Oil and Gas Development: Challenges to Agency Decisions and	 
Opportunities for BLM to Standardize Data Collection (30-NOV-04, 
GAO-05-124).							 
                                                                 
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. 				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-124 					        
    ACCNO:   A14118						        
  TITLE:     Oil and Gas Development: Challenges to Agency Decisions  
and Opportunities for BLM to Standardize Data Collection	 
     DATE:   11/30/2004 
  SUBJECT:   Data collection					 
	     Gas leases 					 
	     Gas resources					 
	     Oil leases 					 
	     Oil resources					 
	     Energy consumption 				 
	     Energy shortages					 
	     Energy demand					 
	     Energy supplies					 

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GAO-05-124

United States Government Accountability Office

  GAO	Report to the Honorable Richard Pombo Chairman, Committee on Resources,
                            House of Representatives

November 2004

OIL AND GAS DEVELOPMENT

  Challenges to Agency Decisions and Opportunities for BLM to Standardize Data
                                   Collection

                                       a

GAO-05-124

[IMG]

November 2004

OIL AND GAS DEVELOPMENT

Challenges to Agency Decisions and Opportunities for BLM to Standardize Data
Collection

  What GAO Found

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.

United States Government Accountability Office

Contents

  Letter

Results in Brief
Background
Public Challenges Can Occur During the Four Stages of the Oil and

Gas Development Process although Procedures Differ among Agencies BLM Does
Not Systematically Gather and Use Public Challenge Information to Manage
Its Oil and Gas Program Areas on the Outer Continental Shelf Open to
Offshore Oil and Gas

Development Experienced Few Public Challenges Conclusions Recommendations
for Executive Action Agency Comments and Our Evaluation

1 3 5

11

21

25 26 27 27

Appendixes                                                              
                Appendix I:       Objectives, Scope, and Methodology       29 
               Appendix II:  Comments from the Department of the Interior  31 
              Appendix III:     GAO Contacts and Staff Acknowledgments     33 
                                             GAO Contacts                  33 
                                        Staff Acknowledgments              33 
                             Table 1: Procedures for Public Challenges to  
     Tables                              BLM, Forest Service,              
                             BIA, and MMS Decisions during the Four Stages 
                                                                of Oil and 
                                           Gas Development                 12 
                                Table 2: The Number of Exploration and     
                                         Operations Decisions              
                             Approved by MMS Between 1999 and 2003 and the 
                                                                    Number 
                                  That Were Challenged by the Public       26 
                            Figure 1: Subsurface Mineral Resources Managed 
    Figures                   by BLM, and Surface Managed by BLM, Forest   
                                        Service, Other Federal             
                            Agencies, or Owned by Private Parties or State 
                                             Governments                    6 
                            Figure 2: MMS Administrative Regions and Areas 
                                            Withdrawn and                  
                             Not Withdrawn From Oil and Gas Leasing on the 
                                                                     Outer 
                                          Continental Shelf                 8 

Contents

Abbreviations

BIA Bureau of Indian Affairs
BLM Bureau of Land Management
FWS Fish and Wildlife Service
GAO Government Accountability Office
IBIA Interior Board of Indian Appeals
IBLA Interior Board of Land Appeals
MMS Minerals Management Service
NPS National Park Service
NEPA National Environmental Policy Act

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.

A

United States Government Accountability Office Washington, D.C. 20548

November 30, 2004

The Honorable Richard Pombo Chairman, Committee on Resources House of
Representatives

Dear Mr. Chairman:

U.S. energy consumption increasingly outpaces domestic production, and
this demand is increasingly being met by imports of oil and natural gas.
In 1982, domestic consumption of oil was about 15 million barrels per day:
73 percent (11 million) from domestic production and 27 percent (4
million) from imports. By 2003, domestic consumption of oil had increased
to about 20 million barrels per day, with 45 percent (9 million) from
domestic production and 55 percent (11 million) from imports. Natural gas
consumption experienced a similar trend. In 1982, natural gas consumption
was almost 18 trillion cubic feet per year, which essentially equaled
domestic production. By 2003, natural gas consumption was about 22
trillion cubic feet per year, with 86 percent (19 trillion) from domestic
production and 14 percent (3 trillion) from imports. The Department of
Energy projects that dependence on foreign oil and gas will continue to
grow rapidly over the next 20 years.

