GAO Report GAO–07–829R

United States Government Accountability Office
Washington, DC 20548

June 29, 2007
The Honorable Nick J. Rahall, II
Chairman
Committee on Natural Resources
House of Representatives
The Honorable Madeleine Z. Bordallo
Chairwoman
Subcommittee on Fisheries
Wildlife and Oceans
Committee on Natural Resources
House of Representatives
The Honorable Ron Kind
House of Representatives
Subject: U.S. Fish and Wildlife Service: Opportunities Remain to Improve Oversight
and Management of Oil and Gas Activities on National Wildlife Refuges
The mission of the Department of the Interior’s Fish and Wildlife Service (FWS) includes
administering a national network of refuges for the conservation, management, and,
where appropriate, restoration of fish, wildlife, and plant resources and their habitats
within the United States for the benefit of present and future generations. The refuges are
unique in that they are the only federal lands managed primarily for the benefit of
wildlife. The refuge system’s 95 million acres, which represent more than 14 percent of all
federal lands and are found in every state, include land that has always been federally
owned and land that has been acquired from others. While the federal government owns
almost all of the surface lands in the system, in many cases it does not own the
subsurface mineral rights. Subject to some restrictions, owners of subsurface mineral
rights have the legal authority to explore for mineral resources such as oil and gas and to
extract resources that are found.
In August 2003, we reported that oil and gas activities were occurring on many wildlife
refuges and that little was known about the effects of those activities on refuge
1
resources. Specifically, we reported that 155 of the 575 FWS-managed refuges had past
or current oil and gas exploration, production, or pipeline activities, including over 1,800
active and 2,600 inactive oil and gas wells. While available studies, anecdotal information,
and our observations indicated that environmental damage had occurred, FWS had not
assessed the cumulative environmental effects of oil and gas activities on refuge
resources. We also reported that FWS oversight of oil and gas activities needed
improvement, in part because of uncertainties related to FWS’s authority to require oil
1

GAO, National Wildlife Refuges: Opportunities to Improve the Management and Oversight of Oil and Gas
Activities on Federal Lands, GAO-03-517 (Washington, D.C.: August 28, 2003).

GAO-07-829R Oil and Gas Activities on National Wildlife Refuges

and gas operators to obtain access permits before conducting exploration and production
activities. In addition, we reported that FWS guidance regarding land acquisition was
unclear and potentially exposed the federal government to situations where it could
unknowingly acquire contaminated land. To address these deficiencies, we made a
number of recommendations that, if implemented, we believed would improve FWS’s
ability to protect refuge resources.
On May 3, 2007, we briefed House Committee on Natural Resources staff on the extent to
which FWS had taken corrective measures to address the problems that we previously
identified. We reported that FWS has taken steps to implement some of our
recommendations, but we believe that more action is needed. For example, FWS has
made progress in developing a database to collect information on the nature and extent
of oil and gas activities and their effect on refuge resources. However, the database is not
yet in use and FWS has no estimate for when it will be in place nationwide. In addition,
FWS has developed an estimate of the staffing levels needed to oversee oil and gas
activities but has not yet sought sufficient resources to fund the needed positions. And,
while FWS reported to us that it has worked with the Department of the Interior (DOI) to
determine the extent of the FWS’s authority to require permits from oil and gas operators,
FWS has yet to make that determination public. In summary, we consider all but one of
the recommendations from our 2003 report to be open.
The enclosed briefing document provides further details about the findings and
recommendations in our 2003 report and the status of FWS actions to implement those
recommendations (see enc. I). We conducted our follow-up review from April 2007
through May 2007 in accordance with generally accepted government auditing standards.
We provided DOI with a draft of this report and the enclosed briefing document for
review and comment. In reply, DOI commented that, in general, it agreed with the
majority of our conclusions that pertain to FWS (see enc. II). DOI also provided
additional details regarding its actions to implement recommendations from our 2003
report. We have incorporated these clarifications in this report as necessary.
DOI stated that it partially concurred with our assessment of its progress in implementing
our recommendation regarding adequate training for staff responsible for overseeing oil
and gas activities. In particular, DOI disagreed that, as we wrote in the draft briefing
document, the training should be required for appropriate personnel. Instead, DOI stated
that voluntary enrollment was sufficient. Our intent in suggesting that training be required
was to ensure that appropriate personnel attended. We accept DOI’s assurances that the
training has been well received and attended, and its claim that making the training
mandatory at this time is not necessary. We expect that DOI would change this policy if
it finds in the future that appropriate personnel are not seeking such training.
Accordingly, we will close this recommendation.
Additionally, DOI stated that it does not believe that our recommendation from the 2003
report that the Secretary of the Interior and the Director of FWS work with DOI’s Office
of the Solicitor to seek from Congress any necessary additional authority over
outstanding and reserved mineral rights is necessary. DOI asserted that it is able, under
its existing authorities, to effectively manage and oversee oil and gas development
activities on national wildlife refuges and that it is able to do so without infringing on the
private property rights of mineral owners.

