Oil And Gas Development: Increased Permitting Activity Has Lessened BLM's Ability to Meet Its Environmental Protection Responsibilities
Published: 2005-06-17T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Rising U.S. energy consumption and concerns about dependency on foreign energy sources have prompted the administration to aggressively pursue domestic oil and gas production, including production on public lands, which in turn has generated concern that the impacts of this activity may compromise the use of public land for other purposes. GAO determined (1) the extent to which the level of oil and gas development on public lands managed by the Bureau of Land Management (BLM) has changed in recent years, and how the change has affected BLM's ability to mitigate impacts; (2) what policy changes related to oil and gas development BLM recently made and how these policies affected BLM's environmental mitigation activities; and (3) what challenges BLM faces in managing its oil and gas program.
section_title: What GAO Found
paragraphs: BLM's ability to meet its environmental mitigation responsibilities for oil and gas development has been lessened by a dramatic increase in oil and gas operations on federal lands over the past 6 years. Nationwide, the total number of drilling permits approved by BLM more than tripled, from 1,803 in fiscal year 1999 to 6,399 in fiscal year 2004. BLM officials in five out of eight field offices that GAO visited explained that as a result of the increases in drilling permit workloads, staff had to devote increased time to processing drilling permits, leaving less time for mitigation activities, such as environmental inspections and idle-well reviews. BLM made policy revisions over the last 6 years that affected to varying degrees its ability to assess and mitigate the environmental impacts of oil and gas development. The combined effects of these policy changes--some of which were aimed at facilitating and managing increased development, while others were meant to enhance environmental mitigation--were mixed. For example, four of the eight field offices reported that the most significant impact of the policies to expedite and manage oil and gas development was the increased emphasis that some of these policies placed on processing permits, which in turn resulted in shifting staff responsibilities away from mitigation activities. On the other hand, policies to enhance mitigation generally had a positive impact, although increases in the permitting workload have limited their effect. For example, in six field offices, policies for revitalizing BLM's inspection and enforcement program resulted in more inspection staff being hired, although most offices remain understaffed. BLM state and field office staff, and GAO, identified several challenges to managing the agency's oil and gas program, including (1) managing workloads while meeting all of its responsibilities, (2) using workforce planning to effectively identify and communicate its workforce needs, and (3) meeting its oil and gas program resource needs in light of budget constraints. Workload pressure, already high due to increased permitting activity, has been further exacerbated by increased appeals and litigation of BLM decisions and actions, according to BLM staff. In reviewing BLM's efforts to manage increasing workloads, GAO found that some data needed to quantify specific workload activities are either not tracked or not consistently tracked, and that BLM's current workforce planning process does not effectively identify and communicate BLM's staff needs to decision makers. As a result, the process does not provide consistent and readily available information that BLM can use to support budget justifications and make informed resource allocation decisions. BLM is also presented with the challenge of meeting its oil and gas program responsibilities in a period when staffing needs are growing faster than available resources. While BLM has the authority to assess and collect fees for processing oil and gas permits, it has not exercised this authority. BLM has recently taken steps to develop a fee structure for permits.

section_title: Letter
paragraphs: American families, communities, and businesses all depend on reliable and  affordable energy for their health, safety, and livelihood. Energy is  necessary for a myriad of things that affect peoples’ daily lives, including  transportation, communication, food production, medical services,  air-conditioning, and heating. As our nation’s energy consumption  continues to rise and concerns about dependency on foreign energy  sources heighten, the administration has aggressively pursued options for  increasing domestic oil and gas production, including production on public  lands. This, in turn, has generated concern among some state and local  government officials, sportsmen, conservationists, and others that this  activity may compromise the use of public land for other purposes.
The Bureau of Land Management (BLM), an agency of the Department of  the Interior, is responsible for managing 261 million surface acres of public  land, which is roughly one-eighth of the United States. BLM is also  responsible for issuing leases for oil and gas resources that are on or under  federal lands as well as private lands for which the federal government  retains mineral rights—amounting to roughly 700 million acres. In fiscal  year 2004, oil and gas valued at roughly $14.5 billion was produced from  these leases and the government collected approximately $1.6 billion in  royalty payments, which are based on a percentage of the value of the oil  and gas produced.
The guiding legislation for BLM’s management of public lands and mineral  estates is the Federal Land Policy and Management Act of 1976, as  amended (FLPMA). Congress declared in FLPMA that it was U.S. policy to  manage public lands for multiple use and sustained yield. “Multiple use” is  defined, in part, as “the management of the public lands and their various  resource values so that they are utilized in the combination that will best  meet the present and future needs of the American people.” “Sustained  yield” is defined as the “achievement and maintenance in perpetuity of a  high-level annual or regular periodic output of the various renewable  resources of the public lands consistent with multiple use.” BLM carries  out these requirements by continuously balancing a variety of competing  land uses, including cattle grazing, habitat protection for threatened and  endangered species, wilderness preservation, recreational use, and oil and  gas development.
BLM is also responsible for protecting the environment by mitigating the  impacts of oil and gas development occurring on lands managed by the  agency. This requires BLM to undertake a number of activities to ensure  that adverse impacts on the land as well as other resources—such as air,  water, vegetation, and wildlife—are properly avoided or mitigated. The  Federal Oil and Gas Royalty Management Act of 1982, as amended,  establishes the authority for BLM’s program for inspecting oil and gas sites  to make sure operators are in compliance with all restrictions and  requirements outlined in their leases and drilling permits—including those  designed to protect the environment. The act requires the Secretary of the  Interior to develop guidelines setting forth the coverage and the frequency  of such inspections. Relatedly, various BLM regulations and policies form  the basis for monitoring the long-term impacts of oil and gas production;  tracking nonproducing wells, also referred to as “idle” wells, to make sure  that, among other things, they do not fall into disrepair and become a  liability to the federal government; and ensuring that lands affected by oil  and gas production are being properly reclaimed. The protection of other  resources that may be affected by oil and gas activity is governed by  resource-specific laws, such as the Clean Air Act, the Clean Water Act, and  the Endangered Species Act.
In January 2001, the President established the National Energy Policy  Development Group for the purpose of developing a national energy policy.  In May 2001, this group issued the National Energy Policy Report, which  included recommendations for facilitating the production of oil and gas  resources on public lands. While Congress is still considering  comprehensive energy policy legislation in response to the National Energy  Policy Development Group, BLM has been administratively implementing  some of its recommendations. Specifically, BLM has focused its efforts on  streamlining its administration and management of the various stages of oil  and gas production through a number of policy and procedural changes  that seek to minimize delays in approving drilling permits and increase  production while also protecting the environment.
In this context, you asked us to determine (1) the extent to which the level  of oil and gas development on public lands managed by BLM has changed  over the past 6 years and how these changes have affected, if at all, BLM’s  ability to assess and mitigate environmental impacts; (2) what policy  changes BLM has made in the past 6 years related to facilitating and  managing oil and gas development and how these changes have affected, if  at all, BLM’s ability to assess and mitigate environmental impacts; and (3)  what challenges BLM faces in managing its oil and gas program.
To respond to these objectives, we obtained data from BLM on the number  of oil and gas drilling permits approved in the past 6 years and the number  of environmental inspections performed. We met with officials from BLM’s  Fluid Minerals Group to discuss the agency’s responsibilities for managing  its oil and gas program. We also met with the Director and Deputy Director  of BLM’s National Energy Office to discuss the agency’s efforts to  implement recommendations in the National Energy Policy specifically  affecting BLM’s oil and gas program. In addition, we visited a  nonprobability sample of BLM field offices and used a structured interview  guide to assist in collecting information about how each field office  manages its oil and gas program, including staffing and workload issues.
We selected field offices that experienced some of the greatest increases in  oil and gas permitting activity for fiscal years 1999 through 2003 (at the  time of site selection, fiscal year 2004 data were not available). Additional  criteria for selection included offices that vary in their ability to meet BLM’s  goals for inspecting oil and gas wells and offices that either are or are not  expediting the update of resource management plans because the plans  involve energy development issues. We focused on these offices because of  concern that the expedited time frames for updating these plans could  compromise the environmental analyses associated with the plans. Using  these criteria, we selected eight field offices to visit: in Glenwood Springs,  Colorado; Miles City, Montana; Carlsbad and Farmington, New Mexico;  Vernal, Utah; and Buffalo, Rawlins, and Pinedale, Wyoming. Using a  structured interview guide, we also interviewed officials from each of the  five BLM state offices—in Colorado, Montana, New Mexico, Utah, and  Wyoming—that have oversight authority for these field offices. The  officials we interviewed at these offices, including state and field office  managers, were responsible for the day-to-day administration of BLM’s oil  and gas program. We also met with officials from industry groups,  environmental and citizen-based groups, and state governments. We  collected and analyzed documents related to BLM’s management of its oil  and gas program, including instructional memoranda, resource  management plans, BLM’s National Energy Policy Implementation Plan,  and relevant laws and regulations. A more detailed description of our scope  and methodology can be found in appendix I. We conducted our work from  February 2004 through April 2005 in accordance with generally accepted  government auditing standards.
subsections: section_title: Background
paragraphs: In recent years, both rising energy prices and new technologies have led to  an increased emphasis on developing oil and gas resources on public lands.  First, higher prices have created greater economic incentives to drill for oil  and gas. According to the Energy Information Administration, the average  of daily New York Mercantile Exchange futures prices for crude oil  increased from $19.30 per barrel in 1999 to $41.47 per barrel in 2004.
Similarly, average wellhead prices for natural gas in the United States have  increased significantly in the past 6 years, increasing from an average of  $2.19 per thousand cubic feet in 1999 to an average of $5.49 per thousand  cubic feet in 2004. Second, advances in technology have made it more  profitable to drill for oil and gas. For example, advances in directional  drilling and new techniques for putting wells into production have made it  possible to economically produce oil and gas from reservoirs that were  previously considered to be uneconomic.
Several other events in the past 6 years have also increased the emphasis  on developing oil and gas resources on public lands. First, the Energy Act  of 2000 directed the Secretary of the Interior, in consultation with the  Secretaries of Agriculture and Energy, to prepare a report that provides an  inventory of oil and natural gas resources beneath federal lands and to  identify the extent and nature of any restrictions or impediments to the  development of such resources. Second, the National Energy Policy  Report, issued on May 16, 2001, contained many recommendations that  were intended to diversify and increase energy supplies, encourage  conservation, and ensure energy distribution. For example, this report  included recommendations directing the Secretary of the Interior to  expedite the ongoing study of impediments to oil and gas development and  to examine restrictions on oil and gas leasing and modify these restrictions  where opportunities exist, as long as they were consistent with the law,  good environmental practice, and balanced use of resources. The National  Energy Policy Report also recommended that the President issue an  executive order to “rationalize permitting for energy production in an  environmentally sound manner by directing federal agencies to expedite  permits and other federal actions necessary for energy related project  approvals on a national basis.” Accordingly, the President signed Executive  Order 13212 (Actions to Expedite Energy-Related Projects) on May 18,  2001, which incorporated these recommendations and established an  interagency task force to monitor and assist the agencies in their efforts.  Lastly, an oil and gas inventory, which is commonly referred to as the Energy Policy and Conservation Act (EPCA) Report, was issued in  January 2003. The EPCA Report included estimates of oil and gas resources  and reserves in five major geologic basins in the interior West and a  description of the extent and nature of any restrictions to the development  of these resources and reserves. These five basins contain much of the  onshore oil resources and the bulk of the onshore natural gas under federal  ownership in the contiguous United States.
