GAO-13-45R Mineral Resources 

November 15, 2012 

The Honorable Raúl M. Grijalva 

Ranking Member 

Subcommittee on National Parks, Forests, and Public Lands 

Committee on Natural Resources 

House of Representatives 

The Honorable Tom Udall 

United States Senate 

Subject: Mineral Resources: Mineral Volume, Value, and Revenue 

The Department of the Interior (Interior) administers minerals found in over 700 million 

acres of federal lands, 57 million acres on Indian lands, and 1.8 billion acres below 

offshore waters. Operators who lease these lands and extract these minerals pay 

billions of dollars annually that are shared among federal, state, and Indian tribal 

governments and are one of the largest nontax sources of revenue to the federal 

government. Some of these minerals, such as oil, gas, and coal, are available through 

leases requiring payments in the form of rents and bonuses, which are required to 

secure and maintain a lease, and royalties, which are based on the value of the 

minerals that are extracted. These minerals are generally known as leasable minerals. 

The Department of the Interior’s Office of Natural Resources Revenue (ONRR) is 

responsible for compiling data on the volume and value of leasable minerals produced 

from all federal and Indian lands where there is a trust responsibility, and collecting the 

appropriate payments. In contrast, other minerals, such as gold, silver, and copper, 

are governed by the General Mining Act of 1872, which makes these minerals 

available to operators through a federal claim-patent system that provides the right to 

explore, extract, and develop the federal mineral deposit without having to pay a 

royalty.1

 These minerals are generally known as hardrock minerals.2

You asked us to review minerals extracted from federal lands. Our objectives were to 

provide information on the (1) volume and dollar value of leasable minerals extracted 

 

1

Since 1995, under provisions in the annual appropriations act, Congress has enacted a series of 1-year moratoria 

on the issuance of mineral patents. 

2

In addition to leasable and hardrock minerals, there is a third category, known as saleable minerals, which include 

such materials as sand, stone, and gravel; these minerals are generally widespread, of low value, and available for 

sale through Interior’s Bureau of Land Management. We do not discuss saleable minerals in this report. 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-13-45R Mineral Resources

from federal lands and waters in fiscal years 2010 and 2011; (2) amount the federal 

government collected for leasable minerals in royalties, rents, bonuses, and other 

revenue and how this amount was calculated; and (3) availability of data on the 

volume and dollar value of hardrock minerals extracted from federal lands in fiscal 

years 2010 and 2011. Enclosure I contains the briefing on the volume, value, and 

revenues from leasable minerals on federal and Indian lands that was given to your 

offices on June 26, 2012 (objectives 1 and 2). In addition, enclosure II presents 

information on the availability of data regarding the volume and value of hardrock 

minerals extracted from federal lands (objective 3).

To obtain data on leasable minerals, we analyzed data on leasable minerals 

maintained by ONRR. These data included sales year data on sales volume, royalties, 

rents, bonuses, and other revenue for fiscal years 2010 and 2011. These data, which 

ONRR updates annually, include all leasable mineral sales transactions that occurred 

in a given fiscal year. We focused our review on revenue data and did not collect data 

on administrative processing fees for services or fines paid to the federal government, 

such as those related to processing leases and hardrock mining claims. We identified 

the factors that were integral to calculating these revenues and the share retained by 

the federal government after disbursement to state and Indian recipients. To assess 

the reliability of these data, we reviewed our prior analyses of the database ONRR 

uses to record mineral sales and revenue data and interviewed officials familiar with 

the database’s contents. We determined that ONRR’s sales volume, sales value, and 

revenue data were sufficiently reliable for the purpose of describing the aggregate data 

that ONRR is reporting but did not assess the reliability of the individual transactions 

that make up those data.

To determine the availability of data on hardrock minerals, we reviewed reports and 

interviewed officials with Interior’s U.S. Geological Survey and Bureau of Land 

Management and with the Department of Agriculture’s U.S. Forest Service. We also 

reviewed reports from the 12 western states where the majority of hardrock mining 

occurs and interviewed state officials in Alaska and Nevada about their efforts to 

estimate the amount of hardrock minerals produced on federal lands. We reviewed 

hardrock mine production data contained in documents filed with the U.S. Securities 

and Exchange Commission by hardrock mine operators and interviewed Interior 

officials regarding their efforts to implement the Extractive Industries Transparency 

Initiative, an international effort to promote openness and accountability in the oil, gas, 

and mining sectors.

We conducted this performance audit from January 2012 to November 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.
Page 3 GAO-13-45R Mineral Resources

In summary, there were nearly 70 different types of leasable minerals extracted from 

federal lands and waters in fiscal years 2010 and 2011, but their volume cannot be 

aggregated because they use different units of measure. For example, the volumes of 

the four most valuable of these minerals—oil, gas, natural gas liquids, and coal—are 

measured in barrels, million cubic feet (mcf), gallons, and tons, respectively. According 

to ONRR data, the total value of all leasable minerals extracted from federal and 

Indian land and sold in fiscal years 2010 and 2011 was $92.3 billion and $98.6 billion, 

respectively.

The resulting revenue to the federal government from mineral leasing activity on 

federal and Indian land in fiscal years 2010 and 2011 was $11.3 billion and $11.4 

billion, respectively. Of this amount, oil, gas, and natural gas liquids accounted for the 

majority of the revenue—$10.1 billion in each fiscal year. The bulk of this revenue 

comes from royalties, which accounted for 92.8 percent of total revenue in 2011. 

