Key Issues > Oil and Natural Gas
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Oil and Natural Gas
The U.S. oil and natural gas industry is a critical component of the nation's economy, providing energy for transportation, manufacturing, and residential use, while creating jobs and reducing imports. In addition, a portion of the nation's oil and natural gas is produced on federal lands and waters, generating billions in revenues, such as royalties.
The Department of the Interior oversees oil and natural gas production on federal lands and waters—providing access to these resources while ensuring their safe and responsible development. However, technological advances and market forces continue to challenge the government's ability to provide oversight. For example:
- Shale oil and natural gas. New applications of horizontal drilling techniques and hydraulic fracturing have allowed the development of oil and natural gas from shale formations. From 2007 to 2011, shale oil production increased more than fivefold, and shale gas production increased more than fourfold. Oil and natural gas development pose inherent environmental and public health risks, and studies GAO reviewed generally found that the potential long-term, cumulative effects of shale development have not been examined. In April 2012, the Federal Energy Regulatory Commission approved a liquefied natural gas (LNG) export facility, the first project authorized by the commission to export LNG from production resources within the U.S. Recent studies commissioned by the Energy Department found that increased natural gas exports lead to higher domestic natural gas prices while providing net economic benefits for the United States.
- Royalties. Interior does not have reasonable assurance that it is collecting its share of royalties for oil and natural gas extracted from leased federal lands and waters. The federal government has, in the past, changed royalty rates on an ad hoc basis. In addition, the Energy Policy Act of 2005 mandated royalty relief for some leases over a five year period. In addition, because Interior has not always conducted production inspections, it is uncertain whether oil and natural gas operators accurately reported oil and natural gas production from federal leases and remitted the appropriate royalties.
- Federal oversight. Following the Deepwater Horizon incident in 2010, Interior established new safety and environmental requirements and policy changes designed to mitigate the risk of an offshore well blowout or spill. However, Interior continues to face challenges in its ability to prioritize oversight according to risk and build and maintain information technology capabilities and a workforce sufficient to meet present and future needs.
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Oil and Gas: Updated Guidance, Increased Coordination, and Comprehensive Data Could Improve BLM's Management and Oversight [Reissued on May 16, 2014]
GAO-14-238: Published: May 5, 2014. Publicly Released: May 12, 2014.
http://gao.gov/products/GAO-14-238
GAO-14-238: Published: May 5, 2014. Publicly Released: May 12, 2014.
Oil and Gas Management: Continued Attention to Interior's Human Capital Challenges Is Needed
GAO-14-394T: Published: Feb 27, 2014. Publicly Released: Feb 27, 2014.
http://gao.gov/products/GAO-14-394T
GAO-14-394T: Published: Feb 27, 2014. Publicly Released: Feb 27, 2014.
Oil and Gas: Interior Has Begun to Address Hiring and Retention Challenges but Needs to Do More
GAO-14-205: Published: Jan 31, 2014. Publicly Released: Feb 19, 2014.
http://gao.gov/products/GAO-14-205
GAO-14-205: Published: Jan 31, 2014. Publicly Released: Feb 19, 2014.
Oil And Gas Resources: Actions Needed for Interior to Better Ensure a Fair Return
GAO-14-50: Published: Dec 6, 2013. Publicly Released: Dec 17, 2013.
http://gao.gov/products/GAO-14-50
GAO-14-50: Published: Dec 6, 2013. Publicly Released: Dec 17, 2013.
Oil and Gas Development: BLM Needs Better Data to Track Permit Processing Times and Prioritize Inspections
GAO-13-572: Published: Aug 23, 2013. Publicly Released: Sep 23, 2013.
http://gao.gov/products/GAO-13-572
GAO-13-572: Published: Aug 23, 2013. Publicly Released: Sep 23, 2013.
More Reports
Oil and Gas Oversight: Interior Has Taken Steps to Address Staff Hiring, Retention, and Training but Needs a More Evaluative and Collaborative Approach
GAO-16-742: Published: Sep 29, 2016. Publicly Released: Oct 31, 2016.
http://gao.gov/products/GAO-16-742
GAO-16-742: Published: Sep 29, 2016. Publicly Released: Oct 31, 2016.
Oil and Gas: Interior Could Do More to Account for and Manage Natural Gas Emissions
GAO-16-607: Published: Jul 7, 2016. Publicly Released: Jul 21, 2016.
http://gao.gov/products/GAO-16-607
GAO-16-607: Published: Jul 7, 2016. Publicly Released: Jul 21, 2016.
Oil and Gas Management: Interior's Bureau of Safety and Environmental Enforcement Restructuring Has Not Addressed Long-Standing Oversight Deficiencies
GAO-16-245: Published: Feb 10, 2016. Publicly Released: Mar 11, 2016.
http://gao.gov/products/GAO-16-245
GAO-16-245: Published: Feb 10, 2016. Publicly Released: Mar 11, 2016.
Offshore Oil and Gas Resources: Actions Needed to Better Protect Against Billions of Dollars in Federal Exposure to Decommissioning Liabilities
GAO-16-40: Published: Dec 18, 2015. Publicly Released: Jan 19, 2016.
http://gao.gov/products/GAO-16-40
GAO-16-40: Published: Dec 18, 2015. Publicly Released: Jan 19, 2016.
Maritime Transportation: Implications of Using U.S. Liquefied-Natural-Gas Carriers for Exports
GAO-16-104: Published: Dec 3, 2015. Publicly Released: Dec 3, 2015.
http://gao.gov/products/GAO-16-104
GAO-16-104: Published: Dec 3, 2015. Publicly Released: Dec 3, 2015.
U.S. Coast Guard National Pollution Funds Center: Improved Controls Needed for Oil Removal Disbursements and Action Needed for Sustainable Funding
GAO-15-682: Published: Sep 15, 2015. Publicly Released: Sep 15, 2015.
http://gao.gov/products/GAO-15-682
GAO-15-682: Published: Sep 15, 2015. Publicly Released: Sep 15, 2015.
Check-Off Programs: Observations from the Propane and Heating Oil Programs
GAO-15-769T: Published: Jul 10, 2015. Publicly Released: Jul 10, 2015.
http://gao.gov/products/GAO-15-769T
GAO-15-769T: Published: Jul 10, 2015. Publicly Released: Jul 10, 2015.
Crude Oil Export Restrictions: Studies Suggest Allowing Exports Could Reduce Consumer Fuel Prices
GAO-15-745T: Published: Jul 8, 2015. Publicly Released: Jul 8, 2015.
http://gao.gov/products/GAO-15-745T
GAO-15-745T: Published: Jul 8, 2015. Publicly Released: Jul 8, 2015.
Oil and Gas Resources: Interior's Production Verification Efforts and Royalty Data Have Improved, but Further Actions Needed
GAO-15-39: Published: Apr 7, 2015. Publicly Released: May 6, 2015.
http://gao.gov/products/GAO-15-39
GAO-15-39: Published: Apr 7, 2015. Publicly Released: May 6, 2015.
Changing Crude Oil Markets: Allowing Exports Could Reduce Consumer Fuel Prices, and the Size of the Strategic Reserves Should Be Reexamined
GAO-14-807: Published: Sep 30, 2014. Publicly Released: Oct 20, 2014.
More...http://gao.gov/products/GAO-14-807
GAO-14-807: Published: Sep 30, 2014. Publicly Released: Oct 20, 2014.
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