Report says backlog in drilling requests hurts energy industry

07/07/2014 3:46 PM

07/07/2014 3:47 PM

The federal agency tasked with approving mines and drills on public lands is handicapping development across the U.S. because it takes too long to review oil and gas proposals, a federal report finds.

In Utah, the Bureau of Land Management's Vernal office is now handling applications amounting to half the yearly federal workload, reports the Department of the Interior's Inspector General.

Reviewing such applications has not been high on the agency's to-do list, and supervisors don't track progress on the applications, the report finds.

But it also acknowledges that the agency grapples with outdated resources and too little staff. In Vernal, it concedes, a high cost of living means the agency has difficulty attracting workers.

Agency staffers could streamline the process by digitizing and assigning the applications to specific managers, the review finds.

"Specifically," the report says, "the federal government and Indian lands mineral owners risk losing royalties from delayed oil and gas production."

Nationally, oil and gas production on federal and Indian lands has brought in $3 billion since fiscal year 2011.

In 2012, reviewing the proposed drilling projects took seven and a half months on average, the report finds. Companies applying for drills and other operations cause some delays, it found, but others stem from agency offices' lack of oversight, accountability and staffing.

It's not the first review to point to a backlog:

The Office of Inspector General in 2003 found long delays. In August of 2013, the General Accountability Office criticized the agency for long processing times that persisted. The BLM at that time said it would implement a list of recommendations by the end of this year.

Kathleen Sgamma, vice president of governmental affairs for Western Energy Alliance, a group of independent oil and gas producers, said she welcomes the recommendations but says hefty constraints likely mean that very little will change.

The alliance, she said, supports a bipartisan bill that would funnel more money to offices handling more applications.

The BLM counters that if industry bore more of the cost for processing the applications to drill, the agency's efficiency would improve in that area.

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