
waters.
* Enhancing other revenue collections and financial assurances.
Additional revenues or financial assurances could be generated by (1)
amending the General Mining Act of 1872 to collect federal royalties on
gold, silver, copper, and other valuable minerals belonging to the
United States, (2) requiring adequate financial assurances from
hardrock mining operations to fully cover estimated reclamation costs,
and (3) increasing the grazing fee for public lands managed by
Interior‘s Bureau of Land Management.
What GAO Recommends:
GAO has made a number of recommendations intended to improve Interior‘s
programs by enhancing the information it uses to manage its programs
and strengthening internal controls. Interior has agreed with most of
the recommendations and taken some steps to implement them. However,
Interior has been slow to implement other recommendations, such as
developing a cohesive wildland fire strategy and improving oversight of
oil and gas activities.
View [hyperlink, http://www.gao.gov/products/GAO-09-425T] or key
components. For more information, contact Robin M. Nazzaro or Frank
Rusco at (202) 512-3841 or nazzaror@gao.gov and ruscof@gao.gov,
respectively.
[End of section]
Mr. Chairman and Members of the Subcommittee:
We are pleased to be here today to discuss our work at the Department
of the Interior. As the stewards for more than 500 million acres of
federal land--about one-fifth of the total U.S. landmass--and over 1.8
billion acres of the Outer Continental Shelf, Interior agencies are
responsible for a wide array of programs to ensure that our nation's
natural resources are adequately protected and that access to and use
of those resources is appropriately managed. Interior is to provide for
the environmentally sound production of oil, gas, minerals, and other
resources found on the nation's public lands; honor the nation's
obligations to American Indians and Alaska Natives; protect habitat to
sustain fish and wildlife; help manage water resources in western
states; and provide scientific and technical information to allow for
sound decision-making about resources. In recent years, Congress has
appropriated over $10 billion annually to meet these responsibilities.
With these resources, Interior employs about 70,000 people in eight
major agencies and bureaus at over 2,400 locations around the country
to carry out its mission. Interior's management of this vast federal
estate is largely characterized by the struggle to balance the demand
for greater use of its resources with the need to conserve and protect
them for the benefit of future generations.
Our testimony today expands upon the issues raised in our 2009
Congressional and Presidential Transition Web site for the Department
of the Interior.[Footnote 1] Specifically, we will discuss management
challenges in six key areas: (1) resource protection, (2) Indian and
island community programs, which includes programs for four U.S.
territories and three sovereign island nations, (3) land acquisition
and management, (4) deferred maintenance, (5) royalties collection, and
(6) other revenue collections and financial assurances. Our testimony
is based on findings from a number of reports we have issued over the
past few years on some of Interior's natural resource management
programs.[Footnote 2]
Strengthening Resource Protection:
Interior, working with the Department of Agriculture's Forest Service,
has taken steps to help manage perhaps the most daunting challenge to
its resource protection mission--protecting lives, private property,
and federal resources from the threats of wildland fire. But concerns
remain. Interior also faces challenges in managing oil and gas
operations on federal lands, adapting to climate change, and resolving
natural resource conflicts through collaborative management.
Wildland Fire Management Challenges Persist:
The wildland fire problems facing our nation continue to grow. The
average annual acreage burned by wildland fires has increased by
approximately 70 percent since the 1990s, and appropriations for the
federal government's wildland fire management activities tripled from
about $1 billion in fiscal year 1999 to nearly $3 billion in fiscal
year 2007. As we have previously reported, a number of factors have
contributed to worsening fire seasons and increased firefighting
expenditures, including an accumulation of fuels resulting from past
land management practices; drought and other stresses, in part related
to climate change; and an increase in human development in or near
wildlands. While Agriculture's Forest Service receives the majority of
fire management resources, Interior agencies--the National Park Service
(NPS); the Bureau of Indian Affairs (BIA); the U.S. Fish and Wildlife
Service (FWS); and, particularly, the Bureau of Land Management (BLM)-
-are key partners in responding to the threats of wildland fire.
Consequently, most of our work and recommendations on wildland fire
management address agencies in both departments. Specifically, we have
called on the agencies to:
* develop a cohesive strategy that identifies options and associated
funding to reduce potentially hazardous vegetation and address wildland
fire problems. In 1999, to address the problem of excess fuels and
their potential to increase the severity of wildland fires and the cost
of suppression efforts, we recommended that a cohesive strategy be
developed to identify the available long-term options for reducing
fuels and the associated funding requirements.[Footnote 3] Six years
later, in 2005, we reiterated the need for a cohesive strategy and
broadened our recommendation's focus to better address the interrelated
nature of fuel reduction efforts and wildland fire response.[Footnote
4] In January 2009, agency officials told us they were working to
create such a cohesive strategy, although they could not provide an
estimate of when it would be completed.
* establish clear goals and a strategy to help contain wildland fire
costs. In 2007, we reported that the agencies were taking a number of
steps intended to help contain wildland fire costs, but had not clearly
defined cost-containment goals or developed a strategy for achieving
those goals.[Footnote 5] Agency officials identified several documents
that they believed provide clearly defined goals and objectives that
make up Interior's strategy to contain costs. However, the documents
lack the clarity and specificity officials in the field need to help
manage and contain wildland fire costs. We therefore continue to
believe that our recommendations, if effectively implemented, would
help the agencies better manage their cost-containment efforts and
improve their ability to contain wildland fire costs.
* continue to improve their processes for allocating fuel reduction
funds and selecting fuel reduction projects. Also in 2007, we
identified several shortcomings in the agencies' processes for
allocating fuel reduction funds to field units and selecting fuel
reduction projects, shortcomings that limited the agency's ability to
ensure that funds are directed where they will reduce risk most
effectively.[Footnote 6] While Interior has taken steps to improve its
processes for allocating fuel reduction funds and the information it
uses in selecting fuel reduction projects, we believe that Interior
must continue these efforts so that it can more effectively use its
limited fuel reduction dollars.
* take steps to improve its use of a new interagency budgeting and
planning tool. In 2008, we reported on the Forest Service's and
Interior's development of a new planning tool known as fire program
analysis (FPA).[Footnote 7] FPA was intended, among other things, to
allow the agencies to analyze potential combinations of firefighting
assets, and potential strategies for reducing fuels and fighting fires
so that they could determine the most cost-effective mix of assets and
strategies. While recognizing that FPA represents a significant step
forward and shows promise in achieving certain of its objectives, we
believe the agencies' approach to FPA's development hampers it from
meeting other key objectives. We made a number of recommendations
designed to enhance FPA and the agencies' ability to use it, and
Interior, in conjunction with the Forest Service, has identified
several steps it is considering taking to do so. It is not yet clear
how successful these steps will be. Furthermore, the steps the agencies
outlined do not address all the shortcomings we identified. We continue
to believe agency improvements are essential if the full potential of
FPA is to be realized.
