Oil and Gas Development: Challenges to Agency Decisions and Opportunities for BLM to Standardize Data Collection
Published: 2004-11-30T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: U.S. consumption of oil and natural gas increasingly outpaces domestic production, a gap that is expected to grow rapidly over the next 20 years. There has been increasing concern about U.S. reliance on foreign energy sources. One option being considered is to increase domestic production of resources on land under the jurisdiction of the Department of the Interior's Bureau of Land Management (BLM), Bureau of Indian Affairs (BIA) and Minerals Management Service (MMS) and the Department of Agriculture's Forest Service. GAO determined (1) the stages when agency decisions about oil and gas development can be challenged by the public, (2) the extent to which BLM gathers and uses public challenge data to manage its oil and gas program, and (3) for fiscal years 1999-2003, the number of MMS offshore development decisions that were challenged.
section_title: What GAO Found
paragraphs: At the four stages of developing oil and gas resources--planning, exploration, leasing, and operations, BLM, the Forest Service, BIA, and MMS allow for public challenges to agency decisions. However, the agencies have different procedures for processing challenges that occur within the stages. For example, BLM leasing decisions can be challenged to a BLM state director, further appealed to the Interior Board of Land Appeals (IBLA), and litigated in federal court. Forest Service leasing decisions, however, sometimes can be appealed through the Forest Service supervisory chain of command and litigated in federal court. The Forest Service has no separate appeals board within the Department of Agriculture, such as IBLA, to review decisions. In addition, unlike BLM, the Forest Service has specific time frames during which appeals must be decided. BIA procedures offer opportunities for public challenges at the exploration and leasing stages, which are the only stages BIA makes decisions related to oil and gas development. MMS regulations do not provide for appeals at the planning or leasing stages, but do provide for appeals to IBLA during the exploration and operations stages. All MMS decisions could potentially be litigated in federal court. BLM does not systematically gather and use nationwide information on public challenges to manage its oil and gas program. BLM has a system that state offices use to collect data on public challenges during leasing, but the state offices use it inconsistently because they lack clear guidance from headquarters on which data to enter. As a result, the system does not provide consistent information that BLM headquarters can use to assess workload impacts on its state offices and to make staffing and funding resource allocation decisions. Because this system does not track all the public challenge data necessary for managing workload, headquarters and state offices also use multiple, independent data collection systems that are not integrated with one another or BLM's system. BLM is in the process of developing a new system that provides an opportunity to standardize collection of data on public challenges at the leasing stage. However, it has not decided whether the new system will be used to track public challenge information. Between fiscal years 1999 and 2003, MMS was challenged on only one of its 1,631 decisions approving offshore oil and gas development and production and only one of its 1,997 decisions approving offshore oil and gas exploration. Both decisions concerned land on the outer continental shelf off the coast of Alaska and were challenged by Alaskans, a Native American tribe, or an environmental interest group on the basis that the decisions violated the National Environmental Policy Act and other laws. One of the decisions was litigated in federal court and the court decided against the challenges. The other decision was appealed to IBLA but the company discontinued work before a decision was reached.

section_title: Letter
paragraphs: U.S. energy consumption increasingly outpaces domestic production, and  this demand is increasingly being met by imports of oil and natural gas. In  1982, domestic consumption of oil was about 15 million barrels per day: 73  percent (11 million) from domestic production and 27 percent (4 million)  from imports. By 2003, domestic consumption of oil had increased to about  20 million barrels per day, with 45 percent (9 million) from domestic  production and 55 percent (11 million) from imports. Natural gas  consumption experienced a similar trend. In 1982, natural gas consumption  was almost 18 trillion cubic feet per year, which essentially equaled  domestic production. By 2003, natural gas consumption was about 22  trillion cubic feet per year, with 86 percent (19 trillion) from domestic  production and 14 percent (3 trillion) from imports. The Department of  Energy projects that dependence on foreign oil and gas will continue to  grow rapidly over the next 20 years.
With continuing instability in many foreign energy-exporting regions  including the Middle East, there has been increasing concern about U.S.  reliance on foreign energy sources. One way being considered is to  increase domestic production by further developing onshore resources on  land under jurisdiction of the Bureau of Land Management (BLM) and the  Bureau of Indian Affairs (BIA) within the Department of the Interior, and  the Forest Service within the Department of Agriculture, and offshore  resources under the jurisdiction of Interior’s Minerals Management Service  (MMS). Among these agencies, BLM has the major federal role in managing  the development of onshore oil and gas resources. It not only issues leases  and permits for oil and gas development on land it manages directly but  also for onshore land under the jurisdiction of the other federal agencies.  BLM also assists BIA, Indian tribes, and tribal members in managing land  owned by Indian tribes and individual Native Americans for oil and gas  development. MMS is the sole agency responsible for managing offshore oil  and gas development. BLM and Forest Service must also manage their  lands for a variety of other uses such as fish and wildlife, grazing, outdoor  recreation, timber, and watersheds.
