The head of the U.S. Department of Interior’s Bureau of Land Management (BLM) lamented a shortage of BLM inspectors that has caused the agency to miss timely inspections on about 40% of the nation's high-priority oil and gas sites.
There are more than 100,000 wells on public lands nationwide that the BLM is supposed to oversee and inspect. Nevertheless, the agency contends its budget for inspecting an ever-increasing number of wells has declined by 20% since 2007.
BLM Director Neil Kornze made a pitch for the agency's current budget request before Congress that would allow a new industry fee-based program to hire a cadre of additional onshore inspectors in the next fiscal year, starting Oct. 1. He offered the plea as part of keynote remarks at the 60th annual meeting of the Rocky Mountain Mineral Law Foundation in Vail, CO.
Kornze said the BLM need for more inspectors comes at a time of an ever-increasing record number of wells being drilled on BLM-managed lands. He said that while the federal permitting process has improved, critical well inspections have not kept pace.
"Over the last few years, the BLM has significantly reduced the time it takes to process drilling permits," Kornze told the conference in Colorado. "Right now, nearly 7,000 permits have been approved but are sitting unused."
According to the General Accountability Office (GAO), BLM failed to inspect about 40% of what are described as high-priority drilling operations during the 2009-2012 period. "Similarly, in recent years, the BLM has been unable to complete 100% of its high-risk production inspections," said an agency spokesperson, adding that these inspections are critical.
Kornze told the Colorado meeting that BLM takes its responsibilities seriously, and thus, it is making the pitch to Congress for more funding to support a larger inspection staff. "Irregular and declining budgets have hindered our ability to move out aggressively in this year," he said, adding that the Obama administration fiscal year 2015 budget proposal seeks to rectify this.
Kornze and other BLM officials are asking for the same sort of fee-based program that Congress previously approved for offshore oil/gas activity. Carried out by the Bureau of Safety and Environmental Enforcement, the offshore program has been a "major success," according to Kornze. "Companies can now count on regular and efficient inspections," he said.
Under a fee-based onshore program, BLM could recruit and hire more than 60 new inspectors, the BLM spokesperson said. Without the additional funding, the agency will have to begin drawing inspectors from its two other major areas: permitting and leasing.
Assuming it gains congressional approval, after Oct. 1 BLM would notify operators of the fee within 60 days while a task force develops the strategy for hiring and training the additional petroleum engineer technicians. The budget item seeks authority for BLM to collect up to $48 million to cover additional annual inspections.
"The fee would be applied [to operators] depending on the number of wells on a lease," the BLM spokesperson told NGI. "The fees would range from $700 for cases where there is surface disturbance but no wells to $9,800 for each case with at least 50 wells."