GAO finds big gaps in BLM’s inspections, data for wells on federal lands
Gayathri Vaidyanathan, E&E reporter
Published: Tuesday, May 13, 2014
The federal government has not inspected more than 60 percent of oil and gas wells that it has identified as high priority, according to a Government Accountability Office (GAO) report released yesterday.
That’s because the Bureau of Land Management, which oversees drilling on federal lands, does not have enough staff or resources to carry out the inspections, the report found.
The GAO did the analysis after being requested by Democrats in Congress to review oversight of federal and Indian lands, which are under the watch of the federal government. The agency interviewed officials with the BLM, the Bureau of Indian Affairs, the Fish and Wildlife Service, the National Park Service, U.S. EPA, the Army Corps of Engineers, the Forest Service, several tribal nations, and the oil and gas industry. It also considered state-level regulations in Arkansas, California, Colorado, Louisiana, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Texas, Utah, West Virginia and Wyoming.
Rep. Diana DeGette (D-Colo.), who had requested the report together with colleagues, said Congress should allocate more resources to the BLM.
“While I support responsible development, the detail in GAO’s report bears out what many have sensed: Our regulatory system is not keeping up with the rapid changes in the oil and gas sector, leaving producers frustrated and members of the public confused and wary about potential threats to public health and the environment,” she said. “Unfortunately, Congress is not setting the Bureau of Land Management up for success. We need to strengthen oversight, starting with GAO’s recommendations, commit to giving BLM the resources it needs to do its job, and do more to foster relationships with state and tribal partners.”
The BLM does not inspect all oil and gas wells drilled on federal lands. Rather, the agency rates wells as high or low priority, and then has inspectors present at high-priority wells when operators drill, install blowout preventers, install casing and cement the well.
A well’s priority is determined based on the geologic formation, the proximity of the well to water resources, and other factors such as whether the zone contains toxic hydrogen sulfide gas.
Of the 3,702 wells that were identified as high priority between 2009 and 2012, the BLM did not inspect 2,100, the GAO found.
Information about the wells is maintained in the BLM’s Automated Fluid Minerals Support System (AFMSS) database. The GAO found that the database is incomplete. For the 14,000 wells drilled since 2009, the database did not classify 1,784 wells as low or high priority.
BLM officials told the GAO that their data collection system would improve in 2015 as the agency is in the process of replacing its AFMSS database with a new system.
The GAO also faulted the agency for not approving communitization agreements where companies stitch together several 640-acre well spacing units to create a larger parcel of land to drill. Industry groups maintain that the standard 640-acre spacing unit is too small to make full use of long horizontal laterals and maximize oil and gas production.
The BLM is also supposed to review the operation of its field offices annually to ensure inspections are being carried out, according to internal policy set in 2011. But since then, the agency has reviewed just one field office, the GAO found.
Reviews are needed to ensure that the actual performance matches planned or expected results and that the offices are meeting their stated goals.
BLM officials told the GAO that they are developing a schedule for office reviews. But they stressed that they may not have the funding and staff to actually conduct the reviews.
The GAO noted that some BLM field offices do not have comprehensive data on the location of federal and Indian oil and gas resources. Some offices also do not know where new and existing well bores are, which would be needed to protect the resources.
“BLM officials from one field office recently reported that the number of wells extracting Indian resources without prior approval is a major concern for the agency,” the report stated. “Without access to data on the location of resources and wells, BLM cannot provide reasonable assurance that federal and Indian resource owners’ rights are protected.”
The BLM relies on outdated rules and does not coordinate with states in carrying out its duties, the report found.
“BLM has not established a process to ensure that all rules and guidance are reviewed and periodically updated consistent with technological advances, as called for by Interior’s guidance and executive order,” the report stated. “Without such a process, BLM cannot provide reasonable assurance that oil and gas rules are keeping pace with and are consistent with technological advances.”