Table 1 shows the volume, value, and royalties for the most valuable leasable mineral 

commodities.

Table 1: Volume, Value, and Royalties of Oil, Gas, Natural Gas Liquids, and Coal Extracted from Federal 

and Indian Land, Fiscal Years 2010 and 2011

Dollars in billions

Volume Value Royalties

Commodity 2010 2011 2010 2011 2010 2011

Oil 739.0 million barrels 645.6 million barrels $53.2 $61.7 $5.4 $6.6

Gas 5,415.2 mcf 4,859.2 mcf $24.4 $20.5 $2.8 $2.4

Natural gas liquids 4,817.9 gallons 4,679.1 gallons $4.7 $5.6 $0.4 $0.6

Coal 478.1 tons 470.0 tons $7.3 $7.6 $0.8 $0.8

Source: GAO analysis of ONRR data.

The mechanisms used to calculate the three types of leasable mineral revenue—

bonus bids, rents, and royalties—vary widely. For example, for oil and gas leases, 

bonus bids—up-front payments to obtain a lease—are determined by a competitive 

bidding process, with leases going to the highest bidder. Prior to the competitive 

bidding, Interior sets a minimum acceptable bonus bid for each offshore parcel and a 

minimum per acre bid amount for each onshore parcel offered for lease. Rent is 

charged annually for a lease until production begins or the lease is terminated or 

relinquished. Royalty rates depend on the mineral and are generally calculated based 

on a proportion of sales value, less allowable deductions, such as transportation and 

processing allowances.

Regarding the availability of data on hardrock minerals, we found that federal agencies 

generally do not collect data from hardrock mine operators on the amount and value of 

hardrock minerals extracted from federal lands because there is no federal royalty that 

would necessitate doing so. Furthermore, while many western states collect data on 

the hardrock minerals produced in their state for purposes of assessing a state royalty, 

they generally do not collect data on the volume of those minerals extracted from 

federal land within those states. The Department of the Interior is now working to 

implement an international initiative to promote openness and accountability in the oil, 
Page 4 GAO-13-45R Mineral Resources

gas, and mining sectors called the Extractive Industries Transparency Initiative. This 

initiative is currently in the beginning stages of implementation—consequently it is 

unclear what affect, if any, it will have on reporting requirements for operators of 

hardrock mines on federal lands. Interior officials told us that they expect to finish 

implementing this initiative in about 4 years.

Agency Comments

We provided a draft of this report to the Department of the Interior for review and 

comment. The department provided technical comments which we incorporated as 

appropriate.

- - - - - 

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 appropriate congressional committees, the Secretary of the 

Interior, the Directors of the Office of Natural Resources Revenue and the Bureau of 

Land Management, 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 concerning this report, please contact 

me at (202) 512-3841 or fennella@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page of this 

report. Key contributors to this report were Jeff Malcolm, Assistant Director; Casey L. 

Brown; David Brown; Michael Kendix; Marya Link; Cheryl Peterson; Mick Ray; Carol 

Herrnstadt Shulman; and Walter Vance.

Anne-Marie Fennell

Director, Natural Resources and Environment

(Enclosures—2)
Enclosure I

Page 5 GAO-13-45R Mineral Resources

Briefing on Volume, Value, and Revenue of Leasable Minerals

Leasable Minerals on 

Federal and Indian Lands:

Volume, Value, and Revenue

Briefing for Congressional Requesters

June 26, 2012
Enclosure I

Page 6 GAO-13-45R Mineral Resources

Introduction

• The Department of the Interior (Interior) administers over 

700 million acres of minerals on federal and Indian lands and 

1.8 billion acres below offshore waters.

• Certain minerals in these areas—such as oil and gas—are 

available through leasing systems that require payments from 

the lessees extracting or producing such minerals. 

• These resources generate billions of dollars annually that are 

shared among federal, state, and tribal governments. Revenue 

generated from oil and gas production is one of the largest 

nontax sources of federal government funds. 

• Interior’s Office of Natural Resources Revenue (ONRR) is 

responsible for collecting payments for minerals produced from 

federal and Indian leases and data on the volume and value of 

the related sales. 

Page 2
Enclosure I

Page 7 GAO-13-45R Mineral Resources

Objectives, Scope, and Methodology

• This final briefing is in response to your request for information 

on the following two objectives:

1. the sales volume and value reported to Interior for onshore 

and offshore federal and Indian leasable minerals sold in fiscal 

years 2010 and 2011, and

2. the amount the federal government collected for these 

minerals in royalties, rents, bonuses, and other revenue, and 

how this amount was calculated.

Page 3
Enclosure I

Page 8 GAO-13-45R Mineral Resources

Objectives, Scope, and Methodology

• We focused our work on leasable minerals on federal and 

Indian lands and in offshore federal waters.

• For the first objective, we analyzed ONRR-maintained “sales 

year” data for fiscal years 2010 and 2011. These data include 

all transactions related to mineral sales that occurred in a given 

fiscal year, and ONRR updates these data annually. 

• For the second objective, we analyzed ONRR-maintained sales 

year data on mineral royalties, rents, bonuses, and other 

revenue for fiscal years 2010 and 2011.

• We determined the factors that were integral to calculations 

of these revenues. 

• We determined the revenue share retained by the federal 

government after disbursement to state and Indian 

recipients.

