OIL AND GAS 

MANAGEMENT 

Interior’s 

Reorganization 

Complete, but 

Challenges Remain in 

Implementing New 

Requirements 

Report to Congressional Requesters

July 2012 

GAO-12-423 

United States Government Accountability Office

GAO 
United States Government Accountability Office

Highlights of GAO-12-423, a report to 

congressional requesters 

July 2012 

OIL AND GAS MANAGEMENT

Interior’s Reorganization Complete, but Challenges 

Remain in Implementing New Requirements

Why GAO Did This Study

On April 20, 2010, the Deepwater 

Horizon drilling rig exploded in the Gulf 

of Mexico resulting in 11 deaths, 

serious injuries, and the largest marine 

oil spill in U.S. history. Interior, which

oversees offshore oil and gas 

activities, initiated a number of reforms 

following the incident to improve its 

oversight. This report assesses (1)

Interior’s reorganization of its oversight 

of offshore oil and gas activities; (2) 

how key policy changes Interior has 

implemented since this incident have 

affected Interior’s environmental 

analyses, plan reviews, and drilling 

permit reviews; (3) the extent to which 

Interior’s inspections of drilling rigs and 

production platforms in the Gulf identify 

violations or result in civil penalty 

assessments; (4) when stakeholders 

provided input to Interior on proposed 

oil and gas activities, and the extent 

which they believe Interior considered 

their concerns; and (5) key challenges, 

if any, Interior faces in overseeing 

offshore oil and gas activities in the 

Gulf. GAO analyzed data and 

documents and interviewed officials 

from Interior and the Department of 

Commerce’s National Oceanic and 

Atmospheric Administration, Gulf of 

Mexico states, environmental groups, 

and industry. 

What GAO Recommends

GAO recommends, among other 

things, that Interior improve the

effectiveness of its inspections through 

timely input of violation correction data, 

its capacity for categorizing oil and gas 

activities according to risk, and its

strategic planning for information 

technology and workforce efforts. In 

commenting on a draft of this report, 

Interior generally agreed with GAO’s

findings and recommendations.

What GAO Found

On October 1, 2011, the Department of the Interior (Interior) officially established 

two new bureaus, separating offshore resource management oversight activities, 

such as reviewing oil and gas exploration and development plans, from safety 

and environmental oversight activities, such as reviewing drilling permits and 

inspecting drilling rigs. Because the responsibilities of these bureaus are closely 

interconnected and will depend on effective coordination, Interior developed

memoranda and standard operating procedures to define roles and 

responsibilities and facilitate and formalize coordination. 

New safety and environmental requirements and policy changes designed to 

mitigate the risk of a well blowout or spill initially required Interior to devote 

additional resources and time to reviewing certain oil and gas exploration and 

development plans and drilling permits for oil and gas activities in the Gulf of 

Mexico. Specifically, these policy changes affected Interior’s (1) environmental

analyses, (2) reviews of oil and gas exploration and development plans, and (3) 

reviews of oil and gas drilling permits. 

Interior’s inspections of offshore Gulf of Mexico oil and gas drilling rigs and 

production platforms from January 1, 2000, through September 30, 2011, 

routinely identified violations. However, Interior’s database is missing data on 

when violations were identified as well as violation correction dates for about half 

of the violations issued. As a result, Interior does not know on a real-time basis 

whether or when all violations were identified and corrected, potentially allowing 

unsafe conditions to continue for extended periods. During this same period, 

Interior issued approximately $18 million in civil penalty assessments. Recently, 

Interior began implementing a number of policy changes to improve both its 

inspection and civil penalty programs. However, Interior has not assessed how 

these changes would affect its ability to conduct monthly drilling rig inspections.

Federal government stakeholders told GAO that they generally provided most of 

their input on Interior’s oil and gas development program early in the planning 

process and typically did not review or comment on oil and gas exploration and 

development plans or drilling permits. Federal and state stakeholders stated that 

Interior was generally responsive to their input on proposed offshore oil and gas 

activities in the Gulf of Mexico from 2002 through January 2012, but

nongovernmental stakeholders—including industry and conservation groups—

stated that Interior was, at times, less responsive. 

Interior continues to face challenges following its reorganization that may affect 

its ability to oversee oil and gas activities in the Gulf of Mexico. Specifically,

Interior’s capacity to identify and evaluate risk remains limited, raising questions 

about the effectiveness with which it allocates its oversight resources. Interior 

also continues to experience difficulties in implementing effective information 

technology systems, such as those that aid exploration and development plan 

reviews. It also continues to face workforce planning challenges, including hiring, 

retaining, and training staff. Moreover, Interior does not have current strategic 

plans to guide its information technology or workforce planning efforts. View GAO-12-423. For more information, 

contact Frank Rusco at (202) 512-3841 or 

ruscof@gao.gov. 
Page i GAO-12-423 Oil and Gas Management 

Letter 1 

Background 7

Interior Has Generally Met Its Key Reorganization Time Frames 22

Key Policy Changes for Oil and Gas NEPA Analyses, Plans, and 

Permits Intended to Enhance Oversight Initially Increased 

Review Times and Resource Requirements 29

Inspections Routinely Identified Violations, and Policy Changes 

Are Under Way to Improve Inspection and Civil Penalty 

Programs 53

Stakeholders Generally Provided Most Substantive Input on Oil 

and Gas Activities Early in Interior’s Lease Sale Planning 

Process and Reported That Interior’s Response Was Mixed 72

Following Interior’s Reorganization, Key Challenges Remain 83

Conclusions 101

Recommendations for Executive Action 105

Agency Comments and Our Evaluation 107

Appendix I Scope and Methodology 109 

Appendix II Interior’s Organizational Structures for the Bureau of Ocean 

Energy Management and the Bureau of Safety and Environmental 

Enforcement 113 

Appendix III Federal and State Stakeholder Input to Interior’s Proposed 

Gulf of Mexico Oil and Gas Activities for 2002 through 2012 115 

Appendix IV Comments from the Department of the Interior 126 

Appendix V GAO Contact and Staff Acknowledgments 136

Contents 
Page ii GAO-12-423 Oil and Gas Management 

Tables 

Table 1: Review Time Frames and Number of Amendments for 

Approved Deepwater Exploration and Development Plans 

from Initial Submission to Final Approval 40

Table 2: Review Time Frames and Number of Amendments for 

Approved Shallow Water Exploration and Development 

Plans from Initial Submission to Final Approval 41

Table 3: Review Time Frames and Average Number of Returns per 

Submission for All Types of Approved Deepwater Drilling 

Permits 49

Table 4: Review Time Frames and Average Number of Returns per 

Submission for All Types of Approved Shallow Water 

Drilling Permits 51

Table 5: Civil Penalties Associated with All Drilling Rig Violations, 

January 1, 2000, through September 30, 2011 67

Table 6: Civil Penalties Associated with Production Platform 

Violations, January 1, 2000, through September 30, 2011 67

Table 7: NOAA’s Input to Interior’s Gulf of Mexico Outer 

Continental Shelf (OCS) Lease Sale Environmental Impact 

Statement (EIS) National Environmental Policy Act 

(NEPA) documents, 2002—2012 115

Table 8: FWS’s Input to Interior’s Gulf of Mexico OCS Lease Sale 

EIS NEPA documents, 2002-2012 120

Table 9: State’s Input to Interior’s Gulf of Mexico OCS Lease Sale 

EIS NEPA documents, 2002-2012 124

Figures 

Figure 1: OCS Oil Production (in Thousands of Barrels), 

1990 through 2010 3

Figure 2: OCS Natural Gas Production (in Millions of Cubic Feet), 

1990 through 2010 4

Figure 3: BOEM and BSEE Regional Offices and BSEE District 

Offices in the Gulf of Mexico (2012) 9

Figure 4: Timeline of Key Events Since the Deepwater Horizon 

Incident 19

Figure 5: Interior’s Key Offshore Oil and Gas Program 

Responsibilities before and after Reorganization 24

Figure 6: Interior’s NEPA Determination for Approved Plans from 

January 1, 2000, through April 19, 2010 30
Page iii GAO-12-423 Oil and Gas Management 

Figure 7: Approved Plans Amended after Final NEPA 

Determination Was Made, January 1, 2000, through 

April 19, 2010 33

Figure 8: Drilling Rig Inspections, Violations, and Inspections per 

30 Days, January 1, 2000, through September 30, 2011 55

Figure 9: Production Platform Inspections, Violations, and Annual 

Inspections per Production Platform, January 1, 2000, 

through September 30, 2011 57

Figure 10: Drilling Rig Enforcement Actions, January 1, 2000, 

through September 30, 2011 58

Figure 11: Production Platform Enforcement Actions, January 1, 

2000, through September 30, 2011 59

Figure 12: Announced and Unannounced Inspections and Associated 

Violations, January 1, 2000, through September 30, 2011 61

Figure 13: Missing Violation Correction Data by Severity of 

Violation, January 1, 2000, through September 30, 2011 63

Figure 14: Violations Flagged for Civil Penalty Consideration and 

District Manager Review, January 1, 2000, through 

September 30, 2011 69

Figure 15: Violations Considered for a Civil Penalty Assessment 

and Whether a Civil Penalty Was Assessed, January 1, 

2000, through September 30, 2011 70

Figure 16: Duration of Civil Penalty Cases, January 1, 2000, through 

September 30, 2011 71

Figure 17: Bureau of Ocean Energy Management Organizational 

Structure 113

Figure 18: Bureau of Safety and Environmental Enforcement 

Organizational Structure 114
Page iv GAO-12-423 Oil and Gas Management 

Abbreviations 

API American Petroleum Institute 

BOEM Bureau of Ocean Energy Management 

BOEMRE Bureau of Ocean Energy, Management, Regulation 

and Enforcement 

BSEE Bureau of Safety and Environmental Enforcement 

EA environmental assessment 

EIS environmental impact statement 

FWS Fish and Wildlife Service 

GIS geographic information system 

IT information technology 

MOU memorandum of understanding 

MMS Minerals Management Service 

NEPA National Environmental Policy Act of 1969, as 

amended 

NOAA National Oceanic and Atmospheric Administration 

OCS outer continental shelf 

OCS Lands Act Outer Continental Shelf Lands Act 

TIMS Technical Information Management System 

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page 1 GAO-12-423 Oil and Gas Management 

United States Government Accountability Office

Washington, DC 20548 

July 30, 2012 

The Honorable Sheldon Whitehouse 

Chairman 

Subcommittee on Oversight 

Committee on Environment 

 and Public Works 

United States Senate 

The Honorable Nick J. Rahall, II 

House of Representatives 

On April 20, 2010, the Deepwater Horizon drilling rig exploded in the Gulf 

of Mexico, resulting in 11 deaths, serious injuries, and the largest marine 

oil spill in the history of the United States. Located over 40 miles off the 

coast of Louisiana and at a depth of nearly 5,000 feet in the Gulf of 

Mexico, the subsea well spilled oil for 87 days before responders were 

able to cap the well and contain the flow of oil. According to government 

estimates, by that time, over 4.9 million barrels of oil had spilled into the 

Gulf of Mexico. In addition to the tragic loss of life, the explosion, fire, and 

catastrophic oil spill damaged the environment and resulted in a loss of 

livelihoods and harm to local economies, with estimated compensation 

costs totaling in the billions of dollars. Following this incident, the 

Department of the Interior (Interior)—which is responsible for overseeing 

oil and gas activities on federal lands and waters—initiated a number of 

policy reforms to strengthen its oversight of offshore oil and gas 

production on the outer continental shelf (OCS),1

 including in the Gulf of 

Mexico. While these reforms were being developed and implemented, 

Interior imposed a moratorium on certain offshore drilling operations that 

mainly affected deepwater oil and gas projects.2

Under the Outer Continental Shelf Lands Act (OCS Lands Act) of 1953, 

as amended,3

 Interior is responsible for leasing federal lands on the OCS 

 

1

The OCS refers to the submerged lands outside the territorial jurisdiction of all 50 states, 

but within U.S. jurisdiction and control. The portion of the North American continental edge 

that is federally designated as the OCS generally extends seaward 3 geographical miles 

off the coastline to at least 200 nautical miles. 

2

Interior considers deepwater projects to be in water depths of 500 feet or greater. 

3

43 U.S.C. §§ 1331-1356. 

 
 

Page 2 GAO-12-423 Oil and Gas Management 

to meet the nation’s energy needs and generate revenue for the federal 

government in a manner that protects the environment. Through its three 

OCS regional offices—in Alaska, the Gulf of Mexico, and the Pacific OCS 

regions, Interior manages more than 1.7 billion acres of the OCS, which, 

according to its estimates, may contain as much as 88.6 billion barrels of 

oil and 398.4 trillion cubic feet of natural gas.4

 Over the past 5 years, 

Interior has collected about $13 billion per year in royalties and other 

payments from companies utilizing public resources, including those 

producing oil and gas from offshore and onshore federal leases. This 

represents one of the largest nontax sources of federal government 

funds. While total domestic production of oil and gas had been on a slow 

decline and flat, respectively, for many years, recent innovations allowing 

new production from shale formations onshore, and increases in oil and 

gas production in deepwater areas of the Gulf of Mexico, have led to a 

reversal of that trend. Figures 1 and 2 illustrate trends in shallow water 

and deepwater Gulf of Mexico oil and gas production from 1990 through 

2010—the last year complete data were available. While oil produced 

from shallow waters has been in decline since 1996, deepwater oil 

production has been increasing and was at an all-time high in 2010 (see 

fig. 1). In 2010, according to Interior, oil produced from offshore federal 

leases—which is almost at a 20-year high—accounted for approximately 

29 percent of domestic production. 

 

4

Bureau of Ocean Energy Management. Assessment of Undiscovered Technically 

Recoverable Oil and Gas Resources of the National Outer Continental Shelf, 2011. 
 

Page 3 GAO-12-423 Oil and Gas Management 

Figure 1: OCS Oil Production (in Thousands of Barrels), 1990 through 2010 

Unlike oil, total production of natural gas in the Gulf of Mexico has been in 

decline since around 2002. Specifically, shallow water gas production has 

been in decline since 1996, while deepwater gas increased through 2003 

and then started to slightly decline (see fig. 2). This was generally 

mirrored by decreasing production onshore until recent years. The recent 

turnaround and growth in domestic gas production has been led by the 

development of gas in shale formations, which are largely on nonfederal 

lands. In 2010, according to Interior, natural gas produced from offshore 

federal leases accounted for approximately 10 percent of total production 

on federal leases and approximately 8 percent of total domestic 

production. 
 

Page 4 GAO-12-423 Oil and Gas Management 

Figure 2: OCS Natural Gas Production (in Millions of Cubic Feet), 1990 through 2010 

Interior’s responsibilities for managing offshore oil and gas production 

activities include administering leases and reviewing and approving 

exploration and development plans as well as applications for drilling 

permits from operators—companies that develop the federal leases—and 

inspecting offshore drilling rigs and production platforms to ensure 

compliance with safety and environmental requirements. The Deepwater 

Horizon incident raised questions about Interior’s oversight of offshore oil 

and gas activities in the Gulf of Mexico and led to a number of reviews—

including those by the National Commission on the BP Deepwater 

Horizon Oil Spill and Offshore Drilling and Interior’s Outer Continental 

Shelf Safety Oversight Board.5

 These reviews generated more than 200 

recommendations to improve Interior’s oversight. In May 2010, Interior 

 

5

The board was created by secretarial order to review and oversee Interior OCS 

operations to support reasoned and fact-based recommendations for potential 

improvement. 
 

Page 5 GAO-12-423 Oil and Gas Management 

announced plans to significantly reorganize the bureau that managed oil 

and gas activities on the OCS and collected royalties. In February 2011, 

GAO added Interior’s oversight of oil and gas resources to its list of 

programs at high risk of waste, fraud, abuse, and mismanagement or in 

need of broad reform, citing concerns about Interior’s ability to undertake 

this reorganization while continuing to carry out its ongoing oversight 

responsibilities, weaknesses in its human capital management, and 

shortcomings in its revenue collection policies.6

You asked us to review Interior’s oversight of offshore oil and gas 

activities in the Gulf of Mexico. Specifically, this report examines (1) 

Interior’s reorganization of its oversight of offshore oil and gas activities in 

the Gulf of Mexico since the Deepwater Horizon incident; (2) how key 

policy changes Interior has implemented since this incident have affected 

Interior’s National Environmental Policy Act (NEPA) analyses, plans 

reviews, and drilling permit reviews; (3) the extent to which Interior’s 

inspections of Gulf of Mexico drilling rigs and production platforms 

identified violations or resulted in civil penalty assessments, and how key 

policy changes since this incident have affected Interior’s inspection and 

civil penalties program; (4) when stakeholders have provided input to 

Interior about proposed offshore oil and gas activities, and the extent to 

which stakeholders believe Interior considered such input from 

approximately 2002 through January 2012; and (5) key challenges, if any, 

affecting Interior’s oversight of offshore oil and gas activities in the Gulf of 

Mexico following its reorganization. 

To conduct this work, we reviewed relevant laws and regulations and 

Interior documents, guidance, and data. We also interviewed officials in 

Interior’s headquarters and Gulf of Mexico regional offices as well as 

officials from other federal agencies and state governments and 

representatives from industry and conservation groups. To identify 

actions Interior has taken as part of its reorganization efforts, we reviewed 

agency documentation and guidance and interviewed knowledgeable 

agency officials. Because the reorganization was not fully complete until 

October 1, 2011, we did not evaluate the effectiveness of the 

reorganization on Interior’s ability to conduct oversight of oil and gas 

activities in the Gulf of Mexico. To examine Interior’s processes and 

policy changes and their effects, we reviewed agency documents relevant 

 

6

GAO, High Risk Series: An Update, GAO-11-278 (Washington, D.C.: February 2011). 
 

Page 6 GAO-12-423 Oil and Gas Management 

to Interior’s work with the National Environmental Policy Act of 1969, as 

amended (NEPA),7

 exploration and development plans, and drilling 

permits. Because many of these policy changes are still under way and 

have not been in force long enough to evaluate, we did not evaluate the 

effectiveness of the policy changes to reduce the risk associated with 

offshore oil and gas activities in this report. We analyzed Interior data on 

its NEPA reviews and plan approvals from January 1, 2000, through 

September 30, 2011, and drilling permit approvals from January 1, 2005, 

through September 30, 2011, and interviewed knowledgeable Interior 

officials. To determine the extent to which Interior’s inspections resulted in 

violations and civil penalty assessments, we analyzed Interior’s inspection 

data from January 1, 2000, through September 30, 2011. We assessed 

the reliability of these data by (1) reviewing documentation about the data 

and the system that produced them, (2) interviewing agency officials 

knowledgeable about the data, and (3) verifying our results with agency 

officials. Based on this assessment, we found these data sufficiently 

reliable for our purposes. To determine the extent to which Interior 

considered and addressed stakeholder concerns, we reviewed relevant 

laws and interviewed stakeholders, including officials from the 

Department of Commerce’s National Oceanic and Atmospheric 

Administration (NOAA); Interior’s Fish and Wildlife Service (FWS); the five 

Gulf of Mexico states (Alabama, Florida, Louisiana, Mississippi, and 

Texas); and representatives from selected nongovernmental 

organizations, including conservation and industry groups.8

 To identify 

challenges Interior faces, we reviewed relevant law and agency 

documentation and guidance and interviewed knowledgeable agency 

officials. While Interior is also responsible for overseeing offshore oil and 

gas activities in all federal waters of the United States, the vast majority of 

such activities currently take place in the Gulf of Mexico and, therefore, 

we focused our review on activities in the Gulf of Mexico. Additional 

details on our scope and methodology can be found in appendix I. 

 

7

Pub. L. No. 91-190, 83 Stat. 852 (1970), codified as amended at 42 U.S.C. §§ 4321-4347 

(2011). Under NEPA, federal agencies must assess the effects of major federal actions—

those they propose to carry out or to permit—that significantly affect the environment. 

8

Conservation organizations were selected based on the following criteria: (1) they were 

involved in environmental issues specific to the Gulf of Mexico, (2) they were referred to 

us by a representative from a conservation group that we initially interviewed, and (3) time 

and resource constraints. 
 

Page 7 GAO-12-423 Oil and Gas Management 

We conducted this performance audit from September 2010 to July 2012 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. 

This section provides a history of Interior’s oversight of oil and gas 

resources, a summary of the oil and gas development process in the Gulf 

of Mexico, and a brief timeline of key events since the Deepwater Horizon

incident. 

Interior was created by Congress in 1849, and part of Interior’s mission is 

to oversee the nation’s publicly owned natural resources, including parks, 

wildlife habitat, and oil and natural gas resources on millions of acres 

onshore and offshore in OCS waters. With regard to oil and gas 

resources in particular, Interior leases federal lands and submerged lands 

on the OCS to oil and gas companies, issues permits for oil and gas 

drilling to operators, and conducts inspections of such drilling and 

production operations. In 1982, by secretarial order, the Secretary of the 

Interior created the Minerals Management Service (MMS), consolidating 

all of Interior’s OCS minerals responsibilities into a single agency. This 

secretarial order gave MMS the authority to assess the nature, extent, 

recoverability, and value of leasable minerals on the OCS. To manage 

OCS energy resources, the Offshore Energy and Minerals Management 

program within MMS carried out resource evaluations and classifications, 

environmental studies and reviews, lease sales and management, and 

inspection and enforcement activities. Until June 2010, this program 

oversaw a number of scientific and technical research efforts and funded 

scientific studies that contributed to understanding the potential effects of 

OCS operations on human, marine, and coastal environments. MMS’s 

Minerals Revenue Management program conducted oversight of royalty 

payments paid by companies on the production of oil and gas from 

federal leases. 

We and others, including Interior’s Office of Inspector General, have 

reported on a history of problems with Interior’s management of oil and 

Background 

History of Interior’s 

Oversight of Oil and Gas 

Resources 
 

Page 8 GAO-12-423 Oil and Gas Management 

gas resources.9,10 In 2010, shortly after the Deepwater Horizon incident, 

Interior announced that it would reorganize its offshore oversight and 

revenue collection functions. Specifically, Interior renamed MMS the 

Bureau of Ocean Energy, Management, Regulation and Enforcement 

(BOEMRE) as an interim step before eventually restructuring it into three 

separate bureaus—the Bureau of Ocean Energy Management (BOEM), 

responsible for leasing and resource management; the Bureau of Safety 

and Environmental Enforcement (BSEE), responsible for issuing oil and 

natural gas drilling permits and conducting inspections; and the Office of 

Natural Resources Revenue, responsible for revenue collection.11 Within 

the Gulf of Mexico region, BOEM and BSEE each have a regional office 

in New Orleans, and BSEE has five additional district offices located in 

southern Louisiana and Texas that report to the BSEE regional office (see 

fig. 3). For leasing purposes, the Gulf of Mexico is composed of three 

geographic planning areas—eastern, central, and western. 

 

9

GAO, Oil and Gas Management: Interior’s Oil and Gas Production Verification Efforts Do 

Not Provide Reasonable Assurance of Accurate Measurement of Production Volumes, 

GAO-10-313 (Washington, D.C.: Mar. 15, 2010). 

10DOI OIG, Minerals Management Service: Royalty-in-Kind Program’s Oil Verification 

Process, C-IN-MMS-0007-2008 (Washington, D.C.: May 2010). 

11This report focuses on BOEM and BSEE; it does not examine the Office of Natural 

Resources Revenue. 
 

Page 9 GAO-12-423 Oil and Gas Management 

Figure 3: BOEM and BSEE Regional Offices and BSEE District Offices in the Gulf of 

Mexico (2012) 

In planning and managing offshore oil and gas development to meet its 

requirements under federal law, Interior follows a complex process 

combining resource development with assessments of potential 

environmental and cultural effects. Throughout this process, Interior must 

meet the federal requirements articulated in the OCS Lands Act while 

also complying with NEPA and other laws that require the consideration 

of the potential effects of offshore oil and gas development on 

environmental and cultural resources. Under NEPA, all federal agencies 

are to evaluate the likely environmental effects of actions they propose to 

carry out or permit. NEPA has two principal purposes: (1) to ensure that 

an agency carefully considers detailed information concerning significant 

environmental effects and (2) to ensure that this information will be made 

available to the public. Under NEPA, before initiating any oil and gas 

planning, leasing, exploration, or development activities, Interior must 

evaluate likely environmental effects of those activities. Generally, the 

scope of those activities requires Interior to use either an environmental 

assessment (EA)––a concise analysis developed if the environmental 

effect of the proposed action is unknown or has the potential to be 

significant––or, if the action is likely to affect the environment significantly, 

a more detailed environmental impact statement (EIS). EIS regulations 

include multiple opportunities for public comment—including commenting 

Oil and Gas Development 

in the Gulf of Mexico 
 

Page 10 GAO-12-423 Oil and Gas Management 

on the draft EIS—and require plans for mitigating adverse effects. EA and 

EIS documents are intended to help decision makers understand the 

environmental consequences associated with proposed activities, such as 

those associated with oil and gas exploration and development. In 

implementing NEPA, federal agencies may rely on a “tiering” process—a 

process generally sanctioned in the governing regulations for NEPA, in 

which prior NEPA reviews, such as EIS or EA documents, are 

incorporated into subsequent, site-specific analyses. Tiering is used to 

avoid duplication of analysis as a proposed activity moves through the 

NEPA process from a broad assessment to a site-specific analysis. 

Interior may also, in accordance with NEPA, categorically exclude 

activities previously found not to have a significant effect on the 

environment from further NEPA review. 

Interior’s process for the development of federal oil and gas resources in 

the Gulf of Mexico consists of the following stages: (1) preparing a 

nationwide 5-year oil and gas leasing program, (2) planning for and 

holding specific lease sales, (3) approving an operator’s exploration plan, 

(4) approving an operator’s development plan,12 (5) approving an 

operator’s drilling permit, and (6) inspecting offshore oil and gas 

activities.13,14

Stage 1: Preparing a nationwide 5-year oil and gas leasing program.

Every 5 years, Interior identifies the areas of the OCS it will offer for 

leasing and establishes a schedule for individual lease offerings. To 

develop a 5-year program under the OCS Lands Act, Interior is to 

consider several principles––including future national energy needs and 

location-specific factors, such as environmental sensitivity and marine 

productivity––and balance the potential for oil and gas discovery and 

adverse environmental effects. Interior also is to conduct leasing activities 

to ensure a fair market value to the federal government. In addition, 

Interior is to seek comments from various state and public stakeholders, 

 

12In the western Gulf of Mexico, the technical term for a development plan is a 

Development and Operations Coordination Document. 

13This process is usually considered to have four stages; however, for the purposes of this 

report, we are examining the process in six stages to separately discuss the issuance of 

drilling permits and inspections. 

14Interior also permits geological and geophysical exploration outside the bounds of this 

process. These activities may introduce sounds into the ocean and have the potential to 

disrupt marine mammal behavior. 
 

Page 11 GAO-12-423 Oil and Gas Management 

and prepare and release an EIS evaluating the likely effects of the 5-year 

program. 

Stage 2: Planning and holding specific lease sales. After final approval of 

the nationwide 5-year program, Interior may hold lease sales under the 

OCS Lands Act for the lease parcels offered at auction. Laws protecting 

environmental resources—such as marine mammals, coastal birds, and 

wetlands—figure prominently at this stage. Under NEPA, before holding a 

lease sale, Interior is to evaluate the likely environmental effects of the 

proposed lease sale and describe various alternatives for oil and gas 

development and their potential environmental effects. In the Gulf of 

Mexico, Interior divides the region into three distinct planning areas—

western, central, and eastern. For the western and central planning 

areas, Interior generally prepares a 5-year multilease sale EIS, which 

describes all lease sales scheduled for those planning areas of the Gulf of 

Mexico during that period and their potential environmental effects. 

Typically, Interior conducts one lease sale in the western and central 

planning areas each year. This EIS serves as the NEPA document for the 

first individual sales in those planning areas. Interior then typically 

conducts an EA or a supplemental EIS for the subsequent sales covered 

by the 5-year multilease sale EIS. For leases in the eastern planning 

area, most of which is currently under a leasing moratorium until 2022,15

Interior generally prepares a separate EIS for any proposed activities that 

could affect resources in that area. 

Because oil and gas development could affect species protected by the 

Endangered Species Act, Interior must also consult with the FWS and 

NOAA during this stage to assess the potential effects of oil and gas 

activities, including seismic exploration, on threatened and endangered 

species. Formal consultation between Interior and FWS and/or NOAA 

results in the issuance of a biological opinion on whether Interior’s 

proposed actions are likely to jeopardize threatened or endangered 

species or adversely modify any designated critical habitat. As it relates to 

oil and gas development, the Endangered Species Act authorizes FWS 

and NOAA to allow incidental takings when approved through an 

 

15A portion of the Central Gulf of Mexico Planning Area and most of the Eastern Gulf of 

Mexico Planning Area are under restriction until 2022 as part of the Gulf of Mexico Energy 

Security Act of 2006. The restricted areas include the portion of the eastern planning area 

within 125 miles of Florida, the Gulf of Mexico east of the Military Mission Line (86o

 41’ 

west longitude), and the central planning area located within 100 miles of Florida. 
 

Page 12 GAO-12-423 Oil and Gas Management 

incidental take statement. The statement includes the amount or extent of 

anticipated take, reasonable and prudent measures to minimize the 

effects of incidental take, and the terms and conditions that must be 

observed.16 Interior may use the “best available science” to assist in its 

determination during the consultation process. If Interior determines that 

the proposed federal action is not likely to adversely affect any 

endangered or threatened species, consultation may be concluded 

informally with concurrence from FWS and NOAA without preparation of a 

biological opinion. Oil and gas development could also affect species 

protected by the Marine Mammal Protection Act; therefore, Interior also 

coordinates with NOAA during this stage to mitigate potentially negative 

effects of oil and gas activities on marine mammals and obtain 

authorizations if mammals are likely to be taken. For offshore oil and gas 

development, oil and gas operators––or Interior, on behalf of operators––

can apply to NOAA for an Incidental Take Authorization, which authorizes 

the incidental but not intentional taking of small numbers of marine 

mammals, provided the taking would have a negligible effect on marine 

mammals and no unmitigable adverse effect on subsistence use of 

marine mammals. Interior also is to consult with NOAA to ensure 

compliance with the Magnuson-Stevens Fishery Conservation and 

Management Act on actions that could adversely affect essential fish 

habitat, which is generally defined as areas necessary to fish for 

spawning, breeding, feeding, or growth to maturity. Additionally, Interior 

and NOAA completed a Programmatic Essential Fish Habitat 

Consultation in 1999, which is to be generally reviewed during 

development of Interior’s Gulf of Mexico multilease sale EIS documents 

or when specific modifications are required. 

During this stage, Interior is to coordinate with the five coastal Gulf of 

Mexico states through the Coastal Zone Management Act,17 which helps 

states develop coastal management programs to manage and balance 

competing uses of the coastal zone. The act and implementing 

regulations require agency actions that are reasonably foreseeable to 

affect any land or water use, or natural resource of the coastal zone, to be 

consistent with enforceable policies of the five states’ coastal 

management program. Accordingly, Interior is to provide the five states 

 

16Take is defined under the Endangered Species Act as “to harass, harm, pursue, hunt, 

shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct.” 

17The five coastal states are Alabama, Florida, Louisiana, Mississippi, and Texas. 
 

