Interior oil program is wasteful, outdated, report finds

The newest report from the Government Accountability Office (GAO) finds that the Interior Department oil and gas leasing program is inefficient and does not maximize benefits to American taxpayers.

The new GAO report highlights the inefficiency of the noncompetitive leasing and minimum bid systems, which encourage speculation on public lands while being unlikely to lead to meaningful mineral production or significant revenue. The Bureau of Land management (BLM) is also behind in updating its guidance and fee structure.

Another highlighted inefficiency is the common practice of oil and gas companies nominating leases with incredibly low potential for development. The report confirms that “BLM does not perform an assessment of the development potential for a [nominated lease] parcel," while also stating that "Several BLM state officials said . . . that the most attractive federal lands are already leased,” and “remaining federal lands [have] lower development potential.”

The government watchdog made a number of recommendations in the report, aimed at modernizing the outdated system. For example, it recommends that the BLM should consider charging oil and gas companies for nominating public lands for oil sales, as the agency wastes large amounts of time and money managing proposed leases that never go on to be sold at auction.

The new report aligns with a recent report from the Interior Department that recommended reforms to the oil program, including higher fees to reduce speculative leasing.

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