Agency procedures for developing oil and gas resources provide  opportunities for the public to challenge agency resource management  decisions. Public challenges can occur in the form of protests, appeals, and  litigation. Through protests and appeals, challengers ask an agency or  appeals board to review a decision—procedures that provide an  opportunity for the agency to correct its own mistakes before it is called  into court. In addition, agency administrative review procedures help  promote judicial efficiency by resolving controversies before they are  litigated in the courts, or at least by developing an extensive factual record  on which the court may base its review.
In this context, you asked us to (1) identify the stages when agency  decisions about oil and gas development can be challenged by the public,  (2) determine the extent to which BLM gathers and uses public challenge  data to manage its onshore oil and gas program, and (3) determine for  fiscal years 1999-2003 the number of offshore oil and gas development  decisions by MMS that were challenged, who challenged them, and the  grounds, time frames, and outcomes of the challenges.
To identify the stages when the public can challenge oil and gas  development decisions, we reviewed and analyzed applicable statutes,  agency regulations, and documentation, and also interviewed BLM, Forest  Service, BIA, and MMS officials. To determine the extent to which BLM  gathers and uses data on public challenges to manage its program, we  reviewed and analyzed BLM documents including database manuals,  internal memorandums, and agencywide procedures for gathering oil and  gas activity data. In addition, we interviewed BLM officials in both  headquarters and selected state offices to determine what data on public  challenges are gathered and used. To obtain information on offshore oil  and gas development decisions and challenges, we interviewed agency  officials and analyzed information from MMS databases that recorded the  number of oil and gas decisions and challenges made in fiscal years 1999  through 2003. We discussed the results with agency officials in  headquarters and regional offices to corroborate our analysis and to obtain  additional information on the public challenges. We conducted our work in  accordance with generally accepted government auditing standards.
subsections: section_title: Background
paragraphs: The federal government owns onshore mineral resources, including oil and  gas, under about 700 million acres of land. These resources are located  below the surface land—known as the subsurface. While the federal  government owns all or part of the mineral resources in the subsurface, it  does not necessarily own the surface land. Of the 700 million acres of  federal mineral resources, the surface and subsurface ownership on 57  million acres is “split” between private parties or state governments, which  own the surface area, and the federal government, which owns the  subsurface area—referred to as “split estate” land. The BLM manages the  federal mineral resources contained in the subsurface of about 700 million  acres. It also manages 261 million acres of the surface areas of the 700  million acres for such purposes as grazing, recreation, and timber  harvesting. BLM, headed by the BLM director, manages public lands under  its jurisdiction through 12 state offices, headed by state directors, with  each state office having several subsidiary field offices, headed by field  office managers. The balance of the federal surface land is managed by  other federal agencies such as the Forest Service. Figure 1 shows the  subsurface mineral resources managed by BLM, and surface managed by  BLM, Forest Service, other federal agencies, or owned by private parties or  state governments.
The Forest Service and BLM both have roles in managing oil and gas  resources on national forest system land. Although BLM has the major role  in issuing oil and gas leases and permits on national forest system land, the  Forest Service is responsible for determining what land is available for  leasing and under what conditions. Once leases are issued, the Forest  Service regulates all surface-disturbing activities conducted under the  lease. The Forest Service manages its programs through nine regional  offices, 155 national forests, 20 grasslands, and over 600 ranger districts  (each forest has several districts). The Forest Service Chief oversees the  agency, whereas regional foresters oversee regional offices, forest  supervisors oversee national forests, and district rangers oversee district  offices.
BLM assists BIA in fulfilling the trust responsibilities of the United States  by assisting Indian tribes and individual Native Americans in managing  about 56 million acres of Indian land for oil and gas development. Indian  land principally consists of lands within Indian reservations, lands owned  by Indian tribes, and Indian allotments. BIA administers its programs  through the BIA director, 12 regional offices, headed by regional directors,  and over 80 agency offices, headed by agency superintendents.