With continuing instability in many foreign energy-exporting regions
including the Middle East, there has been increasing concern about U.S.
reliance on foreign energy sources. One way being considered is to
increase domestic production by further developing onshore resources on
land under jurisdiction of the Bureau of Land Management (BLM) and the
Bureau of Indian Affairs (BIA) within the Department of the Interior, and
the Forest Service within the Department of Agriculture, and offshore
resources under the jurisdiction of Interior's Minerals Management Service
(MMS). Among these agencies, BLM has the major federal role in managing
the development of onshore oil and gas resources. It not only issues
leases and permits for oil and gas development on land it manages directly
but also for onshore land under the jurisdiction of the other federal
agencies. BLM also assists BIA, Indian tribes, and tribal members in
managing land owned by Indian tribes and individual Native Americans for
oil and gas development. MMS is the sole agency responsible for managing
offshore oil and gas development. BLM and Forest Service must also manage
their lands for a variety of other uses such as fish and wildlife,
grazing, outdoor recreation, timber, and watersheds.

Agency procedures for developing oil and gas resources provide
opportunities for the public to challenge agency resource management
decisions. Public challenges can occur in the form of protests, appeals,
and litigation.1 Through protests and appeals, challengers ask an agency
or appeals board to review a decision-procedures that provide an
opportunity for the agency to correct its own mistakes before it is called
into court. In addition, agency administrative review procedures help
promote judicial efficiency by resolving controversies before they are
litigated in the courts, or at least by developing an extensive factual
record on which the court may base its review.

In this context, you asked us to (1) identify the stages when agency
decisions about oil and gas development can be challenged by the public,
(2) determine the extent to which BLM gathers and uses public challenge
data to manage its onshore oil and gas program, and (3) determine for
fiscal years 1999-2003 the number of offshore oil and gas development
decisions by MMS that were challenged, who challenged them, and the
grounds, time frames, and outcomes of the challenges.

To identify the stages when the public can challenge oil and gas
development decisions, we reviewed and analyzed applicable statutes,
agency regulations, and documentation, and also interviewed BLM, Forest
Service, BIA, and MMS officials.2 To determine the extent to which BLM
gathers and uses data on public challenges to manage its program, we
reviewed and analyzed BLM documents including database manuals, internal
memorandums, and agencywide procedures for gathering oil and gas activity
data. In addition, we interviewed BLM officials in both headquarters and
selected state offices to determine what data on public challenges are
gathered and used. To obtain information on offshore oil and gas
development decisions and challenges, we interviewed agency

1A protest is an objection to a proposed decision, while an appeal is
filed after the decision is made. In this report we use the term
"litigation" to mean a challenge to an agency or departmental decision
that is brought in federal court. All litigation is subject to certain
threshold defenses that may prevent the suit from being decided in court.
A person must have standing to bring the suit, the case must be ripe for
decision, the case must not have been made moot by external events, and
the person must generally have exhausted administrative remedies.
Discussion of these complex doctrines is beyond the scope of this report,
but when we state that a particular decision may be litigated, that does
not mean that a member of the public is entitled to or will necessarily
receive a decision on the merits.

2In this report, we use the word public to refer to third-party
challengers to oil and gas decisions. Thus, the term excludes lessees,
operators, and states. The procedures we describe in this report apply to
operators and lessees as well.

officials and analyzed information from MMS databases that recorded the
number of oil and gas decisions and challenges made in fiscal years 1999
through 2003. We discussed the results with agency officials in
headquarters and regional offices to corroborate our analysis and to
obtain additional information on the public challenges. We conducted our
work in accordance with generally accepted government auditing standards.

Results in Brief	BLM, Forest Service, BIA, and MMS procedures allow for
public challenges to agency decisions during the four stages of developing
oil and gas resources-planning, exploration, leasing, and operations.
However, the agencies have different procedures for processing challenges
that occur within the stages. For example, decisions made at the planning
stage on land managed by BLM can first be challenged to the BLM director
at headquarters. Following the challenge, planning decisions can be
litigated in federal court. BLM leasing decisions can be challenged to the
appropriate BLM state office director, appealed to the Interior Board of
Land Appeals (IBLA), and litigated in federal court. At the Forest
Service, planning and leasing decisions sometimes can be appealed through
the supervisory chain of command. For example, a forest supervisor's
decision can be appealed to the regional supervisor or the regional
supervisor's decision can be appealed to the Forest Service Chief.
Following an appeal, planning and leasing decisions can sometimes be
litigated in federal court. Unlike BLM, the Forest Service does not have a
separate appeals board within the Department of Agriculture, such as IBLA,
to review Forest Service decisions. In addition, the Forest Service has
specific time frames for deciding appeals whereas BLM and IBLA have no
specific time frames for deciding protests or appeals. 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 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 collects data on public challenges
during one of the four oil and gas development stages-leasing-there is no
clear guidance on which data the state offices are to enter into the
system. Current guidance allows states the latitude to choose where to
begin recording data within the leasing process. As a result, state
offices use this system inconsistently, leading to gaps in the data.
Specifically, some state

