What ‘America First’ means for energy development

At a hearing, a discussion of Trump’s aggressive oil and gas leasing policies.

 

This week, members of Congress and expert witnesses discussed the Trump administration’s plans for one of the West’s most contentious issues: oil and gas leasing on public lands. Department of Interior Secretary Ryan Zinke has taken steps in recent months toward more extraction-friendly policies, spurred on by executive orders from President Donald Trump, including creating a position to help streamline the energy leasing process. In a subcommittee meeting of the House Committee on Natural Resources on Thursday, members grilled four experts on Interior plans to make the U.S. “energy-dominant,” as the president has promised.

“Public lands are integral to the administration’s America First agenda,” Acting Assistant Secretary of Land and Minerals Management Katharine MacGregor told committee members. Here’s what you need to know from the hearing on what that “America First” vision for public lands will look like. 

Pumpjacks dot the landscape in the Permian Basin of New Mexico, a region discussed at a House Natural Resources subcommittee hearing June 29.
blake.thornberry/cc Flickr

Who controls the permitting process?

Currently, the federal government administers the energy leasing process for lands that they manage — a tradition some state representatives apparently want to change. The Utah governor’s energy advisor Laura Nelson testified that permitting for oil and gas on federal lands would be better administered by the state. “Not to diminish the importance of BLM or DOI in the overall management of multi-use of our federal lands,” Nelson said, but the state of Utah would be more efficient in approving leases. Rep. Don Beyer, D-Virginia, countered that citizens outside Utah should have a say, too: “How do you balance the rights of Americans who live across the country — the other 49 states — who own that land and have their rights represented by the federal agencies?”

How much should companies pay?

Committee members also grappled with the longstanding question over whether to increase royalty rates for oil and gas leases on federal lands. The BLM currently charges a minimum of just two dollars per acre leased. “That doesn’t generate much revenue,” said Mark Squillace, a professor of natural resource law at University of Colorado-Boulder. “We have not reformed our royalty rates since 1920.” A recent Government Accountability Office report found that raising rates would have a negligible impact on industry production but would raise federal revenues by millions annually.

Rep. Rob Bishop, R-Utah, countered that despite low royalty rates, the legal processes required for actually producing on federal land can be so cumbersome companies sometimes opt not to bid at all. “The only reason somebody would bid on federal lands is if they can make money,” Bishop said. “And the longer it takes to permit, the longer it takes to go through litigation… it simply means it’s not profitable.”

Speeding up the process

As of this spring, the Bureau of Land Management, which oversees much of Interior’s 700 million acres of subsurface minerals, had a backlog of nearly 3,000 applications for permits to drill oil and gas. MacGregor testified at the hearing that the government aims to cut through the backlog, hold more lease sales and speed up permit approvals.

The 2005 Energy Policy Act requires the agency to approve applications for permits within 30 days, but the process takes over 200 days, according to MacGregor. The BLM has 325 staffers working on oil and gas permitting; there are currently 90 vacancies, the acting assistant secretary said. BLM is focusing on its top five busiest offices, including in Casper, Wyoming, and recruiting more staff to speed up the permit approval process.

Rep. Alan Lowenthal, D-Calif., pointed out that the backlog is at its lowest number since 2005, and that as of September 2015, there were 7,532 approved permits that industry had yet to use. In 2016, companies bid on less than 39 percent of allowed leases.

Big picture? More drilling.

In practice, the America First agenda means more oil and gas development, which sets the Interior Department on a collision course with conservation-minded stakeholders. Lowenthal said the approach makes Interior “service station for the oil and gas industry.” The Bush administration took a similar tack in opening more federal land to drilling, but Lowenthal said that President Trump “has made the Bush administration look bush league.” The California representative also argued that Trump’s priorities make all other uses, from hunting and boating to off-roading and grazing, lower priority than oil and gas.

Rep. Niki Tsongas, D-Mass., asked MacGregor if the department would be working to ease permitting processes for renewable energy projects as well. “We are remaining supportive of those projects that have already been permitted,” MacGregor said. “(We will be) focusing on our permitting process in general and making sure we’re looking at efficiencies across the board.”

Tay Wiles is an associate editor from High Country News who writes from Oakland, California. 

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