In response to these events, BLM developed a National Energy Policy  Implementation Plan that outlined 54 specific tasks intended to facilitate  the implementation of the President’s National Energy Policy. A subset of  these tasks dealt with BLM’s management of its oil and gas program,  including mitigating the environmental impacts of oil and gas development.  This subset of tasks formed the basis for a series of BLM instructional  memoranda, which among other things, directed BLM field managers to (1)  use the results of the EPCA Report to review their restrictions on oil and  gas development to make sure they are still relevant and that they were the  least restrictive while protecting the environment, (2) improve and  streamline the processing of drilling permits for oil and gas wells, and (3)  expedite the update of certain resource management plans, including those  that are time sensitive because of energy development issues. This subset  of tasks also incorporated the agency’s ongoing efforts to enhance its oil  and gas inspections and enforcement capabilities, improve its management  of idle wells, and encourage the use of best management practices for oil  and gas development.
subsections: section_title: Environmental Impacts of Oil and Gas Development
paragraphs: If not properly mitigated, the environmental impacts of oil and gas  development could compromise BLM’s responsibility for protecting the  environment. These environmental impacts range from being site  specific—for example, removing several acres of vegetation at an  individual well pad—to those that affect a much larger area, such as  fragmenting tens of thousands of acres of crucial winter range for mule  deer. (See figs. 1 and 2.) Air and water quality are also two resources that  can be affected by oil and gas development. Air quality can be degraded by  increased dust from newly graded roads, and visibility can be affected in  the immediate area and downwind. Air quality can also be degraded by  increased nitrogen oxides from diesel engines and compressors used at  drilling sites. Surface water quality can be degraded by increased sediment,  salt, and other pollutants either from water draining off newly graded  surfaces and roads or from the accidental discharge of oil or water  produced during oil and gas production. Shallow aquifers can be polluted if  required protective measures are not in place, and coal bed methane gas  production can deplete shallow aquifers that serve as domestic water  sources. Visual resources can also be degraded by a high density of drilling  and production equipment that in extreme situations can change the  appearance of the landscape from a natural setting to an industrial zone. In  addition, the noises, smells, and lights from trucks, drilling and  construction equipment, and production facilities can disturb wildlife and  people living nearby.
section_title: BLM’s Land Use Planning
paragraphs: The primary method BLM uses to balance resource use and environmental  protection is the development of land use plans (called resource  management plans) under FLPMA. During the planning process, BLM  determines, among other things, which parcels of land will be available for  oil and gas development. BLM then publishes a notice that bids will be  accepted for leases on these lands. Before approving an oil and gas lease,  BLM conducts a review to determine if any restrictions—or  stipulations—are necessary to mitigate the impacts from oil and gas  production. As provided by BLM regulations, if stipulations are necessary,  they are incorporated into the lease. Before an oil and gas company can  drill on leased lands, it must submit an application for a drilling permit with  BLM. BLM then evaluates the operator’s proposal for drilling to ensure  that it conforms to the land use plan and applicable laws and regulations. In  approving a specific drilling permit, BLM inspects the proposed drilling site  and may add site-specific conditions of approval deemed necessary to  protect the environment. In addition, BLM must meet the requirements of  the National Environmental Policy Act of 1969 (NEPA). NEPA requires  federal agencies to prepare an environmental impact statement (EIS) for  major federal actions that may have a significant affect on the quality of the  human environment. When an agency is not sure whether an activity will  have significant impact on the environment, the agency prepares a less  detailed environmental assessment (EA). If an environmental assessment  determines that the activity will significantly affect the environment, the  agency then prepares an EIS. With regard to oil and gas leasing and  development, BLM implements NEPA during both the preparation of the  resource management plan and at the drilling permit application stage.
section_title: BLM’s Environmental Inspection and Monitoring Activities
paragraphs: After BLM approves a drilling permit, the operator can drill the well and  commence production. To ensure compliance with all stipulations in the  lease and conditions of approval in the permit, as well as applicable laws  and regulations, BLM has an inspection and enforcement program that is  designed to verify that the operator remains in compliance with the various  restrictions at a well site. The authority for inspecting wells is derived from  the Federal Oil and Gas Royalty Management Act of 1982, as amended. This  act requires the Secretary of the Interior to develop guidelines that specify  the coverage and frequency of inspections. Although the driver of BLM’s  inspection program is to verify the volumes of oil and gas produced to  ensure the federal government is receiving the required royalty payments,  the inspection program has evolved over time to include various  environmental inspections, as well. BLM tracks data on oil and gas wells  and environmental inspections in its centralized database.
subsections: section_title: Environmental Inspections
paragraphs: Environmental inspections are BLM’s primary mechanism to ensure that  operators are complying with various environmental laws and lease  stipulations. BLM staff conduct environmental inspections in order to  protect the surface and subsurface environments. BLM’s natural resource  specialists, who generally also have some responsibilities for processing  drilling permits, conduct environmental inspections by visiting an  individual well or group of wells to assess compliance with lease  stipulations and conditions of approval that are written into the drilling  permit. (See fig. 3.) BLM managers determine which wells are to be  inspected each year through a ranking process that places wells or groups  of wells into either high- or low-priority categories, with high-priority wells  requiring an annual inspection. Environmental inspection priorities are  based on several criteria, including the proximity to an area of special  environmental concern, whether noncompliance with lease stipulations or  conditions of approval could have a significant impact on the environment,  history of noncompliance, or sites that need BLM approval for successful  reclamation. If the natural resources staff determine that a violation  occurred or is occurring, they can take one of several enforcement actions,  including issuance of a verbal or written “incident of noncompliance.” The  enforcement actions may carry fines, depending on the severity of the  infraction.
Another means for BLM to mitigate the impacts of oil and gas development  is through monitoring programs that are designed to measure the  effectiveness of mitigation measures over a period of time. According to  current BLM land use policy, each field office must develop a monitoring  schedule in their land use plans to periodically (annually is recommended)  revisit land use plan decisions and track progress toward their  implementation. The land use plan may also identify intervals and  standards for monitoring resources, such as air, water, soils, vegetation,  and fish and wildlife; this type of monitoring is referred to as resource  monitoring. Since 2003, when the Office of Management and Budget  identified, among other things, BLM’s resource monitoring activities as an  area that needed improvement, BLM has been developing a National  Monitoring Strategy. This is a multiyear approach that will develop an  integrated data collection and assessment strategy to inform and guide land  management decisions, including protocols for periodically reporting on  resource conditions and the effectiveness of management actions at the  local, regional, and national levels.
With respect to oil and gas development, BLM recognizes two types of  monitoring as important: (1) land use plan monitoring and (2) resource  monitoring. Land use plan monitoring can alert the agency as to whether  the magnitude of the overall environmental impacts resulting from oil and  gas development are within the acceptable level projected in the resource  management plan. BLM’s policy calls for tracking the number of oil and gas  wells drilled and then converting that number into a total amount of  surface acres disturbed. Resource monitoring can reveal how critical  resources, such as air quality, groundwater, surface water, and wildlife are  directly impacted from oil and gas development over time. Scientists  accomplish this by establishing a baseline condition for each resource,  determining the change in this baseline condition over time, and attributing  this change to a specific activity, such as oil and gas development. Land  managers can then determine the effectiveness of stipulations and  conditions of approval and decide whether these measures need to be  modified, strengthened, or eliminated. Resource monitoring generally  involves assessing cumulative impacts to resources over broad geographic  areas and can be incorporated into resource management plans or  environmental impact statements for large-scale oil and gas projects.
section_title: Monitoring Idle Wells
paragraphs: BLM also has monitoring responsibilities for idle wells. Once the operator  demonstrates to BLM that the well can no longer produce oil or gas  economically or has no other use, the well must be plugged. However, the  operator may delay plugging the well and instead allow the well to remain  idle for various reasons, including the anticipation of higher oil and gas  prices that may once again make the well economic to operate or possibly  using the well for secondary recovery operations (for example, using the  well to inject water into the oil reservoir and push any remaining oil to  operating wells).
BLM has policies that require it to periodically review the status of these  idle wells to ensure that legitimate reasons exist for allowing the wells to  remain idle. According to BLM, the primary purpose of idle-well reviews  are to ensure that an operator does not walk away from a nonproducing  well, thereby leaving the federal government with the responsibility of  plugging the well and reclaiming the site. According to BLM, idle-well  reviews also help mitigate impacts from oil and gas developments by  ensuring that well sites are reclaimed in a timely manner.
Idle wells consist of both temporarily abandoned and shut-in wells. BLM  defines temporarily abandoned wells as wells that are physically or  mechanically incapable of producing oil or gas of sufficient value to exceed  direct operating costs but may have value for a future use. Operators must  receive BLM approval prior to placing a well in temporarily abandoned  status for more than 30 days. This approval, which lasts for up to 12  months, can be renewed annually at BLM’s discretion. All temporarily  abandoned wells must have current approval after the initial 30 days. BLM  policy defines shut-in wells as wells that are physically and mechanically  capable of producing oil or gas in paying quantities but have not produced  for 1 month. According to BLM, operators do not have to obtain BLM  approval to place wells in shut-in status. BLM field office staff are directed  to identify the number of idle wells and to review the justification for their  idle status. Although idle-well review policies vary by field office, BLM  policy suggests that field office staff initiate the review when a well has not  produced for 12 months. Staff then review well files to determine if the  information submitted by the operator supports the idle status. If the  justification is insufficient, BLM will require the operator to submit a plan  that allows for a number of actions, including bringing the well back into  production or plugging the well and reclaiming the site.