Page 13 GAO-12-423 Oil and Gas Management 

with information for review during a designated period on lease sales and 

exploration and development plans to conduct a consistency 

determination—a review to determine if the proposed activities are 

consistent with the states’ coastal management policies. If a coastal state 

determines that a proposed action by Interior is not consistent with the 

state’s approved coastal zone management plan, it can pursue one of a 

number of administrative remedies. 

At the end of this stage, Interior is to offer leases for competitive bidding, 

and all eligible companies are invited to submit written sealed bids for the 

rights to explore, develop, and produce oil and gas resources on these 

leases. The lease sale itself is a public auction, with leases sold to the 

highest qualified bidder. Interior may reject bids if it believes they are too 

low based on its analysis of the resource potential of a given lease. 

Stage 3: Approving an operator’s exploration plan. Before allowing an 

operator to explore for oil and gas in its leased area, Interior requires the 

operator to submit an exploration plan. The exploration plan is to describe 

all exploration activities planned by the operator, including the location of 

wells and timing of activities. The plan is to include an analysis of a “worst 

case” discharge from a potential spill and information on how the operator 

would respond to such a discharge.18 After Interior receives an operator’s 

exploration plan, it has 15 working days to review it for completeness. Once 

Interior determines a plan is deemed submitted, it has 30 calendar days to 

approve, disapprove, or require changes to the plan. When Interior 

requests changes or more information, the operator is to submit an 

amendment to the original plan, which begins new 15- and 30-day review 

periods. Interior is to review and approve the operator’s exploration plan in 

accordance with the OCS Lands Act and prepare a NEPA analysis—

typically tiered from the lease sale NEPA analysis completed in stage 2. In 

the Gulf of Mexico, Interior generally performs a NEPA categorical 

exclusion review to determine whether the planned activity can be 

excluded from further environmental analysis or if further environmental 

 

18The worst case discharge analysis is the daily rate of an uncontrolled flow from all 

producible reservoirs into the open wellbore—the hole drilled from the seafloor down to 

the reservoir of oil or gas. The package of reservoirs exposed to an open wellbore with the 

greatest discharge potential is considered to be the worst case discharge scenario. 

Shallower producible reservoirs isolated by casing––a metal pipe that is inserted inside 

the wellbore to prevent high pressure fluids outside the formation from entering the well 

and to prevent drilling mud inside the well from fracturing fragile sections of the wellbore––

and cement are not considered. 
 

Page 14 GAO-12-423 Oil and Gas Management 

analysis is required. If, after conducting an initial environmental review, 

Interior determines that the planned activity does not involve “extraordinary 

circumstances”—which include potential effects to environmentally 

sensitive areas or resources, and public controversy over the 

environmental effects of the agency’s proposed action—it may 

categorically exclude the plan from further environmental analysis.19

However, if it determines that extraordinary circumstances are present, 

Interior is to prepare an EA or EIS, which may cause Interior to require 

modifications to the operator’s exploration plan. Since August 2010, Interior 

has required EAs for deepwater exploration and development plans.20

Interior is also to review each exploration plan to ensure that the plan is 

consistent with the affected states’ coastal zone management plan. 

Stage 4: Approving an operator’s development and production plan. After 

the operator has determined that oil or gas can be found in the leased 

area and decides to begin development and production of a lease, the 

operator is to submit a development plan to Interior that describes the 

wells the operator plans to drill, where these wells will be located, the 

types of structures to be used, and how oil and natural gas will be 

transferred to shore. Interior has 25 working days to deem the plan 

submitted or notify the operator of problems that prevent it from being 

deemed submitted. Once Interior determines the plan is deemed 

submitted, it has 120 calendar days to approve, disapprove, or require 

changes to the plan. When Interior requests changes or more information, 

the operator is to submit an amendment to the original plan, which begins 

a new 25-working day and 120-calendar day review period. Under the 

OCS Lands Act, Interior is to review each development and production 

plan to assess potential environmental effects and ensure that the plan is 

consistent with the affected states’ coastal zone management plan. 

Similar to Interior’s review of exploration plans in the Gulf of Mexico 

region, Interior is to prepare a NEPA categorical exclusion review to 

determine whether the planned activity may be categorically excluded 

from further NEPA review. Since August 2010, Interior has required EAs 

 

19Under NEPA, if an agency determines that activities of a proposed project fall within a 

category of activities the agency has already determined have no significant 

environmental effect—called a categorical exclusion—then the agency generally does not 

need to prepare an EA or an EIS. 

20Interior specifically requires preparation of an EA for exploration plans involving subsea 

blowout preventers or drilling from floating facilities, which are generally associated with 

deepwater operations. 
 

Page 15 GAO-12-423 Oil and Gas Management 

for deepwater exploration and development plans. On the basis of this 

final NEPA analysis, operators are to secure Interior’s approval of their 

development plans before proceeding past the exploration stage.

Stage 5: Approving an operator’s drilling permit. Once Interior approves 

an operator’s plan, the operator is required to obtain drilling permits from 

Interior for wells specified in either the exploration or development plan. 

The operator submits an application for a drilling permit to the appropriate 

Interior district office, where a district engineer initially is to review it for 

completeness and compliance with regulation. The drilling permit may be 

for a new well, which is the first time an operator drills a wellbore––the 

hole drilled from the seafloor down to the reservoir of oil or gas—at a 

location; a bypass, which is when an operator drills around an obstruction 

in the current wellbore; or a sidetrack, which is when an operator uses the 

current wellbore to drill into a new oil or gas reservoir.21 The operator’s 

application may also include a request for a departure—or a waiver from 

complying with a particular regulation. Interior’s district engineer is to 

review the technical elements of the application and verify that they 

conform to all applicable federal regulations.22 This review includes 

verifying that the blowout preventer—a piece of equipment designed to 

prevent the uncontrolled flow of oil and gas from a well—is appropriate for 

the well design. Additionally, the engineer is to review plans for the well’s 

technical specifications, including the casing and cementing 

specifications, among other items. At this point, the district engineer may 

approve the permit. In some instances, however, the district engineer 

may return the permit to the operator for incompleteness or correction 

and resubmission. Unlike exploration and development plans, Interior has 

no statutory time frames for making a final decision on a drilling permit. 

Only after Interior approves a permit can drilling begin.23 Once drilling is 

 

21Each of these types of drilling permits can be revised, and each revision also requires 

an application and Interior approval. 

22In addition to regulations developed by Interior, Interior incorporates standards into its 

regulations that have been generally agreed upon by industry and regulators and 

published by the American Petroleum Institute (API). Since the passage of the National 

Technology Transfer and Advancement Act in 1996, federal agencies have been required 

to adopt private-sector standards, such as API’s, wherever practical, in lieu of creating 

their own proprietary, nonconsensus standards. 

23During drilling operations, operators submit a well activity report to district engineers on 

a weekly basis that includes a description of the drilling activities. The operator can also 

report whether one of twelve significant events occurred, such as drilling rig equipment 

failures. 
 

Page 16 GAO-12-423 Oil and Gas Management 

completed, if the operator determines that oil and gas can be 

economically produced from the well, the operator submits an application 

to the appropriate Interior regional office to begin production. 

Stage 6: Inspecting offshore oil and gas activities. Interior inspectors from 

the five district offices are to conduct inspections in the Gulf of Mexico to 

ensure that operators are in compliance with all regulatory 

requirements.24 Weather permitting, inspectors fly via helicopter to an 

offshore drilling rig or production platform to conduct inspections and 

generally return at the end of the day. The primary objective of an initial 

inspection is to ensure proper installation and functionality of operational 

components along with the associated safety and pollution prevention 

equipment on drilling rigs and production platforms. After drilling 

operations begin, Interior conducts additional inspections. Under the OCS 

Lands Act, Interior is required to inspect offshore facilities, including 

production platforms and drilling rigs, on an annual basis, but Interior 

officials told us that they have an informal goal of conducting inspections 

on drilling rigs once per month. The act also authorizes Interior to provide 

for both annual scheduled—or announced—inspections and periodic 

unscheduled—or unannounced—inspections of all OCS oil and gas 

operations, including those in the Gulf of Mexico. During inspections, 

Interior inspectors are to adhere to specific guidelines established by 

regulation and Interior-approved plans and permits. The inspectors 

perform the inspections, in part through using a checklist called the 

Potential Incident of Noncompliance list, which is a compilation of yes or 

no questions derived from regulated safety and environmental 

requirements. If an inspector identifies out of compliance activities at an 

offshore facility, a nonfinancial violation is issued, which may be (1) a 

warning, (2) an order to shut down a particular component of the facility, 

or (3) an order to shut down an entire drilling rig or production platform. 

Operators generally have 14 days to correct the violation and notify 

Interior that the violation was corrected. Interior’s policy is to place 

 

24In 2004, Interior and the Coast Guard signed a memorandum of understanding (MOU) 

to delineate inspection responsibilities between the agencies. Under the MOU, Interior is 

responsible for, among other things, managing the nation’s oil, natural gas, and other 

mineral resources on the OCS in a safe and environmentally sound manner. The MOU 

assigns the Coast Guard the responsibility for ensuring (1) the safety of life and property 

on offshore energy facilities and vessels engaged in OCS activities; (2) workplace safety 

and health, including enforcement of requirements related to personnel, workplace 

activities, and conditions and equipment on the OCS; and (3) security of offshore energy 

facilities. 
 

Page 17 GAO-12-423 Oil and Gas Management 

operators with a history of poor performance on its monthly operator 

compliance list and inspect those operators more frequently until it 

determines that the operator’s performance has improved. 

Interior also administers a civil penalties program with the goal of 

ensuring safe and environmentally sound operations on the OCS.25 If an 

inspector identifies a violation such as one that could cause injury, death, 

environmental damage, or threaten human life or the environment, 

Interior is to review the violation for a civil penalty assessment review. 

However, before a civil penalty case is officially opened, both the district’s 

supervisory inspector and district manager are to review the violation. A 

civil penalty case is officially opened only after the district manager 

agrees with the inspector and forwards the violation to an Interior civil 

penalty reviewing officer in the relevant regional office. Once a case is 

opened, the civil penalty reviewing officer may develop the case by 

collecting additional information about the violation. If the reviewing officer 

determines that a violation met Interior’s criteria—which includes whether 

the violation caused injury, death, or environmental damage or posed a 

threat to human life or the environment—Interior may issue the operator a 

financial penalty. However, the reviewing officer may also determine that 

a civil penalty is not warranted, in which case Interior would close the civil 

penalty case. In addition to assessing a financial penalty, Interior may 

also suspend any operation on the OCS, including in the Gulf of Mexico 

region, if an operator fails to comply with a provision of any applicable 

law, regulation, or order or provision of a lease or permit.26

Interior has enacted numerous policy changes intended to improve 

Interior’s oversight of offshore oil and gas activities on the OCS, including 

in the Gulf of Mexico since the Deepwater Horizon incident. As part of its 

oversight responsibilities, Interior issues guidance documents called 

Notices to Lessees and Operators that clarify, supplement, or provide 

more detail about certain requirements. In response to the Deepwater 

Horizon incident, Interior issued three of these notices, which, among 

other things, notified operators that Interior would be evaluating whether 

they had submitted adequate well containment information with their oil 

 

2530 C.F.R. Part 250, Subpart N. 

2630 C.F.R. § 250.173(a). 

Recent Policy Changes 

Intended to Improve 

Offshore Oil and Gas 

Activities 
 

Page 18 GAO-12-423 Oil and Gas Management 

spill response plans.27 Specifically, in one notice, Interior informed 

operators that it would evaluate whether they could demonstrate that they 

had access to and could deploy well containment resources to adequately 

and promptly respond to a blowout—the uncontrolled release of oil or gas 

from a well on the ocean floor or other loss of well control (see fig. 4). 

 

27Containment refers to measures taken—after a major oil spill event such as a blowout—

to prevent more oil and gas from reaching the environment. Oil spill response plans must 

include an operator’s proposed methods for ensuring that oil spill containment and 

recovery equipment and response personnel are mobilized and deployed in the event of a 

spill. 
 

Page 19 GAO-12-423 Oil and Gas Management 

Figure 4: Timeline of Key Events Since the Deepwater Horizon Incident 
 

Page 20 GAO-12-423 Oil and Gas Management 

Immediately after the Deepwater Horizon incident, the President ordered 

the Secretary of the Interior to complete a 30-day study of its offshore oil 

and gas policies and procedures, resulting in a May 27, 2010, report that 

included 22 recommendations for improving the safety of offshore oil and 

gas operations.28 On May 30, 2010, Interior made effective a Notice to 

Lessees and Operators that enacted a 6-month moratorium on the drilling 

of deepwater wells on the OCS, including the Gulf of Mexico, in light of 

significant risks associated with drilling in deepwater without 

implementation of recommendations from the report on safety equipment, 

practices, and procedures.29 On June 8, 2010, Interior made effective a 

Notice to Lessees and Operators that included seven new safety 

requirements for drilling permits as recommended in the report.30 These 

new requirements include certification by an operator’s Chief Executive 

Officer that operations were in compliance with Interior’s regulations, and 

third party certifications of the blowout preventer,31 among other items. 

These new safety requirements were later incorporated into an interim 

final drilling safety rule, along with additional requirements to enhance the 

safety of drilling operations in October 2010.32

On June 18, 2010, Interior made effective a Notice to Lessees and 

Operators addressing revised information requirements for exploration 

and development plans.33 The policy, among other things, reversed part 

of a 2008 Notice to Lessees and Operators that limited the information 

 

28Department of the Interior. Increased Safety Measures for Energy Development on the 

Outer Continental Shelf. May 27, 2010. 

29NTL No. 2010-N04. National Notice to Lessees and Operators (NTL) of Federal Oil and 

Gas Leases in the Outer Continental Shelf (OCS): To Implement the Directive to Impose a 

Moratorium on All Drilling of Deepwater Wells. Effective May 30, 2010. 

30NTL No. 2010-N05. National Notice to Lessees and Operators of Federal Oil and Gas 

Leases, Outer Continental Shelf (OCS): Increased Safety measures for Energy 

Development on the OCS. Effective June 8, 2010. 

31A blowout preventer is a mechanical device intended to control and close off a well if 

there is an uncontrolled flow of oil and gas. 

3230 C.F.R. Part 250. Oil and Gas Sulphur Operations in the Outer Continental ShelfIncreased Safety Measures for Energy Development on the Outer Continental Shelf. 

33NTL No. 2010-N06. National Notice to Lessees and Operators of Federal Oil and Gas 

Leases, Outer Continental Shelf (OCS): Information Requirements for Exploration Plans, 

Development and Production Plans, and Development Operations Coordination 

Documents on the OCS. Effective June 18, 2010. 
 

Page 21 GAO-12-423 Oil and Gas Management 

operators were required to submit regarding blowout scenarios and worstcase discharge scenarios.34,35 The new policy required that operators 

submit more detailed information about their worst case discharge 

scenarios and blowout scenarios in exploration, development, and oil spill 

response plans. The new policy explained that all operators, regardless of 

location or state coordination, must submit more detailed information. 

Along with the June 18, 2010, Notice to Lessees and Operators, Interior 

released, and updated three times, a list of frequently asked questions as 

a means to provide operators with additional guidance on how to comply 

with the new policies.36

In June 2010, several companies filed a lawsuit related to the deepwater 

drilling moratorium against the Secretary of the Interior. On June 22, 

2010, a U.S. District Court overturned Interior’s initial drilling 

suspension.37 Interior then announced a second drilling moratorium on 

July 12, 2010, noting the following three key factors as the basis for the 

decision: (1) it provided Interior, industry, and others time to develop 

strategies and methods for the containment of uncontrolled wells in 

deepwater; (2) it was necessary to ensure that an appropriate and 

sufficient response was available in the event of another major oil spill; 

and (3) it allowed for the collection and analysis of evidence regarding the 

potential causes of the Deepwater Horizon incident. On August 16, 2010, 

Interior issued a memorandum which directed all deepwater drilling plans 

to be analyzed with EAs instead of relying on categorical exclusion 

reviews. On October 1, 2010, Interior issued a report on the suspension 

of certain offshore permitting and drilling activities.38 Additionally, many of 

the revised policies outlined in the notices were incorporated into new 

 

34A blowout scenario includes information on the estimated oil and gas flow rate, total 

volume, and maximum duration of a blowout. 

35NTL No. 2008-G04. Notice to Lessees and Operators of Federal Oil, Gas, and Sulphur 

Leases in the Outer Continental Shelf, Gulf of Mexico OCS Region: Information 

Requirements for Exploration Plans and Development Operations Coordination 

Documents. Effective May 1, 2008. Expiration March 31, 2013. 

36NTL No. 2010-N06. Frequently Asked Questions. Effective June 18, 2010 with updates 

on July 15, July 21, and August 10, 2010. 

37Honbeck Offshore Servs., L.L.C. v. Salazar, 696 F. Supp. 2d. 627 (E.D. La. 2010). 

38Department of the Interior. Decision Memorandum. Report Regarding the Current 

Suspension of Certain Offshore Permitting and Drilling Activities on the Outer Continental 

Shelf. Issued on October 1, 2010. 
 

Page 22 GAO-12-423 Oil and Gas Management 

regulations via Interior’s emergency rule process. The Secretary of the 

Interior ended the drilling moratorium on October 12, 2010, but directed 

that, before any drilling permits were issued, operators had to certify 

compliance with all existing rules and requirements, including those 

recently implemented, and demonstrate the availability of adequate 

blowout containment resources. On October 14, 2010, Interior published 

an interim final drilling safety rule that incorporated new safety 

requirements, some of which were previously issued in a Notice to 

Lessees and Operators, along with additional requirements to enhance 

the safety of drilling operations.39 On November 8, 2010, Interior made 

effective another Notice to Lessees and Operators requiring operators 

conducting activities using subsea blowout preventers or surface blowout 

preventers on floating facilities to provide Interior with adequate 

information demonstrating that they have access to and can deploy 

containment resources to promptly respond to a blowout or other loss of 

well control.40 On December 13, 2010, Interior released a document to 

provide operators further guidance regarding environmental and safety 

requirements to be used in preparing their plans and permits. 

On October 1, 2011, Interior generally met its key reorganization time 

frame by officially reorganizing its oversight of offshore oil and gas 

activities in the Gulf of Mexico with the establishment of two new bureaus. 

To aid the development of these new bureaus, the Secretary of the 

Interior directed Interior staff to develop an implementation plan to provide 

further details on the planned reorganization, including target dates. 

Because the oversight responsibilities of these two new bureaus have 

many interdependencies, and their success will depend on effective 

coordination, Interior has drafted memorandums and standard operating 

procedures to define their roles and responsibilities and facilitate and 

formalize their coordination. 

 

39Oil and Gas and Sulfur Operations in the Outer Continental Shelf—Increased Safety 

Measures for Energy Development on the Outer Continental Shelf, 75 Fed. Reg. 63346 

(2010). 

40NTL No. 2010-N10. National Notice to Lessees and Operators (NTL) of Federal Oil and 

Gas Leases, Outer Continental Shelf: Statement of Compliance with Applicable 

Regulations and Evaluation of Information Demonstrating Adequate Spill Response and 

Well Containment. Effective November 8, 2010. 

Interior Has Generally 

Met Its Key 

Reorganization Time 

Frames 
 

Page 23 GAO-12-423 Oil and Gas Management 

On October 1, 2011, Interior met its goal to establish two new 

independent bureaus to oversee offshore oil and gas activities on the 

OCS, including in the Gulf of Mexico, effectively separating Interior’s 

mission to manage resources from its mission to provide oversight of 

safety and environmental enforcement. On May 19, 2010, following the 

Deepwater Horizon incident, the Secretary of the Interior signed a 

secretarial order to reorganize the roles and responsibilities performed by 

MMS into new management structures. Interior subsequently contracted 

with a consultant and formed an agency taskforce to develop key 

milestones for the reorganization.41 According to the secretarial order, the 

goals of the reorganization were to improve the management, oversight, 

and accountability of activities on the OCS; ensure a fair return to the 

taxpayer from royalty and revenue collection and disbursement activities; 

and provide independent safety and environmental oversight and 

enforcement of offshore activities. In the reorganization, Interior renamed 

MMS to BOEMRE as an interim step before transferring MMS’s oil and 

gas revenue collection functions to the newly created Office of Natural 

Resources Revenue and separating BOEMRE into two bureaus—BOEM 

and BSEE.42 To divide BOEMRE’s responsibilities, Interior issued new 

regulations in October 2011 reorganizing existing regulations under the 

new bureaus, thereby formally separating Interior’s regulations that 

govern leasing and approval of development from those addressing lease 

operations, safety, and enforcement.43 Specifically, under the 

reorganization, BOEM is to oversee resource management activities, 

including preparing the 5-year OCS oil and gas leasing program; 

reviewing oil and gas exploration and development plans and 

environmental studies; and conducting NEPA analyses. BSEE is to 

oversee operations and environmental compliance, including reviewing 

drilling permits, inspecting offshore drilling rigs and production platforms, 

assessing civil penalties, and developing regulations and standards for 

offshore drilling. Additionally, BSEE is to manage the National Offshore 

 

41Department of the Interior, Establishment of the Bureau of Ocean Energy Management, 

the Bureau of Safety and Environmental Enforcement, and the Office of Natural 

Resources Revenue, Order No. 3299 (May 19, 2010). 

42Department of Interior, Change of the Name of the Minerals Management Service to the 

Bureau of Ocean Energy Management, Regulation, and Enforcement, Order No. 3302 

(June 18, 2010). 

43Reorganization of Title 30: Bureaus of Safety and Environmental Enforcement and 

Ocean Energy Management (Direct final rule). 76 Fed. Reg. 64432 (2011). 

Interior Established Two 

Independent Bureaus, 

Separating Resource 

Management from Safety 

and Environmental 

Oversight and 

Enforcement 
 

Page 24 GAO-12-423 Oil and Gas Management 

Training and Learning Center—established in June 2011—to train its 

inspectors and engineers. (See fig. 5 for a high level illustration of the 

reorganization and app. II for the full organizational charts for both BOEM 

and BSEE.) 

Figure 5: Interior’s Key Offshore Oil and Gas Program Responsibilities before and after Reorganization 

Interior and others identified a number of reasons for dividing the roles 

and responsibilities previously performed by MMS. BOEMRE’s director 

noted that MMS had three competing missions—revenue collection, 

energy development, and safety and environmental enforcement. The 

National Commission on the BP Deepwater Horizon Oil Spill and Offshore 

Drilling concluded that MMS had primarily focused on revenue collection 

and energy development, adversely affecting its ability to set and enforce 

appropriate safety and environmental oversight rules. After the 
 

Page 25 GAO-12-423 Oil and Gas Management 

Deepwater Horizon incident, the President directed Interior to provide a 

postaccident safety report within 30 days. While developing this report, 

Interior’s senior management, including the Secretary, discussed dividing 

MMS’s duties. A senior Interior official stated that, even before the 

Deepwater Horizon incident, Interior’s leadership was considering 

alternative management structures to MMS, noting that separating 

resource management from the safety and environmental enforcement 

functions had been a best practice used by some European nations such 

as Norway, which established the Petroleum Safety Authority in January 

2004 to hold regulatory responsibility for safety, emergency 

preparedness, and the working environment in the petroleum activities. 

Previously, these responsibilities were held under the Norwegian 

Petroleum Directorate, which among other responsibilities oversees 

resource management. 

Some Interior officials stated that they expect Interior’s overall 

management of oil and gas resources to improve due to the 

reorganization. A senior Interior official overseeing the reorganization 

stated that establishing three separate bureaus, each with its own 

director, will help ensure equal advocacy for all three missions. For 

example, the official stated that by establishing BSEE, the director of 

BSEE will be responsible for safety and environmental enforcement, 

independent from the resource management development and revenue 

collection missions. In addition, an official in the Gulf of Mexico regional 

office stated that by reducing the scope of each bureau’s mission,44 the 

responsibilities of the regional managers will also be reduced so that they 

may delegate less, focus more on the areas they oversee, and take a 

more hands-on approach to management. 

To aid the establishment of the new bureaus, the secretarial order 

directed that an implementation plan with a schedule for the planned 

reorganization be developed within 30 days.45 In July 2010, Interior 

issued its implementation plan with target dates, including October 1, 

2011, as the target date to complete the reorganization. The 

 

44Because many of our interviews were conducted with Interior officials before BSEE and 

BOEM were established, we generally do not distinguish the bureau of the official but refer 

to them as Interior officials. 

45Sec. Order No. 3299. 

Interior’s Implementation 

Plan Guided the 

Reorganization 
 

Page 26 GAO-12-423 Oil and Gas Management 

implementation plan also provided target dates for completing tasks to 

facilitate the reorganization, including reports of best practices and 

organizational effectiveness and a detailed organizational structure for 

BOEM and BSEE. A senior Interior official stated that, although the 

implementation plan identified target dates for the reorganization, details 

of the reorganization were not developed until later in the process. 

According to a senior Interior official, the primary decisions about the 

reorganization were made by BOEMRE’s director, with input from senior 

advisors, including both political appointees and career Interior 

management staff. To help inform these decisions and complete tasks, 

Interior hired a consultant at a cost of approximately $7 million, as of 

November 2011,46 and created an agency taskforce––a team of over 65 

Interior staff with multiple subteams focused on identifying 

interdependencies between BOEM and BSEE.47 Interior officials stated 

that the expertise and advice provided by the consultant was critical to 

completing the reorganization on time while simultaneously keeping the 

agency’s regulatory processes operating, and positioning both new 

bureaus to operate effectively at start up. Throughout this process, 

according to a senior Interior official, the consultant worked closely with 

the taskforce. The consultant was responsible for developing a series of 

reports specified in the July 2010 implementation plan and contract as 

well as providing guidance to BOEMRE management on how to conduct 

analyses that supported key reorganizational decisions. According to a 

senior Interior official, the consultant provided reports from September 

2010 through February of 2011 that helped inform the reorganization. 

These reports included assessments of (1) BOEMRE’s organizational 

structure based, in part, on over 200 interviews, according to the 

consultant, (2) relevant regulatory best practices from Canada’s and 

Norway’s offshore oil and gas regulators, as well as the U.S. Department 

of Agriculture’s and Nuclear Regulatory Commission’s inspection 

 

46The contract included a base period as well as several options that were exercised by 

Interior to provide consulting services throughout the reorganization process. In addition to 

the approximately $7 million identified earlier, the contract includes an additional option to 

purchase approximately $1 million in consulting services. 

47This taskforce is consistent with our July 2003 report in which we discuss key practices 

and implementation steps for successful organizational transformations, including the use 

of dedicated implementation teams as well as the involvement of employees to obtain 

their ideas and gain ownership for the transformation.GAO, Results Oriented Cultures: 

Implementation Steps to Assist Mergers and Organizational Transformations, 

GAO-03-669 (Washington, D.C.: July 2, 2003). 
 

Page 27 GAO-12-423 Oil and Gas Management 

programs, (3) organizational options for dividing BOEMRE’s 

responsibilities into BOEM and BSEE, and (4) an implementation plan 

detailing the necessary steps to complete the reorganization within 

specified time frames, among other assessments. Following the issuance 

of the consultant’s February 2011 report, the consultant continued to 

assist the reorganization. 

The taskforce’s primary goal was to help ensure that BOEM and BSEE 

were fully functional as of October 1, 2011, in accordance with the target 

date outlined in the implementation plan. Among other activities, the 

taskforce helped determine BOEM’s and BSEE’s future organizational 

structures, identified interdependencies between BOEM and BSEE, and 

developed standard operating procedures to help manage functions 

across the two bureaus. Specifically, while working with the consultant, 

the taskforce identified 49 interdependencies between BOEM and BSEE, 

such as between BOEM’s leasing responsibilities and BSEE’s district 

office engineers’ responsibilities. Of those 49 interdependencies, the 

taskforce identified 16 that required policy solutions, including, for 

example, ensuring that drilling permit information is available to BSEE’s 

district engineers, as well as BOEM staff responsible for reviewing and 

approving exploration and development plans. The taskforce developed 

potential policy solutions for many of these interdependencies and 

provided them to Interior senior managers, including BOEMRE’s director. 

Interior took other steps to support the separation of BOEMRE into BOEM 

and BSEE, including dividing the two bureaus’ financial records, although 

BSEE manages administrative resources––such as IT resources––for 

both bureaus to achieve cost savings. Interior also officially reassigned 

employees and launched separate websites for each bureau. 

According to Interior officials, BOEM and BSEE will maintain a close 

working relationship, particularly during the early stages of their formation, 

due to the interdependencies in their oversight responsibilities. Prior to 

the division of BOEMRE, a senior Interior official in the Gulf of Mexico 

Regional office stated that the split would not “put up a wall” between the 

two bureaus, noting that both bureaus will continue to occupy the same 

New Orleans, Louisiana, building and that staff would be able to “walk 

down the hall” to discuss and resolve issues with colleagues in both 

bureaus. Interior officials further stated that the initial reorganization will 

not significantly change the bureau’s work processes. 

Interior Has Developed an 

MOU for BOEM and BSEE 

to Facilitate Coordination 
 

Page 28 GAO-12-423 Oil and Gas Management 

To help define BOEM’s and BSEE’s roles and responsibilities and 

facilitate and formalize their collaboration, Interior developed an 

overarching inter-bureau MOU; a six program set of area-specific 

memoranda of agreements; and numerous standard operating 

procedures. The MOU establishes a high-level working relationship 

between BOEM and BSEE and, according to the document, is intended to 

help minimize duplication of effort, promote consistency in procedures 

and regulations, and resolve disputes between the two bureaus. To help 

accomplish these goals, the MOU outlines a number of 

postreorganization roles and responsibilities. For example, it calls for the 

deputy directors of BOEM and BSEE to meet at least quarterly to discuss 

means to better ensure collaboration across the bureaus. The MOU also 

outlines the use of the six memoranda of agreements to establish 

principles for collaboration on program areas across BOEM and BSEE 

including: (1) plans and permits; (2) the environment and NEPA; (3) 

geologic data assignments; (4) the marine minerals program; (5) 

assignments, bonding, and pipelines; and (6) royalty relief requests. Each 

memorandum of agreement outlines roles and responsibilities for BOEM 

and BSEE and references a number of standard operating procedures 

that document interdependencies between the bureaus. Each standard 

operating procedure identifies specific objectives, responsibilities, and 

agency interdependencies for specific work actions. In documenting 

agency interdependencies, each standard operating procedure provides 

details on the actions to be taken by BSEE and BOEM for individual 

program activities. An Interior official said that, over time, the standard 

operating procedures will be refined and that it will be important to clearly 

document changes to them in order to minimize the risk of staff relying on 

institutional knowledge, especially as experienced staff retire or find work 

elsewhere. 
 

Page 29 GAO-12-423 Oil and Gas Management 

Key policy changes Interior has implemented since the Deepwater 

Horizon incident, which were designed to mitigate the risk of a well 

blowout or spill, initially required Interior to devote additional resources 

and time to reviewing oil and gas exploration and development plans and 

drilling permits for oil and gas activities on the OCS, including in the Gulf 

of Mexico. Specifically, these policy changes affected Interior’s (1) NEPA 

analyses for oil and gas exploration and development plans, including its 

use of categorical exclusions; (2) reviews of oil and gas exploration and 

development plans; and (3) reviews of oil and gas drilling permits. 

Interior approved almost all exploration plans (97 percent) and 

development plans (98 percent) for oil and gas activities in the Gulf of 

Mexico from January 1, 2000, through April 19, 2010, using a categorical 

exclusion. That is, because Interior had previously determined that a 

planned activity was not likely to significantly affect the environment, it 

categorically excluded the activity from a more detailed, site-specific 

NEPA analysis. 

