GAO: BLM needs to better manage onshore well liability

The US Bureau of Land Management needs to develop a comprehensive strategy to better manage potential onshore oil and gas well liability on acreage it leases to producers, the Government Accountability Office said in a Feb. 25 report. It said that the US Department of the Interior agency should review its minimum bond requirements, which have not been updated in more than 50 years, and improve its data system so that it does a better job evaluating potential liability and monitoring the agency’s performance. BLM has two key policies for managing potential oil and gas well liability on land that it manages, the report explained. The agency’s bond adequacy policy is intend to ensure that BLM field office periodically review bonds and increase them as necessary to reflect higher levels of risk, it said. The agency also has a policy to manage wells which have been idle for at least 7 years, or so-called orphan wells that generally have no responsible or liable parties to make certain the wells are either plugged or returned to production. Under this second policy, BLM field offices are required to develop an inventory of such wells and prioritize them for reclamation, based on potential environmental harm and other factors, GAO said. “BLM has not consistently implemented its policies for managing potential liabilities,” the report continued. It said that specifically, for fiscal 2005-09, GAO found that 13 of the 33 field office survey respondents reported that they either did not conduct any reviews or did not know the number of reviews conducted. Most field office officials told the congressional government watchdog service that a lack of resources and higher priorities were the primary reasons for not conducting the reviews, it indicated...more