When an operator determines, and BLM agrees, that a well has no further  economic value, the operator must follow an agreed-upon final reclamation  plan that includes removing all visual evidence of the well and pad,  recontouring the affected land, and revegetating the site with native plant  species. In general, the goal is to reclaim the well site so that it matches the  surrounding natural environment to the extent possible. BLM would then  inspect the site to monitor the success of the reclamation, a process that  typically takes several years. Once BLM determines that reclamation  efforts have been successful, BLM approves a Final Abandonment Notice.
section_title: Inspecting and Monitoring Reclamation Efforts
paragraphs: Two types of reclamation may occur during the life cycle of an oil and gas  well. The first type is interim reclamation. Interim reclamation is the  practice of reclaiming unnecessary surface disturbance after a well has  been drilled. For example, operators may need a 10-acre drill pad to safely  drill a series of wells. However, once the wells are drilled, operators may  only need 4 acres to safely service the well over its lifetime. In this case,  interim reclamation would require the reseeding and regrading of 6 acres of  the initial pad that are no longer needed. While this practice is not a general  requirement in all permits issued by BLM, the agency may choose to add it  as a requirement in drilling permits for specific oil and gas developments.  The other type of reclamation occurs when the operator plugs the well and  initiates the final reclamation process, as described in the previous section.  This type of reclamation is a requirement and the terms of the reclamation  are included in the terms of the lease and the drilling permit.
section_title: Dramatic Increases in Oil and Gas Permitting Activity Have Lessened BLM’s Ability to Ensure That Environmental Impacts Are Mitigated
paragraphs: Oil and gas development on BLM-managed lands has increased  dramatically over the past 6 years, resulting in staff spending more time  processing drilling permits and less time mitigating the environmental  impacts of the development. Nationwide, the total number of oil and gas  drilling permits approved by BLM more than tripled, from 1,803 to 6,399 for  fiscal years 1999 through 2004. Much of the increased oil and gas activity  was concentrated in five intermountain states—Colorado, Montana, New  Mexico, Utah, and Wyoming. In fiscal year 2004, the offices under the  jurisdiction of these five BLM state offices collectively approved 6,204  drilling permits, more than 95 percent of the national total. BLM officials in  most of the field offices that we visited stated that the increased permitting  workload has led to less staff time being available for performing  environmental mitigation activities. These mitigation efforts include  conducting environmental inspections of oil and gas wells, implementing  monitoring programs, tracking idle wells and reviewing justifications for  why these wells are in idle status, and ensuring reclamation efforts are  successful.
subsections: section_title: BLM’s Oil and Gas Permitting Activity Has More Than Tripled in the Past 6 Years
paragraphs: Over the past 6 years, the total number of drilling permits approved by BLM  nationwide has more than tripled from 1,803 to 6,399. The permits  approved under the jurisdictions of five BLM states offices—Colorado,  Montana, New Mexico, Utah, and Wyoming—provided the bulk of the  nationwide increase in permitting activity and accounted for over 95  percent of all the permits approved in fiscal year 2004. The eight BLM field  offices we visited in these five states accounted for 77 percent of the total  permits approved nationwide in fiscal year 2004. (See figs. 4 and 5.)
Specifically, the eight BLM field offices we visited approved 4,911 drilling  permits in fiscal year 2004, an increase of 3,803 over the number approved  in fiscal year 1999. The increases among the eight BLM field offices we  visited ranged from 70 in the Miles City, Montana, field office to 2,151 in the  Buffalo, Wyoming, field office. (See table 1.)
The increases in the number of drilling permits approved in the Buffalo,  Wyoming, and Miles City, Montana, field offices, according to BLM staff,  were due primarily to extensive coal-bed methane developments in the  Powder River Basin. In 2003, a congressional conference committee  considering the 2004 appropriations bill for the Department of the Interior  stated in its report that “ased on the recently completed environmental  impact statement for the Powder River Basin and increased staffing for the  Buffalo and Miles City field offices, the managers expect more than 3,000  drilling permits will be issued in 2004.” The two offices actually approved  2,435 permits in fiscal year 2004. Drilling for natural gas was primarily  responsible for the increases in permits approved in the Rawlins and  Pinedale, Wyoming, the Farmington, New Mexico, and the Glenwood  Springs, Colorado, field offices, while increases in the Carlsbad, New  Mexico, and Vernal, Utah, field offices were due to increases in drilling for  both oil and natural gas.
section_title: Increased Oil and Gas Permitting Activity Has Decreased Staff Resources Available for Environmental Mitigation Activities
paragraphs: BLM officials in five of the eight field offices we visited reported that they  had to shift staff from activities designed to mitigate the impacts of oil and  gas development—such as environmental inspections, monitoring,  idle-well reviews, and reclamation—to those associated with processing  drilling permits. While some staff have had joint responsibilities for  processing permits and performing environmental mitigation activities,  according to BLM officials, staff have spent an increasing amount of time  processing permits, leaving less time for mitigation activities. For example,  the Buffalo, Wyoming, field office, which has the highest drilling permit  workload, was able to meet its annual environmental inspection goal only  once in the past 6 years, and achieved only 27 percent of its environmental  inspection goal in fiscal year 2004. BLM staff also acknowledged  difficulties in developing and implementing monitoring plans due, in part,  to the increased permitting workload. Furthermore, BLM’s ability to  conduct idle-well reviews—which, according to BLM, help prevent  nonproducing wells from becoming a liability to the federal  government—has also been impacted. According to staff from four of the  eight field offices we visited, backlogs of idle-well reviews currently exist  because staff who would normally be available to do these reviews have  spent more time processing permits. Finally, staff at seven of the eight field  offices we visited said they currently have a backlog of reclamation work.  These backlogs are due, in part, to fewer staff available to inspect  reclaimed sites as the result of permit-processing workloads.
subsections: section_title: Several BLM Field Offices with Large Increases in Permitting Activity Have Not Met Their Environmental Inspection Goals
paragraphs: BLM officials in four of the eight field offices we visited said that staff are  spending increasing amounts of time processing permits, resulting in less  time to conduct environmental inspections. The routine environmental  inspection of well sites is BLM’s primary mechanism for ensuring that  operators are complying with various environmental conditions and  stipulations. Detecting violations of environmental requirements and  ensuring that any violation is promptly corrected by the operator is a key  component of BLM’s process for mitigating the environmental impacts of  oil and gas development. Taken as a whole, the eight BLM field offices we  visited met their annual environmental inspection goals only about half of  the time during the past 6 years (from fiscal years 1999 through 2004), due  in part to staff spending an increasing amount of time processing drilling permits. Specifically, two field offices—Glenwood Springs, Colorado, and  Carlsbad, New Mexico—were able to meet their environmental inspection  goals during the entire 6-year span. The success of the remaining six field  offices ranged from achieving their annual environmental inspection goals  in 5 out of the 6 years in the Pinedale, Wyoming, field office, to only once  being able to achieve their annual goal in the 6-year period in both the  Buffalo, Wyoming, and Vernal, Utah, field offices—the two field offices  with the largest increases in permitting activity. These two field offices last  met their annual environmental inspection goals in fiscal years 2000 and  1999, respectively. Furthermore, the Buffalo, Wyoming, field office—the  field office with the highest drilling permit workload—was able to  complete only 27 percent of its environmental inspection goals in fiscal  year 2004. By not performing these inspections, the field offices have not  ensured that the wells in their jurisdictions are being operated in  compliance with applicable environmental requirements.
Although meeting annual goals for environmental inspections continues to  be a challenge for some BLM field offices, BLM has been actively trying to  address this issue in the last few years. As we discuss in more detail later in  the report, BLM initiated efforts to revitalize its oil and gas inspection and  enforcement program in February 2000. However, BLM’s progress in  strengthening its inspections capabilities has been somewhat undercut by  the ever-increasing number of drilling permits that, in turn, continues to  drive a corresponding increase in the various types of inspections that need  to be performed.
section_title: Resource Monitoring Plan Development Has Lagged Partly Because of Increased Permitting Activity
paragraphs: Four of the eight BLM field offices we visited had not developed any  resource monitoring plans for various reasons, including that staff that  could have been used to develop such plans had been busy with processing drilling permits. Monitoring plans help track management decisions to  determine if desired outcomes are achieved, including those related to  mitigating the environmental impacts of oil and gas development. Officials  in the four BLM field offices that had developed resource monitoring plans  also expressed concerns about their ability to implement their monitoring  plans given resource constraints. For example, the heavy workload  associated with processing drilling permits in the Wyoming portion of the  Powder River Basin has slowed the development of a groundwater  monitoring plan, and BLM officials in the Pinedale and Rawlins, Wyoming,  field offices reported that personnel have been diverted from monitoring  activities to processing drilling permits. Appendix II contains additional  information on resource monitoring, the role of federal and state  governments in monitoring, the resource management plans and  environmental impact statements we reviewed, and how budget  constraints are affecting monitoring.
section_title: Idle-Well Reviews Have Been Impacted by Increased Permitting Activity
paragraphs: Officials from four of the eight BLM field offices we visited said their  offices had a backlog of idle-well reviews. According to the BLM database  containing idle-well information, only 44 percent of the wells in temporarily  abandoned status had all of the data needed to determine whether idle-well  reviews were being performed in a timely fashion. However, for those wells  in temporarily abandoned status that had the necessary information, 65  percent of the idle-well reviews were past due.
Due in large part to the increased drilling permit workload, BLM officials in  four of the eight field offices we visited indicated they had not been able to  complete their idle-well reviews in a timely manner. However, staff from a  fifth field office told us while they had diverted staff from idle-well reviews  to processing drilling permits, this diversion had not impacted their ability  to do idle-well reviews.
As with environmental inspections, completing the necessary idle-well  reviews remains a challenge for some BLM offices. As we discuss in more  detail later, BLM initiated a concentrated effort in May 2000 to reduce the  total number of idle wells. In part as a result of this effort—and also  because increases in oil and gas prices resulted in more idle wells being  brought back into production—the total number of idle wells in four of the  five states we visited (excluding Montana) decreased from fiscal years 1999  through 2003. Of the five states we reviewed, Wyoming appeared to have  the greatest decrease in idle wells, while Utah appeared to have the  smallest decrease. Despite progress in reducing the total number of idle  wells, the percentage of wells in idle status for more than 5 years, which,  according to BLM, represents a greater financial risk to the federal  government, increased in four of the five states.
section_title: A Backlog of Reclamation Reviews Exists Partly Because of Increased Permitting Activity
paragraphs: BLM officials in seven of the eight field offices we visited stated that the  workload associated with processing drilling permits has affected their  ability to complete their reclamation work. The reclamation backlog  consists of several activities, including visiting well sites to verify the  success of efforts to partially reclaim drilling-well pads—called interim  reclamation—as well as visiting well sites where the well bore has been  plugged and the entire well pad has been reclaimed—called final  reclamation. BLM officials in five of the seven field offices responded that  they have interim reclamation backlogs (the Carlsbad, New Mexico, field  office does not have any well sites with interim reclamation requirements).  Interim reclamation is important because it mitigates adverse visual and  environmental impacts quickly. Since more acreage is needed for drilling a  well than for its ongoing operations once it is brought into production, the  opportunity exists to reclaim some of the drilling-well pad soon after  drilling has been completed. The purpose of an interim reclamation site  visit is to ensure that the interim reclamation was performed in accordance  with any applicable environmental requirements.
BLM officials in seven of the eight field offices largely attributed their final  reclamation backlogs to their significant workloads associated with  processing drilling permits. The final reclamation backlog at these field  offices consists of site inspections that needed to be performed to assess  the status of final reclamation efforts. If done correctly, final reclamation  should mostly remove any visible evidence that an oil or gas well was ever  on the site. BLM staff told us that final reclamation typically takes  anywhere from 2 to 6 years, depending on precipitation and other factors.  Our review of BLM data showed that there were 1,975 wells in the eight  field offices that were abandoned over 4 years ago that did not have an  approved Final Abandonment Notice as of February 17, 2005. (See table  2.)