Of the 3,249 exploration plans Interior approved from January 1, 2000, 

through April 19, 2010, approximately 14 percent were approved via a 

categorical exclusion with no additional analysis; 83 percent were 

approved via categorical exclusion with some additional analysis; and 3 

percent were approved via a more detailed, site-specific EA.48 Interior 

officials told us they prepared EA documents for exploration plans for 

several reasons, including plans for (1) development in the eastern Gulf 

of Mexico, (2) using new and unusual technology, or (3) development 

adjacent to the federally protected Flower Garden Banks National Marine 

Sanctuary. The overall results for development plans were similar. Of the 

2,935 approved development plans submitted, approximately 16 percent 

were approved via a categorical exclusion with no additional analysis, 82 

percent were approved via a categorical exclusion with some additional 

 

48Approximately 2 percent of approved exploration plans were missing a NEPA code and 

were not included in our analysis. 

Key Policy Changes 

for Oil and Gas NEPA 

Analyses, Plans, and 

Permits Intended to 

Enhance Oversight 

Initially Increased 

Review Times and 

Resource 

Requirements 

Interior Relied Heavily on 

Categorical Exclusions, 

but Use Is Now Limited 

Pending an Internal 

Review 
 

Page 30 GAO-12-423 Oil and Gas Management 

analysis, and 2 percent were approved via a more detailed, site-specific 

EA49 (see fig. 6). 

Figure 6: Interior’s NEPA Determination for Approved Plans from January 1, 2000, through April 19, 2010 

Interior’s categorical exclusion reviews were hindered by (1) the poor 

quality of data in Interior’s geographic information system (GIS), (2) limited 

controls for ensuring NEPA analyses for approved plans were based on 

complete and accurate information, and (3) limited clear criteria for 

identifying certain types of activities that may preclude the use of 

categorical exclusions. According to Interior’s policy prior to the Deepwater 

Horizon incident, all exploration and development plans underwent a NEPA 

analysis, called a categorical exclusion review to determine whether the 

operator proposed activities could be categorically excluded from further 

analysis or if the plan required an EA or EIS. The categorical exclusion 

review—though less detailed and thorough than an EA or EIS—consisted 

of a series of environmental evaluations and site-specific, environmental 

resource reviews. These site-specific reviews, which are based largely on 

 

49Approximately 2 percent of approved development plans were missing a NEPA code 

and were not included in our analysis. 

Categorical Exclusion Reviews 

Were Hindered by Poor 

Geographic Information 

System Data Quality, a Lack of 

Controls, and Limited Criteria
 

Page 31 GAO-12-423 Oil and Gas Management 

information in Interior’s GIS, include assessments of the effects of oil and 

gas activities on air and water quality, archeological sites, and biologically 

sensitive areas, among others. 

However, according to Interior officials, Interior has been unable to 

maintain complete and accurate data in its GIS system due to limited 

resources. Interior officials stated that they have developed alternative 

processes to compensate for the current GIS limitations; however, these 

processes are time and resource intensive and prone to error. Because 

Interior relies on GIS data to conduct its categorical exclusion reviews to 

determine whether additional environmental analyses are necessary, and 

these data may be incomplete and inaccurate, by using them there is a 

risk of not accurately assessing a plan’s potential environmental effects or 

identifying plans that might warrant a more detailed environmental 

analysis. Interior officials told us that they have begun to devote 

resources to improving Interior’s GIS data and that the GIS is being 

upgraded and is scheduled to be deployed in May 2012. 

We also found that Interior’s current plan review process could cause it to 

approve a plan where the NEPA analysis, including categorical exclusion 

reviews, was based on incomplete or inaccurate information. According to 

Interior’s policy, exploration and development plans undergo a NEPA 

analysis through a categorical exclusion review in order to determine 

whether the activity can be categorically excluded or if the plan requires 

additional review through an EA or EIS.50 Interior’s NEPA staff conduct 

these reviews. However, during the exploration and development plan 

review process, Interior officials explained that they may request that 

operators provide additional information or correct previously submitted 

information through a plan amendment. Sometimes, according to Interior 

officials, these amendments may contain information necessary for 

completing the NEPA analysis. In such cases, Interior officials told us that 

staff reviewing the plan are to coordinate with NEPA staff to ensure that 

any information included in subsequent amendments would not need to 

be considered as part of a NEPA analysis. However, Interior staff stated 

that this coordination does not always occur and that this coordination is 

not documented in Interior’s Technical Information Management System 

(TIMS) IT system, meaning that Interior cannot be confident that its NEPA 

 

50Since the Deepwater Horizon incident, Interior no longer used the categorical exclusion 

review process for deepwater exploration and development plans. 
 

Page 32 GAO-12-423 Oil and Gas Management 

analyses were based on the most current relevant information in the 

exploration and development plans. For example, in one instance, the 

NEPA analysis was completed before Interior had received an operator’s 

plan amendment, which included the operator’s final worst case scenario 

discharge estimate, information that, according to Interior officials, would 

typically be considered during Interior’s NEPA analysis. Interior officials 

acknowledged that the controls in place are insufficient to prevent the 

approval of plans with NEPA analyses that were based on inaccurate or 

incomplete information. Without complete and accurate information to 

analyze the potential effects of a proposed project as required by NEPA, 

Interior risks making an erroneous assessment of the environmental risks 

associated with such a project. 

Our analysis of Interior’s data on approved exploration and development 

plans that had amendments from January 1, 2000, through April 19, 

2010, found that, for about 15 percent of the 1,466 plans it approved, 

Interior completed its NEPA analysis, including categorical exclusion 

reviews, before all of the plan’s final amendments had been submitted 

(see fig. 7). 
 

Page 33 GAO-12-423 Oil and Gas Management 

Figure 7: Approved Plans Amended after Final NEPA Determination Was Made, 

January 1, 2000, through April 19, 2010 

In addition, we found that Interior does not have clear criteria for certain 

types of activities that preclude the use of categorical exclusions. Interior 

policy states that if a categorical exclusion review concludes that a 

proposed activity could result in an “extraordinary circumstance,” such as 

having highly uncertain or potentially significant environmental effects, 

Interior cannot approve the plan through a categorical exclusion and must 

prepare, at a minimum, an EA.51 Extraordinary circumstances include 

 

51Interior policy allowed approval of exploratory and development plans in the Western 

and Central Gulf of Mexico—since 1981 and 1985, respectively—via categorical 

exclusions, except when staff determined that an extraordinary circumstance existed. The 

initial policy of categorically excluding exploration and development plans in the Western 

Gulf of Mexico, according to Interior officials, was carried over from the U.S. Geological 

Survey, which had regulatory authority over the Gulf of Mexico prior to the creation of 

MMS in 1982. Interior officials reported that the policy for approving plans via categorical 

exclusions was based on the findings of numerous previously completed EA documents 

that resulted in a finding of no significant effect. 
 

Page 34 GAO-12-423 Oil and Gas Management 

actions such as approving a development plan (1) in areas of high 

seismic risk or seismicity, relatively untested waters, or remote areas; (2) 

within the boundary of a proposed or established marine sanctuary, or 

within or near the boundary of a proposed or established wildlife refuge or 

areas of high biological sensitivity; (3) in areas of hazardous natural 

bottom conditions; or (4) utilizing new or unusual technology. Additionally, 

Interior’s departmental manual specifies a number of “exceptions” to 

individual actions within categorical exclusions—such as activities with 

highly controversial or very uncertain environmental effects or activities 

that could potentially adversely affect endangered species—and requires 

that Interior prepare an EA or EIS for such actions. Interior officials told us 

that, while certain extraordinary circumstances and exceptions, such as 

those related to endangered species, are more clearly determined and 

would trigger an EA or EIS, others have less precise criteria, and 

according to Interior policy, the responsible official determines whether 

they are significant. For example, Interior officials told us that Interior 

does not have documented clear criteria on what constitutes a 

controversial environmental effect as it relates to an exploration or 

development plan; instead, Interior has relied on the expertise of its staff 

to identify such cases. Additionally, these officials stated that Interior does 

not have clear criteria on what constitutes new or unusual technology. 

Interior officials told us that there was an effort to develop guidance on 

this issue, but that such guidance was never completed. Without 

documented clear criteria for when staff may categorically exclude a plan 

from a more detailed, NEPA analysis, Interior risks making inconsistent 

determinations as to what constitutes an extraordinary circumstance and 

making insufficient assessments of the potential effects of a proposed 

plan. According to Interior officials, Interior issued a NEPA handbook in 

September 2011 in response to a recommendation from our March 2010 

report, in which we recommended that Interior develop and set a deadline 

for issuing a comprehensive NEPA handbook providing guidance on how 

to implement NEPA and periodically update and revise this guidance as 

needed.52 Interior officials stated that, while additional guidance on 

extraordinary circumstances was included in the handbook, there are 

broad regional differences, and that the regional offices—including the 

Gulf of Mexico Regional office—are continuing to develop internal 

 

52GAO, Offshore Oil and Gas Development: Additional Guidance Would Help Strengthen 

the Minerals Management Service’s Assessment of Environmental Impacts in the North 

Aleutian Basin, GAO-10-276 (Washington, D.C.: Mar. 8, 2010). 
 

Page 35 GAO-12-423 Oil and Gas Management 

guidance that is more appropriately tailored to their specific geographical 

jurisdiction. 

After the Deepwater Horizon incident, Interior limited its use of categorical 

exclusions to approve deepwater oil and gas activities in the Gulf of 

Mexico while it reviewed its NEPA policy and implemented a new 

requirement for preparing EA documents for exploration and development 

plans proposing deepwater projects. On August 16, 2010, the Council on 

Environmental Quality released a report on Interior’s implementation of 

NEPA in its review and approval of exploration and development 

plans.53,54 Among the report’s findings was that Interior should (1) review 

its use of categorical exclusions for oil and gas exploration and 

development on the OCS in light of the increasing levels of complexity 

and risk and the potential environmental effects associated with 

deepwater drilling and (2) consider revising its policy for using categorical 

exclusions. The same day that the report was released, Interior 

announced that it was revising its categorical exclusion policy and, while 

certain shallow water drilling activities could still be approved using 

categorical exclusions, deepwater drilling activities could not, pending the 

outcome of an Interior review. On October 8, 2010, Interior published a 

notice in the Federal Register announcing its intent to conduct a broad 

review of its categorical exclusions for OCS decisions to ensure that it is 

in full compliance with NEPA and the regulations implementing NEPA.55

Interior officials initially said that the report was to be completed in 2011 

but that due to delays, it will not be finalized until mid-2012. 

According to Interior officials, the new requirement to prepare EA 

documents for exploration and development plans for deepwater projects, 

instead of relying on categorical exclusions, has required additional time 

and resources for Interior’s review but provides greater assurance that 

 

53The Council on Environmental Quality coordinates federal environmental efforts and 

works closely with agencies and other White House offices in the development of 

environmental policies and initiatives. It was established within the Executive Office of the 

President by Congress as part of NEPA, and additional responsibilities were provided by 

the Environmental Quality Improvement Act of 1970. 

54Council on Environmental Quality, Report Regarding the Minerals Management 

Service’s National Environmental Policy Act Policies, Practices, and Procedures as They 

Relate to Outer Continental Shelf Oil and Gas Exploration and Development (Aug. 16, 

2010). 

5575 Fed. Reg. 62418 (2010). 

Since the Deepwater Horizon

Incident, Use of Categorical 

Exclusions for Deepwater 

Plans Is Limited Pending 

Outcome of Internal Review 
 

Page 36 GAO-12-423 Oil and Gas Management 

environmental risks are considered. The officials stated that transitioning 

from categorical exclusions to site-specific EA documents for deepwater 

plans was initially challenging. For example, for exploration plans, staff 

had to produce a much more detailed and lengthy environmental analysis 

than previously required within the same 30-day review time frame. 

Interior officials reported that much of the initial difficulty in completing EA 

documents was getting the necessary information from the operator to 

complete the necessary analysis. Officials said that, going forward, they 

hope to streamline the EA process by developing a template that Interior 

staff can use to capture information to complete EA documents for 

exploration and development plans proposing projects in deepwater. 

Interior officials also reported that improving Interior’s ability to prepare 

EA documents is contingent, in part, on acquiring additional staff. 

As previously discussed in this report, after the Deepwater Horizon

incident, Interior enacted a number of policy changes to improve the 

safety of offshore oil and gas activities. In particular, Interior issued a 

Notice to Lessees and Operators, effective on June 18, 2010, that revised 

information requirements for exploration and development plans.56 This 

guidance, in part, reversed a 2008 Notice to Lessees and Operators that 

limited the blowout scenario and worst case discharge information 

required to accompany such plans.57 The new guidance required that 

operators submit more detailed information about their worst case 

discharge and blowout scenarios, along with information about how they 

would respond to a blowout. On August 16, 2010, Interior also issued a 

memorandum directing that all deepwater drilling plans be analyzed in 

EAs instead of through categorical exclusion reviews. These changes, 

according to Interior officials, would logically result in longer processing 

times for plans. However, according to Interior officials, Interior 

considered these changes necessary to ensure that operators provided 

sufficient environmental safeguards and projects received an appropriate 

level of NEPA review. Interior issued another Notice to Lessees and 

Operators effective about 5 months later on November 8, 2010, to inform 

 

56NTL No. 2010-N06. Information Requirements for Exploration Plans, Development and 

Production Plans, and Development Operations Coordination Documents on the OCS. 

Effective on June 18, 2010. 

57NTL No. 2008-G04. Information Requirements for Exploration Plans and Development 

Operations Coordination Documents. Effective on May 1, 2008. 

Added Safety and 

Environmental 

Requirements for 

Exploration and 

Development Plans Appear 

to Have Initially Increased 

Exploration Plan Review 

Times, and Interior’s TIMS 

IT System Hindered the 

Review Process 
 

Page 37 GAO-12-423 Oil and Gas Management 

operators that the agency would evaluate whether the operator’s current 

oil spill response plan—typically examined during a review of an 

exploration or development plan—described the types and quantities of 

surface and subsea containment equipment that the operator could 

access in the event of a spill or threat of a spill and the deployment time.58

Specifically, operators were encouraged to provide information in their oil 

spill response plans on well containment equipment such as capping 

stacks, dispersant systems, remotely operated underwater vehicles, and 

oil collection vessels, among other things, that would be necessary to 

respond to a subsea well blowout. 

Our analysis of Interior’s data from January 1, 2000, through September 

30, 2011, suggest that after the Deepwater Horizon incident when new 

information requirements for exploration and development plans were 

implemented, plan review times and the number of amendments per plan 

initially generally increased. However, more recent data suggest that 

review times and amendments per plan have decreased somewhat, 

although not to levels prior to the incident. In addition, we found that 

Interior’s TIMS IT system, which tracks amendments to plans, also 

hindered Interior’s review. 

Our analysis of Interior’s data on review and approval of exploration and 

development plans suggests that, following the Deepwater Horizon

incident and Interior’s new safety and environmental requirements for 

plans, both review times and amendments per plan initially generally 

increased for approved plans when compared to before the incident. 

However, our analysis also suggests that, in some cases, review times 

and numbers of amendments per approved plan have recently 

decreased, although not to levels prior to the Deepwater Horizon incident. 

Specifically, our analysis of Interior’s data from January 1, 2000, through 

September 30, 2011, found that after Interior added new requirements, 

the median review times initially increased for approved deepwater 

exploration and development plans and shallow water exploration plans 

but decreased for approved shallow water development plans. 

Amendments for both exploration and development plans irrespective of 

water depth initially increased. Interior officials stated that, over time, both 

review times and amendments may decrease as Interior staff and 

 

58NTL No. 2010-N10. Statement of Compliance with Applicable Regulations and 

Evaluation of Information Demonstrating Adequate Spill Response and Well Containment 

Resources. Effective on November 8, 2010. 

Data Suggest Review Times 

and Frequency of Amendments 

Initially Generally Increased 

after New Safety and 

Environmental Requirements 

for Approved Exploration and 

Development Plans Were 

Enacted 
 

Page 38 GAO-12-423 Oil and Gas Management 

operators become more familiar with the new policy requirements. While 

our analysis of Interior’s data suggest decreases in review times and 

numbers of amendments per plan, until several more years of postDeepwater Horizon incident data are available, we can only present 

preliminary results of the effects of the new plan requirements on plan 

reviews. 

We examined Interior’s review of approved deepwater and shallow water 

exploration and development plans from initial submission to final 

approval for three time frames: (1) routine exploration and development 

plan reviews from January 1, 2000, through April 19, 2010; (2) a transition 

period when Interior staff and operators were adjusting to new policies––

October 12, 2010, through May 31, 2011, for deepwater plans and June 

8, 2010, through May 31, 2011, for shallow water plans; and (3) more 

recent reviews from June 1, 2011, through September 30, 2011.59

Dividing the post-Deepwater Horizon incident period into two time frames 

allowed us to determine whether there had been a change in plan 

processing since the early post-Deepwater Horizon incident time frame 

and accompanying slowdown in reviews. Specifically, in dividing the postDeepwater Horizon period into two time frames, we did not consider the 

outcome for any plan submitted in the first of these periods but approved 

in the second. Our methodology did not allow us to use data for plans that 

were submitted in either period but not approved prior to September 30, 

2011. Therefore, we examined median processing times only for those 

plans that were both submitted and approved during a single one of these 

time frames and, as a result, some of our analysis was based on a small 

number of plans. Due to this limitation, our analysis should be viewed as 

provisional, awaiting the passage of time and the availability of additional 

data to allow for a more detailed examination of post-Deepwater Horizon 

incident plan processing times. It should also be noted that review times 

for exploration plans and development plans include both the time when 

plans are being reviewed at Interior and the time when plans are being 

revised by the applicant (in cases where an applicant’s submission does 

not comply with regulatory requirements). 

Deepwater exploration plans. Our analysis of Interior’s data on 

deepwater exploration plans from January 1, 2000, through April 19, 

 

59Our analysis did not examine review time frames for plans submitted from April 20, 

2010, through June 7, 2010, for shallow water plans, and October 11, 2010, for deepwater 

plans, due to the effect of policy changes and the deepwater drilling moratorium. 
 

Page 39 GAO-12-423 Oil and Gas Management 

2010, found that there were 1,374 plans submitted and approved within 

this time frame. These plans had a median review time of 38 days, and 

an average of 0.63 amendments per plan. For the policy transition period, 

from October 12, 2010, through May 31, 2011, our analysis found that 

there were 15 plans submitted and approved within this time frame. 

These plans had a median review time of 57 days and an average of 2.47 

amendments per plan. For the last time frame, from June 1, 2011, 

through September 30, 2011, our analysis found that there were 5 plans 

that were submitted and approved within this time frame. These plans 

had median review time of 47 days and an average of 0.6 amendments 

per plan (see table 1). 

Deepwater development plans. Our analysis of Interior’s data on 

deepwater development plans from January 1, 2000, through April 19, 

2010, found that there were 448 plans submitted and approved within this 

time frame. These plans had a median review time of 57 days and an 

average of 0.79 amendments per plan. For the policy transition period, 

from October 12, 2010, through May 31, 2011, our analysis found that 

that there were 16 plans submitted and approved within this time frame. 

These plans had a median review time of about 59.5 days and an 

average of 1.63 amendments per plan. For the last time frame, from June 

1, 2011, through September 30, 2011, our analysis found that there were 

7 plans submitted and approved within this time frame. These plans had a 

median review time of 56 days and an average of 0.86 amendments per 

plan (see table 1). 
 

Page 40 GAO-12-423 Oil and Gas Management 

Table 1: Review Time Frames and Number of Amendments for Approved Deepwater Exploration and Development Plans from 

Initial Submission to Final Approval 

 Exploration Development 

 

January 1, 

2000, through 

April 19, 2010 

October 12, 

2010, through 

May 31, 2011

June 1, 2011, 

through 

September 

30, 2011

January 1, 

2000, through 

April 19, 2010 

October 12, 

2010, through 

May 31, 2011

June 1, 2011, 

through 

September 

30, 2011

Total number of submittals with 

both initial plan submission date 

and plan approved date 

1,374 15 5 448 16 7

Median days from initial plan 

submission to the plan approved 

date 

38 57 47 57 59.5 56

Average number of amendments 

per approved plan 

0.63 2.47 0.6 0.79 1.63 0.86

Source: GAO analysis of Interior data. 

Shallow water exploration plans. Our analysis of Interior’s data on 

shallow water exploration plans from January 1, 2000, through April 19, 

2010, found that there were 1,982 plans submitted and approved within 

this time frame. These plans had a median review time of 39 days and an 

average of 0.54 amendments per plan. For the policy transition period, 

from June 8, 2010, through May 31, 2011, our analysis found that 14 

were submitted and approved within this time frame. These plans had a 

median review time of 68 days and an average of 1.71 amendments per 

plan. For the last time frame, from June 1, 2011, through September 30, 

2011, our analysis found that there were 3 plans submitted and approved 

within this time frame. These plans had a median review time of 51 days 

and an average of 0 amendments per plan. 

Shallow water development plans. Our analysis of Interior’s data on 

shallow water development plans from January 1, 2000, through April 19, 

2010, found that 2,579 plans were submitted and approved within this 

time frame. These plans had a median review time of 43 days and an 

average of 0.47 amendments. For the policy transition period, from June 

8, 2010, through May 31, 2011, our analysis found that that there were 39 

plans submitted and approved within the time frame. These plans had a 

median review time of 39 days and an average of 1.79 amendments per 

plan. For the last time frame, from June 1, 2011, through September 30, 

2011, our analysis found that there were 41 plans submitted and 

approved within the time frame. These plans had a median review time of 

20 days and an average of 0.7 amendments per plan (see table 2). 
 

Page 41 GAO-12-423 Oil and Gas Management 

Table 2: Review Time Frames and Number of Amendments for Approved Shallow Water Exploration and Development Plans 

from Initial Submission to Final Approval 

 Exploration Development 

 

January 1, 

2000, through 

April 19, 2010 

June 8, 2010, 

through May 

31, 2011

June 1, 2011, 

through 

September 

30, 2011

January 1, 

2000, through 

April 19, 2010 

June 8, 

2010, 

through May 

31, 2011

June 1, 2011, 

through 

September 

30, 2011

Total number of submittals with 

both initial plan submission date 

and plan approved date 

1982 14 3 2579 39 41

Median days from initial plan 

submission to the plan approved 

date 

39 68 51 43 39 20

Average number of amendments 

per approved plan 

0.54 1.71 0 0.47 1.79 0.7

Source: GAO analysis of Interior data. 

According to Interior officials, the new information requirements for 

exploration and development plans were confusing for both operators and 

Interior reviewers of those plans. As a result, operators amended plans 

more frequently, and the amendments added complexity to Interior’s 

review process, increasing the time before Interior’s final approval 

decision. Interior officials stated that amendments were often the result of 

errors or gaps in the information operators provided to Interior. Interior 

staff stated that, since the additional requirements went into effect, 

communication has increased between Interior and operators during the 

review process. For example, an Interior official told us that the policy 

change that led to the greatest increase in plan review times was the 

August 16, 2010, policy to complete EA documents for deepwater 

exploration or development plans instead of relying on categorical 

exclusions. As result of this new policy, Interior required additional 

information from operators in order to complete the EA documents. 

According to staff, this resulted in additional plan amendments, as 

operators were not initially submitting the necessary information, and led 

to overall increased review times. Additionally, Interior officials stated that 

the new policy requiring worst case discharge analyses was confusing for 

both operators and Interior and that the information and analyses 

operators initially provided were incorrect or incomplete and had to be 

amended. After approximately 6 months, however, Interior officials 

reported that they improved their ability to review the information and 

verify the calculations that operators provided and that operators gained a 

better understanding of how to complete the worst case discharge 

analysis in accordance with the new policy. Overall, Interior officials 
 

Page 42 GAO-12-423 Oil and Gas Management 

stated they expected that, as both staff and operators familiarize 

themselves with the new plan requirements, plan review times would 

decrease along with the number of plan amendments. After reviewing a 

draft of this report, Interior conducted its own analyses of plan review 

times using a different methodology and a longer time frame to show 

more recent trends. Similar to GAO’s analysis, Interior found that review 

times have declined since the policy changes went into effect and the 

deepwater drilling moratorium was lifted. See appendix IV for additional 

details. 

Interior officials reported that their review of exploration and development 

plans was further hindered by the limitations in its TIMS IT system 

including (1) no edit checks that would prevent operators from submitting 

incomplete and inaccurate plans, (2) no field to identify whether 

amendments to plans were made at the request of Interior or the 

operator, and (3) shortcomings in Interior’s TIMS IT system for tracking 

plan amendments. 

Interior has had a long-standing problem ensuring that operators submit 

complete and accurate plans, according to Interior officials, and 

developed a plan to address this limitation in 2003. According to Interior 

officials, Interior planned to develop an IT module called ePlans with data 

input controls––called edit checks––to limit operators’ ability to submit 

incomplete or inaccurate plans and reduce the resources Interior invests 

in these reviews. However, ePlans was never completed due to 

cancellation by Interior in December 2010. As of September 2011, Interior 

officials reported they had worked with a consultant to develop a 

requirements document for procuring the ePlans module. 

In addition, Interior officials stated that the TIMS IT system does not have 

a field for collecting information on whether amendments were submitted 

at the request of Interior to correct a deficiency or if the operator elected 

to revise its plan for technical reasons. As a result, when we attempted to 

analyze Interior’s data to determine why plans were amended so 

frequently, we were unable to do so. Interior officials acknowledged that 

information on the reasons plans were amended would assist them to 

identify common deficiencies in plans that could be communicated to 

operators before they submit plans, potentially minimizing the number of 

incomplete or inaccurate plans. Despite the lack of an automated system 

to collect this data, Interior officials stated that they have identified 

common deficiencies in submitted plans and worked to communicate this 

information to operators on Interior’s website and through plan 

workshops. Interior staff currently use a manual checklist for 

Interior’s TIMS IT System 

Hindered Review of Plans 
 

Page 43 GAO-12-423 Oil and Gas Management 

completeness, which Interior has shared with industry and the public 

through these workshops and on its website. According to Interior 

officials, this checklist will be incorporated into ePlans as Interior 

continues to develop the automated business rules and refine 

requirements for the system. Interior officials also stated that 

development of the ePlans system will depend on available funding 

through the budget process. However, without an automated system to 

identify deficiencies, Interior managers cannot readily determine if there 

are common deficiencies in operators’ plans. 

In addition, the limitations of Interior’s TIMS IT system, which tracks plan 

amendments, makes it difficult for staff to identify the most current version 

of a plan. According to Interior officials, review staff were, at times, unsure 

which version was the most current, a problem that was exacerbated by 

new information requirements that generally increased the average 

number of amendments per plan. To address this issue, in June 2011, 

Interior officials began requesting that operators submit a composite 

plan––a complete, accurate, and final plan that includes all information 

from the initial plan and subsequent amendments. This composite plan 

would be submitted as the final amendment to the initial plan. While not a 

formal policy requirement, Interior officials stated that management 

communicated this new approach to Interior staff via e-mail, and staff, in 

turn, communicated it to operators by e-mail or telephone. Interior officials 

stated that once both Interior and operators become familiar with the new 

requirements for plans, the challenges staff currently face with 

amendments should decrease. 

In addition to the new information requirements for exploration and 

development plans, Interior has added additional safety and 

environmental requirements for drilling permits designed to improve 

Interior’s oversight of oil and gas drilling operations. Our analysis of 

Interior’s new well and revised new well drilling permit review and 

approval data from January 1, 2005, through September 30, 2011, found 

that, after the new safety requirements went into effect, review times 

increased, as did the number of times that Interior returned a permit to an 

operator. 

As previously discussed, Interior has issued a number of policy changes 

to enhance the safety of drilling operations on the OCS, including in the 

Gulf of Mexico. In particular, a June 8, 2010, Notice to Lessees and 

Operators outlined new requirements for obtaining drilling permits, as 

recommended by the Secretary of the Interior’s May 2010 Safety 

New Safety and 

Environmental 

Requirements for Drilling 

Permits Initially Increased 

Review Times 

Interior Added Safety and 

Environmental Requirements 

for Drilling Permits 
 

Page 44 GAO-12-423 Oil and Gas Management 

Measures Report. These new requirements include certification by the 

operator’s Chief Executive Officer that operations were in compliance with 

Interior’s regulations and third-party certifications of well design and the 

blowout preventer, among other things. On October 14, 2010, Interior 

incorporated some of these new safety requirements into an interim 

drilling safety rule, along with additional requirements intended to 

enhance the safety of drilling operations.60 In issuing the interim drilling 

safety rule, Interior reported that “even without the full results of pending 

investigations, the obvious failures of well intervention and blowout 

containment systems demonstrate that previous regulatory assumptions 

concerning their reliability are inaccurate” and that the interim drilling 

safety rule “imposes requirements to give greater certainty that casing 

and cement design and fluid displacement are adequate for wellbore 

integrity, and to enhance the reliability of well control equipment.” All 

together, Interior revised its drilling requirements related to well control, 

blowout preventers, well casing and cementing, secondary intervention, 

unplanned disconnects between drilling rigs and the blowout preventer, 

recordkeeping, well completion, and well plugging. Interior officials 

identified the following new safety requirements as the most significant: 

Deepwater safety system requirement. Interior officials said that the 

new requirements for blowout preventers include testing specific 

components of the blowout preventer’s emergency control systems. 

These systems are required for blowout preventers deployed on 

dynamically positioned drilling rigs61 and, according to Interior officials, the 

new function testing requirements should provide greater assurance that 

emergency control systems will work in the event of, for example, an 

emergency disconnect between the rig and equipment located several 

thousand feet below on the seafloor. 

Third-party verifications of blowout preventer components. Interior 

added a requirement for a third-party licensed entity to verify that the blind 

shear rams—the part of a blowout preventer that cuts the drill pipe and 

seals the well—have the capability to shear the drill pipe, by including 

 

60Oil and Gas Sulfur Operations in the Outer Continental Shelf—Increased Safety 

Measures for Energy Development on the Outer Continental Shelf, 75 Fed. Reg. 63346 

(2010), (amending 30 C.F.R. part 250). 

61A dynamically positioned drilling rig is a drilling rig that is maintained in position over an 

offshore well location via thrusters, rather than mooring anchors. 
 

Page 45 GAO-12-423 Oil and Gas Management 

shear test results and conducting calculations showing that the blowout 

preventer can shear the pipe under any condition. 

Blowout preventer systems review. Interior now requires operators to 

submit additional schematics related to blowout preventers. According to 

Interior officials, Interior engineers now review each blowout preventer’s 

schematics, including for anomalies. Interior officials told us that this 

increases the confidence that Interior understands how that particular 

blowout preventer works. According to Interior officials, should another 

incident similar to the Deepwater Horizon occur, it is critical that both 

Interior and the drilling rig contractor have the most up-to-date schematics 

of the blowout preventer. Officials explained that, during maintenance of 

blowout preventers, components, including hydraulic hoses, may be 

disconnected and reconnected. Without accurate schematics, neither 

Interior nor the operator would be able to identify whether the equipment 

was altered in a manner that could jeopardize its functioning. According to 

Interior officials, the Deepwater Horizon incident and the blowout 

preventer used for the well being drilled illustrate the importance of 

understanding how a blowout preventer works and the need for both 

Interior and the operator to have correct, up-to-date schematics. During 

the well blowout, the operator attempted repeatedly to activate one 

component of the blowout preventer to regain control of the well. 

