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Primary tabs
Neil KornzeBLM Director
FY 14-15: Agency Priority Goal
Oil and gas resource management
Priority Goal
Goal Overview
Problem or opportunity being addressed
The inspection of high risk producing oil and gas cases is paramount to help ensure that hydrocarbon production on federally managed lands are properly accounted for and results in accurate royalty payments to the public and Indian owners of such minerals.Oil and gas production on federally supervised lands represent a significant part of the nation’s hydrocarbon production.Operating regulations at 43 CFR 3161.3 (a) require the BLM to inspect all leases which produce high volumes of oil or natural gas and those leases that have a history of non-compliance at least once a year.The high risk cases are determined by four risk factors: production rating; number of missing Oil and Gas Operations Reports (OGOR); non-compliance rating; and, last production inspection date rating.
This effort is a component of addressing the deficiencies identified in the GAO High Risk report, which identified the areas for needed improvement including:
- ensuring data on production verification and royalties are consistent and reliable,
- meeting goals for oil and gas verification inspections, and
- ensuring that informal employee training is supported by formalized training courses offered on a consistent basis.
Relationship to agency strategic goals and objectives
Achieving a high rate of inspecting high risk producing cases will advance the BLM’s mission by ensuring that oil and gas operations are conducted in compliance with lease terms, with the regulations in title 43 CFR 3161.3 (a), and all other applicable regulations. The BLM is charged, in Section 101. (a) of the Federal Oil and Gas Royalty Management Act of 1982, with procedures to ensure that each federal and Indian lease site which is producing or is expected to produce significant quantities of oil or gas in any year or which has a history of non-compliance be inspected at least once annually.
Key barriers and challenges
The Bureau is limited in its ability to meet the requirement of inspecting all high risk cases by the number of certified inspectors available to inspect these cases. Competing priorities take time from these inspectors in completing high risk production inspections. High priority drilling and abandonment inspections must be completed prior to high risk production inspections. In addition the Bureau has historically had a high turnover of certified inspectors.
Stakeholder Engagement
The Government Accountability Office (GAO) and the Department of the Interior Office of Inspector General (OIG) has pointed out the failure of the BLM to adequately ensure production of federal and Indian minerals. The BLM answered the requests from both the GAO and OIG. This Priority Goal was created to help address some of the identified concerns while providing a forum by which the Department can continue to track the progress toward addressing the other concerns identified by GAO. The goal was developed in concert with the White House and released with the President’s FY 2013 Budget.
Strategies
The number of high risk production cases is determined, by the individual field offices, based on the Bureau’s risk-based inspection strategy. The inspection and enforcement strategy for FY 2014 can be found in Instruction Memorandum (IM) 2014-031. This risk-based strategy is providing managers in the field the means by which to better determine where inspections are most needed through scoring using pre-defined criteria including production, record verification, previous violations, time since last inspection, consistency with Oil and Gas Operating Report, etc. The Washington Office will report quarterly, by State Office, the number of high risk production cases inspected to date. The Washington Office will evaluate the State Office results and confer with the State Offices as necessary.
- A “case” is a lease, communitization agreement, unit agreement or participating area in a unit agreement that is used to identify a group of wells and facilities which are to be inspected together.
- Lease is a legal document executed between a landowner, as lessor, and a company or individual, as lessee, that conveys the right to exploit the premises for minerals or other products for a specified period of time over a given area.
- Communitization Agreement is an agreement to combine two or more mineral leases in order to have sufficient acreage to comply with the spacing required to drill a well.
- Unit Agreement is an agreement or plan for the development and operation which provides for the recovery of oil and/or gas from the lands made subject thereto as a single consolidated entity without regard to separate ownerships and the allocation of costs and benefits on a basis as defined in the agreement or plan.
- Participating Area is that part of a unit area which is considered reasonably proven to be productive in paying quantities or which is necessary for unit operations and to which production is allocated in the manner prescribed in the unit agreement.
In addressing the GAO High Risk Report, the BLM will also be engaged in:
- Revising Onshore Oil and Gas Orders 3, 4 and 5. These onshore orders cover how oil and gas is measured and stored in a secure facility to prevent theft and mishandling of production.
- Revising regulations to determine the royalty rate on oil and gas. The BLM will publish revised regulations that will determine the royalty rate and require a review of the royalty rates at least every five years.
- Reinstating training for managers on oil and gas operations. The BLM developed a training course which covers the responsibilities of a manger of oil and gas operations. The goal is to have all managers with oil and gas responsibilities to complete this course by the end of 2014.
Progress Update
In FY 2015, BLM conducted 2,030 high risk inspections, or greater than 100% of the 1,726 high risk cases that were originally identified for FY 2015. This is the second year in a row that BLM has successfully inspected all of the oil and gas cases that were classified as “high-risk” using a process that was initiated in 2012. This Priority Goal will be continued in FY 2016-2017 as part of the Department's efforts to improve oil and gas resource management and satisfy the GAO concerns in its High Risk Listing.
