Oil and Gas Drilling on Federal Lands

American Association of Petroleum Geologists (AAPG)

Witnesses stated that BLM policies create unnecessary obstacles to oil and gas activities on federal lands at a recent House Natural Resources, Energy and Mineral Resources subcommittee hearing: “Energy in America: BLM’s Red-Tape Run Around and its Impact on American Energy Production”

Witnesses provided dozens of examples of leasing and permitting delays and described the high cost to companies and the loss of royalty income to the nation. This blog will only look at a few of the comments. But first, a little background:

  • Statistics compiled by the U.S. Energy Information Administration (EIA) show that onshore federal acres leased declined 16 percent from 2008 to 2012.
  • Over the same period, the number of drilling permits issued by BLM declined 36 percent.

L Poe Leggett, Natural Resources Litigation, Denver, observed that the volume of federal land holdings means that most operators will have to deal with BLM and its obligation to manage the public lands for multiple uses. He voiced the concern that the proposed hydraulic fracturing rules will not provide any public benefit but will be costly to the industry. And he noted the further complication that BLM cannot meet its administrative requirements under the existing regulations.

Kathleen Schroder, Bjork Lindley Little PC, Denver, testified that BLM in Colorado and Wyoming proposes to regulate air quality, which oil and gas operators have challenged as beyond the BLM’s statutory authority. The Clean Air Act gives the Environmental Protection Agency authority to regulate the nation’s air resources. The EPA has delegated this authority to the States. Additional BLM regulations would be duplicative and add additional work to both operators and the understaffed BLM offices.

Kathleen Sgamma, Vice President of Government & Public Affairs, Western Energy Alliance, observed that policy changes in 2010 have added new layers of leasing analysis onto the already complex system. The changes have been unsuccessful in reducing litigation, their intended purpose.

A further complication is the addition of further protections for the Greater Sage Grouse throughout the west. Industry, state agencies, ranchers and others are working to develop management policies to protect the species in order to demonstrate to the U.S. Fish & Wildlife Service (FWS) that a listing under the Endangered Species Act (ESA) is unnecessary. These actions will further restrict access to western lands.

Other testimony reinforced the understanding that federal land has to be managed in ways that protect the scenery, wildlife, and water and plant resources that we want to preserve.

Dennis Willis, retired BLM employee, suggested that BLM’s important commitment to preserving resources for future generations has not severely impacted industry. He noted that the decline in natural gas drilling on federal lands can be tied to lower natural gas prices, and that oil production has gone up every year for the last five years and is 35% higher than during the last year of President Bush’s administration.

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