2

GAO-07-829R Oil and Gas Activities on National Wildlife Refuges

We appreciate DOI’s belief that it can protect the public's surface interests in national
wildlife refuge lands with the authority it currently has. However, we do not believe that
DOI has adequate information on which to base this claim. In particular, FWS has not
comprehensively assessed the extent of the damages occurring on refuge lands due to oil
and gas activities and it has yet to publicly clarify the extent of its current authority over
private mineral rights. We continue to believe that such information is necessary for DOI
to adequately inform the Congress regarding the need for additional authority. Moreover,
we believe it is for Congress, not DOI, to weigh the needs of the refuge lands and the
interests of mineral owners and, ultimately, to determine what oversight authority would
be appropriate. Before Congress can do so, DOI must inform the Congress as to what
authority FWS might require to adequately protect refuge resources.
----As agreed with your offices, unless you publicly announce the contents of this report
earlier, we plan no further distribution until 30 days from the report date. At that time,
copies of this report will be sent to interested congressional committees and the
Secretary of the Interior. We will also make copies available to others upon request. In
addition, this report will be available at no charge on the GAO Web site at
http://www/gao/gov.
If you or your staffs have any questions, please contact me on (202) 512-3841 or at
[email protected]. Contact points for our offices of Congressional Relations and Public
Affairs may be found on the last page of this report. Key contributors to this report were
Kevin Bray, Ross Campbell, John Delicath, and Trish McClure.

Robin M. Nazzaro
Director, Natural
Resources and Environment
Enclosures

3

GAO-07-829R Oil and Gas Activities on National Wildlife Refuges

Enclosure I
Briefing for House Natural Resources Committee

May 2007

U.S. FISH AND WILDLIFE SERVICE
Accountibility Integrity Reliability

Briefing

Opportunities Remain to Improve
Oversight and Management of Oil and Gas
Activities on National Wildlife Refuges

Why GAO Did This Study

Background

In 2003, GAO issued a report on
the U.S. Fish and Wildlife
Service’s (FWS) management and
oversight of privately held oil and
gas operations on wildlife
refuges. GAO made several
recommendations to the
Department of the Interior and
FWS to improve oversight. In
response to the growing demand
for domestic energy sources,
there has been increased
pressure to pursue oil and gas
development on federal lands,
and some are concerned about
the impact of oil and gas
activities on federal resources if
they are not properly managed. In
this context, you asked us to
determine the extent to which
FWS had implemented the
recommendations from our 2003
report and whether additional
actions are necessary to properly
oversee and manage oil and gas
operations.

The mission of the National Wildlife Refuge System is to administer a national
network of lands and waters for the conservation, management, and, where
appropriate, restoration of fish, wildlife, and plant resources and their habitats
within the United States for the benefit of present and future generations.
While the federal government owns almost all of the surface lands in the
system, in many cases it does not own the subsurface mineral rights. Subject
to some restrictions, owners of subsurface mineral rights have the legal
authority to explore for mineral resources such as oil and gas and to extract
resources that are found.
In August 2003, we reported the following:
•

Of the 575 FWS-managed refuges, 155 had past or current oil and gas
exploration, production, or pipeline activities. As of December 2002, 4,406
active and inactive oil and gas wells were located on 105 refuges. The 1,806
active wells, located on 36 refuges, produced about 1.1 percent and 0.4
percent of total domestic oil and gas production, respectively.

•

FWS had not assessed the cumulative environmental effects of oil and gas
activities on refuge resources. Available evidence indicated that effects
varied from negligible to substantial. Some effects had been reduced
through improvements in industry practices.

•

Federal management and oversight of oil and gas activities varied widely
among refuges. The variation occurred because of differences in authority
to oversee private mineral rights and because refuge managers lacked
guidance, resources, and training.

•

FWS’s legal authority to require oil and gas operators to obtain access
permits that contain conditions designed to protect refuge resources varies
depending upon the nature of the mineral rights. For “reserved” mineral
rights—cases where the property owner retained the mineral rights when
selling the land to the federal government—FWS can require permits only
if the property deed subjects the rights to such requirements. For
“outstanding” mineral rights—cases where the mineral rights were
separated from the surface lands before the government acquired the
property—FWS had not formally determined its position regarding its
authority to require access permits. We reported that based on statutory
language and court decisions, we believe FWS has the authority to require
owners of outstanding mineral rights to obtain permits.

