DRILLING DOWN ON DRILLING

Salazar Unveils Oil and Gas Reforms

By David Frey, 1-06-10

	Photo from Flickr by Mike Disharoon and used here under creative commons license.

Taking aim at the Bush administration’s approach to oil and gas leasing, Interior Secretary Ken Salazar unveiled a slate of reforms on Wednesday intended to better protect land, water and wildlife and reduce the number of protests filed by environmental groups and others at odds with leasing decisions.

“The previous administration’s ‘anywhere, anyhow’ policy on oil and gas development ran afoul of communities, carved up the landscape, and fueled costly conflicts that created uncertainty for investors and industry,” Salazar said on Wednesday.

The package of reforms arose in part from an examination of controversial gas leases in Utah, many of which were close to national parks and archeological resources. After studying those parcels last year, Salazar removed many from leasing and required further studies for others.

The reform package won praise from some environmental and sportsmen’s groups but criticism from industry supporters who say the new rules will only bring further delays to companies already hit hard by falling fuel prices.

“Secretary Salazar’s misguided proposal couldn’t come at a worse time for this economy,” said Colorado state Rep. Josh Penry, a Republican from Grand Junction, where gas jobs have vanished from what had been a once-booming gas patch. “These rules will destroy jobs and reduce domestic energy production at a time when Colorado and America need a lot more of both.”

The reforms call for interdisciplinary reviews that look at site-specific considerations for individual leases, including in some cases, site visits to the individual parcels. They call for greater public involvement in individual lease sales and in developing area plans where intensive drilling is anticipated. While the rules will still allow industry to recommend lease areas, they will emphasize leasing in already-developed areas and call for careful planning in new areas.

The reforms also seek to limit the use of categorical exclusions, which fast-track leases on sometimes controversial sites.

“For too long, leasing has occurred with minimal thought given to the impacts on fish and wildlife, water resources, and hunting and fishing opportunity,” said Chris Wood, Trout Unlimited’s chief operating officer. His group called Salazar’s reforms a “good start, but said Interior needs to do more to rein in industry’s impacts on public lands.

“It’s a good start toward reining in what can only be described as unchecked oil and gas extraction that has already taken a toll on the important places for hunters and anglers in the West,” said Brad Powell, energy director for TU’s Sportsmen’s Conservation Project, but he said they fall short of more comprehensive reforms that are needed.

Salazar said the new rules will bring order and certainty to the leasing process. Industry groups have complained that leasing has become too bureaucratic and unpredictable, but Salazar said past practices too often left leases tied up in litigation for months.

In 1998, he said, just over 1 percent of gas leases on public land were protested. Ten years later, that number grew to 40 percent.

Salazar shrugged off criticism that the reforms would bog down industry. Of 43.6 million acres of federal land that have been leased, Salazar said, only 12 million acres are in production. Last year, the administration offered 9 million acres for leasing.

Follow David Frey on his Web site, www.davidfrey.me, and on Twitter, @davidmfrey.

“In the prior administration, the oil and gas industry essentially were the kings of the world,” he said. “Whatever they wanted to happen essentially happened. This department was essentially a handmaiden of the oil and gas industry. We brought that to an end because the resources the department oversees are resources that belong to the American taxpayer.”

The Independent Petroleum Association of Mountain States blasted what it called additional red tape that would slow down drilling.

IPAMS Director of Government Affairs Kathleen Sgamma called it a “bureaucratic command-and-control system in which government bureaucrats – rather than scientists with expertise in natural gas and oil development – dictate where energy development should occur.”

Follow David Frey on his Web site, www.davidfrey.me, and on Twitter.

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