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

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