•

FWS’s land acquisition guidance was unclear and oversight was
inadequate, thereby exposing the federal government to unexpected
cleanup costs for properties contaminated by hazardous substances,
including oil and gas.

Scope and Methodology
To determine the extent to which
FWS has implemented corrective
actions to address the problems
we identified in 2003, we
reviewed agency documents and
relevant laws, analyzed agency
responses to written questions,
and interviewed agency officials.
This work was conducted in
accordance with generally
accepted government auditing
standards in April and May 2007.

Accordingly, we made numerous recommendations to FWS to address these
deficiencies. We also suggested that the Congress consider providing FWS
with greater authority to oversee private mineral rights.
United States Government Accountability Office

Briefing for House Natural Resources Committee

Briefing

GAO’s Recommendations from 2003 and
FWS’s Actions to Implement Them
Collect and Maintain Better Data on Oil and Gas Activities

Prior GAO Products
GAO, National Wildlife Refuges:
Opportunities to Improve the
Management and Oversight of
Oil and Gas Activities on
Federal Lands, GAO-03-517.
Washington, D.C.: August 28,
2003.

Page 2

1) We recommended that FWS collect and maintain better data on the
nature and extent of oil and gas activities and the effects of those
activities on refuge resources.
Agency Actions
•

FWS reported to us that it began working with the Environmental
Protection Agency (EPA) in October 2006 to evaluate whether an oil and
gas database used by EPA—the Site Assessment Reconnaissance Tracking
System—could be adapted to suit FWS’s needs.

•

According to FWS, the system includes geospatial location information,
site photographs, spill information, and an action tracking log.

•

FWS told us that it is a priority to complete the evaluation process in 2007.

•

FWS’s initial estimate is that it will cost approximately $2 million to create
an initial inventory of all wells and pipelines on the 155 refuges.
Populating and maintaining the database with inspection results would
add yearly costs.

•

FWS is considering a pilot test of the database in Region 4 (which includes
Louisiana).

•

FWS told us that once a funding source is identified, the agency plans to
hire contractors to conduct the initial phases of data collection and
database population. Once that is completed and the database is
operational, FWS will use existing staff to conduct day-to-day oil and gas
facility inspections.

GAO Analysis
•

We consider this recommendation to be open.

•

It appears to us that the EPA database contains many data elements that
would be needed to manage oil and gas activity on refuges and is a
reasonable starting point for the development of an FWS system.

•

It is not clear when the database will be implemented on a systemwide
basis.

Briefing for House Natural Resources Committee

Page 3

Recommendations and Actions (cont.)
Determine Necessary Staffing Levels
2) We recommended that FWS determine the level of staffing
necessary to adequately oversee oil and gas operations and seek
the necessary funding to meet those needs through appropriations,
the authority to assess fees, or other means.
Agency Actions
•

A team of FWS managers, working with staff from the National Park
Service’s Geological Resources Division, determined that a total of 45
positions are needed to oversee oil and gas activities for the national
wildlife refuge system, including 32 refuge oil and gas specialists, 7
regional coordinators, and a 6-person Mineral Resources Team.

•

FWS reported to us that under current budget circumstances, creating 45
positions is not feasible.

•

According to FWS, if additional funding becomes available, it will create
three new positions to form a national Mineral Resources Team.

•

FWS has used damage fees to hire oil and gas staff specialists in Texas
and Louisiana to conduct damage assessments, mitigate or restore
damage, and monitor or study the recovery of damaged resources.

•

FWS told us that it is “strongly considering” initiating a process to expand
its authority nationally to retain fees collected for damages.

GAO Analysis
•

We consider this recommendation to be open.

•

FWS used reasonable factors to determine necessary staffing levels,
namely comparing staff levels with the National Park Service for
comparable activities and assessing expected increases in oil and gas
activities on refuge lands.

•

However, one could argue that reaching parity with National Park Service
staffing levels would require more than 45 FWS positions
.
• The Park Service has 13 dedicated positions to manage over 700 wells
in 12 parks. This equates to just over 1 person per park, and about 54
wells per person.
•

FWS has 4,400 wells on 105 refuges. A staffing level of 45 equates to
less than 1 person for every 2 refuges and almost 100 wells per person.

•

FWS does not appear to be taking aggressive steps to adequately staff
the agency’s management and oversight of oil and gas activities. In
general, FWS is planning for reductions in overall refuge staffing
levels and conceded to us that the loss of staff will have a significant
effect on all programs within the refuge system, including oil and gas
management.

