Onshore Oil and Gas:
BLM's Management of Public Protests to Its Lease Sales Needs Improvement
GAO-10-670: Published: Jul 30, 2010. Publicly Released: Aug 30, 2010.
The development of oil and natural gas resources on federal lands contributes to domestic energy production but also results in concerns over potential impacts on those lands. Numerous public protests about oil and gas lease sales have been filed with the Bureau of Land Management (BLM), which manages these federal resources. GAO was asked to examine (1) the extent to which BLM maintains and makes publicly available information related to protests, (2) the extent to which parcels were protested and the nature of protests, and (3) the effects of protests on BLM's lease sale decisions and on oil and gas development activities. To address these questions, GAO examined laws, regulations, and guidance; BLM's agencywide lease record-keeping system; lease sale records for the 53 lease sales held in the four BLM state offices of Colorado, New Mexico, Utah, and Wyoming during fiscal years 2007-2009; and protest data from a random sample of 12 of the 53 lease sales. GAO also interviewed BLM officials and industry and protester groups.
While BLM has taken steps to collect agency-wide protest data, the data it maintains and makes publicly available are limited. Although in 2007 BLM required its staff to begin using a module, added to its lease record-keeping system, to capture information related to lease sale protests, GAO found that the information BLM collected was incomplete and inconsistent across the four reviewed BLM state offices and, thus, of limited utility. Moreover, in the absence of a written BLM policy on protest-related information the agency is to make publicly available during the leasing process, each state office developed its own practices, resulting in state-by-state variation in what protest-related information was made available. As a result, protester groups expressed frustration with both the extent and timing of protest-related information provided by BLM. In May 2010, the Secretary of the Interior announced several agency-wide leasing reforms that are to take place at BLM. Some of these reforms may address concerns raised by protester groups, by providing earlier opportunities for public input in the lease sale process, thereby potentially giving stakeholders more time to assess parcels and decide whether to file a protest. A diverse group of entities protested the majority of parcels BLM identified in its lease sale notices during fiscal years 2007 through 2009 in the four states, for a variety of reasons. GAO found that 74 percent of parcels whose leases were sold competitively during this period by BLM state offices in Colorado, New Mexico, Utah, and Wyoming were protested. In examining a random sample of lease sales, GAO found that protests came from various entities, including nongovernmental organizations representing environmental and hunting interests, state and local governments, businesses, and private individuals. Their reasons for protesting ranged from concerns over wildlife habitat to air or water quality to loss of recreational or agricultural land uses. The extent to which protests influenced BLM's leasing decisions could not be measured because BLM's information does not include the role protests played in its decisions to withdraw parcels from lease sale. Regardless, BLM officials stated that the protest process can serve as a check on agency decisions to offer parcels for lease. In reviewing BLM's lease sale data in the four selected states during fiscal years 2007 through 2009, GAO found that 91 percent of the time, BLM was unable to issue leases on protested parcels within the 60-day window specified in the Mineral Leasing Act. Industry groups expressed concern that these delays increased the cost and risk associated with leasing federal lands. GAO found that, despite industry concerns, protest activity and delayed leasing have not significantly affected bid prices for leases; if protests or subsequent delays added significantly to industry cost or risk, it would be expected that the value of, and therefore bids for, protested parcels would be reduced. In addition, because federal lands account for a small fraction of the total onshore and offshore nationwide oil and gas output, the effects of protests to BLM leasing decisions on U.S. oil and gas production are likely to be relatively modest. GAO recommends that BLM (1) revisit the way it tracks protest information and in so doing ensure that complete and consistent information is collected and made publicly available and (2) improve the transparency of leasing decisions and the timeliness of lease issuance. Interior concurred with GAO's recommendations.
Recommendations for Executive Action
Comments: In August 2013, BLM officials reported that the agency modified its module for tracking protest information to enhance its reporting capabilities, among other things. The agency also determined that issuing a request for proposal (RFP) containing three options based on existing or new databases would be the best strategy to acquire a system to fully implement the recommendation. The publication of the RFP has been delayed, however, due to budget constraints and competing priorities, according to agency officials, and officials estimate that implementation will occur in December 2015.
Recommendation: To improve the efficiency and transparency of BLM's process with regard to protests of its lease sale decisions and to strengthen how BLM carries out its responsibilities under the Mineral Leasing Act, the Secretary of the Interior should direct the Director of BLM to revisit the agency's use of the module for tracking protest information and, in so doing, determine and implement an approach for collecting protest information agencywide that is complete, consistent, and available to the public.
Agency Affected: Department of the Interior
Status: Closed - Implemented
Comments: In January 2013, BLM issued guidance on its new Master Leasing Plan process that requires analysis of leasing decisions for a focused geographic area within a larger resource management plan, includes a public and stakeholder involvement component, and requires development of a decision document for elements being adopted. In addition, in February 2013, BLM updated its guidance on onshore oil and gas competitive leasing that includes practices to improve transparency of leasing information such as requirements for state BLM offices to update external web pages with protest decision information and related documents. To improve timeliness of lease issuance, the updated 2013 onshore oil and gas competitive leasing guidance requires the posting of a lease sale notice 90 days before a lease sale (compared to the prior minimum of 45 days), which according to BLM, will provide a better opportunity for the agency to evaluate and respond to protests prior to the sale and will improve its ability to adequately address protests within the timeframes required for lease issuance under the Mineral Leasing Act.
Recommendation: To improve the efficiency and transparency of BLM's process with regard to protests of its lease sale decisions and to strengthen how BLM carries out its responsibilities under the Mineral Leasing Act, the Secretary of the Interior should direct the Director of BLM, in implementing the Secretary of the Interior's leasing policy reform issued in May 2010, to take steps to improve (1) the transparency of leasing information provided to the public, including information to explain the basis of agency decisions to include or exclude particular parcels in a lease sale and, to the extent feasible, documentation of the role, if any, that protests played in final lease decisions, and (2) the timeliness of lease issuance, without compromising the thoroughness of review.
Agency Affected: Department of the Interior