Managing Oil and Gas Activities on Federal Lands:
The number of oil and gas operations that are permitted by BLM for
access to federal oil and gas resources has increased dramatically--
more than quadrupling from fiscal year 1999 to fiscal years 2006 and
2007--in part as a result of the desire to reduce the country's
dependence on foreign sources of oil and gas. In June 2005, we reported
that BLM has struggled to deal with the increase in the permitting
workload while also carrying out its responsibility to mitigate the
impacts of oil and gas development on land that it manages.[Footnote 8]
Overall, BLM officials told us that staff had to devote increasing
amounts of time to processing drilling permits, leaving less time to
ensuring the mitigation of the environmental impacts of oil and gas
development. While the Interior, Environment, and Related Agencies
Appropriation Act of Fiscal Year 2008 required BLM to charge a $4,000
processing fee for drilling permits, the act provided that the
appropriation for permit processing would be reduced by the amount of
fees received; thus the fee did not provide any additional resources
for BLM to increase its monitoring and enforcement activities for oil
and gas development. In its fiscal year 2009 budget request, BLM
requested authority to (1) permanently implement a cost recovery fee
for processing applications for permits to drill, (2) set the cost
recovery fee at $4,150 for fiscal year 2009, and (3) deposit the
revenues generated from the cost recovery fee in BLM's Service Charges,
Deposits and Forfeitures Account. BLM estimated the cost recovery fee
would generate $34 million for fiscal year 2009. Within the energy and
minerals budget for fiscal year 2009, BLM also requested a net increase
of $7.8 million for oil and gas activities.
Just as we have had concerns about BLM's protection of environmental
resources from oil and gas activities, we have had concerns, as we
reported in 2003, that FWS's oversight of oil and gas operations on
wildlife refuge lands was not adequate.[Footnote 9] For example, we
found that some refuge managers took extensive measures to oversee
operations and enforce environmental standards, while others exercised
little or no control. Such disparities occurred for two primary
reasons. First, FWS had not officially determined its authority to
require permits--which would include environmental conditions to
protect refuge resources--of all oil and gas operations in refuges; we
believe the agency has such authority. Second, refuge managers lacked
guidance, adequate staffing levels, and training to properly oversee
oil and gas activities. We also found that FWS was not collecting
complete and accurate information on damage to refuge lands as a result
of oil and gas operations and not identifying the steps needed to
address that damage. In June 2007, we reported that the FWS had
generally not taken sufficient actions to address five of the six
recommendations we had made in 2003 to improve FWS's management and
oversight of oil and gas activities on national wildlife refuges.
[Footnote 10]
Adapting to the Effects of Climate Change on Public Lands:
A growing body of evidence shows that increasing concentrations of
greenhouse gases--primarily carbon dioxide, methane, and nitrous oxide-
-in the Earth's atmosphere have resulted in a warmer global climate
system, among other changes. In August 2007, we reported that,
according to experts, federal land and water resources are vulnerable
to a wide range of effects from climate change, some of which are
already occurring.[Footnote 11] These effects include (1) physical
effects, such as droughts, floods, glacial melting, and sea level rise;
(2) biological effects, such as increases in insect and disease
infestations, shifts in species distribution, and changes in the timing
of natural events; and (3) economic and social effects, such as adverse
impacts on tourism, infrastructure, fishing, and other resource uses.
BLM, FWS, and NPS have not made climate change a priority, and the
agencies' strategic plans do not specifically address it. To better
enable federal resource management agencies to take into account the
existing and potential future effects of climate change on federal
resources, we recommended that the Secretary of the Interior and two
other departments develop guidance incorporating agencies' best
practices that advises managers on how to address climate change
effects on the resources they manage. Interior and the other agencies
generally agreed with our recommendation.
The effects of a warmer climate have been clearly evident in Alaska. In
December 2003, we reported that coastal villages in Alaska are becoming
more susceptible to flooding and erosion in part because rising
temperatures cause protective shore ice to form later in the year,
leaving the villages vulnerable to fall storms.[Footnote 12] In
addition, rising temperatures in recent years have led to widespread
thawing of the permafrost (permanently frozen subsoil that is found in
over approximately 80 percent of Alaska), causing serious damage. At
that time, we found that flooding and erosion affects 184 out of 213,
or 86 percent, of Alaska Native villages to some extent, and four
villages in imminent danger planned to relocate.
Resolving Natural Resource Conflicts Through Collaborative Management:
Interior's management of its vast federal estate is largely
characterized by the struggle to balance the demand for greater use of
its resources with the need to conserve and protect them for the
benefit of future generations. In February 2008, we reported that
conflicts over the use of our nation's natural resources, along with
increased ecological problems, has led land managers to seek
cooperative means to resolve natural resource conflicts and
problems.[Footnote 13] Collaborative resource management is one such
approach that communities began using in the 1980s and 1990s. In 2004,
an executive order on cooperative conservation encouraged such efforts.
Experts generally view collaborative resource management--involving
public and private stakeholders in natural resource decisions--as an
effective approach for managing natural resources. The benefits that
result from using collaborative resource management include less
conflict and litigation and improved natural resource conditions,
according to experts. Many experts also noted that there are
limitations to the approach, such as the time and resources it takes to
bring people together to work on a problem and reach a decision. BLM,
FWS, NPS, and Agriculture's Forest Service face challenges in
determining whether to participate in a collaborative effort, measuring
participation and monitoring results, and sharing agency and group
experiences. To enhance the federal government's support of and
participation in collaborative resource management efforts, we
recommended that the Council on Environmental Quality, working with the
departments of the Interior and of Agriculture take several actions to
enhance the federal government's support of and participation in
collaborative resource management efforts, including the preparation of
a written plan identifying goals, actions, and time frames for carrying
out cooperative conservation activities. Interior generally agreed with
our recommendations.
Strengthening the Accountability of Indian and Island Community
Programs:
We have reported on management weaknesses in Indian and island
community programs for a number of years--most recently on serious
delays in BIA's program for determining whether the department will
accept land in trust and the need to assist seven island communities--
four U.S. territories and three sovereign island nations--with long-
standing financial and program management deficiencies.
Improvements Needed in BIA's Processing of Land in Trust Applications:
BIA is the primary federal agency charged with implementing federal
Indian policy and administering the federal trust responsibility for
about 2 million American Indians and Alaska Natives. BIA provides basic
services to 562 federally recognized Indian tribes throughout the
United States, including natural resources management on about 54
million acres of Indian trust lands. Trust status means that the
federal government holds title to the land in trust for tribes or
individual Indians; land taken in trust is no longer subject to state
and local property taxes and zoning ordinances. In 1980, the department
established a regulatory process intended to provide a uniform approach
for taking land in trust.[Footnote 14] While some state and local
governments support the federal government's taking additional land in
trust for tribes or individual Indians, others strongly oppose it
because of concerns about the impacts on their tax base and
jurisdictional control.
We reported in July 2006 that while BIA generally followed its
regulations for processing land in trust applications from tribes and
individual Indians, it had no deadlines for making decisions on them.
[Footnote 15] Specifically, the median processing time for the 87 land
in trust applications with decisions in fiscal year 2005 was 1.2 years--
ranging from 58 days to almost 19 years. We recommended, among other
things, that the department move forward with adopting revisions to the
land in trust regulations that include (1) specific time frames for BIA
to make a decision once an application is complete and (2) guidelines
for providing state and local governments more information on the
applications and a longer period of time to provide meaningful comments
on the applications. While the department agreed with our
recommendations, it has not revised the land in trust regulations.