Page 4
Enclosure I

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Objectives, Scope, and Methodology

• We interviewed Interior staff from several offices and spoke 

with industry representatives to gain their perspective on these 

issues.

• We reviewed prior GAO analyses of the database ONRR uses 

to record mineral sales and revenue data. We also interviewed 

officials familiar with the database’s contents. We determined 

that ONRR’s sales volume, sales value, and revenue data were 

sufficiently reliable for the purpose of describing the aggregate 

data that ONRR is reporting, but did not assess the reliability of 

individual observations that make up those data.

• Our data include dollar values for fiscal years 2010 and 2011. 

The reported values are in nominal dollars, not adjusted for 

inflation. Inflation for fiscal year 2011 was 2.6 percent.

Page 5
Enclosure I

Page 10 GAO-13-45R Mineral Resources

Objectives, Scope, and Methodology

• We provided a draft of this briefing to Interior officials for their 

review and comment. Department officials provided technical 

comments that we incorporated as appropriate. 

• We conducted this performance audit from January 2012 to 

June 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. 

Page 6
Enclosure I

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Results in Brief

• About 70 different leasable mineral products were involved in 

royalty-related transactions in fiscal years 2010 and 2011.

• The total value of leasable minerals extracted from federal and 

Indian lands and sold in fiscal years 2010 and 2011 was 

$92.3 billion and $98.6 billion, respectively. 

• The resulting revenue from mineral leasing activity on federal 

and Indian lands in fiscal years 2010 and 2011 was 

$11.3 billion and $11.4 billion, respectively.

• Oil, gas, and natural gas liquids accounted for the majority of 

this revenue—$10.1 billion in each fiscal year.

Page 7
Enclosure I

Page 12 GAO-13-45R Mineral Resources

Background

Types of minerals on federal lands

• Leasable

• Include energy-producing substances, such as oil, coal, natural gas, and geothermal steam, and non-energy producing substances, such as phosphate and potassium.

• The federal government collects revenues for leasable minerals 

primarily through lease bids, annual rents, and royalties.

• Locatable (hardrock)

• Include substances such as gold, silver, copper, and uranium.

• The federal government generally does not collect royalties or rent for 

locatable minerals. Instead, it charges miners an initial fee to locate a 

claim and an annual fee to maintain the claim.

• Saleable

• Include building materials such as sand, stone, gravel, and clay. 

Saleable minerals are generally widespread and of low value.

• Interior’s Bureau of Land Management (BLM) makes saleable minerals 

available through contracts of sale and free use permits.

Page 8
Enclosure I 

Page 13 GAO-13-45R Mineral Resources 

Background

Leasable minerals

• Classified as leasable based on

• Mineral type, as discussed above, or

• Type of land on which they are located. For example,

• All minerals on Indian lands held in common are 

generally leasable.

• Minerals on acquired federal lands are considered 

leasable.

• The most prominent leasable minerals in sales and revenue are 

oil, gas, natural gas liquids (NGL), and coal products.

• Others include carbon dioxide, copper concentrate, soda ash, 

lead concentrate, phosphate ore, and geothermal steam. 

Page 9
Enclosure I

Page 14 GAO-13-45R Mineral Resources

Background

Commodities and mineral products

• For reporting purposes, ONRR aggregates some similar 

minerals together into groups called commodities.

• Each commodity may consist of several distinct mineral 

products or categories.

• ONRR groups twenty-nine mineral products into the following 

key commodities: oil, gas, NGL, and coal.

• Seventeen of those mineral products were involved in 

royalty-related transactions in fiscal year 2010 and/or 2011.

Page 10
Enclosure I

Page 15 GAO-13-45R Mineral Resources

Background

Page 11

Source: ONRR.

Note: Individual mineral products that were sold in different ways were reported as multiple products in ONRR‘s data and in this table. 

For example, Sand/Gravel was sold both by the ton and by the cubic yard.

Commodities and mineral products (cont’d)

Commodities Mineral products involved in royalty-related transactions, fiscal years 2010-2011 

Oil Condensate, Drip or Scrubber Condensate, Fuel Oil, Inlet Scrubber, Oil, Other Liquid 

Hydrocarbons 

Gas Coal Bed Methane, Flash Gas, Fuel Gas, Gas Hydrate, Gas Lost-Flared or Vented, Nitrogen, 

Processed (Residue) Gas, Unprocessed (Wet) Gas

NGL Gas Plant Products 

Coal Coal, Coal-Bituminous-Raw 

Other Anhydrous Sodium Sulfate, Borax-Anhydrous, Borax-Decahydrate, Borax-Pentahydrate, Boric 

Acid, Brine Barrels, Carbon Dioxide Gas, Caustic, Cinders, Clay, Cobalt Concentrate, Copper, 

Copper Concentrate, Ferro Phosphorous Slag, Geothermal-Direct Utilization (2), GeothermalElectrical Generation (3), Gilsonite, Gold, Gold Ore, Gold Placer, Gypsum, Helium, 

Langbeinite, Lead Concentrate, Leonardite, Limestone, Magnesium Chloride Brine, Manure 

Salts, Molybdenum Concentrate, Muriate Of Potash-Granular, Muriate Of Potash-Standard, 

Phosphate Raw Ore, Potash, Purge Liquor, Quartz Crystal, Salt, Sand/Gravel (2), Silver, Soda 

Ash, Sodium Bi-Carbonate, Sodium Bisulfite, Sodium Decahydrate, Sodium Sesquicarbonate, 

Sulfide, Sulfur, Sylvite-Raw Ore, Trona Ore, Wavellite, Zinc Concentrate
Enclosure I

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Background

Reorganization of the Minerals Management Service (MMS)

• Beginning in 2010, the Secretary of the Interior reorganized the 

MMS into three new agencies to separate its missions of 

promoting offshore resource development, enforcing safety 

regulations offshore, and collecting revenue from both onshore 

and offshore operations.

