OK Delegation Slams New Drilling Rules On Public Lands

OKLAHOMA CITY — Secretary of the Interior Ken Salazar announced in a media conference call Wednesday that the oil and gas industry will face stiffer hurdles, starting this year, when it comes to drilling on public lands in the U.S.

And this could have a detrimental effect on Oklahoma’s energy sector, triggering the wrath of Rep. Dan Boren and critical comments from others in the Oklahoma congressional delegation and representatives of the oil and gas industry.

According to a report in the Houston Chronicle, Salazar told the media that new Department of the Interior policies will “limit the federal government’s practice of fast-tracking some drilling proposals by exempting them from detailed environmental studies.”

The Chronicle report also notes that the Bureau of Land Management, which oversees more than 260 million acres of federal land “to conduct on-site assessments and seek expanded public input on proposed oil and gas leases.”

This all comes, according to Salazar, after the Bush years where he said policies throughout much of the 2000’s made “our public lands essentially the candy store of the oil and gas industry, who could walk in and take whatever they wanted.”

A more “thoughtful” approach to energy development on federal lands is what the DOI is hoping to achieve. However, here in Oklahoma, these new rules are seen as “job-killing,” according to US Rep. Dan Boren (D-Muskogee).

In a blistering letter, reposted at McCarville Report Online today, Boren declared his opposition to the DOI rule changes.

Commenting on Salazar’s declaration that the oil and gas industry were “kings of the world,” Boren replied: “This kind of comment is beyond the pale when thousands of Oklahomans and people from other energy-producing states are losing their jobs due to the recession. It’s the type of rhetoric that only serves to add insult to injury – like he’s just trying to pile-on their misery.”

Continuing, Boren says …

“The energy industry is overwhelmingly made-up of independent producers that drill 90 percent of the wells in the U.S. They are the mom-and-pop outfits that run a handful of wells, the young entrepreneur seeking to expand his operation, or the regional company that employs hundreds or even thousands of people in communities across the nation. And quite frankly, they consider this brand of rancor as a slap in the face and a direct attack on their pride in having helped build this country’s economy and powering its future,” Boren said.

Other members of Oklahoma’s congressional delegation commented as well, inclding the following comments from U.S. Rep. Frank Lucas of Cheyenne, Okla.

“I am disappointed that Secretary Salazar has defied the will of a majority of Americans and made drilling for oil and natural gas in this country more difficult,” Lucas said in an email to Oklahoma Watchdog.  ”His decision is particularly harsh on Oklahomans.  The energy sector is one of the largest industries in our state and provides income and jobs to many of our citizens.  Rather than continuing to stifle oil and natural gas development in this country, we need to use all available avenues and to make the United States energy independent.

U.S. Rep. John Sullivan, a Republican from Tulsa replied: “Secretary Salazar’s decision to implement numerous new hurdles and bureaucratic red tape to the leasing and development of new oil and gas on federal lands will only serve to cost American jobs, and hinder our ability to use the energy resources we have here at home.  The oil and gas industry employs over 100,000 people in the first district alone, I will not stand by and watched these jobs eliminated or shipped overseas because this administration continues to stand between the American people and the comprehensive energy plan our nation so badly needs.”

U.S. Rep. Mary Fallin, R-Oklahoma City, said in an email to Oklahoma Watchdog that the impact of these new rules would have long-lasting impact on Oklahoma.

“This is exactly the wrong approach to reducing our energy costs and reducing our dependence on foreign energy,” Fallin said. ”For Oklahoma, it will mean lost revenue and lost job opportunities.  I believe environmental stewardship and increased domestic energy production are not mutually exclusive, which is why I support an all-of-the above comprehensive energy solution that will encourage energy-rich states like Oklahoma to explore, produce and innovate.”

In fact, last fall, Fallin introduced the “Federal Exploration and Production Reform Act,” a bill that would break down one of the barriers to domestic energy production. This was a bill which would require the BLM to process exploration applications within 30 days and applications for production within 120 days. This, the bill notes, would substantially reduce the federal backlog of long-awaited permits.

Cody Bannister, spokesman for Oklahoma Independent Petroleum Association said independent producers in Oklahoma will be negatively impacted by the new rules. Bannister said the oil and gas industry is “under attack” by Washington and the Obama administration.  And with all the talk about going after “Big Oil” and their hefty profits, Bannister said smaller “mom and pop producers with a  couple of rigs,” who account for 90 percent of the producers in Oklahoma and 70 percent in the United States, are adversely affected, “hurting local businesses and local economies.”

OIPA’s Bannister also said in talking with some of the older oil and gas producers, they call it “the worst regulatory atmosphere they’ve ever seen on the federal level.”

Harold Hamm, the CEO of Continental Resources in Enid, Okla. and called “The Last American Wildcatter” by Forbes magazine, told Oklahoma Watchdog that he has sat in meetings with Secretary Salazar and that “he doesn’t seem to understand” the realities of what the independents have to endure.

“I didn’t appreciate his comments,” Hamm said. “It’s disappointing.”

Continental Resources, Hamm said, has operations in Montana, Wyoming, and in the Dakotas. As a result it’s hard to avoid working on federal lands.

Hamm said the multiple layers of regulation that already exist are “onerous.” And while most people may consider “federal lands” as being parks and pristine corners of America, often they’re open lands where there is little development and little else going on. Hamm said that by making these sorts of decisions, under the guise of protecting forests or whatnot, is misguided, considering America’s energy needs.

“They think they’re serving the American people by doing things like that?” Hamm asked. “It’s ludicrous.”

Reagan Smith Energy Solutions, an Oklahoma City-based regulatory firm that specializes in leasing and permitting projects on federal lands said in a press release Thursday that they are concerned about this new development from the DOI.

“With regulations there is a fine balance that must be reached in protecting various interests and not becoming overly burdensome, said Scott St. John, vice president of regulatory compliance at Reagan Smith. ” The protection of the environment and critical species is a  large part of the current permitting process.  We will continue to monitor any new regulations and alter services in order to make the process as efficient as possible.” 

About the author: Andrew Griffin is editor of reddirtreport.com and oklahomawatchdog.org