Improve Effectiveness and Accountability for Island Programs:
The Secretary of the Interior has varying responsibilities to the
island communities of American Samoa, Guam, the Commonwealth of the
Northern Mariana Islands, and the U.S. Virgin Islands, all of which are
U.S. territories--as well as to the Federated States of Micronesia, the
Republic of the Marshall Islands, and the Republic of Palau, which are
sovereign nations linked with the United States through Compacts of
Free Association. The Office of Insular Affairs (OIA), which carries
out the department's responsibilities for the island communities, is to
assist the island communities in developing more efficient and
effective government by providing financial and technical assistance
and to help manage relations between the federal government and the
island governments by promoting appropriate federal policies. The
island governments have had long-standing financial and program
management deficiencies.
In December 2006, we reported on serious economic, fiscal, and
financial accountability challenges facing American Samoa, Guam, the
Commonwealth of the Northern Mariana Islands, and the U.S. Virgin
Islands.[Footnote 16] The economic challenges stem from dependence on a
few key industries, scarce natural resources, small domestic markets,
limited infrastructure, shortages of skilled labor, and reliance on
federal grants to fund basic services. In addition, efforts to meet
formidable fiscal challenges and build strong economies are hindered by
financial reporting that does not provide timely and complete
information to management and oversight officials for decision making.
As a result of these problems, numerous federal agencies have
designated these governments as "high-risk" grantees. To increase the
effectiveness of the federal government's assistance to these island
communities, we recommended, among other things, that the department
increase coordination activities with other federal grant-making
agencies on issues of common concern relating to the insular area
governments. The department agreed with our recommendations, stating
that they were consistent with OIA's top priorities and ongoing
activities. We will continue to monitor OIA's actions on our
recommendations.
Also in December 2006, we reported on challenges facing the Federated
States of Micronesia and the Republic of the Marshall Islands.[Footnote
17] In 2003, the United States approved amended compacts with the
countries by signing Compacts of Free Association with the two
governments. The amended compacts provide the countries with a combined
total of $3.6 billion from 2004 to 2023, with the annual grants
declining gradually. The single audits for 2004 and 2005 for both
countries reported (1) weaknesses in their ability to account for the
use of compact funds and (2) noncompliance with requirements for major
federal programs. We recommended, among other things, that the
department work with the countries to establish plans to minimize the
impact of declining assistance and to fully develop a reliable
mechanism for measuring progress towards program goals. Furthermore, in
June 2007 we reported that trust funds for both nations may not provide
sustainable income after the compact grants end, and we recommended,
among other things, improvements in trust fund administration.[Footnote
18] The department agreed with the recommendations in our December 2006
and June 2007 reports.
In our June 2008 assessment of the Compact of Free Association with the
Republic of Palau, we reported on the challenges Palau faced in dealing
with persistent financial management weaknesses and with achieving long
term economic self-sufficiency.[Footnote 19] We recommended that the
department formally consult with the government of Palau regarding
Palau's financial management challenges and target future technical
assistance toward building Palau's financial management capacity. The
department concurred with our recommendations.
Improving Federal Land Acquisition and Management:
As the steward of more than 500 million acres of federal land, land
consolidation through sales and acquisitions and land management are
important functions for the Department of the Interior. However, the
Federal Land Transaction Facilitation Act of 2000 which, in part, was
intended to facilitate land consolidation, has had limited success. In
February 2008, we reported that BLM had raised $95.7 million in revenue
through May 2007 under the Federal Land Transaction Facilitation Act.
[Footnote 20] About 92 percent of this revenue came from land
transactions in Nevada. However, the four land management agencies
(BLM, FWS, NPS, and Agriculture's Forest Service) have spent only $13.3
million of the revenues raised for acquiring certain nonfederal lands,
primarily those lying within the boundaries of national parks, forests,
wildlife refuges, and other designated areas, known as inholdings,
($10.1 million) or for administrative expenses to prepare land for
sales ($3.2 million).
The agencies face several challenges to completing future land
acquisitions under the act. Most notably, the act requires that the
agencies use most of the funds to purchase land in the state in which
the funds were raised; this restriction has had the effect of making
little revenue available outside of Nevada. If Congress decides to
reauthorize the act, we suggested that it consider including additional
lands for sale and greater flexibility for acquisitions. We also made a
number of recommendations to the agencies to improve the implementation
and compliance with the act. Interior generally agreed with our
recommendations.
In addition, Interior's Fish and Wildlife Service is unlikely to
achieve its goals to protect certain migratory bird habitat, and it is
generally not managing a majority of its farmlands. In September 2007,
we reported that since the inception of the Small Wetlands Acquisition
Program in the late 1950s, FWS has acquired and permanently protected
about 3 million acres of wetlands and grasslands in the Prairie Pothole
Region.[Footnote 21] However, at the current pace of acquisitions, it
could take FWS about 150 years and billions of dollars to acquire and
permanently protect as much as possible of an additional 12 million
acres of "high-priority" habitat. Some emerging market forces suggest
that FWS may have only several decades before most of its goal acreage
is converted to agricultural uses.
We also reported in September 2007 that, according to FWS data, since
1986, the Service has received at least 1,400 conservation easements
and fee-simple farmlands covering 132,000 acres from the Department of
Agriculture's Farm Service Agency.[Footnote 22] However, FWS is
generally not managing a majority of its farmlands. For 2002 through
2006, FWS has inspected an annual average of only 13 percent of these
lands. Because the farmlands are now part of the National Wildlife
Refuge System, we found that FWS cannot dispose of unwanted farmlands.
As a result, we recommended that FWS develop a proposal to Congress
seeking authority for additional flexibility in dealing with farmlands
FWS determines may not be in the best interests of the National
Wildlife Refuge System. Interior agreed with our recommendations.
Reducing Interior's Deferred Maintenance Backlog:
Interior also faces a challenge in adequately maintaining its
facilities and infrastructure. The department owns, builds, purchases,
and contracts services for assets such as visitor centers, schools,
office buildings, roads, bridges, dams, irrigation systems, and
reservoirs; however, repairs and maintenance on these facilities have
not been adequately funded. The deterioration of facilities can impair
public health and safety, reduce employees' morale and productivity,
and increase the need for costly major repairs or early replacement of
structures and equipment. In November 2008, the department estimated
that the deferred maintenance backlog for fiscal year 2008 was between
$13.2 billion and $19.4 billion (see table 1). Interior is not alone in
facing daunting maintenance challenges. In fact, we have identified the
management of federal real property, including deferred maintenance
issues, as a governmentwide high-risk area since 2003.[Footnote 23]
Table 1: Department of the Interior's Estimate of Deferred Maintenance
for Fiscal Year 2008:
Type of structure: Roads, bridges, and trails;
Estimated range of deferred maintenance: Low estimate: $6.41 billion;
Estimated range of deferred maintenance: High estimate: $9.37 billion.
Type of structure: Irrigation, dams, and other water structures;
Estimated range of deferred maintenance: Low estimate: $2.40 billion;
Estimated range of deferred maintenance: High estimate: $3.59 billion.
Type of structure: Buildings (e.g., administration, education, housing,
historic buildings);
Estimated range of deferred maintenance: Low estimate: $2.38 billion;
Estimated range of deferred maintenance: High estimate: $3.48 billion.