However, because a hydraulic hose was installed incorrectly, the operator 

was unknowingly activating another component of the blowout preventer 

that was not designed to regain control and shut in the well. 

Third-party certification of well casing design. Interior officials said 

this policy requires a certified engineer to review the well casing and 

certify that the design provides adequate well casing integrity. Interior 

officials pointed out, however, that a limitation of this policy requirement is 

that it does not require that a licensed petroleum engineer conduct the 

third-party review, only that the reviewer should be a professional 

engineer with a degree in any engineering position. 

New standards for cement. Prior to the Deepwater Horizon incident, 

Interior officials stated that Interior’s engineers reviewed a well permit’s 

cement plan primarily to ensure that it included adequate volumes of 

cement to construct a safe and secure wellbore. Interior engineers did 

not, however, routinely consider the risks associated with the cementing 

plan. Interior’s new requirement incorporates best practices for certain 
 

Page 46 GAO-12-423 Oil and Gas Management 

technical cementing,62 which Interior officials said will provide greater 

assurance that the operator is examining any risks involved in its 

cementing plan. 

Negative pressure test. Interior added new requirements specifying 

when an operator must conduct a negative pressure test—a test to verify 

the well is not capable of flow in the casing hole section being tested—

and provide criteria for how it would successfully pass the test. Prior to 

the Deepwater Horizon incident and the recent interim final drilling safety 

rule, Interior officials told us that Interior did not have specific 

requirements for negative pressure tests. According to Interior officials, a 

negative pressure test lowers the pressure inside the wellbore to ensure 

that the casing and cement can withstand the pressure differential, 

separating the wellbore from the oil and gas reservoir. A blowout 

preventer is present during the test so that, if something goes wrong, it 

can be activated and prevent the release of oil or gas. According to an 

Interior official, failure to correctly interpret the negative pressure reading 

was likely a contributing factor to the well blowout in the Deepwater 

Horizon incident. 

Our analysis of Interior’s data suggests that, as with the new 

requirements for exploration and development plans, Interior’s drilling 

permit review times and permit returns generally increased after the 

Deepwater Horizon incident and Interior’s new safety and environmental 

requirements for drilling permits intended to improve safety went into 

effect. However, our analysis also suggests that review times and 

numbers of returns per permit have decreased somewhat in the most 

recent time frame, although not to levels prior to the Deepwater Horizon

incident. Specifically, our analysis of Interior’s data from January 1, 2005, 

through September 30, 2011, found that after Interior added new 

requirements, the median review times initially increased for deepwater 

and shallow water new well and revised new well drilling permits. Returns 

per permit for both new well and revised new well permits, irrespective of 

water depth, also increased. Interior officials stated that, over time, both 

review times and returns per permit may decrease as Interior staff and 

 

62Since the passage of the National Technology Transfer and Advancement Act in 1996, 

federal agencies have been required to adopt private-sector standards, which would 

include standards published by the American Petroleum Institute (API), wherever 

practical, in lieu of creating their own proprietary, nonconsensus standards. These best 

practices are based on API 65 part 2. 

Data Suggest Drilling Permit 

Review Times and Permit 

Returns Initially Increased after 

New Safety and Environmental 

Requirements Were Enacted 
 

Page 47 GAO-12-423 Oil and Gas Management 

operators become more familiar with the new policy requirements. And 

while our analysis of Interior’s data suggests decreases in review times 

and numbers of returns per permit, until several more years of postDeepwater Horizon incident data available, we can only present 

preliminary results of the effects of the new permit requirements on permit 

reviews. 

Similar to our analysis of Interior’s reviews of exploration and 

development plans, we examined three distinct time frames for Interior’s 

drilling permit reviews: (1) routine drilling permit review operations from 

January 1, 2005, through April 19, 2010;63 (2) a transition period when 

Interior staff and operators were adjusting to new policies––October 12, 

2010, through May 31, 2011, for deepwater drilling permits and June 8, 

2010, through May 31, 2011, for shallow water drilling permits; and (3) 

recent drilling permit reviews from June 1, 2011, through September 30, 

2011.64 Dividing the post-Deepwater Horizon incident period into two time 

frames allowed us to determine whether there had been a change in 

permit processing since the early post-Deepwater Horizon incident time 

frame and accompanying slowdown in reviews. Specifically, in dividing 

the post-Deepwater Horizon period into two time frames, we did not 

consider the outcome for any permits submitted in the first of these time 

frames but approved in the second. Our methodology did not allow us to 

use data for permits that were submitted in either time frame but not 

approved prior to September 30, 2011. Therefore, we examined median 

processing times only for those permits that were both submitted and 

approved during a single one of these time frames and, as a result, some 

of our analysis was based on a small number of permits. Due to this 

limitation, our analysis should be viewed as provisional, awaiting the 

passage of time and the availability of additional data to allow a more 

detailed examination of post-Deepwater Horizon incident permit 

processing times. In addition to our analysis of new well and revised new 

well permits, we also examined permits for sidetracks, revised sidetracks, 

bypasses, and revised bypasses. 

 

63Analysis of drilling permits prior to 2005 was not possible due to Interior officials’ 

concerns about the reliability of the data. 

64Our analysis did not examine review time frames for permits submitted from April 20, 

2010, through June 7, 2010, for shallow water plans, and October 11, 2010, for deepwater 

plans, due to the effect of policy changes and the deepwater drilling moratorium. 
 

Page 48 GAO-12-423 Oil and Gas Management 

Deepwater drilling permits. Our analysis of Interior’s data on deepwater 

new well drilling permits from January 1, 2005, through April 19, 2010, 

found that 414 permits were submitted and approved within this time 

frame. These permits had a median review time of 20 days, and Interior 

returned the permits to the operator an average of about 1.57 times per 

permit. For the policy transition period, from October 12, 2010, through 

May 31, 2011, we found that 2 permits were submitted and approved 

within the time frame. These permits had a median review time of 68 

days, and Interior returned the permits an average of 3.5 times per 

permit. For the most recent time frame—from June 1, 2011, through 

September 30, 2011—we found that 8 permits were submitted and 

approved within the time frame. These permits had a median review time 

of 32 days, and Interior returned the permits an average of 3 times per 

permit. See table 3 for information on all types of permits, including 

revised new wells, sidetracks, revised sidetracks, and bypasses. 
 

Page 49 GAO-12-423 Oil and Gas Management 

Table 3: Review Time Frames and Average Number of Returns per Submission for All Types of Approved Deepwater Drilling 

Permits 

New well Revised new well 

 

January 1, 

2005, through 

April 19, 2010 

October 12, 

2010, through 

May 31, 2011

June 1, 2011, 

through 

September 30, 

2011

January 1, 2005, 

through April 19, 

2010

October 12, 

2010, through 

May 31, 2011

June 1, 2011, 

through 

September 30, 

2011

Number of 

submittals 

approved 

414 2 8 687 32 46

Median days 

from initial 

submittal until 

final approval 

20 68 32 1 3.5 0.5

Average number 

of returned 

drilling permits 

per approved 

submittal 

1.57 3.5 3 0.54 1.56 0.39

 Sidetrack Revised sidetrack 

 

January 1, 

2005, through 

April 19, 2010 

October 12, 

2010, through 

May 31, 2011

June 1, 2011, 

through 

September 30, 

2011

January 1, 2005, 

through April 19, 

2010

October 12, 

2010, through 

May 31, 2011

June 1, 2011, 

through 

September 30, 

2011

Number of 

submittals 

approved 

259 5 5 177 13 13

Median days from 

initial submittal 

until final 

approval 

4 23 5 1 0 1

Average number 

of returned drilling 

permits per 

approved 

submittal 

0.85 3.6 1 0.32 0.77 0.39
 

Page 50 GAO-12-423 Oil and Gas Management 

 Bypass Revised bypass 

 

January 1, 

2005, through 

April 19, 2010 

October 12, 

2010, through 

May 31, 2011

June 1, 2011, 

through 

September 30, 

2011

January 1, 2005, 

through April 

19, 2010

October 12, 

2010, through 

May 31, 2011

June 1, 2011, 

through 

September 30, 

2011

Number of 

submittals 

approved 

149 7 8 124 8 10

Median days from 

initial submittal 

until final 

approval 

1 1 1.5 1 0.5 1.5

Average number 

of returned drilling 

permits per 

approved 

submittal 

0.55 2.29 0.75 0.39 0.88 0.7

Source: GAO analysis of Interior data. 

Shallow water drilling permits. Our analysis of Interior’s drilling permit 

data from January 1, 2005, through April 19, 2010, for shallow water new 

well drilling permits found that 1,105 permits were submitted and 

approved within the time frame. These permits had a median review time 

of 11 days, and Interior returned the permits to the operator an average of 

1.25 times per permit. For the policy transition period, from June 8, 2010, 

through May 31, 2011, we found that 43 permits were submitted and 

approved within the time frame. These permits had a median review time 

of 28 days, and Interior returned the permits an average of 2.37 times per 

permit. For the most recent time frame—from June 1, 2011, through 

September 30, 2011—we found that 18 permits were submitted and 

approved within the time frame. These permits had a median review time 

of 13.5 days, and Interior returned the permits an average of 2.11 times 

per permit. See table 4 for information on all types of permits, including 

revised new wells, sidetracks, revised sidetracks, and bypasses. 
 

Page 51 GAO-12-423 Oil and Gas Management 

Table 4: Review Time Frames and Average Number of Returns per Submission for All Types of Approved Shallow Water 

Drilling Permits 

New well Revised new well 

 

January 1, 

2005, through 

April 19, 2010 

June 8, 2010, 

through May 31, 

2011

June 1, 2011, 

through 

September 30, 

2011

January 1, 

2005, through 

April 19, 2010

June 8, 2010, 

through May 31, 

2011

June 1, 2011, 

through 

September 30, 

2011

Number of 

submittals 

approved 

1,105 43 18 1,246 92 27

Median days 

from initial 

submittal until 

final approval 

11 28 13.5 1 2 1

Average number 

of returned 

drilling permits 

per approved 

submittal 

1.25 2.37 2.11 0.31 0.82 0.89

Sidetrack Revised sidetrack 

 

January 1, 

2005, through 

April 19, 2010 

June 8, 2010, 

through May 31, 

2011

June 1, 2011, 

through 

September 30, 

2011

January 1, 

2005, through 

April 19, 2010

June 8, 2010, 

through May 31, 

2011

June 1, 2011, 

through 

September 30, 

2011

Number of 

submittals 

approved 

648 75 21 492 94 31

Median days from 

initial submittal 

until final 

approval 

4 22 16 1 1 1

Average number 

of returned drilling 

permits per 

approved 

submittal 

0.72 2.16 1.86 0.34 0.71 0.68
 

Page 52 GAO-12-423 Oil and Gas Management 

 Bypass Revised bypass 

 

January 1, 

2005, through 

April 19, 2010 

June 8, 2010, 

through May 31, 

2011

June 1, 2011, 

through 

September 30, 

2011

January 1, 

2005, through 

April 19, 2010

June 8, 2010, 

through May 31, 

2011

June 1, 2011, 

through 

September 30, 

2011

Number of 

submittals 

approved 

377 22 10 233 13 10

Median days from 

initial submittal 

until final 

approval 

1 1 1 1 1 2

Average number 

of returned drilling 

permits per 

approved 

submittal 

0.38 1.14 0.80 0.26 0.38 0.7

Source: GAO analysis of Interior data. 

According to Interior officials, there has been a learning process for both 

Interior and operators as the new drilling safety requirements went into 

effect. At least one of the new requirements related to blowout 

preventers—reviewing the schematics—was initially difficult for Interior’s 

engineers because, according to those officials, they did not have the 

expertise to review schematics. According to Interior officials, reviewing 

schematics involves printing the schematic, hanging it on a wall, and 

tracing every line on the blowout preventer to ensure that the blowout 

preventer is correctly configured. Interior staff reported that, after the first 

several blowout preventer schematic reviews, staff became more 

experienced. During their review of the schematics, Interior engineers 

found errors and notified the operators. In some instances, operators took 

up to 6 months to submit a corrected blowout preventer schematic to 

Interior. Interior officials reported that, prior to the Deepwater Horizon

incident, there were 33 deepwater drilling rigs each with a subsea blowout 

preventer—typically the most complex blowout preventers that Interior 

reviews—deployed in the Gulf of Mexico. According to Interior officials, 

after Interior staff complete initial reviews of the remaining subsea 

blowout preventers, subsequent reviews should be more efficient 

because, if no changes are made to them, the operator may submit a 

statement certifying that no changes were made since Interior’s last 

review. Interior officials added that Interior does not require a third-party 

certification of blowout preventer schematics as it does, for example, for 

the casing design. 
 

Page 53 GAO-12-423 Oil and Gas Management 

Interior also reported mixed feedback from operators concerning the new 

drilling safety requirements. Interior officials told us that some operators 

stated that the requirements go beyond what is necessary to ensure the 

safety of offshore drilling, while others stated that the requirements are 

long overdue or expressed a desire to understand and comply with the 

new requirements. Despite the mixed feedback from operators, Interior 

officials expressed confidence that the new requirements would lead to 

greater safety for offshore drilling. Going forward, agency officials stated 

that drilling permit reviews should become more efficient as both Interior 

and operators become more familiar with the new requirements. After 

reviewing a draft of this report, Interior conducted its own analyses of 

permit review times using a different methodology and a longer time 

frame to show more recent trends. Similar to GAO’s analysis, Interior 

found that review times have declined since the policy changes went into 

effect and the deepwater drilling moratorium was lifted. See appendix IV 

for additional details. 

Interior’s inspections of Gulf of Mexico offshore oil and gas drilling rigs 

and production platforms routinely identified violations from January 1, 

2000, through September 30, 2011, but the inspection program faced 

several key challenges. Since the Deepwater Horizon incident, Interior 

has made policy changes to its inspection program to improve program 

oversight. Interior issued approximately $18 million in civil penalty 

assessments during this period, and district managers generally agreed 

with inspection staff recommendations to formally open civil penalty 

cases. Since the incident, Interior also made policy changes to improve 

its civil penalty program. 

Our analysis of Interior’s inspection data from January 1, 2000, through 

September 30, 2011,65 found that approximately 8 percent of drilling rig 

inspections and 28 percent of production platform inspections identified 

violations. However, three key challenges hindered Interior’s inspection 

program: (1) Interior did not generally meet its informal goal for 

conducting monthly drilling rig inspections, (2) Interior did not have a 

formal policy for conducting announced versus unannounced inspections 

 

65Because the Deepwater Horizon incident was a unique event, inspection data presented 

for 2010 may not be representative of normal Interior operations. 

Inspections Routinely 

Identified Violations, 

and Policy Changes 

Are Under Way to 

Improve Inspection 

and Civil Penalty 

Programs 

Interior’s Inspection 

Program Routinely 

Identified Violations but 

Was Hindered by Three 

Key Challenges 
 

Page 54 GAO-12-423 Oil and Gas Management 

until fiscal year 2012, and (3) Interior was missing about half of the data 

on whether violations it identified were corrected. 

Drilling rig inspection rates and violations. Our analysis of Interior’s 

data on drilling rig inspection rates—the number of days a drilling rig was 

on site divided by the number of inspections per month—indicates that 

Interior met its informal drilling rig inspection goal in 1 of 11 years for the 

period from January 1, 2000, through 2010,66 but it appeared likely to 

meet its goal for 2011. The OCS Lands Act requires Interior to conduct 

annual inspections for all offshore structures, and Interior, according to 

Interior officials, developed an informal goal of inspecting active drilling 

rigs monthly, which was never formalized in documented policy. During 

the period of our analysis, the overall number of drilling rig inspections 

generally declined from 2,208 in 2000 to 771 in 2009—the last calendar 

year for which complete data were available prior to the Deepwater 

Horizon incident; the decline was largely the result of reduced drilling 

activity in the Gulf of Mexico, according to Interior officials. During this 

same time period, the average drilling rig inspection rate varied from a 

high of 1.15 per month in 2000 to a low of 0.61 per month in 2008 (see 

fig. 8). According to Interior officials, Interior may be even less likely to 

consistently meet this informal goal in future years for several reasons. 

First, as oil and gas drilling activities move further offshore to develop 

deepwater projects, travel times for inspections will increase, thereby 

increasing the average time per inspection. Second, new safety 

requirements Interior issued require operators to notify Interior at least 72 

hours before blowout preventer testing to facilitate having Interior 

inspection staff present to witness at least one of the tests. These new 

requirements have required inspectors to remain on drilling rigs for 

several days, thereby lengthening the time for each drilling rig inspection. 

Additionally, inspection frequency can be greatly affected by weather, 

especially in the winter months. Fog, high winds, and severe storms can 

prevent inspectors from conducting inspections for many days. 

Nonetheless, Interior continues to rely on its informal goal for inspecting 

drilling rigs and has not assessed how new policy requirements and travel 

times to deepwater drilling rigs would affect its ability to conduct these 

monthly drilling rig inspections. 

 

66Our analysis determined the drilling rig inspection rate by dividing the number of active 

rig days on location by the number of inspections per 30 days. This analysis does not 

indicate whether each drilling rig was inspected once every 30 days. 
 

Page 55 GAO-12-423 Oil and Gas Management 

Our analysis of drilling rig inspections found that the percentage of 

violations associated with drilling rig inspections remained within a small 

range during the period of our analysis. Specifically, from 2000 through 

2010, the percentage of inspections associated with violations ranged 

from 5 percent to 10 percent. However, data for the first 9 months of 2011 

indicate that over 19 percent of drilling rig inspections were associated 

with violations, the highest percentage we found (see fig. 8). 

Figure 8: Drilling Rig Inspections, Violations, and Inspections per 30 Days, January 1, 2000, through September 30, 2011 

Note: Because the Deepwater Horizon incident was a unique event, data presented for 2010 may not 

be representative of normal Interior operations. 

When examining all categories of violations associated with drilling rigs 

during this period, we found that the 10 most frequent violations fell into 

three of Interior’s violation categories: (1) general operations, (2) drilling 

operations, and (3) pollution events. Specifically, 5 of the 10 most 
 

Page 56 GAO-12-423 Oil and Gas Management 

frequent violations were related to general operations,67 3 were related to 

drilling operations, and 2 were related to pollution events.68 Overall, the 

most frequent violation was in general operations––for example, the 

inspector observed that the operator was not performing operations in a 

“workmanlike manner,” among other criteria. In this case, a violation could 

be issued if, for example, an inspector saw tools or other equipment lying 

on the ground that could pose a safety hazard for other workers on the 

rig. Other frequent violations for drilling operations were related to 

technical deficiencies in testing blowout preventers. 

Production platform inspection rates and violations. Our analysis of 

Interior’s data on production platform inspection rates—the number of 

production platforms divided by the number of inspections per year—

indicates that Interior generally exceeded its goal of annually inspecting 

production platforms for the 11 years from January 1, 2000, through 

2010,69 but it was uncertain whether it would meet its goal for 2011. When 

examining Interior’s oil and gas production platform inspection data, we 

found that Interior generally exceeded its goal of annually inspecting 

production platforms. During the period of our analysis, the number of 

production platform inspections generally declined from 4,249 in 2000 to 

3,390 in 2010. When accounting for the number of production platforms in 

the Gulf of Mexico during this period, Interior’s average inspection rate 

ranged from a low of 1.03 per year in 2007 to a high of 1.29 per year in 

2009. On average, approximately 28 percent of production platform 

inspections were associated with violations, ranging from a low of 

approximately 20 percent in 2008 to a high of 34 percent in 2010—a rate 

higher than that for drilling rig inspections (see fig. 9). 

 

67General operation violations include violations related to accident reporting and record 

keeping. 

68Pollution event violations include violations related to pollution prevention and oil spill 

reports. 

69Our analysis determined the production platform inspection rate by dividing the number 

of production platforms by the number of inspections per year. This analysis does not 

indicate whether each production platform was inspected once per year. 
 

Page 57 GAO-12-423 Oil and Gas Management 

Figure 9: Production Platform Inspections, Violations, and Annual Inspections per Production Platform, January 1, 2000, 

through September 30, 2011 

Note: Because the Deepwater Horizon incident was a unique event, data presented for 2010 may not 

be representative of normal Interior operations. 

When examining all categories of violations associated with production 

platforms during this period, similar to drilling rigs, we found that the 10 

most frequent violations fell into 3 categories: (1) production operations, 

(2) general operations, and (3) pollution events. Specifically, 5 of the 10 

most frequent violations were related to production operations, 4 were 

related to general operations, and 1 was related to a pollution event. 

Similar to drilling rig inspections, the most frequently issued violations 

were related either to inspectors observing unsafe work practices or 

unsafe conditions. 

Enforcement actions. We found that the severity of Interior’s 

enforcement actions in response to about half of all drilling rig and 

production platform violations issued from January 1, 2000, through 

September 30, 2011, were warnings, and the other half resulted in orders 

to either shut down the component in violation––such as a piece of 

equipment––or, if sufficiently serious, shut down the entire drilling rig or 
 

Page 58 GAO-12-423 Oil and Gas Management 

production platform. Specifically, our analysis of drilling rig enforcement 

actions from January 1, 2000, through September 30, 2011, found that, 

on average, approximately 60 percent of the violations were warnings, 20 

percent were component or well shut down orders, and 20 percent were 

drilling rig shutdown orders (see fig. 10). 

Figure 10: Drilling Rig Enforcement Actions, January 1, 2000, through September 

30, 2011 

Note: Because the Deepwater Horizon incident was a unique event, data presented for 2010 may not 

be representative of normal Interior operations. 

Our analysis of production platform enforcement actions from January 1, 

2000, through September 30, 2011, showed that, on average, 

approximately 50 percent of the violations were warnings, 46 percent 

were component or well shutdown requests, and about 4 percent were 

production platform shutdown requests (see fig. 11). 
 

Page 59 GAO-12-423 Oil and Gas Management 

Figure 11: Production Platform Enforcement Actions, January 1, 2000, through 

September 30, 2011 

Note: Because the Deepwater Horizon incident was a unique event, data presented for 2010 may not 

be representative of normal Interior operations. 

Interior officials explained that the financial cost incurred by the operator 

associated with shutting down a production platform or drilling rig can be 

significant. However, officials explained that the operator may be able to 

correct the violation while the inspector is present, meaning that the 

component or the production platform or drilling rig is not shut down. For 

example, an operator may forget to open a safety valve after an 

equipment test, which could result in a violation, as well as a mandatory 

shut down of the production platform or drilling rig. However, since the 

operator can immediately fix the problem, the facility would not be shut 

down, but would still receive a violation. 
 

Page 60 GAO-12-423 Oil and Gas Management 

Announced versus unannounced inspections. Interior has authority to 

conduct both announced and unannounced inspections, but did not have 

a documented policy to differentiate between them until fiscal year 2012. 

For both drilling rigs and production platforms, we found that 

unannounced inspections were associated with a greater number of 

violations than were announced inspections from January 1, 2000, 

through September 30, 2011. For example, we found that about 8 percent 

of announced drilling rig inspections were associated with violations 

compared to about 10 percent of unannounced inspections associated 

with violations. Similarly, we found that 28 percent of announced 

production platform inspections were associated with violations, whereas 

approximately 45 percent of unannounced inspections were associated 

with violations. The percentage of unannounced inspections of drilling rigs 

per year varied from a low of zero percent in 2002 and 2003 to a high of 

about 11 percent in 2009, and for production platforms, from a low of 

approximately 1 percent in 2008 and 2009 to a high of about 11 percent 

in 2000 (see fig. 12). 
 

Page 61 GAO-12-423 Oil and Gas Management 

Figure 12: Announced and Unannounced Inspections and Associated Violations, January 1, 2000, through September 30, 2011 

Note: Because the Deepwater Horizon incident was a unique event, data presented for 2010 may not 

be representative of normal Interior operations. 
 

Page 62 GAO-12-423 Oil and Gas Management 

Interior officials told us that conducting unannounced inspections can be 

logistically challenging for several reasons. For example, without advance 

notice to the drilling rig or production platform, Interior may have difficulty 

landing a helicopter because the landing pad on the rig or platform may 

be occupied by another helicopter, or operators may be actively using a 

crane to move equipment, which prevents a safe landing. Additionally, 

without advance scheduling, the operator may not have all of the 

personnel available that the inspectors need to meet with to conduct the 

inspection. Moreover, according to Interior officials, the resources 

necessary to conduct annual announced inspections required under the 

OCS Lands Act does not allow Interior inspectors much time to conduct 

unannounced inspections. Interior officials stated that as more inspection 

staff are hired and trained, they expect to conduct greater numbers of 

unannounced inspections. Recently, Interior issued guidance to each of 

its district offices informing them of the number of unannounced 

inspections—including inspections of drilling rigs—required to be 

conducted in fiscal year 2012.70 Specifically, each of the five district 

offices in the Gulf of Mexico is required to conduct unannounced 

inspections of 15 percent of all manned platforms or drilling rigs within 

their district. 

Violation correction dates. We also found that Interior did not record in 

its TIMS IT system whether about half of the violations issued from 

January 1, 2000, through September 30, 2011, were ever corrected, 

raising questions about the safety of offshore oil and gas operations. 

According to Interior’s policy, operators generally have 14 days to 

respond to an issued violation. The operator is required to mail Interior a 

copy of the violation along with steps taken by the operator to correct the 

violation or request an extension for correcting the violation. According to 

Interior officials, paper copies of this information should be retained in 

Interior’s files and subsequently keyed into Interior’s electronic database. 

However, when examining Interior’s data, we found that from January 1, 

2000, through September 30, 2011, violation correction dates were 

missing from Interior’s TIMS IT system for a significant number of 

violations of varying levels of enforcement action. For example, for the 

period examined, approximately 58 percent of warning violations were 

missing a correction date, as were 42 percent of component shutdown 

 

70According to Interior’s policy, the definition of an unannounced inspection is one that is 

performed without prior notification; that is, the operator shall be notified only 20 minutes 

before landing on the facility.
 

Page 63 GAO-12-423 Oil and Gas Management 

violations and 44 percent of drilling rig or production platform shutdown 

violations. According to the standards for internal control in the federal 

government, agencies are to promptly record transactions and events to 

maintain their relevance to management in controlling operations and 

making decisions.71 Interior officials stated that they were uncertain why 

violation correction data was not consistently being entered into the TIMS 

IT system. Moreover, one official told us that, in some cases, violation 

data is entered into the TIMS IT system only after the violation is 

corrected. Because Interior is not recording data in an accurate and 

consistent manner, Interior management does not know on a real-time 

basis whether or when violations were identified or corrected, potentially 

allowing unsafe activities to continue (see fig. 13). 

Figure 13: Missing Violation Correction Data by Severity of Violation, January 1, 2000, through September 30, 2011 

 

71GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999). 
 

Page 64 GAO-12-423 Oil and Gas Management 

Interior officials stated that numerous efforts and policy changes are 

under way to improve Interior’s inspection program in the aftermath of the 

Deepwater Horizon incident, including (1) hiring additional inspectors, (2) 

considering specialization of inspection staff, (3) shifting from one-person 

to two-person inspection teams, (4) requiring additional documentation of 

inspections, and (5) requiring that inspectors witness blowout preventer 

tests. Interior has not, however, expanded a 2009 voluntary pilot program 

whereby inspection staff could electronically access and review operators’ 

records while onshore, allowing additional time to physically inspect 

operations when offshore on a production platform or drilling rig. 

Hiring inspectors. Interior determined that its inspection staff was too 

small and not sufficient to carry out its new oversight responsibilities. 

Since the Deepwater Horizon incident, Interior officials told us that, as of 

March 2012, they hired 43 new Gulf of Mexico region inspectors while 

losing 24, resulting in a net increase of 19 inspectors. Additionally, in April 

2011, Interior reported it was creating a new training program for its 

inspection staff. According to the new national training director, it may be 

up to 2 years before new inspection staff are fully trained under the new 

training program, meaning that while the number of inspectors has 

increased, Interior’s inspection capacity has not necessarily increased 

commensurately. However, Interior has not assessed how the numbers of 

inspectors hired would affect its ability to conduct monthly drilling rig 

inspections. 

Specialization of inspectors. As of December 2011, Interior’s inspection 

staff did not specialize in specific offshore activities, such as oil and gas 

measurement, drilling, or well abandonment. However, Interior officials 

reported that, given the complexity of the operations occurring, they are 

initiating an inspection program whereby inspection staff specialize in 

technical aspects of offshore oil and gas activities, such as drilling, with 

the goal of conducting more effective and robust oversight. According to 

several Interior officials, a more specialized inspection workforce would 

result in more effective oversight. However, this effort is closely linked 

with its newly established formal training program and the ability to hire 

additional inspectors. 

Inspection teams. In June 2011, Interior announced that it planned to 

begin using multiple person teams to conduct inspections. Several Interior 

officials stated that this approach should result in better oversight, but in 

the short term, overall inspection numbers may temporarily decline 

because moving from a one-person inspection team to two-person 

Policy Changes Intended 

to Improve Inspection 

Program Are Under Way 
 

Page 65 GAO-12-423 Oil and Gas Management 

inspection teams will decrease the number of inspections in which each 

inspector can participate in. 

Documentation of inspections. Prior to the Deepwater Horizon incident, 

Interior inspection staff did not always document what they examined 

during inspections. According to several Interior officials, Interior 

historically required inspectors to use a checklist to document their 

inspections, but as inspection staff became more experienced over the 

past 10 years, Interior stopped requiring such documentation. Since the 

Deepwater Horizon incident, Interior officials told us that Interior has 

again begun to require that inspectors document that all aspects of an 

inspection were completed. Additionally, beginning in July 2011, Interior 

began training inspectors for a pilot program using laptops, as opposed to 

paper records, to document drilling inspections while offshore on a drilling 

rig. According to an Interior official, the pilot program is an electronicbased documentation system that provides inspectors with all of the data 

they need to perform an inspection, including the inspection form in 

electronic format. 

Witnessing blowout preventer tests. As a result of the new safety 

requirements, inspection staff are to witness blowout preventer tests to 

better ensure that blowout preventers will work when needed. According 

to Interior officials, these new inspections can take a long time because of 

the difficulty coordinating the timing of a blowout preventer test with an 

operator. As a result, inspectors may remain on a drilling rig for several 

days waiting for the operator to complete the test, which prevents the 

inspector from completing inspections on other drilling rigs or production 

platforms. 

Pilot program for electronic inspections of records. In 2008, Interior 

implemented a pilot program called eInspection––a program that allows 

operators to upload certain records related to oil and gas measurement to 

an electronic database and enable inspectors to review the records 

electronically from onshore, for example, on days when weather prevents 

them from flying to drilling rigs or production platforms offshore. According 

to an Interior official, while this program is still ongoing, it has not had 

much participation from industry. To date, Interior has not implemented 

similar programs for other types of inspections, such as drilling. Gulf of 

Mexico region officials stated that improvements to eInspection could 

significantly improve the use of agency and operator resources and 

reduce costs. Specifically, they cited benefits such as (1) maintaining 

productivity during bad weather; (2) limiting the number of expensive 

helicopter flights; (3) improving inspection efficiencies through the division 
 

Page 66 GAO-12-423 Oil and Gas Management 

of inspection duties; and (4) allowing Interior to retain experienced staff 

that can no longer meet the physical requirements for conducting offshore 

inspections, such as periodic helicopter crash simulation training. Some 

Interior officials cautioned that, despite the potential benefits of this 

program, its expansion to other types of inspections would likely require 

new regulations and could pose challenges for smaller operators that 

might not currently store their records electronically. 

