Interior Secretary Ken Salazar is expected to announce Wednesday that his agency will require oil and natural-gas companies to clear more regulatory hurdles before they are allowed to drill on federal lands.
Mr. Salazar’s action is likely to make it more difficult for the U.S. Bureau of Land Management to fast-track the permitting of oil and gas projects on federal land. BLM field staffers would be required to seek additional approvals from their supervisors and to undertake more visits to areas where energy companies are seeking access, according to people familiar with the matter.
The BLM manages more than 260 million acres of federal land, and with it, a significant chunk of U.S. energy supplies. Domestic production from federal onshore oil and gas wells accounts for 11% of U.S. natural-gas supplies and 5% of the nation’s oil.
The Obama administration is already locked in a bitter fight with the oil and gas industry over proposals to raise billions of dollars in additional taxes from energy companies, and to cap the emissions of gases caused by burning fossil fuels, which have been linked to global warming.
Mr. Salazar’s action follows litigation from some environmental groups and criticism from the Government Accountability Office that the BLM has often misinterpreted and violated a 2005 federal law. The legislation was designed to speed oil and gas drilling in the West by allowing federal land managers to waive extensive environmental reviews normally required.
Part of the problem, the GAO said, is that the 2005 law fails to clearly spell out the conditions under which such waivers, or exclusions, can be granted.
Business groups fear the administration’s action will discourage domestic energy development, by adding new red tape to the permitting process for oil and gas drilling. In a letter to Mr. Salazar last week, the Industrial Energy Consumers of America, a lobbying group that represents manufacturers, credited the 2005 law with reducing drilling-permit backlogs and boosting natural-gas production.
“At a time when we should be working to enhance our energy supplies here at home, we believe it would be a mistake to pursue policies that would make it more expensive or difficult to access critical natural-gas resources,” the group said. Republican lawmakers also have urged Mr. Salazar not to do away with the practice of granting categorical exclusions altogether, saying better guidance to BLM staff is needed.
“We are concerned that the [U.S.] Department of the Interior is prepared to use a sledgehammer where a scalpel would suffice,” four Republican lawmakers, led by Rep. Doc Hastings of Washington, said in a letter to Mr. Salazar last fall.
But some congressional Democrats and environmental groups say the BLM has abused its authority in too many cases, and the rules need to be tightened.
Spokesmen for the Interior Department declined to comment Tuesday, except to say that Mr. Salazar would hold a teleconference Wednesday to announce “several initiatives to reform the onshore oil and gas leasing program” administered by the BLM. In addition to reining in the practice of granting categorical exclusions, Mr. Salazar is expected to assign Assistant Interior Secretary Wilma Lewis to lead a broad internal review of the BLM’s permitting practices.
THE WALL STREET JOURNAL (via Dow Jones), Jan. 6, 2010