MMS manages oil and gas development for offshore mineral resources on  the outer continental shelf through three administrative regions: Gulf of  Mexico, Alaska, and Pacific. The MMS director heads the agency and  regional managers head the regions. District offices support the regional  offices and are headed by district managers. The federal outer continental  shelf is an area extending from 3 to 9 nautical miles, depending on the  location, to about 200 nautical miles off the United States coast. Over 610  million acres of the outer continental shelf is closed to future oil and gas  development due to legislative and Presidential moratoria. Figure 2 shows  MMS administrative regions and the areas open or closed to oil and gas  development.
subsections: section_title: Federal Agency Processes for Managing Oil and Gas Resources
paragraphs: Several statutes, including the National Environmental Policy Act (NEPA),  and regulations govern oil and gas development on federal and Indian land.  NEPA requires BLM, Forest Service, BIA, and MMS, and all other federal  agencies, to assess and report on the likely environmental impacts of any  land management activities they propose or approve that significantly  affect environmental quality. Specifically, if a proposed activity, such as oil  and gas development, is expected to significantly impact the environment,  the agency is required to prepare an environmental impact statement.  When an agency is not sure whether an activity will have significant impact  on the environment, the agency prepares an intermediate-level analysis  called an environmental assessment. If an environmental assessment  determines that the activity will significantly affect the environment, the  agency then prepares an environmental impact statement. Agencies also  identify certain categories of actions that normally do not significantly  impact the environment, and which are excluded from preparation of an  environmental impact statement or environmental assessment—referred to  as categorical exclusions.
BLM, Forest Service, BIA, and MMS each have similar processes for  managing oil and gas activity on land within their jurisdiction. Generally,  these processes center around four stages—planning, exploration, leasing  and operations.
During the planning stage, agencies develop land-use plans, revisions,  and amendments, delineating where and under what conditions oil and  gas activities can take place on federal land managed by each agency.  To develop land-use plans, agencies use a multistep process, which  generally includes preparation of environmental analyses under NEPA.
Once land-use plans allowing oil and gas activities are finalized, oil and  gas development companies may perform exploration activities such as  geophysical exploration. Geophysical exploration activities can occur  before or after the leasing stage. Development companies must obtain  approval from BLM for geophysical exploration on land managed by  BLM and from the Forest Service on land managed by the Forest  Service. BIA may approve permits and agreements between Indian  tribes or individual Native Americans and oil and gas development  companies for geophysical exploration on Indian land. MMS must  approve exploration activity on the outer continental shelf.
BLM and MMS have the primary role in the leasing stage of federal oil  and gas resource development. After a land-use plan, revision or  amendment is completed, development companies nominate land they  are interested in leasing. Onshore and offshore leases are competitively  bid on at lease sales held by BLM state offices and MMS regional offices  several times throughout the year, if lands are available. BLM is required  to post a lease sale notice containing land parcels available for lease at  least 45 days before it holds a competitive lease sale; MMS posts a  notice at least 30 days before the offshore lease sale. BLM issues leases  for onshore land, and MMS issues offshore leases. Indian tribes have the  option to negotiate oil and gas leases individually, or to hold competitive  lease sales. BIA must approve oil and gas leases and negotiated  agreements affecting Indian land.
BLM and MMS have the primary role in managing drilling activity for  federal oil and gas resources and the Forest Service regulates surface  activities on national forest system land. Once BLM and MMS issue oil  and gas leases, development companies must obtain approval for  drilling operations. For onshore activity, development companies  submit development plans and applications for drilling permits to BLM  for approval. On national forest system land, the Forest Service must  approve all surface-disturbing activities—called a surface-use plan— before BLM approves applications for drilling permits. BLM also  approves applications for drilling permits on Indian land after  consulting with BIA. For offshore development activity, MMS approves  development plans and applications for drilling permits.
section_title: Public Challenges Can Occur During the Four Stages of the Oil and Gas Development Process although Procedures Differ among Agencies
paragraphs: Decisions by BLM, Forest Service, BIA, and MMS can be challenged during  the four stages of oil and gas development—planning, exploration, leasing,  and operations. However, each agency differs in how challenges can be  made at the various stages. The public may pursue a number of avenues to  challenge agency decisions, depending on the type and nature of the  underlying decision. For example, BLM planning decisions can be  protested to the BLM director prior to challenging the decision in federal  court, while Forest Service planning decisions can be appealed to the next  highest officer prior to any challenge of the decision that might be brought  in federal court. Table 1 summarizes procedures for public challenges  during each stage of oil and gas development.
subsections: section_title: Bureau of Land Management
paragraphs: During each of the four stages of oil and gas development, the public can  make one or more of the following types of challenges to BLM decisions:  protests, requests for state director review, appeals, and litigation. Through  protests and requests for state director review, challengers essentially ask  BLM to reconsider a decision. An appeal is a request to the Interior Board  of Land Appeals (IBLA)—a body of administrative judges within the  Department of the Interior—to review a BLM decision. In this report we use  the term “litigation” to mean a challenge to an agency or departmental  decision that is brought in federal court.