Significance of the Accomplishment (through the Priority Goal) especially in relation to past experience and benefit to the public
As a part of addressing weaknesses in the Department’s oil and gas programs identified in GAO’s High Risk list, a risk-based strategy has been effectively implemented for determining which oil and gas cases need to be inspected each year. This risk-based strategy has been providing managers in the field the means by which to better determine where production inspections are most needed through scoring of pre-defined criteria including production volumes, previous violations, time since last inspection, and missing Oil and Gas Operations Reports.
Next Steps
No Data Available
Contributing Programs & Other Factors
Contributing Programs within the agency
The Field Offices inspect the cases throughout the year and the inspection results are then entered into the Automated Fluid Minerals Support System (AFMSS). The Washington Office then runs reports from AFMSS showing the number of high risk production inspections completed. The respective Field Office Managers have the lead responsibility for the accomplishment of the inspection goals. The Washington Office, Chief, Division of Fluid Minerals has the responsibility for providing oversight and policy to the inspection program.
Contributing programs or partners outside the agency
The BLM is responsible for the inspection of all federal and Indian oil and gas operations. Other surface management agencies such as the Forest Service, Bureau of Indian Affairs, and the US Fish and Wildlife Service may help in determining surface use risks. These agencies report surface incidents of non-compliance to the local BLM field offices when discovered. The Office of Natural Resources Revenue does provide production data to the Bureau in the completion of inspections. Partners outside the Federal government that routinely report similar incidents are the respective State oil and gas inspection agencies and Indian Tribal inspectors.
Expand All
Strategic Goals
Strategic Goal:
Secure America's Energy Resources
Statement:
We will promote responsible development of renewable energy and ensure safe and environmentally responsible access to natural resources.
Strategic Objectives
Statement:
Ensure environmental compliance and the safety of energy development.
Description:
Four Department bureaus, Office of Surface Mining Reclamation and Enforcement (OSMRE), Bureau of Safety and Environmental Enforcement (BSEE), Bureau of Land Management (BLM), and Bureau of Ocean Energy Management (BOEM), oversee responsible energy development on private, public, and tribal lands and waters. Safety, environmental, and conservation compliance activities safeguard the Nation’s onshore and offshore energy resources, and mitigate the effects of mining on natural resources, including the protection and restoration of coal effected lands. These efforts are also key to maintaining the public’s confidence that energy development can be and is subject to strong and effective oversight.
Statement:
Develop renewable energy potential.
Description:
As four Department bureaus, BLM, BOEM, BSEE and the Bureau of Reclamation (BOR), work to promote domestic energy production by ensuring that renewable energy resources on the Department’s managed lands and waters are developed in an environmentally responsible manner. Standing up new sources of clean energy generation and facilitating the construction of new or upgraded transmission networks are helping to create new industries and supply chains, driving economic growth and job creation, and helping provide for a cleaner energy future.
Statement:
Manage conventional energy development.
Description:
The DOI oversees vast resources that, when developed the right way and in the right places, support an “all of the above” energy strategy that expands the production of energy at home, promotes energy security, and helps drive the economy and job growth. The Department’s landscape-level approach focuses on environmentally responsible energy development.
Statement:
Account for energy revenue.
Description:
ONRR disburses mineral and renewable energy revenues to a number of entities. Distributions to the Land and Water Conservation Fund, the Historic Preservation Fund, and the Reclamation Fund help ensure America’s natural resources, landscapes, and rich history are available to be enjoyed by current and future generations. Distributions to states are used to fund large capital projects such as schools, roads, and public buildings. Revenues collected from leases on Indian lands work directly to benefit members of the Indian community.
Agency Priority Goals
Statement:
Renewable energy resource development.
By September 30, 2015, increase approved capacity authorized for renewable (solar, wind, and geothermal) energy resources affecting Department of the Interior managed lands, while ensuring full environmental review, to at least 16,500 Megawatts (since 2009).
Description:
The Obama Administration’s coordinated strategy to develop all appropriate sources of renewable and conventional energy on U.S. public lands calls for development of onshore and offshore renewable energy under a ‘Smart from the Start’ approach that prioritizes and processes existing applications in a coordinated, focused manner with full environmental analysis and public review.
As manager of one-fifth of the nation’s landmass and 1.7 billion acres of the outer continental shelf, the U.S. Department of the Interior has the resources to help America produce more energy at home, thereby supporting a growing economy and job creation and reducing dependence on foreign oil and increasing sustainable practices with reduced greenhouse gas emissions. Secretary Sally Jewell has placed a priority on “Powering Our Future,” emphasizing the responsible development of conventional and renewable resources on our nation’s public lands and waters.