Type of structure: Other structures (e.g., recreation sites and fish
hatcheries);
Estimated range of deferred maintenance: Low estimate: $2.00 billion;
Estimated range of deferred maintenance: High estimate: $2.93 billion.
Total:
Estimated range of deferred maintenance: Low estimate: $13.19 billion;
Estimated range of deferred maintenance: High estimate: $19.37 billion.
Source: Department of the Interior.
[End of table]
Interior has made progress addressing prior recommendations to improve
information on the maintenance needs of NPS facilities, BIA schools,
and BIA irrigation projects. For example, in February 2006 we reported
that BIA plans to hire experts in engineering and irrigation to
thoroughly assess the condition of all 16 irrigation projects every 5
years to further refine the deferred maintenance estimate for these
projects.[Footnote 24] It completed its first assessment in July 2005,
and expects to complete all 16 assessments by 2010. Although Interior
has made a concentrated effort to address its deferred maintenance
backlog, the dollar estimate of the backlog has continued to escalate.
The 2008 backlog estimate is more than 60 percent higher than the 2003
estimate of between $8.1 billion and $11.4 billion. The funds included
in the recently enacted stimulus package for Interior may reverse this
trend.
Ensuring the Accurate Collection of Royalties:
Interior collects, on average, over $10 billion annually in mineral
lease revenues,[Footnote 25] but many material weaknesses in federal
oil and gas management and revenue collection processes and practices
place an unknown but significant proportion of royalties and other oil
and gas revenues at risk. These weaknesses also raise questions about
whether Interior is collecting an appropriate amount of revenue for the
rights to explore for, develop, and produce oil and gas on federal
lands and waters.
Substantial Revenues May be at Risk Due to Inadequate Management
Practices:
With regard to overall revenue collection, in September 2008, we
reported that compared with other countries, the United States receives
one of the lowest shares of revenue for its oil and gas resources.
[Footnote 26] A number of these other countries and resource owners had
responded to higher oil and gas prices by increasing their share of oil
and gas revenues to potentially generate substantially more revenue.
However, despite significant changes in the oil and gas industry and
widely fluctuating prices, Interior has not systematically reexamined
how the federal government is compensated for oil and gas on federal
lands for over 25 years. Furthermore, we have found that Interior does
less to encourage development of its leases than do some state and
private landowners.
Also in September 2008, we reported that Interior's Minerals Management
Service's (MMS) management of cash royalty collection lacks key
controls, such as the ability to effectively monitor and validate oil
and gas company adjustments to self-reported royalty data, including
those made after audits have been completed. Furthermore, MMS's royalty
compliance efforts rely too heavily on self-reported data, but the more
consistent use of available third-party data as a check on self-
reported data could provide greater assurance that royalties are
accurately assessed and paid.[Footnote 27] In another September 2008
report, we found that for MMS's Royalty-in-Kind program, in which
companies provide the federal government with oil or gas in lieu of
cash royalty payments, MMS's oversight of natural gas volumes is less
robust than its oversight of oil volumes--a finding that raises
questions about the accuracy of company-reported volumes of natural gas
from which MMS must determine whether it is receiving its appropriate
share of production.[Footnote 28] In addition, we found that MMS's
annual reports to Congress do not fully describe the performance of the
Royalty-in-Kind program and, in some instances, may overstate the
benefits of the program.
Concerning workforce issues, we reported in June 2005 that BLM has
encountered persistent problems in hiring and retaining sufficient and
adequately trained staff to keep up with an increasing workload as a
result of rapid increases in oil and gas operations on federal lands.
[Footnote 29] For example, between 1999 and 2004, when applications for
permits to drill more than tripled, BLM was unable to keep up with the
commensurate increase in its workload, in part, as a result of an
ineffective workforce planning process, the lack of key data on
workload activities, and a lack of resources. BLM's inability to
attract and retain sufficiently trained staff has kept the agency from
meeting requirements to inspect the drilling and production of oil and
gas on federal lands. Lack of inspection puts federal revenues at risk
because inspections have found violations, including errors in the
volumes of oil and gas that operators reported. Furthermore, in one of
our September 2008 reports, we reported that Interior is not meeting
statutory or agency targets for inspecting certain onshore and offshore
leases and metering equipment for measuring oil and gas production,
raising questions about the accuracy of company-reported oil and gas
production figures.[Footnote 30] As a result, and based on Interior's
comments, we recommended that Interior report to Congress any year in
which it does not meet its legal and agency requirements for completing
production inspections, along with the cause and a plan for achieving
compliance.
Substantial Revenue May be Forgone Because of Royalty Relief:
In 2007 and 2008, we reported on MMS's implementation of the Outer
Continental Shelf Deep Water Royalty Relief Act of 1995 and other
authorities for granting royalty relief for oil and gas leases.
[Footnote 31] We found that MMS had issued lease contracts in 1998 and
1999 that failed to include price thresholds above which royalty relief
would no longer be applicable. As a result, large volumes of oil and
natural gas are exempt from royalties, which significantly reduces the
amount of royalty revenues that the federal government can collect. At
least $1 billion in royalties has already been lost because of this
failure to include price thresholds. We developed a number of scenarios
that showed that forgone royalties from leases issued between 1996 and
2000 under the act could be as high as $53 billion. However, there is
much uncertainty in this scenario as a result of the inherent
difficulties in estimating future production, ongoing litigation over
MMS's authority to set price thresholds for some leases, and widely
fluctuating oil and gas prices. Other authorities for granting royalty
relief may also affect future royalty revenues. Specifically, under
discretionary authority, the Secretary of the Interior administers
programs granting relief for certain deep water leases issued after
2000, certain gas wells drilled in shallow waters, and wells nearing
the end of their productive lives. In addition, the Energy Policy Act
of 2005 mandates relief for leases issued in the Gulf of Mexico during
the 5 years following the act's passage, provides some relief for some
gas wells that would not have previously qualified for royalty relief,
and addresses relief in certain areas of Alaska where there currently
is little or no production.
Enhancing Other Revenue Collections and Financial Assurances:
Additional revenues or financial assurances could be generated through
hardrock mining operations by amending the General Mining Act of 1872
so that the federal government could collect federal royalties on
minerals extracted from U.S. mineral rights and by requiring adequate
financial assurances from hardrock mining operations to fully cover
estimated reclamation costs. Additional revenues could also be
generated by increasing the grazing fee for public lands managed by
Interior's Bureau of Land Management.
Additional Revenue or Financial Assurances Could be Generated Through
Hardrock Mining Operations:
The General Mining Act of 1872 helped open the West by allowing
individuals to obtain exclusive rights to mine billions of dollars
worth of hardrock minerals from federal lands without having to pay a
federal royalty. In July 2008 we reported that the 12 western states,
including Alaska, assess multiple types of royalties on mining
operations.[Footnote 32] States may use similar names for the royalties
they assess, but these can vary widely in their forms and rates. Unlike
the federal government, these states charge royalties that allow them
to share in the proceeds from hardrock minerals extracted from state-
owned lands, as well as levy taxes that function like royalties, on
private, state, and federal lands.
