Zinke signs secretarial order to streamline federal onshore oil and gas leasing permits

US Secretary of the Interior Ryan Zinke has signed a secretarial order to tackle permitting backlogs and delays, identify solutions to improve the permitting process on federal lands, and to identify solutions to improve access to additional parcels of federal land that are appropriate for mineral development. As of 31 January 2017, the Bureau of Land Management (BLM) had 2,802 Applications for Permit to Drill (APD) pending.

In response to the order, IADC President Jason McFarland stated: “IADC appreciates Secretary Zinke’s dedication to reduce permitting times to encourage more interest in the development of our federal lands. The current processing time for onshore federal land leases discourages development of our nation’s resources. The revenue generated from this activity is an important source of funding for the Treasury, providing funds for national parks and infrastructure, among other activities. Drilling contractors aim to serve as responsible environmental stewards on all lands in which we conduct operations, and we welcome this effort by the secretary to increase development on our nation’s federal lands.”

Despite the fact that statute requires that the department and the BLM process APD review within 30 days, the average time to process an APD in FY16 was 257 days. The directive will improve the Federal Onshore Oil and Gas Leasing Program and the Federal Solid Mineral Leasing Program, which is a major source of income for the federal government and a critical component of American Energy Dominance.

“Oil and gas production on federal lands is an important source of revenue and job growth in rural America but it is hard to envision increased investment on federal lands when a federal permit can take the better part of a year or more in some cases. This is why I’m directing the BLM to conduct quarterly lease sales and address these permitting issues. We are also looking at opportunities to bring support to our front line offices who are facing the brunt of this workload,” Secretary Zinke said. “This is just good government and will further support the President’s goal of American energy dominance.”

As of 31 January 2017, the BLM had 2,802 APDs pending. The five BLM field offices with the highest number of pending APDs are listed below, which account for 2,060, or approximately 74%, of the total pending APDs:

• Casper, Wyo.: 526
• Vernal, Utah: 506
• Dickinson, N.D.: 488
• Carlsbad/Hobbs, N.M.: 388
• Farmington, N.M.: 152

Last year, the department canceled or postponed 11 lease sales. By contrast, the Trump Administration has already held more lease sales in the first six months than in the previous year, offered more acreage in those sales and raised more revenue than in the same time period last year.

“The Department of the Interior will be a better neighbor in the new Trump Administration,” Secretary Zinke added. “As is outlined in this order, we will look at ways to improve the process and make sure regulations serve their intended purpose rather than create a mountain of useless paperwork. By streamlining approvals of responsible energy development on federal land and actually holding lease sales, we will generate revenue for local communities and the Treasury to fund the things we all value like national parks, infrastructure and education.”

Secretarial Order 3354 directs the BLM to make both federal oil and gas resources and solid mineral resources on the public lands available for the benefit of the citizens of the United States. The order is in compliance with the Mineral Leasing ACT (30 U.S.C. § 226), which requires oil and gas lease sales “be held for each state where eligible lands are available at least quarterly and more frequently if the Secretary of the Interior determines such sales are necessary.”

The order also directs the BLM to address permitting backlogs and identify areas where improvements can be made in the permitting process to ensure the safe and timely exploration and development of our nation’s federal energy resources.

Currently, an applicant pays a non-refundable $9,610 processing fee to the BLM per APD filed. Approved APDs are valid for two years from the date of approval as long as the lease does not expire during that time. For FY18, the President’s budget proposal includes a $16 million increase in the Oil and Gas Management program to support permitting and rights-of-way processing.