An official at the Buffalo, Wyoming, field office said that approximately 40  percent the Final Abandonment Notices could be approved for sites where  they have been submitted if staff had time to verify that final reclamation  had occurred and was successful. However, due to the significant increase  in permitting workloads, staff have been unable to visit these sites.
section_title: Recent BLM Policy Changes Have Had Mixed Impacts on Environmental Mitigation Activities for Oil and Gas Development
paragraphs: The policy changes BLM made in the past 6 years to help facilitate and  manage increased oil and gas development and to enhance environmental  mitigation efforts have had mixed impacts on the agency’s environmental  mitigation activities. Specifically, while most of BLM’s recent policy  changes to help facilitate and manage increased oil and gas development  have had little overall impact on environmental mitigation activities, some  have had a negative impact. Because some of these policies placed greater  emphasis on processing drilling permits, the effect of these policies was to  cause field office staff to spend more time processing permits and less time  performing environmental mitigation activities. In contrast, most of BLM’s  policy changes to enhance environmental mitigation activities have had  some positive impacts on the ability of the field office staff to conduct such  activities. However, the effect of these policies has been somewhat  constrained by increases in the permitting workload.
subsections: section_title: Some BLM Policy Changes to Help Facilitate and Manage Oil and Gas Development Indirectly Limited BLM’s Ability to Meet Its Mitigation Responsibilities
paragraphs: For the eight field offices visited, most of the recent BLM policy changes  that were designed to facilitate and manage oil and gas development have,  thus far, had little direct impact on environmental mitigation activities, but  some have indirectly limited BLM’s ability to carry out its mitigation  responsibilities. For example, BLM’s policy changes that required field  offices to review restrictions on oil and gas development had little impact  on environmental mitigation activities because they generally did not result  in any revisions to lease stipulations or conditions of permit approval.  Similarly, the policy changes that expedited the completion of revised  energy-related resource management plans had little impact on  environmental mitigation activities, because the completion of these plans  has been delayed for various reasons, including to allow more time for key  stakeholders to comment on the plans and for necessary environmental  reviews. In contrast, BLM’s policy changes to improve and streamline the  processing of drilling permits have indirectly had a negative impact on  environmental mitigation activities, because they have reinforced  processing drilling permits as a top priority. Consequently, these policies  have resulted in staff spending less time performing environmental  mitigation activities.
subsections: section_title: Policy Changes on Reviewing Restrictions on Oil and Gas Development Have Had Little Impact on Environmental Mitigation Activities
paragraphs: BLM officials from the eight field offices we visited stated that recent  policy changes on reviewing restrictions on oil and gas development have  had little or no impact thus far on their environmental mitigation activities.  In April and July 2003, BLM issued policy changes that provided direction  to BLM state and field offices on ways to incorporate the findings of the  EPCA Report into the agency’s land use planning process and into oil and  gas use authorizations (such as leases and drilling permits). These polices  were aimed at reducing or eliminating impediments to oil and gas leasing  on BLM land while continuing to protect resources. These policies directed  BLM land use planners to evaluate the necessity of existing constraints on  energy development in high-potential oil and gas areas—including such  environmental mitigation measures as lease stipulations and conditions of  permit approval.
Since these policy changes generally did not result in revisions to  stipulations in existing land use plans or revisions to existing lease  stipulations or conditions of permit approval for the eight BLM field offices  we visited, they have had little impact thus far on the field offices’  environmental mitigation activities. Seven of the eight field offices reported  making no revisions to land use plan stipulations or to existing lease  stipulations or conditions of approval as a result of these policy changes,  while one field office reported making a significant revision to stipulations  in a land use plan. Specifically, the Farmington, New Mexico, field office  revised stipulations for the Negro Canyon area from “no leasing” to “no  surface occupancy” with seasonal drilling restrictions, noise standards, and  designated bald eagle resource areas. This modification allowed an  operator to lease Negro Canyon and drill directionally from land adjacent  to the canyon. The field office staff said this revision allowed BLM to  collect additional royalties and prevented the oil and gas from being  drained by drilling activity on private and state land adjacent to the canyon.  With this new oil and gas development, staff in the Farmington field office  will need to perform additional environmental inspections to ensure  compliance with the new lease stipulations.
In addition, three of the eight BLM field offices reported that these policy  changes may result in modifications to their future environmental  mitigation activities as resource management plans are updated. For  example, staff from the Vernal, Utah, field office said that as a result of  these recent policy changes, standardized lease stipulations would be  adopted in the current revision of the Vernal Resource Management Plan.  According to these staff, so far, this has involved clarifying stipulations as  opposed to revising them. Since this resource management plan is still  being drafted, any final changes to lease stipulations and their subsequent  potential impact on environmental mitigation activities have yet to be  determined. Also, staff from the Glenwood Springs, Colorado, field office  said these policies may result in modifications to stipulations in the  amendment under development for the Roan Plateau Resource  Management Plan. The staff are performing an in-depth analysis to  determine if less-restrictive stipulations can be used. For example,  currently there is a 5-month restriction in the Roan Plateau area on oil and  gas drilling activity to protect winter range habitat for deer and elk. The  field office staff are looking at the impacts of reducing this restriction to 2  months or dropping it altogether. This resource management plan  amendment is also still in draft form, and it is too early to determine what,  if any, impact any revisions may have on environmental mitigation  activities. Similarly, staff from the Miles City, Montana, field office said the  EPCA policies will likely impact the stipulations in an upcoming land use  plan revision that is scheduled to begin in fiscal year 2005.
section_title: Policy Changes to Expedite Energy-Related Resource Management Plans Have Had Little Impact on Environmental Mitigation Activities
paragraphs: Overall, staff from the seven BLM field offices we visited that were  responsible for developing time-sensitive energy-related resource  management plans (Carlsbad, New Mexico, was not) said the recent policy  changes to expedite these plans have had little or no impact on their  environmental mitigation activities. In February and August 2002, BLM  issued policy changes that placed a high priority on expediting the update  of 21 resource management plans, including 10 energy-related plans.  Many of these plans had not been updated in several years and did not  contain the latest available information needed to make land use and  resource protection decisions. The February 2002 policy noted that BLM  had received increased funding for updating and preparing these plans.  With respect to environmental issues, the concern was that the  environmental analyses associated with these updated plans would be  compromised in the rush to complete them within their expedited time  frames. However, for the expedited plans being developed by the BLM field  offices we visited, none have been completed on time—only 4 of the plans  have been completed, ranging from 7 months to 1 year past their original  deadlines—and there was time to complete the necessary environmental  analyses.
The seven BLM field offices we visited that were developing energy-related  expedited plans were responsible for eight of these plans (the Pinedale,  Wyoming, field office had two plans). (See table 3.) BLM officials from  these field offices said the original deadlines were too optimistic. Among  the reasons cited for why the deadlines were not met for several of these  plans were because time frames had to be extended to allow key  stakeholders more time to comment on the plans and to accommodate  required environmental reviews, including public comment periods. Thus,  staff from four of the seven field offices believed the environmental  analyses associated with their plans were not affected by these policy  changes. Staff from two field offices felt the policies slightly improved the  quality of their environmental analyses. For example, staff from the  Glenwood Springs field office said that because their plan was time  sensitive, it was deemed high profile and received more scrutiny than  usual. Staff from one field office said the policies may have had a slightly  negative impact on the environmental analysis supporting their expedited  plan because, among other things, time was not sufficient to allow some  stakeholders to participate as much as they would have liked.  Consequently, overall, the field staff believed these policy changes had little  or no impact on environmental mitigation activities.
Overall, BLM officials from four of the eight field offices we visited stated  that the most significant impact of the recent policy changes for  streamlining the processing of drilling permits was that the policies  re-emphasized that processing permits was BLM headquarters’ top priority.  As a result, for these four offices, the emphasis on processing permits has  indirectly limited environmental mitigation activities by shifting staff  resources from performing environmental mitigation activities to  processing drillings permits. In April 2003, BLM issued five policy changes  that were aimed at improving procedures for processing drilling permits.  (See table 4.) However, only two of the five policies were to be  implemented immediately.
Despite the general overall sense of several of the field office staff with  whom we spoke that these five policy changes collectively have had an  indirect negative impact on their environmental mitigation activities, the  direct impact of the two policy changes that have been implemented has  been mixed. For the first policy change, BLM officials from six of the eight  field offices stated that some of the strategies in the policy on efficiently  and effectively processing drilling permits have had some positive impacts  on their environmental mitigation activities. For example, four of the eight  field offices successfully used the strategy of encouraging companies to  bundle together multiple drilling permits that share certain characteristics  and submit them for review together. This strategy is most suitable for use  in areas of intense drilling activity or where it is certain that drilled wells  can be put into production immediately. Among other benefits, this strategy  can encourage companies to plan their drilling operations more carefully  and help BLM better assess the cumulative environmental impacts of  drilling activities.
For the second policy change, BLM officials from the eight field offices said  the policy on ways to reduce the time needed to identify and protect  cultural resources has had limited or no impact on their environmental  mitigation activities. This policy recommended strategies for (1) identifying  cultural resources early, and (2) using “block” surveys to allow all of the  components of a proposed project to be sited and to help better facilitate  the protection of both environmental and cultural resources. According to  BLM, where block surveys are used, the cultural resources of concern can  be readily identified and companies can have more flexibility to move  project components around without additional surveys. Staff from four  field offices said this policy has had a slightly positive impact on their  environmental mitigation activities. For example, staff from the Glenwood  Springs field office said using block surveys has helped them improve the  quality of their environmental analyses. Staff from two field offices said  this policy has had no impact because they were already using these  practices before the policy was issued. Staff from two other field offices  said the policy has had no impact because they were having difficulties  getting companies to use the strategies. For example, staff from one of  these field offices said companies were hesitant to use block surveys  because they believe they incur higher costs than if they use more  traditional “piecemeal” cultural surveys.
section_title: BLM Policy Changes to Enhance Environmental Mitigation Activities Have Had Some Positive Impacts
paragraphs: Two of the three policy changes BLM issued to enhance certain  environmental mitigation activities have had some positive impacts,  although increases in the permitting workload have limited their  usefulness. The first policy change, to enhance BLM’s inspection and  enforcement capabilities, has had a positive impact on environmental  mitigation activities because it resulted in additional resources to hire new  staff. However, BLM staff in many of the eight field offices we visited still  do not have the necessary resources to perform their required  environmental inspections. The second policy change, to address the large  inventory of idle wells, has had a limited impact on environmental  mitigation activities by helping somewhat reduce the number of idle  wells. However, increases in the permitting workload have resulted in  staff having less time to perform idle-well reviews and to make sure that  their justification for being in idle status is valid. The third policy change,  on encouraging the use of best management practices for oil and gas  development, has had no impact on environmental mitigation activities  because the eight field offices we visited were already using these  practices.
subsections: section_title: Policy Change to Enhance Oil and Gas Inspection Capabilities Has Had a Positive Impact on Environmental Mitigation Activities
paragraphs: BLM officials from six of the eight field offices we visited said that the  policy change to enhance their inspection and enforcement capabilities has  had a positive impact on their environmental mitigation activities. In  February 2000, BLM initiated efforts to revitalize its oil and gas inspection  and enforcement program. BLM continued this effort by incorporating  goals for enhancing inspection and enforcement capabilities in its National  Energy Policy Implementation Plan. For example, two of these goals were  to (1) increase the resources needed to conduct the required number of  inspections, and (2) establish a method for ensuring that inspection  personnel maintain the knowledge, skills, and ability to conduct  high-quality inspections.
