A large portion of federal lands are classified as “available” and open to energy exploration and development, but oil and natural gas producers still can’t drill on the lands due to the number of obstacles they face, the head of the Independent Petroleum Association of Mountain States (IPAMS) told a Senate panel last Thursday.

Despite the availability of the lands, the reality is only 5% of the entire federal mineral estate in the West currently is leased and productive largely because of lengthy permitting delays, a prolonged environmental impact statement (EIS) process and other prohibitive restrictions and costs, said Robert L. Bayless Jr., president of IPAMS, which represents independent producers in a 13-state region of the Rocky Mountains and West.

Nevertheless, he noted producers in his area, the Intermountain West region, produce more than 20% of the natural gas in the Lower 48 states. The region contains more than 48% of the nation’s estimated and proven gas reserves, he said.

Testifying at a Senate Energy and Natural Resources Committee hearing reviewing production activity on federal lands, Bayless said Congress was told that 95% of the lands in the Intermountain West are available for leasing, but he noted that “this is inaccurate.” A recent Interior Department report “set the record straight,” estimating that approximately 36% of the region is off-limits to producers.

And on lands where drilling is allowed, Bayless said producers have had to wait up to 137 days to get their drilling permits approved, a process that by law should only take 30 days. Last year some waited as long as 370 days to get the federal government’s okay to drill. He pinned the blame on the inadequate funding and staffing of the Interior Department’s Bureau of Land Management (BLM).

Following Thursday’s hearing, Committee Chairman Pete Domenici (R-NM) said he will seek to remove the “unnecessary delays” to oil and gas development on federal lands as part of his broad-based energy legislation. He noted he plans to file the bill this spring for Senate floor consideration in May or June.

“Congress needs to take a hard look at the way our own federal bureaucracies are adding to the rising costs and dwindling supplies of oil and gas. Then we need to do something about it,” Domenici said.

The focus of controversy at the hearing was the recent results of a joint-agency (Interior, Agriculture and Energy departments) survey of oil and gas resources on federal lands in five western basins. Congress ordered the report in the Energy Policy and Conservation Act Amendments (EPCA) of 2000. The report found that 64% of the federal lands in the basins was “available” for oil and gas leasing with standard lease stipulations or leasing restrictions beyond the standard stipulations.

Conrad Lass, a BLM official involved in the joint-agency survey, was unable to tell NGI what portion of the “available” federal lands in the basins were actually being drilled by producers now.

The study further concluded that federal lands contain 85% of the technically recoverable oil and 88% of the technically recoverable gas in the five basins — Paradox-San Juan, Uinta-Piceance, Greater Green River, Powder River Basin and the Montana Thrust Belt.

The reports seem to be saying one thing, while producers tell another story, Domenici said. “Maybe [the EPCA survey] doesn’t report the full story when it comes to impediments and delays associated with oil and gas leasing on federal lands,” he conceded. Bayless said he agreed with that statement.

Sen. Lisa Murkowski (R-AK) expressed similar sentiments, after David Alberswerth of The Wilderness Society claimed that the “vast majority” of Alaska’s North Slope currently was “legally available” for oil and gas development and exploration.

“We may have it available for leasing, but leasing cannot take place because of the environmental impact statements, because of the regulations,” said Murkowski. “Statutorily, maybe you can go in there [to drill], but in terms of the science, in terms of the impact [statement], in terms of the regulations, it is not physically possible to do.”

So “is that [really] open?” she asked Alberswerth. “It appears to us that there is a great deal of activity underway in Alaska,” he countered.

Citing Alaska’s own estimates, Murkowski said only about 14% of the state’s northern coastline is currently open to exploration and development. Both she and Interior Deputy Secretary J. Steven Grimes urged Congress to open the 1002 area of the Arctic National Wildlife Refuge (ANWR) to exploration and drilling this year.

The Wilderness Society’s Alberswerth, however, pointed to the EPCA study as proof that oil and gas development is a “robust activity” on federal lands, both onshore and offshore.

Bayless assured the Senate panel that gas producers will be able to meet the future needs of energy customers, but he said it will require the cooperation of the federal government, given that it is the single largest holder of natural gas through its land holdings.

He noted there is a “disconnect” between federal policies promoting the use of natural gas, and policies that restrict producers’ access to federal lands for exploring and drilling. This, he believes, is the “root cause” of the existing high gas prices and market volatility.

Asked to name something he would change, he said the Interior agency needs to “get away from the mindset of ‘No, not here, not now, not yet without more study.”

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