Our analysis of Interior data showed that from January 1, 2000, through 

September 30, 2011, Interior issued approximately $18 million in civil 

penalty assessments for violations associated with drilling rigs and 

production platforms.72 During this period, inspectors referred violations 

for consideration to formally open a civil penalty case, and Interior district 

managers agreed with over 50 percent of inspectors’ referrals. Once a 

civil penalty case was officially opened, most led to an assessment, which 

took an average of 213 days to bring the case to resolution. 

Violations associated with civil penalty assessments. We reviewed 

Interior’s data on civil penalty assessments for violations associated with 

drilling rigs and production platforms from January 1, 2000, through 

September 30, 2011, and found that Interior issued about $18 million in 

civil penalty assessments for such violations. Of this $18 million, about $2 

million was assessed for drilling rig violations and $16 million for 

production platform violations. Tables 5 and 6 show the number of total 

violations, those violations that were assessed with civil penalties, and the 

dollar amounts of those assessments for drilling rigs and production 

platforms, respectively. 

 

72All civil penalty assessments are presented in nominal dollars. 

Violations Resulted in 

$18 Million in Civil Penalty 

Assessments 
 

Page 67 GAO-12-423 Oil and Gas Management 

Table 5: Civil Penalties Associated with All Drilling Rig Violations, January 1, 2000, through September 30, 2011 

Year Drilling rig violations 

Drilling rig violation not 

associated with 

civil penalty

Drilling rig violation 

associated with 

civil penalty 

Total amount of civil 

penalties assessed

2000 259 251 8 (3 %) $116,000

2001 305 301 4 (1 %) $102,000

2002 134 127 7 (5 %) $190,000

2003 166 165 1 (1 %) $25,000

2004 119 114 5 (4 %) $60,000

2005 153 148 5 (3 %) $268,000

2006 244 203 41 (17 %) $673,500

2007 154 148 6 (4 %) $242,000

2008 72 68 4 (6 %) $40,000

2009 114 105 9 (8 %) $210,000

2010 113 109 4 (4 %) $115,000

2011a 211 206 5 (2 %) 

Total 2,044 1,945 99 (5 %) $2,041,500

Source: GAO analysis of Interior data. 

a

Data for 2011 are through September 30, 2011. 

Table 6: Civil Penalties Associated with Production Platform Violations, January 1, 2000, through September 30, 2011 

Year 

Production platform 

violations 

Production platform 

violation not associated 

with civil penalty

Production platform 

violation associated 

with civil penalty 

Total amount of civil 

penalties assessed

2000 3,988 3,863 125 (3 %) $2,569,000

2001 3,864 3,700 164 (4 %) $1,520,450

2002 3,423 3,349 74 (2 %) $1,612,450

2003 2,997 2,975 22 (1 %) $707,250

2004 3,093 3,036 57 (2 %) $802,500

2005 2,389 2,339 50 (2 %) $961,500

2006 2,392 2,293 99 (4 %) $2,154,500

2007 2,291 2,247 44 (2 %) $2,167,750

2008 1,597 1,561 36 (2 %) $529,000

2009 2,130 2,096 34 (2 %) $1,963,000

2010 2,821 2,776 45 (2 %) $1,346,250

2011a 1,689 1,646 43 (3 %) $95,000

Total 32,674 31,881 793 (2 %) $16,428,650

Source: GAO analysis of Interior data. 

a

Data for 2011 are through September 30, 2011. 
 

Page 68 GAO-12-423 Oil and Gas Management 

Interior may assess civil penalties at a daily rate, and such penalties can 

accrue over time. For example, Interior may impose a single $40,000 civil 

penalty assessment for a serious violation or a $5,000 per-day civil 

penalty assessment for a less serious violation, resulting in a $40,000 fine 

if the operator took 8 days to correct the violation. According to Interior 

officials, data on civil penalty assessments—by day and by violation—

would be useful in examining civil penalty trends over time. However, 

Interior’s TIMS IT system does not contain the data in a way that would 

allow program managers to identify trends in the civil penalty program. 

Because Interior management cannot readily distinguish whether civil 

penalties were more frequently associated with significant violations that 

were immediately corrected, as opposed to less serious violations that 

were not immediately corrected, its ability to examine civil penalty trends 

over time is limited. 

Violation referrals for civil penalty case consideration. In examining 

Interior’s civil penalty data from January 1, 2000, through September 30, 

2011, we found that Interior’s district managers agreed with inspection 

staffs’ recommendations to develop a violation for civil penalty review 

about 56 percent of the time. According to Interior officials, when 

inspection staff refer a violation for consideration for civil penalties, both 

the district supervisory inspector and district manager review the violation 

to verify that it meets the specified criteria for officially opening a civil 

penalty case. Ultimately, the district manager determines whether to 

officially develop a civil penalty case and forward the information to the 

civil penalty case reviewing officer. Our analysis of Interior’s civil penalty 

data found that inspection staff referred 1,439 violations for consideration 

for civil penalties and that district managers agreed with inspectors for 

802 of these violations, or about 56 percent of the violations (see fig. 14). 
 

Page 69 GAO-12-423 Oil and Gas Management 

Figure 14: Violations Flagged for Civil Penalty Consideration and District Manager Review, January 1, 2000, through 

September 30, 2011 

Violations leading to civil penalty assessments. Our analysis found 

that once a district manager determined that a violation warranted 

consideration for a civil penalty assessment, Interior assessed a civil 

penalty in approximately 89 percent of these violations from January 1, 

2000, through September 30, 2011. Specifically, we found that of the 

1,232 violations considered for a civil penalty assessment, Interior 

assessed a civil penalty for 1,099 violations, or about 89 percent of the 

time (see fig. 15). Interior officials reported that during the time when a 

civil penalty reviewing officer develops the case, the reviewing officer may 

decide not to assess a civil penalty based on the available evidence. 
 

Page 70 GAO-12-423 Oil and Gas Management 

Figure 15: Violations Considered for a Civil Penalty Assessment and Whether a Civil Penalty Was Assessed, January 1, 2000, 

through September 30, 2011 

Duration of civil penalty cases. For the period reviewed, once a civil 

penalty case was officially opened, Interior spent an average of 213 days 

to bring the case to resolution. The days to complete a civil penalty review 

varied from a high of 323 days in 2003 to a low of 119 days in 2011, with 

a slight overall decline over time. Interior officials told us that the length of 

time to complete a review is a concern for them, and that they are 

planning to examine how to shorten the duration of civil penalty cases 

going forward (see fig. 16). 
 

Page 71 GAO-12-423 Oil and Gas Management 

Figure 16: Duration of Civil Penalty Cases, January 1, 2000, through September 30, 2011 

Interior’s civil penalty program manager told us that Interior has initiated 

several efforts to reform the civil penalty program since the Deepwater 

Horizon incident, including addressing human capital issues and 

responding to recommendations from the September 2010 report of 

Interior’s Outer Continental Shelf Safety Oversight Board.73

Human capital. Interior officials reported that, in July 2011, the entire 

Gulf of Mexico civil penalty program comprised three staff: (1) an 

experienced civil penalty program manager who has since left the 

agency; (2) a full-time reviewing officer; and (3) a former Interior official 

 

73Interior, Outer Continental Shelf Safety Oversight Board Report to Secretary of the 

Interior Ken Salazar (Sept. 1, 2010). 

Policy Changes Intended 

to Improve Civil Penalty 

Program Are Under Way 
 

Page 72 GAO-12-423 Oil and Gas Management 

who retired but was rehired on a temporary basis. More recently, in March 

2012, Interior hired a new civil penalty program manager and one 

additional full-time reviewing officer. As Interior increases the number of 

inspection staff, Interior officials said they anticipate that the number of 

violations referred for civil penalty review will also increase. According to 

Interior officials, Interior is attempting to hire additional civil penalty 

reviewing officers to help manage the workload. 

Responding to recommendations. Interior is working to address four 

recommendations from the Safety Oversight Board report according to 

Interior officials. First, Interior is reevaluating the full range of its 

enforcement actions, including fines, violations, and its ability to suspend 

an operator’s lease. Second, Interior is considering whether certain 

violations should be automatically associated with a fine, rather than 

relying upon the civil penalty process to determine whether to fine an 

operator. Third, Interior is working to reduce the time frames for the entire 

civil penalty process, from referral to collection of a fine, and is developing 

a civil penalty tracking database, so that management can provide more 

effective oversight of the process. Fourth, Interior is examining its civil 

penalty rate structure to determine whether current fine amounts should 

be adjusted; however, Interior officials stated that any changes to the 

current civil penalty rate structure would require new legislation or a 

rulemaking. 

Stakeholders typically provided their most substantive input on Interior’s 

proposed Gulf of Mexico oil and gas activities early in the lease sale 

planning process and varied in the extent to which they believed Interior 

considered their concerns. Federal stakeholders said they provided most 

input while Interior was developing its Gulf of Mexico multilease sale EIS 

and that Interior was generally responsive to their concerns. State 

stakeholders indicated that their level of input varied and also said that 

Interior was generally responsive to their concerns. Nongovernmental 

industry stakeholder groups stated that Interior has not always been 

responsive to their concerns and that seemingly inconsistent plan and 

permit review time frames have made it difficult for companies to plan 

operations, among other concerns. Nongovernmental conservation 

stakeholders said that Interior was not always responsive to their 

concerns. (See app. III for more information on federal and state 

governmental stakeholders.) Some federal and state stakeholders also 

told us that opportunities to provide input have recently become more 

limited because, in 2010, Interior did not renew the charter for a longstanding stakeholder advisory committee. 

Stakeholders 

Generally Provided 

Most Substantive 

Input on Oil and Gas 

Activities Early in 

Interior’s Lease Sale 

Planning Process and 

Reported That 

Interior’s Response 

Was Mixed 
 

Page 73 GAO-12-423 Oil and Gas Management 

The federal stakeholders we contacted—officials from NOAA and FWS––

said that they generally submitted their most substantive input early in the 

lease sale planning process when Interior was developing its Gulf of 

Mexico multilease sale EIS.74 NOAA and FWS officials told us that 

historically, they did not review or comment on postlease oil and gas 

activities, including reviewing exploration and development plans and 

drilling permits. Various officials at both agencies told us that Interior was 

generally responsive to their concerns (see app. III for detailed 

information on stakeholder input). 

According to NOAA officials, until the Deepwater Horizon incident, NOAA 

provided its most substantive input early in the lease sale planning 

process, when Interior was developing its Gulf of Mexico multilease sale 

EIS. Specifically, NEPA regulations direct federal agencies to prepare 

NEPA analyses, such as EIS documents, concurrently and integrated 

with other environmental impact analyses to the fullest extent practicable. 

As such, NOAA’s implementation of its responsibilities under the 

Endangered Species Act, Magnuson-Stevens Fishery Conservation and 

Management Act, and Marine Mammal Protection Act, generally 

overlapped with Interior’s Gulf of Mexico multilease sale EIS process. 

NOAA officials explained that, by informally providing input to Interior as it 

developed its Gulf of Mexico multilease sale EIS,75 NOAA could ensure 

that the information necessary to complete its consultations under the 

Endangered Species Act and the Magnuson-Stevens Fishery 

Conservation and Management Act were included, as well as any 

required mitigation measures. As long as these mitigation measures were 

enforced by Interior, and as long as no new information became available 

that would require Interior to update the Gulf of Mexico multilease sale 

EIS, NOAA officials stated that no additional consultations were 

necessary. As a result, NOAA generally did not request or receive 

exploration and development plans or drilling permits. (See app. III for 

more information on NOAA’s input into Interior’s proposed Gulf of Mexico 

oil and gas activities from 2002 through January, 2012.) 

 

74FWS is part of Interior. Therefore, for the purposes of this report, when we state that 

FWS provided input to Interior, we are stating that FWS provided input to the part of 

Interior responsible for overseeing offshore oil and gas activities. 

75In this context, informal means that NOAA did not provide its most substantive input 

through formally commenting on draft Gulf of Mexico lease sale EISs, rather NOAA staff 

communicated with Interior staff on an ongoing basis via telephone calls and e-mails to 

provide input into Interior’s Gulf of Mexico lease sale EISs. 

Federal Stakeholders 

Provided Input to Interior 

Early in the Lease Sale 

Planning Process and 

Believed Interior Was 

Generally Responsive to 

Their Concerns 

NOAA 
 

Page 74 GAO-12-423 Oil and Gas Management 

NOAA officials told us that Interior has generally been responsive to their 

input regarding oil and gas development in the Gulf of Mexico, although 

they have disagreed over how to assess the effects of seismic 

technologies––frequently used by operators to explore the Gulf of Mexico 

for oil and gas––on marine mammals. Overall, NOAA officials reported 

that their primary concerns about oil and gas development in the Gulf of 

Mexico are the potential effects on marine mammals and fish, including 

damage to coral reefs, marine debris, vessel strikes of marine life, the risk 

of an oil spill, and the effects of seismic activities on marine life. Of these 

issues, assessing the effects from seismic activities on marine mammals 

has been one of the more challenging issues. Typically, when operators 

explore for oil and gas in the Gulf of Mexico, they use various seismic 

technologies that emit powerful sound waves into the water and seafloor 

to facilitate identifying potential oil and gas resources. According to NOAA 

officials, the use of these technologies can negatively affect marine 

mammals, predominantly through behavioral disturbance, but also 

potentially through hearing impairment or physical injury. NOAA and 

Interior have been working toward addressing these issues and ensuring 

environmental compliance for about 10 years. 

Since the Deepwater Horizon incident, NOAA officials told us that they 

have reviewed oil spill analyses included in past Gulf of Mexico multilease 

sale EIS documents. NOAA officials stated that they believe that Interior 

made a good faith effort to provide accurate scientific data and risk 

analysis; however, in retrospect, NOAA officials also said that they 

believe Interior could improve these analyses. For example, NOAA 

officials told us that it would be difficult to determine the full effect of an oil 

spill, such as the direction of oil flow and how the oil would affect unique 

marine life, without better baseline research.76 At the same time, NOAA 

officials acknowledged Interior faces financial and technical challenges in 

obtaining higher quality data. 

In addition, on May 19, 2011, Interior and NOAA signed an MOU intended 

to ensure greater communication and collaboration on oil and gas 

 

76NOAA officials reported that baseline research, as well as short/long-term monitoring 

and ocean observing, are important to the oil and gas permitting process in the Gulf of 

Mexico. At the October 2011 Deepwater Horizon Oil Spill Principal Investigator 

Conference researchers emphasized that there is a lack of baseline information related to 

living marine resources in the Gulf of Mexico, and that the collection of information is very 

important to understanding ecosystem processes and oil spill response. 
 

Page 75 GAO-12-423 Oil and Gas Management 

development in the Gulf of Mexico. Specifically, the MOU established a 

formal agreement regarding the agencies’ coordination and collaboration 

to ensure that decision making related to the development of oil and gas 

on the OCS is based on relevant scientific information and both agencies’ 

expertise and respective responsibilities and authorities. The MOU 

specifies that NOAA and Interior will cooperate and coordinate by: (1) 

defining specific processes to ensure effective and timely communication 

of agency priorities and upcoming activities; (2) identifying and 

undertaking critical environmental studies and analyses; (3) collaborating 

on scientific, environmental, and technical issues related to offshore 

renewable energy technologies; and (4) increasing coordination and 

collaboration on public announcements related to OCS activities, 

including with respect to research and scientific priorities. For example, 

the MOU created more formal procedures for NOAA’s involvement with 

Interior’s OCS energy-related programs and environmental analyses and 

established quarterly meetings for Interior and NOAA senior leadership to 

discuss topics relevant to OCS resource development. Under the MOU, 

NOAA will have a clear role in commenting on both management and 

science issues and ensuring that both areas receive appropriate 

attention. When we spoke with a NOAA official about this MOU in July 

2011, the official reported that meeting the requirements of the MOU 

would require additional resources and that NOAA had not yet 

determined how the specific details of the MOU would be implemented. 

According to FWS officials, FWS also provided its most substantive input 

early in the lease sale planning process, when Interior was developing its 

Gulf of Mexico multilease sale EIS. Similar to NOAA, FWS did not 

typically receive or comment on postlease activities, such as individual 

exploration and development plans and drilling permits.77 Again, because 

NEPA regulations direct federal agencies to prepare EIS documents 

concurrently and integrated with other environmental impact analyses to 

the fullest extent practicable, FWS’s implementation of its Endangered 

Species Act responsibilities generally overlap with Interior’s Gulf of 

Mexico multilease sale EIS process. FWS officials explained that by 

informally providing input to Interior as it develops its Gulf of Mexico 

multilease sale EIS documents, FWS can ensure that the information 

 

77According to FWS officials, Interior does request that FWS review each individual lease 

sale EA covered by the 5-year consultation as they are prepared. The purpose of this 

review is for Interior to verify that the proposed action has not changed and to ensure that 

there is no new endangered species information that would need to be addressed. 

FWS 
 

Page 76 GAO-12-423 Oil and Gas Management 

necessary to complete its consultations under the Endangered Species 

Act are included, as well as any measures Interior has included to 

minimize the potential for adverse effects. As long as these measures are 

enforced by Interior, and no new information becomes available that 

would require Interior to update the EIS, FWS officials stated that no 

additional consultations are necessary. As a result, FWS generally did not 

request or receive exploration and development plans or drilling permits. 

(See app. III for more information on FWS’s input into Interior’s proposed 

Gulf of Mexico oil and gas activities for 2002 through 2012.)78

FWS officials reported that Interior has generally been responsive to their 

concerns regarding proposed oil and gas activities in the Gulf of Mexico 

since 2002 relating to (1) emergency contingency plans, (2) oil spill risk 

analyses, and (3) the effects of oil spills on coastal areas. 

 Emergency contingency plans. FWS officials reported that, during a 

2001 consultation related to proposed oil and gas activities from 2003 

through 2007, it recommended that Interior continues to require 

operators to prepare adequate hazardous spill contingency plans for 

all activities. Further, FWS recommended that such plans include 

strategic placement of appropriate spill cleanup equipment, personnel 

training in nonintrusive cleanup technique, and demonstration of 

response commitment, capabilities, and implementation. Interior, 

according to FWS officials, has since required all operators to have 

such a plan. 

 Oil spill risk analyses. FWS officials told us that they asked to be 

involved early in the process to model oil spill risk in support of the 

Gulf of Mexico multilease sale EIS documents. FWS officials stated 

that, in their 2001 review of the oil spill models that Interior used in its 

final Gulf of Mexico 2003 to 2007 multilease sale EIS, they raised 

concerns about assumptions and methodologies that Interior used in 

preparing the models. FWS requested additional information, which 

Interior provided, ultimately alleviating many of FWS’s concerns. 

 

78FWS’s responsibilities in the OCS under the Endangered Species Act consist primarily 

of cooperating and assisting other Federal agencies (in this case Interior) to meet their 

requirements under the act. This is accomplished when another agency presents an 

action for FWS’s review and comment. Depending on the effects to listed species, the end 

result would be a concurrence letter or biological opinion written by FWS to Interior. 
 

Page 77 GAO-12-423 Oil and Gas Management 

 Effects of coastal spills. FWS officials said that they raised concerns 

about the effect of coastal spills from pipelines and near shore activity 

associated with the OCS leasing program. According to FWS officials, 

oil spills can occur along the coastline when pipelines are ruptured, 

such as in the event a shrimp trawler punctures a pipeline on the 

seafloor. To respond to this concern, FWS officials told us that Interior 

must now address the potential effects on the coastal habitats of 

endangered species from pipelines and other near shore activities 

associated with the Gulf of Mexico leasing program 

Since the Deepwater Horizon incident, FWS officials told us that their 

concerns about oil and gas development in the Gulf of Mexico have 

evolved. For example, FWS officials said that they believed that 

deepwater drilling was much more likely to adversely affect species that 

fall under NOAA’s jurisdiction, such as fish and marine mammals. 

However, the presence of tar balls on beaches along the Gulf Coast after 

the Deepwater Horizon incident, which could negatively affect resources 

under FWS’s jurisdiction, has led FWS to consider taking more 

precautions when reviewing Interior’s Gulf of Mexico multilease sale EIS 

documents that include proposed deepwater oil and gas development. 

FWS officials reported telling Interior that they would like more detailed 

information and validated scientific modeling in Interior’s NEPA 

documents, particularly concerning oil spill risk analysis and cumulative 

effects of oil and gas activities. Despite the shifts in concerns, FWS told 

us that they planned no major policy or programmatic changes. 

Stakeholders from the five Gulf of Mexico coastal states—Alabama, 

Florida, Louisiana, Mississippi, and Texas—varied in how they provided 

input to Interior.79 Of the five states, two provided comments on Interior’s 

Gulf of Mexico multilease sale EIS documents, according to state officials, 

and several of the states commented on specific lease sale EIS 

documents. Officials from all five states reported conducting consistency 

reviews in accordance with the Coastal Zone Management Act, and one 

state—twice in the 1990s—found that a proposed oil and gas project in 

the Gulf of Mexico was inconsistent with its Coastal Zone Management 

 

79The stakeholders who provided this input were state officials who participated in 

conducting consistency reviews under the Coastal Zone Management Act, and therefore 

do not represent the full scope of interaction between Interior and state government 

officials. 

States’ Input to Interior 

Varied, and State Officials 

Indicated That Interior 

Was Generally Responsive 

to Their Concerns 
 

Page 78 GAO-12-423 Oil and Gas Management 

Plan. Officials from all five Gulf of Mexico coastal states told us that 

Interior has generally been responsive to input they provided about its 

proposed oil and gas development activities in the Gulf of Mexico, but this 

responsiveness has varied over time; officials from several states said 

that they still have concerns associated with oil and gas development in 

the Gulf of Mexico, including wetland loss, oil spills, and potential effects 

on both state coastal tourism and deep-sea species and habitats. (See 

app. III for more information on states’ input into Interior’s proposed Gulf 

of Mexico oil and gas activities for 2002 through 2012.) 

 Alabama. Officials from the Alabama Department of Environmental 

Management stated they were satisfied with Interior’s ability to 

address their comments even in instances in which they disagreed. 

Officials explained that both the tourism and fisheries industries are 

present along the Alabama coast and that they take into consideration 

any potential effects that oil and gas drilling activities might have on 

these industries when reviewing Interior’s oil and gas NEPA 

documents. For example, a primary concern to these officials, which 

was communicated to Interior in 2007, was that they did not want 

visible structures—such as drilling rigs or production platforms—along 

the state’s coastline. 

 Florida. Officials from the Florida Department of Environmental 

Protection characterized Interior as being responsive to their input. 

Officials explained that their primary concern with oil and gas activities 

in the Gulf of Mexico was the possibility that an oil spill—whether from 

a pipeline rupture or well blowout similar to the Deepwater Horizon

incident—could affect the state’s coastal tourism industry. Of the 

coastal states we reviewed, Florida is unique in that its coastal waters 

are in Interior’s Eastern Planning Area of the Gulf of Mexico, which 

has had a moratorium on new oil and gas leasing since 1988. 

However, in 2000, Interior proposed a lease sale that could include 

areas in the Eastern Planning Area of the Gulf of Mexico. Florida 

officials, including the Governor, requested that the lease sale be 

canceled due to long-standing concerns about possible effects on 

tourism. According to Florida officials, Interior ultimately reduced the 

size of the area being leased by eliminating areas closest to Florida’s 

coastline. 

 Louisiana. Officials from Louisiana’s Department of Natural 

Resources’ Office of Coastal Management stated that, while 

historically, they did not find Interior to be responsive to their input, 

Interior has been more responsive over the past 2 years. 

Furthermore, these officials stated that relationships with Interior staff, 
 

Page 79 GAO-12-423 Oil and Gas Management 

as well as the NEPA and other related documents that they produced, 

have greatly improved since the Deepwater Horizon incident. Officials 

explained that they are very supportive of OCS leasing and offshore 

oil and gas development in the Gulf of Mexico but that they still have 

specific concerns. Officials explained that Louisiana supports the 

expansion of exploration and development of Gulf energy resources, 

and all of the nation’s natural resources, and believes this is critical to 

the nation’s economic and energy security. However, concerns about 

how some aspects of OCS leasing are conducted and royalties 

distributed led Louisiana’s Department of Natural Resources to file 

two lawsuits against Interior in 1991 and again in 2006. The 2006 

lawsuit—settled in Louisiana’s favor—was filed as a result of 

Louisiana’s long-standing concerns about the techniques used by 

Interior in its NEPA analyses. State officials told us that Interior had 

improved, but a report issued by the state in September 2009 

identified eight remaining concerns. Specifically, the state was 

concerned about the adequacy of Interior’s analysis of the indirect, 

secondary, or cumulative effects of lease sales, and that Interior has 

not verified its predictions of potential environmental and 

socioeconomic analyses included in its NEPA documents. Louisiana 

state officials contend that these secondary and cumulative effects 

cannot be directly attributed to one specific act or event, yet clearly 

there are secondary and cumulative effects of the development that 

result from federal lease sales. Louisiana state officials told us that the 

lease sale stage is the point at which all such potential effects should 

be addressed because the lease sale is the gateway to any 

subsequent exploration and development activity within the affected 

area. 

 Mississippi. Officials from the Mississippi Department of Marine 

Resources stated that they were satisfied with Interior’s response to 

their concerns and that they have not had problems cooperating with 

Interior. Similar to Alabama, officials told us the state’s primary 

concern prior to Hurricane Katrina in 2005 was the drilling of oil and 

gas wells within 15 miles of the Gulf Island National Seashore’s 

shoreline. 

 Texas. Officials from the Texas General Land Office stated that, 

overall, they have had a good working relationship with Interior and 

that collaboration has been effective. Officials stated that they are 

primarily concerned about protecting Texas’s coastal areas and, in 

particular, its wetlands, beaches, and oyster reefs. Officials stated that 

Interior’s plans for oil and gas activities have seldom caused concern 

about possible effects to these areas. 
 

Page 80 GAO-12-423 Oil and Gas Management 

Since the Deepwater Horizon incident, officials from all five states told us 

that no major changes in policies for reviewing Interior’s Gulf of Mexico 

multilease sale EIS and other lease sale EIS documents or conducting 

consistency reviews have occurred. 

The nongovernment stakeholders we contacted—representatives from oil 

and gas industry associations and conservation groups—expressed 

frustration with the level of input they can provide to Interior and told us 

that Interior has not always been responsive to their concerns. 

Representatives from oil and gas industry associations told us that they 

were satisfied with the process for providing comments on Interior’s Gulf 

of Mexico lease sales, but that since the Deepwater Horizon incident, 

there has been much uncertainty regarding Interior’s review and 

approvals of plans and permits. One representative from an oil and gas 

association stated that member companies had specified four key issues 

of concern. First, companies reported inconsistent time frames for 

reviews of plans and permits, making it difficult for companies to plan 

operations. Second, companies raised concerns that Interior’s staffing 

was insufficient to review the plans and permits in a timely manner and 

that Interior staff were uncertain how to comply with new requirements for 

plans and permits. Third, companies stated that recently issued guidance 

on new requirements were sometimes contradictory, complicating an 

operator’s efforts to comply with Interior’s new policies. Fourth, 

companies raised concerns that Interior’s reliance on notices to lessees 

and operators amounted to de facto rulemaking outside of the standard 

regulatory process, which generally results in less opportunity for public 

comment. Another oil and gas association representative told us that 

Interior’s new policies have been difficult to interpret and that Interior has 

had to return both exploration and development plans and drilling permit 

applications to operators for corrections, increasing Interior’s review times 

and delaying approvals. Interior has taken several steps to address this 

uncertainty, including holding workshops on new policies and making 

checklists available to provide greater assurance that all required 

information is submitted with the drilling permit. 

Nongovernment 

Stakeholders Said They 

Had Few Opportunities to 

Provide Input and That 

Interior Was Not Always 

Responsive to Their 

Concerns 

Oil and Gas Industry
 

Page 81 GAO-12-423 Oil and Gas Management 

Representatives of conservation groups we contacted expressed 

frustration with identifying and accessing operators’ exploration and 

development plans and drilling permits in advance of Interior approvals. 

Specifically, a conservation group representative told us that the group 

believed Interior did not routinely make exploration or development plans 

or drilling permits available to the public for comment prior to approval, 

and only placed them on its website after being approved. Another 

representative stated that her conservation group had difficulty locating 

and commenting on drilling permits and believed that drilling permit 

information is made available on Interior’s website only after drilling 

approval. Additionally, representatives from conservation groups told us 

that Interior’s website—the principal mechanism to obtain information on 

proposed oil and gas activities—was difficult to navigate. For example, 

one representative told us that the website lacked a user friendly 

mechanism to identify and locate exploration and development plans, 

stating that it was necessary to know the plan number in order to search 

for the plan. As a result, conservation group representatives generally 

expressed dissatisfaction with the amount of information—including 

exploration and development plans and drilling permits—Interior makes 

available to the public for oil and gas activities in the Gulf of Mexico. 

Representatives from several conservation groups reported that Interior 

was generally not responsive to concerns they raised about oil and gas 

activities in the Gulf of Mexico. These representatives reported a range of 

ongoing concerns, including their view that Interior’s management of the 

Gulf of Mexico has been biased toward development of oil and gas and 

that there has been a lack of thorough scientific analyses in leasing 

decisions. Specifically, conservation group representatives said they 

believed that Interior had relied too heavily on the use of categorical 

exclusions in approving oil and gas activities as opposed to conducting 

more thorough, site-specific scientific analyses. A representative from one 

group stated that either NOAA or another independent scientific agency 

should have the authority to deny a project when it poses a significant 

threat to the Gulf of Mexico. 

Conservation group representatives also raised concerns that the 

technology for deepwater drilling may have outpaced oil spill containment 

and cleanup technologies and the government’s capacity to either prevent 

or address spills when they occur. Compounding that concern was a 

belief that Interior was too reliant on industries’ own assessment of the 

new containment technologies. Additional concerns these representatives 

raised included effects to marine mammals from seismic technologies, 

vessel collisions with marine mammals, and oil spills and other 

Conservation Groups 
 

Page 82 GAO-12-423 Oil and Gas Management 

discharges. Because Interior had not addressed their concerns 

sufficiently, a number of lawsuits have been filed against the Secretary of 

the Interior for reasons including Interior’s use of categorical exclusions 

for approving oil and gas activities and continued permitting of seismic 

activities. 

In 2010, opportunities for stakeholders to provide input to Interior about 

offshore leasing activities became more limited because Interior did not 

renew the charter for a key stakeholder advisory committee—the OCS 

Policy Committee—that had existed since 1975 and consisted of 

stakeholders representing federal and state agencies, conservation 

groups, and industry associations, among others. Under the implementing 

regulations for the OCS Lands Act, Interior is required to periodically 

consult with key stakeholders, including state and local governments, oil 

and gas lessees (operators), and other individuals engaged in OCS 

activities. Interior’s regulations have historically called for consultation 

between the Secretary of the Interior and OCS stakeholders to take 

place, in part, through the OCS Policy Committee.80 The committee’s 

charter called for the committee to review and comment on all aspects of 

leasing, exploration, development, and protection of OCS resources and 

states that the committee provides a forum to convey the views 

representative of coastal states, local governments, offshore industries, 

environmental communities, other offshore users, and the public. In 

addition, federal standards for internal control state that federal managers 

should ensure that there are adequate means of communicating with, and 

obtaining information that may significantly affect the ability of an agency 

to achieve its goals from external stakeholders.81

In 2010, however, Interior did not renew the committee’s charter. Several 

stakeholders who were former committee participants told us that the 

committee was an effective mechanism for providing input directly to the 

Secretary of the Interior and said that they would have liked to have been 

consulted about actions Interior took after the Deepwater Horizon

incident. A senior Interior official said that the committee’s charter was 

allowed to lapse because Interior was actively deciding how best to meet 

the committee’s goals, given the increasing complexity of the energy 

 

8030 C.F.R. §256.19. 

81GAO/AIMD-00-21.3.1. 