Six of the eight field offices we visited reported they were able to obtain the  additional resources to hire 44 new enforcement personnel. The number of  additional staff hired ranged from 15 in the Farmington, New Mexico, field  office to 1 in the Glenwood Springs, Colorado, office. According to BLM,  funding for additional enforcement staff was secured through additional  appropriations. Although the additional staff have been helping field offices  deal with their inspection workloads, a majority of the field offices  indicated that they were still understaffed. In addition to hiring more  personnel, this policy change has also resulted in the development of a  National Certification Program for BLM’s inspection and enforcement staff.  All new inspection staff are required to complete this course to be certified  to conduct inspections. However, BLM officials from five of the eight field  offices stated that the new certification course cannot accommodate all of  the new inspectors that need to be trained and, as a result, some of their  inspection personnel have not been able to complete the course and are not  yet certified.
section_title: Policy Changes to Improve the Management of Idle Wells Have Generally Had a Limited Impact on Environmental Mitigation Activities
paragraphs: BLM officials from the eight field offices stated that the policy changes on  reducing the number of idle wells have generally had a limited impact on  environmental mitigation activities. In May 2000 and May 2001, BLM issued  policies that established an agencywide program to help manage its  significant inventory of idle wells and help prevent these wells from  becoming abandoned, falling into disrepair, causing environmental  damage, and becoming a liability to the federal government. Certain  aspects of this effort were incorporated into BLM’s National Energy Policy  Implementation Plan. Specifically, the policy changes required each BLM  state office that administers an oil and gas program to establish a plan that  outlines procedures—including roles and responsibilities for conducting  idle-well reviews—to help ensure that every well without a viable future  use is properly plugged and abandoned.
Staff from four of the eight field offices indicated that the effect of the  policies has been hampered by increases in permitting workloads, which  has not allowed staff time to perform idle-well reviews. In contrast, staff  from the Miles City, Montana, field office stated that the policies have had a  moderately significant impact in reducing the number of idle wells in their  jurisdiction, because they made a concentrated effort to contact operators  and notify them that all wells capable of production must be returned to  production or evaluated for plugging and abandonment. Similarly, staff  from the Carlsbad, New Mexico, field office said the policy changes had  greatly reduced the number of idle wells in their jurisdiction because they  successfully used it in discussions with operators to convince them to bring  wells back into production or plug them. They believe this policy has  helped them plug 450 to 500 wells in the last 3 years. Also, they said the  increased emphasis on the need to address idle wells has encouraged  operators to plug wells without BLM directing them to do so.
section_title: Policy Change on Using Best Management Practices Has Had No Impact on Environmental Mitigation Activities
paragraphs: BLM officials from each of the eight field offices stated that the policy  change on using best management practices has had no impact on their  environmental mitigation activities because they were already using these  practices. In June 2004, BLM issued a policy that required all of its field  offices to consider incorporating best management practices for oil and gas  development into drilling permits. In particular, this policy encouraged  BLM staff to meet with oil and gas operators prior to the submission of a  drilling permit application to plan for development, identify resources to be  protected, and discuss the use of appropriate best management practices.  Among other things, those practices included the interim reclamation of  well locations and access roads soon after the well is put into production;  painting all new oil and gas facilities a color that best blends with the  surrounding environment; reusing old roads and pads, if possible; and  finalizing reclamation of all disturbed areas, including access roads, to the  original contour or a contour that blends with the surrounding topography.
Since staff from the eight field offices we visited said they were already  following the best management practices described in the policy change to  the extent possible, the policy has had no impact on their environmental  mitigation activities. For example, staff from the Rawlins, Wyoming, field  office said they have been encouraging practices such as interim  reclamation and use of appropriate paint color for years, and that they  meet annually with oil and gas operators to discuss and encourage the use  of these practices. Also, staff from the Buffalo field office said they were  using these practices long before this policy was issued and have found  them to be beneficial in mitigating the environmental impacts of oil and gas  activity.
section_title: BLM Faces Several Major Challenges in Implementing Its Oil and Gas Program
paragraphs: BLM state and field office staff and GAO identified several challenges that  BLM faces to effectively manage its oil and gas program, including, but not  limited to, (1) managing growing workloads to meet all of its  responsibilities, (2) using workforce planning and workload-related data to  effectively identify and communicate its workforce needs, and (3) meeting  its oil and gas program resource needs in light of budget and funding  constraints. According to BLM staff, workload pressure, which was already  at a high level due to the increases in permitting activity, has been further exacerbated by increases in public challenges to BLM’s decisions and  actions. Further, in reviewing their efforts to manage increasing workloads,  we found that BLM’s current workforce planning process does not allow all  of BLM’s staffing needs to be effectively communicated to BLM state and  headquarters decision makers for use in supporting budget justifications  and resource allocation decisions and that some data needed to quantify  workloads are either not tracked or not consistently tracked. Moreover,  BLM is faced with managing the oil and gas program at a time when  increases in program resources are greatly outpaced by workload activities  necessary to manage the rapidly expanding oil and gas permitting activity.  While many federal agencies are facing tight budget constraints, BLM is in  an unusual position because it has authority, which it has not exercised, to  generate additional revenues to cover its oil and gas program activities.
subsections: section_title: Managing Increasing Oil and Gas Workload
paragraphs: As previously discussed, the recent upswing in oil and gas permitting  activity has made it increasingly difficult for BLM to manage its workloads  and meet all of its oil and gas program responsibilities. According to some  of the BLM state and field office staff with whom we spoke, these workload  management issues have been exacerbated by an increase in public  challenges to BLM decisions about oil and gas development. Generally,  such challenges stem from differing views on how public lands should be  managed, and the perception by some groups and individuals that BLM is  not adequately protecting the environment and is not achieving the  appropriate balance among the multiple ways land can be used (for  example, oil and gas development versus recreation). BLM officials from  each of the five state offices and each of the eight BLM field offices we  visited identified public challenges to agency decisions as an issue their  office faces, with staff from four of the five state offices and six of the eight  field offices anticipating the workload associated with public challenges to  moderately or greatly increase over the next 5 years. One BLM official  explained that attending to these challenges consumes the time of  specialists who would otherwise be processing drilling permits or  conducting inspections. A few BLM staff also explained that as leasing and  permitting increasingly encroach upon residential and environmentally  sensitive areas, public challenges will likely increase.
In addition to affecting BLM’s ability to meet its oil and gas program  responsibilities, heavy workloads have also led to high stress levels and  low morale among BLM field office staff, according to several BLM staff  with whom we spoke. Several BLM managers expressed concern over staff  burnout and that staff turnover could require offices to spend more time  hiring and training new employees. One field office employee substantiated  this concern by explaining that a few employees in the office, who used to  spend their days in the field conducting environmental inspections, now  spend all of their time in offices processing drilling permits and are under  pressure to approve the permits quickly. Consequently, these staff are  considering retiring earlier than they had planned to, which would leave  the office with a severe gap in experience during a critical period of high  workload.
section_title: Effectively Identifying and Communicating Workforce Needs
paragraphs: When asked to identify actions necessary to minimize the impacts of  workload management and other challenges their offices face, BLM  officials consistently cited the need to secure budgets and staff that could  adequately sustain the increasing workloads associated with oil and gas  program responsibilities. However, during the course of our review, we  found that BLM’s current workforce planning process, a crucial tool in  managing workload and associated staff needs, is not effective in  identifying and communicating all BLM state and field office needs to the  decision makers at headquarters. In addition, BLM does not consistently  track certain data types in a way that provides an accurate assessment of  workloads. Collectively, these shortfalls make it difficult for BLM to  effectively manage and prioritize workloads and staffing decisions and  meet the agency’s strategic goals within constrained budgets.
subsections: section_title: BLM’s Workforce Planning Process Is Not Effective in Identifying and Communicating Needs
paragraphs: The way BLM utilizes the workforce planning process limits the ability of  the agency to use the information gathered to support informed oil and gas  workload management decisions. As described by the Department of the  Interior’s Workforce Planning Instruction Manual, one of the key  applications of the workforce planning process is to determine the  workforce required to meet strategic goals and use this information to  present a strong justification to appropriators. In making workforce  requirement determinations through the workforce planning process, it is  widely recognized that an agency must identify any workforce gaps, or the  difference between forecasted staff needs and future staff supply. Our  December 2003 report on this subject specifically states that it is essential  that agencies determine the skills and competencies that are critical to  successfully achieving their missions and goals, especially as changes in  factors such as budget constraints change the environment within which  the agencies operate. Once a gap is identified, workforce planning  dictates that management must prioritize the gap by determining the staff  needs that are most critical in attaining organizational goals, and then, as  our 2003 report highlights, they can develop strategies tailored to address  the gaps.
We found that BLM’s current workforce planning process does not  effectively identify all of BLM’s staffing needs, or its workforce gap, in large  part because BLM headquarters directs state and field offices to identify  only those needs for which funding is available. While five out of the eight  field office managers we interviewed reported communicating their full  staffing needs to their respective state offices, regardless of funding  expectations, three of the eight field office managers acknowledged that  they factor the budget into the needs they communicate, and therefore  forward only a subset of the field offices’ workforce gap to the state office.  For example, in its most recent workforce planning document, the  Farmington field office included only half of the staff needs they identified  to us. Similarly, the Buffalo field office included only a quarter of its needs  in its most recent workforce planning document. In addition, officials in the  Wyoming state BLM office, which oversees three of the eight field offices  we visited, explained that the needs for their state that they reported to us  were actually lower than what was needed because they directed field  office managers in their state to submit needs based on flat or restricted  budgets.
Even when actual needs are effectively communicated from the field  offices to their respective state offices, the state offices are not  communicating these needs to BLM headquarters, where key budget  decisions are made. In fact, four out of the five state offices we interviewed  indicated needing more staff for the oil and gas program than was reflected  in the workforce planning documents they submitted to headquarters.  Specifically, these four state offices included in their workforce plans less  than half of the workforce needs they identified during our interviews.  Collectively, of the roughly 174 full-time equivalents (FTE) identified during  our interviews, the states included only 50 FTEs in their workforce plans.  When asked to provide a reason for the discrepancy, all four offices cited  BLM headquarters’ direction to only include in their workforce plan the  needs that the office expects to have funding to support. In one instance,  this direction resulted in a state office deciding not to forward workforce  planning documents to headquarters because they were aware that BLM  was anticipating budget cuts and consequently did not believe there was  any reason to identify positions that could not be funded.
