The Dept. of the Interior is responsible for managing much of the nation's vast natural resources. Its agencies implement an array of programs intended to protect these precious resources for future generations while also allowing certain uses of them, such as oil and gas dev¿t. and recreation. Interior faces major mgmt. challenges in the following six areas: (1) Strengthening resource protection; (2) Strengthening the accountability of Indian and island community programs; (3) Improving fed. land acquisition and mgmt.; (4) Reducing Interior's deferred maintenance backlog; (5) Ensuring the accurate collection of royalties; and (6) Enhancing other revenue collections and financial assurances. Illustrations.

The Strategic Petroleum Reserve (SPR) helps protect the U.S. economy from oil supply disruptions and currently holds 700 million barrels of crude oil. The Energy Policy Act directed the DoE to increase the SPR storage capacity from 727 million barrels to 1 million barrels. Since 1999, oil for the SPR has been obtained through the royalty-in-kind program, whereby the gov¿t. receives oil instead of cash for payment of royalties on leases of fed. property. The Minerals Mgmt. Service collects the royalty oil and transfers it to DoE, which then trades it for oil for the SPR. This testimony focuses on: (1) factors for DoE to consider when filling the SPR; and (2) the cost-effectiveness of using oil received through the royalty-in-kind program to fill the SPR.

The Strategic Petroleum Reserve (SPR) was created in 1975 to help insulate the U.S. economy from oil supply disruptions and currently holds about 700 million barrels of crude oil. The Energy Policy Act of 2005 directed the Dept. of Energy (DoE) to increase the SPR storage capacity from 727 million barrels to 1 billion barrels, which it plans to accomplish by 2018. Since 1999, oil for the SPR has generally been obtained through the royalty-in-kind program, whereby the gov¿t. receives oil instead of cash for payment of royalties on leases of fed. property. This testimony focuses on: (1) factor that DoE should consider when filling the SPR; and (2) the cost-effectiveness of using oil received through the royalty-in-kind program to fill the SPR.

The catastrophic oil spill in the Gulf of Mexico has drawn attention to the exploration and production of oil and gas from leases on federal lands and waters. The Dept. of the Interior oversees oil and gas activities on federal lands and waters. Onshore, the Bureau of Land Mgmt. has oversight responsibilities. Offshore, the newly created Bureau of Ocean Energy Mgmt., Regulation, and Enforcement(BOEMRE), has oversight responsibilities. Prior to BOEMRE, the Minerals Mgmt. Service¿s Offshore Energy and Minerals Mgmt. oversaw offshore oil and gas activities. This testimony presents the auditor¿s findings in accordance with Interior¿s organizational structure prior to establishing BOEMRE. Charts and tables.