• The three agencies are:

• Bureau of Ocean Energy Management. BOEM manages the development of the nation’s offshore resources. 

• Bureau of Safety and Environmental Enforcement. BSEE 

enforces safety and environmental regulations offshore.

• Office of Natural Resources Revenue. ONRR manages revenue associated with federal and Indian mineral leases 

both onshore and offshore.

Page 12
Enclosure I

Page 17 GAO-13-45R Mineral Resources

Background

ONRR’s management of leasable minerals revenue

• ONRR collects nearly all of the data and payments for minerals 

leased from federal and Indian lands.

• Much of this information is self-reported by lessees who, 

according to ONRR, have up to 6 years to make adjustments to 

their submitted data. 

• ONRR audits a portion of all lessee data and payments after 

3 years. For example, in 2012 ONRR is auditing information 

reported by lessees in fiscal year 2009.

Page 13
Enclosure I

Page 18 GAO-13-45R Mineral Resources

Background

Types of leasable mineral revenue commonly collected by ONRR

• Bonus bids (Bonuses)

• Up-front cash payments to secure a lease. Mineral leases generally are 

awarded based on competitive bidding, with leases going to the highest 

bidder. Interior determines a minimum acceptable bonus bid for each 

onshore and offshore parcel offered for lease.

• Rents 

• Rent per acre leased is charged annually until production begins unless 

the lease is terminated or relinquished.

• Royalties 

• Payments based on a proportion of sales value, less allowable deductions.

• Other revenues

• Miscellaneous fees and other payments. For example, ONRR collects 

interest on late royalty payments.

Page 14
Enclosure I

Page 19 GAO-13-45R Mineral Resources

Background

Key legislation governing leasable minerals

Mining Law of 1872

• Authorizes and governs prospecting and mining for locatable minerals on 

federal lands, originally ranging from gold to fossil fuels. 

Mineral Leasing Act of 1920

• Authorizes and governs leasing on federal lands for development of 

deposits of fossil fuels, fertilizer minerals, and chemical minerals on federal 

lands, which were previously governed by the Mining Law of 1872. 

Mineral Leasing Act for Acquired Lands of 1947

• Authorizes and governs mineral leasing on federal acquired lands. Federal 

acquired lands may be leased under the provisions of the Mineral Leasing 

Act of 1920.

Page 15
Enclosure I

Page 20 GAO-13-45R Mineral Resources

Background

Key legislation governing leasable minerals (cont’d)

Outer Continental Shelf Lands Act of 1953

• Serves as the basis for most federal regulation governing offshore minerals 

and development activities within U.S. coastal waters generally from 3 to 

200 miles offshore.

Federal Land Policy and Management Act of 1976

• Governs wind and solar projects, which are authorized by obtaining a rightof-way from BLM.

The Federal Oil and Gas Royalty Management Act of 1982

• Affirms the authority of the Secretary of the Interior to administer and 

enforce all rules and regulations governing oil and gas leases on federal or 

Indian land.

Indian Mineral Development Act of 1982

• Authorizes tribes to enter into agreements with private companies to 

develop the mineral resources on their lands.

Page 16
Enclosure I

Page 21 GAO-13-45R Mineral Resources

Objective 1

Volume and Value of Leasable Minerals

Page 17
Enclosure I

Page 22 GAO-13-45R Mineral Resources

Objective 1: Volume and Value of 

Leasable Minerals

Sales volume in fiscal years 2010 and 2011

• Calculations or comparisons of total volume sold across 

commodities or individual mineral products are not 

meaningful because measurement units often differ.

• For example, oil sales are measured in barrels (bbl); 

gas sales in thousands of cubic feet (mcf); coal sales 

in tons; and NGL sales in gallons (gal). 

• However, we can compare sales volumes for key 

commodities across time. 

Page 18
Enclosure I

Page 23 GAO-13-45R Mineral Resources

Objective 1: Volume and Value of 

Leasable Minerals

Page 19

Total sales volume by key commodity and source for fiscal 

years 2010 and 2011 (Quantities in millions)

Commodity

Fiscal

year

Federal

onshore

Federal

offshore

Indian

lands Total

Oil (bbl) 2010 107.8 617.9 13.2 739.0

2011 111.8 514.4 19.4 645.6

Gas (mcf) 2010 3,068.0 2,097.7 249.4 5,415.2

2011 2,955.1 1,654.1 250.0 4,859.2

Coal (ton) 2010 456.5 N/A 21.6 478.1

2011 448.0 N/A 22.0 470.0

NGL (gal) 2010 2,272.4 2,415.4 130.0 4,817.9

2011 2,484.3 2,054.8 140.0 4,679.1

Source: GAO analysis of ONRR data.
Enclosure I

Page 24 GAO-13-45R Mineral Resources

Objective 1: Volume and Value of 

Leasable Minerals

Non-revenue volume, fiscal years 2010 and 2011 

• Certain leasable mineral sales are exempt from royalty payments 

under specific royalty relief programs.

