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BLM Says Funding Shortfall Keeps It From Inspecting Some Wells

The Department of Interior's Bureau of Land Management (BLM) hasn't inspected some high-priority oil and natural gas wells due to budget constraints, according to an agency spokesman.

The agency is looking to Congress to approve a budget request that would earmark $10 million raised from fees charged to oil and natural gas companies to cover the expense of high-priority inspections, said BLM spokesman Jeff Kraus.

Last month, President Obama's proposed budget for fiscal 2015 allocated $11.5 billion to fund Interior, including millions to help facilitate oil and gas development on federal lands both onshore and offshore (see Daily GPI, March 4).

"The safe and environmentally sound operation of oil and gas activities on the nation's public lands is a high priority," Krauss said in comments originally reported by the Associated Press and confirmed byNGI's Shale Daily. "While federal onshore oil production is the highest it has been in a decade and has risen for the fourth year in a row, the BLM continues to improve oversight of energy development on public lands."

A Government Accountability Office (GAO) report released Monday concluded that BLM is falling short in its charge to manage and oversee oil and natural gas development on federal and Indian lands, failing to inspect thousands of wells that may pose a threat to the environment (see Shale Daily, May 12).

As the use of hydraulic fracturing, horizontal drilling and other technological advances has increased, federal agencies have proposed new or revised rules governing development of federal and Indian resources, but "BLM's continued reliance on outdated rules and guidance, limited coordination with state regulatory agencies, incomplete data on the location of resources and industry activities, and delayed reviews of communitization agreements" hinder the agency's ability to effectively manage and oversee development of those resources," GAO said.

A GAO review of BLM's Automated Fluid Minerals Support System found that more than 2,100 of the 3,702 high-priority wells drilled from fiscal 2009 through fiscal 2012 were not inspected.

Sen. Edward Markey (D-MA), one of seven members of Congress who requested the GAO study, has asked Interior what it has done and plans to do to increase well inspections and make oil and gas drilling on public lands safer.

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