offices enter data on public challenges for all land parcels included in a
lease sale, whether or not the parcels receive a bid. Other states offices
only enter data on land parcels that receive a bid at lease sale;
excluding those that did not receive a bid. According to officials at
these state offices, entering data on all land parcels creates extra work
because they only use the agencywide system to track leases, not unsold
land parcels. However, the state offices that do use the system to track
public challenges for unsold parcels believe that the information is
useful for managing workload. Due to this discrepancy, headquarters cannot
use the data in the agencywide system to track all public challenges and
assess the impact on the workload of their state offices. Because the
system does not keep all public challenge data, headquarters and state
offices also use multiple, independent data collection systems for the
various stages of oil and gas development. These systems vary, and include
nonintegrated electronic spreadsheets and paper files.

Headquarters does not have ready access to the state office data and
therefore, the stand-alone systems do not supplement the information
available in the agencywide system. According to BLM officials, to manage
the oil and gas development program, headquarters must specifically
request such data from its state offices, as it recently did in June 2004.
In this instance, the data were received in a couple of weeks. BLM is in
the process of developing an automated agencywide system to manage the
leasing process that will supplement the existing system. BLM is creating
the new system because it recognizes a need to eliminate duplicative,
nonintegrated systems currently used by its state offices. The development
of this new system provides an opportunity to standardize collection of
data on public challenges at the leasing stage and to eliminate data gaps
that currently exist. However, BLM officials told us that they have not
yet decided whether the new leasing system will include information on
public challenges, in part because state offices are reluctant to abandon
their current methods for gathering public challenge data. We are making
recommendations to the Department of the Interior to include information
on public challenges in the new agencywide automated system for selling
leases and to issue clear guidance on which data on public challenges
should be entered into the system.

According to data provided by MMS officials, between fiscal years 1999 and
2003, the agency 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 of

the challenged MMS decisions, described below, concerned access to mineral
resources on the outer continental shelf off the coast of Alaska.

o 	MMS's approval of a development and production plan in September 1999
was litigated the next month in federal appeals court. Several Alaskans
and an environmental interest group challenged MMS's decision on grounds
that the plan violated the National Environmental Policy Act and the Oil
Pollution Act. A federal appeals court ruled against the challenges in
September 2001.

o 	MMS's approval of an exploration plan in February 2002 was appealed to
IBLA by a Native American tribe in Alaska and three tribal members on the
grounds that the plan violated the National Environmental Policy Act and
the Administrative Procedure Act. No decision was reached on the appeal
before the company discontinued work on the plan in July 2003.

For the period we examined, MMS reported no lawsuits challenging its 5year
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.

In commenting on a draft of this report, the Department of the Interior
reinforced that the new national Lease Sale System being designed will
track public challenge data on oil and gas lease sales. The Department of
Agriculture said that the report is 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 Interior and Agriculture also provided technical
clarifications to the report. We modified the report as appropriate to
reflect their technical comments.

Background	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.

Figure 1: Subsurface Mineral Resources Managed by BLM, and Surface Managed
by BLM, Forest Service, Other Federal Agencies, or Owned by Private
Parties or State Governments

Source: GAO.

Note: Not all subsurface mineral resources below federal lands are
federally owned and managed by BLM. According to the Department of the
Interior, mineral resources under an estimated 4 million

acres of federally managed surface lands are retained in private
ownership. Percentages may not add to 100 percent due to rounding.

aOther federal agencies include the National Park Service (NPS), the Fish
& Wildlife Service (FWS), and the Bureau of Reclamation within the
Department of the Interior, and the Army Corps of Engineers within the
Department of Defense. Almost all NPS land has been withdrawn from mineral
leasing and development. Further, mineral leasing occurs on a few FWS
lands, but most have been withdrawn from leasing or have no mineral
potential.