At the planning stage, the public can challenge BLM decisions through  protests and litigation. Protests to land-use plans or their amendments or  revisions are submitted to the BLM Director and must be filed within 30  days of the published a proposed land-use plan.The BLM director has no  specific deadline to respond to protests; but must “promptly” provide a  written decision with a statement of supportive reasons. The director’s  decision cannot be appealed to IBLA, but can be challenged in federal  court. The duration of a court case depends on the facts and circumstances  of each case.
The public can challenge agency decisions to approve geophysical  exploration activities to IBLA and in federal court.Once a BLM field office  issues a decision approving geophysical exploration activities, the public  can appeal the decision to IBLA within 30 days or challenge the decision in  federal court.Following approval, a development company can  commence geophysical exploration activities unless the challenger asks  IBLA to halt or “stay” the activities, or asks a federal court to issue an  injunction prohibiting the activity, and IBLA or federal court grants the  request. IBLA has 45 days following expiration of the 30-day appeal period  to render a decision on a stay request. IBLA has no deadline to respond to  appeals. IBLA decisions pertaining to geophysical exploration activities  can be litigated in federal court. The duration of court cases and the length  of any injunctions that may be issued depend on the facts and  circumstances of each case.
The public can challenge leasing decisions through protests, appeals to  IBLA, and litigation. Challengers can protest the inclusion of individual  land parcels in a lease sale; such protests must be filed with the relevant  BLM State Director during the 45-day notice period that precedes the lease  sale. In some cases, the state director may not be able to decide the protest  before the lease sale. However, if BLM receives a protest on any parcel  included in the lease sale, the protest must be resolved before issuing a  lease on the affected parcel. BLM is required to issue leases to the highest  bidder within 60 days of receiving full payment for the lease and the first  year's annual rent. According to agency officials, however, BLM sometimes  fails to do so because it may not have resolved pending protests within the  60-day time period. The public can appeal BLM’s decision to issue a lease to  IBLA within 30 days or challenge the decision in federal court. A  leaseholder can seek approval for development activities unless a  challenger appeals the decision to issue the lease to IBLA and asks IBLA or  a federal court to halt or “stay” the activities. IBLA has 45 days following  expiration of the 30-day appeal period to render a decision on a stay  request.
At the operations stage, the public can challenge BLM decisions to approve  oil and gas drilling through requests for state director review, appeals to  IBLA, and litigation. The public may ask the state director to review a  decision to approve oil and gas development projects or individual drilling  permits within 20 business days of the decision, and the state director must  render a decision on the request within 10 business days. The public can  appeal the state director’s decision to IBLA and can challenge the  department’s decision in federal court.Development companies can begin  drilling activity once a state director approves a drilling permit following  review. A challenger may attempt to halt drilling activity by requesting a  stay from the state director or IBLA, or seek an injunction in federal court.
section_title: Forest Service
paragraphs: The public can challenge Forest Service decisions either through appeals  or litigation during each stage of oil and gas development. Through an  appeal, the public asks the Forest Service to review a decision. During the  planning stage, the public has either 45 or 90 days to appeal planning  decisions approving, amending or revising land use plans which may  identify lands as available for leasing. Decisions are appealed to the next  highest officer. For instance, a regional forester’s decision to approve a  land use plan, amendment, or revision can be appealed to the Chief. A  Forest Service official has 160 days to render a decision on an appeal.  Following the conclusion of the appeals process, land use plan decisions  can sometimes be litigated in federal court. According to Forest Service  officials, BLM normally participates in the process for developing those  plans that include decisions to make areas available for oil and gas  development.
During the exploration and operations stages, the public may generally  challenge Forest Service decisions approving or disapproving of these  actions under the agency's project appeals procedures.Specifically, these  decisions include those involving (1) approving geophysical exploration  activity on national forest system lands; and (2) the approval of surface use  plans related to proposed drilling operations on national forest system  lands. The Forest Service's appeals procedures generally apply to decisions  for which the agency prepared an environmental impact statement or  environmental assessment under NEPA.
