GAO-25-108130 Oil and Gas Snapshot
Federal Oil and Gas: Challenges for Providing Effective
Oversight
GAO-25-108130, April 2025
The Department of the Interior faces challenges in its oversight of oil and gas resources on federal lands
and waters. GAO has made over 100 recommendations in 11 years that aim to address challenges. About
one-third of the recommendations remained open as of March 2025.
The Big Picture
In 2024, oil and gas production from federal leases
represented 26 percent and 14 percent of all U.S.
domestic production, respectively. Companies paid
the Department of the Interior (Interior) almost $14
billion in revenues related to oil and gas, representing
one of the largest non-tax sources of revenue for the
government. Certain bureaus within Interior oversee
oil and gas resources on federal lands and waters.
This includes selling leases and granting permits to
companies, inspecting production sites, and verifying
companies pay royalties. Under policies
implementing recent executive orders, Interior is to
identify impediments to, and expedite, the
development of oil and gas on federal lands and
waters. Interior’s management of oil and gas has
been on our High-Risk List since 2011. This
Snapshot summarizes our recent findings from 2014
through 2024 related to federal oversight of oil and
gas resources and our recommendations to Interior.
What GAO’s Work Shows
We identified five key areas in which Interior faces
challenges.
Interior strives to ensure that the federal government
receives a fair return of revenues. The Office of
Natural Resources Revenue (ONRR) is to ensure
companies accurately pay royalties. There can be a
gap between the payments ONRR collects from
companies and what it should collect—called a
royalty gap—which may be due in part to companies
not reporting or misreporting revenues. We found in
2024 that ONRR last estimated a royalty gap of
approximately $100 million in both 2010 and 2011.
We recommended that ONRR consider creating a
new royalty gap model and periodically estimate
a royalty gap to enhance its decision-making and
strategic planning of its efforts to collect and
verify accurate royalties.
The Bureau of Land Management (BLM) relies on
guidance in its management and oversight of oil and
gas development on federal lands. We found in
2020—by not first working on permits that will most
likely be used for drilling in the near term—BLM did
not work with companies to consistently prioritize
drilling permit applications. This can lead to inefficient
use of BLM’s limited staff. We also found in 2021 that
BLM relied on outdated leasing guidance, which
could lead to inefficiencies for companies and BLM
due to extra time spent interpreting the guidance.
We recommended that BLM develop a
documented process on how to prioritize drilling
permit applications. We also recommended that
BLM adjust its approach for updating its leasing
guidance.
Interior relies on multiple IT systems housing
significant amounts of data to help it effectively
oversee oil and gas activities, such as permitting,
inspections, and royalty collection.