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.3 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,4 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

3Indian allotments are parcels of land created out of Indian reservations
and held in trust by the federal government for the benefit of individual
Indians.

4A nautical mile is about 6,080 feet, or about 1.15 miles.

    Federal Agency Processes for Managing Oil and Gas Resources

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.5 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.

o 	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.6 To
develop land-use plans, agencies use a multistep process, which generally
includes preparation of environmental analyses under NEPA.

5If the environmental assessment determines that the activity will not
significantly affect the environment, the agency prepares a document
called a "Finding of No Significant Impact."

6Land-use plans developed by BLM are called Resource Management Plans
while those developed by the Forest Service are called Land and Resource
Management Plans. MMS develops a 5-year program plan to determine which
areas of the outer continental shelf will be developed for oil and gas.
BIA generally does not develop land-use plans for tribal land but may
assist Indian tribes in developing plans to manage their resources.

o 	Once land-use plans allowing oil and gas activities are finalized, oil
and gas development companies may perform exploration activities such as
geophysical exploration.7 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.8 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.

o 	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;9 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.

o 	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

7Geophysical exploration means activity relating to the search for
evidence of oil and gas which requires the physical presence upon the
lands and which may result in damage to the lands. It includes seismic
exploration, construction of roads and trails and cross-country transit of
vehicles over such lands.

8Development companies must file a Notice of Intent to Conduct Oil and Gas
Geophysical Exploration Operations (NOI) and have it approved by BLM for
exploration activity on land managed by BLM. According to Forest Service
officials, development companies must file a NOI for approval to the
Forest Service for geophysical exploration activity on national forest
system land.

9Land parcels offered at a lease sale that do not receive a bid are
available for leasing through a noncompetitive process for a 2-year period
following the first business day after the lease sale.

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.

  Public Challenges Can Occur During the Four Stages of the Oil and Gas
  Development Process although Procedures Differ among Agencies

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.

Table 1: Procedures for Public Challenges to BLM, Forest Service, BIA, and
MMS Decisions during the Four Stages of Oil and Gas Development

Decision that potentially Agency can be challenged Type of challenge and
to whom Time frames for administrative actiona

                                 Planning stage

BLM Approval of land-use plans, Protest to BLM director; land-use Protest
within 30 days of publishing proposed landamendments, or revisions plan
may be subject to challenge in use plan;b BLM Director must respond
promptly federal court

Forest Approval of land-use plans, Appeal or objection filed with the
Appeal within 90 days of decision;d Forest Service

Service amendments, or revisions	approving officer's supervisor;c official
has 160 days from date decision was appealed supervisor must respond to
appeals to decide appeal or objections; land-use plan may be subject to
challenge in federal court Objection within 30 days of publication of
final

environmental impact statement or notice of proposed amendment; no time
limit on resolving objections

BIA	BIA does not approve landuse plans; therefore no challenges can be
made at this stage

MMS 5-year program decision	No administrative appeals process; suits must
be filed in the U.S. Court of Appeals for the District of Columbia

                               Exploration stage

BLM  Approval of Appeal to IBLA;      Appeal to IBLA within 30 days; if a  
        geophysical litigate in federal  request to halt or                   
        activities         courte        "stay" activities is filed, IBLA has 
                                                        45 days from the time 
                                         appeal period expires to grant or    
                                         deny stay; IBLA is                   
                                            not required to rule on an appeal 
                                                        within a certain time 
                                                        frame                 

           Approval of         Appeal to next highest  Appeal within 45 days  
Forest  geophysical               officer;f          of legal notice of    
                                                             decision;        
                                litigate in federal   Forest Service official 
Service     activities            court once       has 45 days from close  
                                                                of            
                               administrative appeal  appeal period to        
                               is decided             provide appeal          
                                                      decision; the Forest    
                                                       Service may implement  
                                                       the decision after 15  
                                                               days           
                                                       following the appeal   
                                                            disposition       
                                                         Appeal must be filed 
     BIA   Approval of permits Appeal to regional           within 30 days of 
                   to          director; appeal              receiving notice 
           conduct geological  regional director       of decision; appeal to 
           and                 decision to the         IBIA within 30 days of 
                                                                    receiving 
               geophysical     Interior Board of      decision;h IBIA is not  
               activities      Indian Appeals         required to rule on an  
                                                              appeal          
                                (IBIA); litigate in    within a certain time  
                                   federal courtg              frame          