Under BLM regulations, hardrock mining operators who extract gold,
silver, copper, and other valuable mineral deposits from land belonging
to the United States are required to provide financial assurances,
before they begin exploration or mining, to guarantee that the costs to
reclaim land disturbed by their operations are paid. However, we
reported in June 2005 that BLM did not have a process for ensuring that
adequate assurances were in place.[Footnote 33] When operators with
insufficient financial assurances fail to reclaim BLM land disturbed by
hardrock mining operations, BLM is left with public land that poses
risks to the environment and public health and safety, and requires
millions of federal dollars to reclaim.
In March 2008, we found that the financial assurances required by BLM
were not adequate to fully cover estimated reclamation costs.[Footnote
34] According to BLM, mine operators had provided financial assurances
valued at approximately $982 million to guarantee reclamation costs for
1,463 hardrock operations on BLM land. BLM also estimated that 52
mining operations had financial assurances that amounted to about $28
million less than needed to fully cover estimated reclamation costs.
However, we found that the financial assurances for these 52 operations
were in fact about $61 million less than needed to fully cover
estimated reclamation costs. The $33 million difference between our
estimated shortfall and BLM's occurs because BLM calculated its
shortfall by comparing the total value of financial assurances in place
with the total estimated reclamation costs. This calculation approach
has the effect of offsetting the shortfalls in some operations with the
financial assurances of other operations. However, financial assurances
that are greater than the amount required for an operation cannot be
transferred to another operation that has inadequate financial
assurances. BLM officials agreed that it would be valuable to report
the dollar value of the difference between financial assurances in
place and required for those operations where financial assurances are
inadequate.
Additional Revenue Could be Generated Through an Adjustment to BLM
Grazing Fees:
Ten federal agencies manage grazing on over 22 million acres, with BLM
and the Forest Service managing the vast majority of this activity.
[Footnote 35] In total, federal grazing revenue amounted to about $21
million in fiscal year 2004, although grazing fees differ by agency.
For example, in 2004, BLM and the Forest Service charged $1.43 per
animal unit month, while other federal agencies charged between $0.29
and $112 per animal unit month.[Footnote 36] We reported in 2005 that
while BLM and the Forest Service charged generally much lower fees than
other federal agencies and private entities, these fees reflect
legislative and executive branch policies to support local economies
and ranching communities.[Footnote 37] Specifically, BLM fees are set
by a formula that expired in 1985, but was extended indefinitely by
executive order in 1986. This formula takes into account a rancher's
ability to pay and, therefore, the purpose is not primarily to recover
the agencies' costs or capture the fair market value of forage.
Instead, the formula is designed to set a fee that helps support
ranchers and the western livestock industry. Other federal agencies
employ market-based approaches to setting grazing fees.
Using this formula, BLM collected about $12 million in receipts in
fiscal year 2004, while its costs for implementing its grazing program,
including range improvement activities, were about $58 million. Were
BLM to implement approaches used by other agencies to set grazing fees,
it could help to close the gap between expenditures and receipts and
more closely align its fees with market prices. Instead, for 2007,
2008, and 2009, the grazing fee was set at $1.35 per animal unit month,
the lowest level allowable under the executive order. We recognize,
however, that the purpose and size of BLM's grazing fee are ultimately
for Congress to decide.
Mr. Chairman, this concludes our prepared statement. We would be
pleased to answer any questions that you or other Members of the
Subcommittee may have at this time.
GAO Contacts and Staff Acknowledgments:
For further information about this testimony, please contact Robin M.
Nazzaro or Frank Rusco at (202) 512-3841 or nazzaror@gao.gov and
ruscof@gao.gov, respectively. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last
page of this statement. Individuals making key contributions to this
testimony include Jeffery D. Malcolm, Assistant Director, and Ross
Campbell. Also contributing to this testimony were Ron Belak, Jonathan
Dent, Glenn Fischer, Emil Friberg, Steve Gaty, Richard P. Johnson,
Marissa Jones, Carol Kolarik, Carol Herrnstadt Shulman, and Desirée
Thorp.
[End of section]
Related GAO Products:
High Risk Series:
High-Risk Series: An Update. [hyperlink,
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2009.
High-Risk Series: An Update. [hyperlink,
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2007.
High-Risk Series: An Update. [hyperlink,
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2005.
High-Risk Series: An Update. [hyperlink,
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2003.
High-Risk Series: Federal Real Property. [hyperlink,
http://www.gao.gov/products/GAO-03-122]. Washington, D.C.: January
2003.
Interior Management Challenges:
2009 Congressional and Presidential Transition: Department of the
Interior; Web-based Update: [hyperlink,
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Posthearing Questions: Major Management Challenges at the Department of
the Interior. [hyperlink, http://www.gao.gov/products/GAO-07-659R].
Washington, D.C.: March 28, 2007.
Department of the Interior: Major Management Challenges. [hyperlink,
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16, 2007.
Major Management Challenges at the Department of the Interior 2005 Web-
based Update: [hyperlink, http://www.gao.gov/pas/2005/doi.htm].
Resource Protection:
Wildland Fires:
Wildland Fire Management: Interagency Budget Tool Needs Further
Development to Fully Meet Key Objectives. [hyperlink,
http://www.gao.gov/products/GAO-09-68]. Washington, D.C.: November 24,
2008.
Wildland Fire Management: Federal Agencies Lack Key Long-and Short-Term
Management Strategies for Using Program Funds Effectively. [hyperlink,
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12, 2008.
Wildland Fire Management: Better Information and a Systematic Process
Could Improve Agencies' Approach to Allocating Fuel Reduction Funds and
Selecting Projects. [hyperlink,
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28, 2007.
Wildland Fire Management: Lack of Clear Goals or a Strategy Hinders
Federal Agencies' Efforts to Contain the Costs of Fighting Fires.
[hyperlink, http://www.gao.gov/products/GAO-07-655]. Washington, D.C.:
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Wildland Fire Suppression: Lack of Clear Guidance Raises Concerns about
Cost Sharing between Federal and Nonfederal Entities. [hyperlink,
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Wildland Fire Management: Update on Federal Agency Efforts to Develop a
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Wildland Fire Management: Important Progress Has Been Made, but
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Wildland Fires: Forest Service and BLM Need Better Information and a
Systematic Approach for Assessing the Risks of Environmental Effects.
[hyperlink, http://www.gao.gov/products/GAO-04-705]. Washington, D.C.:
June 24, 2004.
Wildland Fire Management: Additional Actions Required to Better
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Western National Forests: A Cohesive Strategy is Needed to Address
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1999.
Other Resource Protection Products:
Endangered Species Act: Many GAO Recommendations Have Been Implemented,
but Some Issues Remain Unresolved. [hyperlink,
http://www.gao.gov/products/GAO-09-225R]. Washington, D.C.: December
19, 2008.
Federal Land Management: Use of Stewardship Contracting Is Increasing,
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[hyperlink, http://www.gao.gov/products/GAO-09-23]. Washington, D.C.:
November 13, 2008.
Bureau of Land Management: Effective Long-Term Options Needed to Manage
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Wildlife Refuges: Changes in Funding, Staffing, and Other Factors
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U.S. Fish and Wildlife Service: Endangered Species Act Decision Making.
