Udall, Barrasso Bill Would Renew and Improve BLM Energy Permitting Program

Yesterday, U.S. Senators Tom Udall (D-N.M.) and John Barrasso (R-WY) introduced a bipartisan bill to extend a pilot program that has helped the Bureau of Land Management (BLM) balance complex demands, including oil and gas permitting and environmental management, in New Mexico, Wyoming and other parts of the West.

Created as part of the Energy Policy Act of 2005, the pilot program was designed to help the agency deal with a backlog of permit applications while balancing other duties. The program, which also established a dedicated fund, has helped streamline operations in BLM field offices in Farmington and Carlsbad, N.M., and Rawlins and Buffalo, WY, among others.

Funding for the pilot program is set to expire in 2015. The senators’ bill permanently reauthorizes the Permit Processing Improvement Fund, and provides the Interior Secretary with greater flexibility to designate new pilot offices and proactively allocate resources based on shifting oil and gas production trends. Additionally, the bill revises the fee structure, and directs the proceeds to be retained by the BLM to support oil and gas permitting operations.

“The BLM offices in Farmington and Carlsbad are among the busiest in the country, and thanks to this pilot program they have become more efficient and effective,” Udall said. “Oil and natural gas are critical and active industries in New Mexico, supporting jobs and providing revenue for our kids’ education and other important state functions. Our bipartisan bill will make this successful program permanent, providing certainty for industry and giving the BLM the flexibility it needs to balance the complex demands of oil and gas permitting and environmental management.”

“Delays have plagued the Bureau of Land Management’s oil and gas permitting process for years,” Barrasso said. “In 2005, Congress established a program to expedite oil and gas permitting in several key states-including Wyoming. Our bipartisan bill reauthorizes this program and makes a number of important changes to it that will ensure Wyoming and other BLM offices can process permits in a timely manner.”

The Permit Processing Improvement Fund provides approximately $18 million each year for the Secretary of Interior to distribute to pilot offices for reinvestment in additional staff and resources to help improve efficiency, and support BLM’s diverse responsibilities, such as mineral leasing permits and wildlife and range conservation. The bill improves upon this program by providing the secretary with the flexibility to designate new project offices in response to shifts in industry demand while directing the BLM to consider public industry reports to reallocate resources more proactively. In order to pay for the extension of the pilot program, the Udall-Barrasso bill adjusts the interest rate that industry receives on overpayment of oil and gas royalties.

In addition to permanently reauthorizing the pilot program, the bill sets a $9,500 fee, to take effect 2016, for applications for permits to drill (APDs). The BLM will retain the funding, which the bill locks in through 2026, to support the agency’s base oil and gas permitting operations. Additionally, the bill prohibits the Secretary from raising this fee through a rulemaking, though the fee is indexed for inflation. The legislation further requires that at least 75 percent of funds to be distributed to the state offices where they were collected, and gives BLM the flexibility to allocate the remaining funds.

The bill is cosponsored by Sens. Martin Heinrich (D-N.M.); Heidi Heitkamp (D-N.D.); John Hoeven (R-N.D.); Mike Enzi (R-WY); Mark Udall (D-CO); Dean Heller (R-NV); John Walsh (D-MT); and James Inhofe (R-OK).