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Agencies Overseeing Oil, Gas Operating on Limited Funds

October 7, 2013
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U.S. Interior Department employees tasked with monitoring oil and gas activity in the Gulf of Mexico who had been furloughed Tuesday when Congress cut off funding and shut down the federal government were hurriedly called back to work last week as Tropical Storm/Hurricane Karen entered the Gulf. Federal Emergency Management Agency personnel also were recalled to deal with effects of the storm.

Employees of the Energy Information Administration (EIA) and the Federal Energy Regulatory Commission (FERC) still had their jobs last week as both continued to operate for a time on reserve funds.

During the first week of the federal government shutdown, the Interior Department continued permitting for offshore drilling, albeit at a slower pace, but halted onshore permitting, while the Commodity Futures Trading Commission (CFTC) operated only essential functions such as market monitoring with a skeleton crew.

The EIA and FERC acknowledged that they have limited funds remaining, and could be subject to furloughs soon if Congress doesn't reach an agreement on the federal budget.

The Interior's Bureau of Safety and Environmental Enforcement (BSEE) said it intended to continue receiving and processing exploration and development plans as well as applications for drilling permits and other offshore permits. In addition to its emergency services, Interior also maintained inspection and enforcement of existing offshore oil and natural gas activities. More than half of the agency's 772 full-time employees reported for work during the shutdown.

At Interior's Bureau of Land Management (BLM), processing of applications for permits to drill onshore for oil and natural gas ceased. The processing of lease sales, permits and other non-emergency authorizations of onshore oil and gas, coal and minerals came to a halt as well. BLM will continue inspection and enforcement of existing oil and gas activities.

The Bureau of Energy Management (BOEM) reported that activity on its five-year Outer Continental Shelf oil and gas leasing plan would come to a halt during the shutdown.

Despite the shutdown, the EIA said the agency reports, such as the weekly report of gas in underground storage, which the energy markets rely on, should be released on schedule. FERC, which is a self-funding agency, operating on fees collected from the companies it regulates, also was conducting business as usual last Tuesday for an unspecified time until its reserve funds run out.

The EIA has funding that is not tied to the fiscal year budget, and as a result can operate until Oct. 11, said EIA spokesman Jonathan Cogan. "Hopefully it [the stalemate] will be resolved by then.

"It is premature to speculate on EIA operations in the event that a continuing resolution is not enacted by the end of [this] week. Once no-year appropriation balances available to EIA are exhausted, EIA staff would be furloughed and operations would be shut down. Should furloughs become necessary, staff cannot work voluntarily or be required to work. Also, Congress would need to take affirmative action to authorize pay for staff who are furloughed."

After issuing a plan last Monday to furlough all but a skeleton crew, FERC checked its pocketbook last Tuesday morning after the shutdown went into effect and said it was staying in business until further notice. The announcement said FERC would continue normal business operations and normal business hours.

"We don't know how long the funds will last. We're open for business as usual now. When the funds run out, then only excepted employees will remain," a Commission spokesperson said.

FERC's announced shutdown plans had called for furloughing the majority of its approximately 1,500 employees, keeping just 53 employees, including the five Commissioners, and 19 contractors, on board. Those employees would continue to inspect liquefied natural gas projects, monitor energy markets for manipulation or other violations of Commission rules and potential threats to energy infrastructure. The mass furloughs, however, were put off until further notice.

The CFTC stuck with its plan to keep just 28 of its 680 employees occupied during the shutdown that began at 12:01 a.m. Tuesday. Their job was to maintain "a bare minimum level of oversight and surveillance of the futures markets, clearing operations, and intermediaries. However, the vast bulk of the CFTC's oversight and surveillance functions will cease during a lapse of appropriations."

Hours before the shutdown became official, a coalition of 251 organizations, including the American Gas Association and Petroleum Marketers Association of America, led by the U.S. Chamber of Commerce, urged the Senate and House of Representatives to pass a Continuing Resolution to ensure uninterrupted funding of the federal government and to raise the nation's debt limit.

"It is not in the best interest of the employers, employees or the American people to risk a government shutdown that will be economically disruptive and create even more uncertainties for the U.S. economy," the coalition said in a letter to the lawmakers. 

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