As Industry Complains About Oil and Gas Permitting Times, 6,700 Go Unused

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On Tuesday, the Inspector General’s (IG) office at the Department of Interior (DOI) released a new report which found that approval times for Applications for Permits to Drill (APD) are still lagging at the Bureau of Land Management, which manages over 90,000 wells on federal lands. While those findings are sure to become a favorite talking point for industry representatives and their allies in Washington, the report deserves a deeper dive.

Permitting Times are Already Down

The IG report found that “that the BLM approves thousands of permits each year, but review times are very long.” However, it’s important to note that between 2005 and 2013, BLM permitting times decreased significantly, with no thanks to industry. The IG report found that the blame for permitting delays should be placed squarely on the shoulders of both industry and the BLM. In April, the Congressional Research Service (CRS) said, “In 2006, the industry took an average of 91 days to complete an APD, but in 2011, industry took 236 days.” The reason? Incomplete applications. While blaming the federal government for slow processing times, the oil and gas industry continues to hand in incomplete homework while still seeking out favoritism.

Doing it Right

Just earlier this month, the Associated Press reported that 4 in 10 high-risk oil and gas wells go uninspected by the BLM. Rapidly increasing the amount of approved drilling permits would only serve to exacerbate the problem. Can we count on an agency that is understaffed and underfunded to inspect even more wells without additional resources? What’s more, the oil and gas industry is adamantly opposed to paying well inspection fees, despite acknowledging that’s how it’s done with offshore oil and gas development. That leaves taxpayers on the hook.

New tools like Master Leasing Plans (MLP’s), which look at the landscape as a whole, could actually serve to expedite the permitting process by reducing red tape, reducing protests, and bringing more stakeholders to the table, preventing controversial leases. Unfortunately, while those efforts are widely supported by sportsmen, ranchers, and small businesses, —they are opposed by industry.

Approved Permits Go Idle

In 2013 alone, 3,700 new wells were permitted by the BLM for use on public lands. Of those, industry has spudded (drilled) just 2,413 new wells. Put simply, the oil and gas industry isn’t even using the permits they already have, but still complaining about the ones they don’t have yet. In fact, there are currently 6,700 wells already approved by the government for drilling that are sitting idle.

Taxpayers Footing the Bill

All this points to a broader picture. If both BLM and industry share the blame, then why are American taxpayers footing the bill for onshore inspections, paying for the hiring of more personnel at the BLM for permit applications, and still receiving next to nothing in royalties for the energy extracted from public lands? Those are the questions our elected officials in Congress should be asking. Instead, taxpayers are simply left in the dust as politicians craft legislation meant only to garner flashy headlines in an election year.

While the West has seen great benefits from the development of oil and gas resources on public lands, it would be foolish not to do it right. Westerners hunt, ride dirt bikes, shoot guns, camp, hike and everything in between on these same public lands. So while the oil and gas industry would like you to believe onerous government regulations and federal agencies are preventing domestic energy production, maybe they should be asking themselves why they oppose commonsense policies that protect our way of life, and balance the needs of many different stakeholders including industry.

 

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