Watching Government: Producers push Rockies access

March 21, 2005
W ashington was in the midst of a late-winter cold snap when Rocky Mountain independent producers paid 195 visits to the House and Senate.

Washington was in the midst of a late-winter cold snap when Rocky Mountain independent producers paid 195 visits to the House and Senate. Members of the Independent Petroleum Association of Mountain States called on more federal lawmakers from consuming states than usual, however, and got a warm reception overall.

People are concerned about high energy costs,” said Logan Magruder, Berry Petroleum Co.’s senior vice-president for the Rocky Mountains and Midcontinent and IPAMS vice-president for membership. “One staff member from the Missouri delegation already was aware of the impact of a $1[/MMbtu] increase in natural gas prices on voters in his state.”

IPAMS members also met with US Bureau of Land Management Director Kathleen Clarke to discuss federal oil and gas permitting delays. “We can kick off natural gas projects in 4-6 weeks on fee or state lands. On federal lands, the same process can take up to 5 years,” Magruder said.

He suggested that Congress could make no better investment to increase domestic gas production than to double funding for BLM so it can improve operations in its Colorado, Wyoming, Montana, Utah, and New Mexico field offices. “For every dollar in, the nation would get $1,600 back in royalties,” he said.

“We think Congress should consider creating self-sustaining funding for BLM, particularly for oil and gas,” added IPAMS Executive Director Marc W. Smith. “It could take a fraction of the receipts and return it to the field offices.”

Leasing permits

At a briefing on Rockies oil and gas issues a week later, Clarke said that BLM processed a record number of leasing permits in 2004 despite delays. But she suggested that part of the logjam was the applicants’ fault.

“If an application is incomplete in terms of cultural or archeological impacts or doesn’t have a good development plan, we have to send it back to the company,” she explained. “I was advised by our Wyoming office that it takes them longer to deal with deficiencies than to process the actual applications. We think it would be better to get together with producers beforehand and find ways to make their applications more complete.”

Litigation also delays federal oil and gas permitting. “In Colorado, 80% of the leases are protested,” said Smith. “That’s just the front end. There are more opportunities for protest before the first well is drilled.”

Utah's situation

Clarke confirmed the Colorado figure and said the situation is even worse in Utah, where all of BLM’s 2004 oil and gas leases are under protest.

“When we go to lease, the level of protests is 640% of what it was in the previous administration. Last year, we had over 300 requests for state director reviews-a provision that wasn’t even used 4 years ago,” she said.

“The protests are coming from people and groups who want to treat multiple-use lands as wilderness.”