oversight

Federal Land Management: Better Oil and Gas Information Needed to Support Land Use Decisions

Published by the Government Accountability Office on 1990-06-27.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

        1”




                      United   States   Genera1   Accounting   Office
                      Report to Congressional Requesters
GAO

June 1990
                      FEDERAL LAND
                      MANAGEMENT
                      Better Oil and Gas
                      Information Needed                                to


                      Support Land Use
                      Decisions




                 RESTRICTED --Not      to be &eased outside the
                 General Accounting OfIice unless specifically
                 approved by the Office of Congressional
                 Relations.


GAO/RCED-90-71
  Resources, Community,    and
  Economic Development     Division

   B-233482

   June 27,199O

  The Honorable Dale Bumpers
  Chairman, Subcommittee on Public Lands,
    National Parks and Forests
  Committee on Energy and Natural Resources
  United States Senate

  The Honorable Nick J. Rahall, II
  Chairman, Subcommittee on Mining and
    Natural Resources
  Committee on Interior and Insular Affairs
  House of Representatives

  Section 5111 of the Federal Onshore Oil and Gas Leasing Reform Act of 1987 (P.L. 100-203,
  Dec. 22, 1987) and your March 2, 1988, letter directed GAO and the National Academy of
  Sciences to study the manner in which oil and gas resources are considered in Bureau of
  Land Management and Forest Service land use plans and recommend any improvements that
  may be necessary to ensure that (1) potential oil and gas resources are adequately addressed
  in planning documents; (2) the social, economic, and environmental consequences of
  exploration and development of oil and gas resources are determined; and (3) any
  stipulations to be applied to oil and gas leases are clearly identified.

   This report analyzes how Bureau of Land Management and Forest Service land use plans
   address the oil and gas issues and social, economic, and environmental impacts of oil and gas
   development; and it analyzes stipulations used to reduce impacts. The National Academy of
   Sciences completed a separate report in September 1989.

   As agreed with your offices, unless you publicly announce its contents earlier, we plan no
   further distribution of this report until 30 days from the date of this letter. At that time, we
   will send copies to interested congressional committees, the Secretary of the Interior, the
   Secretary of Agriculture, the Director of the Bureau of Land Management, and the Chief of
   the Forest Service.

   This work was performed under the direction of James Duffus III, Director of Natural
   Resources Management Issues. He may be reached at (202) 275-7756. Other major
   contributors are listed in appendix X.




I/ Assistant Comptroller General
                                                                                      -
Executive Summq


             Federal onshore leases produced oil and gas valued at about $3.3 billion
Purpose      in 1988. The federal government, states, and Indians share a percentage
             of the revenues from these leases. In making leasing decisions, the
             Department of the Interior’s Bureau of Land Management (BLM) and the
             Department of Agriculture’s Forest Service must weigh the benefits of
             oil and gas development against potentially adverse impacts on other
             resources.

             The Federal Onshore Oil and Gas Leasing Reform Act of 1987 required
             GAO to study how oil and gas development is considered in BLM and
             Forest Service land use plans and to recommend any necessary improve-
             ments. GAO addressed (1) whether land use plans include adequate infor-
             mation on oil and gas activities in areas with high oil and gas potential,
             (2) whether appropriate mitigating measures (stipulations or conditions
             of approval) are imposed on leases and drilling permits to minimize the
             adverse environmental consequences of oil and gas development, and (3)
             what it will cost to improve oil and gas information in land use plans.


             The Federal Land Policy and Management Act and the National Forest
Background   Management Act, both enacted in 1976, require Interior (through BLM)
             and Agriculture (through the Forest Service) to develop land use plans.
             These plans are to clearly identify the area’s resources, such as min-
             erals, wildlife, recreation, and timber, and encourage management of
             those resources to meet present and future public needs. Both agencies
             have determined that they must comply with the National Environ-
             mental Policy Act (NEPA) when developing land use plans and use the
             environmental impact statement process NEPA requires as the principal
             analysis in developing the plans. BIN and the Forest Service also have
             determined that they must comply with WA at two subsequent points
             when making oil and gas leasing and development decisions: (1) issuing
             a lease and (2) approving a drilling permit. In preparing the NEPA anal-
             yses to support issuing leases or approving drilling permits, both agen-
             cies draw on and/or tier to previous analyses, including land use plans,
             and supplement them as necessary.

             GAO identified   five key elements required by NEPA, BLM, and Forest Ser-
             vice regulations and/or guidance that are essential to assess the environ-
             mental impacts of oil and gas leasing and development decisions. These
             elements are (1) oil and gas potential, (2) reasonably foreseeable devel-
             opment scenario(s), (3) indirect impacts, (4) cumulative impacts, and (5)
             lease stipulations.



             Page 2                                     GAO/RCED-90-71Oil and Gas Decisions
                           Executive Summary




                           Most plans and related environmental impact statements covering BLM
Results in Brief           and Forest Service lands with high oil and gas potential do not contain
                           adequate information on one or more of the five elements essential for
                           assessing the environmental impacts of oil and gas leasing and develop-
                           ment decisions. Moreover, at the four BLM resource areas and four Forest
                           Service forests visited, GAO found that only one BLM resource area had
                           supplemented its plan with the additional studies necessary to address
                           all five elements before making oil and gas leasing or development deci-
                           sions. Both agencies also have issued leases and approved permits
                           without including appropriate mitigating measures, even approving
                           some drilling permits without first completing the environmental studies
                           they identified as necessary. Such actions have led to delayed or sus-
                           pended oil and gas activity. As a result, federal revenues have been
                           delayed or lost. Although the total cost is unknown at this time, infor-
                           mation GAO reviewed indicates that estimated foregone and delayed rev-
                           enues resulting from inadequate environmental studies far exceed any
                           reasonable estimated cost to improve them.

                           Both BLM and the Forest Service have identified many resource areas
                           and forests where oil and gas information is insufficient and have begun
                           to complete additional environmental studies. However, both agencies
                           still must clarify guidance for their field offices and institute more effec-
                           tive oversight.



Principal Findings

Inadequate Environmental   In examining 82 land use plans and related environmental impact state-
                           ments covering BLM and Forest Service lands having high oil and gas
Studies Used to Make Oil   potential, GAO found that 76 either did not identify, and/or only par-
and Gas Decisions          tially addressed 1 or more of the 5 elements essential for assessing the
                           environmental impacts of oil and gas activities. Only six BLM plans and
                           one Forest Service plan met GAO'S criteria for all five elements.

                           Recognizing that NEPA regulations permit the agencies to supplement the
                           plans with additional environmental studies before issuing leases or
                           approving permits to drill, GAO looked at other environmental studies
                           relating to oil and gas activities at four BIN resource area offices and
                           four Forest Service offices. At the four BLM resource area offices and
                           two Forest Service offices that used other existing environmental
                           studies to supplement their plans, GAO found that, when taken together


                           Page 3                                       GAO/iZCEBoO-71Oil and GM Decisions
                            Executive Summary




                            with the land use plans, only one BLM resource area met GAO'S criteria
                            for addressing all five essential elements.


SomePermits to Drill        Three of the four BLM resource areas and three of the four Forest Service
Approved Without            forests visited also approved some drilling permits without including all
                            the conditions of approval required by the land use plans, environ-
Appropriate Mitigating      mental studies, and/or resource specialists. GAO reviewed all or a sample
Measures                    of permits approved in fiscal year 1988 and estimates that 10 percent of
                            all permits approved in those resource areas and forests were approved
                            without all of the conditions of approval identified as necessary to pro-
                            tect other resources.


Potential RevenuesAppear    Inadequate land use plans and/or environmental studies have resulted
                            in leasing being suspended, primarily on Forest Service lands. These
to Exceed Cost to Develop   actions result in lost or delayed federal revenues. The total cost associ-
Additional Oil and Gas      ated with developing improved information on the environmental
Information                 impacts of oil and gas leasing and development decisions cannot be esti-
                            mated with any degree of certainty at this time. However, it appears
                            that estimated foregone and delayed revenues far exceed any reason-
                            able estimated cost to develop such information for resource areas and
                            forests with high oil and gas potential. For example, the Forest Service
                            estimates that it will cost about $620,000 to complete the environmental
                            studies for the Custer National Forest-including    the Little Missouri
                            National Grasslands. GAO estimates that about $22 million in bonus bids
                            alone (payments made to acquire leases) will be generated when leasing
                            resumes in the grasslands.


Agencies’ Initiatives       BLM has chosen to develop the needed oil and gas information   by
                            amending existing plans or preparing new ones. The Forest Service will
                            decide on a case-by-case basis whether to amend or revise its plans, and/
                            or complete additional environmental studies, as appropriate. On the
                            basis of its review, GAO believes that studies may be required for addi-
                            tional resource areas and forests.


Management Controls         If Bud and Forest Service initiatives to improve information on the envi-
                            ronmental impacts of oil and gas leasing and development decisions are
                            to be successful, they must be accompanied by improved internal man-
                            agement controls. Existing BLM and Forest Service guidance is unclear on
                            how to address cumulative impacts, and the Forest Service needs to


                            Page 4                                      GAO/WED-W71 Oil and Gas Decisions
                             Executive Summary




                             clarify guidance on what types of environmental studies will be
                             required. Moreover, both agencies need more effective oversight of their
                             field offices to ensure compliance with applicable regulations and
                             guidance.


                             GAO recommends, among other things, that the Secretaries of the Interior
Recommendationsto            and Agriculture direct the BLM Director and the Forest Service Chief,
the Secretaries of the       respectively, to
Interior and             . establish management controls to ensure that (1) NEPA requirements are
Agriculture                adequately addressed, whether in land use plans and/or other environ-
                           mental studies, before issuing leases or approving permits to drill and
                           (2) appropriate stipulations and conditions of approval are attached to
                           leases and permits; and
                         l determine which resource areas or forests will yield the most revenues
                           and give priority to developing adequate information for those areas so
                           oil and gas development can proceed expeditiously, with the least pos-
                           sible damage to the environment.


                             Interior and the Forest Service agreed with GAO'S two major recommen-
Agency Comments              dations and have indicated actions they are taking in response to the
                             draft report. Interior had no significant disagreements with the draft
                             report; however, it offered technical clarifications that have been incor-
                             porated into the report. The Forest Service noted that its plans are not
                             intended to be used for making oil and gas leasing or development deci-
                             sions, and asked that the report make clear the Forest Service’s phased
                             approach for complying with NEPA. The report has been clarified to
                             make clear that there are alternative ways of complying with NEPA; how-
                             ever, it should be noted that in the four forests GAO visited, none of the
                             land use plans or other environmental studies used to make leasing or
                             development decisions adequately addressed the five elements.




                             Page S                                     GAO/‘lKED-90-71Oil and Gas Decisions
Contents


Executive Summary                                                                                  2

Chapter 1                                                                                         10
Introduction             Laws Affecting Oil and Gas Leasing and Development                       10
                         BLM and Forest Service Organization                                      14
                         Land Use Planning Process                                                14
                         Land Use Planning Policies                                               18
                         Procedures for Oil and Gas Development                                   18
                         Objectives, Scope, and Methodology                                       19

Chapter 2                                                                                         25
Oil and Gas Leasing      Five Key Elements Should Be Adequately Addressed at
                              Three Decision Points
                                                                                                  25
and Development          Inadequate Environmental Studies Used to Support                         26
Continue Without              Leasing and Development Decisions
Adequate Information     Conditions of Approval Not Always Included in Drilling                   30
                              Permits
And/Or Mitigating        Some Leasing and Development Decisions Have Been                         32
Stipulations                  Contested
                         Conclusions                                                              33

Chapter 3                                                                                         35
Status of BLM and        BLM Plans to Improve Oil and Gas Information but
                             Underestimates the Number of Resource Areas
                                                                                                  35
Forest Service           Forest Service Plans to Improve Oil and Gas Information                  36
Initiatives to Improve       but Approach Unclear
                         An Accurate Estimate of the Total Cost to Develop                        37
Information and              Additional Oil and Gas Information Is Not Possible
Related Cost Estimates       Now
                         Improving Oil and Gas Information Appears to Be Cost-                    38
                             Effective
                         Conclusions                                                              39
                         Recommendations                                                          39
                         Agency Comments and GAO’s Evaluation                                     39




                         Page 6                                    GAO/XXD-B@71 Oil and Gas Lhxisions
                      Contents




Chapter 4                                                                                     40
Improved Internal     Better Agency Guidance Needed on Addressing
                           Cumulative Impacts
                                                                                              40
Management Controls   Forest Service Needs Clear Guidance on What Types of                    41
Must Accompany             Environmental Studies Will Be Required
Agency Initiatives    More Direct Oversight and Evaluation of Field Offices                   41
                           Needed
                      Conclusions                                                             44
                      Recommendations                                                         45
                      Agency Comments and GAO’s Evaluation                                    45

Appendixes            Appendix I: List of Elements Reviewed and Associated                    48
                          NEPA and/or Agency Regulatory or Guidance
                          Citations
                      Appendix II: Results of BLM Land Use Plan Review                        50
                      Appendix III: Results of Forest Service Land Use Plan                   52
                          Review
                      Appendix IV: Results of BLM and Forest Service Land                     54
                          Use Plan Review for Socioeconomic Impacts
                      Appendix V: Extent to Which BLM and Forest Service                      55
                          Land Use Plans Met the Criteria by Element
                      Appendix VI: BLM and Forest Service Land Use Plans and                  57
                          Areawide Environmental Assessments for Four
                          Resource Areas and Four Forests Visited
                      Appendix VII: BLM and Forest Service Resource Areas                     58
                          and Forests That May Need Additional Oil and Gas
                          Information as Identified by GAO and/or the
                          Agencies
                      Appendix VIII: Comments From the Department of the                      63
                          Interior
                      Appendix IX: Comments From the Forest Service                           70
                      Appendix X: Major Contributors to This Report                           75

Tables                Table 1.1: BLM and Forest Service Planning Process                      17
                      Table 2.1: Extent to Which Key Elements Were Fully                      27
                          Addressed in 82 BLM and Forest Service Plans
                      Table 2.2: Fiscal Year 1988 Drilling Permits Issued                     31
                          Without One or More Appropriate Conditions of
                          Approval
                      Table IV. 1: Extent to Which Plans Identify Socioeconomic                54
                          Consequences


                      Page 7                                    GAO/RCED9O-71Oil and Gas Decisions
                                                                              .-
         Contents




         Table V.l: Extent to Which Plans Addressed Oil and Gas                    55
             Potential
         Table V.2: Extent to Which Plans Projected Reasonably                     55
             Foreseeable Development Scenarios
         Table V.3: Extent to Which Plans Addressed Indirect                       55
             Impacts
         Table V.4: Extent to Which Plans Cited Cumulative                         55
             Impacts
         Table V.5: Extent to Which Plans Addressed Lease                          56
             Stipulations
         Table VI. 1: Extent to Which Areawide Environmental                       57
             Assessments And/Or Applicable Land Use Plans Do
             Not Meet the Criteria for Each of the Five Elements
         Table VII.l: BLM Resource Areas With Actions                              58
              Completed, Underway, or Proposed
         Table VII.2: Additional Resource Areas Identified by GAO                  59
              Where More Oil and Gas Information May Be Needed
         Table VII.3: Forest Service Forests With Actions                          60
              Completed, Underway, or Proposed
         Table VII.4: Additional Forests Identified by GAO Where                   62
              More Oil and Gas Information May Be Needed

Figure   Figure 1.1: BLM and Forest Service Roles in the Land Use                  16
              Planning Process




         Abbreviations

         BLM        Bureau of Land Management
         EIS        environmental impact statement
         EISS       environmental impact statements
         FLPMA      Federal Land Policy and Management Act of 1976
         IBLA       Interior Board of Land Appeals
         NEPA       National Environmental Policy Act of 1969


         Page8                                    GAO/RCTED~71 Oil and Gas Decisions
Page 9   GAO/WED-9iS71 Oil and Gas Decisions
Chapter 1                                                                                                                 -
Introduction


                      More than 925 million acres of subsurface mineral estate are adminis-
                      tered by the Department of the Interior’s (Interior) Bureau of Land Man-
                      agement (BLM) and the U.S. Department of Agriculture’s (Agriculture)
                      Forest Service. Approximately 76 million of these acres are leased for
                      the development of oil and gas. Oil and gas valued at about $3.3 billion
                      was produced from onshore leases in 1988, and the government col-
                      lected over $600 million in revenues.’

