Industry says federal leasing permits need overhaul

By Maureen Lorenzetti
OGJ Online

WASHINGTON, DC, Apr. 25 -- Uncertainty plagues federal leasing and post-leasing permitting, oil industry officials told the House Subcommittee on Energy and Mineral Resources Wednesday.

They said companies need defined time frames and consistent, cost-effective regulations.

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subcommittee, the permitting process can take many months to complete, and much longer if the agency's land-use plan is out of date with respect to anticipating the cumulative impacts of the development.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 also acknowledged industry has had problems dealing with BLM in the past. But he added that it was "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.

Contact Maureen Lorenzetti at Maureenl@ogjonline.com.