MMS    Approval of     Appeal to IBLA; suits Appeal to IBLA within 60 days 
          exploration     must be filed             after receiving final     
       plans or permitsi  with court of appeals   order or decision;j if stay 
                             for the circuit in   requested, IBLA has 45 days 
                          which the affected    from the time appeal period   
                          state is located      expires to grant or deny      
                                                 stay;k IBLA is not required  
                                                  to rule on appeal within    
                                                     certain time frame       

(Continued From Previous Page)

Decision that potentially Agency can be challenged Type of challenge and
to whom Time frames for administrative actiona Leasing stage

BLM	Inclusion of individual land Protest to state director; appeal to
parcels in a notice of IBLA; litigate in federal court competitive lease
sale

Lease issuance	Appeal to IBLA; litigate in federal courtl Protest during
45-day period for posting notice of competitive lease sale; no time frame
for state director decision on protest;m appeal underlying decision to
IBLA within 30 days of state director decision; if stay requested, IBLA
has 45 days from the time appeal period expires to grant or deny stay;
IBLA is not required to rule on an appeal within a certain time frame

Appeal to IBLA within 30 days; if stay requested, IBLA has 45 days from
the time appeal period expires to grant or deny stay; IBLA is not required
to rule on an appeal within a certain time frame

Forest  Authorize BLM to  Generally not subject to 
           offer             appealn                  
Service specific lands                             
           for lease                                  
                                                         Appeal must be filed 
     BIA   Approval of lease Appeal to regional             within 30 days of 
                  or         director; appeal                receiving notice 
                             regional director         of decision; appeal to 
           mineral agreement decision to IBIA;         IBIA within 30 days of 
                                                                    receiving 
                               litigated in federal   decision;p IBIA is not  
                                      courto          required to rule on an  
                                                              appeal          
                                                       within a certain time  
                                                               frame          
     MMS   Decision to lease        No administrative 
           OCS                      appeals; decision 
                 land        may be litigated in      
                             federal court            

                                Operations stage

                 Approval of    Request a state        Request state director 
BLM           development   director review;     review within 20 business 
                                                                         days 
       plans or applications appeal state director         of decision; State 
                for          review decision          Director has 10 days to 
                                                                 respond to a 
         drilling permits    to IBLA; and litigate   review request; appeal   
                                 in federal courtq state director decision on 
                                                     review request to IBLA   
                                                    within 30 days; if stay   
                                                     requested, IBLA has 45   
                                                   days from the time appeal  
                                                   period expires to grant or 
                                                     deny stay; IBLA is not   
                                                     required to rule on an   
                                                    appeal within a certain   
                                                              time            
                                                             frame            

Forest  Approval of a  Appeal to next highest  Appeal within 45 days of    
             surface use        officer;s         legal notice of decision;   
Service     planr       litigate in federal    Forest Service official has 
                                court once        45 days from close of       
                         administrative appeal is    appeal period to provide 
                         decided                  appeal decision; the Forest 
                                                  Service may implement the   
                                                  decision after 15 days      
                                                     following the appeal     
                                                          disposition         

BIA	BLM approves drilling permits after consulting with BIA; no BIA
decisions can be challenged at this staget

MMS         Approval of Appeal to IBLA; suits   Appeal to IBLA within 60   
               development must be filed          days after receiving final  
       and production plan with court of appeals order or decision;v if stay  
       and                    for the circuit in requested, IBLA has 45 days  
        drilling permitsu  which the affected    from the time appeal period  
                           state is located        expires to grant or deny   
                                                 stay; w IBLA is not required 
                                                  to rule on appeal within a  
                                                      certain time frame      
                               Source: GAO.      
                                                 GAO-05-124 Public Challenges 
                                  Page 13            to Oil and Gas Decisions 

aThe duration of cases and the length of any injunctions that may be
issued are dependent on the facts and circumstances of each case.

bIn the case of a plan amendment documented in a decision associated with
an environmental assessment, the 30-day protest period begins on the day
when notice of the amendment's effective date is published.

cThere are two sets of regulations that currently may apply to land-use
plans, the "1982 regulations" and the "2000 regulations." The Forest
Service is in the process of revising the 2000 regulations. Until the
Forest Service promulgates new revised planning regulations, land-use
plans may be developed in accordance with either the 1982 regulations or
2000 regulations at the option of the responsible Forest Service official.
The administrative review process applicable to land-use plans developed
under the 1982 regulations is called an "appeals" process. The
administrative review process applicable to landuse plans developed under
the 2000 regulations is called an "objection" process.

