Summary

Pursuant to a congressional request, GAO reviewed the Chandler Lake exchange, which gave the Department of the Interior surface rights to Alaskan native-owned lands and gave the Alaskan native corporations subsurface rights to land within the Arctic National Wildlife Refuge (ANWR) for petroleum exploration, focusing on whether the exchange was in the government's best interest.

GAO found that: (1) although the Chandler Lake exchange accomplished Interior objectives of consolidating federal lands and obtaining access to parklands in the national park, it was not in the government's best interest; (2) the exchange limited natives' use of all-terrain vehicles (ATV) to easements along riverbeds, but they continued to use ATV throughout the lands as before and increased ATV usage in park wilderness areas; (3) the exchange gave one native corporation the right to drill the only exploratory test well within ANWR and to retain exclusive rights to the test data, resulting in its superior position in assessing ANWR oil and gas potential; (4) without the test data, the federal government has a disadvantage in estimating the oil and gas value of the ANWR subsurface and in setting sale terms for possible future leases; (5) the exchange also allowed the natives to select the unspecified 23,040 acres without acquiring Interior's approval, and they chose an area that Interior now considers to hold the highest oil and gas potential within ANWR; (6) the exchange made inapplicable the revenue-sharing provisions of the Alaska Native Claims Settlement Act, which would divide the revenues among the 12 Alaska regional corporations; and (7) Interior used its broad authority to avoid procedural requirements otherwise applicable to land exchanges, such as full public review, preparation of environmental impact statements, and disclosure of the fair market value of the land and interest exchanged.