DOI's permitting problems unresolved, API official charges

The US Department of the Interior has not made its new oil and gas regulations sufficiently clear for drilling permits and exploration plans to be approved within a reasonable time period, an American Petroleum Institute official charged.

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, June 14 – The US Department of the Interior has not made its new oil and gas regulations sufficiently clear for drilling permits and exploration plans to be approved within a reasonable time period, an American Petroleum Institute official charged. “Not enough is happening to assure that the oil and gas development this country needs will occur,” said Erik Milito, group director of API’s upstream and industry operations. “The regulatory process is more time consuming than ever.”

DOI’s Bureau of Offshore Energy Management, Regulation, and Enforcement has extended some Gulf of Mexico leases, where operations were suspended following the Macondo well accident and spill, and issued some permits, while its Bureau of Land Management quit implementing the so-called wild lands order, Milito told reporters during a teleconference. But producers remain confused, he said.

“We have seen dozen of exploration plans get recycled 4-5 times. It should require only one submission,” he maintained. “They’re getting sent back after the government has determined they are already complete. At some levels, it has put some procedures in place so that some permits can be approved. But a lot more are sitting on desks at DOI.”

In an e-mailed response, BOEMRE said that the agency has approved 48 permits for 16 unique wells since applicants began demonstrating containment capabilities in mid-February. It said that 12 exploration plans and 1 development operations and coordination document have been approved since June 8 following completion of site-specific environmental assessments, and BOEMRE has met frequently with operator groups including the Back to Work Coalition to discuss questions.

Permit checklist
BOEMRE Director Michael R. Bromwich announced on June 3 that the agency would publish a permit application checklist to help well operators submit complete applications, have BOEMRE staff members check each application for completeness before significant time is spent reviewing the application, and develop clear permit priorities to expedite agency reviews. Milito said the checklist should not be necessary because producers should know what’s required already.

“It becomes a ping-pong game when the government keeps sending the applications back for more information, such as worst case discharge calculations and waste and discharge tables,” he said. “We’ve seen at least 20 plans kicked back because the government doesn’t like what it sees. It could be right, but it should be providing information about what it needs before deeming the application submitted.”

Requirements keep changing, Milito continued. He said BOEMRE notified offshore operators by e-mail of a new requirement for an archeological survey before any bottom-disturbing work takes place. “We don’t know if there are enough marine archeologists to meet the requirement,” he said. “It’s unclear at this point. This is one of the problems of trying to regulate by e-mail.”

Still unclear
Offshore exploration plans began to be processed and approved after BOEMRE certified the Marine Well Containment Co. and Helix Containment Group systems acceptable for spill response and containment in February, he said. But continued recycling of applications suggests that the government still hasn’t made its requirements sufficiently clear, Milito indicated.

DOI also has aggravated problems by what the API official termed an unnecessary suspension of categorical exclusions (CXs) as a permitting tool. CXs allowed operators to submit environmental assessments for adjacent tracts in lieu of conducting full reviews under the National Environmental Policy Act. BP PLC submitted one for its Macondo well. US Interior Sec. Ken Salazar already was questioning their wide use onshore as well as offshore when the well blew out on Apr. 20, 2010. Milito said that CXs still could serve an important purpose by eliminating duplicative evaluations and paperwork in several instances.

BOEMRE has taken a positive step by agreeing to appoint a coordinator to be the single contact point for each exploration plan application as it is being prepared, he noted. The air quality agreement which Anadarko Petroleum Corp., the US Environmental Protection Agency, and BLM recently reached for the company’s Greater Natural Buttes natural gas project in eastern Utah also represents progress, Milito said, adding that the key will lie in its implementation (OGJ Online, June 10, 2011).

“Strong coordination is needed both onshore and offshore,” he said. “[US President Barack Obama] announced in a speech last month that he hopes to have coordination in place offshore. We hope to see the government move ahead in this so more oil and gas development can take place. We want to make sure we’re preparing this nation for a secure energy future. We recognize that the United States has some of the world’s most stringent environmental requirements, but by not moving forward we’re jeopardizing our economic growth.”

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