Because BLM’s workforce planning process does not effectively  communicate all of the critical workforce needs of its field offices to the  state offices and ultimately to BLM headquarters, the process does not  provide agency officials responsible for making key management decisions  with consistent and readily available information capable of supporting  budget justifications and resource allocation decisions. In fact, one BLM  headquarters workforce planning official stated that BLM faces a dilemma  when assessing needs between programs through the current workforce  planning process. In order to assess, compare, and prioritize needs, BLM  decision makers need to have complete and consistent information  describing the gap among all of the state and field offices. While it is  reasonable that budget considerations must come into play when managing  workloads and making workforce decisions, workforce planning is  designed to help an agency meet its organizational goals by assessing all of  its needs, which in turn helps ensure key management decisions are fully  informed.
section_title: Data Needed to Identify Some Workload Needs Are Either Not Tracked or Not Consistently Tracked
paragraphs: The lack of readily available and consistent data to measure some of BLM’s  oil and gas program activities has limited the agency’s ability to effectively  manage program workloads. Specifically, in our efforts to determine the  extent to which the recent increase in permitting activity has affected  BLM’s ability to assess and mitigate environmental impacts, we attempted  to gather data that conveyed workloads and the related work  accomplishments for environmental inspections, idle-well reviews, interim  reclamation inspections, and final reclamation inspections. While we found  that BLM generally had suitable data to measure the workloads and  progress in attaining workload goals for environmental inspections, we  found that data on idle-well reviews, final reclamation inspections, and  interim reclamation inspections were incomplete or inconsistent,  incomparable, or not tracked at all, respectively, making it difficult to  determine for each field office the workloads and related accomplishments  for these activities.
According to one of the administrators of the BLM database containing  idle-well information, the database is already capable of accepting the  idle-well data that we attempted to gather, which included the number of  idle wells that needs to be reviewed within a given year and the  corresponding number of those idle wells actually reviewed. However, he  explained that field office staff are not consistently entering the  information into the database because it is not required, and all staff are  not aware of the capability. Many staff, however, have opted to use their  own tracking systems. Out of the eight field offices we interviewed, six  reported relying on their own systems to track idle wells. As a result,  queries from the database do not provide complete information on the  workload and related work accomplishments for idle-well reviews for each  field office.
The database is also capable of tracking the final reclamation data we  attempted to gather, including the number of final reclamation inspections  planned and completed. However, we found that the criteria used to  determine the number of planned inspections vary among the field offices.  For example, an official in one field office told us that staff in that office  used the estimated number of wells that will be plugged in the coming year  as the planned number of reclamation inspections. This is inconsistent with  the criteria used in another field office, which, according to an official in  that office, plans the number of reclamation inspections for the upcoming  year based on the total number of wells in abandoned status. This variation  precludes senior BLM staff from gathering accurate and comparable data  on the final reclamation workloads for each field office.
The database does not, however, have the capacity to track data that  measure the workload and related accomplishments associated with  interim reclamation inspections. While the database tracks a number of  different types of inspections, it does not currently provide a means to  track interim reclamation inspections as a separate inspection type.  Consequently, as a senior BLM official explained, BLM is unable to  separately plan and track workloads for interim reclamation inspections.  This official indicated that it would be helpful to have this capacity in order  to better manage these workloads.
Without consistent and readily available data, BLM state and headquarters  offices cannot easily determine if field offices are completing all of their  necessary idle-well reviews—a key action in achieving the agency’s  strategic goals—and they cannot assess the interim and final reclamation  workloads or their progress in addressing these workloads to ensure timely  surface restoration. Moreover, without these critical data, BLM state and  headquarters offices do not have the information necessary to make  appropriate staffing and budget decisions to ensure that these key  mitigation and reclamation activities are accomplished.
In addition to mitigation and reclamation data, BLM also lacks consistent,  readily available data on the extent to which public challenges to agency  decisions are affecting agency workloads. Our November 2004 report on  this subject, which sought to determine the extent to which BLM gathers  and uses public challenges data to manage its onshore oil and gas program,  found that BLM does not systematically gather and use nationwide  information on public challenges in a way that helps the agency manage the  program. While a number of BLM state and field office staff we  interviewed indicated that an increase in public challenges has exacerbated  their office’s oil and gas program workloads, our previous review found  that the system state offices use to collect data on public challenges does  not provide consistent information that BLM headquarters can use to  assess workload impacts on its state offices and to make staffing and  funding resource allocation decisions. Specifically, we reported that the  system does not provide useful data to headquarters because state offices  use the system inconsistently (due to a lack of clear guidance from  headquarters on which data to enter) and because the system tracks  challenges only during leasing, rather than challenges at all four stages of  oil and gas development—planning, exploration, leasing, and operations.  Our November 2004 report recommended that the Secretary of the Interior  direct BLM to (1) include public challenge data in BLM’s new agencywide  automated system for selling leases, and (2) issue clear guidance on how  public challenge data should be entered into the new system. In its  response to our report, BLM stated that it does plan to design the system in  a way that allows BLM to track public challenge data on lease sales.
section_title: Meeting Oil and Gas Program Resource and Staffing Needs in a Period of Declining Budgets
paragraphs: Lastly, but perhaps most significantly, BLM is presented with the challenge  of meeting its oil and gas program resource and staffing needs in a period  when these needs are growing faster than available resources. Although the  percent change in the number of approved drilling permits increased by  roughly 255 percent from fiscal years 1999 through 2004, and the need for  several other activities, such as inspections, rose along with permit  approval increases, the percentage changes in BLM’s oil and gas  management budget and staff levels, as measured in authorized FTEs, rose  only 64 percent and 21 percent, respectively. (See fig. 2.) In addition,  according to BLM budget justification documents, budget levels and  authorized FTEs decreased slightly for fiscal year 2005 compared with the  previous year, despite the expected continuing increase in approved  drilling permits and corresponding mitigation and reclamation  responsibilities.
However, as reflected in BLM’s fiscal year 2006 Budget Justification, the  agency is considering steps to improve the disparity between needed and  available resources. Since it is unlikely, given current and anticipated  federal fiscal conditions, that BLM will receive budget increases  commensurate with its oil and gas program workloads, BLM is considering  other options for generating additional revenues. Under FLPMA, BLM has  the authority to assess and collect fees for various services that it  provides. FLPMA provides specific authority to the Department of the  Interior, through BLM, to “establish reasonable filing and service fees and  reasonable charges” FLPMA further provides that the funds received (1)  must be deposited in a special account in the U.S. Treasury and (2) are  authorized to be appropriated and made available until expended. In  December 2000, BLM proposed collecting fees associated with processing  documents for oil and gas, mining, geothermal, and nonenergy activities,  but this proposal, which was never finalized, did not include collecting fees  to recover costs associated with issuing oil and gas permits. According to  BLM headquarters officials, BLM has recently decided to revisit this  proposal and incorporate a fee structure to recover the costs of processing  drilling permits. In commenting on this report, BLM stated that this revised  fee collection structure, which BLM plans to issue as a final rule, is  currently being reviewed by the Administration. BLM’s fiscal year 2006  Budget Justification includes language describing BLM’s intent to publish  regulations that would require industry to pay more of the recoverable  costs of processing new applications for drilling permits as well as  documents associated with oil and gas lease transactions. BLM estimates  that the cost recovery fees would generate a net increase of $7.6 million,  which would allow the agency to maintain its FTE level and shift a portion  of its appropriated funds to other program priorities such as ensuring  proper inspection and enforcement actions, assuming that more of the fees  are not used to reduce BLM’s appropriation.
During our interviews at BLM state and field offices, staff expressed a  variety of concerns related to the feasibility of cost recovery  implementation and its utility in helping offices meet programmatic goals  and requirements. Among these concerns was the notion that industry  would be opposed to any cost recovery because many companies are  already paying for costs for which BLM would otherwise be responsible,  such as environmental assessments, cultural surveys, and wildlife  inventories, in addition to lease bonuses, annual lease rentals, and  royalties. Another concern was that industry might expect a reduction in  permit approval processing times if cost recovery were implemented, even  though, in the opinion of a few BLM staff, the processing times would likely  not change because a large portion the time is spent complying with NEPA  procedural requirements, which could not be shortened. Our discussions  with industry groups supported both of these concerns. One company  official stated that under the current BLM permitting structure, any cost  recovery measure would be unreasonable because the industry already  pays for a number of expenses, such as those highlighted above. The  company official also commented that industry might support a cost  recovery proposal if the fee payment would generate a higher degree of  permitting accountability within BLM and if industry were guaranteed that  a project would be permitted within a reasonable time frame (no more than  90 days).
In discussing the utility of cost recovery, staff in some of the BLM state and  field offices we visited asserted that the usefulness of cost recovery would  largely depend upon whether the fee would be an offset or an addition to  existing appropriations. Some of the staff with whom we spoke stated that  cost recovery fees would not be helpful if the revenues offset a decrease in  appropriations, rather than providing additional funds to help meet  programmatic responsibilities. BLM’s cost recovery proposal for fiscal year  2005 was to implement a fee structure that would generate approximately  $3 million in revenues and a corresponding $3 million reduction in the Oil  and Gas Management Program. However, the proposal was not  implemented. BLM’s cost recovery proposal for fiscal year 2006 has  addressed the offset concerns expressed by the state and field office staff  with whom we spoke. Under the current proposal, BLM estimates that  about $9.7 million in revenue would be generated and that $7.6 million of  this revenue would be used to supplement BLM’s budget rather than offset  a corresponding decrease in their annual appropriation.
section_title: Conclusions
paragraphs: Processing drilling permits, while always a priority of BLM’s oil and gas  program, has received renewed emphasis following publication of the  National Energy Policy Report. The emphasis on processing permits  reflects, in part, the desire to reduce the country’s dependence on foreign  sources of oil and gas. While an important goal, BLM recognizes, and the  public demands, that the development of federal oil and gas resources be  done in an environmentally responsible manner. Over the past 6 years, BLM  has experienced a significant increase in applications for drilling permits  and has struggled to deal with this increase in permitting activities while  carrying out its environmental mitigation responsibilities during a time of  austere federal budgets. In field offices that have experienced the greatest  increases in applications for drilling permits, staff that once had more time  for conducting environmental inspections now find their days filled with  processing drilling permits.
BLM’s ability to respond to increasing workload demands brought on by  increasing applications for drilling permits is hampered by its ineffective  workforce planning process, lack of key data on workload activities, and  lack of resources. Relying on a workforce planning process that is not open  and transparent is ultimately not particularly instructive or useful for  informing key management decisions, such as staffing and resource  allocation determinations. For workforce planning to be effective, it must  incorporate and reflect actual staffing needs. While budgetary  considerations are clearly important factors in the decision-making  process, effective resource allocation decisions can only be based on  complete information on what staffing gaps exist beyond those positions  for which funding is available.
Further, BLM must have reliable and consistent data on the workload  activities related to oil and gas development—specifically the staffing  required to carry out environmental mitigation responsibilities, in order to  accurately reflect this information in its management decisions and  resource allocations. While BLM’s centralized database has a wealth of  information on BLM’s oil and gas program activities, without complete and  accurate workload data covering the entire life cycle of oil and gas wells,  BLM will be unable to develop comprehensive and useful workforce plans.
Finally, it is unlikely in the current fiscal environment that BLM will be able  to obtain adequate appropriations to meet all of its needs. Therefore, BLM  should pursue every opportunity to generate additional revenues that could  potentially be used to meet these needs. Currently, BLM is not exercising  its statutory authority to recover the cost of processing applications for  drilling permits. Implementing such a fee structure, as proposed in BLM’s  fiscal year 2006 Budget Justification, would help BLM obtain the resources  it needs to perform environmental mitigation duties.
section_title: Recommendations for Executive Action
paragraphs: We recommend that the Secretary of the Interior take the following four  actions.