The public can appeal Forest Service decisions, other than planning  decisions, to the next highest officer within 45 days of the decision. If an  appeal is filed, the Forest Service has 45 days from the close of the appeal  period to determine the outcome of the appeal.Following the conclusion  of the appeal process, the agency decision can be litigated in federal court.  Likewise, decisions that are not appealable can be litigated in federal court.  Challengers can seek an injunction from federal court to halt activities  while litigation is pending. If no appeal is filed, the Forest Service may  implement the decision 5 business days after the appeal period closes. If an  appeal is filed, implementation may occur 15 days following the appeal’s  disposition.
section_title: Bureau of Indian Affairs
paragraphs: The public can challenge certain BIA decisions through appeals and  litigation. Through an appeal, the public asks BIA to review decisions  concerning oil and gas development on Indian land or asks the Interior  Board of Indian Appeals (IBIA) to review a BIA appeal decision.The  public can challenge IBIA decisions in federal court.
BIA is not required to prepare land-use plans for Indian land, but can assist  tribes in developing such plans. Because BIA does not approve land-use  plans, there are no challengeable decisions at the planning stage.
At the exploration stage, however, the public can challenge BIA decisions  to approve permits to conduct geological and geophysical operations to  assess whether oil and gas resources are present. The public must appeal  a BIA official’s decision to the regional director—typically the official  above the deciding official—within 30 days of the decision. After a decision  is made on the appeal, the public has 30 days to file a separate appeal with  IBIA. Following the appeal period, the operator can commence exploration  activities unless the challenger requests a stay from IBIA. IBIA has 45 days  from the expiration of the appeal period to render a decision on a stay  request. If IBIA denies a stay, the operator can proceed with planned  activities. IBIA decisions may be litigated in federal court. The duration of  court cases and the length of any injunctions that may be issued are  dependent on the facts and circumstances of each case.
Likewise, at the leasing stage, the public can challenge BIA decisions to  approve leasing agreements and mineral agreements between Indian tribes  and Indian landowners and oil and gas development companies. The appeal  and litigation process is the same as for the exploration stage. At the  operations stage, BLM has agreed to approve drilling permits for BIA.
Consequently, there are no BIA decisions for the public to challenge at this  stage. However, the public can challenge BLM permit decisions through the  BLM process.
section_title: Mineral Management Service
paragraphs: The public can challenge MMS oil and gas development decisions through  requests for informal reviews within MMS, appeals to IBLA, and in federal  court. Through informal review requests, the public asks the next highest  officer to review a decision made by the official at the field office. Through  an appeal, the public can ask IBLA to overturn an MMS decision.
At the planning and leasing stages, MMS decisions involving its 5-year plan  and lease sales are not subject to informal reviews or appeals to IBLA, but  can be litigated in federal court.
During the exploration and operations stages, the public can challenge  exploration plans and permits, development and production plans, and  applications for oil and gas drilling through informal reviews within MMS,  appeals to IBLA, and in federal court. The public can appeal exploration or  operations decisions to IBLA within 60 days. Within that period, the public  may ask for informal resolution with the issuing officer’s next highest  supervisor. During the 60-day appeal period, the development company can  commence exploration or operation activities unless the challenger  requests a stay from IBLA and IBLA grants the request. IBLA has 45 days  from the expiration of the appeal period to render a decision on a stay  request. IBLA has no time frame to decide appeals. Decisions of IBLA  pertaining to exploration plans and permits, development and production  plans, and applications for oil and gas drilling can be litigated in federal  court.
section_title: BLM Does Not Systematically Gather and Use Public Challenge Information to Manage Its Oil and Gas Program
paragraphs: BLM headquarters does not systematically gather and use nationwide  information on public challenges to manage its oil and gas program. While  there is an agencywide system that state offices use to collect data on  public challenges during leasing, it is not used to collect public challenge  data during the planning, exploration, or operations stages. However, the  system is used inconsistently because BLM has not issued clear guidance  on which data the state offices are required to enter into the system.  Because the agencywide system does not track all the public challenge data  necessary for managing workload, headquarters and state offices also use  multiple, independent data collection systems for the various stages of oil  and gas development. These systems include paper files and electronic  spreadsheets that are not integrated with one another or the agencywide  system. BLM is in the process of developing a new national Lease Sale  System that provides an opportunity to standardize collection of data on  public challenges at the leasing stage. However, BLM has not decided  whether the new system will track public challenge information.
