Locking Away Potential

Congressmen criticize Obama administration’s management of drilling permits

Oklahoma Oil Rigs / AP
May 16, 2013

The Department of the Interior admitted to Congress on Thursday morning that it could process oil and natural gas drilling applications more efficiently than it does right now during a hearing on the administration’s management of federal property.

"There are opportunities for greater efficiencies," Tommy Beaudreau, the acting assistant secretary of Land and Minerals Management for the Interior Department, told a subcommittee of the House Oversight and Government Reform Committee.

The hearing focused on the Obama administration’s efforts to allow drilling for natural resources on federally owned land.

The federal government approved 7,124 permits for drilling on federal lands in 2007, with an average approval time of 196 days. However, the Obama administration approved only 4,256 in 2012, at an average time of 228 days, Rep. Jason Chaffetz (R., Utah) said.

States can take under a month, and sometimes under two weeks, to issue a permit, multiple congressmen said.

Beaudreau argued after the hearing that states have different regulatory requirements and the Interior Department has to take multiple factors, including multiple uses of federal land, into account when issuing permits.

"That takes time," Beaudreau said. "That takes public engagement. That takes analysis."

Frustration about the federal permitting time led Rep. Blake Farenthold (R., Texas) to ask if the department was intentionally sitting on permits in order to delay drilling. Beaudreau assured him the department was not doing that.

Rep. James Lankford (R., Okla.), chairman of the Subcommittee on Energy Policy, Health Care, and Entitlements, showed a map at the beginning of the hearing of drilling locations around federal land in North Dakota. He noted that companies are drilling all around federal land—often right up to the border—but are not actually venturing onto federal land to drill. Lankford argued that the regulatory burden is too high to make it worth it, even though royalty costs are lower on federal land than elsewhere.

Unleashing the resources on federal land would allow "American energy independence and broad economic renaissance," Lankford argued.

Opening up all federal land to drilling would increase GDP by $127 billion each year over the next seven years and create 552,000 jobs over the next seven years, Lankford said, citing an Institute for Energy Research study.

Subcommittee ranking member Jackie Speier (D., Calif.) argued that issued and unused leases pose a greater problem for the United States than federal land that is closed to drilling.

The Obama administration has been criticized in the past for its reluctance to allow drilling on federal lands. Republican candidate Mitt Romney attacked President Barack Obama during the campaign for the drop in drilling on federal lands under his watch.

The Government Accountability Office issued a report last May asserting that America’s oil shale formations could be equal to the entirety of the world’s proven oil reserves.

The Interior Department is working on a new regulation for hydraulic fracturing, or fracking, on federal lands, Beaudreau said at the hearing.

Lankford wondered after the hearing if the department could handle yet another responsibility, given the inefficiencies that already plague it.