United States (Gulf of Mexico)


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With a federal system and multiple regulatory agencies, the legal and fiscal arrangements governing petroleum and mineral resources in the United States are complex. For this reason, the RGI has focused on petroleum extraction in the Gulf of Mexico, where 23 percent of U.S. crude oil is produced. The region is of special concern following the 2010 BP oil spill, which exposed critical gaps in federal government oversight.


The United States' Performance on the Resource Governance Index

The U.S. received a "satisfactory" score of 92, ranking 2nd out of 58 countries. While the petroleum industry is frequently a topic of politicized debate, the U.S. scored well on all components.

Rank
(out of 58)
Score
(out of 100)
2 Composite Score 92
2 Institutional & Legal Setting 88
Freedom of information law 100
Comprehensive sector legislation 100
EITI participation 33
Independent licensing process 100
Environmental and social impact assessments required 100
Clarity in revenue collection 67
Comprehensive public sector balance 100
SOC financial reports required N/A
Fund rules defined in law N/A
Subnational transfer rules defined in law 100
1 Reporting Practices 97
Licensing process 100
Contracts 100
Environmental and social impact assessments 100
Exploration data 100
Production volumes 100
Production value 67
Primary sources of revenue 100
Secondary sources of revenue 100
Subsidies 100
Operating company names 100
Comprehensive SOC reports N/A
SOC production data N/A
SOC revenue data N/A
SOC quasi fiscal activities N/A
SOC board of directors N/A
Fund rules N/A
Comprehensive fund reports N/A
Subnational transfer rules 100
Comprehensive subnational transfer reports 100
Subnational reporting of transfers 100
4 Safeguards & Quality Controls 89
Checks on licensing process 89
Checks on budgetary process 100
Quality of government reports 78
Government disclosure of conflicts of interest 100
Quality of SOC reports N/A
SOC reports audited N/A
SOC use of international accounting standards N/A
SOC disclosure of conflicts of interest N/A
Quality of fund reports N/A
Fund reports audited N/A
Government follows fund rules N/A
Checks on fund spending N/A
Fund disclosure of conflicts of interest N/A
Quality of subnational transfer reports 67
Government follows subnational transfer rules 100
5 Enabling Environment 90
Corruption (TI Corruption Perceptions Index & WGI control of corruption) 87
Open Budget (IBP Index) 94
Accountability & democracy (EIU Democracy Index & WGI voice and accountability) 89
Government effectiveness (WGI) 90
Rule of law (WGI) 91
Satisfactory Weak
Partial Failing
To explore all data and compare
scores, use the RGI Data Tool.

Institutional & Legal Setting (Rank: 2nd/58, Score: 88/100) learn more

The U.S. has a detailed regulatory framework governing petroleum extraction in the Gulf of Mexico. Although its systems of revenue collection are particularly complex, it earned a "satisfactory" score of 88.

In 2010 the U.S. Department of the Interior's Minerals Management Service (MMS) was divided into three new regulatory bodies: the Bureau of Ocean Energy Management (BOEM), the Bureau of Safety and Environmental Enforcement (BSEE), and the Office of Natural Resources Revenue (ONRR).

A percentage of revenues accruing from federal offshore extraction is shared with coastal states, with some receiving additional revenues under the 2006 Gulf of Mexico Energy Security Act (GOMESA). Royalties, bonuses, rents, and other payments collected by ONRR are disbursed annually to the U.S. Treasury, individual states, American Indian tribes, and other federal conservation funds. Outside of ONRR's jurisdiction, federal income taxes are collected directly by the Internal Revenue Service.

Reporting Practices (Rank: 1st/58, Score: 97/100) learn more

The U.S. received a "satisfactory" score of 97, the product of detailed government disclosure on nearly all aspects of petroleum extraction in the Gulf.

Information on the leasing process and lease sales are publicly available, with bidding results and contract information available on the BOEM website. BOEM also provides regular reports on investments in exploration, the names of companies operating in the Gulf, and production data by company and state. These reports tend to be comprehensible, but the BOEM does not have access to the industry's real-time production data, making it difficult to determine accurate revenue figures.

Revenue information is reported annually by ONRR, though much of it is in aggregated form. ONRR also publishes historical data on key payments including royalties, bonuses, license fees, and acreage fees. A number of government agencies, such as the Energy Information Administration, publish additional data on the U.S. petroleum sector.

Under Section 1504 of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, oil, gas, and mining companies that file annual reports with the U.S. Securities and Exchange Commission are required to report the amounts they pay to the U.S. government and foreign governments for access to resources. Reports must be made on a country-by-country and project-by-project basis.

Safeguards & Quality Controls (Rank: 4th/58, Score: 89/100) learn more

Government oversight of Gulf petroleum production has improved, leading to a "satisfactory" score of 89.

As the licensing authority for offshore leases, BOEM has limited discretionary powers, although it may reject bids that do not meet its "fair market criteria." Both BOEM and BSEE have procedures for appealing licensing decisions. Federal regulatory and revenue-collecting agencies, ONRR included, are also subject to audits, and the results are reported to Congress.

The Government Accountability Office, the Office of the Inspector General and other external organizations routinely oversee and monitor U.S. minerals management activities.

Additionally, both houses of Congress have natural resources committees that regularly scrutinize petroleum management and revenue collection issues.

Enabling Environment (Rank: 5th/58, Score: 90/100) learn more

The U.S. performed relatively well on global measurement of government effectiveness, democratic accountability and budget openness, receiving a "satisfactory" score of 90.


Subnational Transfers (Rank: 4th/30, Score: 94/100) learn more

Gulf states receive a share of petroleum revenues under various revenue-sharing regimes. Under Section 8(g) of the Outer Continental Shelf Lands Act, all coastal states receive 27 percent of revenues from federal leases on lands within three miles of their seaward boundaries. GOMESA also gives coastal states a 37.5 percent share of revenues from certain oil and gas leases in the Gulf. BOEM publishes annual reports on the transfers.

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