BLM defends offering more leases
Published: Friday, January 19, 2018
Brian Steed, the Bureau of Land Management deputy director for programs and policy, yesterday defended his agency's push to auction new oil and gas leases, despite thousands of inactive permits, siding with industry representatives who argued such delays are a necessity in their business.
Steed testified before the House Natural Resources Subcommittee on Energy and Mineral Resources, which held an oversight hearing on efforts by the Trump administration to ease restrictions on energy extraction on public lands.
During the hearing, Rep. Don Beyer (D-Va.), a member of the subcommittee, asked Steed to justify offering new leases when records show 7,950 BLM permits unused at the end of fiscal 2016.
"Last year we approved 1,000 more permits," Beyer said. "Why do we need to be aggressively doing new permits when so many existing permits are outstanding?"
Steed defended new lease sales, arguing idle leases are caused by "a variety of factors."
"Some of them are lease stipulations [that] may prohibit drilling during certain time frames or other reasons that may be better for business overall," Steed said.
Arizona Rep. Paul Gosar (R), the subcommittee's chairman, also asked witnesses to address the question of unused leases, pointing to criticism by Democrats on the panel.
"It has been reported recently that BLM has a backlog of permits to drill that have been approved, yet companies continue to submit APDs for other projects," Gosar said, referring to applications for permit to drill.
"My colleagues on the other side of the dais seem to believe there is a smoking gun here as to why companies would leave undeveloped leases and undeveloped permits on the table while pursuing leases elsewhere," he said.
Both Shane Schulz, the director of government affairs for Denver-based QEP Resources Inc., and Jarred Kubat, the vice president of land, legal and regulatory for Denver-based Wold Energy Partners, defended the process of allowing leases to sit idle.
Schulz said that many leases have gone unused as companies work to piece together significant acreage before beginning extraction.
"It's also important to know that not every lease is going to get developed. At the end of the day, you're going out and making an educated guess on what you think that acreage holds," he added.
Kubat likewise argued developers need time to assess new parcels. "When you drill and develop on lease hold ... you're learning more about it as each well progresses from one to the next, and that will drive where you go in the development and drilling program."