                      Decisions to issue oil and gas leases on federal lands often generate con-
                      troversy. Oil and gas development may significantly affect other uses of
                      these lands-wildlife    habitat, vegetation, grazing, range, and recrea-
                      tion-if steps are not taken to minimize the impacts of development.

                      Federal laws encourage the domestic production of oil and gas as well as
                      the environmental preservation of other resources that may be affected
                      by that development. BLM and the Forest Service are required to manage
                      their lands under the principles of multiple use and sustained yield to
                      ensure that resources are used in the combination that best meets
                      demands, yet are protected and preserved for future generations.” To
                      this end, BLM and the Forest Service are required to develop land use
                      plans that clearly identify how the resources will be managed. These
                      plans should, among other things, identify the resources present in an
                      area; encourage the domestic development of minerals, including oil and
                      gas; and reflect a multiple-use/sustained-yield philosophy for managing
                      the land.


                      Several laws govern oil and gas leasing and development. The objectives
Laws Affecting Oil    of these laws vary, from promoting domestic oil and gas development to
and Gas Leasing and   ensuring consideration of the environmental impacts of oil and gas
Development           development on other resources. Taken together, these laws reflect an
                      attempt to balance the often competing interests of developers and
                      environmentalists.




                      ‘These revenues include bonus payments for the right to acquire leases, annual rent paid to hold
                      nonproducing leases, and royalties paid as a percentage of the value of the oil and gas produced.

                      2Multiple use requires management of public lands and their various resource values, such as fish and
                      wildlife, range, recreation, timber, and watenhed, so that they are used in the combination that will
                      best meet the present and future needs of the public. Sustained yield requires that the lands’ condi-
                      tion be maintained so that future generations will have access to the multiple uses associated wrth
                      land resources.



                      Page10                                                     GAO/RCED90-71Oil and Gas Decisions
                            Chapter 1
                            Introduction




Legislation Promoting and   The Mineral Leasing Act of 1920, (30 U.S.C. 181 et seq.), as amended, is
Regulating Oil and Gas      intended to promote and regulate the development of minerals,
                            including oil and gas, on public lands.3 The act provides a framework
Development                 under which public lands can be leased and developed for valuable min-
                            eral deposits. The act also outlines a fee structure, including rents,
                            bonuses, and royalties, for monies due the government for the use of the
                            land and minerals, and authorizes Interior to issue and administer
                            onshore oil and gas leases on federal land.*

                            In the Mining and Minerals Policy Act of 1970 (P.L. 91-631), the Con-
                            gress declared that the continuing policy of the federal government is to
                            encourage the development of domestic minerals, including oil and gas.
                            While it did not specifically mention federal lands, the act is referenced
                            in legislation applicable to federal land management.

                            The Federal Onshore Oil and Gas Leasing Reform Act of 1987 (P.L. 100-
                            203, the “reform act”) amended several provisions in the Minerals
                            Leasing Act. A major purpose of the reform act is to require competitive
                            bidding initially for all oil and gas leases, rather than allowing leases to
                            be purchased noncompetitively. The Congress expects to generate more
                            revenue through a competitive bidding process. In addition, although
                            BLM will still offer Forest Service lands along with other federal lands
                            for lease, the reform act gives the Forest Service the authority to
                            approve leasing on its public domain lands6 and designate surface use
                            stipulations and conditions of approval6 that are applicable to all its
                            lands.


Environmental Legislation   Oil and gas decisionmaking must be consistent with the National Envi-
                            ronmental Policy Act of 1969 (NEFA) (42 U.S.C. 4321 et seq.) and other
                            environmental legislation such as the Endangered Species Act of 1973 as



                            3The Mineral Leasing Act for Acquired Lands provides similar approval authority for the Forest
                            Service’s acquired lands. For purposes of this report, public and acquired lands are referred to as
                            federal lands.

                            *Offshore leasing is covered primarily under the Outer Continental Shelf Lands Act (67 Stat. 462), as
                            amended.

                            %blic domain lands are lands owned by the federal government that have never been in private or
                            state ownership; acquired lands are lands purchased by, condemned by, or donated to the federal
                            government.

                            6Stipulations are restrictions on operations that are included on leases; conditions of approval are
                            n&rktions on drilhng permits. Both are designed to mitigate adverse environmental impacts.



                            Page 11                                                     GAO/RCRD!W71 Oil and Gas Lkcisiona
                                                                        -
Chapter 1
Introduction




amended (16 USC. 1531 et seq.). NEPA requires that the applicable fed-
eral agency prepare a detailed environmental impact statement (EIS) for
every major federal action that may significantly affect the quality of
the human environment. The EIS is designed to ensure that important
environmental impacts will not be overlooked or underestimated before
the government makes a commitment to a proposed action.

The Council on Environmental Quality, established by NEPA, developed
regulations implementing NEPA on a governmentwide basis. These regu-
lations provide agencies with a process for determining whether or not
to prepare an Ers. When an agency is not sure if an EIS is necessary, it
prepares an environmental assessment that should provide sufficient
information to permit the agency to determine whether to prepare an
EIS. If the environmental assessment determines that the proposed
action will not significantly affect the environment, and therefore an EIS
is not necessary, the agency prepares a “finding of no significant
impact.” This finding explains why the proposed action will have no sig-
nificant impact on the environment.

According to the regulations, an EIS must address the following five
issues: (1) the environmental impacts of the proposed action (including
the direct, indirect, and cumulative impacts); (2) any adverse environ-
mental impacts that cannot be avoided should the proposed action be
implemented; (3) alternatives to the proposed action; (4) the relation-
ship between local short-term uses of the environment and the mainte-
nance and enhancement of long-term productivity; and (5) any
irreversible and irretrievable commitments of resources that would
occur should the proposed action be implemented. In addition, before
making a decision, the responsible agency must solicit comments from
the public and other government agencies that may have jurisdiction by
law or expertise with respect to any environmental impacts. If an
agency believes that a class of actions will not individually or cumula-
tively have a significant effect on the environment, NEPA regulations
allow that agency to exclude these actions from environmental analysis.

With regard to oil and gas leasing and development, there are three key
points at which NEPA requirements must be met: (1) developing a land
use plan, (2) issuing an oil and gas lease, and (3) approving a drilling
permit. At each of these points, the agencies must assess whether they
have adequately disclosed, to the extent possible, the impacts of oil and
gas development. Implementing regulations provide flexibility and a
variety of options regarding the type of study that may be done to meet
NEPA requirements. To avoid duplicating efforts, the regulations



Page 12                                    GAO/RCEDW71 Oil and Gas Decisions
                    Chapter 1
                    IllWOdllCti0n




                    encourage drawing on and/or tiering to existing studies when possible
                    and supplementing them as appropriate.

                    To the extent that a land use plan makes oil and gas leasing and/or
                    development decisions, the EIS should address the five elements in the
                    detail necessary to assess the environmental impact of the proposed
                    action. If the land use plan does not make such decisions, oil and gas
                    issues should be more generally discussed in the EISaccompanying the
                    plan. Such an EIS should, in broad terms, discuss the environmental con-
                    sequences of the possible uses of the lands. Subsequently, more specific
                    environmental analysis concerning oil and gas activities should be pre-
                    pared before issuing leases or drilling permits.


Land Use Planning   In the mid-1970s, the Congress required Interior and Agriculture to
Legislation         develop land use plans that provide for the management, protection,
                    development, and enhancement of public lands. The 1976 Federal Land
                    Policy and Management Act (FXPMA)(P.L. 94-579) applies to Interior,
                    and the 1974 Forest and Rangeland Renewable Resources Act (P.L. 93-
                    378), as amended by the 1976 National Forest Management Act (P.L. 94-
                    588), applies to Agriculture. Except for some differences discussed
                    below, the acts contain similar requirements for land use planning.

                    In developing land use plans, both agencies are required to consider the
                    principles of multiple use and sustained yield. Agencies must also (1)
                    use a systematic, interdisciplinary approach; (2) consider present and
                    potential uses of the public lands; (3) consider the relative scarcity of
                    the values involved; (4) weigh long-term benefits against short-term
                    benefits to the public; (5) comply with pollution control laws; and (6) to
                    the extent practicable, coordinate with state and local plans. The acts
                    also stipulate that the general public play an integral role in developing
                    land use plans through a public participation process described in the
                    legislation.

                     In addition, both agencies must establish requirements that are consis-
                     tent with NEPA analysis requirements for EISS.For example, both agen-
                     cies’ land use planning legislation requires that present and potential
                     alternative uses of public lands be considered. This requirement is sim-
                     ilar to the NEPA requirement that an EISanalyze alternatives to the pro-
                     posed action. Also, both NEPA and land use planning laws require public
                     participation in the development and analysis of alternatives.




                     Page 13                                    GAO,‘RCED-90-71
                                                                              Oil and Gas Decisions
                       Chapter 1
                       Introduction




                       The two land use planning laws differ in some areas. Interior is required
                       to develop land use plans for both renewable resources (surface
                       resources, such as timber and wildlife) and nonrenewable resources
                       (subsurface resources, such as oil and gas). Agriculture is required to
                       develop land use plans for renewable resources only. However, the
                       Forest Service’s guidance and regulations require that nonrenewable
                       resources also be considered in preparing land use plans.


                            and the Forest Service are organized similarly, both having four
BLM and Forest         BLM
                       levels of management. The BLM Director and Forest Service Chief head
Service Organization   their respective agencies. Roth agencies’ headquarters consist of a
                       variety of program offices that issue policy and guidance for their
                       respective programs. Each agency has three levels of management in
                       field operations.

                       BIJA  field operations consist of state offices, district offices, and resource
                       area offices. Its 12 state offices, each managed by a state director, are
                       responsible for providing statewide program direction, oversight, and
                       coordination of resource programs for federal lands under BLM’S jurisdic-
                       tion. Each state office has several district offices, each headed by a dis-
                       trict manager. Each district office is responsible for two or more
                       resource areas. District offices provide oversight and support to their
                       resource area offices. Resource area offices, each headed by a resource
                       area manager, are the primary field locations for public contact and
                       information on the use of BLM lands.

                       Forest Service field operations consist of regional, forest, and ranger dis-
                       trict offices that manage the nation’s forests. The Forest Service has
                       nine regional offices, each managed by a regional forester. A regional
                       office has several forest offices, managed by a forest supervisor. A
                       forest office is responsible for two or more ranger district offices.
                       Ranger district offices, managed by district rangers, consist of a portion
                       of a forest.


                            and the Forest Service follow a decentralized approach to land use
Land Use Planning      BLM
                       planning and oil and gas leasing and development. BLN state and Forest
Process                Service regional offices develop their own planning policies and proce-
                       dures and have the flexibility to conduct their planning processes on the
                       basis of individual needs and priorities. However, both agencies’ expect
                       resource areas and forests with high oil and gas potential to have sim-
                       ilar oil and gas information in their land use plans.


                       Page 14                                        GAO/RCRIMO-71Oil and Gas Decisions
Chapter 1
introduction




BLM and the Forest Service develop their land use plans for a resource
area or forest by using resource specialists who provide input to the
plan on the basis of their fields of expertise, such as wildlife biology,
geology, range conservation, or forestry. BLM state offices and Forest
Service regional offices oversee the development of and have the
authority to approve the land use plans. Both agencies’ headquarters
provide national guidance on how to develop land use plans; however,
they do not approve completed plans. Figure 1.1 identifies the roles of
BLM and Forest Service personnel in the land use planning process.




 Page 15                                     GAO/WED-90.71 Oil and Gas Decisions
                                          Chapter 1
                                          Introduction




Figure 1.1: BLM and Forest Service Roles in the Land Use Planning Process



                                                                                                Assumes overall responsibility
                                                                                                                                  .
                                                                 -‘-
  Establishes agency wide policy                                        BLM                        for the land use planning
    for regional planning and                                         Director                      system. Issues national
     approves regional guide.                                                                  guidance. Develops procedures
                                                                                                  and sets budget priorities.



                                                                                                                                  L


                                                                                                 Approves the land use plan.
                                                                                               Publishes the proposed plan and
     Develops regional guide                Reglonal                                            files the related environmental
  setting regional standards and            Forester                                                impact statement with the
    guidelines for forest plans.                                                                    Environmental Protection
 Approves individual forest plans.                                                                   Agency. Gives statewide
                                                                                                guidance and controls quality.
                                                                                      i.




                                                                 -                         I        Directly supervises the
                                                                                                         land use plan
    Selects and supervises the               Forest                   District                  and provides quality control at
 team that prepares, implements            Supervlsor                 Manager    -4               the district level. Provides
   and monitors the forest plan.                                 I
                                                                                                   budget and staff support
                                                                                                for the resource area offices.




/j-Y&-
                                           BLM  and the Forest Service have developed a land use planning process
                                           that is intended to meet the requirements of land use planning legisla-
                                           tion and comply with NEPA. Both agencies have determined that, under
                                           NEPA, the development of a land use plan constitutes a major federal
                                           action, and thus requires an EIS. The EXSthen becomes the major analysis
                                           used in developing a land use plan. Both agencies are required by NEPA
                                           to examine alternative combinations of resource uses, including oil and
                                           gas development, and estimate the physical, biological, economic, and


                                           Page 16                                             GAO/RCED-W71 Oil and Gas Decisions
                                    chapter 1
                                    introduction




                                    social effects of implementing each alternative. The land use plan is
                                    developed from the selected alternative or combination of alternatives
                                    in the EIS that best meets the agency’s management objectives for the
                                    area. A land use plan may incorporate one or more resource area(s) or
                                    forest(s).

