Shale Daily / NGI All News Access

Interior Responding to Call for Quicker Permitting

Standing in the middle of North Dakota's booming oil/gas production fields, Interior Secretary Ken Salazar on Tuesday rolled out new federal government efforts to streamline onshore leasing and drilling processes on federal lands. Salazar made the announcement after two days of touring the Bakken Shale area, a major economic driver in what is now the nation's third largest oil producing state.

Interior's Bureau of Land Management (BLM) under the new program will be able to electronically track leasing and drilling permit applications in every step of the federal review process, Salazar said during his visit with BLM Director Bob Abbey and members of North Dakota's congressional delegation. The new tracking systems will allow missing or incomplete information to be more quickly spotted and dealt with.

Both systems are targeted to be in place by late this year or early next, following pilot testing this summer and fall, said Salazar, who defended the Obama administration's record for advancing oil/gas leasing on federal lands.

At the Fort Berthold Native American Reservation, where he met with three affiliated tribes, Salazar said he was at a location that had only a single well operating three years ago, and now there are 245 wells constructed and 112 more permitted. "There has been a virtual energy revolution here; it is incredible to me to see how much progress has been made here."

The Bakken/Sanish/Three Forks has been the second fastest growing unconventional play in the United States over the last year, second only to the Eagle Ford Shale. For the week ending March 30 a total of 227 rigs were actively searching for oil and gas in the play, up 31% from the 173 rigs operating one year ago and up nine rigs from a month ago, according to NGI's Shale Daily Unconventional Rig Count.

Abbey said moving from a paper-based to electronic permitting system for leasing and drilling can accelerate efforts to extract more domestic energy resources from federal lands. For the automated system of issuing drilling permits, the average time can be slashed from the current 298 days to 60 days, he said, noting in response to questions that in a pilot program at the BLM Carlsbad, NM, office, permitting times were cut by two-thirds.

Noting that BLM has more than 50 million acres on and offshore that are not being explored, and more than 7,000 permits have been issued that are not currently being used by the industry, Abbey said his agency is "still receiving new applications daily; it is the industry that ultimately decides whether to purchase a lease and whether to develop it."

Abbey said the industry has been critical of the BLM processes, and "to some degree" those criticisms are valid. He said the effort to streamline processes is being done in response to the industry.

Salazar and Abbey emphasized that the country has experienced a 13% increase in oil/gas production from federal lands during the past three years. Since 2008, BLM has processed more than 15,000 applications for permits to drill, and the agency expects to process 5,500 applications in fiscal year 2012.

"As part of President Obama's all-of-the-above energy strategy, Interior is committed to expanding safe and responsible oil/gas development an public lands and Indian trust lands," said Salazar.

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