Briefing for House Natural Resources Committee

Page 4

Recommendations and Actions (cont.)
Ensure that Agency Staff Are Trained
3) We recommended that FWS ensure that staff are adequately
trained to oversee oil and gas activities.
Agency Actions
•

FWS developed a new training manual and conducted three training
sessions in Texas, North Dakota, and Louisiana. A fourth session is
tentatively scheduled for September 2007 in Alaska.

•

FWS plans to offer one course per year starting in FY 2008.

•

FWS personnel involved with natural resource management or
enforcement concerning oil and gas facilities are “strongly encouraged,”
but not required, to attend the training.

•

FWS is working on a handbook entitled Management of Oil and Gas on
National Wildlife Refuges to provide guidance to refuge managers. FWS
told us that the handbook would be available to personnel in August or
September 2007.

•

FWS believes that it has met the requirement of this recommendation.

GAO Analysis
•

We are closing this recommendation in recognition of FWS’s actions.
However, we have several comments on those actions.
•

We believe that FWS should monitor the attendance at its training
classes to ensure that personnel with oil and gas responsibilities are
enrolling. If voluntary enrollment does not prove adequate, then
mandatory enrollment might be needed.

•

In our view, a key element of training concerns FWS’s authority to
require permits for oil and gas activities. However, FWS’s training
manual states that the question of permitting authority for outstanding
mineral rights is “unresolved.” We believe that the handbook will be a
more meaningful document than the training manual if it directly
addresses the issue of authority over private mineral rights. According
to FWS, the handbook will address legal authorities, including mineral
ownership, and implementing regulations. Although FWS testified in
October 2003 that the handbook would be ready in December 2004, it
is still not available.

Briefing for House Natural Resources Committee

Page 5

Recommendations and Actions (cont.)
Enhance Permit Authorities for Oil and Gas Activities
4) We recommended that the Secretary of the Interior and the
Director of FWS should work with the Department of the Interior’s
(DOI) Office of the Solicitor to determine FWS’s existing
authority to issue permits and set reasonable conditions regarding
outstanding mineral rights and to report the results of its
determination to Congress.
Agency Actions
•

According to FWS, it is considering seeking—but has not sought—a
formal opinion from DOI’s Office of the Solicitor regarding FWS’s
authority to issue permits for outstanding mineral rights.

•

However, FWS told us that it has consulted with the Office of the Solicitor
regarding its authorities to issue permits for nonfederal oil and gas
operations on refuge lands.

•

According to FWS, the Office of the Solicitor has reviewed and concurred
with the language in the draft FWS handbook on oil and gas management
regarding FWS’s authorities.

•

FWS will not reveal the solicitor’s position on this question until it
releases the handbook on oil and gas management.

GAO Analysis
•

We consider this recommendation to be open until the Secretary and FWS
report the results of their determination to the Congress.

Briefing for House Natural Resources Committee

Page 6

Recommendations and Actions (cont.)
Enhance Permit Authorities for Oil and Gas Activities
5) We recommended that the Secretary of the Interior and the
Director of FWS should work with DOI’s Office of the Solicitor to
seek from Congress, in coordination with appropriate
administration officials—including those within the Executive
Office of the President—any necessary additional authority over
such [outstanding] rights, and over reserved mineral rights, so that
FWS can apply a consistent and reasonable set of regulatory and
management controls over all oil and gas activities occurring on
national wildlife refuges to protect the public’s surface interests.
Agency Actions
•

In October 2003, FWS testified that it did not see the need for additional
legislative authority—similar to that available to the National Park Service
and the Forest Service—regarding outstanding or reserved mineral rights.
FWS has maintained this position in its response to our recent inquiries.

•

In response to our request for comments on a draft of this product, DOI
stated its belief that it does not require additional authority to manage oil
and gas activities where the mineral rights have been reserved. DOI also
said that additional authority would require permitting for operators who
own the subsurface mineral rights and that FWS is able to effectively
manage oil and gas activities on refuges without infringing on the private
property rights of mineral owners.

GAO Analysis
•

We consider this recommendation to be open.

•

We appreciate DOI’s belief that it can protect the public's surface interests
in national wildlife refuge lands with the authority it currently has.
However, we do not believe that DOI has adequate information on which
to base this claim. In particular, FWS has not comprehensively assessed
the extent of the damages occurring on refuge lands due to oil and gas
activities and it has yet to publicly clarify the extent of its current
authority over private mineral rights. We continue to believe that such
information is necessary for DOI to adequately inform the Congress
regarding the need for additional authority. Moreover, we believe it is for
Congress, not DOI, to weigh the needs of the refuge lands and the
interests of mineral owners and, ultimately, to determine what oversight
authority would be appropriate. Before Congress can do so, DOI must
inform the Congress as to what authority FWS might require to adequately
protect refuge resources.

