Summary

GAO recently completed an evaluation of oil and gas wells on Federal lands that are considered producible but are shut-in. The primary purpose of the review was to determine if Government regulations are precluding these wells from producing.

GAO found that Government regulations will delay production in some cases, but apparently not for an unreasonable period of time. Economic considerations, such as lack of demand and reserves insufficient to justify the costs to start production, seem to be the primary reasons that such wells are shut-in. The data on shut-in oil and gas wells, compiled at the field level and summarized at the Minerals Management Service (MMS) headquarters: (1) are inaccurate, thereby creating a false impression about the number of wells shut-in on Federal lands, and (2) are probably not needed. Present efforts to gather and summarize the data for MMS headquarters require approximately 300 staff days per year. Maintaining accurate data would cost more. If eliminated and later found to be necessary during another energy crisis, the basic raw data would continue to be available through monthly production reports and could be pulled together and analyzed quickly.