To ensure that BLM’s staffing needs are accurately reflected in its  workforce plans and considered by key decision makers, we recommend  that the Secretary direct BLM to  reflect in its workforce plans the staffing levels needed to perform the  necessary number of environmental inspections and other mitigation  activities in addition to those positions that the agency expects to be  funded;  determine the data necessary to track workloads associated with  idle-well reviews and reclamation inspections; and  ensure that the field offices consistently enter the data on idle-well  reviews and reclamation inspections into BLM’s centralized database.
To generate additional revenues that could potentially help BLM better  respond to its increased workload due to the significant increase in oil and  gas production on public lands, we recommend that the Secretary direct  BLM to finalize and implement a fee structure to recover BLM’s costs for  processing applications for drilling permits.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Department of the Interior for  review and comment. Overall, Interior agreed with our recommendations  and stated that the report generally does much to capture the many  demands placed on BLM’s oil and gas program. Specifically regarding the  recommendation for fee collection, BLM stated a draft fee collection rule is  currently being reviewed by the Administration. Interior also commented  that our report does not support the conclusion that BLM policy changes  have had a negative impact on mitigation activities. We disagree with BLM’s  comment because it mischaracterizes the information presented in our  report. Our report concludes that the six BLM policy changes that we  analyzed had varying impacts on mitigation activities. We found, for  example, that the policies that streamlined the permitting process had an  indirect negative impact on mitigation activities because the policies also  increased the emphasis on processing permits, which in turn resulted in  shifting staff away from their environmental mitigation responsibilities. On  the other hand, our report points out that BLM policies issued to revitalize  inspection and enforcement activities impacted BLM’s mitigation activities  positively because they resulted in six of the eight field offices obtaining  greater resources to hire more staff. We found the remaining four policy  changes had little or no impact on BLM’s mitigation activities.
Interior also commented that we used the term “environmental mitigation  activities” in this report for a range of activities that are only part of the  mitigation process. According to Interior, environmental mitigation also  encompasses other activities, including NEPA analysis, conditions of  approval in drilling permits, and best management practices, and that these  methods help BLM moderate its dependence on reclamation. We agree that  the NEPA analysis performed by BLM during the land use planning, leasing,  and permitting stages of oil and gas development; the conditions of  approval placed on oil and gas permits; and use of best management  practices are critical parts of the environmental mitigation framework,  along with other activities, such as inspections and monitoring. However,  the main focus of this report was on whether BLM was adequately  conducting activities meant to ensure that oil and gas operators are  complying with the environmental mitigation requirements and conditions  of their permits. Based on the information we gathered, we found that  increases in permitting activity are compromising the agency’s ability to  conduct certain mitigation activities—such as inspections and idle-well  reviews—because staff responsibilities are being shifted away from these  important activities to process permits.
Interior also provided technical comments and editorial suggestions that  we have incorporated throughout the report, as appropriate.
As arranged with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution of this report until 30  days after the date of this letter. At that time, we will send copies to other  interested congressional committees. In addition, we will send copies of  this report to the Secretary of the Interior and the Director of BLM. We will  also make copies available at no charge on the GAO Web site at  http://www.gao.gov.
If you or your staff have questions about this report, please contact me at  (202) 512-3841 or mittala@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. Key contributors to this report are listed in the appendix IV.
section_title: Objectives, Scope, and Methodology
paragraphs: We were asked us to address several issues concerning the Bureau of Land  Management’s (BLM) management of its oil and gas programs. Specifically,  we were asked to determine (1) the extent to which the level of oil and gas  production on public lands managed by BLM has changed over the past 6  years and how these changes have affected, if at all, BLM’s ability to assess  and mitigate environmental impacts; (2) what policies BLM has issued in  the past 6 years related to facilitating and managing oil and gas production  and how these policies have affected, if at all, BLM’s ability to assess and  mitigate environmental impacts; and (3) what challenges BLM faces in  managing its oil and gas program.
To obtain BLM headquarters’ insights on all three objectives, we met with  officials from BLM’s Fluid Minerals Group to discuss the agency’s  responsibilities for managing its oil and gas program. Through these  discussions, we obtained an array of documents and high-level  perspectives related to all three objectives. We also met with officials from  BLM’s National Energy Office to discuss the agency’s efforts to implement  the National Energy Policy, and spoke with leaders and other staff assigned  to relevant tasks in BLM’s National Energy Policy Implementation Plan.  Through these efforts, we obtained documents and information related to  policies issued in recent years, as well as high- level perspectives of the  impacts of these policies and related management challenges.
To obtain on-the-ground perspectives regarding all three objectives, we  visited a nonprobability sample of BLM field offices. We selected field  offices that experienced some of the greatest increases in oil and gas  permitting activity from fiscal years 1999 through 2003 (at the time of site  selection, fiscal year 2004 data were not available). Additional criteria for  selection included offices with and without energy-related time- sensitive  plans and offices that vary in their ability to meet inspection and  enforcement requirements. Using these criteria, we selected eight offices to  visit: the Glenwood Springs field office in Colorado; the Miles City field  office in Montana; the Carlsbad and Farmington field offices in New  Mexico; the Vernal field office in Utah; and the Buffalo, Rawlins, and  Pinedale field offices in Wyoming.
We developed a structured interview guide to assist in collecting  information about how each of the eight field offices manages its oil and  gas program, including staffing and workload issues. We developed another  structured interview guide to assist in collecting information from officials  in each of the five BLM state offices—in Colorado, Montana, New Mexico,  Utah, and Wyoming—that have oversight authority for the eight field  offices we visited. The officials we interviewed at these state and field  offices, including the state and field office managers, were responsible for  the day-to-day administration of BLM’s oil and gas program. The structured  interview guides were developed between May 2004 and September 2004.
The practical difficulties of administering a structured interview guide may  introduce errors, commonly referred to as nonsampling errors. For  example, difficulties may arise in how a particular question is interpreted  or from differences in experience and information available to respondents  in answering a question. We took steps in the development, administration,  and analysis of our structured interview guides to minimize these  nonsampling errors. We conducted pretests of the structured interview  guides with two state offices in Montana and Utah and four field offices— the Glenwood Springs, Colorado, field office; Miles City, Montana, field  office; Vernal, Utah, field office; and Buffalo, Wyoming, field office—to  ensure that (1) the questions were clear and unambiguous, (2) terminology  was used correctly, and (3) the guide was comprehensive and unbiased. We  made changes to the content and the format of the final structured  interview guides based on the pretests. The guides were also internally  reviewed by one of our survey methodologists. To ensure that the  information from the interview guides was analyzed correctly, 100 percent  of the data and formulas used were internally and independently checked  and verified.
In addition to BLM officials, we also contacted officials from industry  groups, environmental and citizen-based groups, and state governments, in  order to gain outside perspectives on the three objectives. Industry group  participants included the Colorado Oil and Gas Association, New Mexico  Oil and Gas Association, and Public Lands Advocacy. Environmental and  citizen-based group participants included Colorado Environmental  Coalition, Natural Resources Defense Council, Northern Plains Resource  Council, Powder River Basin Resource Council, Southern Utah Wilderness  Alliance, The Wilderness Society, and Wyoming Outdoor Council. State  government participants included Colorado Department of Public Health  and Environment’s Air Pollution Control Division and Water Quality  Control Division; Colorado Oil and Gas Conservation Commission;  Montana Board of Oil and Gas Conservation; Montana Department of  Environmental Quality Air Resources Management Bureau; New Mexico  Energy, Minerals, and Natural Resources Department’s Oil Conservation  Division; New Mexico Office of the Governor; Utah Division of Oil, Gas,  and Mining; Wyoming Department of Environmental Quality’s Air Quality  Division and Water Quality Division; Wyoming Game and Fish Department;  Wyoming Office of the Governor; and Wyoming Oil and Gas Conservation  Commission.
To respond to the first objective and provide context to the second and  third objectives, we gathered data on levels of oil and gas production on  public lands managed by BLM from fiscal year 1999 through fiscal year  2004 as well as other workload-related data from staff responsible for  managing BLM’s Automated Fluid Minerals Support System (AFMSS) and  from individual field office records. Specifically, we gathered information  on (1) approved drilling permits, (2) environmental inspections, (3)  temporarily abandoned idle wells, and (4) abandoned wells that do not  have an approved final abandonment notice. To assess the reliability of the  data for purposes of our report, we interviewed agency officials with  knowledge of the data and the AFMSS system; reviewed related  documentation, including software user guides, the data element  dictionary, and training manuals; and corroborated the data with other  sources to the maximum extent possible. We obtained responses from a  key database official to a series of data reliability questions covering issues  such as data entry, access, quality control procedures, and the accuracy  and completeness of the data. Follow-up questions were added when  necessary. Agency officials knowledgeable about AFMSS provided the  following views on the accuracy and completeness of the data in AFMSS:   Approved drilling permit data. An agency official knowledgeable about  AFMSS commented that approved drilling permit data are generally  accurate and complete because there are so many checks on those data.  To corroborate these numbers to the maximum extent possible, we  presented these numbers to the eight BLM field offices during our site  visits and asked them to verify or, where applicable, to correct the  numbers. Of these eight field offices, two offices confirmed that the  numbers were correct, and one of the field offices indicated that the  data provided by the central AFMSS contact included only one of the  two counties under the field office’s jurisdiction (and would have  matched if queried correctly). In the other five field offices, we found  that AFMSS is generally underreporting the data the field offices have, in  one case by as much as 34.9 percent. As a result, the numbers in AFMSS  are likely understated. Field offices reported two primary reasons for  the differences in the numbers: (1) the inability to enter data during the  Internet shutdowns related to the lawsuit concerning Indian trust lands,  and (2) the cancellation of approved drilling permits in AFMSS when  drilling does not occur. As a result of the steps taken to assess the  reliability of the approved drilling permit data, we have determined that  the data are adequate to provide a conservative, or minimum, indication  of the numbers of approved drilling permits.
Environmental inspections data. An agency official knowledgeable  about AFMSS also told us that there are many checks on the  environmental inspections data and, as a result, that they are also  generally accurate and complete. In our efforts to corroborate these  data, we asked the five BLM state and eight BLM field offices we visited  to provide data on the total number of required, planned, and completed  federal inspections in their jurisdiction for fiscal years 1999 through  2003. We then compared the federal environmental inspection  completed numbers provided by the field offices to numbers from the  AFMSS inspection roll-up reports by fiscal year for each of the field and  state offices. Of the five state offices, one office provided numbers that  matched and another office provided numbers that matched in all but  one fiscal year, where AFMSS underestimated the numbers the state  office reported by 21 percent. In the remaining three offices, the  numbers matched once data on Indian-well inspections were removed.  Of the eight field offices, five offices provided numbers that matched,  and one office matched in all but one fiscal year, where AFMSS  overestimated the numbers the field office reported by 22 percent. In  another office, the variation could not be explained, and AFMSS  underestimated the inspections between 1 percent and 20 percent  across the five years. Finally, in one instance, the field office jointly  planned inspections with another field office, which was not among  those we reviewed. Because of this joint planning, there was no way to  disaggregate the inspections. As a result of our work to assess the  accuracy and completeness of the environmental inspections data, we  have determined that the data are adequate to provide a conservative, or  minimum, indication of the number of environmental inspections.
