BLM finalizes onshore leasing reforms amid industry, GOP criticism

The US Bureau of Land Management finalized reforms of its onshore oil and gas leasing program on May 17.

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, May 18 -- The US Bureau of Land Management finalized reforms of its onshore oil and gas leasing program on May 17. The US Department of the Interior agency said the changes represent a more orderly and balanced approach to energy development. Area independent producers and Republican members of Congress called the changes a mistake. A leading national environmental group applauded the new rules.

“These reforms take a fresh look—from inside the federal government and from outside—at how we can better manage Americans’ energy resources,” said BLM Director Robert V. Abbey. “They will improve protections for land, water, and wildlife, and reduce potential conflicts that can lead to costly and time-consuming protests and litigation of leases. The reforms will also move control of the leasing process from Washington, DC, to the field.”

The reforms, which US Interior Secretary Ken Salazar ordered in January, include public involvement in developing master leasing plans prior to leasing in certain areas where oil and gas development is anticipated, which BLM said would fully consider other natural resources before deciding whether to proceed.

The agency also plans to coordinate more fully externally with additional public participation and internally with more interdisciplinary reviews of information as well as onsite visits prior to leasing to supplement or validate existing data.

The changes also add an “extraordinary circumstances” review before applying categorical exclusions (CXs) from full environmental reviews under the National Environmental Policy Act which the 2005 Energy Policy Act authorized. Extraordinary circumstances reviews for administratively authorized CXs already are required, BLM noted.

Fewer protests
The increased public participation opportunities and a more thorough environmental review process and documentation can help reduce the number of protests filed, as well as enhance BLM’s ability to resolve protests prior to lease sales, according to Abbey.

“The consequence of not following this front-loaded process in the past has been significant protests and appeals, coupled with judicial restraints on development, job loss, and diminished access to energy resources,” he maintained. “Instead of BLM investing vast amounts of staff time and attention to defending lawsuits and revisiting the leasing process after receiving direction from the courts, our goal is to undertake important reviews in advance.”

But the Independent Petroleum Association of Mountain States said that the policy changes simply would delay resource development on federal lands with increased uncertainty from redundant environmental analyses and more opportunities for legal challenges.

“These policy changes were formalized with no input from the hundreds of thousands of hard-working men and women whose livelihoods are tied to energy development on western federal lands,” IPAMS Government Affairs Director Kathleen Sgamma said on May 17.

“These working families and their small towns and communities are already suffering from [the US Department of the Interior’s] slowdown of energy development,” she indicated. “The uncertainty that will result from these policy changes will further unemployment and decrease revenue that small towns and rural counties throughout the West depend on to fund education and public safety.”

‘Surprised, disappointed’
GOP federal lawmakers from the region also protested. “I’m surprised and disappointed that while the administration appears to be pulling back the reins on its offshore policy, they would simultaneously be pulling the plug on onshore oil and natural gas development by drowning it in new red tape,” said US Sen. Robert F. Bennett (Utah). “Simply put, even more layers of bureaucracy means fewer jobs, less revenue for federal and state coffers, and less energy at a time when we clearly need it.”

“In light of the recent accident in the Gulf of Mexico, America’s onshore oil and gas development is more important than ever,” US Sen. John Barrasso (Wyo.) said on May 17. “This administration’s decision to add even more red tape to onshore policies will drive jobs and energy production out of western states and leave Americans more vulnerable to higher gas prices.”

“There is some irony in that new rules purportedly designed to ‘engage the public’ were developed without any public meetings or any public input,” observed US Rep. Rob Bishop (Utah), who chairs the congressional Western Caucus. “The energy policies from this administration have already diverted billions of dollars of investment away from the West. These new policies will only increase uncertainty and hinder responsible development in the West.”

“These new regulations aren’t aimed at improving drilling safety and will only lead to lost jobs by stifling American-made energy production,” added US Rep. Doc Hastings (Wash.), the House Natural Resources Committee’s ranking minority member. “The bigger bureaucracy and more red-tape approach announced today will only serve to drive up the price of energy and cause further damage to our economy.”

The Wilderness Society, meanwhile, said that the changes end an era in which oil and gas development overwhelmed BLM’s responsibility to protect the environment, fish and wildlife, and cultural values on public lands. “Oil and gas development is one use of our public lands, but it is not the only one and, given the damage it causes to other resources, it should not be presumed to always be the right one,” said Dave Alberswerth, the group’s senior policy advisor on energy issues.

Contact Nick Snow at nicks@pennwell.com.

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