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EMD-80-116 1 (1980-09-25)

handle is hein.gao/gaobabbbu0001 and id is 1 raw text is: /IqU COMPTROLLER GENERAL OF THE UNITED STATES i ..WASHINGTON D.C. 20548 B-196523 SEPTEMBER 25, 1980 The Honorable Cecil D. Andrus Secretary of the Interior Dear Mr. Secretary: Subject: CGAO's Basis for Its Analysis of S.1637J (END-80-116) This is in response to your letter of June 16, 1980, taking issue with our March 14, 1980, report Impact of Mak- ing the Onshore Oil and Gas Leasing System More Competitive (EMD-80-60). Following is a point-by-point analysis of the issues raised in your letter, along with some restatement or amplification of the basis for the positions taken in our report. CHANGE FROM PRIOR GAO POSITIONS It is true that we did advocate competitive onshore oil and gas leasing in 1970 on the grounds that many tracts apparently could have generated greater revenues if leased competitively. We would reiterate, however, the point made in our report as well as in recent testimony before the House Interior Committee's Subcommittee on Mines and Mining--that changing world and national circumstances during the past decade call for some change in emphasis. Domestic energy production is much more vital now than then, and we were unable to satisfy ourselves--nor did Interior offer any evidence--that S.1637 would not have a detrimental effect on production. Moreover, we did not find that it would even necessarily increase revenues to the Government or ensure receipt of fair market value. The point should also be made that we are not irrevo- cably committed to non-competitive leasing; our position is only that major changes should not be made to the present system if the uncertainty of their effect is too great, and particularly if the problems cited can be solved through less drastic administrative or regulatory changes. 113412 (008961)

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