                                    Nine separate planning steps occur during the development of a BLM or
                                    Forest Service land use plan and related EL% Table 1.1 provides a brief
                                    explanation of each of these steps.

Table 1.1: BLM and Forest Service
Planning Process                    Action                   Description
                                    Identify issues          Solicit information from the public, industry, and government to
                                                             identify issues or land use problems.
                                    Develop plannrng         State the limits of what will or will not be considered during the
                                    criteria                 planning process.
                                    Collect inventory data   Gather existing inventories and other information and develop other
                                    and information          needed information.
                                    Analyze the              Describe the physical and biological characteristics of the land and
                                    management situation     its resource potential.
                                    Formulate alternatives   identify a range of reasonable combinations of resource uses and
                                                             management practices that respond to the planning issues
                                    Estimate effects of      Compare, evaluate, and analyze the impacts of each alternative on
                                    alternatives             the environment.
                                    Select the preferred     Recommend the alternative that best resolves planning issues and
                                    alternative              promotes balanced multiple-use and sustained-yield objectives.
                                    De&elop the land use     Choose or modify the preferred alternative after analyzing public
                                                             comments.
                                    Monitor and evaluate     Track changes and trends in the environment caused by planning
                                    the land use plan        decisions and evaluate compliance with the plan, laws, and policies.


                                    During the land use planning process, mineral specialists develop infor-
                                    mation on oil and gas activity, including available data on the area’s
                                    geology and oil and gas exploration and production in written summa-
                                    ries, tables, or maps. This information should describe previous oil and
                                    gas exploration and production in the area or forest, assess the potential
                                    for finding oil and gas, estimate the amount of oil and gas that might be
                                    discovered, and describe the facilities necessary to produce the oil and
                                    gas. Other resource specialists should identify the potential impacts of
                                    development on the land’s other resources. The resource area manager
                                    or regional forester then makes preliminary decisions about lands to be
                                    open or closed to oil and gas development, including stipulations on
                                    development to mitigate impacts. The draft land use plan is then made
                                    available to the public for comment.




                                    Page 17                                                GAO/RCED9@71Oil and Gae Decisions
                         Chapter 1
                         Introduction




                         BLM  and Forest Service procedures for internal review and approval of
                         plans are different. Authority to approve plans generally rests at a com-
                         parable level in each agency-the Regional Forester in the Forest Ser-
                         vice, and the State Director in BLM. However, in the Forest Service each
                         plan must be routed through Forest Service headquarters for review to
                         ensure that its format is consistent with national standards. BLM head-
                         quarters staff, on the other hand, do not routinely review plans and
                         have delegated this responsibility to the state offices.


                              and Forest Service headquarters issue land use planning regulations
Land Use Planning        BLM
                         and policies and procedures in manuals, handbooks, and other guidance
Policies                 documents. BLM’S Director issues this information to all state offices,
                         which, in turn, distribute them to their district and resource area
                         offices. Similarly, the Forest Service Chief issues this information to all
                         regional offices, which distribute them to their forest and ranger district
                         offices.

                         In November 1986 BLM issued supplemental program guidance that spec-
                         ified the type of oil and gas information that must be included in land
                         use plans and related EIS.5. This guidance notes that all plans are
                         expected to identify areas that are open and closed to leasing and the
                         conditions under which stipulations will be attached to leases. In addi-
                         tion, for areas considered to have high potential for oil and gas develop-
                         ment, the guidance directs that land use plans identify (1) the amount of
                         oil and gas potential, (2) the projected level of development-called   a
                         reasonably foreseeable development scenario, and (3) the projected
                         cumulative impacts of that development. These elements are discussed
                         in greater detail below.

                         Until October 1989, the Forest Service’s requirements for how oil and
                         gas issues are to be considered in land use plans were contained
                         throughout the agency’s planning regulations, manuals, and handbooks.
                         In an October 11, 1989, memorandum, the Forest Service Chief issued
                         guidance similar to BLM’S supplemental program guidance.


                         In order to develop oil and gas on federal lands, an operator must have a
Procedures for Oil and   lease and a drilling permit. A lease usually gives an operator the right to
Gas Development          drill and to perform other necessary development activities, such as




                          Page 18                                     GAO/RCED-90.71Oil and Gas Decisions
                        chapter 1
                        Introduction




                        road building. However, before operators can undertake any surface-dis-
                        turbing activities, they must obtain approval for those actions by sub-
                        mitting an application for a permit to drill to BLM, and in the case of
                        forest lands, to the Forest Service.

                        A drilling permit contains an operator’s plan of operations and is
                        divided into two parts: a surface-use plan describing surface-disturbing
                        activities and a drilling plan describing subsurface activities. For forest
                        lands, the Forest Service approves the surface-use plan. BLM approves
                        the surface-use plan for BLM lands, and approves the drilling plan for all
                        federal lands, including Forest Service lands.


                        The Federal Onshore Oil and Gas Leasing Reform Act of 1987 requires
Objectives, Scope,and   GAO and the National Academy of Sciences to (1) study BIN’S and the
Methodology             Forest Service’s consideration of oil and gas development in their land
                        use plans and (2) make recommendations for improvement to ensure
                        that oil and gas resources are adequately addressed; the social, eco-
                        nomic, and environmental consequences of exploration and development
                        are determined; and any stipulations to be applied to oil and gas leases
                        are clearly identified.

                        The Chairman, Subcommittee on Public Lands, National Parks and For-
                        ests, Senate Committee on Energy and Natural Resources, and the
                        Chairman, Subcommittee on Mining and Natural Resources, House Com-
                        mittee on Interior and Insular Affairs, authored bills that ultimately led
                        to the reform act. In a March 2, 1988, letter, the Chairmen elaborated on
                        the issues that they wanted us and the Academy to address in response
                        to the legislation. As a result of the letter and discussions with their
                        offices, we agreed to focus our review on the following issues: (1)
                        whether land use plans include adequate information on oil and gas in
                        areas of high oil and gas potential, (2) whether BLM and the Forest Ser-
                        vice impose appropriate mitigating measures (stipulations or conditions
                        of approval) on leases and drilling permits to minimize the adverse envi-
                        ronmental consequences of oil and gas development, and (3) what it will
                        cost to improve oil and gas information in land use plans. In addition, we
                        also identified the extent of oil and gas activities on BLM and Forest Ser-
                        vice lands in a separate report7



                        7Federal Land Man ement: The Extent of Oil and Gas Activities on BLM and Forest Service Lands
                        GAO/-Q@1         %‘S , Apr. 11,lQQO).



                        Page 19                                                GAO/RCED-99-71Oil and Gas Decisions
Chapter 1
Introduction




As agreed with the Chairmen’s offices, we and the Academy conducted
independent studies8 We did, however, coordinate our review with
Academy officials and kept them advised of our progress. The
Academy’s report addressed, among other things, the interrelation
between oil and gas leasing decisions and other resource planning
decisions.

We performed our evaluation in four BLM state offices and three Forest
Service regional offices covering four states-California,     Colorado, New
Mexico, and Wyoming. Additionally, we visited Forest Service officials
in region 1 in Missoula, Montana, where all oil and gas leasing activities
have been suspended. The four states were selected because they had
the highest level of oil and gas activity as measured by the number of
producing and exploratory oil and gas wells drilled. Within each state,
we visited officials from the applicable BLM state office, one resource
area office, and applicable district office staff. Similarly, for the Forest
Service, we met with Forest Service officials in region 2 in Lakewood,
Colorado; region 3 in Albuquerque, New Mexico; and region 5 in San
Francisco, California; and visited one forest, district, and ranger district
office in each state.

We selected resource areas and forests that were identified as having
the most oil and gas activity in each state. Resource areas visited were
Caliente, in California; White River, in Colorado; Farmington, in New
Mexico; and Platte River, in Wyoming. Forests visited included Los
Padres, in California; San Juan, in Colorado; Carson, in New Mexico; and
Medicine Bow, in Wyoming.

 We interviewed environmental, planning, and minerals staff in BIN and
 Forest Service headquarters and state and local offices. We obtained pol-
 icies and procedures on the development of land use plans and the oil
 and gas leasing program, and information on the cost to amend plans,
 the process used to lease lands for oil and gas exploration, and how stip-
 ulations and conditions of approval are imposed on leases and drilling
 permits, respectively.

 To address the adequacy of oil and gas information in land use plans, we
 conducted a two-phased approach. First, because neither BLM nor the
 Forest Service had information on a nationwide basis, our staff geologist
 identified resource areas and forests located in productive or potentially

 %Xe Academy’s report, entitled Land Use Planning and Oil and Gas Leasing on Onshore Federal
 Lands was issued in Sept. 1989.



 Page 20                                                 GAO/RCEIMO-71Oil and Gas Decisions
Chapter 1
Introduction




productive oil and gas provinces.g The geologist mapped current and
previous oil and gas production locations by provinces using a variety of
government and petroleum industry maps, reports, and professional
journals. Using maps obtained from BLM that identified resource areas,
 and a map from the Forest Service that identified all forests, our geolo-
 gist determined which of the 141 BLM resource areas and 156 national
 forests were located in productive or potentially productive oil and gas
 provinces.1o

The geologist determined that 62 BLM resource areas and 56 forests are
located in productive or potentially productive oil and gas provinces.
Because of time constraints, the geologist did not verify whether the
federal lands within the provinces were currently productive. We
reviewed 40 BLM plans and related EISScovering 41 of the 62 BLM
resource areas; the remaining 21 resource areas are generally covered
by different types of plans and, therefore, not included in our detailed
review.ll We reviewed 42 Forest Service land use plans and related EISs
covering all 56 forests located in high oil and gas potential areas. A total
of 82 plans and related EISSwere reviewed, covering 97 BLM and Forest
Service lands.

We did not review any BLM plans covered by the Alaska or the Eastern
States Offices, which do not have resource areas. Their planning efforts
are different than those of the other state offices. The Alaska State
Office plans by district; and the Eastern States Office plans by state. In
addition, the Eastern States Office is not completing land use plans as
provided for by FLPMA;rather, it is completing less detailed documents
called “planning analyses” provided for in BLM’S implementing regula-
tions. Among the most significant differences between a land use plan
and a planning analysis is that the former requires an EIS, while the
Eastern States Office is completing its planning analyses with environ-
mental assessments.

 Second, we identified five key elements required by NEPA regulations or
 BLM and Forest Service regulations and/or guidance (including BLM’S sup-
 plemental program guidance) as essential for the agencies to assess the
 environmental impacts of oil and gas development in resource areas and

 QForpurposes of this report, we will consider these areas high potential oil and gas areas.
 “Alaska was not included in this determination.

 “These areas are generally covered by “management framework plans.” These plans generally do
 not meet FLPMA or NEPA requirements and are sometimes unpublished documents It is not unusual
 for several of these documents to etit for one resource area.



 Page 21                                                     GAO/RCEDBO-71Oil and Gas Decisions
chapter 1
Introduction




forests with high oil and gas potential. These elements are (1) oil and
gas potential, (2) reasonably foreseeable development scenario(s), (3)
indirect impacts, (4) cumulative impacts, and (5) lease stipulations. Offi-
cials from BLM and the Forest Service as well as officials from environ-
mental and industry groups concurred that these elements are necessary
to address the environmental impacts of oil and gas development.

We then developed criteria to assess each element on the basis of infor-
mation in NEPA regulations, BLM’S supplemental program guidance,
Forest Service regulations and guidance, and discussions with BLM and
Forest Service officials. We developed our criteria to serve as a baseline
for minimal requirements that, we believe, must be met to address each
element. Because these elements and criteria are not necessarily all-
inclusive, the EISS and other environmental studies that meet our criteria
for all five elements cannot be automatically assumed to fully comply
with NEPA, Appendix I describes the five elements and their associated
criteria. Appendixes II and III contain the results of our review of the 82
land use plans using the criteria.

In addition, because the reform act specifically asked us, we reviewed
the land use plans and related EISS to determine how social and economic
consequences were addressed. After reviewing NEPA, BIN, and Forest
Service regulations and guidance, and discussing the issue with agency
officials, we developed criteria to assess how social and economic conse-
quences were addressed in the land use plans. In order to fully address
this element, our criteria were that the land use plan and related EIS
contain a narrative or table assessing the future impacts of oil and gas
development on the local economy, in terms of jobs and/or actual dol-
lars. See appendix IV for a summary of our findings regarding this issue.

To determine whether BLM and the Forest Service impose appropriate
stipulations on leases, we reviewed recent lease sale protests that have
occurred nationwide. To determine if conditions of approval identified
in approving oil and gas drilling activity were attached to the permits,
we focused our examination on recent drilling permits for two reasons:
(1) most of the leases for the resource areas and national forests visited
were issued before land use plans were required or completed, and, in
many instances, before NEPA was passed, and (2) the approval of a
drilling permit represents the third and final key decision point for the
development of oil and gas resources. To determine whether appropriate
conditions of approval are included on drilling permits, we reviewed all
or a sample of permits approved in fiscal year 1988 at the four resource



 Page 22                                    GAO/ECED-B&71Oil and Gas Decisions
Chapter 1
Introduction




areas and four forests we visited. For each approved permit, we identi-
fied the resources present in the affected area and the conditions of
approval that should be included in the permit; and determined if the
identified conditions were actually included in the approved permit. We
reviewed agency files, including the permit application documentation,
and interviewed resource specialists to determine whether required con-
ditions were attached to the permits. If conditions of approval were not
included, we attempted to determine through discussions with agency
officials why they were missing.

Because we sampled drilling permits, our estimates of the percentage of
permits approved without applicable conditions are subject to sampling
error. The sampling error is the maximum amount by which results
obtained from a statistical sample can be expected to differ from the
true universe characteristic (value) we are estimating. At the 95-percent
confidence level, this means that the chances are 19 out of 20 that if we
reviewed all permits, the results would differ from the estimates we
obtained by less than the sampling error of these estimates. The two
sampling errors for the estimates in this report were calculated at the
95-percent confidence level and do not exceed 2 percent.

To determine BLM and Forest Service cost and schedule estimates for
developing oil and gas information in land use plans and the basis for
those estimates, we: (1) determined the agencies’ strategy to revise land
use plans, including cost and schedule estimates; (2) determined the
basis for those estimates; and (3) assessed the reasonableness of the
estimates. In addition, in one Forest Service region that has suspended
leasing until necessary environmental studies are completed, we com-
pared the cost of completing the necessary environmental studies with
the revenue that has been lost because of leasing delays.

For this comparison, we obtained cost estimates from the Forest Ser-
vice’s region 1 office to complete environmental studies in that region’s
forests, and estimated lost and foregone rent, and royalty revenues. Spe-
cifically, the Forest Service estimated that one-third of all acreage
offered in the region would be leased, and we calculated the amount of
rental revenue that is lost annually because lands are not being leased in
the region. The Forest Service estimated that 100 percent of the Little
Missouri National Grasslands would be leased. On the basis of that
assumption and after considering the bonus bids received from seven
sales of state leases that occurred from April 1987 to May 1989 in the
same area, we estimated foregone bonus bid revenue. To complete our



Page 23                                    GAO/RCED-9@71Oil and Gas Decisions
Chapter 1
Introduction




analysis, we accepted Forest Service estimates of the amount of fore-
gone royalty revenue for the Little Missouri National Grassland.