Interior Did Not Renew the 

Charter for a Key 

Stakeholder Advisory 

Committee in 2010
 

Page 83 GAO-12-423 Oil and Gas Management 

industry. The official further explained that the committee’s value to 

Interior has varied over time and that the committee was most successful 

when it was charged with a specific task, such as examining issues 

related to the leasing moratorium in the Eastern Planning Area of the Gulf 

of Mexico. The official stated that reestablishing the committee is an open 

item for Interior and may be discussed in the future following the 

reorganization. In the meantime, the official said that industry and 

environmental groups have other means of providing input to Interior such 

as meeting directly with Interior officials. Additionally, while Interior no 

longer has an advisory committee that provides input on leasing on the 

OCS, the Interior official stated that Interior established a new advisory 

committee—the Ocean Energy Safety Advisory Committee—to provide 

input on offshore energy safety. Specifically, this committee is a 

collaborative initiative among government, industry, academia, and 

nongovernmental organizations to advise on matters and actions relating 

to offshore energy safety, including, but not limited to, drilling and 

workplace safety, well intervention and containment, and oil spill 

response. Interior officials also stated that they have heard the concerns 

of stakeholders through frequent workshops, meetings, and public 

comment periods. They note that Interior’s leadership and staff have 

spent numerous hours devoted to outreach efforts. Interior officials also 

stated that a Federal Advisory Committee Act (FACA) committee may not 

always be the most effective manner to receive stakeholder input, and 

with other outreach measures in place, officials said they do not believe 

the absence of this committee reflects an internal control compliance 

issue. Interior has stated that it has an open door policy for all 

stakeholders, conducting numerous public outreach meetings; 

stakeholder meetings; public comment periods; meetings with industry, 

state and local officials, and nongovernment organizations; and 

workshops and conferences. 

Since its reorganization, Interior faces six key challenges in its oversight 

of offshore oil and gas activities in the Gulf of Mexico. These challenges 

include Interior’s ability to: (1) prospectively categorize drilling operations 

according to risk; (2) implement effective IT systems; (3) hire, retain, and 

train qualified staff; (4) respond to recommendations from external 

reviews; (5) develop and implement timely and effective regulations; and 

(6) adapt to constrained resources. 

Following Interior’s 

Reorganization, Key 

Challenges Remain 
 

Page 84 GAO-12-423 Oil and Gas Management 

Since the Deepwater Horizon incident, Interior has taken steps to identify 

and evaluate drilling risks, but its capacity to do so remains limited. 

Federal standards for internal control state that agency management 

should identify relevant risks from internal and external sources and 

analyze their potential effects.82 Such an analysis generally includes 

estimating the risk’s significance, assessing the likelihood of its 

occurrence, and deciding how to manage the risk and what actions 

should be taken. Interior officials stated that they have the technical 

capacity to prospectively categorize proposed drilling operations 

according to risk but they have not done so, though they acknowledged 

such an effort could improve Interior’s oversight of offshore oil and gas 

activities. Prospectively categorizing risk helps ensure that oversight 

resources are effectively allocated. 

Interior officials told us they can devote additional resources to certain 

drilling operations that they believe may be challenging. For example, 

Interior officials told us that district engineers are aware that drilling 

certain wells is likely to pose greater risks, such as drilling exploratory 

wells and wells at depths greater than 15,000 feet, and may require a 

more rigorous review. More recently, since the Deepwater Horizon

incident, Interior officials told us that Interior, in a joint effort with industry, 

developed a well containment screening tool to assess well design, the 

geology surrounding the well site, reservoir pressures, and wellbore fluid 

gradient requirements. According to these officials, the screening tool is 

primarily intended to assess whether a well may be contained following a 

subsea well blowout, but that they also use the screening tool to evaluate 

overall well design based on risk. 

Interior officials told us that once drilling is under way, district engineers 

receive from operators weekly well activity reports, which they review to 

ensure compliance with the specifications contained in the drilling permit. 

Each weekly well activity report also includes a checklist of 12 “significant 

events,” including such items as rig failure, well kick occurrence, and 

stuck drilling pipe.83 Interior officials told us that systematically analyzing 

 

82GAO/AIMD-00-21.3.1. 

83A well kick is an entry of water, gas, oil, or other formation fluid into the wellbore during 

drilling. It occurs when the pressure exerted by the column of drilling fluid is not great 

enough to overcome the pressure exerted by the fluids in the formation drilled. If prompt 

action is not taken to control the kick, or kill the well, a blowout may occur. A stuck pipe is 

when a drill pipe has inadvertently become immovable in the wellbore. 

Interior Has Taken Steps 

to Identify and Evaluate 

Drilling Risks, but Its 

Capacity to Do So Remains 

Limited 
 

Page 85 GAO-12-423 Oil and Gas Management 

these reports could provide information on drilling risk. For example, 

based on the information in these reports, Interior may be able to improve 

its data on what geographic areas, specific drilling rigs, or operators are 

associated with higher risks for drilling operations, which could allow them 

to better prospectively categorize drilling risks. However, Interior officials 

told us they have not had the resources to systematically analyze data 

reported in the weekly well activity reports. In addition, Interior has not 

specifically defined all “significant events.” As a result, even if Interior had 

the resources to analyze its weekly well activity reports, it may find that 

the information they contain on the 12 significant events is inconsistent 

because the agency does not have clear definitions for some of these 

significant events. 

Interior officials also told us that district engineers who have concerns 

about a particular well may request additional inspections of certain 

drilling operations, although when such requests are made, Interior does 

not track them in its TIMS IT system. Additionally, Interior has a 

documented policy to more frequently inspect operators that have poor 

performance records. Specifically, Interior generates a monthly operator 

compliance report that includes operators and specific facilities that 

require special on-site inspections or attention based on their compliance 

history. Interior’s district offices can include an operator on this report 

based on several criteria, including violations that resulted in a serious 

injury or fatality and violations forwarded for civil penalty reviews. Once 

an operator or facility is included in this report, Interior’s policy is to 

inspect its operations at least once every 4 months, using a combination 

of announced and unannounced inspections, among other actions. 

Interior removes the operator or facility from the report when it determines 

that the operator’s performance and compliance history improves. 

However, an Interior official told us that Interior did not begin to 

systematically track which operators were included on the compliance 

report and their associated inspection in its TIMS IT system until 2011. 

Accordingly, we were unable to verify the extent to which operators were 

included on the monthly operator compliance report and whether those 

operators were inspected according to Interior’s policy. Overall, Interior 

remains unable to demonstrate how it deploys its inspection resources in 

such a manner that takes into account a prospective categorization of 

drilling according to risk, whether the risk is technical—such as drilling 

into high pressure, high temperature reservoirs—or associated with 

operators or facilities with a history of poor compliance. 

Some entities have expressed concern that Interior does not have a 

policy to categorize proposed drilling operations based on risk. In January 
 

Page 86 GAO-12-423 Oil and Gas Management 

2011, the report of the National Commission on the BP Deepwater 

Horizon Oil Spill and Offshore Drilling recommended that Interior, with the 

help of the National Academy of Engineering, cultivate and maintain 

expertise on offshore drilling safety by identifying criteria and establishing 

a methodology for assessing high-risk wells in collaboration with the U.S. 

Geological Survey, the Department of Energy, NOAA, and academia, and 

developing the capability to perform sophisticated risk assessments.

84

Interior officials told us that, while they have taken some actions related to 

the recommendation, they have not specifically followed through with the 

recommendation, and an official from the National Academy of 

Engineering told us that it was unaware of any ongoing discussions 

between Interior and the National Academy of Engineering on this issue. 

Interior officials stated that a potential project that industry may sponsor 

would, among other things, quantitatively assign a risk score to proposed 

wells based on factors such as well location, well design, and other 

technical considerations. Interior officials stated that they would like to 

participate in this project, although they recognize Interior would have to 

contribute to the project financially. If successful, the project could result 

in a tool that Interior could require operators to use as part of its permit 

review process. Interior officials explained that there is a precedent for 

this type of collaboration; after Hurricanes Katrina and Rita, they worked 

with industry to develop an analytical tool to identify the risk of structures 

breaking free from their mooring. Operators may now include the results 

of this tool with their drilling permit applications. However, without a more 

systematic and prospective approach to identifying and categorizing 

drilling risk, Interior may not effectively devote its limited oversight 

resources—including engineering reviews of drilling permits, monitoring 

weekly well activity reports, and inspecting drilling operations—in a 

manner that most effectively mitigates risk. 

 

84National Commission, Deep Water: The Gulf Oil Disaster and the Future of Offshore 

Drilling, Report to the President (January 2011). 
 

Page 87 GAO-12-423 Oil and Gas Management 

As we reported in September 2007,85 Interior has faced challenges 

implementing effective IT systems, which has affected its ability to meet 

program and mission goals in overseeing oil and gas development in the 

OCS. We found that these challenges persist. In particular, we found two 

challenges with Interior’s current IT systems. 

First, Interior initiated a major IT project in 2003 called OCS Connect that 

did not meet user needs or planned delivery dates. At that time, Interior 

reported that its offshore leasing program relied heavily on paper-based 

processes and that technology improvements would allow it to streamline 

its business processes.86 OCS Connect was designed to replace some of 

Interior’s existing IT systems—including its TIMS IT system––and 

improve and expand stakeholders’ access to information, decrease 

Interior’s processing time for reviews of plans and drilling permits, and 

increase the quality and quantity of the analyses of offshore resources, 

among other things. Additionally, a key goal of OCS Connect was that it 

would allow Interior to track the life cycle of a specific oil and gas 

development from initial leasing, through planning, permitting, and 

compliance. OCS Connect was initially designed to include 14 

processes––called business process clusters––that Interior had identified 

as potential candidates for reengineering, such as managing drilling plan 

submittals and permit requests. A senior Interior official said that Interior 

hired a contractor to gather system requirements from agency staff and 

develop OCS Connect. The contractor developed the first of the 14 

clusters, but it was poorly received by Interior staff and did not meet their 

needs. Subsequent problems, including Hurricane Katrina in 2005, led to 

delays in developing the remaining clusters. In July 2008, we reported 

that the Office of Management and Budget identified OCS Connect as a 

high-risk project that was poorly planned.87 On December 31, 2010, after 

obligating approximately $67 million toward the development of OCS 

Connect, according to an Interior official estimate, and following several 

 

85GAO, Information Technology: Further Improvements Needed to Identify and Oversee 

Poorly Planned and Performing Projects, GAO-07-1211T (Washington, D.C.: Sept. 20, 

2007). 

86Outer Continental Shelf (OCS) Connect Initiative (Request for Comments concerning 

Offshore Minerals Management Program’s e-Government Initiative).” 68 Fed. Reg. 46656 

(2003). 

87GAO, Information Technology: OMB and Agencies Need to Improve Planning, 

Management, and Oversight of Projects Totaling Billions of Dollars, GAO-08-1051T 

(Washington, D.C.: July 31, 2008). 

Interior Continues to Face 

Challenges Implementing 

Effective IT Systems 
 

Page 88 GAO-12-423 Oil and Gas Management 

changes to its scope, Interior officially terminated the project, citing the 

ongoing reorganization of BOEM and BSEE. Interior officials and agency 

documentation reported that 1 of the 14 clusters was complete, 

development had begun on some others, and some software and 

hardware had been upgraded. A senior Interior official said that Interior 

learned a number of lessons from this experience, many of which were 

formally documented. One of the key lessons learned was that the 

contractor limited the amount of feedback end users could provide 

throughout the development process, which contributed to the problems 

with the project. As a result, Interior’s offshore leasing program continues 

without the technology improvements that would allow it to streamline its 

business processes. Because Interior has yet to fully replace or upgrade 

the IT systems used for overseeing offshore oil and gas developments, it 

continues to have problems with its GIS used to facilitate NEPA analyses 

and the TIMS IT system used to track operators’ exploration and 

development plans and records with more accurate and efficient systems. 

As noted previously, officials in the Gulf of Mexico regional office told us 

that GIS is hindered by the poor quality of data in the system. 

Furthermore, Interior’s TIMS IT system lacks edit checks to limit 

operators’ ability to submit incomplete or inaccurate plans, making 

Interior’s review of exploration and development plans challenging. In 

addition, the method by which amendments are currently tracked in the 

TIMS IT system can complicate and lengthen Interior’s review process. 

As of September 2011, Interior staff were working with the consultant that 

facilitated the reorganization to create a requirements document for 

ePlans, which is designed to address the shortcomings in the TIMS IT 

system. However, some Interior officials expressed concern that Interior’s 

experience going forward with ePlans could be similar to its experience 

with OCS Connect.88

Second, BOEM and BSEE do not have a current comprehensive IT 

strategic plan. Interior’s most recent IT strategic plan is dated 2005 to 

2007 and was developed for MMS. Senior Interior officials said that they 

have not updated the IT strategic plan because they were focused on the 

reorganization and were addressing only those IT issues related to the 

reorganization, such as the division of IT support resources. The officials 

said that they anticipated developing a plan within the next few months, 

 

88In addition, as previously discussed in this report, Interior also has not fully implemented 

a 2009 pilot program that would allow inspection staff to electronically access and review 

operators’ records while onshore. 
 

Page 89 GAO-12-423 Oil and Gas Management 

but were currently in the very early stages of the process. In January 

2004, we identified well-defined IT strategic planning as an important 

component of effective management because it helps ensure that an 

agency’s IT goals are aligned with its strategic goals and that IT is being 

used to maximize improvement in mission performance.89 Additionally, in 

2009, we reported that IT strategic plans should serve as the agency’s IT 

vision or road map and help align its information resources with its 

business strategies and investment decisions.90 Further, an IT strategic 

plan comprising results-orientated goals, strategies, milestones, and 

performance measures is important to enable an agency to consider the 

resources, including human capital, infrastructure, and funding, that are 

needed to implement, manage, support, and pay for IT projects. For 

example, a strategic plan that identifies what an agency intends to 

accomplish during a given period helps ensure that the necessary 

infrastructure is put in place for new or improved IT capabilities. In 

addition, a strategic plan that identifies interdependencies within and 

across individual IT systems modernization projects helps ensure that the 

interdependencies are understood and managed, so that projects—and 

thus system solutions—are effectively integrated. Without an effective IT 

strategic plan, Interior will find it more difficult to address the challenges it 

faces in implementing effective IT systems, potentially limiting its abilities 

to meet programmatic and system modernization goals. 

We have previously reported that Interior has faced persistent challenges 

in hiring and retaining qualified staff in key oil and gas engineering and 

inspection positions. In particular, in March 2010, we reported that Interior 

lacked staff with critical skills because of difficulties in hiring, training, and 

retaining staff.91 In February 2011, when we added Interior’s management 

of oil and gas resources to our list of areas at high risk for waste, fraud, 

abuse, and mismanagement or in need of broad reform,92 we cited human 

capital challenges as a key concern. We found during this review that 

 

89GAO, Information Technology Management: Governmentwide Strategic Planning, 

Performance Measurement, and Investment Management Can Be Further Improved, 

GAO-04-49 (Washington, D.C.: Jan. 12, 2004). 

90GAO, Information Technology: FDA Needs to Establish Key Plans and Processes for 

Guiding Systems Modernization Efforts, GAO-09-523 (Washington, D.C.: June 2, 2009).

91GAO-10-313. 

92GAO-11-278. 

Interior Continues to 

Report Challenges in 

Hiring, Retaining, and 

Training Staff as Well As 

Succession Planning 
 

Page 90 GAO-12-423 Oil and Gas Management 

human capital problems persist as Interior undergoes its reorganization, 

which increases the need for key positions such as engineers and 

inspectors. In addition, Interior has not developed a comprehensive 

strategic workforce plan that outlines specific strategies to address gaps 

in critical skills and competencies that need attention and processes to 

address human capital challenges, including determining the critical skills 

and competencies that will be needed to achieve current and future 

programmatic results, and help guide future human capital management. 

A senior Interior official told us that hiring qualified engineers and 

inspectors poses the greatest human capital challenge. In particular, the 

official told us that hiring qualified engineers is difficult because the 

federal salary schedule sets starting salaries for entry-level engineers at 

Interior at about $30,000 to $40,000 less per year than an entry-level 

position in the private sector—a difference of about 50 percent. The 

$30,000 to $40,000 gap between the federal and private sector salaries 

persists throughout engineers’ careers, although as an Interior engineer’s 

salary rises over time, it decreases as a percentage of total salary. 

Locality pay differentials within the federal salary schedule also mean that 

workers in Louisiana are paid less than those in Houston, TX; therefore, 

Interior’s Gulf of Mexico offices are competing with both government and 

private-sector employers located in Houston that can pay higher salaries. 

Interior regional office officials also noted that the current federal pay 

freeze, which eliminates cost-of-living adjustments for federal employees, 

may further deter inspectors from seeking or continuing employment with 

Interior. Regional office officials also stated that because the private 

sector offers higher starting salaries than the federal government, top 

candidates are typically hired by the petroleum industry, with Interior 

attracting less skilled candidates. To address pay challenges, in 

December of 2011, Congress provided a special 25 percent base pay 

increase for geologists, geophysicists, and petroleum engineers in the 

Gulf of Mexico region.93 Further, in February 2012, Interior announced 

expanded student loan repayment for engineers and certain technical 

staff. In addition to pay, Interior officials stated that the small number of 

petroleum engineering programs in the United States, as well as 

constraints on hiring non-U.S. citizens for federal positions, means that 

the pool of qualified candidates is limited. To attract applicants, a senior 

Interior official said that recruiting has begun to focus on midlevel career 

 

93Pub. L. No. 112-74, div. E, title I, § 121(c), 125 Stat. 1012 (2011). 

Challenges in Hiring Staff 
 

Page 91 GAO-12-423 Oil and Gas Management 

engineers in the private sector who may be interested in working for 

Interior because the agency offers a more standard work week and 

family-friendly work environment than the private sector, including 

working most days onshore versus months away from home and 

overseas. For inspectors, a senior Interior official stated that, similar to 

engineers, the primary challenge is recruiting highly qualified candidates. 

This official also stated that, unlike the situation for engineers, the pay 

difference between Interior inspectors and comparable positions in the 

private sector is not as great, but stricter federal hiring standards 

disqualify many potential applicants. For example, conflicts of interest 

could disqualify candidates from federal jobs but may not limit their 

prospects in the private sector. 

A senior Interior official stated that retaining qualified engineers was less 

of an issue than recruitment. Interior engineers tend to spend less time 

offshore on drilling rigs and production platforms than those in the private 

sector, meaning that they have more time with their families. Government 

work is also typically less cyclical than that in the private sector, providing 

more job security. The senior Interior official stated that the better worklife balance and relative job security meant that the engineers they are 

able to recruit typically stay. Nonetheless, regional office officials 

expressed some concern about retention and recent attrition. Specifically, 

one regional office official noted that the Gulf of Mexico regional office 

had recently lost four of its five experienced engineers. 

Interior’s headquarters and Gulf of Mexico regional office officials also 

noted that retention of inspectors has been a challenge in the aftermath of 

the Deepwater Horizon incident. Many senior staff left the agency, and 

new requirements that Interior implemented in response to the oil spill 

have led to an increase in work demands without a commensurate 

increase in compensation, which may increase attrition. Specifically, 

several officials from the Gulf of Mexico regional office noted that new 

requirements for witnessing blowout preventer tests significantly 

increased the number of days inspectors must spend offshore. As with 

engineers, regional office officials said that one of the key advantages 

that Interior offers over positions in the private sector is that its inspectors 

can generally be home each night; therefore increased time offshore 

might cause inspectors to migrate to better-paying jobs in the private 

sector. In June 2011, a senior Interior official stated that Interior received 

a strong response from its inspector job announcements in the Gulf of 

Mexico and hired 30 new inspectors; however, attrition limited the net 

gain to 15 inspectors. As of March 2012, Interior was able to hire an 

Challenges in Retaining Staff 
 

Page 92 GAO-12-423 Oil and Gas Management 

additional 13 inspectors while losing 9, resulting in a total net gain of 19 

inspectors since the Deepwater Horizon incident. 

Retirements were cited as a significant issue by Interior officials, as many 

senior staff are now eligible or will soon be eligible for retirement. 

According to data provided by Interior, as of January 2012, approximately 

45 percent of BOEM and 42 percent of BSEE staff will be eligible for 

retirement over the next 5 years. Regional office officials were particularly 

concerned about the loss of senior staff following the reorganization, 

noting that until they can refine and document many new processes, they 

depend on the expertise of their senior staff to fulfill their missions. 

Interior’s human capital planning documents, as well as officials in both 

headquarters and the Gulf of Mexico regional office, noted that long-term 

succession planning was a major issue and that, in many cases, positions 

were “one deep”––meaning that if experienced staff left the agency, there 

would not be enough skilled staff to take their place. 

In June 2011, in response to concerns with developing newer staff, 

Interior announced the opening of a new National Offshore Training and 

Learning Center and the development of the agency’s first formal training 

curriculum for inspectors and engineers. An official responsible for 

overseeing inspectors and engineers stated that the development of the 

training program may be one of the most important accomplishments to 

come out of the reorganization. Interior officials told us that, historically, 

Interior has not had a formal inspector training program; rather, it relied 

on on-the-job training that included pairing senior inspectors with newly 

hired inspectors and some classroom instruction. Senior and regional 

office officials stated that this type of training produced inconsistent 

results, as some senior inspectors proved to be less effective trainers 

than others. Additionally, following the Deepwater Horizon incident, 

Interior’s Office of Inspector General reported that, based on survey 

results, only 39 percent of inspectors believed that they had received 

sufficient training to perform their duties effectively. The training center’s 

director stated that the center will eventually provide training for 

inspectors, engineers, and environmental enforcement officers, although 

the first priority is to establish a core curriculum to train inspection staff. 

The director stated that the inspection staff training curriculum would 

eventually consist of 25 modules covering a range of issues. As of 

December 2011, 1 module had been developed and was being revised by 

the new training director. Overall, the director stated that the inspection 

training curriculum will include classroom training, testing, on-the-job 

training, and potentially some form of certification. Additionally, as part of 

the inspection training curriculum, the director plans to incorporate 

Challenges in Training Staff 
 

Page 93 GAO-12-423 Oil and Gas Management 

various simulators, thereby allowing inspectors to experience real-world 

situations. For example, according to the director, Interior plans to use a 

fully operational drilling platform simulator operated by Louisiana State 

University, as well as a working production platform to allow inspectors to 

train in a more realistic environment. In December 2011, the director 

stated that training for engineers will eventually be developed but that 

because engineers generally have well-developed technical skills, the 

curriculum will focus on problem solving rather than obtaining and 

developing specific technical skills. More recently, in March 2012, Interior 

officials stated that it had initiated technical training for engineers. Interior 

officials stated that they have adjusted the training program to provide 

training for both engineers and inspectors in the first year of employment, 

use a comprehensive training plan to address the needs of the current 

and expanding workforce, and added an enhanced technical curriculum. 

While we note Interior’s action to date, Interior has not yet finalized its 

training modules, and no inspection staff have been certified. Until Interior 

has successfully developed, finalized, and implemented a training 

program for inspectors and engineers, Interior will find it more difficult to 

provide adequate oversight of offshore oil and gas activities in the Gulf. 

Interior is taking steps to respond to its human capital challenges, but it 

has not developed a comprehensive strategic workforce plan that outlines 

specific strategies and processes to help address these challenges and 

help guide future human capital management for BOEM and BSEE. In 

January 2001, we determined that strategic human capital management 

merited designation as a governmentwide high-risk area because the 

government’s approach to managing its people—its human capital—was 

the critical missing link in reforming and modernizing the federal 

government’s management practices.94 In a December 2003 report, we 

identified strategic human capital, or workforce, planning as the key to 

addressing two critical organizational needs: (1) aligning an organization’s 

human capital program with its current and emerging mission and 

programmatic goals and (2) developing long-term strategies for acquiring, 

developing, and retaining staff to achieve programmatic goals.95 In that 

report, we identified five key principles that effective human capital 

planning should address. For example, effective workforce planning 

 

94GAO, High-Risk Series: An Update, GAO-01-263 (Washington, D.C.: January 2001). 

95GAO, Human Capital: Key Principles for Effective Strategic Workforce Planning, 

GAO-04-39 (Washington, D.C.: Dec. 11, 2003). 

Absence of Comprehensive 

Strategic Workforce Planning 
 

Page 94 GAO-12-423 Oil and Gas Management 

should determine the critical skills and competencies that will be needed 

to achieve current and future programmatic results and develop strategies 

to address gaps and human capital conditions in critical skills and 

competencies that need attention, such as for succession planning and 

addressing short-term human capital needs for critical skills. Prior to the 

reorganization, Interior developed a strategic workforce plan for MMS for 

2008 through 2013 and a similar workforce plan for MMS’s Gulf of Mexico 

region in March of 2010, but it has not adapted these plans to the new 

organizational structure. Following the Deepwater Horizon incident, 

Interior took steps to improve its human capital planning in response to 

recommendations from external reviews and as part of the reorganization. 

For example, in response to a recommendation from Interior’s Office of 

Inspector General, Interior developed a succession plan for its regional 

offices. Most recently, in March 2012 Interior issued a departmentwide 

strategic workforce management plan and indicated that it would 

implement more detailed workforce planning. However, without a 

strategic workforce plan for both BOEM and BSEE, Interior may find it 

more challenging to address human capital challenges such as hiring, 

retention, and training. Senior Interior officials said that they would 

eventually develop a plan for BOEM and BSEE, but that they did not have 

the time or the resources to do so because of the demands placed upon 

them by the reorganization. To date, Interior has not specifically identified 

when it plans to develop such a plan. 

While improved workforce planning will assist Interior in meeting BOEM 

and BSEE’s agency-wide goals, both agencies will still likely face 

significant human capital challenges in coming years. For example, a 

2011 study by Schlumberger Business Consulting,96 an oil and gas 

services company, reported that the oil and gas industry is going through 

a major transition referred to as the “big crew change,” as many workers 

hired before significant recruitment cuts in the 1980s are now 

approaching retirement. The report projected a significant net loss in 

experienced petroleum technicians by 2015 due to retirements and 

concluded that while recruitment should compensate for the total number 

of employees lost, a significant experience gap will remain, threatening 

the timely completion of projects. 

 

96Schlumberger Business Consulting, 2011 SBC Oil & Gas HR Benchmark, March 8, 

2012. 
 

Page 95 GAO-12-423 Oil and Gas Management 

Interior had not consistently tracked recommendations from external 

reviews examining Interior’s oversight of oil and gas activities issued after 

the Deepwater Horizon incident until March 2012, when it provided 

documentation that it had begun developing a database to consistently 

track recommendations. Under federal standards for internal control,97

agencies are to ensure that the findings of audits and other reviews are 

promptly resolved under the monitoring standard. Specifically, agency 

managers should (1) promptly evaluate findings from audits and other 

reviews, including those showing deficiencies and recommendations 

reported by auditors and others who evaluate agency operations; (2) 

determine proper actions in response to findings and recommendations 

from those audits and reviews; and (3) complete, within established time 

frames, all actions that correct or otherwise resolve the matters brought to 

management’s attention.98 Following the Deepwater Horizon incident, 

various federal entities reported on factors that contributed to the 

Deepwater Horizon incident and made a number of recommendations to 

Interior to improve its oversight of oil and gas drilling operations and help 

prevent such incidents. Federal government reviews on the Deepwater 

Horizon incident include the following: 

 The postaccident safety report that the President directed Interior to 

prepare within 30 days of the accident, issued on May 27, 2010;99

 A review of Interior’s NEPA policies, practices, and procedures by the 

President’s Council on Environmental Quality, issued on August 16, 

2010;100

 

97GAO/AIMD-00-21.3.1. 

98The resolution process begins when audit or other review results are reported to 

management and is completed only after action has been taken that (1) corrects identified 

deficiencies, (2) produces improvements, or (3) demonstrates the findings and 

recommendations do not warrant management action. 

99U.S. Department of the Interior, Increased Safety Measures for Energy Development on 

the Outer Continental Shelf (May 27, 2010). 

100Council on Environmental Quality. August 16, 2010. 

Interior Has Not 

Consistently Tracked 

Recommendations from 

External Reviews 
 

Page 96 GAO-12-423 Oil and Gas Management 

 A report by the OCS Safety Oversight Board––a group established by 

the Interior’s Secretary following the Deepwater Horizon incident––

issued on September 1, 2010;101

 A report by Interior’s Office of Inspector General issued on December 

7, 2010;102

 A report by the National Commission on the BP Deepwater Horizon 

Oil Spill and Offshore Drilling issued on January 11, 2011;103

 A joint accident investigation report by Interior and the U.S. Coast 

Guard issued on September 14, 2011;104,105 and 

 A report by the National Academy of Engineering on December 14, 

2011.106

We found that Interior is formally tracking recommendations from several 

reports, including those issued by Interior’s Office of Inspector General 

and the OCS Safety Oversight Board. According to Interior’s Office of 

Inspector General, as of March 2012, Interior has implemented 29 of the 

64 recommendations included in its December 2010 report.107

 

101U.S. Department of the Interior. September 1, 2010. 

102U.S. Department of the Interior Office of Inspector General, A New Horizon: Looking to 

the Future of the Bureau of Ocean Energy Management, Regulation, and Enforcement, 

CR-EV-MMS-0015-2010 (Dec. 7, 2010). 

103National Commission, Deep Water: The Gulf Oil Disaster and the Future of Offshore 

Drilling, Report to the President (January 2011). 

104The Bureau of Ocean Energy Management Regulation and Enforcement, Report 

Regarding the Causes of the April 20, 2010, Macondo Well Blowout (Sept. 14, 2011). 

105United States Coast Guard: Report of Investigation into the Circumstances Surrounding 

the Explosion, Fire, Sinking and Loss of Eleven Crew Members Aboard the Mobile 

Offshore Drilling Unit Deepwater Horizon. In the Gulf of Mexico, April 20-22, 2010. Volume 

I of the report was released on April 20, 2011. 

106National Academy of Engineering and National Research Council, Macondo WellDeepwater Horizon Blowout (Dec. 14, 2011). 

107Oil and Gas and Sulfur Operations in the Outer Continental Shelf—Increased Safety 

Measures for Energy Development on the Outer Continental Shelf, 75 Fed. Reg. 63346 

(2010). 
 

Page 97 GAO-12-423 Oil and Gas Management 

However, Interior has not consistently employed a process for tracking 

and responding to the findings and recommendations of other external 

reviews. The national commission’s report on the BP Oil Spill108 made 

recommendations covering 31 areas. In September 2011, we asked a 

senior Interior official about the national commission’s recommendations 

and the agency’s response. Interior was able to provide responses on 

specific recommendations but was unable to provide documentation that 

tracked the steps Interior had taken to address the national commission’s 

recommendations. According to the official, the national commission’s 

report was directed to the President; therefore, Interior was not required 

or expected to officially document its response to the report’s 

recommendations. Moreover, according to the official, Interior’s 

reorganization, along with other policy changes enacted since the 

Deepwater Horizon incident, has likely addressed the recommendations 

in the national commission’s report. However, in March 2012, Interior 

provided documentation tracking the national commission’s 

recommendations and announced on March 14, 2012, that several 

members of the national commission were forming a new organization—

the Oil Spill Commission Action— to monitor the progress of government 

and industry to implement a series of critical safety 

recommendations outlined in its January 2011 report. On April 17, 2012, 

the Oil Spill Commission Action released a progress report stating that 

while it was encouraged by the advances industry, Interior, and other 

federal agencies had made in the 2 years since the Deepwater Horizon 

incident to improve the safety of offshore drilling and the nation’s 

readiness to respond to any spills that do occur, it noted that more needs 

to be done, including by Congress, which has yet to enact any legislation 

responding to the explosion and spill. Furthermore, Interior’s BSEE 

indicated that it had recently developed a database to track 

recommendations from all recently issued reports and planned to 

systematically enter and track recommendations from all relevant reports. 

