Senate adopts bill making BLM drilling permit pilot program permanent

The US Senate approved Tom Udall (D-NM) and John Barrasso’s (R-Wyo.) bill permanently extending a US Bureau of Land Management drilling permit processing improvement pilot program that was established under the 2005 Energy Policy Act. It was scheduled to expire in 2015.

S. 2440, which passed the Senate by unanimous consent, would extend the program that was designed to help the US Department of the Interior agency deal with a drilling permit application backlog while balancing other duties, the senators said following the measure’s adoption on Sept. 16.

The program, which also established a dedicated fund, has helped streamline operations in BLM field offices in Farmington and Carlsbad, NM, and Rawlins and Buffalo, Wyo., as well as other Rocky Mountain states, they noted. Six more Democrats and six additional Republicans from the region cosponsored the bill.

“This is a great step forward for our BLM offices in Carlsbad and Farmington to ensure they will have the necessary resources to balance the complex demands of oil and gas permitting and environmental management," Udall said. “I hope the House will act quickly to give BLM and the industry the certainty they need.”

Barrasso, who is an Energy and Natural Resources Committee member, said, “Our bill will give local BLM offices the resources they desperately need to ensure oil and gas permits are processed in a timely manner. Now it’s time for the House to act so we can get this bill signed into law as soon as possible.”

The senators said their bill would make the Permit Processing Improvement Fund permanent, and give the US Interior Secretary more flexibility to designate new pilot offices and proactively allocate resources based on shifting oil and gas production trends. The fund provides some $18 million/year for the secretary to distribute to pilot offices for reinvestment in additional staff and resources to help improve efficiency, and support BLM's diverse responsibilities.

Additional provisions

The measure also would establish a $9,500 drilling permit application processing fee in 2016 for 10 years, a $3,000 increase, which the Secretary could not increase but would be indexed to inflation. It also would require that at least 75% of funds collected be distributed to state offices where they were collected, and would let BLM distribute the remaining 25% as it sees fit.

The American Petroleum Institute welcomed the bill’s passage by the Senate. “Reauthorization of the pilot program is an important step toward addressing well-documented permitting delays that have held up energy production and slowed the growth of jobs on federal lands,” said API Upstream Group Director Erik Milito.

“Addressing these issues will help to ensure that the US economy can benefit from the bounty of resources on federal lands, supporting continued job growth, increasing government revenues, and building America’s strength as an energy superpower,” he maintained.

Meanwhile, Kathleen Sgamma, vice-president of government and public affairs at the Western Energy Alliance in Denver, told OGJ on Sept. 17: “This bill is a good bipartisan compromise that provides adequate funding for BLM to process permits while providing industry with regulatory certainty for the next 10 years.”

The industry returns $54.12 to BLM for every taxpayer dollar spent by BLM, she noted. “We were willing to put additional money on the table to get a good bipartisan bill through to keep funding from running out at the end of 2015,” Sgamma said.

Contact Nick Snow at [email protected].