dFor non-significant amendments to land-use plans, the public has 45 days
to file an appeal to the next highest officer within the Forest Service.

eBLM decisions approving geophysical activities are in full force and
effective immediately. These decisions may be challenged in court without
going through the administrative appeals process.

fCertain geophysical exploration decisions can be categorically excluded
from preparation of an environmental impact statement or environmental
assessment. If so, these decisions are not appealable but can be
challenged in federal court. To appeal, a party must have submitted
substantive comments during the 30-day environmental assessment comment
period and/or the 45-day environmental impact statement comment period.

gThe Assistant or a Deputy Assistant Secretary for Indian Affairs may
decide administrative appeals in certain circumstances. If the Assistant
Secretary signs the appeals decision, it is considered final agency action
and may be litigated. If a deputy signs the decision, it may be appealed
to the IBIA.

hA notice of appeal to the IBIA is not effective until 20 days after IBIA
receives notice, during which time the Assistant Secretary for Indian
Affairs has authority to assume jurisdiction over the appeal.

iMMS procedures do not allow development companies to submit exploration
plans until after they have obtained a lease.

jWithin the 60-day appeal period, the public can request informal
resolution of the appeal from the next highest MMS official.

kMMS decisions are generally effective during the 60-day appeal period. If
an MMS decision is appealed to IBLA, the decision is effective while the
appeal is pending unless IBLA grants a stay.

lBLM decisions approving leases generally take effect immediately and may
be challenged immediately in court.

mWhile there is no set time frame for state directors to respond to
protests to the inclusion of a parcel in a lease sale, leases may not be
issued on parcels receiving bids or noncompetitive offers until the
protests have been resolved

nAuthorization decisions are appealable if they are documented in a
decision associated with an environmental assessment or environmental
impact statement. If the authorization decision is appealable, it can be
appealed to the next highest officer and the underlying decision can be
litigated in federal court once the appeal is decided. To appeal, a party
must have submitted substantive comments during the 30-day environmental
assessment comment period and/or the 45-day environmental impact statement
comment period. Time frames for administrative action are the same as the
exploration and operations stages. The public may also challenge BLM
leasing decisions through the BLM process.

oThe Assistant or a Deputy Assistant Secretary for Indian Affairs may
decide administrative appeals in certain circumstances. If the Assistant
Secretary signs the appeals decision, it is considered final agency action
and may be litigated. If a Deputy signs the decision, it may be appealed
to the IBIA.

pA notice of appeal to the IBIA is not effective until 20 days after IBIA
receives notice, during which time the Assistant Secretary for Indian
Affairs has authority to assume jurisdiction over the appeal.

qBLM decisions approving drilling permits are in full force and effective
immediately. These decisions may be challenged in court without going
through the administrative appeals process.

rFollowing the Forest Service approval of the surface use plan, BLM
decides whether to approve the complete drilling permit. The public may
also challenge the drilling permit approval decision through the BLM
process.

sTo appeal, a party must have submitted substantive comments during the
30-day environmental assessment comment period and/or the 45-day
environmental impact statement comment period.

tAlthough no BIA decisions can be challenged at this stage, the public can
challenge BLM decisions under BLM procedures.

uDevelopment and production plans are not required for leases in the
western Gulf of Mexico. Instead, the lessee must submit a Development and
Operations Coordination Document with all the information necessary to
assure conformance with applicable statutes, regulations, and lease
provisions.

vWithin the 60-day appeal period, the public can request informal
resolution of the appeal from the next highest MMS official.

wMMS decisions are effective during the 60-day appeal period. If an MMS
decision is appealed to IBLA, the decision is effective while the appeal
is pending unless IBLA grants a stay.

    Bureau of Land Management

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.10 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.11 The BLM director has no
specific deadline to respond to protests; but must "promptly" provide a

10The IBLA is part of the Department of the Interior's Office of Hearings
and Appeals (OHA). IBLA reviews and adjudicates appeals concerning
Interior's land management and mineral resources decisions. IBLA is
authorized to review decisions of certain departmental agencies, including
BLM and MMS, and departmental administrative law judges. IBLA has the
authority to provide a final decision for the Department of the Interior.
The Secretary of Interior retains the authority to decide any matter at
any stage of departmental review after holding any hearing required by
law. A party to a case who is adversely affected by a BLM decision
generally has a right to appeal to IBLA.