Nonetheless, Interior has not consistently employed a formal process for 

tracking and responding to the findings and recommendations of external 

reviews and ensured they are promptly resolved. Without taking steps to 

document that such findings and recommendations are resolved by 

correcting identified deficiencies, producing improvements, or 

demonstrating that the findings and recommendations do not warrant 

 

108National Commission, Deep Water: The Gulf Oil Disaster and the Future of Offshore 

Drilling, Report to the President (January 2011). 
 

Page 98 GAO-12-423 Oil and Gas Management 

management action, Interior cannot, for example, demonstrate to decision 

makers and reviewers that it considered the national commission’s 

recommendations for improving oversight and what actions, if any, 

Interior has taken to implement them. 

Interior officials stated that the rate of technology development in 

deepwater drilling has surpassed Interior’s ability to draft and publish 

regulations and that, even prior to the Deepwater Horizon incident, 

Interior was already taking a stopgap approach to provide regulatory 

oversight. Specifically, instead of updating regulations to address new 

technologies and processes, Interior has to some extent, relied on 

Notices to Lessees and Operators to communicate new policies and 

regulatory approaches. Additionally in 2005, Interior began requiring 

operators to submit a Deepwater Operations Plan for deepwater 

projects.109 According to Interior officials, the Deepwater Operations Plan 

is designed to address industry and Interior concerns by notifying an 

operator in advance of significant investment whether Interior accepted 

the operator’s plan. According to an Interior official, because Interior does 

not have any regulations specific to deepwater environments, the 

Deepwater Operations Plan functioned in lieu of regulations. However, 

without up-to-date regulations on current technologies and practices, the 

incidence of requests for departures from existing regulations is likely to 

increase. 

Interior officials stated that many activities on deepwater operations in the 

Gulf of Mexico are not covered by existing regulations and that, therefore, 

operators’ departure requests are common. Departure requests 

potentially increase the risks associated with certain drilling operations 

because district engineers are making decisions independently and often 

without documented guidance, which can result in regulations being 

inconsistently applied. For example, the OCS Safety Oversight Board’s 

report found that operators will “shop around” district offices for approval 

for departure requests. We attempted to analyze Interior’s data from 

 

10930 C.F.R. §§ 250.286–295; see also NTL No. 2011-N11 issued Nov. 21, 2011. Prior to 

issuing new regulations, Interior began requiring certain information from operators 

working in water depths greater than 1,000 feet through the establishment of handling 

procedures for Deepwater Operation Plans in 1997. In October 2000, Interior issued NTL 

No. 2000-N06, which provided guidance on Deepwater Operations Plan submission 

requirements. 

Interior Continues to Face 

Challenges Issuing 

Effective and Timely 

Regulations for Deepwater 

Drilling Activities 
 

Page 99 GAO-12-423 Oil and Gas Management 

Interior’s TIMS IT system on departure requests but found that the data 

were incomplete and unreliable. Specifically, Interior officials reported that 

they did not record departure request denials. When we analyzed 

approved departure requests––which Interior guidance states district 

engineers should record––Interior officials reported that engineers were 

no longer recording that information consistently in the TIMS IT system. 

However, officials stated that accurate data on departure requests, 

approvals, and denials, would help Interior identify specific regulations 

that should be considered for revision. 

In response to the Deepwater Horizon incident, as noted previously, 

Interior issued a number of new policies affecting offshore oil and gas 

operations and is taking steps to improve its ability to develop and issue 

final regulations; however, Interior continues to face challenges issuing 

effective and timely regulations. An Interior official stated that, following 

the Deepwater Horizon incident, there was a significant shift to focus on 

ensuring that Interior has effective regulations. Additionally, according to 

an Interior official, Interior’s senior management have taken a more active 

role in discussions regarding regulations than have directors of the 

predecessor agency, MMS. An Interior official stated that the new 

requirements—including regulations—issued in the period following the 

Deepwater Horizon incident are not typical of the agencies’ processes 

and that they were issued much more quickly than typical regulations. 

Interior documents acknowledge a historic weakness in the agency not 

issuing timely and effective regulations. 

Representatives of API, which publishes standards for oil and gas 

activities frequently incorporated into Interior’s regulations, stated that 

although API fully supported an effective regulatory regime, it was 

concerned about the effectiveness of Interior’s rulemaking, especially 

rulemaking in response to the Deepwater Horizon incident. API 

representatives stated that the interim final drilling safety rule Interior 

issued in October 2010 created burdens for operators and potentially 

undermined the effectiveness of some existing regulations.110 Specifically, 

API publishes standards generally agreed upon by industry and 

regulators, and where applicable, Interior incorporated some of these 

standards into its regulations. These standards typically state that an 

operator “should” or “shall” follow some specified practice or procedure; 

 

11075 Fed. Reg. 63346 (2010). 
 

Page 100 GAO-12-423 Oil and Gas Management 

however, an API representative stated that the interim final drilling safety 

rule, which applies to many API standards referenced by Interior’s 

regulations, requires that operators “must” follow the specified practice or 

procedure. In some circumstances, according to an API representative, 

this revision undermined the standards’ effectiveness, may increase risk, 

and created substantial new requirements for operators. In a letter to the 

Regulations and Standards Branch of BOEMRE on December 13, 2010, 

trade and industry groups stated that revising a section on well control 

and blowout preventer maintenance to include mandatory requirements 

would increase the risk to worker safety due to increased blowout 

preventer handling requirements.111

In addition to concerns raised specifically by API, industry representatives 

also stated that, by relying so heavily on Notices to Lessees and 

Operators, Interior is not following the formal rulemaking process, limiting 

the public’s—including industry’s—opportunities for involvement and 

undermining the transparency of the process. Despite concerns regarding 

Interior’s rulemaking, API representatives noted that Interior has recently 

become more involved in API’s standard-setting meetings since the 

Deepwater Horizon incident. In particular, representatives stated that 

Interior staff regularly attended meetings and provided formal comments 

on new standards that API is developing for deepwater well design.112

Additionally, API officials stated that they worked with industry to provide 

recommendations in May 2010 for Interior to consider in its review of its 

regulatory scheme. Later, in September 2010, industry provided 

recommendations to both Interior and the Coast Guard on well 

intervention and oil spill response. 

Interior has taken steps to reexamine and improve the processes used to 

develop regulations since the Deepwater Horizon incident. For example, 

Interior is working with industry to improve regulations specific to 

deepwater drilling and hosted a conference in November 2011 to discuss 

these efforts. In addition, Interior officials stated that they had recently 

contracted with Argonne National Laboratory to review BSEE’s current 

 

111API, the International Association of Drilling Contractors, the Independent Petroleum 

Association of America, the National Ocean Industries Association, the Offshore 

Operators Committee, the Offshore Equipment and Operating Procedures Joint Industry 

Task Forces, and the US Oil and Gas Association submitted comments. 

112API Recommended Practice 96, Deepwater Well Design and Construction, 1st Ed. 

201X. 
 

Page 101 GAO-12-423 Oil and Gas Management 

regulations and make recommendations on how it can improve those 

regulations. 

While Interior has taken steps to issue new regulations and improve its 

regulatory processes following the Deepwater Horizon incident, it will also 

continue to face challenges in this area in coming years. In particular, 

Interior staff noted that industry is drilling more wells into reservoirs 

associated with high temperatures and pressures. These drilling 

operations can be more challenging than other operations. For example, 

in late March 2012, a high pressure and high temperature well in the 

North Sea began leaking gas, causing the evacuation of the platform due 

to the potential risk of an explosion and fire. In May 2012, the platform’s 

operator announced that the leak had been stopped. 

Interior officials told us that Interior had planned to increase its oversight 

capacity—including hiring additional staff and improving support service—

through a multiyear expansion plan, with full staffing anticipated in fiscal 

year 2013. As of September 2011, Interior officials expressed concern 

that current and potential future budgetary constraints may prevent 

Interior from increasing its capacity as anticipated. In particular, Gulf of 

Mexico regional office officials expressed concerns that they may not 

receive the anticipated increases in resources for staffing and helicopter 

operating costs, which would hinder their ability to review permits and 

conduct inspections. Without the resources initially anticipated, officials 

said that they will not be able to fully develop their programs as planned, 

potentially hindering their ability to manage oil and gas activities in the 

Gulf of Mexico. However, in March 2012, officials told us that the fiscal 

year 2012 appropriations bill included an inspection fee of $62 million, 

allowing BSEE to receive most of the resources needed to increase its 

inspection and permitting capacity. Despite these new fees, Interior 

officials expressed concern that attention to oversight of offshore oil and 

gas drilling may diminish over time and that future budget appropriations 

may be limited, hindering their ability to provide effective oversight. 

The Department of the Interior is charged with the critical role of ensuring 

that the country’s oil and gas resources on the OCS in the Gulf of Mexico 

are developed in a manner that is protective of both human health and 

the environment. The April 20, 2010, Deepwater Horizon incident raised 

serious questions about Interior’s management of oil and gas activities in 

the Gulf of Mexico. Since the incident, Interior has fundamentally 

reorganized its oversight of offshore oil and gas activities through the 

Interior Anticipates That 

Resource Constraints 

Could Limit Efforts to 

Increase Its Oversight 

Capacity 

Conclusions 
 

Page 102 GAO-12-423 Oil and Gas Management 

creation of BSEE and BOEM. Interior has also enacted numerous policy 

changes intended to improve its oversight of offshore oil and gas 

activities. Moreover, Interior has taken and continues to take steps to 

reform its oversight. However, the ultimate effectiveness of Interior’s 

reorganization and recent policy changes remains uncertain. 

In particular, questions remain about one aspect of Interior’s 

environmental NEPA analyses, which are required for exploration and 

development plans and play a critical role in assessing the potential 

effects of oil and gas development in the Gulf of Mexico. Interior 

completed a number of NEPA analyses without the most current, 

potentially relevant information—for example, in amendments to operatorsubmitted plans. Also, Interior technical staff reviewing the plans do not 

always coordinate with the agency’s NEPA staff to ensure that any 

information included in subsequent amendments would not need to be 

considered as part of a NEPA analysis and do not always document such 

coordination. As a result, some of these NEPA analyses may have been 

based on incomplete or inaccurate information. Interior officials 

acknowledged that the controls in place are insufficient to prevent the 

approval of plans with NEPA analyses based on inaccurate or incomplete 

information. Without ensuring that NEPA analyses are conducted on 

complete and accurate information to analyze the potential effects of a 

proposed project as required by NEPA, Interior risks making an 

erroneous assessment of the environmental risks associated with such a 

project. 

In addition, we are concerned with two limitations in Interior’s exploration 

and development plan review process. First, because Interior’s TIMS IT 

system does not include necessary data input controls, called edit 

checks, for preventing operators from submitting inaccurate and 

incomplete plans, Interior must devote resources to reviewing exploration 

and development plans for accuracy and completeness and asking 

operators to submit amendments to address inaccurate or incomplete 

plans. Interior attempted to develop an IT module called ePlans—which 

was to include edit checks—to help manage its review process for 

exploration and development plans; however, ePlans was never 

completed. Interior continues to evaluate ePlans and has worked on a 

requirements document for it. Second, because Interior’s TIMS IT system 

does not have a field to collect information on (1) whether plan 

amendments were requested by Interior or initiated by the operator or (2) 

the reasons for the amendments, Interior management does not have the 

information it needs to conduct targeted outreach with operators on how 
 

Page 103 GAO-12-423 Oil and Gas Management 

to improve plan submissions, which could reduce the use of amendments 

as well as the burden on operators and Interior staff. 

We are also concerned about the effectiveness of two aspects of 

Interior’s inspection program. First, Interior has not assessed how new 

policy requirements, travel times to deepwater drilling rigs, and the 

current number of inspectors affect its ability to conduct drilling 

inspections; as a result, it cannot be certain that its informal monthly 

inspection goal is appropriate for overseeing drilling activities in the Gulf 

of Mexico. Furthermore, Interior’s inspections routinely identify violations, 

but Interior’s TIMS IT system is missing some data, such as the date that 

violations were found or corrected. As a result, Interior does not know on 

a real-time basis whether or when all violations were identified and 

corrected, potentially allowing unsafe conditions to continue for extended 

periods. 

Additionally, Interior officials acknowledged challenges in maintaining 

timely regulations for drilling, especially as they relate to deepwater 

drilling. However, Interior has not systematically recorded operators’ 

requests for departures from regulations in its TIMS IT system or whether 

the requests were approved or denied. Without data on departure 

requests, Interior is foregoing information that may help it to identify which 

regulations operators consistently request departures from and that it 

subsequently may use to identify when specific regulations should be 

considered for revision. 

Furthermore, while Interior has taken steps to identify and evaluate 

drilling risks, its capacity to do so remains limited. Interior officials stated 

that they have the expertise to do so and acknowledged that such an 

effort could improve Interior’s oversight of offshore oil and gas activities. 

Interior has taken some steps, for example, with its well containment 

screening tool, that can be used to evaluate overall well design based on 

risk. In this regard, even though operators are to report to Interior 

significant event data in weekly well activity reports once they begin 

drilling, Interior does not have clear definitions for some of these 

significant events, raising uncertainty as to whether Interior is 

systematically collecting and maintaining reliable data on risk factors 

associated with drilling operations. Moreover, some entities have 

expressed concern that Interior does not have a policy to categorize 

proposed drilling operations based on risk. For example, the report of the 

National Commission on the BP Deepwater Horizon Oil Spill and Offshore 

Drilling recommended that Interior should identify criteria and a 

methodology for assessing high-risk wells in collaboration with the U.S. 
 

Page 104 GAO-12-423 Oil and Gas Management 

Geological Survey, the Department of Energy, NOAA, and academia and 

develop in-house competence to perform such sophisticated risk 

assessments. As the government faces significant financial constraints, 

without clear criteria and a methodology for assessing drilling operations 

according to risk, Interior may not adjust and evaluate its oversight—

including inspections—in a cost-effective manner. 

We and others have identified numerous opportunities for Interior to 

improve its oversight. Since the Deepwater Horizon incident, a number of 

government agencies, boards, and commissions have reported on the 

factors contributing to the incident and recommended areas for 

improvement. Interior has addressed and responded to the results of 

audits, as well as to many of the recommendations from these reports. 

However, Interior was unable to provide documentation that it was 

consistently tracking and responding to the results of external reviews—

other than audits—to ensure that findings were promptly addressed and 

actions were taken to respond to recommendations until March 2012, 

when officials provided documentation that they had begun developing a 

database to track such recommendations. Without such tracking, it is 

uncertain whether Interior has fully considered and either concurred or 

disagreed with the findings of these reports and what, if any, steps it has 

taken to implement the recommendations it agrees with. 

Questions also remain about Interior’s efforts to complete long-term 

strategies for IT planning. Interior’s IT systems are critical for managing 

its oil and gas oversight responsibilities. Recognizing this, Interior is 

taking steps to improve its implementation of IT projects and has 

identified IT system initiatives that could assist implementation of 

Interior’s mission. However, it has not yet specified a time frame for when 

it would complete a comprehensive IT strategic plan, which should 

include results-oriented goals, strategies for achieving those goals, 

milestones, performance measures, and an analysis of interdependences 

among IT projects and activities, among other things. Without such a 

plan, BOEM and BSEE will have difficulty applying the lessons from prior 

failed improvement efforts and are at increased risk of falling short of 

meeting their system modernization goals. 

In recent years, we have identified various challenges facing Interior in 

hiring, training, and retaining staff to oversee oil and gas activities. 

According to Interior officials, Interior historically did not provide 

standardized or rigorous training for its offshore inspection staff or 

engineers. Interior has taken steps to address the training gap by 

establishing a National Offshore Training and Learning Center, but 
 

Page 105 GAO-12-423 Oil and Gas Management 

Interior officials stated that they are only at the initial phases of designing 

a curriculum. Additionally, Interior recently developed a succession plan 

for its regional offices, though Interior officials expressed concern that 

many critical positions are “one deep” and that, due to retirements, both 

BOEM and BSEE risk losing significant expertise and institutional 

knowledge. Finally, Interior continues to struggle to compete with industry 

in hiring qualified staff. Interior has taken steps to improve its human 

capital planning following Deepwater Horizon, but challenges remain. For 

example, Interior has not developed a comprehensive strategic workforce 

plan for both BOEM and BSEE that outlines specific strategies to address 

gaps in critical skills and competencies that need attention and processes 

to address human capital challenges, including determining the critical 

skills and competencies that will be needed to achieve current and future 

programmatic results. Since BOEM and BSEE started operations on 

October 1, 2011, neither has developed a strategic workforce plan, which 

could help guide each bureau’s efforts to address human capital 

challenges and help guide future human capital management. 

Finally, while Interior’s implementing regulations for the OCS Lands Act 

require that the Secretary of the Interior provide for periodic consultation 

with stakeholders on a regional and national basis, Interior did not renew 

its OCS Policy Committee’s charter for 2011. This long-standing advisory 

committee historically provided opportunities for stakeholders 

representing industry, conservation groups, and state and local 

governments to provide input to the Secretary on offshore leasing 

activities. Without this committee, or some equivalent alternative, 

opportunities for stakeholders to engage Interior on oil and gas leasing 

activities and other oil and gas related issues in the Gulf of Mexico have 

become more limited. 

To improve Interior’s oversight of offshore oil and gas activities in the Gulf 

of Mexico, we are making the following 11 recommendations to the 

Secretary of the Interior: 

 Institute controls to help ensure that Interior’s environmental NEPA 

analyses are based on the most current, relevant information, such as 

in amendments to operator-submitted exploration and development 

plans that would need to be considered as part of such an analysis. 

 Continue to evaluate ePlans and develop edit checks to improve the 

accuracy and completeness of operators’ exploration and 

development plan submissions. 

Recommendations for 

Executive Action 
 

Page 106 GAO-12-423 Oil and Gas Management 

 Track whether plan amendments were initiated at the request of 

Interior or the operator and, for amendments initiated at the request of 

Interior, the reasons for the amendments to provide Interior’s 

managers with information needed to conduct targeted outreach with 

operators on how to improve plan submissions and reduce the use of 

amendments. 

 Enhance the effectiveness of Interior’s inspection program by 

 assessing how new inspection policy requirements, travel times to 

drilling rigs, and numbers of inspectors affect Interior’s ability to 

conduct monthly drilling inspections and whether its monthly 

inspection goal is appropriate; and 

 ensuring that both violations and correction dates are recorded in 

Interior’s TIMS IT system in a timely manner. 

 Ensure that operators’ requests, approvals, and disapprovals for 

departure from regulations are recorded to provide Interior with 

information that would better allow it to identify when specific 

regulations should be considered for revision. 

 Enhance Interior’s capacity for identifying and evaluating offshore oil 

and gas drilling operations according to risk, thereby allowing it to 

adjust and evaluate its oversight accordingly by (1) identifying and 

systematically collecting and maintaining reliable data on risk factors 

associated with drilling operations, (2) providing operators with clear 

definitions for significant events in the weekly well activity reports and 

developing a way to characterize and record these events 

systematically and reliably, and (3) using the risk factors and 

significant events data to develop a risk-based approach with clear 

criteria to prospectively evaluate and categorize drilling operations 

according to risk and retrospectively to evaluate the performance of 

oversight and risk mitigation activities in avoiding significant events. 

 Complete and maintain its database for tracking recommendations, so 

that Interior consistently tracks and responds to the results of all 

audits and other external reviews to ensure that findings are promptly 

addressed and appropriate actions are taken to respond to 

recommendations and improve oversight. 

 Direct BOEM and BSEE to set milestones and a completion date for 

developing a comprehensive IT strategic plan, including resultsoriented goals, strategies, milestones, performance measures, and an 
 

Page 107 GAO-12-423 Oil and Gas Management 

analysis of interdependencies among projects and activities, and use 

this plan to guide and coordinate their modernization goals. 

 Direct BOEM and BSEE to develop a strategic workforce plan that, 

among other actions, determines the critical skills and competencies 

that will be needed to achieve current and future programmatic results 

and develop strategies to address gaps and human capital conditions 

in critical skills and competencies that need attention. 

 Consider reinstating the OCS Policy Committee, on a regional and 

national basis, or adopt an equivalent alternative to allow increased 

opportunities for stakeholders to provide input as it relates to offshore 

oil and gas leasing activities to ensure Interior fulfills its obligations 

under the implementing regulations of the OCS Lands Act. 

We provided a draft of this report to Interior for review and comment. 

Interior generally agreed with our findings and recommendations. 

Interior also provided its own analysis of exploration and development 

plan and drilling permit review times which differed from our analysis in 

two ways. First, our analysis included plans and permits submitted and 

approved within each separate time frame, while Interior’s analysis 

required only that the plan was submitted and approved, regardless of the 

time frame. Second, our analysis of review times included data through 

September 30, 2011, while Interior’s analysis included data through May 

31, 2012, allowing time for Interior staff and operators to become more 

familiar with the increased environmental and safety requirements and 

new review process. 

While we believe our analysis provides a more conservative and accurate 

view of review times, Interior’s analysis is not incorrect for examining 

trends in review times for plans and permits. Further, Interior’s analysis 

provides a more current assessment of review times in the post 

Deepwater Horizon incident period. Overall, Interior’s analyses found that 

review times for plans and permits has decreased since the Deepwater 

Horizon incident, which is consistent with the results of our work. 

Interior and the Department of Commerce (NOAA) also provided 

technical comments which we incorporated as appropriate. Appendix IV 

contains Interior’s comment letter and enclosure containing its analysis of 

plan and permit review times. 

Agency Comments 

and Our Evaluation 
 

Page 108 GAO-12-423 Oil and Gas Management 

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to the Secretary of the 

Interior, the Secretary of Commerce, the appropriate congressional 

committees, and other interested parties. In addition, the report will be 

available at no charge on the GAO website at http://www.gao.gov. 

If you or your staff members have any questions about this report, please 

contact me at (202) 512-3841 or ruscof@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made key contributions to this 

report are listed in appendix V. 

Frank Rusco 

Director, Natural Resources 

 and Environment 
Appendix I: Scope and Methodology 

Page 109 GAO-12-423 Oil and Gas Management 

This report examines (1) Interior’s reorganization of its oversight of 

offshore oil and gas activities in the Gulf of Mexico since the Deepwater 

Horizon incident; (2) how key policy changes Interior has implemented 

since this incident have affected Interior’s National Environmental Policy 

Act (NEPA) analyses, plans reviews, and drilling permit reviews; (3) the 

extent to which Interior’s inspections of Gulf of Mexico drilling rigs and 

production platforms identified violations or resulted in civil penalty 

assessments, and how key policy changes since this incident have 

affected Interior’s inspection and civil penalties program; (4) when 

stakeholders have provided input to Interior about proposed offshore oil 

and gas activities, and the extent to which stakeholders believe Interior 

considered such input from approximately 2002 through January 2012; 

and (5) key challenges, if any, affecting Interior’s oversight of offshore oil 

and gas activities in the Gulf of Mexico following its reorganization. 

To identify the actions Interior has taken as part of its reorganization of 

Interior’s Minerals Management Service (MMS), we reviewed relevant 

regulations, Interior’s secretarial orders as well as applicable federal rules 

associated with the reorganization. We also interviewed knowledgeable 

officials at Interior’s headquarters office in Washington, D.C., and its Gulf 

of Mexico regional office in New Orleans, including staff overseeing the 

reorganization. We reviewed previous and current budget documentation 

detailing changes to the MMS; the Bureau of Ocean Energy 

Management, Regulation, and Enforcement (BOEMRE); the Bureau of 

Ocean Energy Management; and the Bureau of Safety and 

Environmental Enforcement. We also reviewed documentation and 

guidance developed by both Interior and an outside consultant hired by 

Interior to guide the reorganization, such as by establishing time frames 

and other milestones. We also reviewed documentation including 

memoranda of understanding, memoranda of agreements, and standard 

operating procedures used to define working relationships following the 

reorganization’s completion, as well as supporting documentation used to 

develop these documents. Additionally, we met with Interior officials at 

their headquarters’ offices in Herndon, Virginia, and Washington, D.C., 

and at the Gulf of Mexico regional office in New Orleans, to discuss these 

documents. Due to the short amount of time that elapsed since the 

reorganization, we did not evaluate the effect of the reorganization on 

Interior’s ability to conduct oversight of oil and gas activities in the Gulf of 

Mexico. 

To examine key policy changes Interior has implemented since the 

Deepwater Horizon incident related to overseeing oil and gas 

development in the Gulf of Mexico, and how these changes have affected 

Appendix I: Scope and Methodology 
Appendix I: Scope and Methodology 

Page 110 GAO-12-423 Oil and Gas Management 

Interior’s operations, we reviewed agency documents relevant to Interior’s 

work with NEPA exploration and development plans, and drilling permits. 

We also interviewed officials from Interior’s Gulf of Mexico regional office 

and New Orleans and Lafayette district offices. We analyzed Interior data 

from its Technical Information Management (TIMS) information 

technology (IT) system on NEPA reviews and exploration and 

development plan approvals from January 1, 2000, through September 

30, 2011. We analyzed Interior data from its TIMS IT system on drilling 

permit approvals from January 1, 2005, through September 30, 2011. Our 

review of drilling permits was limited to data beginning in 2005 due to 

concerns about the reliability of data recorded prior to 2005. We assessed 

the reliability of these data by (1) reviewing documentation about the data 

and the system that produced them; (2) interviewing agency officials 

knowledgeable about the data; and (3) verifying our results with agency 

officials. Based on this assessment, we found these data sufficiently 

reliable for our purposes. Because many policy changes are still under 

way and have not been in place long enough to evaluate, our report does 

not evaluate the effectiveness of the policy changes to reduce the risk 

associated with offshore oil and gas activities. 

To determine the extent to which Interior’s inspections resulted in 

violations and penalties and how key policy changes since the Deepwater 

Horizon incident have affected Interior’s inspection and civil penalties 

program, we analyzed Interior’s inspection and civil penalty data from its 

TIMS IT system from January 1, 2000, through September 30, 2011. We 

assessed the reliability of these data by (1) reviewing documentation 

about the data and the system that produced them; (2) interviewing 

agency officials knowledgeable about the data; and (3) verifying our 

results with agency officials. Based on this assessment, we found these 

data sufficiently reliable for our purposes. We also reviewed agency 

documents relevant to Interior’s inspection and civil penalty program and 

interviewed officials from Interior’s headquarters office in Herndon, VA, 

the Gulf of Mexico regional office, and the Houma district office. Because 

many of these policy changes are still under way and have not been in 

place long enough to evaluate, we did not evaluate the effectiveness of 

the policy changes to reduce the risk associated with offshore oil and gas 

activities in this report. 

To determine when stakeholders provided input to Interior about 

proposed offshore oil and gas activities and the extent to which they 

believe Interior considered and addressed their input (the Fish and 

Wildlife Service, the National Oceanic and Atmospheric Administration, 

coastal states, industry and conservation groups) on oil and gas 
Appendix I: Scope and Methodology 

Page 111 GAO-12-423 Oil and Gas Management 

development in the Gulf of Mexico from 2002 through January 2012, we 

reviewed relevant federal statutes on Interior’s process for offshore oil 

and gas development. Key statutes included the Outer Continental Shelf 

Lands Act, National Environmental Policy Act, the Endangered Species 

Act, the Marine Mammal Protection Act, the Magnuson-Stevens Fishery 

Conservation and Management Act, and the Coastal Zone Management 

Act. We identified key lease sale documents for the Gulf of Mexico from 

2000 through January 2012, and limited our review to the 5-year Gulf of 

Mexico Outer Continental Shelf (OCS) multilease sale environmental 

impact statements (EIS) documents and individual lease sale EIS 

documents that were not included within Interior’s 5-year plan. We 

identified and interviewed both government and nongovernment 

stakeholders that collaborated or submitted input to Interior concerning 

offshore oil and gas activities during the period of our review. Government 

stakeholders included officials from the Department of Commerce’s 

National Oceanic and Atmospheric Administration (NOAA) and Interior’s 

Fish and Wildlife Service (FWS) and state environmental agencies 

responsible for conducting consistency reviews under the Coastal Zone 

Management Act (CZMA) in Alabama, Florida, Louisiana, Mississippi, and 

Texas. We collected correspondence documentation between 

stakeholders and Interior and interviewed officials from NOAA and FWS 

to determine whether and when they submitted input on oil and gas 

NEPA documents. We also interviewed officials from the five Gulf of 

Mexico coastal states (Alabama, Florida, Louisiana, Mississippi, and 

Texas) to determine when and how they provided input to interior on 

proposed offshore oil and gas activities. Nongovernment stakeholders 

included representatives from conservation organizations and the 

associations representing the offshore oil and gas industry. Conservation 

organizations were selected based on the following criteria: (1) they were 

involved in environmental issues specific to the Gulf of Mexico, (2) they 

were referred to us by a representative from a conservation group that we 

initially interviewed, and (3) time and resource constraints. We selected 

three oil and gas industry trade groups based on their announcement to 

form oil spill task forces and because each represents a minimum of 250 

companies in the oil and gas industry. GAO spoke to representatives of 

two of the three trade groups. Despite several attempts to speak to the 

third, our correspondence was not returned. The findings from our 

interviews cannot be generalized to groups we did not speak with. 

To determine what challenges, if any, Interior faces in providing oversight 

of offshore oil and gas activities in the Gulf of Mexico, we reviewed 

relevant laws, regulations, and Interior guidance and documentation, and 

interviewed knowledgeable officials in Interior’s headquarters and Gulf of 
Appendix I: Scope and Methodology 

Page 112 GAO-12-423 Oil and Gas Management 

Mexico regional offices. We also reviewed our previous work on Interior 

as well as federal external reviews that reported on factors contributing to 

the Deepwater Horizon incident. To report on Interior’s ability to identify 

and evaluate drilling risk, we obtained Interior data from its TIMS IT 

system on significant events from January 1, 2004, through May 14, 

2011, but determined that the data was not sufficiently reliable for our 

purposes. We also reviewed documentation and interviewed Interior 

officials responsible for overseeing drilling permit reviews and drilling rig 

inspections. To further our understanding of IT challenges, we reviewed 

Interior’s IT strategic plans, as well as budget and other documentation 

describing Interior’s implementation of IT systems. We also spoke with 

knowledgeable Interior officials responsible for overseeing IT systems as 

well as officials with direct experience working with these systems. To 

enhance our understanding of human capital issues, we reviewed 

Interior’s human capital strategic plans developed for MMS, as well as 

other human capital documentation and reviewed data provided to us by 

Interior, and verified the reliability of the data for our purposes by 

reviewing documentation and gathering information from people 

knowledgeable of the system. We also met with Interior officials 

responsible for overseeing human capital planning in the Gulf of Mexico 

regional office. To report on Interior’s responses to federal government 

stakeholders, we reviewed federal government stakeholder studies and 

Interior’s responses and discussed this documentation with the 

responsible interior official. To further our review of the development of 

federal regulations, we reviewed Interior documentation on regulations 

and met with knowledgeable Interior officials and representatives from the 

American Petroleum Institute to obtain their views. To enhance our 

understanding of the effect, if any, of resource constraints on Interior’s 

oversight, we reviewed relevant budgetary documentation from Interior 

and met with Interior officials in headquarters and the Gulf of Mexico to 

discuss these issues. 