We also met with special interest groups in Washington, D.C., and in the
states we visited: the Colorado Environmental Coalition, Burlington
Northern Inc.,‘2 the National Wildlife Federation, the New Mexico Oil
and Gas Association, the Rocky Mountain Oil and Gas Association, and
the Sierra Club Legal Defense Fund. We obtained these interest groups’
comments regarding BLM and Forest Service land use plans and the oil
and gas leasing program.

Our work was performed primarily from May 1988 through October
1989 in accordance with generally accepted government auditing
standards.

The Department of the Interior and the Forest Service provided written
comments on a draft of this report. Interior’s comments are presented
and evaluated in appendix VIII and the Forest Service’s comments are
presented and evaluated in appendix IX.




12This company is the holding company for Meridian Oil and El Paso Pipeline Co.



Page 24                                                  GAO/RCED-90-71Oil and Gas Lkcisiona
Chapter 2

Oil and Gas Leasingand DevelopmentContinue
Without Adequate Information And/Or
Mitigating Stipulations
                       The management decisions made in a land use plan-such as whether to
                       allow leasing in a given resource area or national forest-represent   the
                       first of three key decision points for the development of oil and gas
                       resources. However, our examination of 82 land use plans and related
                       EXSS  showed that most plans did not address or only partially addressed
                       one or more of the five key elements essential to assess the environ-
                       mental impacts of oil and gas leasing and development decisions. To the
                       extent that these plans and related EL%are used to make such decisions,
                       more information is needed.

                       In addition, at the other two subsequent decision points-issuance of a
                       lease and approval of a drilling permit-we    found that the four BIN
                       offices and the four Forest Service offices we visited (1) rely on environ-
                       mental studies that lack the necessary oil and gas information to make
                       informed decisions concerning environmental impacts;1 (2) continue to
                       approve some drilling permits even though additional environmental
                       studies, identified as needed by the agencies, have not been completed;
                       and/or (3) do not always include mitigating measures (stipulations or
                       conditions of approval) required in the leases or permits to minimize the
                       environmental impact of oil and gas development. Consequently, some
                       leasing and development decisions have been contested in administra-
                       tive and judicial actions, suspending or delaying oil and gas development
                       activities.


                       In resource areas and forests with high oil and gas potential, decisions
Five Key Elements      relating to oil and gas activities and compliance with environmental
Should Be Adequately   requirements converge at three key points: (1) developing a land use
Addressed at Three     plan, (2) issuing oil and gas leases, and (3) approving drilling permits. At
                       each point, the responsible agency must assess whether it has ade-
Decision Points        quately disclosed information on such essential elements as (1) oil and
                       gas potential, (2) reasonably foreseeable development scenario(s), (3)
                       indirect impacts, (4) cumulative impacts, and (5) lease stipulations.
                       When adequate information is not available on one or more of the ele-
                       ments to make leasing and/or development decisions, the agency must
                       complete the additional environmental studies, and/or draw on existing
                       studies, to reach an informed decision.




                       ‘For purposes of this report, environmental studies encompass the El& prepared as part of the land
                       use planning process as well as areawide environmental assesments and other EISs and environ-
                       mental assessmentsdeveloped to support leasing and development decisions.



                       Page 26                                                   GAO/WED-S&71 Oil and Gas Decisions
                            Chapter2
                            Oil and Gas Leasing and Development
                            Continue Without Adequate Information
                            AndjOr Mitigating Stipulations




                            A judgment about the adequacy of available information on a particular
                            element is subjective. However, we believe that the criteria we devel-
                            oped to assess whether an element is fully or only partially addressed in
                            land use plans, related EISS, and other environmental studies represent
                            minimal requirements that must be met. As we cautioned previously,
                            these elements and criteria are not necessarily all-inclusive, and land use
                            plans, related EISS, and other environmental studies that meet our cri-
                            teria for all five elements cannot be automatically assumed to be in full
                            compliance with NEPA.


                            To the extent that BLM and the Forest Service rely on land use plans
Inadequate                  and/or related environmental studies to support leasing and/or develop-
Environmental Studies       ment decisions, they must ensure that these plans and/or related studies
Used to Support             contain sufficient information to meet NEPA requirements. However,
                            most of the BLM and Forest Service land use plans that we reviewed did
Leasing and                 not fully address one or more of the key elements essential to ade-
Development                 quately assess the impacts of oil and gas development. Additionally, for
Decisions                   three of the four resource areas and all four of the forests we visited,
                            other environmental studies used to meet NEPA requirements for oil and
                            gas leasing and development decisions did not adequately address one or
                            more of the key elements. Yet, the agencies continue to rely on these
                            documents to support their leasing and development decisions,


Most Land Use Plans Do      We found that 75 of 82 land use plans and related EISS covering BLM and
                            Forest Service lands having high oil and gas potential did not fully
Not Contain Essential Oil   address one or more of the 5 key elements. Table 2.1 shows the extent to
and Gas Information         which the elements were fully addressed for the plans. In all, only 7 of
                            the 82 plans met our criteria for all 5 elements-6 plans in BLM and 1
                            plan in the Forest Service. (See apps. II and III for the extent to which
                            each of the 5 elements was addressed.)




                            Page 28                                     GAO/RCED9@71OilandGas Decisions
                                              Chapter 2
                                              Oil and Gas Len&g and Development
                                              Continue Without Adequate Information
                                              And/or Mitlgatlug stipulatIoM




Table 2.1: Extent to Which Key Elements
Were Fully Addressed in 82 BLM and            Number of elements               BLM                  Forest Service             Total plans
Forest Service Plan8                          fully addressed            Number    Percent         Number    Percent        Number      Percent
                                              None                               3             8          4            10          7             9
                                              One                                6            15         14            33         20            24
                                              Two                                                                                               37
                                              Three                              6            15          4            10          10           12
                                              Four                               5            13          3             7           8           IO
                                              Five                                                                      2                        9
                                              TOW                               40                       42                       82


                                              The extent to which the 82 land use plans addressedeach of the five
                                              elements varied greatly by element. For example, 71 of the 82 plans did
                                              not cite the cumulative impacts of a reasonably foreseeabledevelopment
                                              scenario. The following is a brief summary of how the plans addressed
                                              each element.2
                                              Oil and gas potential. Sixty plans met the criteria by identifying in a
                                              map, narrative, or table areas of high, medium, low, unknown, or no oil
                                              and gas potential. An additional 17 plans partially addressedthis
                                              element.
                                              Reasonably foreseeabledevelopment scenarios.Twentyone plans met
                                              the criteria by projecting the number of wells that BLM or the Forest Ser-
                                              vice expects to be drilled during the life of the plan. Forty-five plans
                                              partially addressedthis element.
                                              Indirect impacts. Forty-nine of the plans met the criteria by discussing
                                              the anticipated impacts of oil and gas development on other resourcesin
                                              the area. An additional 20 plans partially addressedthis element.
                                              Cumulative impacts. We could not develop criteria to assessthe ade-
                                              quacy of these plans’ treatment of cumulative impacts becauseneither
                                              BLM nor the Forest Service had issued applicable guidance at the time of
                                              our review. However, in order to address cumulative impacts of oil and
                                              gas development, land use plans must first project a reasonably foresee-
                                              able development scenario. Of the 21 plans that projected a development
                                              scenario, only 11 specifically cited the cumulative impacts of such a sce-
                                              nario in discussing impacts on other resources.
                                          .   Leasestipulatiok Thirty-five plans met the criteria by identifying
                                               applicable stipulations through a map, narrative, or table for all areas
                                               within a resource area or forest. An additional 44 plans partially
                                               addressedthis element.

                                               2App. V provides a detailed breakdown by element of the number of plans that met the criteria,
                                               parthlly met the criteria, or did not identify the element.



                                               Page 27                                                   GAO/RCED9&71011 and GM De&ions
                              Chapter 2
                              Oil and GM Leasing and Development
                              Continue Without Adequate Information
                              And/Or Mitigating Stipulations




                              The NEPA regulations permit agencies to supplement their land use plans
                              and related EISS with other studies before issuing leases or approving
                              drilling permits. The four BLM resource area offices and the four national
                              forest offices we visited often based leasing and development decisions
                              on the EISSprepared as part of the land use planning process and/or
                              areawide oil and gas environmental assessments. However, these studies
                              either did not identify or only partially addressed one or more of the key
                              elements. (See app. VI for the results of our review of the land use plans
                              and applicable areawide environmental assessments covering the four
                              resource areas and four forests.) Two of the eight offices referred solely
                              to the land use plan in approving leases and/or drilling permits. The
                              other six offices referenced the areawide oil and gas environmental
                              assessments and/or the land use plans. In seven of the eight offices, the
                              land use plans and/or areawide environmental assessments, when taken
                              together, did not fully address all of the five key elements. For example,
                              at three offices the applicable environmental studies did not identify or
                              only partially addressed a reasonably foreseeable development scenario.
                              As a result, these resource areas and forests also could not address the
                              cumulative impacts of projected oil and gas development.


Drilling Permits Approv -ed   If BJ..Mand the Forest Service determine that the information in land use
Before Needed Studies         plans or environmental assessments is inadequate, NEPA regulations
                              require them to develop additional information before deciding to issue
Completed                     a lease or approve a drilling permit. At two of the four resource area
                              offices and two of the four forest offices visited, the agencies had identi-
                              fied the need for more comprehensive environmental studies. However,
                              three of these four offices continued to approve drilling permits even
                              though the additional studies had not been completed. Although two of
                              the three studies are now complete, our review shows that neither study
                              fully addresses the five key elements essential to assess the environ-
                              mental impacts of oil and gas development. Although the needed study
                              was completed at the fourth office before development activities were
                              allowed to begin, it did not fully address the five key elements.

J3-wironmentalImpacts of      In 1988, at two resource area offices and one forest office we visited, the
Producing MethaneGasFrom a    existing plans and/or environmental studies were inadequate because
coal seam                     they did not analyze the environmental impacts of producing methane
                              gas from a coal seam called the Fruitland Formation. Drilling for coal-
                              bed methane gas was initiated in BLM'S Farmington resource area and
                              the Forest Service’s Carson National Forest, both in New Mexico, and
                              the San Juan National Forest in Colorado as a result of a tax credit
                              offered for developing nonconventional fuel sources. Under the law,


                              Page 28                                      GAO/RCEIMO-71Oil and Gas Decisiona
                                   Chapter 2
                                   Oil and Gas Leamingand Development
                                   Continue Without Adequate hformation
                                   And/Or Mitigating Stipulatious




                                   wells had to be drilled by December 31, 1989, (since extended to Dec. 3 1,
                                   1990) to qualify for the credit.

                                   All three areas determined that additional studies were required. For
                                   example, Farmington resource area officials stated that coal-gas devel-
                                   opment requires larger drill pads than conventional development and
                                   acknowledged potentially greater impacts on surface resources. More-
                                   over, many of these wells may produce large quantities of water, cre-
                                   ating a potential disposal problem. The following identifies the status of
                                   these studies as of May 1990:

                               l The Farmington resource area issued its environmental assessment in
                                 November 1988. The assessment projected that 600 wells would be
                                 drilled in the Fruitland Formation by December 31, 1989. This projec-
                                 tion included almost 100 wells already drilled before November 1988.
                                 The environmental assessment concluded that the coal-gas development
                                 would not result in significant impacts to the human environment as
                                 long as conditions of approval were added to drilling permits.
                               . The Carson forest completed its environmental assessment in April
                                 1989, concluding that there would be no significant impacts from coal-
                                 gas production.
                               . The San Juan forest is in the process of preparing an EIS to determine
                                 the impacts of coal-gas production in its portion of the Fruitland Forma-
                                 tion and expects to have a draft of the study by July 1990.

                                   Prior to completing these additional environmental studies, Farmington
                                   and the two forests issued 97 leases and approved over 210 gas wells
                                   through fiscal year 1988. Approximately 70 of these leases and about
                                   190 of these approved wells were within the Farmington resource area.

                                   Although two of the three additional studies are now complete, they do
                                   not fully address all five of our key elements. For example, although the
                                   Farmington study concludes that there will be no significant impacts
                                   associated with coal-gas development, it did not adequately address
                                   cumulative impacts. Also, the study for the Carson forest only partially
                                   addressed indirect impacts and lease stipulations.

Environmental Impacts of Oil        The White River resource area in Colorado completed an environmental
and GasDevelopmentin a              assessment in April 1988 for approving oil and gas development in the
ColoradoResourceArea                Douglas Creek area. The study projected that 28 wells would be drilled
                                    in that area. Officials told us that if more wells are drilled than pro-
                                   jected, they will complete an additional environmental study. In our



                                   Page 29                                     GAO/RCED-9@71Oil and Gas Decisions
                       Chapter 2
                       Oil and Gas Leasing aud Development
                       Continue Without Adequate Information
                       And/Or Mitigating Stipulations




                       review of the April environmental assessment, we found that the ele-
                       ments of oil and gas potential, reasonably foreseeable development sce-
                       narios, and indirect impacts met our criteria. However, we did not find a
                       specific citation of cumulative impacts. Conditions of approval also were
                       included-although     the assessment does not clearly show which condi-
                       tions of approval apply to which well sites. The assessment concludes
                       that the environmental impact of the projected level of oil and gas devel-
                       opment is not significant. Nevertheless, no wells were allowed to be
                       drilled before the environmental assessment was completed.


                       Before issuing a lease, the BLM resource area offices and national forests
Conditions of          we visited identified stipulations from land use plans and/or other envi-
Approval Not Always    ronmental studies as well as in-house maps and records. Before
Included in Drilling   approving drilling permits, these offices conducted on-the-ground
                       inspections of the areas to approve the location of surface-disturbing
Permits                activities, such as roads and well pads, and to identify conditions of
                       approval needed to protect resources identified at the sites. Resource
                       specialists in the offices were also consulted to identify the resources
                       present in the areas and to help identify any necessary conditions of
                       approval.

                       We estimate that 96 percent of the oil and gas drilling permits we sam-
                       pled at the resource areas and national forests visited were for leases
                       issued before applicable land use plans were completed, and, in many
                       instances, before NEPA was passed. Consequently, these leases do not
                       include certain stipulations that resulted from subsequent land use
                       plans. In these instances, however, BLM and Forest Service officials said
                       that they have been able to include appropriate conditions of approval
                       in the drilling permits to mitigate the adverse impacts of oil and gas
                       development.

                       To determine whether appropriate conditions of approval were attached
                       to drilling permits, we reviewed all or a sample of permits approved in
                       fiscal year 1988 at the four resource areas and four forests we visited.
                       We identified the resources located in the affected area; and the condi-
                       tions of approval the agencies believed were necessary to protect those
                       resources,3 and determined whether those conditions of approval were
                       actually included in the permit.