Temporarily abandoned idle wells. To determine the total number of  federal temporarily abandoned (TA) wells, TA wells with both approval  and expiration dates entered, and TA wells with current approval, we  asked an AFMSS manager to provide an AFMSS report on temporarily  abandoned wells (SNT.59). To calculate the number of federal wells in  TA status with both approval and expiration dates entered, we manually  counted the entries for the eight field offices. Finally, to determine the  number of federal TA wells that had current approval, we manually  counted only those federal TA wells with both an approval and  expiration date that had not expired. However, interviews with the  responsible officials in the eight field offices indicated that in six of the  eight field offices, officials had concerns about operators properly  reporting TA status to BLM. For example, officials expressed concern  that operators were misreporting wells in shut-in status (which does not  require BLM approval) rather than in temporarily abandoned status  (which does require BLM approval). The effect of this  mischaracterization would be an underreporting of temporarily  abandoned wells. As a result of our work to assess the accuracy and  completeness of the federal TA data, we have determined that the data  are adequate to provide a conservative, or minimum, indication of the  numbers of temporarily abandoned wells.
Wells in abandoned status. To determine the number of wells in  abandoned status, we asked our central AFMSS contact to provide  AFMSS reports on the number of federal wells, by field office, in  abandoned status in 4-year increments starting in fiscal year 1980.  AFMSS was fully implemented in all 31 offices in October 1997. Prior to  that date, there was no automated system that tracked the historical  status of a well. The previous database, Automated Inspection Records  System (AIRS), was in place before AFMSS, and any data related to  abandoned wells were transferred to AFMSS at the system’s  implementation. A BLM official stated that because of the transfer, the  total number of wells in abandoned status in AFMSS may be  underestimated. As a result of our work to assess the accuracy and  completeness of these data, we have determined that the data are  adequate to provide a conservative, or minimum, indication of the  numbers of wells in abandoned status.
Wells in idle status. To determine the total number of federal wells in  idle status, we asked the five BLM state and eight BLM field offices we  visited to provide data on the total number of federal idle wells for fiscal  year 1999 through 2003. All five state offices and all eight field offices  indicated AFMSS as the source of the idle-well data they provided. A  knowledgeable official indicated that although the primary idle-well  report in AFMSS is retrieving data in an accurate manner at this time,  questions have been raised as to the consistency of data used for the  report. At this time, there is no formal guidance from BLM Headquarters  making it mandatory to enter that data into AFMSS. Also, officials in five  of the eight field offices stated they did not believe that their current  idle-well inventory was accurate. As a result of our work to assess the  accuracy and completeness of these data, we have determined that the  data are of uncertain reliability. These data, along with information from  knowledgeable officials, are used in this report to illustrate the  problems with the idle-well data.
In summary—with the exception of the data describing wells in idle  status—although there are definite limitations associated with the data  describing approved permits, environmental inspections, temporarily  abandoned wells, and wells in abandoned status, these data are sufficient  to provide indications of general trends, given the magnitude of the  changes occurring over time.
We conducted our work from February 2004 through April 2005 in  accordance with generally accepted government auditing standards.
section_title: Resource Monitoring
paragraphs: Resource monitoring generally involves assessing cumulative impacts to  resources over broad geographic areas and can be incorporated into  resource management plans or environmental impact statements for large- scale oil and gas projects. BLM managers stated that it is important to  assess cumulative impacts to air quality, groundwater, surface water, and  wildlife and its habitat over broad geographic areas. When issues are raised  about the extent of impacts or the effectiveness of mitigation measures,  federal managers may propose to design and implement a resource  monitoring plan. However, in different geographic areas, certain resources  are more susceptible to the impacts of oil and gas development and, hence,  more important to monitor than in other areas. For example, in the Powder  River Basin of Wyoming and Montana, groundwater is very susceptible to  the impacts of coal-bed methane gas production because production  entails the simultaneous pumping of both gas and groundwater out of  shallow aquifers, lowering the aquifers’ pressure and decreasing the  amount of groundwater that can be used to supply homes and ranches.  Because of this impact, BLM is developing a monitoring plan for  groundwater in the Powder River Basin. In contrast, the proper extraction  of gas in northwestern Colorado does not impact shallow groundwater  resources to this degree because these shallow aquifers are sealed off  during drilling and gas is extracted from much deeper zones. Hence, BLM  resource managers did not believe that a detailed groundwater monitoring  plan was necessary for the Glenwood Springs Field Office.
The responsibility for monitoring the cumulative impacts of oil and gas  production on air quality, surface water, groundwater, and wildlife and its  habitat across broad geographic areas is shared by federal, state, and local  governments. However, much of the implementation of programs to  protect and monitor impacts to these resources is carried out by state  governments. While some state agencies conduct broad-scale efforts to  monitor cumulative impacts to air quality, surface water, groundwater, and  wildlife in the West, these efforts are seldom comprehensive enough or  involve enough monitoring stations to relate changes in baseline conditions  directly to impacts from oil and gas development. For example, in  Colorado, the state Department of Public Health and Environment, Air  Pollution Control Division has established a network of air quality  monitoring stations, but these stations are more concentrated along the  highly populated Front Range, which includes the cities of Denver, Boulder,  Fort Collins, and Colorado Springs, while oil and gas development on  federal lands in Colorado is more concentrated in the less populated  northwestern part of the state, where there are fewer monitoring stations.  Also, the Clean Water Act provides for states to establish a list of waters  that are impaired by specific pollutants. This list contains known waters  that have been polluted by various contaminants and are to be monitored  by the states for changes in these pollutants. However, because of the  diverse sources and types of pollutants within the watersheds that these  rivers and streams drain, it is difficult under most circumstances to  attribute changes in the baseline levels of pollutants directly to oil and gas  development. With respect to groundwater, states generally do not have an  extensive network of groundwater monitoring wells, although groups of  monitoring wells have been identified in the Powder River Basin of  Montana and Wyoming that are being used to develop a network for  monitoring the impacts of oil and gas development. Monitoring the impacts  of oil and gas on wildlife is even more of a challenge because responsibility  for managing the wildlife and habitats may be divided among different  government agencies.
Of 16 resource management plans and environmental impact statements  prepared in the eight BLM field offices we visited, only six documents  called for detailed plans for monitoring the environmental impacts of oil  and gas development. A BLM official explained that detailed written plans  for monitoring resources were not included in some of the resource  management plans because these plans are old, having been written in the  1980s—when the need for monitoring was not fully appreciated and when  the number of oil and gas wells was less than it is today. Furthermore, BLM  officials explained that they have not developed plans for monitoring  resources for some of the more recently developed resource management  plans for various reasons, including that BLM staff (1) have concentrated  more on processing drilling permits, (2) have been diverted from  monitoring to address litigation concerns, (3) believe monitoring to be  more of a responsibility for state government, or (4) simply have not tied  together a number of disjointed monitoring efforts.
We found detailed written resource monitoring plans for addressing oil and  gas impacts only in amendments to the resource management plans  developed for the Buffalo, Wyoming and Miles City, Montana, field offices  in 2003. In the Pinedale and Rawlins field offices, where the resource  management plans currently in effect were published in 1988 and 1990,  respectively, monitoring plans are also included in the environmental  impact statements prepared for major oil and gas developments at the  Jonah Gas Field and the Continental Divide/Wamsutter Natural Gas  Project, and requirements for drafting a monitoring plan also exist in the  environmental impact statement for the Pinedale Anticline. Monitoring  plans for Buffalo, Miles City, Rawlins, and the Pinedale Anticline require  the monitoring of impacts to air quality, groundwater, surface water, and  wildlife and its habitat, while monitoring plans for the Jonah Gas Field and  the Continental Divide/Wamsutter Project contain monitoring plans only  for wildlife and its habitat. Table 5 describes the monitoring plans  associated with the 16 resource management plans and environmental  impact statements we examined.
BLM officials have expressed concerns about obtaining the necessary  appropriations to implement their monitoring plans. Specifically, BLM  officials estimate that about $2.3 million per year in additional funding is  necessary for implementing monitoring programs for wildlife,  groundwater, and surface water in the Powder River Basin of Wyoming and  Montana over the next 3 to 10 years. According to the resource  management plans for the Buffalo and Miles City field offices,  implementation of these monitoring plans is dependent on the availability  of federal funding. BLM personnel expressed uncertainty over whether  BLM would be able to obtain in future years the federal funding for its  share of the surface water and the wildlife monitoring plans. Similarly, a  BLM official also reported uncertainty in funding future groundwater  monitoring in the Powder River Basin. However, BLM officials with whom  we spoke did report some success in designing and implementing resource  monitoring plans in those locations where industry primarily paid for the  costs of monitoring. For example, an operator on the Pinedale Anticline  has been tracking the movements of mule deer through radio collars in an  effort to determine the impacts of wintertime drilling, and a Montana  operator of coal-bed methane wells paid for monitoring the impacts of  discharging produced water into the Tongue River.
In an effort to place more emphasis on monitoring, BLM announced in  January 2005 that it is developing a National Monitoring Strategy. BLM  cited the need to develop this strategy because it had previously identified  monitoring as a weakness in its restoration activities and because the  Office of Management and Budget identified the need for improving BLM’s  baseline data collection, resource monitoring, and effectiveness  monitoring. BLM intends to develop four work groups to identify issues at  the national, regional, and local levels related to land health, assess  whether current data collection efforts address these issues, identify other  data sources that may address land health, and determine what else needs  to be done to provide land health information. One of the work groups will  be tasked with addressing energy issues at the regional level, and thus  could address monitoring the impacts of oil and gas development on  critical resources.
section_title: Comments from the Department of the Interior
paragraphs: The following are GAO’s comments on the Department of the Interior’s  letter dated May 26, 2005. See the “agency comments and our evaluation”  section for additional responses to BLM’s comments.
subsections: section_title: GAO Comments
paragraphs: 1. We asked BLM to provide documentation for the revised drilling permit  numbers for fiscal years 1999 and 2004. Because the AFMSS database  was unavailable due to security concerns, we could not establish why  our previous permit numbers differed from the revised numbers. As a  result, we did not make any changes. However, we clarified that the  permit numbers in figure 5 are as of April 2004. 2. We asked BLM for support for the sentence describing the Secretary of  Interior’s responsibilities for managing oil and gas operations. Because  the support provided was incomplete, we did not make any changes.  However, we do describe BLM’s responsibilities for mitigating the  environmental impacts of oil and gas production in the report.
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to those named above, Ronald Belak, Glenn C. Fischer, Laura  Gatz, Jeff Malcolm, and Lisa Turner made key contributions to this report.  Also contributing to the report were Christine Bonham, John Delicath,  Doreen Feldman, Julian Klazkin, Rob Martin, Mary Mohiyuddin, Marmar  Nadji, Judy Pagano, and Lisa Shames.