Oil and gas leasing and public lands development issues are coming under increasing debate in the US.
Uncertainty plagues federal leasing and post-leasing permitting, oil industry officials told the House Subcommittee on Energy and Mineral Resources in late April. Companies need defined time frames and consistent, cost-effective regulations, the officials said.
Meanwhile, US Interior Sec. Gale Norton defended the Bush administration's new emphasis on increased industry access to public lands in testimony before a Senate committee.
Leasing scrutinized
Subcommittee Chairman Rep. Barbara Cubin, (R-Wyo.), a vocal critic of the current federal land permitting process, held the oversight hearing. It was the third in a series of hearings that sought advice from industry on how to reduce permit delays. Representatives from the Department of Interior's Bureau of Land Management also testified.
According to the Republican-controlled subcommittee, the permitting process can take many months, even longer if the agency's land-use plan is out of date with respect to anticipating the cumulative impacts of the development.
This problem has had a direct impact on producers seeking to develop coalbed methane on federal land, Cubin's staff said. Tens of thousands of wells have been delayed pending completion of extensive environmental impact studies, the staff said.
Meanwhile, Wyoming's Oil & Gas Conservation Commission, which permits wells on state and fee lands, "has issued several thousand permits in the Powder River basin, while the BLM studies."
The staff said the San Juan basin of New Mexico and Colorado, an older coalbed methane province, may soon be in the same situation as the BLM scrambles to anticipate the impacts of expanded production, although the agency is trying to update its resource management plan.
A critical first step for the government to break the logjam is to require agencies to measure and document the impact of their decisions on the development of energy resources, the Independent Petroleum Association of America told the subcommittee.
BLM Assistant Director Pete Culp acknowledged there have been problems in the past and told the subcommittee the agency is updating land use plans for areas with a high potential for oil and gas. They also plan to work with the US Geological Survey to determine which areas should be examined first. BLM also is looking into expanding electronic permitting to expedite applications. Permit applications in similar areas are also being grouped together to streamline the process further.
The White House is also listening: Vice-President Dick Cheney's energy task force is expected to recommend an interagency approach to permitting that would dramatically reduce the time required.
At the same hearing, Rep. Ron Kind (D-Wis.), ranking minority member of the subcommittee, offered another view. He acknowledged industry has had problems dealing with BLM in the past but called it "simply inaccurate" to conclude that a few examples of difficulties with BLM or the Forest Service mean that laws, policies, and/or regulations in these areas have arbitrarily constrained or prohibited access to economically recoverable oil and gas resources.
He said that during the Clinton administration, oil and gas leasing on public lands increased. According to Interior data, oil production from federal land and waters doubled while gas production nearly tripled from 1993-2000, he noted.
Further, the vast majority of federal lands that are "restricted" are off-limits only seasonally, for example, to provide wildlife protection, Kind said. "We believe, overall, that wildlife resources are important and should not be subservient to oil and gas production."
Kind said he would ask the General Accounting Office to review BLM and Forest Service permitting practices to see if the agencies have been too excessive in protection wildlife resources.
Other access pleas
Interior's Norton said, for example, that allowing controversial exploration to occur on the coastal plain of the Arctic National Wildlife Refuge was environmentally sound because industry has technology that would protect the area's fragile terrain.
That view is supported by industry but not by a majority of lawmakers. Congressional supporters of an ANWR lease sale acknowledge they have an uphill fight this year.
Interior's $12.8 billion budget request for fiscal year 2002 adds $15 million to the Bureau of Land Management's spending for an expanded energy and mineral program. The proposal includes $5 million for BLM to identify and evaluate oil and gas resources and reserves on public lands, as required by the Energy Policy and Conservation Act of 2000 (OGJ Online, Apr. 9, 2001).
Norton told the Senate Subcommittee on Interior Appropriations BLM will work with the Department of Energy, the US Forest Service, and the US Geological Survey to survey onshore reserves. An increase of $5 million will be used to support another lease sale offering in the National Petroleum Reserve-Alaska and to initiate planning and associated studies in the ANWR coastal plain area to support future oil and gas lease sales "if authorized by Congress," Norton told lawmakers.
The budget includes an additional $2 million to increase leasing and processing of permits to drill for coalbed methane, and $3 million to increase coal leasing and other mineral development on federal and Indian lands and to address increased workload for land and realty processing of rights-of-way.
The budget includes an increase of $7.4 million for the Minerals Management Service's Gulf of Mexico leasing and regulatory program. The budget also assumes that Lease Sale 181, opposed by some members of the Florida congressional delegation and Gov. Jeb Bush, is held on schedule in December.
The budget does not assume however, that Congress will allow a 2-decade moratorium on drilling in most offshore waters to be lifted, although the White House has signaled it would like to see more federal offshore development. Most of the US Outer Continental Shelf is barred from development, except for the Gulf of Mexico and parts off Alaska.
Norton has proposed MMS get an additional $7.3 million upgrade to its management system to support an expanded royalty-in-kind program.
"When favorable conditions exist, taking royalties in value is an innovative approach that may potentially reduce administrative burdens," she told the subcommittee.
Meanwhile, Democrats on the panel such as Sen. Pat Leahy (D-Vt.) used the hearing to criticize recent White House policy decisions on the environment.
Leahy assailed the ANWR leasing proposal and also President George W. Bush's decision to not support the Kyoto global warming treaty. Norton said Bush thinks more time is needed to reach a scientific and public consensus on the impact of greenhouse gases on the environment.