                       3We identified these conditions by reviewing the environmenkxl studies the agencies provided us as
                       well as discussing the permits with appropriate resource specialists Unlike the land use plans, how-
                       ever, we did not assessthe adequacy of the environmental studies; we merely extracted the condi-
                       tions of approval from them.



                       Page 30                                                    GAO/RCJXHJ@71Oil and Gas Decisions
                                       Chapter 2
                                       Oil and Gas Leasing and Development
                                       Continue Without Adequate Information
                                       And/Or Mitigating Stipulations




                                       We estimate that an average of 10 percent of drilling permits in the
                                       offices we visited were approved without one or more of the required
                                       conditions of approval. The actual number of permits reviewed at these
                                       BLM resource area and Forest Service offices is shown in table 2.2.

Table 2.2: Fiscal Year 1988 Drilling
Permits Issued Without One or More                                                                                                 Permits
Appropriate Conditions of Approval                                                                Drilling         Permits         missing
                                       Area                                                       permits        reviewed       conditionsa
                                       BLM
                                       Caliente, California                                             85               85                 26
                                       White River, Colorado                                            44               29                  Ob
                                       Farmington, New Mexico                                          279               80                  3b
                                       Platte River, Wyoming                                           104               53                  3b
                                       BLM Total                                                       512              247                      b

                                       Forest Service
                                       Los Padres, California                                             5                5                 0
                                       San Juan, Colorado                                                 6                6                 2
                                       Carson, New Mexico                                                16               16                11
                                       Medicine Bow, Wyoming                                             10               10                 2
                                       Forest Service Total                                              37               37                15
                                       We discussed our findings with BLM resource area offices and Forest Service ranger distnct offices
                                       because these offices have primary responsibility for including conditions of approval in permrts.

                                       bThese data are for information purposes only. They should not be used to estimate the total number of
                                       permits missing conditions of approval in the individual offices visited.


                                       The type of missing conditions of approval varied. For example, cul-
                                       tural/archaeological requirements, such as suspending work in the event
                                       of the discovery of any historic or prehistoric ruin, monument, or site,
                                       were missing from 25 BLM drilling permits. Also, standard conditions of
                                       approval, such as measures to protect soil and watersheds, were not
                                       attached to eight BLM permits. And specific conditions of approval, such
                                       as certain wildlife restrictions, were missing from 11 Forest Service
                                       drilling permits.




                                       Page 31                                                     GAO/ECED-9&71Oil and Gas Decisions
                      Chapter 2
                      Oil and Gas Leasing and Development
                      Continue Without Adequate Information
                      And/Or Mitigating  Stipulations




                      Over the past several years, environmental groups have challenged
SomeLeasing and       some BLM and Forest Service leasing and development decisions, either
Development           through BLM’S internal administrative protest procedures or through the
Decisions Have Been   courts. Recent lease sale protests have generally focused on two con-
                      cerns:4 (1) the stipulations attached to a lease were not adequate and (2)
Contested             the cumulative impacts of oil and gas development were not adequately
                      addressed in developing an EISor other environmental study.

                      As of May 1989, lease sales had been protested in Colorado, Montana,
                      Utah, and Wyoming. Additionally, since June of 1987, an environmental
                      group has been appealing the adequacy of the environmental study cov-
                      ering portions of four forests in California. Several groups have pro-
                      tested recent lease sales, in part, because stipulations were (1) not
                      identified in the land use plans; (2) when identified, were not attached
                      to the leases involved in the sales; or (3) challenged as not being effec-
                      tive. BLM generally upheld these protests and either retroactively
                      attached the required stipulations to the leases or suspended the sales.

                      Although both agencies have been subjected to administrative protests,
                      the Forest Service has borne the brunt of the litigation. The Forest Ser-
                      vice has faced intensive scrutiny by environmental groups because, it is
                      generally agreed, the Forest Service has more environmentally sensitive
                      lands. Three recent circuit court decisions involving Forest Service lands
                      have addressed the level of information necessary to make adequate
                      leasing and development decisions and meet NEPA requirements.

                      Two decisions involved cases in which BIB issued leases on over 1 mil-
                      lion acres of Forest Service lands. The District of Columbia Circuit
                      Court6 and the 9th Circuit Court in California6 found that unless leases
                      are issued with no-surface-occupancy stipulations, leasing constitutes an
                      “irretrievable and irreversible commitment of resources.” As such,
                      under NEPA, the environmental impacts of the proposed actions must be
                      assessed in EISS before leases are issued. The courts held that leases
                      lacking no-surface-occupancy stipulations only give the government the
                      right to impose reasonable conditions on the development, not the right
                      to prevent development. Therefore, the courts have held that the envi-
                      ronmental impacts of the proposed actions must be assessed before

                      4Since BJA issues the leases for federal lands, lease sales are challengedthrough the BLM adminis-
                      trative protest process. If Forest Service lands are involved, the Forest Service assists in resolving the
                      protest.
                      5Sierra Club v. Peterson, 717 F2d 1409, D.C. Circuit, 1983.

                      ‘Conner v. Burford, 848 F2d 1441,Qth Circuit, 1988.



                      Page 32                                                       GAO/RCEMO-71 Oil and Gas Decisions
              Chapter 2
              Oil and Gas Leasing and Development
              Continue Without Adequate Inf’ormation
              And/Or Mitigating Stipulations




              issuing the leases. The courts held that the agencies could issue leases
              with no-surface-occupancy stipulations without first completing EISS
              because they reserved to the government the absolute right to preclude
              all surface-disturbing activity.

              In another case, challenging the issuance of one lease, the 10th Circuit in
              Colorado ruled that the Forest Service’s environmental assessment,
              which concluded that the issuance of oil and gas leases in the Shoshone
              National Forest would have no significant impact on the environment,
              was adequate.’ The court held that the Forest Service did not have to
              prepare an EIS because (1) it had prepared an extensive environmental
              assessment, (2) the lessee’s development plans were too speculative to
              trigger the need for an EIS, and (3) the lease subjected all development
              proposals to continuing NEPA review.

              Industry groups believe the Conner and Park County decisions are
              inconsistent and petitioned the Supreme Court to review the Conner
              decision. Industry argued that under Conner leasing will always require
              preparing an EIS, while under Park County leasing did not have to be
              preceded by an EIS. The Supreme Court denied the petition for review on
              February 21, 1989.

              These administrative or judicial actions have delayed oil and gas devel-
              opment activities. To date, the Forest Service has formally suspended
              leasing on about 35 million acres of land, pending completion of environ-
              mental studies that adequately assess the cumulative impacts of devel-
              opment, and BLM has done the same for several thousand acres of its
              lands.


              A number of administrative protests and lawsuits have occurred
Conclusions   because leasing and development decisions were based on inadequate
              information about the environmental impacts of oil and gas activities,
              and because leases were issued and drilling permits approved without
              including all of the required stipulations or conditions of approval. Some
              of these protests and court decisions have resulted in leasing and devel-
              opment being suspended on about 35 million acres of Forest Service land
              and on several thousand acres of BLM land. The agencies have resolved
              other protests by retroactively attaching the required stipulations to the
              leases.

              7Park County Resource Council, Inc. v. US. Department of Agriculture, 817 F2d 609, 10th Circuit,
              1987.



              Page 33                                                   GAO/RCED9&71 Oil and GM Decisions
Chapter2
Oil and Gas Leasing and Development
Continue Without Adequate Information
And/Or hiit&ating Stipulations




Most BLM and Forest Service land use plans and related environ-
mental studies for resource areas and forests with high oil and gas
potential do not contain adequate information necessary to make
informed decisions about the environmental impacts of oil and gas
leasing and development. Although the plans and studies are often
deficient, BLM and the Forest Service often relied on these plans and
studies when issuing leases and approving drilling permits.

We recognize that the expiration of the tax credit for nonconventional
fuel sources placed added pressure on BIN and the Forest Service to con-
tinue approving drilling permits in the Fruitland Formation while the
necessary environmental studies were still ongoing. However, these
agencies recognized that they did not meet NEPA requirements. Regard-
less of the final outcome, we believe that approving permits to drill
without having first completed the environmental studies required by
WA regulations does not meet the spirit of a multiple-use philosophy
because it places oil and gas development ahead of the use of other
resources, and does not comply with NEPA.




Page34                                    GAO/RCED-9@7lOilandGas Decisions
Status of BLM and Forest Service Initiatives to
Improve Information and Related
Cost Estimates
                       BLM and the Forest Service have begun to improve their information      on
                       the environmental impacts of oil and gas activities. However, we believe
                       that more needs to be done. BLM plans to develop the needed information
                       by amending land use plans or completing new ones. Towards this end,
                       it has identified resource areas with high oil and gas potential and/or
                       high industry interest and plans to amend existing plans or prepare new
                       ones for many of these areas. The Forest Service’s approach to devel-
                       oping the needed information is less clear, but it appears that the
                       regional offices will have the option of amending existing land use
                       plans, supplementing the plans with additional environmental studies
                       before issuing leases or approving drilling permits, or clarifying infor-
                       mation already contained in the plans. As a first step, regional offices
                       have identified those forests that they believe need more detailed oil
                       and gas information.

                       We believe, however, that both BLM and the Forest Service may have
                       underestimated the number of resource areas and forests, respectively,
                       that need additional information on the environmental impacts of oil
                       and gas activities before issuing leases or approving permits to drill.
                       Until BLM and the Forest Service accurately determine the total number
                       of plans and studies that need to be amended or prepared, the total cost
                       to improve oil and gas information will be unknown. However, we
                       believe that developing this information may be cost-effective for
                       resource areas and forests with high oil and gas potential because fore-
                       gone and delayed revenues resulting from suspended leasing activities
                       appear to far exceed any reasonable estimated cost to develop such
                       information.


                       After the reform act was passed in 1987, BLM increased its efforts to
BLM Plans to Improve   incorporate more oil and gas information into its land use plans. How-
Oil and Gas            ever, we believe that to the extent that land use plans are used to make
Information but        leasing and development decisions, more resource areas than currently
                       identified and scheduled by BLM may require additional oil and gas
Underestimates the     information.
Number of Resource
                       Information provided to us by BLM in March 1990 and supplemented in
Areas                  an April 18, 1990, Federal Register notice, indicates that BLM has identi-
                       fied 49 resource areas with high oil and gas potential and/or high
                       interest to industry that need improved oil and gas information. BLM
                       officials told us that 2 new plans have been completed, and 24 new
                       plans and 13 amendments covering the 49 resource areas are tentatively



                       Page 36                                     GAO/RCED9@71Oil and Gas kisions
                          Chapter 3
                          Statue of BLBf and Forest Service Initiativea
                          to Improve Information and Belated
                          Cost Jzalmatea




                          scheduled to be completed by fiscal year 1996. (See table VII.1 in app.
                          VII, for BLM’S schedule.)

                          Generally, BLM is preparing new plans for those resource areas currently
                          operating under a management framework plan. Management frame-
                          work plans are planning documents usually completed prior to the
                          enactment of FLPMA;they do not have EISSand/or meet current require-
                          ments for public involvement. BLM has determined that these plans do
                          not meet its supplemental program guidance. It believes that when these
                          scheduled efforts are completed, virtually all of BLM’S land use plans for
                          identified oil and gas priority areas will comply with its supplemental
                          program guidance.

                          BLM  plans to develop new plans or amendments for 45 of the 55 resource
                          areas that we identified as having both high oil and gas potential and
                          inadequate land use plans for making well-informed oil and gas leasing
                          and/or development decisions.’ We believe that improved oil and gas
                          information may be required for the remaining 10 resource areas. (See
                          table VII.2 in app. VII for a list of these resource areas.)


                          A 1988 internal assessment by the Forest Service concluded that almost
Forest Service Plans to   all of its land use plans and accompanying EISS would not meet existing
Improve Oil and Gas       oil and gas planning requirements. The Forest Service has begun to
Information but           improve its oil and gas information. Responding to our September 1989
                          testimony that addressed inadequacies in the Forest Service’s land use
Approach Unclear          pla.n~,~the Forest Service Chief issued an October 11, 1989, directive to
                          the regional foresters that land use plans must provide a good basis for
                          oil and gas leasing decisions when there is oil and gas potential or
                          interest in leasing. Offices were instructed to prioritize forests and com-
                          plete additional environmental studies, including amending land use
                          plans when appropriate. As of March 1990, the Forest Service had iden-
                          tified 46 forests on the basis of industry interest for oil and gas leasing
                          that need improved oil and gas information. Fifteen of these forests
                          were not identified by us as high oil and gas potential areas. As of

                          ‘Of the 49 resource areas identified by BLM, 4 were not included on our list of plans that may require
                          additional information. We reviewed plans for two of these areas-the Cody resource area plan in
                          Wyoming and the Book Cliffs resource area plan in Utah-and found that both met our criteria for
                          all five elements. We did not evaluate the Border resource area plan in Oregon or the Lahontan
                          resource area plan in Nevadabecause they were not on our list of oil and gas resource areas with
                          high potential.

                          21mplementation of the Federal Onshore Oil and Gas Leasing Reform Act of 1987, (GAO/T-
                          RcEbs9-69, Sep. 28, 1989).



                          Page 36                                                     GAO/RcED-go-71Oil and Gas Decisions
                         Chapter 3
                         Statns of BLM and Forest Service Initiatives
                         to Improve Information and Related
                         cost Bstimates




                         March 1990, the Forest Service had completed additional studies for five
                         forests; the remaining studies are expected to be completed by fiscal
                         year 1994.” (See table VII.3 in app. VII for the Forest Service’s tentative
                         schedule.)

                         In addition to the 46 forests the Forest Service identified (31 of which
                         we also identified), we identified another 24 forests with high oil and
                         gas potential that had limited information on oil and gas in their land
                         use plans. We believe that many of these 24 forests may require
                         improved oil and gas information prior to making leasing and develop-
                         ment decisions. (See table VII.4 in app. VII for a list of these forests.)


                         Until BLM and the Forest Service determine the total number of land use
An Accurate Estimate     plans and environmental studies that need to be completed or amended,
of the Total Cost to     the total cost cannot be estimated with any degree of certainty. How-
Develop Additional Oil   ever, we computed rough cost estimates for BLM to develop 24 new plans
                         and to amend 13 existing plans by using costs provided by BLM head-
and Gas Information Is   quarters to develop new plans or amendments. According to BLM head-
Not Possible Now         quarters planning officials, a state office is normally allocated $300,000
                         to develop a new plan and $100,000 to amend an existing plan. Applying
                         these amounts to the 37 plans to be developed or amended, we estimate
                         that revisions would cost about $8.5 million. Adding the 10 additional
                         resource areas that we believe may require new plans or amendments
                         would increase the cost even further.

