Proposal to CEQ / Energy Streamlining Task Force

TO: CEQ/ Energy Streamlining Task Force

Project/Problem:

Lack of, and need for, Department of the Interior Bureau of Land Management (BLM) nationwide permitting benchmark study and best practices implementation.

Entity Proposing Project:

Domestic Petroleum Council (DPC), representing 22 of the largest independent natural gas and oil exploration and production (E&P) companies in the United States. (See Attachment 1 for a summary of DPC company activity within the United States E&P industry.)

Contact:

William F. Whitsitt
President
Domestic Petroleum Council
201 Maryland Avenue, NE
Washington, DC 20002-5703

Type of Project:

Natural gas and oil exploration and production involving federal government lands and minerals.

Approval/Consultation Agencies;

Department of the Interior (DOI) and its Bureau of Land Management (BLM).

Background and Overview

The Domestic Petroleum Council companies are among the most active explorers, developers and producers of natural gas and oil from beneath federal government lands. As a result, they have unique firsthand experience in working with BLM personnel across the country, and in comparing and contrasting BLM land and minerals management policies, practices and implementation processes nationwide. That experience indicates a wide variation in efficiency and effectiveness with respect to processing of permits needed at every stage of gas and oil operations.

Problem/Recommendations

BLM permitting at every stage of exploration and production operations must be carried out in a timely and consistent manner so that companies can plan and sequence environmental studies, drilling plans, gathering line connections and production operations.

The processing of applications for permits to drill (APDs), and other sundry applications and notices, such as for re-completions and changes in completion procedures, can add significant delay, scheduling confusion and at least temporary -- and sometimes permanent -- loss of energy supply to consumers.

Currently the processing of permits in certain BLM field offices is handled very efficiently. In others there are long and increasing delays.

Causes may be varied: interpretation of legal, regulatory or political requirements; lack of personnel positions and/or budget; inefficient and/or duplicative processes; personnel lacking skills and/or training to match changes in industry operating practices and/or new legal, policy or regulatory directives.

The DPC companies believe that a short-term two-step nationwide natural gas and oil permit benchmarking and implementation project should be initiated to improve BLM operations, reduce agency costs and expedite finding, developing and producing federal government oil and gas resources.

The project would build upon and go beyond the May 17, 1996 BLM study entitled "Applications for Permit to Drill: Report on Problems Identified with Processing Timeframes and Recommendations to Resolve Identified Issues." That study confirmed a significant range of success rates among BLM offices in meeting permit processing objectives. It also made a number of potentially significant recommendations to improve APD processing. The recommendations dealt with such issues as "…conflicting priorities, poor understanding of APD priority, incomplete APD packages submitted by the operator, conflicting resource demands, excessive or unnecessary NEPA compliance…" and a number of others.

It is not clear, however, whether the 1996 APD study included comprehensive and uniform data on APD processing by every BLM office. It apparently did not address other notices or permitting actions. It is not clear to what extent its recommendations were accepted or put in place. And, there is no indication that it led to a comprehensive "best practices" approach to permitting improvements throughout the BLM.

As a result, the DPC recommends that the 1996 study be reviewed and that an additional short-term Natural Gas and Oil Permit Process Improvement Project be initiated to include:

- A quick-turnaround nationwide survey of every field office to gain data on:

• numbers and types of gas and oil permits received and processed over the past two years;
• numbers of permits approved on a weekly basis during the period; and,
• numbers and skill levels or grades of employees processing permits and doing related work, such as field visits and inspections.

(See Attachment 2 for representative examples of graphed data on permit processing that should be readily available from all BLM field offices.)

- Analysis of office-by-office data to find and highlight obvious correlations among variables that may contribute to such things as:

• higher and lower numbers of permits processed during comparable time periods; and,
• higher and lower numbers of permits approved per employee.

- Field visits to qualitatively explore variables and capture "best practices" that might be replicated in lower-performing offices.

- An action plan to:

• compile findings, including highlighting successes and identifying offices and areas needing improvement;
• prioritize improvement variables and factors to be addressed (policy interpretation, necessary changes in law, appropriations levels, staffing reallocation, process streamlining);
• create and field human resource teams to work with field office on moving toward "best practices" and higher performance; and,
• create a BLM-wide system of best permitting practice recognition and sharing.

- An evaluation process that will establish periodic monitoring and feedback to
managers and employees on energy permitting performance.

Initiation of such a project would send important signals throughout BLM as to the importance of excellence in the processing of energy permits - and a commitment of DOI and BLM leaders to provide the necessary resources to accomplish it.

Completion of such a project would go a long way toward ensuring an energy-conscious culture and institutionalized permitting process improvements in the agency.

Contact: Bill Whitsitt, DPC, 202 544 7100