• In 2010 and 2011, these exemptions applied to some offshore oil, 

gas, and natural gas liquid sales.

• Royalty relief programs include those for minerals located in deep 

water, for minerals buried deep in shallow water, and for wells where 

production is no longer profitable.

• In fiscal year 2010, 2.2 million barrels of oil were accepted into the 

U.S. Strategic Petroleum Reserve in lieu of royalty payments, but this 

royalty-in-kind program was no longer active in 2011. 

• Other volumes never make it to market because they are used as 

fuel on the lease site or, in the case of gas, vented or flared into the 

air.

Page 20
Enclosure I

Page 25 GAO-13-45R Mineral Resources

Objective 1: Volume and Value of 

Leasable Minerals

Page 21

Revenue-bearing versus non-revenue volume, fiscal years 

2010 and 2011 (Quantities in millions)

Source: GAO analysis of ONRR data.

Note: According to ONRR officials, oil, gas, and NGL were the only minerals 

that had non-revenue sales in 2010-2011, and all were from offshore leases.

559

5,008

4,419

513

4,633

4,381

180 407 399 132 226 298

0

1000

2000

3000

4000

5000

6000

Oil (bbl) Gas (mcf) NGL (gal) Oil (bbl) Gas (mcf) NGL (gal)

2010 2011

Millions

Revenue-bearing 

volume

Non-revenue bearing 

volume
Enclosure I

Page 26 GAO-13-45R Mineral Resources

$53.2

$61.7

$24.4

$20.5

$7.3 $7.6

$4.7 $5.6

$2.8 $3.2

2010 2011 2010 2011 2010 2011 2010 2011 2010 2011

Oil Gas Coal NGL Other Products

Objective 1: Volume and Value of 

Leasable Minerals

Total sales value by key commodity, fiscal years 2010 and 2011 

(Dollars in billions) 

Page 22

Source: GAO analysis of ONRR data.

Oil, gas, coal, and natural gas liquid products 

collectively accounted for 97 percent of sales 

in both fiscal years 2010 and 2011.
Enclosure I

Page 27 GAO-13-45R Mineral Resources

Objective 1: Volume and Value of 

Leasable Minerals

Total sales value by key commodity and source, fiscal years 

2010 and 2011 (Dollars in billions)

Page 23

Commodity

Fiscal 

year

Federal

onshore 

Federal

offshore

Indian 

lands Total

Oil 2010 $7.5 $44.8 $0.9 $53.2

2011 9.6 50.5 1.6 $61.7

Gas 2010 13.5 9.9 1.0 $24.4

2011 12.4 7.1 1.0 $20.5

Coal 2010 6.7 N/A 0.6 $7.3

2011 7.0 N/A 0.6 $7.6

NGL 2010 2.0 2.5 0.1 $4.7

2011 2.8 2.6 0.2 $5.6

All other 2010 2.6 0.0 0.2 $2.8

2011 3.1 0.0 0.1 $3.2

Total 2010 $32.3 $57.2 $2.8 $92.3

2011 $34.9 $60.2 $3.5 $98.6

Source: GAO analysis of ONRR data.
Enclosure I

Page 28 GAO-13-45R Mineral Resources

Objective 1: Volume and Value of 

Leasable Minerals

Page 24

Revenue-bearing versus non-revenue sales value, fiscal years 

2010 and 2011 (Dollars in billions)

$41.1

$22.5

$4.2

$48.7

$19.5

$5.2

$12.1

$1.9 $0.4

$13.0

$1.0 $0.4 $0

$10

$20

$30

$40

$50

$60

Oil Gas NGL Oil Gas NGL

2010 2011

Billions

Revenue-bearing 

sales

Non-revenue bearing 

sales

Source: GAO analysis of ONRR data.

Note: According to ONRR officials, oil, gas, and NGL were the only minerals 

that had non-revenue sales in 2010-2011, and all were from offshore leases.
Enclosure I

Page 29 GAO-13-45R Mineral Resources

Objective 2

Leasable Minerals Revenue

Page 25
Enclosure I

Page 30 GAO-13-45R Mineral Resources

Objective 2: Revenue from Leasable 

Minerals

Total sales value and total revenue, fiscal years 2010 and 2011 

(Dollars in billions)

Page 26

Source: GAO analysis of ONRR data.

$92.3

$98.6

$11.3 $11.4

$0

$20

$40

$60

$80

$100

$120

2010 2011 2010 2011

Sales Value Total Revenue

Billions

Oil, gas, and natural gas 

liquids accounted for 

$10.1 billion of total 

revenues in each fiscal 

year.
Enclosure I

Page 31 GAO-13-45R Mineral Resources

Objective 2: Revenue from Leasable 

Minerals

Total revenue and revenue by category, fiscal years 2010 and 2011 

(Dollars in billions)

Page 27

Source: GAO analysis of ONRR data.

$11.3 $11.4

$1.3

$0.5 $0.3 $0.3

$9.7

$10.5

$0.0 $0.0

$0

$2

$4

$6

$8

$10

$12

2010 2011 2010 2011 2010 2011 2010 2011 2010 2011

Total Revenue Bonuses Rents Royalties Other Revenues

Billions
Enclosure I

Page 32 GAO-13-45R Mineral Resources

Objective 2: Revenue from Leasable 

Minerals

Bonus bids to obtain mineral leases

• Pricing mechanisms for land and resource leases vary widely.