                         BLM  officials generally agree that the amount allocated by headquarters
                         to prepare or amend a plan are less than the total cost incurred. BLM’S
                         Chief of Planning and Environmental Coordination stated that the
                         agency does not know the actual cost of preparing a land use plan or the
                         cost of amending an existing plan to improve oil and gas information.
                         Although $300,000 is an estimate of the costs needed to prepare a new
                         plan, he said this estimate does not generally include funding for
                         resource specialists who participate in preparing the plan. BLM’S Colo-
                         rado state office officials estimated that the actual cost of preparing a
                         land use plan may be $400,000.

                         Because the Forest Service is still not sure how many of the 46 forests
                         identified as needing improved oil and gas information will require
                         amended land use plans, supplemental environmental studies, or clarifi-
                         cations to the plans, and has no agencywide estimates of the costs to

                          %me of these studies will cover portions of the forests, not the entire forest.



                          Page 37                                                     GAO/RCEIMO-71 Oil and Gas Decisions
                        Chapter 3
                        Status of BLM and Forest 8ervic.eInitiatives
                        to Improve Information and Related
                        cost Bstimates




                        complete these different analyses, no accurate estimate of total cost is
                        possible at this time. However, we believe that whatever cost estimate
                        the Forest Service finally develops should include the costs needed to
                        improve the oil and gas information in the additional 24 forests we iden-
                        tified as having high oil and gas potential.


                        In areas where industry interest is high because of oil and gas potential,
Improving Oil and Gas   foregone and delayed revenues resulting from suspending leasing activi-
Information Appears     ties are likely to exceed the costs associated with developing adequate
to Be Cost-Effective    environmental information. Until these resource areas and forests have
                        adequate environmental documentation to support leasing decisions, the
                        federal government will continue to lose rental revenue, and receipt of
                        bonus bid and royalty revenue will be delayed.

                        For example, the Forest Service’s Region 1, which covers 24 million
                        acres and includes 15 forests in northern Idaho, Montana, North Dakota,
                        and northwest South Dakota, suspended leasing in 1985 following a dis-
                        trict court decision that the Forest Service had not adequately assessed
                        the environmental impacts of its leasing decisions4 We estimate that
                        about $9.6 million in rental revenue is lost annually on the 5.4 million
                        acres that the Forest Service believes would be leased in the region and
                        on leases that have been suspended because existing environmental
                        studies do not comply with NEPA. By comparison, the Forest Service esti-
                        mates that it will cost between $140,000 and $620,000 to complete addi-
                        tional environmental studies for each of the six forests with high oil and
                        gas potential in Region 1, or a total of about $1.9 million.

                        In addition to foregone rental revenue, bonus bids and additional roy-
                        alty revenues cannot be generated until leasing resumes. For example, in
                        fiscal year 1987, Region 1 suspended leasing in the Little Missouri
                        National Grasslands in the Custer National Forest. The Forest Service
                        estimates that it will cost $620,000 to complete the environmental
                        studies for the Custer National Forest-a portion of which will directly
                        relate to the Little Missouri National Grasslands. The Forest Service esti-
                        mates that about 336,000 acres will be leased in the Little Missouri
                        National Grasslands. We estimate that this will generate about $22 mil-
                        lion in bonus bids. The Forest Service estimates that about $1.1 million
                        in royalties would have been generated annually in the Little Missouri
                        National Grasslands had companies been allowed to lease the land and


                        4Conner v. Burford, 605 F Supp. 107 (D.Mont. 1986).



                        Page 38                                               GAO/RcEDso-71 Oil and Gas Decisions
                      Chapter 3
                      Status of BLM and Forest Service Lnitiatives
                      to Improve Information and Related
                      cost Estimates




                      drill wells. In addition, about $500,000 of the $9.6 million in rental rev-
                      enue identified above is lost annually.


                      Although BLM and the Forest Service recognize the importance of
Conclusions           improving information on the environmental impacts of oil and gas
                      leasing and development, it will be many years before they complete or
                      amend all plans and/or environmental studies for resource areas and
                      forests with high oil and gas potential to include such information.
                      Overall estimates of the cost to develop this information to meet NEPA
                      requirements cannot be determined until both agencies have a better
                      understanding of how many plans and studies are deficient and what it
                      will take to improve them. However, available cost estimates for indi-
                      vidual projects indicate that it may be cost-effective to improve oil and
                      gas information for resource areas and forests with high oil and gas
                      potential. Estimated foregone and delayed revenues resulting from sus-
                      pended leasing activities far exceed any reasonable estimated cost to
                      develop such information.


                      To ensure that resources available to improve oil and gas information
Recommendations       are used efficiently, we recommend that the Secretaries of the Interior
                      and Agriculture direct the BLM Director and Forest Service Chief, respec-
                      tively, to determine which resource areas or forests will yield the most
                      revenues and give priority to revising plans or studies for those areas so
                      oil and gas development can proceed expeditiously, with the least pos-
                      sible damage to the environment.


                      Both Interior and the Forest Service generally agreed with the facts in
Agency Comments and   this chapter and support this recommendation. Interior added that it
GAO’s Evaluation      believes the recommended approach would help refine the schedule for
                      land use planning. Although Interior believes that it has already identi-
                      fied its resource areas with high oil and gas potential, we continue to
                      recommend that it determine which resource areas are likely to yield the
                      most revenues and give priority to revising those plans.




                      Page 39                                        GAO/RCED9O-71Oil andGas Decisions
Improved Internal ManagementControls Must
Accompany Agency Initiatives

                          If BLM and Forest Service initiatives to improve information on the envi-
                          ronmental impacts of oil and gas leasing and development are to be suc-
                          cessful, improvements to existing management controls must also take
                          place. Specifically, (1) BLM and the Forest Service need to improve their
                          guidance on how to address cumulative impacts in land use plans and
                          environmental studies, (2) the Forest Service needs to clarify its recently
                          issued guidance on what types of environmental studies will be
                          required, and (3) both agencies need to institute more effective over-
                          sight to ensure compliance with land use planning and environmental
                          regulations and guidance.


                          The key element most often missing from land use plans and related
Better Agency             environmental studies is cumulative impacts. NEPA requires that cumula-
Guidance Needed on        tive impacts be disclosed in land use plans; however, the agencies did
Addressing                not provide clear guidance on how to develop this information. While
                          both agencies have improved their guidance, it is still inadequate for
Cumulative Impacts        assessing the cumulative impacts of oil and gas leasing and
                          development.


BLM Guidance              BLM’S November 1986 supplemental program guidance identified the
                          type of oil and gas information that should be included in land use plans
                          and related EISS.To address cumulative impacts, this guidance states
                          only that such impacts should be assessed for each alternative
                          presented in the land use plan. In 1987 BLM concluded that its guidance
                          for assessing cumulative impacts was both unclear and inadequate. In
                          October 1988, responding to the need for more detailed guidance, BLM
                          issued a handbook providing instructions for complying with NEPA. This
                          was followed in February 1989 by a draft fluid minerals handbook that
                          provided even more detailed guidance on how to develop oil and gas
                          information. However, neither BLM’S NEPA handbook nor its draft fluid
                          minerals handbook provide adequate guidance for analyzing cumulative
                          impacts.


Forest Service Guidance   The guidance in effect during the development of the Forest Service’s
                          land use plans was diffused throughout the agency’s planning regula-
                          tions, manuals, and handbooks, and did not provide adequate informa-
                          tion on how to develop a reasonably foreseeable development scenario
                          or assess cumulative impacts. In a May 1988 memorandum, the Forest
                          Service Chief agreed to consolidate the Forest Service’s planning gui-
                          dance, incorporating the major elements of BLM’S supplemental program


                          Page 40                                     GAO/RCED9@71Oil and Gas Decisions
                        Chapter 4
                        Improved Internal Management C4mtrola
                        Mnst Accompany Agency Initiatives




                        guidance. This consolidated guidance was issued on October 11, 1989.
                        The revised guidance defined the reasonably foreseeable development
                        scenario, and like BLM’S draft fluid minerals handbook, listed the factors
                        to be considered when projecting such a scenario. However, it does not
                        provide clear direction on developing cumulative impacts analyses.


                        The Forest Service’s revised guidance is also unclear about what types
Forest Service Needs    of environmental studies will be required to support oil and gas leasing
Clear Guidance on       and development decisions. It provides several options for meeting its
What Types of           requirements: (1) amending existing land use plans and completing
                        appropriate environmental studies; (2) tiering additional environmental
Environmental Studies   studies to existing land use plans before issuing leases or approving
Will Be Required        drilling permits; or (3) supplementing land use plans with “additional
                        clarification” that may or may not require additional environmental
                        studies. However, there is no further discussion in the guidance as to
                        when each of these options may be appropriate. We believe that further
                        clarification is needed because the level of detail in the studies required
                        to be completed under each of these options varies significantly.


                        Although both BLM and the Forest Service are improving their guidance
More Direct Oversight   on land use planning and environmental studies, the decentralized
and Evaluation of       nature of the two agencies provides no assurance that the improved gui-
Field Offices Needed    dance will be followed. Neither agency has the necessary oversight and
                        evaluation in place to ensure that field offices adhere to their national
                        policies and guidance.

                        Under BLM’S and the Forest Service’s decentralized management philos-
                        ophy, effective program oversight and evaluation are needed to provide
                        management with feedback to measure performance and, when neces-
                        sary, to correct performance problems. However, this oversight and
                        evaluation has not accompanied devolution of responsibility for oil and
                        gas leasing and development decisions. Neither agency can ensure that
                        land use plans and related environmental studies comply with land use
                        planning and environmental regulations and guidance. In addition,
                        neither agency has the necessary internal management controls in place
                        to ensure that leases and drilling permits include all the necessary stipu-
                        lations As a result, resource area and forest offices lack uniformity in
                        (1) their interpretation and implementation of land use planning and
                        environmental regulations and guidance and (2) the extent to which all
                        required stipulations and conditions of approval are attached to leases
                        and drilling permits.


                        Page 41                                      GAO/RCEIh9@71Oil and Gas Decisions
                           Chapter 4
                           Improved Intemal Management Conlz-ols
                           Must Accompany Agency Initiatives




Compliance With Planning   Although BLM and Forest Service field offices are responsible for devel-
Regulations and Guidance   oping land use plans, neither agency has adequate systems in place to
                           ensure that applicable regulations and guidance are followed. As a
Varies Among Field         result, the extent to which land use plans contained the necessary infor-
Offices                    mation varied among BLM state and Forest Service regional offices. For
                           example, six of the eight plans we reviewed from BLhI'S Utah state office
                           met our criteria for at least four of the five elements, whereas the four
                           plans we reviewed from BL.M'S Nevada state office met our criteria for
                           only two or fewer of the elements. Similarly, the six plans we reviewed
                           from the Forest Service’s Region 1 generally met our criteria for two or
                           more of the five elements, whereas the three plans we reviewed from
                           the Forest Service’s Region 3 met our criteria for only one or none of the
                           elements.

                           BIN headquarters     issued a memorandum in May 1988 reiterating the
                           importance of the supplemental program guidance and the requirement
                           that it be incorporated into land use plans. For areas of high oil and gas
                           potential, the guidance directs that the plans contain more detailed
                           information. Officials at the four BLM state offices we visited said that
                           although they did not incorporate the supplemental program guidance
                           into their land use plans, they believe the plans they have approved
                           comply with both FLPMAand NEPA requirements. BIN Wyoming State
                           Office officials, for example, stated that they view the supplemental
                           program guidance as optional guidance, not policy, that does not neces-
                           sarily have to be complied with.

                           According to officials of the three Forest Service regional offices we vis-
                           ited, the resource specialists who prepare the plans in the local forest
                           offices often lack the oil and gas expertise needed to develop the neces-
                           sary information. Additionally, although the regional offices are respon-
                           sible for approving land use plans, some regions also lack the necessary
                           oil and gas expertise. This lack of knowledge, coupled -with the lack of
                           agencywide guidance, make it difficult to reach informed decisions on
                           the environmental impacts of oil and gas activities.

                           BLM and Forest Service headquarters     officials told us that they have lim-
                           ited control over the quality of the land use plans developed by resource
                           area and forest offices and approved by state and regional offices,
                           respectively. Under the agencies’ decentralization philosophies, these
                           officials view their role as being primarily responsible for providing gui-
                           dance, training, and technical assistance to their respective state and
                           regional offices. They look to their state and regional offices to provide
                           the necessary systems or controls needed to ensure adherence to land


                           Page 42                                      GAO/ECJZD90-71Oil and Gas Decisions
                             Chapter 4
                             Improved Internal Management Controls
                             Must Accompany Agency Initiativives




                             use planning and NEPA policies and procedures. And, although all Forest
                             Service plans must be routed through Forest Service headquarters,
                             review at this level is limited primarily to format rather than content.


Incorporating Required       The extent to which BLM resource area offices and Forest Service forest
Stipulations or Conditions   offices included all needed stipulations and conditions of approval in
                             leases and permits also varied. For example, 26 (or 31 percent) of the 85
of Approval Into Leases      permits reviewed at BLM'S Caliente resource area, in California, did not
and Permits Varies Among     have 1 or more of the conditions of approval required by the land use
Field Offices                plans and/or other environmental studies, while only 3 (or 4 percent) of
                             the 80 permits reviewed at the Farmington, New Mexico, resource area
                             had been approved without the appropriate condition(s). Similarly, 11
                             (or 69 percent) of the 16 permits reviewed at the Carson National
                             Forest, in New Mexico, were missing 1 or more conditions, while 2 (or 20
                             percent) of the 10 permits reviewed at the Medicine Bow National
                             Forest, Wyoming, had been approved without the appropriate condi-
                             tion(s) included.

                             BLM and Forest Service officials explained that stipulations are missing
                             from some leases because the responsible BLM state office or Forest Ser-
                             vice regional office did not ensure that it had the most current informa-
                             tion from the affected resource area or forest. Colorado BLM officials
                             also said stipulations are missing from some leases because the wording
                             in the applicable land use plans is vague or inconsistent with other
                             studies. Moreover, these officials believe that drilling permits have
                             missing conditions of approval because resource specialists responsible
                             for identifying the potential impacts of oil and gas development on other
                             resources did not properly review the permits to ensure all conditions
                             were included.

                             The Rocky Mountain Regional Coordinating Committee, with the sup-
                             port of the BLM Director and Forest Service Chief, has issued guidance
                             that is intended to standardize language for lease stipulations identified
                             in land use plans, making it clearer when and what stipulations are
                             applicable. However, without effective oversight, BLiM and the Forest
                             Service will not know the extent to which field officials are complying
                             with this guidance. Moreover, there is no system to ensure communica-
                             tion and coordination among the responsible BLM state, district, and
                             resource area offices, or between the responsible Forest Service regional
                             office and the affected forest office to ensure that stipulations are
                             attached to leases on the basis of the most current information avail-
                             able. There is a need for similar coordination and communication among


                             Page 43                                    GAO/RCEDS@71Oil and Gas Decisions
                          Chapter 4
                          Improved Internal Management Controls
                          Must Accompany Agency Initiatives




                          resource specialists before a drilling permit is approved by a resource
                          area or forest office.