Briefing for House Natural Resources Committee

Briefing

Recommendations and Actions (cont.)
Improve Land Acquistion Guidance to Avoid Problems

GAO Contributors
If you have any questions
concerning this briefing, please
contact Robin M. Nazzaro,
Director, Natural Resources and
Environment, at (202) 512-3841.
Other key contributors to this
briefing were Kevin Bray, Ross
Campbell, John Delicath, and
Trish McClure.

Page 7

6) We recommended that FWS clarify guidance and better oversee its
land acquisition process so that all hazardous substances and
environmental problems, as well as future cleanup costs, are fully
identified prior to acquisition and that unexpected costs are
avoided.
Agency Actions

•

October 2003—FWS testified that it believed that existing policies
were sound but that they could be further improved.

•

June 2004—FWS wrote to GAO stating that its policies were clear but
that it would issue a Director’s Order in FY 2004 reaffirming the
importance of conducting thorough environmental site assessments
for all sites, including properties with oil and gas activities.

•

FWS has now decided to revise the policy rather than issue a
Director’s Order. The agency stated the following reasons for its
change in plans:
•

Director’s Orders are temporary.

•

In November 2005, EPA issued regulations describing
environmental site assessment practices. Those regulations
became effective in November 2006 and FWS needs to address
them in its revised policy.

•

FWS has assembled a team to work on revising its policy but
cannot complete that task until

•

•

DOI and the U.S. Department of Agriculture issue guidance for
addressing the new EPA regulations and

•

DOI revises its land acquisition policy after issuing the
guidance.

In its comments on a draft of this report, DOI said that its guidance
for addressing the new EPA regulation is under review and is
expected to be completed by the end of 2007.

GAO Analysis

•

We consider this recommendation to be open.

•

We are not yet able to evaluate DOI or FWS changes to policy.

•

The revised FWS policy will not be available until at least 2008.

•

We note that improved guidance must also be accompanied by
adequate implementation and oversight.

Enclosure II
Comments from the Department of the Interior

(360828)

11

GAO-07-829R Oil and Gas Activities on National Wildlife Refuges

This is a work of the U.S. government and is not subject to copyright protection in the
United States. It may be reproduced and distributed in its entirety without further
permission from GAO. However, because this work may contain copyrighted images or
other material, permission from the copyright holder may be necessary if you wish to
reproduce this material separately.

GAO’s Mission

The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting its
constitutional responsibilities and to help improve the performance and
accountability of the federal government for the American people. GAO
examines the use of public funds; evaluates federal programs and policies;
and provides analyses, recommendations, and other assistance to help
Congress make informed oversight, policy, and funding decisions. GAO’s
commitment to good government is reflected in its core values of
accountability, integrity, and reliability.

Obtaining Copies of
GAO Reports and
Testimony

The fastest and easiest way to obtain copies of GAO documents at no cost
is through GAO’s Web site (www.gao.gov). Each weekday, GAO posts
newly released reports, testimony, and correspondence on its Web site. To
have GAO e-mail you a list of newly posted products every afternoon, go
to www.gao.gov and select “Subscribe to Updates.”

Order by Mail or Phone

The first copy of each printed report is free. Additional copies are $2 each.
A check or money order should be made out to the Superintendent of
Documents. GAO also accepts VISA and Mastercard. Orders for 100 or
more copies mailed to a single address are discounted 25 percent. Orders
should be sent to:
U.S. Government Accountability Office
441 G Street NW, Room LM
Washington, D.C. 20548
To order by Phone: Voice:
TDD:
Fax:

(202) 512-6000
(202) 512-2537
(202) 512-6061

Contact:

To Report Fraud,
Waste, and Abuse in
Federal Programs

Web site: www.gao.gov/fraudnet/fraudnet.htm
E-mail: [email protected]
Automated answering system: (800) 424-5454 or (202) 512-7470

Congressional
Relations

Gloria Jarmon, Managing Director, [email protected] (202) 512-4400
U.S. Government Accountability Office, 441 G Street NW, Room 7125
Washington, D.C. 20548

Public Affairs

Paul Anderson, Managing Director, [email protected] (202) 512-4800
U.S. Government Accountability Office, 441 G Street NW, Room 7149
Washington, D.C. 20548

PRINTED ON

RECYCLED PAPER