11In BLM, land-use plans are called Resource Management Plans and are
accompanied by an environmental impact statement or environmental
assessment. In the case of an amendment to the land-use plan completed
with an environmental assessment, the 30-day protest period begins on the
day when the notice of the amendment's effective date is published.

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.12 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.13 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

12A company cannot conduct geophysical exploration activities without
first having BLM approve a Notice of Intent to Conduct Geophysical
Exploration Operations.

13A person must typically exhaust administrative remedies-appeal a
challenged decision to IBLA and wait for the appeal to be resolved-before
challenging the decision in federal court. However, BLM geophysical
exploration, leasing, and operations decisions generally take effect
immediately and can therefore be challenged in court without going through
the administrative appeals process.

IBLA within 30 days or challenge the decision in federal court.14 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.15 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.

Forest Service	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

14BLM decisions approving leases generally take effect immediately and may
be challenged immediately in court.

15BLM decisions approving drilling permits generally take effect
immediately and may be challenged immediately in court.

identify lands as available for leasing.16 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.17 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.18 Specifically,
these

16In the Forest Service, land-use plans are called Land and Resource
Management Plans and are accompanied by an environmental impact statement
or environmental assessment. There are two sets of regulations that
currently may apply to land-use plans, the "1982 regulations" and the
"2000 regulations." The Forest Service is in the process of revising the
2000 regulations. Until the Forest Service promulgates new revised
planning regulations, land-use plans may be developed in accordance with
either the 1982 regulations or 2000 regulations at the option of the
responsible Forest Service official (usually a Forest Supervisor). The
administrative review process applicable to land-use plans developed under
the 1982 regulations is called an "appeals" process. The administrative
review process applicable to land-use plans developed under the 2000
regulations is called an "objection" process. Under the appeal process,
the public has 90 days to appeal land-use plan approvals, significant
amendments, or revisions. The public has 45 days to appeal nonsignificant
amendments to land-use plans. Under the objection process, the public may
object to a proposed amendment or revision to a land-use plan within 30
days of publication of (1) the final environmental impact statement for
revisions and significant amendments, or (2) notice of proposed amendment
for non-significant amendments. There is no time limit on resolving
objections and all objections must be resolved prior to approval of the
amendment or revision.

17The next highest officer above the official deciding the appeal has
discretion to review the appeal decision. For example, if a forest
supervisor's decision is appealed to the regional forester, the Forest
Service Chief can review the regional forester's decision.

18At the leasing stage, Forest Service decisions authorizing BLM to
include parcels within a national forest in a lease sale are generally not
appealable. However, if the Forest Service documents the decision to
authorize BLM to include land parcels in a lease sale with a decision
associated with an environmental impact statement or environmental
assessment, the decisions are generally appealable. The Forest Service
authorizes BLM to include the parcel in a notice of competitive lease sale
under a three-step procedure. First, the Forest Service verifies that oil
and gas leasing on a specific land parcel has been adequately addressed in
a NEPA analysis and is consistent with the appropriate land use plan.
Next, the Forest Service ensures that the appropriate conditions of the
surface occupancy have been properly included as stipulations on the
parcel. Finally, the Forest Service determines whether operations and
development could be allowed somewhere on each proposed land parcel,
except where all surface occupancy is prohibited by stipulations.

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.19

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.20 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.

19Certain decisions are "categorically excluded" from analysis under NEPA
if the category of decisions does not individually or cumulatively have a
significant effect on the human environment, and have been found to have
no such effect by the relevant federal agency. Such decisions cannot be
appealed, but can be litigated in federal court. Decisions approving
short-term geophysical activity may be categorically excluded from
preparation of an environmental impact statement or environmental
assessment and cannot be appealed.

20If the Forest Service officer does not render a decision on an appeal
within 45 days, the original decision stands and a challenger can seek
review in federal court.

Bureau of Indian Affairs	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.21 The public can challenge IBIA decisions in federal court.22

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.23 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.

21IBIA is one of three standing appeal boards of the Office of Hearings
and Appeals within the Department of the Interior. IBIA is separate from
Interior's various program bureaus, including BIA, whose decisions it
reviews.

22The Assistant Secretary or a Deputy Assistant Secretary for Indian
Affairs may decide administrative appeals in certain circumstances. The
Assistant Secretary has 20 days to exercise his authority to assume
jurisdiction in the appeal and either (1) issue a decision in the appeal
or (2) assign responsibility for issuing a decision to a Deputy to the
Assistant Secretary. Decisions made by the Assistant Secretary are
effective immediately unless the Assistant Secretary provides otherwise.
If a Deputy signs the decision, it may be appealed to IBIA.