• Competitive bidding is generally used for onshore lease sales, 

with leases awarded to the highest bidder. Interior determines a 

minimum acceptable “bonus bid” for each tract offered. 

Successful bidders must pay a portion of the bonus bid on the 

date of auction and then must pay the balance within 

10 business days.

• Competitive bidding is also used for offshore lease sales. As 

with onshore sales, if no bids match or exceed the minimum, 

the lease is withheld and offered again at a later sale.

Page 28
Enclosure I

Page 33 GAO-13-45R Mineral Resources

$1,177.5

$109.7

$2.7 $0.0

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

Oil and Gas Total Coal Total Geothermal Total Sodium Total

Millions

$332.0

$174.8

$21.0 $0.8 $0.5 $0.0

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

Oil and Gas 

Total

Coal Total Potassium 

Total

Phosphate 

Total

Geothermal 

Total

Sodium Total

Millions

Objective 2: Revenue from Leasable 

Minerals

Bonuses by lease type, fiscal years 2010 and 2011 

(Dollars in millions)

Page 29

2010 2011

Source: GAO analysis of ONRR data.

Note: Sodium bonuses totaled $120.00 in both 2010 and 2011. 
Enclosure I

Page 34 GAO-13-45R Mineral Resources

Objective 2: Revenue from Leasable 

Minerals

Page 30

Customary rental rates to maintain leases prior to generating royalties1

1 These are rental terms for new leases. Rental terms have varied over time.

Types of leases Annual rental terms for new leases

Oil and gas leases 

on federal onshore lands $1.50 per acre for the first 5 years and $2 per acre thereafter.

on federal offshore lands Starts at $7 or $11 per acre in the Gulf of Mexico with increases 

beginning in the sixth year of the lease.

on Indian lands $2 per acre or greater as prescribed in the lease.

Coal leases

on federal lands $3 per acre not credited against royalty payments.

on Indian lands Varies with lease; not less than $2 per acre.

Geothermal leases on federal lands Competitive leases are $2 per acre for the first year, $3 per acre for the 

second through tenth years; non-competitive leases are $1 per acre 

through the tenth year. Both types of leases increase to $5 per acre after 

the tenth year.

Lead, zinc, copper, and other hardrock

mineral leases on federal lands

$1 per acre on acquired lands; minimum per permit or lease is $20.

Source: Interior.
Enclosure I

Page 35 GAO-13-45R Mineral Resources

Objective 2: Revenue from Leasable 

Minerals

Rents by lease type, fiscal years 2010 and 2011 

(Dollars in millions)

Page 31

$294.9

$4.9

$271.1

$5.2

$0

$50

$100

$150

$200

$250

$300

$350

Oil & Gas Total All Other Leases Total

Millions

2010

2011

Source: GAO analysis of ONRR data.
Enclosure I

Page 36 GAO-13-45R Mineral Resources

Objective 2: Revenue from Leasable 

Minerals

1 These are royalty rates for new leases. Royalty rates have varied over time.

Page 32

Customary royalty rates for new mineral leases1

Types of leases Customary royalty rates for new leases

Oil and gas leases 

on federal onshore lands 12.5 percent for both competitive and non-competitive leases.

on federal offshore lands 18.75 percent in Gulf of Mexico; 12.5 percent in Alaska and other frontier 

areas. BOEM can use other royalty rates of no less than 12.5 percent.

on Indian lands Varies; in most cases the minimum rate is 16.67 percent.

Coal leases

on federal lands 8 percent of the value of production for underground mines and 12.5 

percent of value of production of surface mines.

on Indian lands Varies; not less than 8 percent of value of production for underground mines 

and 12.5 percent of value of production for surface mines.

Geothermal leases on federal lands For electricity production, 1 to 2.5 percent of the value of geothermal steam 

in the first 10 years; not more than 2 to 5 percent annually thereafter.

Lead, zinc, copper, and other hardrock

mineral leases on federal lands

No minimum royalty rate on acquired lands, but usually 5 percent.

Source: Interior.
Enclosure I

Page 37 GAO-13-45R Mineral Resources

Objective 2: Revenue from Leasable 

Minerals

Royalties by key commodity, fiscal years 2010 and 2011 

(Dollars in billions)

Page 33

Source: GAO analysis of ONRR data.

$5.4

$6.6

$2.8

$2.4

$0.8 $0.8

$0.4 $0.6

$0.2 $0.2

2010 2011 2010 2011 2010 2011 2010 2011 2010 2011

Oil Gas Coal NGL All Other

Oil, gas, coal, and natural gas liquid products 

collectively accounted for 98 percent of 

royalties in both fiscal years 2010 and 2011.
Enclosure I

Page 38 GAO-13-45R Mineral Resources

Objective 2: Revenue from Leasable 

Minerals

Page 34

Sales values versus royalties for key commodities, fiscal years 

2010 and 2011 (Dollars in billions)

Source: GAO analysis of ONRR data.

$53.2

$5.4

$24.4

$2.8

$7.3

$0.8

$4.7

$0.4

$61.7

$6.6

$20.5

$2.4

$7.6

$0.8

$5.6

$0.6

Sales 

Value

Royalties Sales 

Value

Royalties Sales 

Value

Royalties Sales 

Value

Royalties Sales 

Value

Royalties Sales 

Value

Royalties Sales 

Value

Royalties Sales 

Value

Royalties

Oil Gas Coal NGL Oil Gas Coal NGL

2010 2011
Enclosure I

Page 39 GAO-13-45R Mineral Resources

Objective 2: Revenue from Leasable 

Minerals

Allowable deductions from royalty payments

• Transportation. Transportation allowances are granted for 

reasonable, actual, and necessary costs to transport oil, gas, or gas 

plant products to an off-lease point, such as a sales point, a delivery 

point, or a gas processing plant.

