Grijalva, Committee Democrats Make Various GAO Requests to Examine Energy Production on Public Lands
WASHINGTON – Today, U.S. House Natural Resources Committee Ranking Member Raúl M. Grijalva (D-Ariz.) and Committee Democrats sent letters to independent government watchdog, the U.S. Government Accountability Office (GAO), requesting three separate reports regarding energy production on public lands managed by the Bureau of Land Management (BLM). Together, these requests will help inform congressional oversight on idled and orphaned wells, oil and gas companies’ leasing practices, and geothermal permitting.
GAO REQUEST ON IDLED AND ORPHANED WELLS
Idled and orphaned oil and gas wells pose major environmental, public health, and financial risks to nearby communities and American taxpayers. New reporting and monitoring requirements can be instrumental in keeping communities safe, but as the lawmakers point out, will require oversight to ensure adequate implementation:
In the recently finalized 2024 Oil and Gas Rule, BLM requires additional reporting on and monitoring of inactive wells. After a well has been inactive for four years, the new regulation requires operators to return the well to production, condition the well for another beneficial use, or immediately plug the well and reclaim any surface disturbances.
The implementation of this new regulation warrants oversight to ensure it functions as expected to reduce the number of long-term inactive, idled, and orphaned wells. BLM’s enforcement of reclamation requirements has been repeatedly criticized as inadequate by nonpartisan watchdogs, including in 2017 and 2019 reviews by the Government Accountability Office and a 2018 Department of the Interior Office of the Inspector General audit.
The lawmakers are requesting a review of BLM’s current reporting and monitoring processes, as well as a review of the agency’s prioritization for reclamation and enforcement of reclamation responsibilities.
Cleaning up orphaned wells is a major priority for Committee Democrats. Through the Infrastructure Investment and Jobs Act, Committee Democrats secured $4.7 billion to establish new well-plugging, remediation, and reclamation programs on federal, state, tribal, and private lands. These funds are helping to improve environmental and public health, while also creating jobs and revitalizing communities.
READ the full letter to GAO on idled and orphaned wells here.
GAO REQUEST ON OIL AND GAS COMPANIES’ LEASING PRACTICES
To ensure American taxpayers receive a fair return for oil and gas drilled on public lands, BLM and the Office of Natural Resources Revenue (ONRR) must have accurate data about the companies that hold public land leases and how many leases they hold. Federal statute limits the number of acres any one company can hold, but as the lawmakers highlight in their request, considerable bankruptcies, mergers, and acquisitions in the oil and gas industry complicate data and enable leasing practices that result in underpaid royalties:
In August 2023, a non-governmental watchdog reported that some of the largest oil and gas companies hold more leases on public lands—in some cases, hundreds more leases—than reported in BLM’s data. According to the report, comparing BLM leasing data with Securities and Exchange Commission filings revealed that 21 companies, through 300 subsidiaries, hold nearly half of all federal oil and gas leases. The report also stated that the top five publicly traded federal leaseholders control a quarter of all federal leases and have underreported or underpaid royalties to ONNR.
The lawmakers are requesting a review of BLM’s and ONRR’s capacity to accurately track oil and gas companies’ bankruptcies, mergers, and acquisitions, as well as companies’ compliance with regulatory acreage limits. Underscoring the importance of accurate leasing data, a recent Office of Inspector General report found that one company, Hilcorp San Juan, LP, provided false, misleading, or inaccurate information when reporting its oil and gas production and royalties. The investigation resulted in the recovery of more than $34 million for American taxpayers.
READ the full letter to GAO on oil and gas companies’ leasing practices here.
GAO REQUEST ON GEOTHERMAL PERMITTING
The future of geothermal energy is highly dependent on our public lands; one study estimates that 90% of potential geothermal development is located on federal public lands. However, as the lawmakers describe in their letter, there are significant challenges to fully harnessing that potential:
DOE’s National Renewable Energy Laboratory has reported that next-generation geothermal plants face some challenges operating on BLM lands. Stakeholders in the energy sector have expressed concerns that there are insufficient acres of federal land available for geothermal development because few BLM field offices hold regularly scheduled sales of geothermal leases. According to a geothermal association, some BLM field offices have experience with geothermal permitting while others do not. As a result, offices with less experience may take considerable time to review and approve geothermal permits. The association further stated that limited staff availability and high staff turnover at some BLM field offices have increased geothermal permit review and processing timeframes.
To better understand and address these challenges, the lawmakers are requesting information about current geothermal leases and permits, workforce limitations and opportunities, and other potential needs for increasing BLM’s capacity to expand geothermal development.
READ the full letter to GAO on geothermal permitting here.
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