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RCED-84-10 1 (1984-01-27)

handle is hein.gao/gaobabngo0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE 3 WASHINGTON, D.C. 20548 RESOURCES, COMMUNITY AND ECONOMIC DEVELOPMENT DIVISION January 27, 1984 B-2 14062 Tr oY by the Oft.co of Congressional Relations, The Honorable Max Baucus RELEASED United States Senate Dear Senator Baucus: Subject: Interior Department Activities Concerning Proposed Natural Gas Tight Formations in Montana (GAO/RCED-84-10) Your letters of May 4 and June 23, 1982, raised questions about natural gas tight formations, in general, and about proposed tight formations in Montana, in -articular. A tight formation is a geologically distinctive body of rock strata; a principal char- acteristic is its low permeability which means that, under normal conditions, the gas it contains g3nerally seeps out slowly. Under the provisions of the Natural Gas Policy Act of 1978 (15 U.S.C. 3301 et seq.), gas produced from tight formations may qualify for a higF'er price. The higher price is intended to encourage produc- tion of natural gas from such formationis. On the basis of your letters and discussions with your office, we agreed to answer three questions about activities of the Department of the Interior's Minerals Management Service (Minerals Management)1 in recommending to the Federal Energy Reg- ulatory Commission (the Commission) that an area be designated as tight formation areas. These questions relate to an application submitted by the Petroleum Corporation of America2 (the Petroleum Corporation) for three formations to be designated as tight forma- tions in the state of Montana. 123445 lResponsibilities for tight formations in onshore lands were transferred to Minerals Management from the U.S. Geological Survey on January 19, 1982. These responsibilities, except for royalty management, were transferred to the Bureau of Land Management on December 3, 1982. 2The application was submitted jointly with others; however, this report relates to Petroleum Corporation activities. (308562)

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