Zinke signs order to address federal onshore drilling permit delays

US Interior Sec. Ryan Zinke signed an order on July 6 aimed at reducing oil and gas drilling permit delays on federal onshore lands and holding lease sales at least quarterly.

US Interior Sec. Ryan Zinke signed an order on July 6 aimed at reducing oil and gas drilling permit delays on federal onshore lands and holding lease sales at least quarterly.

“By streamlining approvals of responsible energy development on federal land, and actually holding lease sales, we will generate revenue for local communities and the US Treasury to fund the things we all value,” Zinke said.

The order also directs the US Bureau of Land Management to identify additional steps to offer more onshore oil and gas resources as well as solid-mineral deposits.

Despite the fact that federal law requires that DOI and BLM review drilling permit applications within 30 days, the average time to process one in Fiscal 2016 was 257 days, he noted.

As of Jan. 31, BLM had 2,802 drilling permit applications pending, Zinke said. Of that total, 2,060, or 74%, were concentrated in five field offices in Casper, Wyo. (526); Vernal, Utah (506); Dickinson, ND (488); Carlsbad/Hobbs, NM (388); and Farmington, NM (152).

Zinke said while the 1920 Mineral Leasing Act requires that federal lease sales be held at least quarterly, BLM canceled or postponed 11 sales. By contrast, the Trump administration already has held more lease sales in its first 6 months than a year earlier, offered more acreage in those sales, and raised more revenue.

“Oil and gas production on federal lands is an important source of revenue and job growth in rural America but it is hard to envision increased investment on federal lands when a federal permit can take the better part of a year or more in some cases,” Zinke said.

‘An important recognition’

Major US oil and gas associations welcomed his move. “Today’s action is an important recognition of the benefits of responsible development on federal lands, which make up nearly a third of US territory,” said Erik Milito, the American Petroleum Institute’s upstream and industry operations group director.

“A key component of a successful policy is repairing the federal permitting process so that companies have the confidence to invest and see their projects move forward,” Milito said.

Daniel T. Naatz, senior vice-president of government relations and political affairs at the Independent Petroleum Association of America, said Zinke’s order will restore certainty and efficiency to the federal permitting process. “Long-term business planning and certainty is a critical component to the leasing process for oil and natural gas producers. Reinstating quarterly lease sales is vital as independent producers consider future American energy opportunities on federal lands,” he said.

“Another way to help with the [DOI’s] permitting backlog is to use the dedicated funds made available by the bipartisan pilot project to streamline permitting to hire more staff equipped to process drilling permits in an efficient, timely fashion,” Naatz said. “The longer a company’s applications for permits to drill go ignored, the more American consumers and businesses lose out on reliable, affordable US energy and the royalty payments generated from oil and gas production on federal lands.”

In Denver, Western Energy Alliance Pres. Kathleen Sgamma said the regional organization of independent producers welcomed Zinke’s order as a first step to bring certainty to the federal onshore leasing and permitting process. “Work will need to be done to ensure this order leads to real changed behavior at the field office level,” she said.

Contact Nick Snow at nicks@pennwell.com.

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