23BIA may only approve such permits with the consent of the Indian oil and
gas owner.

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.

    Mineral Management Service

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 Does Not Systematically Gather and Use Public Challenge Information to
  Manage Its Oil and Gas Program

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.

    Agencywide System Gathers Limited Public Challenge Data and Is Used
    Inconsistently

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.24 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.25 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,

24This component, called Case Recordation, has the capability to track
some public challenge information during the exploration and operations
stages, but BLM does not use the system for these purposes, in part
because, according to BLM, there are few geophysical exploration permits
issued and operations activities are tracked in another system.

25Current guidance on the use of LR2000 during oil and gas leasing can be
found in the Oil and Gas Adjudication Handbook: Competitive Leases (BLM
Manual Handbook H-3120-1).

which is important to understanding what additional staffing and funding
resources may be needed to process public challenges.

    BLM Uses Various Nonintegrated Systems to Gather Public Challenge Data

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.26 As in the leasing stage, this information is gathered to

26While BLM state offices use an agency wide system called the Automated
Fluids Minerals Support System to track information on drilling permits
during the operations stage, the system does not have the capability to
track public challenges such as requests for state director reviews, IBLA
appeals, or litigation of decisions regarding drilling permits.

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 Public Challenge Data
    Gathered by State Offices

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.27 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 an Agencywide System That Could be Used to Standardize
    Public Challenge Data at the Leasing Stage

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

27Split estate lands are those lands where the surface owner does not own
the subsurface minerals. BLM sometimes issues leases to develop federally
owned oil and gas deposits underlying land owned by a private party. Such
development creates the potential for conflict between the surface owner
and the oil and gas developer. However, BLM cannot readily determine the
extent of public challenges to development activities occurring on split
estate lands.

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.

  Areas on the Outer Continental Shelf Open to Offshore Oil and Gas Development
  Experienced Few Public Challenges

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.

o 	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.

o 	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 5year
offshore management plan or the land parcels included in its 13 lease
sales.28 MMS also reported that there were no challenges to the 2,850
drilling permits it issued.

28The 13 lease sales offered 42,994 tracts covering 230,493,810 acres for
lease sale. Of the tracts offered for sale, 3,541 tracts covering almost
18,659,610 acres were leased.

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.

Table 2: The Number of Exploration and Operations Decisions Approved by
MMS Between 1999 and 2003 and the Number That Were Challenged by the
Public

                                       Gulf of                       
                                     Mexico      Pacific    Alaska      Total 
            Explorations Plans and                                   
                Revisions Approved       1,995           0         2    1,997 

o  Public Appeals to IBLA 0 0 1

o  Federal Lawsuits Filed by Public 000

Development and Production
Plans and Revisions
Approveda 1,628 2 1 1,631

o  Public Appeals to IBLA 0 0 0

o  Federal Lawsuits Filed by Public 001

Applications for Drilling Permits and Revisions Approved 2,800 44 6 2,850

o  Public Appeals to IBLA 0 0 0

o  Federal Lawsuits Filed by Public 000

Source: MMS.

aDevelopment and production plans are not required for leases in the
western Gulf of Mexico. Instead, the lessee must submit a Development and
Operations Coordination Document with all the information necessary to
assure conformance with applicable statutes, regulations, and lease
provisions.

Conclusions	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.

  Recommendations for Executive Action

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:

o 	Include public challenge data in the new agencywide automated system
for selling leases.

o 	Issue clear guidance on how public challenge data should be entered
into the new system.

  Agency Comments and Our Evaluation

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.

Sincerely yours,

Anu K. Mittal Director, Natural Resources

and Environment

Appendix I

                       Objectives, Scope, and Methodology

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,

Appendix I
Objectives, Scope, and Methodology

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.

Appendix II

Comments from the Department of the Interior

Appendix II
Comments from the Department of the
Interior

Appendix III

                     GAO Contacts and Staff Acknowledgments

GAO Contacts	Anu K. Mittal, (202) 512-3841 Roy Judy, (202) 512-3482

Staff 	In addition to those named above, Laura Helm, R. Denton Herring,
Richard Johnson, Cynthia Norris, Matthew Reinhart, Patrick Sigl, and
Walter Vance

Acknowledgments made key contributions to this report.

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