We conducted this performance audit from September 2010 to July 2012 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit. 
Appendix II: Interior’s Organizational 

Structures for the Bureau of Ocean Energy 

Management and the Bureau of Safety and 

Environmental Enforcement 

Page 113 GAO-12-423 Oil and Gas Management 

The Bureau of Ocean Energy Management’s and the Bureau of Safety 

and Environmental Enforcement’s detailed organizational structures are 

provided in figures 17 and 18. 

Figure 17: Bureau of Ocean Energy Management Organizational Structure 

Appendix II: Interior’s Organizational Structures 

for the Bureau of Ocean Energy Management and 

the Bureau of Safety and Environmental 

Enforcement 
Appendix II: Interior’s Organizational 

Structures for the Bureau of Ocean Energy 

Management and the Bureau of Safety and 

Environmental Enforcement 

Page 114 GAO-12-423 Oil and Gas Management 

Figure 18: Bureau of Safety and Environmental Enforcement Organizational Structure 
Appendix III: Federal and State Stakeholder 

Input to Interior’s Proposed Gulf of Mexico Oil 

and Gas Activities for 2002 through 2012 

Page 115 GAO-12-423 Oil and Gas Management 

Federal stakeholders—the National Oceanic and Atmospheric 

Administration (NOAA) and Fish and Wildlife Service (FWS)––and state 

government stakeholders provide input to Interior through a variety of 

legal authorities. 

According to NOAA officials, NOAA generally provided its most 

substantive input to Interior while Interior was developing its Gulf of 

Mexico multilease sale environmental impact statement (EIS). Table 7 

outlines NOAA’s input to Interior. 

Table 7: NOAA’s Input to Interior’s Gulf of Mexico Outer Continental Shelf (OCS) Lease Sale Environmental Impact Statement 

(EIS) National Environmental Policy Act (NEPA) documents, 2002—2012 

 

National Environmental 

Policy Act Endangered Species Act 

Magnuson-Stevens 

Fishery Conservation and 

Management Act 

Marine Mammal 

Protection Act 

Gulf of Mexico Lease Sale EIS Documents Prior to the Deepwater Horizon Incident 

Final Gulf of Mexico OCS 

2003-2007 Multilease Sale 

EIS (November 2002) 

Yes – informal Yes – biological opinion, 

November 29, 2002 

Yes – Letter documenting 

consultation April 29, 2002 

No 

Final Gulf of Mexico OCS 

Lease Sales 189 and 197 

Eastern Planning Area EIS 

(May 2003)a

Yes – informal Yes – biological opinion, 

August 30, 2003 

Yes – Letter documenting 

consultation November 19, 

2002 

No 

Final Gulf of Mexico OCS 

2007 – 2012 Multilease 

Sale EIS (April 2007) 

Yes – informal Yes – biological opinion, 

June 29, 2007 

Yes – Letter documenting 

consultation December 21, 

2006 

No 

Final Gulf of Mexico OCS 

Lease Sale 224 Eastern 

Planning Area 

Supplemental EIS 

(October 2007)a

Yes – informal Yes – biological opinion, 

June 15, 2001. Still in effect. 

Interior expanded lease 

area 181 after the biological 

opinion was completed. 

Interior requested NOAA 

review of the amended 

action. On October 9, 2007, 

NOAA determined that the 

expanded area would not 

change the effects to listed 

species already considered, 

and would be covered under 

the existing biological 

opinion. 

Yes - Letter Documenting 

Consultation July 19, 2007 

No 

Final Gulf of Mexico OCS 

Supplemental 2009 – 2012 

Supplemental EIS 

(September 2008)b

 No Yes – biological opinion, 

June 29, 2007. Still in effect.

Yes – Letter documenting 

consultation December 13, 

2006. 

No 

 

Appendix III: Federal and State Stakeholder 

Input to Interior’s Proposed Gulf of Mexico 

Oil and Gas Activities for 2002 through 2012 

NOAA 
Appendix III: Federal and State Stakeholder 

Input to Interior’s Proposed Gulf of Mexico Oil 

and Gas Activities for 2002 through 2012 

Page 116 GAO-12-423 Oil and Gas Management 

 

National Environmental 

Policy Act Endangered Species Act 

Magnuson-Stevens 

Fishery Conservation and 

Management Act 

Marine Mammal 

Protection Act 

Gulf of Mexico Lease Sale EIS Documents After the Deepwater Horizon Incident 

Final Gulf of Mexico OCS 

Lease Sale 218 Western 

Planning Area 

Supplemental EIS (August 

2011)c

Yes – formal, June 6, 

2011 

Yes – Interior requested 

reinitiation of the 

Endangered Species Act 

Consultation on July 30, 

2010, and NOAA responded 

on September 24, 2010. 

Reinitiations are not 

complete. The June 29, 

2007, biological opinion 

remains in effect until the 

reinitiated consultations are 

complete. 

Yes – Letter Documenting 

Consultation June 6, 2011. 

Post-Deepwater Horizon

incident, NOAA requested a 

comprehensive review of 

existing EFH consultations 

on September 24, 2010. 

NOAA and Interior are 

working on a new 

consultation document for 

the 2012-2017 multisale 

EIS. 

No 

Final Gulf of Mexico OCS 

Lease Sale 216 and 222 

Central Planning Area 

Supplemental EIS 

(January 2012)c

Yes – formal, August 15, 

2011 

Yes – Interior requested 

reinitiation of Endangered 

Species Act Consultation on 

July 30, 2010, and NOAA 

responded on September 

24, 2010. Reinitiations are 

not complete. The June 29, 

2007 biological opinion 

remains in effect until the 

reinitiated consultations are 

complete. 

Yes – Letter Documenting 

Consultation August 15, 

2011. Post-Deepwater 

Horizon incident, NOAA 

requested a comprehensive 

review of existing essential 

fish habitat consultations on 

September 24, 2010. NOAA 

and Interior are working on 

a new consultation 

document for the 2012-2017 

multisale EIS 

No 

Source: GAO’s analysis of Interior and NOAA documents and input from NOAA officials. 

a

Interior does not include lease sales that could affect the eastern planning area in its programmatic 

Gulf of Mexico multilease sale EIS documents; rather, it prepares a separate lease sale EIS. 

b

Interior had to supplement its programmatic Gulf of Mexico 2007-2012 multilease sale EIS because 

of the Gulf of Mexico Energy Security Act of 2006. 

c

Interior created a separate lease sale EIS due to potential changes in the baseline conditions that 

may have occurred since the Deepwater Horizon incident. 

National Environmental Policy Act. NOAA officials stated that they do not 

always submit formal comments under NEPA on Interior’s Gulf of Mexico 

multilease sale EIS or individual lease sale EIS documents, but generally 

provide comments informally under other legal authorities, such as the 

ESA. Our analysis of Interior’s Gulf of Mexico lease sale environmental 

impact statement (EIS) documents from 2002 through January 2012 

found that NOAA did not formally comment on the five draft lease sale 

EIS documents completed prior to the Deepwater Horizon incident. NOAA 

officials explained that, in the past, they generally consulted informally 

with Interior as it developed its Gulf of Mexico multilease sale EIS 

documents and individual lease sale EIS documents so that NOAA could 

ensure that the information necessary to complete its consultations were 
Appendix III: Federal and State Stakeholder 

Input to Interior’s Proposed Gulf of Mexico Oil 

and Gas Activities for 2002 through 2012 

Page 117 GAO-12-423 Oil and Gas Management 

included in Interior’s National Environmental Policy Act (NEPA) 

documents. However, NOAA provided comments on the supplemental 

EIS documents for both the Western and Central Planning areas—the 

first lease sale NEPA documents completed since the Deepwater Horizon

incident—indicating a shift in its practice.1

NOAA officials also explained that, with regard to other Interior NEPA 

documents, such as individual lease sale environmental assessments 

(EA) or NEPA analyses associated with exploration and development 

plans and drilling permits, as long as the environmental conditions had 

not changed since the completion of the Gulf of Mexico multilease sale 

EIS or individual lease sale EIS, and the exploration and development 

plans or drilling permits were approved with the stated mitigation 

requirements, NOAA typically has not requested or received these 

documents and therefore generally has not commented on them. 

Endangered Species Act. NOAA officials told us that they generally rely on 

information included in Interior’s draft Gulf of Mexico multilease sale EIS 

documents to prepare biological opinions required under Section 7 of the 

Endangered Species Act (ESA).2

 NOAA officials further explained that the 

time frames covered by the biological opinions generally coincide with time 

frames analyzed in the Gulf of Mexico multilease sale EIS documents. For 

example, NOAA’s biological opinion dated November 29, 2002, covers all 

proposed activities analyzed in Interior’s draft Gulf of Mexico OCS 2003-

2007 multilease sale EIS, which was finalized in November 2002. NOAA 

officials told us that by providing input informally through the NEPA process 

and formally through ESA Section 7 consultations, they have ensured that 

Interior’s final Gulf of Mexico multilease sale EIS and other NEPA 

documents included any necessary mitigation measures—such as Notices 

to Lessees and Operators or lease stipulations—to protect threatened or 

engendered species. Accordingly, all subsequent approvals of oil and gas 

activities, including exploration and development plans and drilling permits, 

would be tiered back to the final Gulf of Mexico multilease sale EIS. 

Although NOAA officials told us they typically do not request or receive 

 

1

While the leases included in this lease sale were previously analyzed in the Final 

Programmatic Gulf of Mexico OCS Supplemental EIS 2009-2012 Multilease Sale 

(September 2008), the potential effects of the Deepwater Horizon incident caused Interior 

to prepare an EIS, taking into consideration new information. 

2

Interior officials stated that they also provided Biological Assessments in addition to the 

EIS for consideration in the Section 7 analysis. 
Appendix III: Federal and State Stakeholder 

Input to Interior’s Proposed Gulf of Mexico Oil 

and Gas Activities for 2002 through 2012 

Page 118 GAO-12-423 Oil and Gas Management 

these documents from Interior and, therefore, do not typically comment on 

them as it relates to their authority under the ESA, recent coordination 

between NOAA and Interior has resulted in interim ESA consultation 

procedures. According to NOAA officials, these procedures, finalized on 

February 8, 2012, ensure that the existing mitigation measures in the 

biological opinion are sufficient. As a result, NOAA officials told us that 

Interior is now consulting with them on both exploration and development 

plans, among other items. These interim procedures will remain in place 

until they are replaced with new mitigation measures and procedures in a 

new biological opinion under the ESA. 

Our analysis of NOAA’s biological opinions for the lease sales we 

reviewed found that, prior to the Deepwater Horizon incident, NOAA 

completed four biological opinions, all of which found that the proposed 

lease sales and their associated actions were not likely to jeopardize the 

continued existence of any endangered or threatened species under 

NOAA’s jurisdiction. These biological opinions included both mandatory 

terms and conditions for Interior, in addition to discretionary 

recommendations intended to minimize or avoid adverse effects of 

proposed actions on listed species and critical habitat. Exceptions to this 

process exist, for example, if certain new information becomes available 

during the time period for which the biological opinion is in effect, such as 

with the Deepwater Horizon incident, Interior is required to reinitiate ESA 

Section 7 consultations. On July 30, 2010, Interior requested reinitiation 

of Section 7 ESA consultation with NOAA as it prepared supplemental 

NEPA documents for the remaining lease sales initially included in the 

final programmatic Gulf of Mexico OCS 2007-2012 multilease sale EIS 

(April 2007). In the interim, the existing July 29, 2007, biological opinion 

will remain in effect. 

Magnuson-Stevens Fishery Conservation and Management Act. NOAA 

generally uses information included in Interior’s draft Gulf of Mexico 

multilease sale EIS to facilitate its consultation requirements under the 

Magnuson-Stevens Fishery Conservation and Management Act. 

Specifically, NOAA works with Interior to ensure that the elements of 

Essential Fish Habitat assessments required by regulation are included in 

Interior’s Gulf of Mexico multilease sale EIS. Then, similar to NOAA’s 

biological opinions, NOAA’s Essential Fish Habitat programmatic 

consultations remain in effect for the time period of the Interior lease 

program being analyzed in the final Gulf of Mexico multilease sale EIS. 

For example, NOAA’s Essential Fish Habitat programmatic consultation 

letter dated April 26, 2002, covers activities associated with Interior’s final 

Gulf of Mexico OCS 2003-2007 multilease sale EIS, dated November 
Appendix III: Federal and State Stakeholder 

Input to Interior’s Proposed Gulf of Mexico Oil 

and Gas Activities for 2002 through 2012 

Page 119 GAO-12-423 Oil and Gas Management 

2002. Also, similar to NOAA’s biological opinions, the consultation letter 

may include recommendations to minimize and avoid the effects of oil 

and gas development on Essential Fish Habitats. For example, NOAA 

and Interior cooperatively developed a mitigation measure for the 

protection of certain organisms that inhabit the seafloor of the Gulf of 

Mexico. 

Our analysis of NOAA’s Essential Fish Habitat consultations from 

approximately 2002 through January 2012 found that, prior to the 

Deepwater Horizon incident, NOAA completed five consultations, all of 

which, according to NOAA officials, found that if the proposed Interior 

mitigations, conservation recommendations, and standard lease 

stipulations and regulations are followed, the effects on Essential Fish 

Habitats resulting from activities proposed in the lease sale EIS 

documents would be minimal. However, after the Deepwater Horizon

incident, NOAA requested a comprehensive review of existing essential 

fish habitat consultations on September 24, 2010.3

 NOAA and Interior are 

working on a new consultation document for Interior’s next Gulf of Mexico 

multilease sale EIS. 

Marine Mammal Protection Act. Under the Marine Mammal Protection Act 

(MMPA), Interior coordinates with NOAA to mitigate potentially negative 

effects on marine mammals and obtain authorizations if mammals are 

likely to be taken. NOAA officials stated that NOAA worked with Interior 

through the ESA and NEPA processes to institute lease stipulations and 

Notices to Lessees and Operators that provide protection for threatened 

or endangered marine mammals. However, both NOAA and Interior 

officials acknowledged that adverse effects to marine mammals (both 

ESA-listed and nonlisted) from seismic surveys in the Gulf of Mexico 

could occur and that an MMPA authorization would be appropriate and, 

as a result, Interior first applied for an MMPA authorization in 2002. 

NOAA and Interior have been working toward the issuance of MMPA 

incidental take regulations to cover seismic surveys in the Gulf of Mexico. 

Since 2002, however, changes in the anticipated activities, the need for 

 

3

NOAA officials stated that to the extent that Interior can examine the effects to essential 

fish habitat and related critical habitat for ESA-listed species together (or at least keep the 

potential effects in mind as they complete their NEPA documentation and related ESA 

documentation), it will aid their overall analysis from the standpoint of ecosystem effects 

and, potentially, regulatory compliance under the ESA and Magnusson-Stevens Fishery 

Conservation and Management Act. 
Appendix III: Federal and State Stakeholder 

Input to Interior’s Proposed Gulf of Mexico Oil 

and Gas Activities for 2002 through 2012 

Page 120 GAO-12-423 Oil and Gas Management 

NEPA analyses, and resource limitations have slowed down the process 

and regulations have not yet been issued. 

In April 2011, Interior again revised its application for take authorizations 

based on industries’ updated seismic effort projections, which NOAA later 

published for comment. However, the EIS is not still complete, and NOAA 

has issued no take authorizations for marine mammals for seismic 

activities. In addition, a group of conservation organizations filed a 

number of formal notices of intent to sue the Secretary of the Interior and, 

in one case, the Secretary of Commerce, for failure to comply with MMPA 

and ESA when approving offshore oil and gas activities in the Gulf of 

Mexico. For example, in its February 9, 2011, notice, the group informed 

Interior and NOAA that it intended to challenge the 10 projects approved 

since October 15, 2010, for, among other things, failing to obtain take 

permits under the MMPA and ESA that are designed to protect 

endangered species and marine mammals, such as whales, from harmful 

offshore oil activities. 

According to FWS officials, FWS also generally provided its most 

substantive input while Interior was developing its Gulf of Mexico 

multilease sale EIS documents. Table 8 outlines FWS’s input to Interior. 

Table 8: FWS’s Input to Interior’s Gulf of Mexico OCS Lease Sale EIS NEPA documents, 2002-2012 

National Environmental 

Policy Act Endangered Species Act 

Gulf of Mexico Lease Sale EIS Documents Prior to the Deepwater Horizon Incident 

Final Gulf of Mexico OCS 2003-2007 

Multilease Sale EIS (November 2002) 

Yes – informal Yes – biological opinion, January 13, 2003 

Final Gulf of Mexico OCS Lease Sales 

189 and 197 Eastern Planning Area EIS 

(May 2003)a

Yes – formal, January 27, 2003 Yes – biological opinion, August, 2003 

Final Gulf of Mexico OCS 2007 – 2012 

Multilease Sale EIS (April 2007) 

Yes – formal, January 5, 2007 Yes – concurrence to Interior’s biological assessment 

September 14, 2007 

Final Gulf of Mexico OCS Lease Lease 

Sale 224 Eastern Planning Area 

Supplemental EIS (October 2007)a

Yes – Informal Yes – biological opinion, June 8, 2001 

Final Gulf of Mexico OCS Supplemental 

2009 – 2012 Supplemental EIS 

(September 2008) b

Yes – formal, June 6, 2008 Yes – concurrence to Interior’s original biological 

assessment September 14, 2007. Concur to draft 

Supplemental EIS (addition of Lease Sale 181 and 

updates) via e-mail dated July 30, 2008. 

FWS 
Appendix III: Federal and State Stakeholder 

Input to Interior’s Proposed Gulf of Mexico Oil 

and Gas Activities for 2002 through 2012 

Page 121 GAO-12-423 Oil and Gas Management 

National Environmental 

Policy Act Endangered Species Act 

Gulf of Mexico Multilease Sale EIS Documents After the Deepwater Horizon Incident 

Final Gulf of Mexico OCS Lease Sale 

218 Western Planning Area 

Supplemental EIS (August 2011)c

Yes – formal, June 6, 2011 Yes – Interior requested reinitiation of ESA 

consultations on July 30, 2010, and FWS responded on 

September 27, 2010. Reinitiations are not complete. 

The September 14, 2007 and July 30, 2008 

concurrence to Interior’s biological assessments 

remain in effect until the reinitiated consultations are 

complete 

Final Gulf of Mexico OCS Lease Sale 

216 and 222 Central Planning Area 

Supplemental EIS (January 2012)c

Yes – formal, August 10, 2011 Yes – Interior requested reinitiation of ESA 

consultations on July 30, 2010, and FWS responded on 

September 27, 2010. Reinitiations are not complete. 

The September 14, 2007 and July 30, 2008 

concurrence to Interior’s biological assessments 

remain in effect until the reinitiated consultations are 

complete 

Source: GAO analysis of Interior and FWS documents and input from FWS officials. 

a

Due to the drilling moratorium in the eastern planning area of the Gulf of Mexico, Interior does not 

include lease sales that could affect the eastern planning area in its programmatic Gulf of Mexico 

multilease sale EIS documents; rather, it prepares a separate lease sale EIS. 

b

Interior had to supplement its programmatic Gulf of Mexico 2007-2012 multilease sale EIS because 

of the Gulf of Mexico Security Act of 2006. 

c

Interior created a separate lease sale EIS due to potential changes in the baseline conditions that 

may have occurred since the Deepwater Horizon incident. 

National Environmental Policy Act. FWS officials told us that they are 

generally involved with Interior as it develops its Gulf of Mexico multilease 

sale EIS. Similar to NOAA, FWS officials told us they coordinate with 

Interior early in the process and are able to provide information on 

endangered species necessary to ensure that Interior meets its ESA 

requirements. 

Our analysis of Interior’s Gulf of Mexico lease sale EIS documents from 

2002 through January 2012 indicated that FWS provided formal 

comments to Interior on three of the five draft lease sale EIS documents 

prior to the Deepwater Horizon incident and on both draft lease EIS 

documents since the incident. FWS officials also explained that, again, 

like NOAA, because they provide their most substantive input during the 

lease sale planning process as Interior develops a Gulf of Mexico 

multilease sale EIS, they do not typically formally comment on postlease 
Appendix III: Federal and State Stakeholder 

Input to Interior’s Proposed Gulf of Mexico Oil 

and Gas Activities for 2002 through 2012 

Page 122 GAO-12-423 Oil and Gas Management 

activities, including lease sale EA documents,4 exploration and 

development plans, or individual drilling permits. 

Endangered Species Act. FWS officials told us that, until 2007, FWS 

typically relied on information included in the draft Gulf of Mexico 

multilease sale EIS to complete the required ESA Section 7 

consultations.5

 Similar to NOAA, FWS officials explained that the time 

frames covered by these consultations—which resulted in biological 

opinions drafted by FWS—generally coincided with time frames analyzed 

in Interior’s final Gulf of Mexico multilease sale EIS. For example, FWS’s 

biological opinion dated January 13, 2003, covers the proposed activities 

analyzed in Interior’s draft Gulf of Mexico OCS 2003-2007 multilease sale 

EIS, which was finalized in November 2002. Our analysis of FWS’s ESA 

consultations from 2002 through 2012 found that, prior to the Deepwater 

Horizon incident; FWS completed three ESA Section 7 consultations, all 

of which found that the proposed lease sales and their associated actions 

were not likely to adversely affect any threatened or endangered species. 

FWS prepared a biological opinion at the request of Interior that found 

that the proposed lease sales were not likely to jeopardize the continued 

existence of any endangered or threatened species. 

Beginning in 2007, instead of formally consulting with Interior and preparing 

a biological opinion for the final Gulf of Mexico OCS 2007-2012 multilease 

sale EIS (April 2007), FWS requested that it informally consult with Interior 

and that Interior prepare a biological assessment.6

 FWS officials explained 

that formal consultations resulting in biological opinions were resource 

intensive but generally necessary to determine if the authorized incidental 

take would jeopardize a threatened or endangered species. However, in 

2007, based on the outcomes of the previously completed biological 

opinions which all concluded that Interior’s proposed actions were not likely 

 

4

FWS officials told us that they sometimes informally consult with Interior on individual 

lease sales. 

5

Interior officials stated that they also provided Biological Assessments in addition to the 

EIS for consideration in the Section 7 analysis. 

6

Under Section 7, federal agencies must consult with FWS when any action the agency 

carries out, funds, or authorizes––such as through a permit––may affect a listed 

endangered or threatened species or critical habitat. This process usually begins as 

informal consultation. When a federal agency determines that, through a biological 

assessment or other review, its action is likely to adversely affect a listed species, the 

agency submits a request to FWS for a formal consultation. 
Appendix III: Federal and State Stakeholder 

Input to Interior’s Proposed Gulf of Mexico Oil 

and Gas Activities for 2002 through 2012 

Page 123 GAO-12-423 Oil and Gas Management 

to adversely affect listed species, FWS requested that Interior consider 

completing the consultation informally, rather than formally. This informal 

consultation required Interior to prepare a biological assessment for the 

proposed activities, with which FWS concurred. FWS officials told us that 

both its formal and informal consultations included conservation 

recommendations for Interior intended to further minimize the potential for 

adverse effects of proposed actions on listed species and critical habitat or 

further a species recovery. FWS officials explained that, again, similar to 

NOAA, by providing input informally through the NEPA process and the 

ESA Section 7 consultations, it has ensured that Interior’s final Gulf of 

Mexico multilease sale EIS and ESA consultation documents have 

included the necessary conservation measures—such as Notices to 

Lessees and Operators or lease stipulations—to protect threatened or 

endangered species under its jurisdiction. Accordingly, all subsequent 

authorization of oil and gas activities, including approvals of exploration and 

development plans or drilling permits, would be tiered back to the relevant 

Gulf of Mexico multilease sale EIS and ESA biological opinion or biological 

assessment. As a result, as oil and gas development moves through 

Interior’s postlease process––including the exploration and development 

plan and drilling permit review and approvals––FWS officials told us that 

they typically do not request or receive these documents from Interior and 

therefore do not typically comment on them as it relates to their authority 

under the ESA. Again, as with NOAA, the exception is if new information 

becomes available during the time period for which the biological opinion is 

in effect, such as with the Deepwater Horizon incident, in which case 

Interior is required to reinitiate Section 7 ESA consultations. On July 30, 

2010, Interior requested reinitiation of Section 7 ESA consultation with 

FWS. Subsequent to the Deepwater Horizon incident, on July 30, 2010, 

Interior requested reinitiation of Section 7 consultation with FWS. However, 

FWS did not reinitiate consultation at this time because no assessments of 

the current status of listed species as a result of the oil spill has been made 

available to FWS to serve as a basis for assessing the effects of the 

proposed actions. In the interim, Interior has determined that the existing 

September 14, 2007, biological assessment remains in effect. 

State government stakeholders provided input to Interior through 

commenting on Gulf of Mexico multilease sale EIS and other lease sale 

EIS documents and consistency reviews conducted under the Coastal 

Zone Management Act. 

National Environmental Policy Act. Of the five state agencies from Gulf of 

Mexico states that we reviewed, only the Mississippi Department of 

State Government 

Stakeholders 
Appendix III: Federal and State Stakeholder 

Input to Interior’s Proposed Gulf of Mexico Oil 

and Gas Activities for 2002 through 2012 

Page 124 GAO-12-423 Oil and Gas Management 

Marine Resources did not comment on any of Interior’s Gulf of Mexico 

multilease sale EIS documents or individual lease sale EIS documents 

from approximately 2002 through January 2012. Of the remaining four 

state agencies that provided comments, Louisiana’s Department of 

Natural Resources was most consistent in commenting on Interior’s draft 

lease sale EIS documents, commenting on five of the six included in our 

analysis period (see table 9). 

Table 9: State’s Input to Interior’s Gulf of Mexico OCS Lease Sale EIS NEPA documents, 2002-2012 

 

Alabama 

Department of 

Environmental 

Management

Florida 

Department of 

Environmental 

Protection

Louisiana 

Department of 

Natural 

Resources 

Mississippi 

Department of 

Marine 

Resources

Texas 

General 

Land 

Office

Gulf of Mexico Lease Sale EIS Documents Prior to the Deepwater Horizon Incident 

Final Gulf of Mexico OCS 2003-2007 

Multilease Sale EIS (November 2002) 

Yes No Yes No No

Final Gulf of Mexico OCS Lease 

Sales 189 and 197 Eastern Planning 

Area EIS (May 2003)a

No Yes Yes No Yes

Final Gulf of Mexico OCS 2007 – 

2012 Multilease Sale EIS (April 2007) 

Yes No Yes No No

Final Gulf of Mexico OCS Lease 

Lease Sale 224 Eastern Planning 

Area Supplemental EIS (October 

2007)a

No No No No No

Final Gulf of Mexico OCS 

Supplemental 2009 – 2012 

Supplemental EIS (September 2008)b

Yes No No No No

Gulf of Mexico Lease Sale EIS Documents After the Deepwater Horizon Incident 

Final Gulf of Mexico OCS Lease Sale 

218 Western Planning Area 

Supplemental EIS (August 2011)c

No No No No No

Final Gulf of Mexico OCS Lease Sale 

216 and 222 Central Planning Area 

Supplemental EIS (January 2012)c

 Yes No Yes No No

Source: GAO analysis of Interior and state documents and input from state officials. 

a

Due to the drilling moratorium in the eastern planning area of the Gulf of Mexico, Interior does not 

include lease sales that could affect the eastern planning area in its programmatic Gulf of Mexico 

multilease sale EIS documents; rather, it prepares a separate lease sale EIS. 

b

Interior had to supplement its programmatic Gulf of Mexico 2007-2012 multilease sale EIS because 

of the Gulf of Mexico Energy Security Act of 2006. 

c

Interior created a separate lease sale EIS due to potential changes in the baseline conditions that 

may have occurred since the Deepwater Horizon incident. 
Appendix III: Federal and State Stakeholder 

Input to Interior’s Proposed Gulf of Mexico Oil 

and Gas Activities for 2002 through 2012 

Page 125 GAO-12-423 Oil and Gas Management 

Coastal Zone Management Act. State agency officials responsible for 

complying with CZMA from the five Gulf of Mexico states told us that no 

oil and gas activities proposed by Interior since 2000 have been found to 

be inconsistent with the states’ coastal zone management plan. In 

accordance with CZMA, states are required to approve or deny 

consistency certification under the CZMA for Interior’s oil and gas 

proposed activities, including for Interior’s Gulf of Mexico multilease sale 

EIS, individual lease sale EA documents, and exploration and 

development plans. Unlike most other stakeholders, states receive and 

have the opportunity to review and disapprove an operator’s exploration 

and development plan if they find the proposed plan to be inconsistent 

with the state’s coastal zone management plan. However, officials from 

two of the five Gulf of Mexico states characterized their consistency 

reviews as cursory. Officials from one of these state agencies said they 

are checking the documents for form and not content, while an official 

from another state agency explained that the states’ approvals were 

mostly through default—that is, by not disapproving the project within the 

specified time frame, the project was found to be consistent with the 

state’s coastal zone management plan. An official from another state 

agency said that while state officials conduct consistency reviews, they 

provide their most substantive input to Interior during the NEPA process. 

We attempted to obtain data from the states and report on their 

consistency determinations but found that the data were not sufficiently 

reliable for the purposes of our analysis. 
Appendix IV: Comments from the Department 

of the Interior 

Page 126 GAO-12-423 Oil and Gas Management 

Appendix IV: Comments from the 

Department of the Interior 
Appendix IV: Comments from the Department 

of the Interior 

Page 127 GAO-12-423 Oil and Gas Management 
Appendix IV: Comments from the Department 

of the Interior 

Page 128 GAO-12-423 Oil and Gas Management 
Appendix IV: Comments from the Department 

of the Interior 

Page 129 GAO-12-423 Oil and Gas Management 
Appendix IV: Comments from the Department 

of the Interior 

Page 130 GAO-12-423 Oil and Gas Management 
Appendix IV: Comments from the Department 

of the Interior 

Page 131 GAO-12-423 Oil and Gas Management 
Appendix IV: Comments from the Department 

of the Interior 

Page 132 GAO-12-423 Oil and Gas Management 
Appendix IV: Comments from the Department 

of the Interior 

Page 133 GAO-12-423 Oil and Gas Management 
Appendix IV: Comments from the Department 

of the Interior 

Page 134 GAO-12-423 Oil and Gas Management 
Appendix IV: Comments from the Department 

of the Interior 

Page 135 GAO-12-423 Oil and Gas Management 
Appendix V: GAO Contact and Staff 

Acknowledgments 

Page 136 GAO-12-423 Oil and Gas Management 

Frank Rusco, (202) 512-3841 or ruscof@gao.gov

In addition to the contact named above, Christine Kehr, Assistant 

Director; Nirmal Chaudhary; Glenn C. Fischer; Cindy Gilbert; David 

Greyer; Michael Kendix; Alison O’Neill; Kiki Theodoropoulos; Barbara 

Timmerman; and Nick Weeks made key contributions to this report. 

Appendix V: GAO Contact and Staff 

Acknowledgments 

GAO Contact 

Staff 

Acknowledgments 

(361227)
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