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Backlog slows energy production

By MICHAEL MCLAUGHLIN, UPI Energy Correspondent   |   July 3, 2006 at 8:13 AM   |   Comments

WASHINGTON, July 3 (UPI) -- Amid the push to spur oil and natural gas development in the continental United States, federal agencies do not have the manpower to process the rising number of drilling applications or to inspect existing sites for environmental damage.

The Senate Committee on Energy and Natural Resources heard testimony last Tuesday that the Energy Policy Act of 2005 has expedited the application process for drilling permits by removing bureaucratic hurdles, but the surge in requests has outstripped the government's ability to process them. The average application continues to take about three times as long as targeted by law.

"The law streamlined some things. In the past, this onshore drilling was hit with the redundancy of overlapping provisions," in the application process, Dan Lieberman, of the conservative Heritage Foundation in Washington, told United Press International. "But it's still difficult to get a permit."

On the back of surging fuel prices, the Bush administration and Congress are looking at ways to increase energy output.

Demand for natural gas is expected to rise by 25 percent over the next 10 years, said Kathleen Clarke, director of the Bureau of Land Management, before the energy committee.

"Recent natural disasters and the price of energy serve as reminders of the extent to which the availability of energy affects our quality of life," she said in her written statement. "Public lands and the BLM play a key role here, as they currently provide 18 percent of the Nation's natural gas production."

The BLM estimates that five Western states contain 140 trillion cubic feet of natural gas on public lands. This could heat more than 55 million homes for almost 40 years, according to Clarke.

Because of the growing market and opportunity for profit, the number of permits granted between 2001 and 2005 was approximately 24,000 or nearly double the number issued between 1996 and 2000, Clarke said.

"It's important to do everything we can to meet that demand," she said.

Yet pending permits are not being processed in a timely manner. Although offices that were opened in 2006 specifically to handle the growing application volume appear to be helping, they might be precipitating environmental degradation.

By law, the BLM is expected to approve or reject a drilling application within 30 days, but the actual turnaround time is closer to 90 days, according to statistics presented to the energy committee.

"This has been an issue for many, many years predating this administration," Celia Boddington, a spokeswoman for the BLM, told UPI.

The BLM regulates the leases for drilling on all federal lands, but began working in conjunction with experts from the Department of Agriculture, the Environmental Protection Agency and the Army Corps of Engineers to review proposals prior to issuing a permit following passage of the 2005 Energy Policy Act.

"Permitting remains the most immediate and perhaps manageable element controlling the amount of natural gas to reach consumers," said Duane Zavadil of the Independent Petroleum Association of Mountain States. "Commodity prices tell us that more wells need to be drilled."

The quest to extract natural resources from public lands worries some conservationists and state officials. They say that exploiting non-renewable energy sources like oil and gas comes at the cost to the environment.

Without increasing staff to monitor the environmental impact from drill sites, there is the concern that the BLM is imbalanced and favors energy production over other concerns.

In Wyoming -- a state with vast oil and gas fields -- BLM offices completed 93 percent of their "required environmental inspections" in 2001, according to Mary Flanderka, Wyoming State Planning Coordinator. In 2005, however, 66 percent was completed, she told the panel.

"The data clearly indicates that an expedited well permitting process coupled with increased drilling applications requires that federal agencies be provided additional adequate resources to fulfill inspection and enforcement guidelines," she said.

But performance from the pilot office in Colorado might allay her concerns.

Officials from the Colorado BLM quadrupled the number of inspections they expected to carry out, because the pilot office quickly processed drilling applications, although they will still not inspect as many rigs as mandated.

"We're still falling short of what's required, but it's a vast improvement of what's been done in the past," Pat Gallagher, Colorado BLM inspector, told UPI.

Environmentalists perceive a wholesale attack on the natural treasures in the Energy Policy Act.

"This administration and the Energy Policy Act have set up a false choice," Sharon Buccino of the Natural Resources Defense Council, told UPI. "We should not have to choose between our wild lands and energy consumption."

Buccino says that the 2005 energy law caused a "land grab," because of the more than 6,000 permits issued, only 2,700 new wells were drilled.

"We try to accommodate all authorized uses in a way that resources are protected," said a BLM representative in Washington.

--

(Comments to energy@upi.com)

© 2006 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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