Three federal agencies say they will cooperate on air quality issues for onshore oil and gas projects drilled on public lands and will create a new agency to implement collaborative plans by late September.

The U.S. Environmental Protection Agency (EPA), Interior Department (DOI) and Agriculture Department (USDA) said recently they were forging a memorandum of understanding (MOU) to establish a common process for the agencies to follow as they analyze the air quality impacts of oil and gas drilling on public lands managed by the federal government.

"This agreement is an important step forward in our nation's energy security," Deputy DOI Secretary David Hayes said. "We want to build on lessons learned to establish clearer lines of communication and a predictable, common sense process for ensuring prompt and thorough reviews of proposed oil and gas projects."

The MOU brings together the EPA, the USDA's Forest Service (FS) and the DOI's Bureau of Land Management (BLM), Fish and Wildlife Service (FWS) and National Park Service (NPS). The agencies said they have been using different criteria to make decisions on oil and gas projects as required by the National Environmental Policy Act (NEPA). Sometimes those criteria were incompatible and project delays occurred.

"Authorities and requirements of different agencies inadvertently have contributed to heightened uncertainty for oil and gas companies proposing development on federal lands regarding the NEPA process and have undermined prospects for timely decision making," the MOU said. "In some instances, major oil and gas development proposals have been delayed while questions about appropriate air analyses and mitigation measures were resolved."

Under the MOU, the lead agency charged with considering an oil and gas project would receive "input and assistance early in the [permitting] process" from the other agencies on air quality and related issues. A common procedure for deciding what types of air quality tests are needed would also be established, as would criteria for when air modeling is necessary.

The MOU also calls for a three-level dispute resolution process, which it hopes to "raise and resolve in a timely manner with due consideration to the projects or other activities impacted by the dispute."

Under the dispute resolution process, level one disputes would be made in writing. After 15 working days, any unresolved disputes would be elevated to level two in writing but a meeting seeking consensus would also be held. Continuing disputes would go to level three within another 30 working days and would be resolved at the appropriate policymakers' headquarters.

DOI, EPA and USDA officials each signed the MOU -- which calls for developing an agency to implement the MOU and set up the appropriate training and materials for it within 90 days -- on June 23. That effectively sets the deadline for the new agency as Sept. 21.

Carlton Carroll, spokesman for the American Petroleum Institute (API), told NGI's Shale Daily that the organization was supportive of the federal agencies' collaborative effort.

"We welcome any attempt to streamline the permit process and hope this will move us in that direction," Carroll said Wednesday.

The BLM administers more than 245 million surface acres of public land and has mineral rights to another 700 million acres under land owned by other entities, including other federal agencies and state and private landowners. The FS manages 193 million acres, the FWS has 150 million acres and the NPS has 84 million acres.

In June, four environmental groups filed suit against the BLM, alleging the agency illegally approved dozens of oil and gas projects in the Piceance Basin in western Colorado without analyzing air quality impacts (see Shale Daily, June 16). Meanwhile another environmental group funded a study that found drillers in the North Texas portion of the Barnett Shale were losing about $52 million a year through fugitive natural gas and condensate air emissions (see Shale Daily, June 7).