Onshore, the Bureau of Land Management (BLM) has identified 20.6 million acres of public land with wind energy potential in 11 western states, 30 million acres with solar energy potential in six southwestern states, and 111 million acres of public land in western states and Alaska with geothermal resource potential. Offshore, the Bureau of Ocean Energy Management (BOEM) manages the Outer Continental Shelf, 1.7 billion acres of federal-offshore lands with enormous wind-energy potential, and approved in 2011 the construction plan for Cape Wind Energy off the coast of Massachusetts.
In addition to the multiple renewable energy efforts on public lands, the Department of Interior is reducing energy consumption within its own buildings while also self-generating renewable energy at over 1,000 Interior sites nationwide, including locations such as visitor centers, wildlife refuges, recreation centers, and tribal facilities. Developing such renewable energy resources responsibly could help support a growing economy and protect our national interests while reducing our dependence on foreign oil and climate-changing greenhouse gas emissions.
Relationship to agency strategic goals and objectives
As the means for advancing the Administration’s ‘all-of-the-above’ strategy to develop domestic energy resources, realizing one of the Secretary of the Interior’s key priorities in creating a new energy frontier and as reflected in Interior’s Strategic Plan’s mission area to “Powering Our Future and Responsible Use of the Nation’s Resources,” this goal continues to expand upon the efforts started with the initial FY 2010/2011 Priority Goal to, “Increase approved capacity authorized for renewable (solar, wind, and geothermal) energy resources on Department of the Interior managed lands, while ensuring full environmental review, by at least 9,000 megawatts through 2011.” As part of securing America’s energy future, DOI is helping to move our nation toward a clean-energy economy. At Interior, this means changing the way we do business by opening our doors to responsible development of renewable energy on our public lands. This means using a ‘Smart from the Start’ approach that prioritizes and processes existing applications in a coordinated, focused manner with full environmental analysis and public review. Efforts include facilitating environmentally appropriate renewable-energy projects involving solar, wind and waves, geothermal, and hydropower. These resources, developed in the right ways and the right places, will help curb our dependence on foreign oil, reduce our use of fossil fuels and promote new industries and jobs here in America.
Key barriers and challenges
Renewable energy projects, especially solar and wind, are complex. The Department is committed to permitting renewable energy projects on public lands in an environmentally responsible manner. As a result, proposed projects are sometimes rejected or reduced in size and scope to avoid or minimize impacts to tribal and cultural resources, threatened and endangered species and their habitat, or areas near or adjacent to lands designated by Congress, the President, or Secretary for the protection of sensitive viewsheds, resources, and values that could be adversely affected by development. Additionally, renewable energy companies sometimes decide to scale down, modify timelines and develop their projects in phases, or otherwise modify or withdraw projects for reasons unrelated to the permitting process.
By tracking progress on a quarterly basis, Interior is aware of the emerging complex issues and challenges associated with the formulation of renewable energy projects that require time and resources to address—including for example, rerouting and modification of plans to avoid impacts to natural resources like sensitive avian and wildlife species and tribal concerns. Further, while Interior agencies play a critical role in facilitating the siting and permitting of renewable energy projects on public lands, there are other factors that impact a potential project’s progress, including the project proponent’s ability to secure financing and to obtain power purchase agreements with electric utility companies. Technology and transmission constraints, such as an applicant needing to upgrade a transmission line, can also impact the overall schedule.
Stakeholder Engagement
This goal includes a broad number of stakeholders within Interior and externally. It is a continuation of a FY 2012-2013 goal that was developed by BLM in concert with the Assistant Secretary for Land and Minerals Management. Other Federal agencies including DOI, USDA, EPA, NOAA; Interior bureaus including FWS, NPS, USGS; as well as States, local entities, conservation groups, industry and others are engaged to advance the Administration’s ‘all-of-the-above’ strategy to develop domestic energy resources and to achieve one of the Secretary of the Interior’s top priorities for “Powering Our Future.”
Statement:
Oil and gas resources management. By September 30, 2015, the Bureau of Land Management (BLM) will increase the completion of inspections of federal and Indian high risk oil and gas cases by 9 percent over FY 2011 levels, which is equivalent to covering as much as 95% of the potential high risk cases.
Description:
Problem or opportunity being addressed
The inspection of high risk producing oil and gas cases is paramount to help ensure that hydrocarbon production on federally managed lands are properly accounted for and results in accurate royalty payments to the public and Indian owners of such minerals.Oil and gas production on federally supervised lands represent a significant part of the nation’s hydrocarbon production.Operating regulations at 43 CFR 3161.3 (a) require the BLM to inspect all leases which produce high volumes of oil or natural gas and those leases that have a history of non-compliance at least once a year.The high risk cases are determined by four risk factors: production rating; number of missing Oil and Gas Operations Reports (OGOR); non-compliance rating; and, last production inspection date rating.