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Hardrock Mining: Information on Abandoned Mines and Value and Coverage
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Yellowstone Bison: Interagency Plan and Agencies' Management Need
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March 7, 2008.
Natural Resource Management: Opportunities Exist to Enhance Federal
Participation in Collaborative Efforts to Reduce Conflicts and Improve
Natural Resource Conditions. [hyperlink,
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2008.
Climate Change: Agencies Should Develop Guidance for Addressing the
Effects on Federal Land and Water Resources. [hyperlink,
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2007.
U.S. Fish and Wildlife Service: Opportunities Remain to Improve
Oversight and Management of Oil and Gas Activities on National Wildlife
Refuges. [hyperlink, http://www.gao.gov/products/GAO-07-829R].
Washington, DC: June 29, 2007.
Endangered Species: Many Factors Affect the Length of Time to Recover
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Washington, D.C.: September 6, 2006.
Invasive Forest Pests: Lessons Learned from Three Recent Infestations
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Endangered Species: Time and Costs Required to Recover Species Are
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Wind Power: Impacts on Wildlife and Government Responsibilities for
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Hardrock Mining: BLM Needs to Better Manage Financial Assurances to
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2005.
Oil and Gas Development: Increased Permitting Activity Has Lessened
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Invasive Species: Cooperation and Coordination Are Important for
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2005.
Oil and Gas Development: Challenges to Agency Decisions and
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2004.
Endangered Species: More Federal Management Attention Is Needed to
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2004.
Invasive Species: Clearer Focus and Greater Commitment Needed to
Effectively Manage the Problem. [hyperlink,
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2002.
Indian and Island Community Programs:
Indian Land Management:
Indian Issues: BLM's Program for Issuing Individual Indian Allotments
on Public Lands Is No Longer Viable. [hyperlink,
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2006.
Indian Issues: BIA's Efforts to Impose Time Frames and Collect Better
Data Should Improve the Processing of Land in Trust Applications.
[hyperlink, http://www.gao.gov/products/GAO-06-781]. Washington, D.C.:
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Indian Irrigation: Numerous Issues Need to Be Addressed to Improve
Project Management and Financial Sustainability. [hyperlink,
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2006.
Alaska Native Allotments: Conflicts with Utility Rights-of-Way Have Not
Been Resolved Through Existing Remedies. [hyperlink,
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2004.
Columbia River Basin: A Multilayered Collection of Directives and Plans
Guide Federal Fish and Wildlife Plans. [hyperlink,
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2004.
Alaska Native Villages: Most Are Affected by Flooding and Erosion, but
Few Qualify for Federal Assistance. [hyperlink,
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2003.
Island Communities:
Commonwealth of the Northern Mariana Islands: Managing Potential
Economic Impact of Applying U.S. Immigration Law Requires Coordinated
Federal Decisions and Additional Data. [hyperlink,
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2008.
American Samoa: Issues Associated with Potential Changes to the Current
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2008.
Compact of Free Association: Palau's Use of and Accountability for U.S.
Assistance and Prospects for Economic Self-Sufficiency. [hyperlink,
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2008.
Commonwealth of the Northern Mariana Islands: Pending Legislation Would
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March 28, 2008.
Compacts of Free Association: Trust Funds for Micronesia and the
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Compacts of Free Association: Micronesia's and the Marshall Islands'
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2007.
Compacts of Free Association: Micronesia and the Marshall Islands Face
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U.S. Insular Areas: Economic, Fiscal, and Financial Accountability
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Compacts of Free Association: Development Prospects Remain Limited for
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2006.
U.S. Insular Areas: Multiple Factors Affect Federal Health Care
Funding. [hyperlink, http://www.gao.gov/products/GAO-06-75].
Washington, D.C.: October 14, 2005.
Compacts of Free Association: Implementation of New Funding and
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Remain. [hyperlink, http://www.gao.gov/products/GAO-05-633].
Washington, D.C.: July 11, 2005.
American Samoa: Accountability for Key Federal Grants Needs
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2004.
Compact of Free Association: Single Audits Demonstrate Accountability
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Compact of Free Association: An Assessment of Amended Compacts and
Related Agreements. [hyperlink,
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2003.
Federal Land Acquisition and Management:
Federal Land Management: Federal Land Transaction Facilitation Act
Restrictions and Management Weaknesses Limit Future Sales and
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Washington, D.C.: February 5, 2008.
Prairie Pothole Region: At the Current Pace of Acquisitions, the U.S.
Fish and Wildlife Service Is Unlikely to Achieve Its Habitat Protection
Goals for Migratory Birds. [hyperlink,
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U.S. Fish and Wildlife Service: Additional Flexibility Needed to Deal
with Farmlands Received from the Department of Agriculture. [hyperlink,
http://www.gao.gov/products/GAO-07-1092]. Washington, D.C.: September
18, 2007.
Interior's Land Appraisal Services: Action Needed to Improve Compliance
with Appraisal Standards, Increase Efficiency, and Broaden Oversight.
[hyperlink, http://www.gao.gov/products/GAO-06-1050]. Washington, D.C.:
September 28, 2006.
Deferred Maintenance Backlog:
National Park Service: Major Operations Funding Trends and How Selected
Park Units Responded to Those Trends for Fiscal Years 2001 through
2005. [hyperlink, http://www.gao.gov/products/GAO-06-431]. Washington,
D.C.: March 31, 2006.
Indian Irrigation Projects: Numerous Issues Need to Be Addressed to
Improve Project Management and Financial Sustainability. [hyperlink,
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2006.
Recreation Fees: Comments on the Federal Lands Recreation Enhancement
Act, H.R. 3283. [hyperlink, http://www.gao.gov/products/GAO-04-745T].
Washington, D.C.: May 6, 2004.
National Park Service: Efforts Underway to Address Its Maintenance
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Washington, D.C.: September 27, 2003.
Bureau of Indian Affairs Schools: Expenditures in Selected Schools Are
Comparable to Similar Public Schools, but Data Are Insufficient to
Judge Adequacy of Funding and Formulas. [hyperlink,
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2003.
Bureau of Indian Affairs Schools: New Facilities Management Information
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2003.
National Park Service: Status of Agency Efforts to Address Its
Maintenance Backlog. [hyperlink,
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2003.
Royalties Collection:
Oil and Gas Royalties: MMS's Oversight of Its Royalty-in-Kind Program
Can Be Improved through Additional Use of Production Verification Data
and Enhanced Reporting of Financial Benefits and Costs. [hyperlink,
http://www.gao.gov/products/GAO-08-942R]. Washington, D.C.: September
26, 2008.
Mineral Revenues: Data Management Problems and Reliance on Self-
Reported Data for Compliance Efforts Put MMS Royalty Collections at
Risk. [hyperlink, http://www.gao.gov/products/GAO-08-893R]. Washington,
D.C.: September 12, 2008.
Oil and Gas Royalties: The Federal System for Collecting Oil and Gas
Revenues Needs Comprehensive Reassessment. [hyperlink,
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2008.
Oil and Gas Royalties: Litigation over Royalty Relief Could Cost the
Federal Government Billions of Dollars. [hyperlink,
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2008.
Mineral Revenues: Data Management Problems and Reliance on Self-
Reported Data for Compliance Efforts Put MMS Royalty Collections at
Risk. [hyperlink, http://www.gao.gov/products/GAO-08-560T]. Washington,
D.C.: March 11, 2008.
Oil and Gas Royalties: A Comparison of the Share of Revenue Received
From Oil and Gas Production by the Federal Government and Other
Resources. [hyperlink, http://www.gao.gov/products/GAO-07-676R].
Washington, D.C.: May 1, 2007.
Oil and Gas Royalties: Royalty Relief Will Cost the Government Billions
of Dollars but Uncertainty Over Future Energy Prices and Production
Levels Make Precise Estimates Impossible at this Time. [hyperlink,
http://www.gao.gov/products/GAO-07-590R]. Washington, D.C.: April 12,
2007.
Royalties Collection: Ongoing Problems with Interior's Efforts to
Ensure a Fair Return for Taxpayers Require Attention. [hyperlink,
http://www.gao.gov/products/GAO-07-682T]. Washington, D.C.: March 28,
2007.
Oil and Gas Royalties: Royalty Relief Will Likely Cost the Government
Billions, but the Final Costs Have Yet to Be Determined. [hyperlink,
http://www.gao.gov/products/GAO-07-369T]. Washington, D.C.: January 18,
2007.
Royalty Revenues: Total Revenues Have Not Increased at the Same Pace as
Rising Oil and Natural Gas Prices due to Decreasing Production Sold.
[hyperlink, http://www.gao.gov/products/GAO-06-786R]. Washington, D.C.:
June 21, 2006.
Oil and Gas Development: Challenges to Agency Decisions and
Opportunities for BLM to Standardize Data Collection. [hyperlink,
http://www.gao.gov/products/GAO-05-124]. Washington, D.C.: November 30,
2004.
Mineral Revenues: Cost and Revenue Information Needed to Compare
Different Approaches for Collecting Federal Oil and Gas Royalties.
[hyperlink, http://www.gao.gov/products/GAO-04-448]. Washington, D.C.:
April 16, 2004.
Mineral Revenues: A More Systematic Evaluation of the Royalty-in-Kind
Pilots Is Needed. [hyperlink,
http://www.gao.gov/products/GAO-03-296]. Washington, D.C.: January 9,
2003.
Other Revenue Collections and Financial Assurances:
Hardrock Mining: Information on State Royalties and Trends in Mineral
Imports and Exports. [hyperlink,
http://www.gao.gov/products/GAO-08-849R]. Washington, D.C.: July 21,
2008.
Hardrock Mining: Information on Abandoned Mines and Value and Coverage
of Financial Assurances on BLM Land. [hyperlink,
http://www.gao.gov/products/GAO-08-574T]. Washington, D.C.: March 12,
2008.
Recreation Fees: Agencies Can Better Implement the Federal Lands
Recreation Enhancement Act and Account for Fee Revenues. [hyperlink,
http://www.gao.gov/products/GAO-06-1016]. Washington, D.C.: September
22, 2006.
National Park Air Tour Fees: Effective Verification and Enforcement Are
Needed to Improve Compliance. [hyperlink,
http://www.gao.gov/products/GAO-06-468]. Washington, D.C.: May 11,
2006.
Livestock Grazing: Federal Expenditures and Receipts Vary, Depending on
the Agency and the Purpose of the Fee Charged. [hyperlink,
http://www.gao.gov/products/GAO-05-869]. Washington, D.C.: September
30, 2005.
Hardrock Mining: BLM Needs to Better Manage Financial Assurances to
Guarantee Coverage of Reclamation Costs. [hyperlink,
http://www.gao.gov/products/GAO-05-377]. Washington, D.C.: June 20,
2005.
Oil and Gas Development: Increased Permitting Activity Has Lessened
BLM's Ability to Meet Its Environmental Protection Responsibilities.
[hyperlink, http://www.gao.gov/products/GAO-05-418]. Washington, D.C.:
June 17, 2005.
[End of section]
Footnotes:
[1] GAO, 2009 Congressional and Presidential Transition: Department of
the Interior (Web-based update at [hyperlink,
http://www.gao.gov/transition_2009/agency/doi/]).
[2] See the list of related GAO products at the end of this statement.
We conducted our work in accordance with all sections of GAO's Quality
Assurance Framework that were relevant to the objectives of each
engagement. The framework requires that we plan and perform each
engagement to obtain sufficient and appropriate evidence to meet our
stated objectives and to discuss any limitations in our work. We
believe that the information and data obtained, and the analyses
conducted, provided a reasonable basis for the findings and conclusions
in each report.
[3] GAO, Western National Forests: A Cohesive Strategy Is Needed to
Address Catastrophic Wildfire Threats, [hyperlink,
http://www.gao.gov/products/GAO/RCED-99-65] (Washington, D.C.: Apr. 2,
1999).
[4] GAO, Wildland Fire Management: Important Progress Has Been Made,
but Challenges Remain to Completing a Cohesive Strategy, [hyperlink,
http://www.gao.gov/products/GAO-05-147] (Washington, D.C.: Jan. 14,
2005).
[5] GAO, Wildland Fire Management: Lack of Clear Goals or a Strategy
Hinders Federal Agencies' Efforts to Contain the Costs of Fighting
Fires, [hyperlink, http://www.gao.gov/products/GAO-07-655] (Washington,
D.C.: June 1, 2007).
[6] GAO, Wildland Fire Management: Better Information and a Systematic
Process Could Improve Agencies' Approach to Allocating Fuel Reduction
Funds and Selecting Projects, [hyperlink,
http://www.gao.gov/products/GAO-07-1168] (Washington, D.C.: Sept. 28,
2007).
[7] GAO, Wildland Fire Management: Interagency Budget Tool Needs
Further Development to Fully Meet Key Objectives, [hyperlink,
http://www.gao.gov/products/GAO-09-68] (Washington, D.C.: Nov. 24,
2008).
[8] GAO, Oil and Gas Development: Increased Permitting Activity Has
Lessened BLM's Ability to Meet Its Environmental Protection
Responsibilities, [hyperlink, http://www.gao.gov/products/GAO-05-418]
(Washington, D.C.: June 17, 2005).
[9] GAO, Natural Wildlife Refuges: Opportunities to Improve the
Management and Oversight of Oil and Gas Activities on Federal Lands,
[hyperlink, http://www.gao.gov/products/GAO-03-517] (Washington, D.C.:
Aug. 28, 2003).
[10] GAO, U.S. Fish and Wildlife Service: Opportunities Remain to
Improve Oversight and Management of Oil and Gas Activities on National
Wildlife Refuges, [hyperlink, http://www.gao.gov/products/GAO-07-829R]
(Washington, D.C.: June 29, 2007).
[11] GAO, Climate Change: Agencies Should Develop Guidance for
Addressing the Effects on Federal Land and Water Resources, [hyperlink,
http://www.gao.gov/products/GAO-07-863] (Washington, D.C.: Aug. 7,
2007).
[12] GAO, Alaska Native Villages: Most Are Affected by Flooding and
Erosion, but Few Qualify for Federal Assistance, [hyperlink,
http://www.gao.gov/products/GAO-04-142] (Washington, D.C.: Dec. 12,
2003).
[13] GAO, Natural Resource Management: Opportunities Exist to Enhance
Federal Participation in Collaborative Efforts to Reduce Conflicts and
Improve Natural Resource Conditions, [hyperlink,
http://www.gao.gov/products/GAO-08-262] (Washington, D.C.: Feb. 12,
2008).
[14] 25 C.F.R. pt. 151.
[15] GAO, Indian Issues: BIA's Efforts to Impose Time Frames and
Collect Better Data Should Improve the Processing of Land in Trust
Applications, [hyperlink, http://www.gao.gov/products/GAO-06-781]
(Washington, D.C.: July 28, 2006).
[16] GAO, U.S. Insular Areas: Economic, Fiscal, and Financial
Accountability Challenges, [hyperlink,
http://www.gao.gov/products/GAO-07-119] (Washington, D.C.: Dec. 12,
2006).
[17] GAO, Compacts of Free Association: Micronesia and the Marshall
Islands Face Challenges in Planning for Sustainability, Measuring
Progress, and Ensuring Accountability, [hyperlink,
http://www.gao.gov/products/GAO-07-163] (Washington, D.C.: Dec. 15,
2006).
[18] GAO, Compacts of Free Association: Trust Funds for Micronesia and
the Marshall Islands May Not Provide Sustainable Income, [hyperlink,
http://www.gao.gov/products/GAO-07-513] (Washington, D.C.: June 15,
2007).
[19] GAO, Compact of Free Association: Palau's Use of and
Accountability for U.S. Assistance and Prospects for Economic Self-
Sufficiency, [hyperlink, http://www.gao.gov/products/GAO-08-732]
(Washington, D.C.: June 10, 2008).
[20] GAO, Federal Land Management: Federal Land Transaction
Facilitation Act Restrictions and Management Weaknesses Limit Future
Sales and Acquisitions, [hyperlink,
http://www.gao.gov/products/GAO-08-196] (Washington, D.C.: Feb. 5,
2008).
[21] GAO, Prairie Pothole Region: At the Current Pace of Acquisitions,
the U.S. Fish and Wildlife Service Is Unlikely to Achieve Its Habitat
Protection Goals for Migratory Birds, [hyperlink,
http://www.gao.gov/products/
GAO-07-1093 (Washington, D.C.: Sept. 27, 2007).
[22] GAO, U.S. Fish and Wildlife Service: Additional Flexibility Needed
to Deal with Farmlands Received from the Department of Agriculture,
[hyperlink, http://www.gao.gov/products/
GAO-07-1092 (Washington, D.C.: Sept. 18, 2007).
[23] GAO, High-Risk Series: An Update, [hyperlink,
http://www.gao.gov/products/GAO-03-119] (Washington, D.C.: Jan. 2003);
GAO, High-Risk Series: Federal Real Property, [hyperlink,
http://www.gao.gov/products/GAO-03-122] (Washington, D.C.: Jan. 2003);
GAO, High-Risk Series: An Update, [hyperlink,
http://www.gao.gov/products/GAO-05-207] (Washington, D.C.: Jan. 2005);
GAO, High-Risk Series: An Update, [hyperlink,
http://www.gao.gov/products/GAO-07-310] (Washington, D.C.: Jan. 2007);
GAO, High-Risk Series: An Update, [hyperlink,
http://www.gao.gov/products/GAO-09-271] (Washington, D.C.: Jan. 2009).
[24] GAO, Indian Irrigation Projects: Numerous Issues Need to Be
Addressed to Improve Project Management and Financial Sustainability,
[hyperlink, http://www.gao.gov/products/GAO-06-314] (Washington, D.C.:
Feb. 24, 2006).
[25] Interior collected $10.98 billion in mineral lease revenues in
fiscal year 2007. However, mineral lease revenues increased to $25.37
billion in fiscal year 2008 largely due to an increase in offshore
lease sales revenue from $0.39 billion in fiscal year 2007 to $9.54
billion in fiscal year 2008.
[26] GAO, Oil and Gas Royalties: The Federal System for Collecting Oil
and Gas Revenues Needs Comprehensive Reassessment, [hyperlink,
http://www.gao.gov/products/GAO-08-691] (Washington, D.C.: Sept. 3,
2008).
[27] GAO, Mineral Revenues: Data Management Problems and Reliance on
Self-Reported Data for Compliance Efforts Put MMS Royalty Collections
at Risk, [hyperlink, http://www.gao.gov/products/GAO-08-893R]
(Washington, D.C.: Sept. 12, 2008).
[28] GAO, Oil and Gas Royalties: MMS's Oversight of Its Royalty-in-Kind
Program Can Be Improved through Additional Use of Production
Verification Data and Enhanced Reporting of Financial Benefits and
Costs, [hyperlink, http://www.gao.gov/products/GAO-08-942R]
(Washington, D.C.: Sept. 26, 2008).
[29] [hyperlink, http://www.gao.gov/products/GAO-05-418].
[30] [hyperlink, http://www.gao.gov/products/GAO-08-893R].
[31] In order to promote oil and gas production, the federal government
has at times and in specific cases provided "royalty relief'--the
waiver or reduction of royalties that companies would otherwise be
obligated to pay. See GAO, Oil and Gas Royalties: Royalty Relief Will
Cost the Government Billions of Dollars but Uncertainty Over Future
Energy Prices and Production Levels Make Precise Estimates Impossible
at this Time, [hyperlink, http://www.gao.gov/products/GAO-07-590R]
(Washington, D.C.: Apr. 12, 2007) and GAO, Oil and Gas Royalties:
Litigation over Royalty Relief Could Cost the Federal Government
Billions of Dollars, [hyperlink,
http://www.gao.gov/products/GAO-08-792R] (Washington, D.C.: June 5,
2008).
[32] GAO, Hardrock Mining: Information on State Royalties and Trends in
Mineral Imports and Exports, [hyperlink,
http://www.gao.gov/products/GAO-08-849R] (Washington, D.C.: July 21,
2008).
[33] GAO, Hardrock Mining: BLM Needs to Better Manage Financial
Assurances to Guarantee Coverage of Reclamation Costs, [hyperlink,
http://www.gao.gov/products/GAO-05-377] (Washington, D.C.: June 20,
2005).
[34] GAO, Hardrock Mining: Information on Abandoned Mines and Value and
Coverage of Financial Assurances on BLM Land, [hyperlink,
http://www.gao.gov/products/GAO-08-574T] (Washington, D.C.: Mar. 12,
2008).
[35] The 10 agencies are the BLM, FWS, NPS, Bureau of Reclamation,
Forest Service, Department of Energy, Army Corps of Engineers, Army,
Air Force, and Navy. In addition, a number of other federal agencies
manage some minor grazing-related activities.
[36] An animal unit month is the amount of forage (vegetation such as
grass and shrubs) that a cow and her calf eat in a month (or one bull,
one steer, one horse, or five sheep).
[37] GAO, Livestock Grazing: Federal Expenditures and Receipts Vary,
Depending on the Agency and the Purpose of the Fee Charged, [hyperlink,
http://www.gao.gov/products/GAO-05-869] (Washington, D.C.: Sept. 30,
2005).
[End of section]
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