BLM and the Forest        In its 1987 NEPA evaluation report, BLM concluded that program manage-
Service Recognizea Need   ment and quality control (oversight) improvements were needed at both
                          the headquarters and state office levels. BLM state offices generally
for Management Controls   agreed with the evaluation report’s recommendation and made a com-
                          mitment to improving their program management and oversight strate-
                          gies. In addition, in commenting on a draft of our report, Interior stated
                          that BLM is planning to review its planning and NEPA compliance
                          processes to improve its performance and is reorganizing its fluid min-
                          erals group in headquarters to improve efficiency. BLM also plans to
                          issue additional guidance on its oil and gas program, including draft gui-
                          dance on how to develop cumulative impact analysis.

                          The Forest Service has recognized the need to improve management con-
                          trols to ensure that NEFJArequirements are adequately addressed before
                          making leasing or development decisions and to ensure appropriate stip-
                          ulations or conditions of approval are attached to leases or drilling per-
                          mits, respectively. In commenting on a draft of our report, the Forest
                          Service stated that it has recently established an advisory group with
                          expertise drawn from minerals, environmental, and planning staffs.
                          Among other things, this group will coordinate with Agriculture’s Office
                          of General Counsel and provide advice to the Forest Service manage-
                          ment team on how to prepare environmental studies. It will also periodi-
                          cally review the environmental studies in process.


                          In the last few years, BLM and the Forest Service have improved their
Conclusions               guidance on the oil and gas information to be included in land use plans
                          and related environmental studies. In particular, the Forest Service’s
                          recently issued guidance on analyzing oil and gas environmental impacts
                          is an improvement over earlier guidance that was diffused throughout
                          the agency’s planning regulations, manuals, and handbooks. However,
                          as recognized by the agencies, clearer guidance is still needed on how to
                          address cumulative impacts. In addition, the Forest Service guidance
                          provides several options for meeting the guidance but does not provide
                          clear direction on how to decide when each option is appropriate.

                          Both BLM and the Forest Service are improving their guidance for land
                          use planning and environmental studies, as well as their guidance on
                          when and where stipulations or conditions of approval are applicable.


                          Page 44                                     GAO/RCED-90-71Oil and Gas Decisions
                      Chapter 4
                      Improved Internal Management Controls
                      Must Accompany Agency Initiatives




                      However, the decentralized nature of the two agencies, coupled with the
                      lack of effective management controls and program oversight and evalu-
                      ation, provides no assurance that the improved guidance will be adhered
                      to. Delegation of responsibility for approving land use plans and for
                      making leasing and development decisions that affect other resources
                      carries with it an implied accountability. Yet, neither BLM nor the Forest
                      Service has instituted the necessary internal management controls to
                      ensure that in taking these actions, its field offices will comply with
                      applicable planning regulations and guidance.


                      To better ensure that the environmental impacts of oil and gas leasing
Recommendations       and development on federal lands are adequately considered in land use
                      plans and at subsequent key decision points and that available’ resources
                      are used efficiently, we recommend that the Secretaries of the Interior
                      and Agriculture direct the BLM Director and the Forest Service Chief,
                      respectively, to

                  l   provide clear guidance on how to address cumulative impacts in land
                      use plans and related environmental studies. In addition, the Forest Ser-
                      vice Chief should be directed to clarify when the recently issued gui-
                      dance can be met by amending the land use plan, completing additional
                      environmental studies, or supplementing the plan with additional
                      information.
                  l   establish an oversight and evaluation program to ensure that (1) NEPA
                      requirements are adequately addressed, whether in land use plans and/
                      or other environmental studies, before leases are issued or permits to
                      drill are approved; and (2) appropriate stipulations or conditions of
                      approval are attached to leases and permits. As part of this program,
                      the BLM Director and the Forest Service Chief should establish measur-
                      able goals and target dates to correct identified problems.


                      Both Interior and the Forest Service generally agreed with the facts in
Agency Comments and   this chapter and supported our recommendations. Although Interior did
GAO’s Evaluation      not specifically address our recommendation regarding the need for
                      additional guidance on cumulative impacts, it indicated that it plans to
                      issue such draft guidance. The Forest Service disagreed with us
                      regarding missing conditions of approval from drilling permits and, in
                      most cases, considered such conditions standard operating procedures,
                      and therefore did not believe these conditions needed to be included.




                      Page 48                                    GAO/RCED90-71Oil and Gas Decisions
Chapter 4
Improved Internal Management C4mtrola
Must Accompany Agency Initiadves




However, we identified several types of conditions missing from the per-
mits including cultural, wildlife, and road restrictions that are not con-
sidered standard operating procedures in every forest. We have
summarized the actions BLM and the Forest Service are taking in this
chapter.




Page 40                                    GAO/WED90-71 Oil and Gas Decisions
Page 47   GAO/RCEDBO-71Oil and Gas Decisions
Appendix I

List of ElementsReviewedAnd Associated
NEF?AAnd/Or Agency Regulatory Or
GuidanceCitations

Elements                       Requirements                                               GAO criteria
identification of areas open   BLM Supplemental    Program Guidance (SPG) 1624.21         Full response
to leasing and applicable
stipulations                   Identify areas open and closed to development. For         A map, narrative, or table identifying areas that are (1)
                               land open to development, identify areas subject to        open subject to standard lease terms and conditions;
                               standard lease terms and conditions, areas subject to      (2) open subject to moderate protection (such as
                               seasonal or other minor constraints, areas subject to      restricted seasonable use stipulations; (3) open
                               no-surface-occupancy and similar major constraints.        subject to maximum protection (such as no-surface-
                               The boundaries of these areas are to be portrayed on       occupancy stipulations); and (4) closed to leaslng.
                               maps.
                                                                                          Partial response
                               Forest Service planning regulations, 36 CFR 219.22(f)
                                                                                          A narrative discussing acreage or percentage of areas
                               Recognize the probable effect of renewable resource        with appropriate stipulations without identifying
                               prescriptions and management direction on oil and          specific areas.
                               gas exploration and development (resource
                               prescriptions are translated into stipulations).       A narrative or table listing stipulations that will apply in
                                                                                      given certain circumstances without identifying
                               National Environment Policy Act (NEPA) regulations, 40 specific areas (e.g., if wildlife exists, apply wlldlife
                                         14(t)                                        protection stipulation).

                               Include appropriate mitigation measures (stipulations)     A map, narrative or table identifying one or more of the
                               not already included in the proposed action or             required stipulations, but not all of them.
                               alternatives.
Oil and gas potential          BLM SPG 1624.22(A)                                         Full response

                               The potential for fluid mineral occurrence should be       A map, narrative, or table identifying areas of high,
                               assessed using BLM’s classification system as well as      medium, low, unknown, or no potential for oil and gas.
                               public interest that has been shown in an area. Should
                               be in a table format with low, moderate, high and          Partial response
                               unknown potential.
                                                                                          A narrative or table discussing acreage or percentage
                               Forest Service planning regulations, 36 CFR 219.22(c)      of potential, but not identifying specific areas.

                               Recognize the probable occurrence of leasable              A map, narrative or table discussing drilling and
                               minerals (oil and gas); the potential for future mineral   production activity, without a discussion of other
                               development.                                               potential in the area.

                               NEPA regulations, 40 CFR 1502.15

                               Succinctly describe the environment of the area(s) to
                               be affected or created by the alternatives under
                               consideration. (Oil and gas potential is one aspect of
                               the environment.)                                      -
Reasonably foreseeable         BLM SPG 1624.22(B)                                         Full response
development scenarios
                               Reasonably foreseeable development scenario                A map, narrative, or table projecting the anticipated
                               projections should usually be expressed in terms of        level of oil and gas development in terms of number of
                               the number of wells and fields. Such projections           wells over the life of the plan. These projections should
                               should vary depending on the potential for fluid           be based on mineral potential and development
                               mineral occurrence and which areas are open to             history.
                               development.
                                                                                          Partial response
                               Forest Service planning regulations, 36 CFR 219.22(e)
                                                                                          A general narrative of future oil and gas development
                               Recognize the access requirements      for mineral         in the area.
                               exploration and development.
                                                                                                                                        (continued)




                                                   Page 48                                                   GAO/RCEXNO-71Oil and Gas Decisions
                                            Appendix I
                                            List of Elements Reviewed And Associated
                                            NEPAAnd/Or Agency Regulatory Or
                                            Guidance Citations




Elements                 Requirements                                              GAO criteria
                                                                                   A narrative or table of the number of expected leases
                         Forest Service Manual 2806.4                              However, no discussion on posstble development of
                                                                                   these leases.
                         An activity forecast should be in the plans, projecting
                         the most probable types of oil and gas activities         A narrative of strpulations that will be imposed and
                         expected to occur and where the actrvity IS most likely   their effect on oil and gas development
                         to occur.
                                                                                   A map or narrative on currently producing fields and
                         NEPA regulations 40 CFR 1502.16                           their life expectancy.

                         The agency must disclose reasonably foreseeable
                         future actions in order to assess cumulative impacts.
Indirect impacts         BLM planning guidance 1600 series, 1616.62                Full response

                         Discuss the indirect impacts In estimating the effects    A map, narrative, or table of the types of impacts to
                         of alternatives.                                          other resources expected from surface and
                                                                                   subsurface activities such as clearing land, drilling,
                         Forest Service planning regulatrons, 36 CFR 219.12(g)     building roads, and/or installing pipelines. This
                                                                                   discussion must address significant resources such as
                         The estimated effects of the alternatives will be         wildlife, cultural values, soil, vegetation, air and water
                         considered in detail according to NEPA procedures         quality. We did not require the plan to disclose the
                         (Includes indirect impacts).                              magnitude of indirect impacts associated with
                                                                                   different levels of development; therefore, we
                         NEPA regulations 40 CFR 1502.16(b) and 1508.8             accepted indirect impact discussions without
                                                                                   disclosure of a reasonably foreseeable development
                         Discuss the environmental impacts of alternatives         scenarto.
                         including indirect effects and their significance.
                         Indirect effects, which are caused by the action (i.e.,   Partial response
                         oil and gas exploration and development) and are later
                         in time or farther removed In distance, but are still     A narrative or table on the impact(s) of 011and gas
                         reasonably foreseeable. Indirect effects may include      development to some, but not all resources In the
                         related effects on air and water and other natural        area.
                         systems, including ecosystems.
                                                                                   A narrative or table that identifies resources that will
                                                                                   be affected by oil and gas development; however,
                                                                                   does not describe how they will be affected
Cumulative impacts of    BLM SPG 1624.22(B)                                        Full response
reasonably foreseeable
development scenarios    The cumulative impacts of reasonable foreseeable          For those plans containing a reasonably foreseeable
                         development scenarios should be analyzed in detail.       development scenario, a narrative specrfically ctting
                                                                                   the term “cumulative impacts”. Webid not evaluate
                         Forest Service planning regulations, 36 CFR 219.12(g)     the adequacy of these citations because at the time of
                                                                                   our review neither agency had criteria for developrng
                         The estimated effects of alternatives WIII be             cumulative impacts as they relate to oil and gas
                         considered in detail according to NEPA procedures.        development. Reasonably foreseeable development
                                                                                   scenarios were required to be fully addressed In order
                         NEPA regulations 40 CFR 1502.16(b) and 1508.7             to receive a complete response for cumulative impacts
                                                                                   because cumulative impacts are the incremental
                         Discuss the environmental impacts of the alternatives     impacts of the proposed actions, which cannot be
                         including the cumulative impacts. Cumulative impact       assessed without the expected level of development.
                         is the impact on the environment, which results from
                         the incremental impact of the action when added to
                         other past, present, and reasonably foreseeable future
                         actions. Cumulative impacts can result from
                         individually minor but collectively significant actions
                         taking place over a period of time.




                                             Page 49                                                  GAO/WED-W71 Oil and Gas Decisions
Amendix       II

Resultsof BLM Land Use Plan Review


                                                                  Reasonably
                                   Lease stips    Oil and gas     foreseeable        Indirect         Cumulative
Resource area                        identified      potetiial   dev.scenario       impacts         --___impacts
California
California Desert                             P              Y              P               Y                      N
Caliente                                      Y              Y              N               Y                      N
Hollister                                     P              Y              P               P                      N
Colorado                                                                                                ..____~
Glenwood Sonnas                               Y              P              N               P                      N
Grand Junction                                Y              Y              Y               Y                      Y
Kremmling                                     P              Y              P               P                      N
Little Snake                                  Y              Y              N               Y                      N
Northeast                                     Y              Y              N               Y                      N
San Juan                                      Y              Y              P               P                      t2
Uncompahare                                   Y              Y              Y               Y                      Y
White River                                   P              Y              P               Y                       N
Montana                                                                                                    ___.
Billings                                      P              Y                  P           Y                       N
Garnet                                        P              Y                  P           Y                       N
Great Falls, Havre                            Y              Y                  Y           Y                       Y
Headwaters                                    Y              P                  P           Y                       N
North Dakota                                  P              P                  P           Y                       N
Powder River                                  Y              Y                  P           N       -               N
South Dakota                                  P              Y                  N           Y                       N
Nevada                                                                                                    ___-
Egan                                          P              Y                  N           N                       N
Elko                                          Y              Y                  P           P                       N
Eureka, Shoshone                              N              Y                  N           N                       N
Wells                                         P              N                  P           P                       N
New Mexico
Carlsbad                                      Y              Y                  P               Y                   N
Farmington                                    P              P                  N               N                   N
Rio Puerto                                    P              P                  P               N        ~-____     N
Taos                                          Y              Y                  P               N                   N


Wenatchee (Spokane District)                                                                    Y                   N
Utah
Bear River                                                                                      P                    N
Book Cliffs                                                                                     Y                    Y
Grand                                                                                           Y       --    .____  N
San Juan                                                                                        Y                    N
                                                                                                           (contrnued)




                               Page 60                                    GAO/RCJD9l%71Oil and Gas Decisions
                        Appendix II
                        Resulta of BLM Land Use Plan Review




                                                                        Reasonably
                              Lease stips           Oil and gas         foreseeable        Indirect    Cumulative
                                identified             potential       dev.scenario       impacts        impacts
                                           Y                    Y                   Y             P             N
Wvomina                                                                                                         Y
Buffalo                                     P                      Y               Y              Y             Y
Cody                                        Y                      Y               Y              Y             N
Great Divide                                P                      Y               Y              P
   (Formerly Medicine
   Bow and Divide)
Kemmerer                                    P                      Y               N              Y             N
Lander                                      Y                      Y               Y              Y             N
Pinedale                                    Y                      Y               Y              Y             Y
Platte River                                Y                      Y               Y              Y             N
Washakie                                    Y                      Y               Y              Y             N

                        Daft plan was revlewed
                        Legend
                        Y = Yes, element fully addressed
                        P = Partial, element partially addressed
                        N = No, element not addressed




                        Page 51                                                  GAO/RCED-9@71Oil and Gas Decisions
Appendix III