• Processing. Processing allowances are granted for costs incurred 

by the lessee in the extraction and recovery of gas plant products 

from a gas stream.

• Effective royalty rate.

• The rate actually paid by lessees, once non-revenue volumes 

and deductions for transportation and processing have been 

factored in. It is expressed as a percentage that is calculated by 

dividing the actual royalty payment by the sales value.

Page 35
Enclosure I

Page 40 GAO-13-45R Mineral Resources

Objective 2: Revenue from Leasable 

Minerals

Effective royalty rate paid for offshore oil at common lease rates, 

fiscal years 2010-2011 (dollars in millions)

Page 36

Source: GAO analysis of ONRR data.

Fiscal 

year

Royalty rate 

specified

in lease

Total sales 

value 

Nonrevenue 

sales value

Royalty value 

prior to 

allowances

Transportation 

and processing 

allowances

Royalty value 

less 

allowances

Effective 

royalty 

rate

2010 12.50% $34,557.4 $11,985.9 $2,755.0 ($51.5) $2,703.5 7.82%

16.67% $9,635.6 $53.9 $1,578.8 ($15.0) $1,563.8 16.23%

18.75% $54.4 $1.1 $10.0 ($1.6) $8.4 15.36%

2011 12.50% $37,770.8 $12,797.3 $3,122.0 ($52.6) $3,069.4 8.13%

16.67% $12,081.3 $136.5 $1,984.2 ($17.7) $1,966.4 16.28%

18.75% $41.1 $1.8 $7.3 ($0.1) $7.3 17.70%
Enclosure I

Page 41 GAO-13-45R Mineral Resources

Objective 2: Revenue from Leasable 

Minerals

Page 37

Effective royalty rate paid for offshore gas at common lease rates, 

fiscal years 2010-2011 (dollars in millions)

Source: GAO analysis of ONRR data.

Fiscal 

year

Royalty rate 

specified in 

lease

Total sales 

value 

Nonrevenue 

sales value

Royalty value 

prior to 

allowances

Transportation 

and processing 

allowances

Royalty value 

less 

allowances

Effective 

royalty 

rate

2010 12.50% $4,965.6 $1,776.5 $398.0 ($42.4) $355.6 7.16%

16.67% $4,782.9 $124.3 $765.4 ($18.5) $746.9 15.62%

18.75% $15.0 $8.3 $1.3 ($0.0) $1.2 8.27%

2011 12.50% $3,421.5 $935.4 $310.9 ($34.8) $276.0 8.07%

16.67% $3,574.3 $61.1 $583.3 ($14.3) $569.0 15.92%

18.75% $33.9 $7.8 $4.8 ($0.2) $4.6 13.72%
Enclosure I

Page 42 GAO-13-45R Mineral Resources

Objective 2: Revenue from Leasable 

Minerals

Disbursement of revenues from onshore leasable minerals 

• 50 percent of federal receipts are disbursed to the states, with 

2 percent of the states’ share (i.e., 1 percent of total receipts) 

retained to cover the administrative costs of the leasing 

program.1

• 40 percent of federal receipts are deposited in the Reclamation 

Fund for water project and program activities in the 17 western 

states.2

• 10 percent of federal receipts are deposited in the Treasury.

• All revenues from Indian lands are returned to the appropriate 

tribal entities or individual Indians.

Page 38

1 90 percent of receipts from Alaska are permanently appropriated to that state, with 1.8 percent of total receipts retained to cover 

administrative costs. 

2 No receipts from Alaska are deposited in the Reclamation Fund.
Enclosure I

Page 43 GAO-13-45R Mineral Resources

Objective 2: Revenue from Leasable 

Minerals

Disbursement of revenues from offshore leasable minerals 

• Up to $900 million is allocated annually to the Land and Water Conservation 

Fund from sources including offshore mineral leasing.

• When appropriated by Congress, $150 million is allocated annually to the 

National Historic Preservation Fund from Outer Continental Shelf lease 

receipts. 

• 27 percent of receipts from Section 8(g) leases are allocated to the states. 

These leases are located in federal waters within 3 miles of the offshore 

boundary of coastal states.

• 37.5 percent of receipts from specified oil and gas leases off the coasts of 

selected Gulf Coast states are allocated annually to those states (Alabama, 

Louisiana, Mississippi, and Texas).

• $250 million of annual spending for fiscal years 2007-2010 is permanently 

appropriated for the Coastal Impact Assistance Program.

• Any remaining funds are deposited in the Treasury. 

Page 39
Enclosure I

Page 44 GAO-13-45R Mineral Resources

Objective 2: Revenue from Leasable 

Minerals

Page 40

Disbursement of total revenues from onshore and offshore 

leases, fiscal years 2010-2011 (in millions)

$408

$150

$899

$1,364

$1,832

$4,517

2010 disbursement: $9,170

$538

$150

$892

$1,533

$1,999

$6,050

2011 disbursement: $11,162

American 

Indian Tribes & Allottees

Historic Preservation Fund

Land & Water Conservation 

Fund

Reclamation 

Fund

State Share

U.S. Treasury

Source: GAO analysis of ONRR data.

