GAO Asked to Explore Number of Undeveloped Leases, Royalties

Two Democratic energy lawmakers have called on the Government Accountability Office (GAO) to review why so many federal onshore and offshore oil and natural gas leases are going undeveloped, as well as determine if the federal government is receiving a "fair price" for its energy resources.

"We understand that millions of acres of onshore federal lands and the OCS [Outer Continental Shelf] are currently under federal oil and gas lease, but are not producing needed energy resources," wrote Sen. Jeff Bingaman of New Mexico, the ranking Democrat on the Senate Energy and Natural Resources Committee, and Rep. Nick Rahall of West Virginia, the ranking Democrat on the House Resources Committee, in a letter to the GAO Monday.

"We are advised that there are over 26 million acres of federal onshore lands currently under oil and gas lease but not producing. Likewise, there are 33 million acres of the federal OCS that are under oil and gas lease but are not producing," Bingaman and Rahall noted.

"In the National Petroleum Reserve-Alaska (NPR-A), some 2.8 million acres are already under lease, and the Interior Department is scheduled to lease more acreage for oil and gas development in September. However, it is our understanding that only one well was drilled by industry in the NPR-A this past drilling season," they said.

"The laws governing the leasing and development of federal lands and the OCS contain requirements for diligent development by industry. Some of these diligent development requirements were amended by the Energy Policy Act of 2005. We are interested in GAO's review and analysis of these requirements, what impact they have on the production of federal energy resources needed by the American people, and whether changes are needed in these laws and policies to ensure the production of energy resources."

Bingaman and Rahall also asked the GAO to compare the royalties being paid for oil and gas production on federal onshore and offshore lands to the royalties being paid for production on state and private lands to determine if the federal government is receiving a "fair price" for its federal resources.

Copyright 2006 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

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