subsections: section_title: Agencywide System Gathers Limited Public Challenge Data and Is Used Inconsistently
paragraphs: BLM’s nationwide system, Legacy Re-host 2000 (LR2000), has a component  that state offices use to track limited public challenge information during  the leasing stage but not during any of the other oil and gas development  stages. State offices use the system inconsistently because BLM guidance  on the use of the system to track oil and gas leasing data is unclear, leading  to data gaps.According to BLM guidance, state offices have the option to  begin recording data for a given parcel at any of three different points  during the leasing stage: (1) prior to the posting of the competitive lease  sale notice, (2) the day prior to the lease sale, or (3) after the lease sale. If  state offices choose to start recording data at the third point—after the  lease sale—the system will not capture public challenges on unsold  parcels. For example, because the Wyoming State office begins recording  data after the lease sale, the system does not capture public challenge data  for unsold parcels, in that state office. Wyoming State office officials  believe that recording information into the agencywide system prior to the  lease sale creates added work and did not see any merit in tracking public  challenges on parcels that are not leased. However, officials from a state  office that tracks challenges for unsold parcels noted that doing so  provides useful information for managing workload. Because the states are  not consistent in entering data into the system, the data cannot be used by  headquarters to track public challenges and to assess impacts on the  workload of its state offices. According to officials at some state offices,  the volume of public challenges at the leasing stage has increased over the  past few years. However, BLM cannot readily provide nationwide data on  the number of public challenges made. In addition, it cannot assess the  extent to which such challenges affect the workload of its state offices,  which is important to understanding what additional staffing and funding  resources may be needed to process public challenges.
section_title: BLM Uses Various Nonintegrated Systems to Gather Public Challenge Data
paragraphs: BLM headquarters, field offices, and state offices use multiple, independent  data collection systems to collect additional information that they need to  track public challenge information at the various stages of oil and gas  development. For example, during the planning stage, BLM headquarters  tracks pending protests to land-use plans in a stand-alone spreadsheet and  in case files. According to a BLM official, BLM headquarters tracks protest  information so it can manage its workload in responding to protests. Once  a challenge is resolved, information is deleted from the spreadsheet and the  data are maintained only in case files and cannot be readily analyzed in  aggregate. As a result, BLM cannot readily determine how many protests  occurred year-to-year, who the protesters were, what the outcomes were,  and the time frames for resolving the protests.
Similarly, during the exploration stage, BLM field offices maintain case files  on public challenges to geophysical exploration permits. According to a  BLM official, the number of geophysical exploration permits issued is so  low that it is unnecessary to aggregate information on public challenges to  the permits. However, BLM did not have the data readily available for us to  verify this condition.
BLM state offices have developed their own systems for gathering public  challenge data during the leasing and operations stages. During the leasing  stage, BLM state offices use spreadsheets and paper files as well as LR2000  to track public challenges. The spreadsheets are not integrated with  LR2000 or one another. BLM state offices use the information mostly to  manage workload associated with protests, appeals, and litigation. Other  uses include responding to information requests from protesters and  potential leaseholders concerning the status of protests.
During the operations stage, stand-alone spreadsheets and paper files are  the primary methods state offices use to collect public challenge  information. As in the leasing stage, this information is gathered to  manage workload associated with responding to public challenges. It is  also used to respond to information requests from challengers concerning  the status of their challenges and from permit-holders on whether they can  begin operations such as road construction and drilling.
section_title: BLM Headquarters Does Not Have Ready Access to Public Challenge Data Gathered by State Offices
paragraphs: BLM headquarters does not have ready access to the public challenge data  gathered by state offices in stand-alone electronic spreadsheets or paper  files. As a result, similar to the planning stage, BLM headquarters cannot  readily determine from year-to-year how many public challenges occurred,  including protests; appeals and litigation; who the challengers were; what  the outcomes were; whether the challenges affected split estate land; and  the time frames for resolving the challenges.To obtain such information,  headquarters must make individual, resource-intensive data calls to state  offices. In one instance in June 2004, BLM headquarters requested  information from state offices on their backlogs of protest decisions and  the affected acreage at the leasing stage. According to the BLM official, the  state offices responded in a couple of weeks, and the data indicated that  some state offices had a backlog in issuing protest decisions.
section_title: BLM Is Developing an Agencywide System That Could be Used to Standardize Public Challenge Data at the Leasing Stage
paragraphs: BLM is developing a system called the national Lease Sale System that is  being designed to automate its leasing process and standardize data  entered into LR2000. The Lease Sale System will replace five separate state  office systems. This system is being developed because BLM recognizes  that “there is a high degree of variability” in the extent to which the five  systems can assist BLM state offices in managing the leasing process. In  addition, according to BLM justification documentation for the Lease Sale  System “all of the processes and support systems currently in place involve  multiple data entry along with intricate data manipulations and data  handoffs that open the processes to errors and inefficiencies.” According to  BLM headquarters officials, the Lease Sale System, along with LR2000,  could be used to gather public challenge data at the leasing stage, and BLM  officials are in the process of determining whether to include public  challenge data in the Lease Sale System. According to BLM officials, some  state offices are reluctant to abandon their current leasing systems and  methods of gathering public challenge data, and a consensus has not yet  been reached concerning what information should be included in Lease  Sale System, including public challenge data.
section_title: Areas on the Outer Continental Shelf Open to Offshore Oil and Gas Development Experienced Few Public Challenges
paragraphs: According to data provided by MMS officials, during fiscal years 1999  through 2003, MMS was challenged on only one of its 1,631 decisions  approving offshore oil and gas development and production and only one  of its 1,997 decisions approving oil and gas exploration. Both of the  challenged MMS decisions concerned access to mineral resources on the  outer continental shelf off the coast of Alaska.
