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December 9, 2008



Comptroller DiNapoli Announces Audit
of Gas Well Leasing Program

State Comptroller Thomas P. DiNapoli, speaking at the annual meeting of the New York Farm Bureau in Albany, announced that his office would begin a new audit of the Department of Environmental Conservation’s (DEC) leasing of state land for natural gas and oil exploration and production.

“We want to make sure DEC is implementing appropriate bidding, economic and environmental oversight procedures for the leasing of state lands,” DiNapoli said. “These leasing agreements are of critical value to many farmers and in these challenging economic times. We want to make sure farmers are getting a fair deal. At the same time, we want to ensure that the water resources needed for farm production are not harmed by drilling.”

In 2007, DiNapoli’s office released an audit examining DEC’s leasing process and found that it generally complied with guidelines that are intended to promote open competition. However, auditors also identified certain actions that could be taken by DEC to provide additional assurance lease revenue is being maximized. The audit recommended the department obtain independent corroboration of the information used in calculating the leaseholders’ royalty payments to the state and not solely rely on the leaseholders to self-report this information accurately and completely.

The department is also responsible for monitoring gas and oil well operations on both public and private lands. DiNapoli’s auditors examined the DEC’s monitoring practices and identified the need for improvements in certain administrative and recordkeeping practices.

For a complete copy of the previous audit, Report 2005-S-54, click here.

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