Resultsof Forest ServiceLand Use Plan Review


                                                                       Reasonably
                                        Lease stips.   Oil and gas     foreseeable        Indirect   Cumulative
Forest                     Region         identified      potential   dev.scenario       imPacts       imoacts
Alabama
Conecuh, Bankhead,              8                  P             N               P               Y              N
  Talladega” and
  Tuskaqeea
Arkansas
Oauchita                        8                  P              Y              P               P              N
Ozark and St. Franci            8                  P              P              P               P              N
California
Angeles                         5                  P             N               P               N              N
Los Padres                      5                  P             Y               N               P              N
Colorado
Arapaho and Roosevelt           2                  Y              Y              Y               Y              N
Grand Mesa, Gunnison and
   Uncompahgre                  2                  P              N              N               Y              N
Pike and San Isabela            2                  P              Y              P               P              N
Routte                          2                  P              Y              P               N              N
San Juan                        2                  P              P              Y               Y              N
White River                     2                  P              Y              P               P              N
Kentucky
Daniel Boone                    8                  P              P                  P           Y              N
Louisiana
  Kisatchie                     8                  Y              Y              Y               P              Y
Michigan
Huron and Manistee              9                  P              Y                  P           N              N
Mississippi
Bienville, Delta,               8                  N              P                  P           Y              N
   De Soto. Holly
   Springs”       .
   Homochitto and
  Tombigbee
Montana
Custer                          1                  Y              P                  P           Y              N
Flathead                        1                  P              Y                  N           Y              N
Lewis and Clark                 1                  Y              Y                  Y           Y              Y
Lolo                            1                  Y              Y                  Y           P              Y
Beaverhead                      1                  P              Y                  P           Y              N
Gallatin                        1                  Y              Y                  P           P              N
                                                                                                      (continued)




                                    Page 62                                    GAO/RCEMJO-71Oil and Caa Decisions
                             Appendix III
                             Results of Forest Service Land Use
                             Plan Review




                                                                                  Reasonably
                                  Lease stips.           Oil and gas              foreseeable             Indirect         Cumulative
Forest              Region          identified              potential            devscenario             impacts             impacts

Nebraska                 2                      P                       Y                       P                 Y                     N
Nevada
Humboldt                 4                      P                       Y                       P                 Y                     N
Toiyabe                  4                      P                       Y                       N                 Y                     N
New Mexico
Carson                   3                       P                      P                       P                 N                     N
Cibola                   3                      Y                       P                       P                 P                     N
Santa Fe                 3                      Y                       P                       N                 N                     N


Wayne                    9                       P                      Y                       P                 Y                     N
Pennsvlvania
Alleahenv                9                       P                      P                       P                 Y                     N
Texas
An elina, Davy           8                      N                       Y                       Y                 Y                     N
  2 rockett,
  E;;Fo;nd    Sam

Utah
Ashley                   4                       P                      Y                       P                 Y                     N
Cache and Wasatch        4                       Y                      P                       P                 Y                     N
Dixie                    4                       P                      Y                       P                 Y                     N
Manti Lasalle            4                       P                      Y                       Y                 Y                     N
Uinta                    4                       Y                      Y                       P                 N                     N
Virginia
Georae Washinaton        8                       Y                      Y                       P                 N                     N
Jefferson                8                       P                      Y                       P                 P                     N
West Virginia
Monongahela              9                       P                      N                       P                    P                  N
Wyoming
Biahorn                  2                       P                      Y                       P                 Y                     N
Bridaer-Tetonb           4                       P                      P                       Y                 Y                     Y
Medicine    Bow          2                       Y                      P                       P                 Y                     N
Shoshane                 2                       P                      Y                       P                 Y                     N

                             =This forest is not located In a high oil and gas potential area; however, it was Included In a land use
                             plan that covers at least one forest wrth high 011and gas potentral.

                             bDraft plan was revrewed.
                             Legend

                             Y = Yes, element fully addressed
                             P = Partral, element partially addressed
                             N = No, element not addressed




                             Page 63                                                        GAO/WED-SO-71Oil and GasDecisions
Appendix IV

Resultsof BLM and Forest ServiceLand Use -
Plan Review for SocioeconomicImpacts

                                             In addition to the 5 elements required in the land use plans, we reviewed
                                             the 82 plans located in oil and gas provinces to determine whether the
                                             plans addressed the socioeconomic consequences of oil and gas explora-
                                             tion and development. We looked for a narrative or table assessing the
                                             future impacts of oil and gas on the local economy. These effects may be
                                             expressed in terms of jobs and/or actual dollars. Table IV.1 shows the
                                             number of plans that identify socioeconomic consequences:

Table IV.l: Extent to Which Plans Identify
Socioeconomic Consequences                   Extent element                            Forest
                                             addressed                ELM   Percent   Service   Percent    Total    Percent
                                             Socioeconomic
                                             consequences
                                             identified in jobs and
                                             dollars to the local
                                             economv                   24        60        27        64       51         62
                                             Socioeconomic
                                             consequencesnot
                                             addressed                 16        40        15        36       31         38
                                             Total                     40                  42                 82


                                             Fifty-one plans discussed the socioeconomic consequences of oil and gas
                                             development. These plans discussed the number of jobs created and dol-
                                             lars generated for the local economy as a result of oil and gas explora-
                                             tion and development- although the length and quality of the
                                             discussion varied among the plans. For example, one BLM resource area
                                             plan projected the employment and annual salaries and wages that
                                             could be expected as a result of oil and gas activity. Thirty-one plans did
                                             not discuss socioeconomic consequences specifically in terms of jobs and
                                             dollars generated.




                                             Page 64                                      GAO/RCEDsO-71Oil and Gas Decisions
ADDendiX      V

Extent to Which BLM and Forest ServiceLand
Use Plans Met the Criteria by Element

                                          Tables V.l through V.5 list the number of land use plans that met,
                                          partially addressed, or did not address each of the five key elements.


Table V.l: Extent to Which Plans Addressed Oil and Gas Potential
                                                    BLM                                Forest Service                            Total plans
Extent element addressed                       Number    Percent                      Number     Percent                       Number     Percent
Plan meets the criteria                              34             85                       26            62                        60            73
                                                                                                                                     -.---~___
Plan partially meets the criteria                     5             13                       12            29                        17 ~__-       21
Element not Identified in plan                        1              3                        4            10                         5             6
Total                                                40                                      42                                      82------^



Table V.2: Extent to Which Plans Projected Reasonably Foreseeable Development Scenarios
                                                     ELM                    Forest Service                                       Total plans
Extent element addressed                       Number    Percent           Number     Percent                                  Number     Percent
Plan meets the criteria                              13             33                        8            19                        21            26
                                                                                                                                           -___
Plan partially meets the criteria                    16             40                       29            69                        45-____       55
Element not identified in plan                       11             28                        5            12                        16            20
Total                                                40                                      42                                      82




Table V.3: Extent to Which Plans Addressed Indirect Impacts
                                                     BLM                               Forest Service                            Total plans
Extent element addressed                       Number     Percent                     Number     Percent                       Number     Percent
Plan meets the criteria                               25            63                       24             57                       49            60
Plan partially meets the criteria                      9            23                       11             26                       20            24
Element not Identified in plan                         6            15                        7             17                       13            16
Total                                                 40                                     42                                      82




Table V.4: Extent to Which Plans Cited Cumulative Impacts
                                                     BLM                               Forest Service                            Total plans
Extent element addressed                        Number    Percent                     Number     Percent                       Number     Percent
Plans meet the crIteriaa                               7            18                         4            10                        11           13
Element not identified in plan                        33            83                        38            90                        71           87
Total                                                 40                                     42                                       82 -
                                           aPlans that meet the cnteria for projecting reasonably foreseeable    development   scenanos and cite
                                           “cumulative impacts”




                                           Page 55                                                       GAO/RCED-91571
                                                                                                                      Oil and Gas Decisions
                                           Appendix V
                                           Extent to Which BLM and Forest Service
                                           Land Use Plans Met the Criteria by Element




Table V.5: Extent to Which Plans Addressed Lease Stimulations
                                                    -tiLM                        Forest Service                     Total plans
Extent element addressed                      Number      Percent               Number     Percent                Number     Percent
Plan meets the criteria                               23         58                     12      29                     35         43
Plan partially meets the criteria                     16         40                     28      67                     44         54
Element not identified in plan                         1          3                      2       5                      3          4
Total                                                 40                                42                             82




                                            Page 66                                            GAO/lUXDsO-71011      and Gas Decisions
Appendix VI

I&M and Forest ServiceLand Use Plans and
Areatide Environmental Assessmentsfor Four
ResourceAreas and Four ForestsVisited
Table Vl.1: Extent to Which Areawide
Environmental Assessments And/Or                                      Lease      Oil/gas    Development               Impacts
Applicable Land Use Plans Do Not Meet        Location                  stips.   potential       scenario   Indirect       Cumulative
                                                                                                                              ___-
the Criteria for Each of the Five Elements   BLM resource area
                                             Caliente, California                                      N                           N
                                             White River, Colorado          P
                                             Farmington, New
                                             Mexico                         P
                                             Platte River, Wyoming
                                             National forest
                                             Los Padres, California         P                          P                           N
                                             San Juan, Colorado             P           P                                          N
                                             Carson, New Mexico             P           P              P          N                N
                                             Medicine Bow,
                                             Wvomina                                    P              P                           N

                                             Legend:
                                             P = partial
                                             N = not ldentlfled




                                             Page 57                                           GAO/RCEINO-71Oil and Gas Decisions
Appendix VII

BLM and Forest ServiceResourceAreas and
ForestsThat May Need Additional Oil and Gas
Information as Identified by GAO And/Or
the Agencies
Table VII.1: ELM Resource Areas With
Actions Completed, Underway, or        State        Resource area       Type of action      Complete in FY:
Proposed                               California   Caliente            New plan             1992
                                                    Clear Lakea         New plan             1994
                                                    Folsoma             New plan             1992
                                                    Hollister           Amendment            1991
                                                    lndio               New plan             1992
                                                    Reddinga            New plan             1992
                                       Colorado     Glenwood Sprinasb   Amendment            1991
                                                    Kremmlinob          Amendment            1991
                                                    Little Snakeb       Amendment            1991
                                                    Northeastb          Amendment            1991
                                                    Royal Gorge         New plan             1993
                                                    San Juanb           Amendment            1991
                                                    White River         New plan             1992
                                       Montana      Big Dryc            Amendment            1991
                                                    BillingsC           Amendment            1991
                                                    Dillona             New plan             1993
                                                    Judithd             New plan             1993
                                                    Phillipsd           New plan             1993
                                                    Valleyd             New plan             1993
                                                    Powder Rivef        Amendment            1991
                                                    South DakotaC       Amendment            1991
                                       Nevada        Caliente”          New plan             1996
                                                    Eqan                Amendment            1991
                                                    Elko                Amendment            1992
                                                    Lahontana,e         Amendment            1992
                                                    Shoshone-Eureka     Amendment            1994
                                                    SchelP              New plan             1994
                                                    Tonopah             New plan             1992
                                                    Wellsa              Amendment            1994
                                       New Mexico   Farmington’         Amendment            1991
                                                    Rio Puercoa.’       Amendment            1991
                                                    Roswell             New plan             1993
                                                    Tao@’               Amendment            1991
                                                    Carlsbad            Amendment            1993
                                       Oregon       BordeP 9            Amendment            1991
                                                    Tillamooka          New plan             1993
                                                    Wenatcheeg          Amendment            1991
                                       Utah         Bear River           Amendment           1990
                                                    Book Cliffsh        Amendment            1994
                                                    Diamond Mountain     New plan            1992
                                                                                                      (contrnued)



                                       Page 58                                 GAO/RCED9O-71Oil and Gas Decisions
                                         Appendix M
                                         BLM and Forest Service ResourceAreas and
                                         Forests That May NeedAdditional oil and
                                         GM Information as Identified by GAO And/
                                         Or the Agencies




                                         State                          Resource area           Type of action        Complete in FY:
                                                                        Dixiea                  New   elan            1990
                                                                        Escalantea              New   plan            1994
                                                                        Price Rivera            New   plan            1995
                                         Wyoming                        Buffalo                 New   plan            1994
                                                                        Codvh                   New   elan            Completed
                                                                        Grass Creek             New   plan            1993
                                                                        Great Divide            New   plan            Completed
                                                                        Green River             New   plan            1991
                                                                        Newcastle               New   elan            1992
                                         Note: ELM also identified the states of Kansas, Oklahoma, and Texas as needing new plans to address
                                         oil and gas issues tn the plans. Thuslist rdentifres only resource areas.
                                         %onsrdered     lower priority by BLM.

                                         bThese five plans are being amended In a srngle statewide plan amendment.

                                         CThese four plans are being amended in a srngie districtwide    amendment

                                         dAll part of the same land use plan.

                                         eNot identified as a hrgh potential oil and gas area by GAO

                                         ‘Albuquerque    districtwide   amendment covers these three resource areas
                                         s0ne land use plan covers both these areas. that plan will be amended.

                                         hPlans were reviewed by GAO and met our criteria for all 5 elements


Table Vll.2: Additional Resource Areas
Identified by GAO Where More Oil and     State                           Resource area
Gas Information May Be Needed            Montana                         Dickinson District (North Dakota)
                                                                         Garnet
                                                                         Headwaters
                                         Utah                            Grand
                                                                         San Juan
                                                                         San Rafael
                                         Wvomina                         Kemmerer
                                                                         Lander
                                                                         Platte River
                                                                         Washakie




                                         Page 69                                                         GAO/RCEIML71 Oil and GasDecisions
       1661         iv3ei-ww
       Z661            ww!j
       266 1               a!va
                  ,uolsnoH LueS



                                          sexal


                        eUlO=J!l     OO!XEIwMaN
                       ,,peuaiacl
        166 1          wauw
        E66 c           fmsno
        Z66C        peaqJaheag         eueiuoyy
        1661           .Ja!SOOH         eue!pul
        066 1            auheM             0lU-l

 PaWwoo                   ,UOJnH       ue6!43!w
        1661          ,aauMegS            s!ou!III
        P661            eaaq6Jel
        2661          o w.ues


        1661            dww3               wwi
        1661        Jan!ki ai!4M
        1661              ww
        266 1      eapuw w
        0661       ,~,iawi ues
        066 1               .ay!d
        Z661    ,aJ6gedwomn
        1661         ,uosiuung
        266 1     ,esam pueJg
        166 1        3t1ahas00b
        2661           ,OqedeJy        opeJolo3
        1661        q ,sJaA!ki X!S
        1661    q ehu!~l-eww
        Z661            a F3OPOW
        166 1       q d4www
        166 1        SaJped so1        eluJojye3
        066 1           etic(3eng      sesueyJy
         :Aj    &SeJOb l6UO!$8N           was                                       pe6OdOJd
u! weldwo3                                                  JO ‘r(6MJepun ‘pevqdwo3    SUO!pv
                                                     lJ&!M 6)WJO j W!tUeS )66JOj :E’III\ elq6l