In September of 1999, MMS’ Alaska regional office approved a  development company’s plan to develop and produce oil off the  northern coast of Alaska. Several Alaskans and an environmental  interest group challenged the plan by filing a lawsuit in federal appeals  court. MMS’ decision to approve the plan was challenged on the grounds  that MMS did not comply with the requirements of NEPA and the Oil  Pollution Act. In September 2001, the court ruled against the  challengers.
In February 2002, MMS’ Alaska regional office approved an operator’s  plan to conduct exploration activities off the coast of Alaska. A Native  American tribe in Alaska and three tribal members challenged the  regional office’s decision to the IBLA in May 2002 on the grounds that  MMS did not comply with the requirements of NEPA and the  Administrative Procedure Act. IBLA denied the challengers’ requests for  a stay and the operator commenced exploration activities while IBLA  considered the appeal. Prior to IBLA’s appeal decision, the operator  halted activities and, in July 2003, relinquished the lease.
For the period we examined, MMS reported no lawsuits challenging its 5- year offshore management plan or the land parcels included in its 13 lease  sales. MMS also reported that there were no challenges to the 2,850  drilling permits it issued.
Table 2 shows the number of exploration and operations decisions  approved by MMS between 1999 and 2003 and the number that were  challenged by the public.
section_title: Conclusions
paragraphs: Existing laws, regulations, and agency procedures allow multiple  opportunities for the public to challenge decisions made by BLM, Forest  Service, BIA, and MMS during the four stages of the oil and gas  development process. While BLM is the primary agency approving oil and  gas activity on federal land, it cannot readily provide nationwide data on  the number of public challenges made. Consequently, it cannot assess the  extent to which such challenges affect the workload of its state offices,  which is important to understanding what additional staffing and funding  resources may be needed to process public challenges. Although each state  office gathers its own data on public challenges to manage workload, the  data are not kept in a standardized format, and is not easily accessible. As a  result, BLM headquarters must rely on resource intensive data calls to  determine whether its state offices are experiencing backlogs of protested  decisions. The new agencywide system that BLM is developing will provide  an opportunity for the agency to maintain public challenge data in a  standardized format at least for the leasing stage and provide it with more  reliable data from which to make resource allocation decisions, but the  agency has not yet determined whether it will include public challenge data  in the system. We believe that including public challenge data into the new  system should, at a minimum allow BLM headquarters easier access to  public challenge data and provide information that will help it better  manage workload impacts on its state offices from public challenges.
section_title: Recommendations for Executive Action
paragraphs: To standardize the collection of public challenge data at the leasing stage  for onshore federal lands, we recommend the Secretary of the Interior  direct BLM to take the following two actions:   Include public challenge data in the new agencywide automated system  for selling leases.
Issue clear guidance on how public challenge data should be entered  into the new system.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Secretaries of the Interior and  Agriculture for review and comment. In commenting on our  recommendation for BLM to include public challenge data in its new  agencywide system for lease sales, Interior wanted to ensure that the  recommendation only applied to the leasing stage and not other stages of  oil and gas development, such as land use planning, geophysical  exploration, drilling, and reclamation. It further said the new national  Lease Sale System will be designed to track public challenge data on oil and  gas lease sales, and the BLM is developing a timeline for developing and  deploying the new system. Our recommendation is directed to collecting  data at the leasing stage and is not intended for other stages of oil and gas  development. Interior did not comment on our second recommendation  that BLM issue clear guidance on entering public challenge data into the  new system.
The Department of Agriculture stated that the report is complete and  accurate and provides a good summary of the complex process that BLM  and the Forest Service use to jointly manage and make decisions  concerning the oil and gas programs, and appeals related to agency  decisions.
Both the Interior and Agriculture provided us with technical comments and  editorial suggestions. We have made corrections to the report to reflect  these comments, as appropriate.
As arranged with your office, unless you publicly announce the contents  earlier, we plan no further distribution of this report until 30 days after the  date of this letter. At that time, we will send copies of this report to other  interested congressional committees. We will also send copies of this  report to the Secretaries of Agriculture and the Interior, the Chief of the  Forest Service, the director of BLM, the director of BIA, and the director of  MMS. We will make copies available to others upon request. In addition, the  report will be available at no charge on the GAO Web site at  http://www.gao.gov.
