Watching Government: Now comes the hard part

July 17, 2017
Ryan Zinke's secretarial order for the US Bureau of Land Management to address onshore drilling permit logjams in its field offices was only the latest indication that the Trump administration is more sympathetic than its immediate predecessor to the US oil and gas industry. But such orders-whether executive or secretarial-can be significantly harder to implement than to issue.

Ryan Zinke's secretarial order for the US Bureau of Land Management to address onshore drilling permit logjams in its field offices was only the latest indication that the Trump administration is more sympathetic than its immediate predecessor to the US oil and gas industry. But such orders-whether executive or secretarial-can be significantly harder to implement than to issue.

Interior Sec. Zinke said the right things on July 6. "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," he said.

"This is why I'm directing BLM to conduct quarterly lease sales and address these permitting issues. We are also looking at opportunities to bring support to our frontline offices, [which] are facing the brunt of this workload," Zinke said.

This might prove challenging since the White House proposed a $162.7-billion year-to-year reduction in BLM's fiscal 2018 budget in May from the 2017 baseline level. It also called on a year-to-year drop of 1,062 in the number of the agency's employees to an estimated 8,349 full-time positions.

BLM's Oil and Gas Management Program would receive a $16-million increase to not only reduce delays to drilling permits and expressions of interest but also to ease administration burdens in processing right-of-way requests for pipelines and other critical energy transportation components, however.

The proposed oil and gas budget also anticipated $1.4 million less from drilling permit processing fees, based on projections that BLM will receive fewer applications in 2018 than is expected during 2017. "Under the 2015 National Defense Authorization Act, 15% of [drilling permit] fee revenue is subject to appropriation," the agency added.

Congress' review begins

The first real test in Congress for BLM's proposed budget was scheduled for July 12 when the House Appropriations Committee's Interior, Environment, and Related Agencies Subcommittee planned to mark up the full 2018 DOI appropriations bill.

But a DOI official who testified at a June 28 hearing before the House Natural Resources Committee's Energy Subcommittee mentioned other problems in processing oil and gas drilling permit requests that BLM is trying to tackle.

The agency has 329 employees who process those applications, but there are 90 vacancies, said Katharine McGregor, deputy assistant secretary for land and minerals management. "We're trying to bring people on board to deal with this," she told the subcommittee. "It's also important to remember that drilling permits expire after 2 years and cost $9,500 each to process."

About the Author

Nick Snow

NICK SNOW covered oil and gas in Washington for more than 30 years. He worked in several capacities for The Oil Daily and was founding editor of Petroleum Finance Week before joining OGJ as its Washington correspondent in September 2005 and becoming its full-time Washington editor in October 2007. He retired from OGJ in January 2020.