GAO: BLM needs better permit processing, inspections data

The US Bureau of Land Management needs to improve data it uses to process oil and gas permit applications and to establish inspection priorities, the Government Accountability Office said in a Sept. 23 report.

GAO said BLM received about half as many drilling permit applications in fiscal 2012 as it did in fiscal 2007. Declines in natural gas and coalbed methane activity on federal lands were not offset by increased crude oil activity during that period, it indicated.

The report said BLM took actions to improve its oil and gas permit processing workload, including revising its permitting rule in 2007 and implementing a pilot project to improve drilling permit processing that increased funding and staff in seven BLM offices.

“It is unclear whether the pilot project has met its goals as BLM has neither completed an assessment of the project in the past 5 years, nor reported to Congress, as required by [the 2005 Energy Policy Act], on the results of the project along with a recommendation about implementing [it] throughout the United States,” it continued.

Investigators for the GAO also cited a 2013 internal memorandum in which BLM said it had not been able to consistently process completed drilling permit applications within the 30-day deadline EPACT established.

Certain data missing

“GAO found that BLM's central oil and gas database was missing certain data needed to assess compliance with this deadline and contained other inaccurate [drilling permit application] processing data,” the report said.

“Without complete data on approved [applications], GAO could not perform a comprehensive assessment of the amount of time it took BLM to process [them] from their date of receipt to date of approval,” it said. “Without accurate data on the amount of time it takes to process [applications], BLM does not have the information it needs to make adjustments that could improve its operations.”

During the same period, BLM also increased the number of environmental inspections on its oil and gas leases to 17,866 in fiscal 2012 from 10,941 in fiscal 2007, according to the report. It said the agency attributed the increase to revised guidance, performance targets for staff, additional staff in some offices, and technological changes in the oil and gas industry that result in more wells on a single well pad, allowing for multiple inspections at one site.

“Nevertheless, BLM's environmental inspection prioritization process may not identify oil and gas wells that pose the greatest environmental risk because the agency's central oil and gas database does not include data on the environmental inspection history of many wells, and environmental inspection history is not one of the criteria that BLM staff use in prioritizing inspections,” it noted.

The report said GAO’s review of data on 60,330 federal oil and gas wells found no record in BLM's database of 24,840 wells ever having received an environmental inspection. “In addition, GAO found inconsistent documentation of inspections and enforcement actions across BLM offices,” it said.

Recommendations, responses

It recommended that the Interior secretary have BLM’s director complete and submit to Congress a final report outlining the Federal Permit Streamlining Pilot Project’s result to date, and whether its pilot project should be implemented nationwide, to meet the mandate set out in EPACT’s Section 365.

The report also suggested that the secretary have the agency’s director ensure that all key dates associated with the processing of drilling permit applications are completely and accurately entered and retained in BLM’s Automated Fluid Minerals Support System (AFMSS) and in any new system that replaces AFMSS, to help it assess compliance with required deadlines and identify ways to improve the efficiency of the drilling application review process.

It also recommended that BLM’s director be told to take steps, including making changes to AFMSS, and in any new system that replaces AFMSS, to improve the ability of staff to identify wells that are a high priority for environmental inspection and to incorporate information on the inspection history of wells into the environmental inspection prioritization process.

Its final recommendation was for the director to “take steps to ensure that environmental violations or problems and enforcement actions are documented in a consistent manner.”

In a July 29 response that GAO included in the report, Tommy P. Beaudreau, DOI’s acting assistant secretary for land and minerals management, acknowledged that AFMSS’s database limitations have kept the environmental compliance component of BLM’s risk-based inspection and enforcement strategy from being fully implemented.

“However, BLM plans to transition to a new database system that will, among other things, have the ability to support a risk-based inspection strategy,” he said. “The BLM directorate and the department have approved the project, which is being implemented in phases due to funding limitations.”

The agency expects to implement the new database system’s first phase, which deals with drilling permit process and tracking which GAO’s report mentioned, “agency-wide by the end of this calendar year,” Beaudreau said.

Contact Nick Snow at nicks@pennwell.com.

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