Focus on drilling permits could hinder development: state official

Focus on drilling permits could hinder development: state official

Washington (Platts)--27Jun2006

The focus on permitting oil and gas activities in the Rocky Mountain
region -- and specifically in Wyoming -- at the expense of planning,
monitoring, inspection and reclamation activities, could hinder efficient and
effective energy development, a Wyoming state official told the US Senate
Energy Committee Tuesday.

"There is no question of the need to develop Wyoming's energy resources,"
Mary Flanderka, state planning coordinator in the governor's office, said in
her testimony. Concurrently, "Wyoming feels the impact of accelerated
development through social and economic changes in local communities as well
as impacts to wildlife, recreation and air and water resources."

There is support for permit-streamlining efforts that will increase
production, Flanderka said. However, "Without improving planning and
inspection/monitoring activities, permitting times could continue to languish
due to social and even legal constraints related to impacts on other
resources."

Since 2001, BLM's inspection rate has dropped from 93% to 66%, which a
2005 Government Accountability Office report Flanderka cited blamed on
increased permitting activity. "Moving ahead quickly on any project is
dangerous if there is no monitoring to make sure that the project is being
done correctly," she said.

Project environmental impact statements and resource management plans,
which are imperative to successful energy development, are overdue, Flanderka
said. "The resource management plan revisions need to identify those areas
whose leasing should be deferred for the protection of other resources, while
energy-rich areas are fully developed," she said.

Flanderka also urged BLM to "avoid any hasty actions" that would remove
winter stipulations from leases that "provide crucial protection to wildlife."

BLM Director Kathleen Clarke told the committee that with the imperative
for increased energy development the agency "is beginning to question those
protections, and is investigating ways to limit the impact on wildlife if we
do year-round drilling."

Duane Zavadil, vice president of the Independent Petroleum Association of
Mountain States, said many of the current land use plans do not reflect the
importance of public lands in meeting energy needs.

BLM initiated a project in 2001 to revise all 160 plans within 10 years,
but Zavadil complained that "some of the plans, in draft form, contain
prescriptions that further limit, rather than expand, the potential for energy
development."

With $20 million in hand courtesy of the Energy Policy Act of 2005, BLM
last year launched a pilot program in seven of its busiest field offices
designed to eliminate a backlog of 4,636 drilling permits, as of April 1, to
3,000 by the end of September. Since the program began, BLM officials have
frequently said they have been able to chip away at the permit surfeit.

But Zavadil noted that while BLM's permit approval rate has risen 20%
over the last three years, the number of permits received by the agency over
the same period has climbed 27%.

Once the pilot program is fully implemented, gas production from BLM
lands should rise to more than 1 Bcf/year, according to a study prepared last
year by Arlington, Va.-based consulting firm Advanced Resources International.

--Gerald Karey, gerry_karey@platts.com
--Matt Spangler, matt_spangler@platts.com

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