If you or your staff have questions about this report, please contact me at  (202) 512-3841. Key contributors to this report are listed in appendix III.
section_title: Objectives, Scope, and Methodology
paragraphs: This appendix presents the scope and methodology we used to gather  information on the stages when agency decisions about oil and gas  development can be challenged by the public and the extent to which the  Bureau of Land Management gathers and uses public challenge data to  manage its onshore oil and gas program. It also addresses the number of  Minerals Management Service offshore oil and gas development decisions  that were challenged, who challenged them, and the grounds, time frames,  and outcomes of the challenges for fiscal years 1999-2003.
To describe the stages when oil and gas development decisions can be  challenged by the public, we analyzed pertinent laws, rules, and regulations  and interviewed agency officials pertaining to oil and gas development  processes under the jurisdiction of the Bureau of Land Management (BLM),  Bureau of Indian Affairs (BIA), and Minerals Management Service (MMS)  in the Department of the Interior and Forest Service in the Department of  Agriculture. This included a review of statutes including the Federal Land  Policy Management Act, Minerals Leasing Act, National Forest  Management Act, Omnibus Indian Mineral Leasing Act, Allotted Mineral  Leasing Act, Submerged Lands Act, Outer Continental Shelf Lands Act,  National Environmental Policy Act, and associated amendments and  regulations. From our analysis of these documents, we determined the  administrative procedures the agencies use to manage oil and gas  development on federal lands. We also identified the primary stages when  the public can challenge oil and gas development decisions—planning,  exploration, leasing, and operations and the types of challenges that can  occur (e.g. protests, appeals, and litigation) during each of these stages. We  interviewed BLM, BIA, MMS, and Forest Service officials in their respective  headquarters, regional, and field offices and in the Department of the  Interior’s Solicitor’s Office to discuss the application of the laws and  regulations and to enhance our understanding of them.
To determine the extent to which BLM gathers and uses data on public  challenges to manage its onshore oil and gas program, we identified  through discussions with BLM headquarters and state office officials the  various management information systems and databases the agency  maintains for managing the oil and gas program. We collected and analyzed  pertinent manuals, handbooks, memorandums, spreadsheets, and  procedures to ascertain the extent that BLM gathers and records public  challenge data on the oil and gas program. We interviewed BLM  headquarters officials to determine what, if any, public challenge data they  gathered on a national level for managing the oil and gas program. We also  interviewed officials from BLM’s state offices in California, Colorado,  Eastern States, New Mexico, Utah, and Wyoming to determine how public  challenge data is gathered and used at the state office level and to ascertain  how these offices used the agencywide systems for recording such data.  We visited the Eastern States office, which has jurisdiction over the 31  states east of the Mississippi River, and the Colorado, New Mexico, Utah,  and Wyoming state offices, which, according to BLM headquarters officials,  are state offices with a higher volume of oil and gas development activity.
To determine for fiscal years 1999 through 2003 the number of offshore oil  and gas development decisions by the MMS that were challenged, who  challenged them, and the grounds, time frames, and outcomes of the  challenges, we performed the following steps. We interviewed MMS  headquarters officials to determine the number of planning decisions and  lease sales held during fiscal years 1999 through 2003. We also analyzed  information in MMS’ Technical Information Management System (TIMS) to  identify the number of exploration and operations plans and revisions to  plans the MMS approved from fiscal years 1999 through 2003. We reviewed  the procedures governing data entry into TIMS to test the reliability of the  data provided. To determine the number of public challenges to MMS’  decisions, we interviewed officials at MMS headquarters and its three  regional offices: Gulf of Mexico, Pacific and the Alaska regional offices.  Officials from the Alaska regional office indicated that they had two public  challenges during this time period. Neither headquarters nor the other  regions reported any other public challenges. We collected and reviewed  the case files for the two challenged decisions to identify who challenged  the decisions, the basis for the challenge, when the challenges occurred,  and their outcomes. We also analyzed records at the Interior Board of Land  Appeals and legal briefs provided by MMS Alaska region on these two  challenges.
We conducted our work from November 2003 to October 2004 in  accordance with generally accepted government auditing standards.
section_title: Comments from the Department of the Interior
section_title: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Staff Acknowledgments
paragraphs: In addition to those named above, Laura Helm, R. Denton Herring, Richard  Johnson, Cynthia Norris, Matthew Reinhart, Patrick Sigl, and Walter Vance  made key contributions to this report.