The Bureau of Land Management is currently sitting on a backlog of 3,500 applications that need approval to move forward, according to a government watchdog report.
The Interior Department’s inspector general reported that the huge huge backlog of drilling is declining, but inefficiencies in the agency means “review times are very long” for approval of oil and natural gas drilling permits on federal lands.
“Although oil and gas operators share responsibility for this situation, inefficiencies in the U.S. Department of the Interior’s (DOI) review process impede productivity,” the DOI IG’s report says.
The BLM receives about 5,000 new drilling permits a year, according to the report, but these approval processes take 7.5 months on average and require input from multiple agencies that may also control lands being drilled on. But under current BLM procedures, there is no limit for how long reviews can go, meaning oil and gas permits can be delayed indefinitely.
“We found that neither BLM nor the operator can predict when the permit will be approved. Target dates for completion of individual [applications for a permit to drill] are rarely set and enforced, and consequently, the review may continue indefinitely,” the report continued.
“This adversely affects developing the Nation’s domestic energy resources,” the inspector general added. “Specifically, the Federal Government and Indian mineral owners risk losing royalties from delayed oil and gas production. Industry officials informed us that delays cause some wells not to be drilled, resulting in additional lost production and royalties.”
Drilling application approval times have improved somewhat recently, but this only happened because “until recently, improving the [drilling application approval] process has not been a high departmental priority,” the DOI IG noted.
The oil and gas industry has been criticizing the Obama administration in recent years for not moving fast enough to approve drilling permits on federal lands, which has contributed to declining energy production on federal lands.
Data from the Energy Information Administration shows that coal, gas and oil production on federal lands has fallen 15.5 percent since 2009, when President Obama took office. Oil production on federal lands is slightly up last year, but coal and gas production levels have fallen dramatically, causing fossil fuels production to fall 7 percent last year.
Republicans have also called out the Obama administration for allowing energy production to fall on federal lands, while production booms on state and federal lands. House Republicans recently passed a bill that would streamline oil and gas permitting in federal lands and waters to boost U.S. energy production and help lower gas prices.
“Right now, American families and small businesses are feeling the squeeze of high gasoline prices, which are a drain to our entire economy,” said Washington Republican Rep. Doc Hastings in a statement. “Since President Obama took office, gasoline prices have doubled and our federal energy resources have been put under tight lock-and-key.”
“The passage of this bipartisan common sense plan is a bold step forward to unlocking America’s energy resources that will create over one million new American jobs, strengthen national security, improve our economy, and help ease the pain at the pump for every American,” said Hastings, who chairs the House Natural Resources Committee.
Republicans are looking to lower drilling approval times to be in line with those of some states. While federal agencies take 228 days on average to approve drilling permits, state governments can take 80 days or less. North Dakota only takes 25 days to approve drilling permits and Texas only takes about five days to do so.
The streamlined and industry-friendly processes combined with hydraulic fracturing have allowed North Dakota and Texas to unlock vast amounts of shale oil and natural gas locked deep underground. These two states combined now produce nearly half of the U.S.’s total oil production.
But the BLM has failed to be as effective as state agencies in approving oil and gas drilling permits.
“Based on many factors such as available staff, natural resource issues unique to each region, and the complexities of the drilling and surface use plans, the length will likely vary among field offices and individual wells within the same office,” the DOI IG reported. “Nevertheless, we concluded that BLM has opportunities to improve the efficiency and speed of the Federal and Indian [drilling application approvals].”
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