The Rocky Mountain Oil & Gas Association (Rmoga) has objected to a U.S. Bureau of Land Management proposal to delegate control over federal oil and gas leases to producing states.
The Clinton administration's Reinventing Government (REGO) proposal raised the idea of shifting BLM's oil and gas inspection and enforcement (I&E) and environmental compliance responsibilities to states and Indian tribes (OGJ, Apr. 1, p. 23), and a few states have expressed strong interest in the idea.
At a recent House of Representatives energy and mineral resources subcommittee hearing, representatives of states and small oil firms advocated the transfer.
Rmoga, whose members account for more than 90% of the exploration and production in eight Rocky Mountain states, criticized the plan. But the Independent Petroleum Association of Mountain States supports it.
BLM said, "Although the avowed goal is to speed government processes, a number of operators are concerned that devolvement might subject them to a greater variety of rules and reporting where each state requires adherence to different policies, thereby reducing any efficiencies expected from the transfer.
"BLM will play a crucial role in ensuring such situations are minimized through its proposed oversight policies and application review process."
BLM plans to have a final proposal ready in September. It said that at yearend 1995, it oversaw more than 63,000 producing wells on 19,000 producing leases totaling 37 million acres of federal land, as well as 4,200 leases on tribal lands.
Rmoga view
Randy Maebon, Marathon Oil Co.'s Rocky Mountain regulatory coordinator, testified for Rmoga. He said its major concern is BLM's "failure to provide definitive, innovative information about alternatives for cutting costs and streamlining the onshore oil and gas program.
"We have been involved with the transfer proposal since it was initiated. Throughout the process, industry has raised many questions which have yet to be adequately addressed. Rmoga can support the transfer proposal only if it results in clear and demonstrable benefits to industry and the affected government agencies.''
He said nearly a year after the proposal was made, specifics are still so lacking "it is impossible to discern the full ramifications of the transfer proposal."
Maebon said, "If the proposed transfer goes forward, industry must be involved in the dialogue between states, tribes, and BLM on the manner in which transfers will be structured.
"I&E programs also must be consistent from state to state. The major goal of the government reinvention will be negated if states negotiate individual and diverse I&E programs. The transfer should provide a common I&E framework for all states wishing to assume responsibility over federal leases. And should states assume I&E responsibilities, the federal government must relinquish its oversight role and its responsibility for 'inherently federal' functions."
Rmoga questions whether the proposal is necessary at all, since there are regulations allowing states and tribes to enter cooperative agreements with BLM to assume delegation of BLM functions.
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