Note: Total disbursement amounts are not directly comparable to the total revenue amounts 

presented earlier because of different accounting and reporting practices for the two values.
Enclosure I

Page 45 GAO-13-45R Mineral Resources

Objective 2: Revenue from Leasable 

Minerals

Page 41

A 2011 Interior report identifies payments other than bonuses, rents, and royalties 

that companies are required to remit to various levels of government.1 For example, 

according to this report, oil companies operating in the United States may also be 

subject to:

Income tax. This is the most common levy. A few jurisdictions, however, exempt the oil 

industry from the generally applicable corporate income tax and impose a petroleum 

income tax. Incentives are often provided in the form of accelerated recovery of 

development costs, depletion allowances, infrastructure credits, and other benefits. A state 

income tax may be levied in addition to the federal income tax with appropriate deductions. 

Severance tax. Common in the United States, this tax is usually levied by states on the 

same basis as royalty. Different rates may apply to oil and gas.

Property tax. A property tax may be levied by counties. 

1 Agalliu, Irena. Comparative assessment of the federal oil and gas fiscal systems. A special report prepared at the request of the U.S.

Department of the Interior, Bureau of Ocean Energy Management. October 2011. Interior commissioned this report in response to a

GAO recommendation. See GAO, Oil and Gas Royalties: The Federal System for Collecting Oil and Gas Revenues Needs

Comprehensive Reassessment, GAO-08-691 (Washington, D.C.: Sept. 3, 2008).
Enclosure I

Page 46 GAO-13-45R Mineral Resources

Page 42

GAO on the Web

Web site: http://www.gao.gov/

Contact

Chuck Young, Managing Director, Public Affairs, youngc1@gao.gov

(202) 512-4800, U.S. Government Accountability Office

441 G Street NW, Room 7149, Washington, D.C. 20548

Copyright

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

protection in the United States. The published product may be reproduced 

and distributed in its entirety without further permission from GAO. However, 

because this work may contain copyrighted images or other material, 

permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 
Enclosure II 

Page 47 GAO-13-45R Mineral Resources

Data Are Not Available on the Volume or Value of Hardrock Minerals Extracted 

from Federal Land

Federal agencies generally do not collect data from hardrock mine operators on the 

amount and value of hardrock minerals extracted from federal land because there is 

no federal royalty that would necessitate doing so. For example, as we reported in 

2008, Interior’s U.S. Geological Survey collects extensive data on mineral production 

through its annual surveys, but it does not collect data that would allow it to determine 

what proportion of this production came from federal land.3 In addition, publicly traded 

hardrock mine operators frequently include production information as part of their 

filings with the U.S. Securities and Exchange Commission, but they do not consistently 

report the amount of minerals produced from federal lands. Similarly, many western 

states collect data on the hardrock minerals produced in their state for purposes of 

assessing a state royalty, but they generally do not collect data on the volume of those 

minerals extracted from federal land within those states.

While the United States has committed to implementing the Extractive Industries 

Transparency Initiative—an international effort to promote openness and 

accountability in the oil, gas, and mining sectors—it is unclear if this will affect 

reporting on hardrock mineral production on federal land. To comply with the initiative, 

extractive companies operating in a country must comprehensively disclose all 

material payments to the government, and government agencies must disclose all 

material revenues received from extractive industries. President Obama announced in 

September 2011 that the United States would implement the initiative and named the 

Secretary of the Interior as the government official responsible for its implementation. 

However, because this effort is in the early stages of implementation, it is currently 

unclear if hardrock mine operators will ultimately be required to disclose the amount of 

minerals produced from federal land, as is required in some of the other countries that 

have implemented the initiative. Interior officials told us that they expect to finish 

implementing this initiative in about 4 years.

Even though overall data are not available on federal hardrock production, Interior and 

some western states have used the limited data available to roughly estimate the 

amount and value of hardrock minerals produced from federal land. For example, in 

1993, Interior estimated that 15.3 percent of the total U.S. production value of hardrock 

minerals came from federal land. Using this percentage and 2011 survey data on 

nonfuel minerals from the U.S. Geological Survey, Interior estimated that the sales 

value of hardrock minerals extracted from federal land in fiscal year 2011 was about 

$6.41 billion.4

 

3

GAO, Hardrock Mining: Information on State Royalties and Trends in Mineral Imports and Exports, GAO-08-849R 

(Washington, D.C.: July 21, 2008).

In addition, officials with the Nevada Division of Minerals, using 

estimates provided by mine operators, told us that that roughly two-thirds of metallic 

4

U.S. Department of the Interior, Task Force on Mining Royalties, Economic Implications of a Royalty System for 

Hardrock Minerals (Aug. 16, 1993); and U.S. Department of the Interior, The Department of the Interior’s Economic 

Contributions, Fiscal Year 2011 (Washington, D.C.: July 9, 2012).
Enclosure II 

Page 48 GAO-13-45R Mineral Resources

minerals—a subgroup of hardrock minerals—produced in Nevada comes from federal 

land, and about one-third comes from private land.5

(361417)

 

5

According to the U.S. Geological Survey, Nevada has the highest value of nonfuel mineral production in the United 

States, with a total value of about $10.4 billion in 2011. See U.S. Geological Survey, Mineral Commodity 

Summaries 2012 (Reston, VA: Jan. 21, 2012).
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necessary if you wish to reproduce this material separately.
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