This effort is a component of addressing the deficiencies identified in the GAO High Risk report, which identified the areas for needed improvement including:
- ensuring data on production verification and royalties are consistent and reliable,
- meeting goals for oil and gas verification inspections, and
- ensuring that informal employee training is supported by formalized training courses offered on a consistent basis.
Relationship to agency strategic goals and objectives
Achieving a high rate of inspecting high risk producing cases will advance the BLM’s mission by ensuring that oil and gas operations are conducted in compliance with lease terms, with the regulations in title 43 CFR 3161.3 (a), and all other applicable regulations. The BLM is charged, in Section 101. (a) of the Federal Oil and Gas Royalty Management Act of 1982, with procedures to ensure that each federal and Indian lease site which is producing or is expected to produce significant quantities of oil or gas in any year or which has a history of non-compliance be inspected at least once annually.
Key barriers and challenges
The Bureau is limited in its ability to meet the requirement of inspecting all high risk cases by the number of certified inspectors available to inspect these cases. Competing priorities take time from these inspectors in completing high risk production inspections. High priority drilling and abandonment inspections must be completed prior to high risk production inspections. In addition the Bureau has historically had a high turnover of certified inspectors.
Stakeholder Engagement
The Government Accountability Office (GAO) and the Department of the Interior Office of Inspector General (OIG) has pointed out the failure of the BLM to adequately ensure production of federal and Indian minerals. The BLM answered the requests from both the GAO and OIG. This Priority Goal was created to help address some of the identified concerns while providing a forum by which the Department can continue to track the progress toward addressing the other concerns identified by GAO. The goal was developed in concert with the White House and released with the President’s FY 2013 Budget.
Strategic Objectives
Strategic Objective:
Ensure Environmental Compliance and Safety of Energy Development Activities
Statement:
Ensure environmental compliance and the safety of energy development.
Description:
Four Department bureaus, Office of Surface Mining Reclamation and Enforcement (OSMRE), Bureau of Safety and Environmental Enforcement (BSEE), Bureau of Land Management (BLM), and Bureau of Ocean Energy Management (BOEM), oversee responsible energy development on private, public, and tribal lands and waters. Safety, environmental, and conservation compliance activities safeguard the Nation’s onshore and offshore energy resources, and mitigate the effects of mining on natural resources, including the protection and restoration of coal effected lands. These efforts are also key to maintaining the public’s confidence that energy development can be and is subject to strong and effective oversight.
Agency Priority Goals
Statement: Oil and gas resources management. By September 30, 2015, the Bureau of Land Management (BLM) will increase the completion of inspections of federal and Indian high risk oil and gas cases by 9 percent over FY 2011 levels, which is equivalent to covering as much as 95% of the potential high risk cases.
Description: Problem or opportunity being addressed The inspection of high risk producing oil and gas cases is paramount to help ensure that hydrocarbon production on federally managed lands are properly accounted for and results in accurate royalty payments to the public and Indian owners of such minerals.Oil and gas production on federally supervised lands represent a significant part of the nation’s hydrocarbon production.Operating regulations at 43 CFR 3161.3 (a) require the BLM to inspect all leases which produce high volumes of oil or natural gas and those leases that have a history of non-compliance at least once a year.The high risk cases are determined by four risk factors: production rating; number of missing Oil and Gas Operations Reports (OGOR); non-compliance rating; and, last production inspection date rating. Relationship to agency strategic goals and objectives Achieving a high rate of inspecting high risk producing cases will advance the BLM’s mission by ensuring that oil and gas operations are conducted in compliance with lease terms, with the regulations in title 43 CFR 3161.3 (a), and all other applicable regulations. The BLM is charged, in Section 101. (a) of the Federal Oil and Gas Royalty Management Act of 1982, with procedures to ensure that each federal and Indian lease site which is producing or is expected to produce significant quantities of oil or gas in any year or which has a history of non-compliance be inspected at least once annually. Key barriers and challenges The Bureau is limited in its ability to meet the requirement of inspecting all high risk cases by the number of certified inspectors available to inspect these cases. Competing priorities take time from these inspectors in completing high risk production inspections. High priority drilling and abandonment inspections must be completed prior to high risk production inspections. In addition the Bureau has historically had a high turnover of certified inspectors. Stakeholder Engagement The Government Accountability Office (GAO) and the Department of the Interior Office of Inspector General (OIG) has pointed out the failure of the BLM to adequately ensure production of federal and Indian minerals. The BLM answered the requests from both the GAO and OIG. This Priority Goal was created to help address some of the identified concerns while providing a forum by which the Department can continue to track the progress toward addressing the other concerns identified by GAO. The goal was developed in concert with the White House and released with the President’s FY 2013 Budget.
This effort is a component of addressing the deficiencies identified in the GAO High Risk report, which identified the areas for needed improvement including:
