Today, the House Natural Resources Committee is considering proposed legislation to transfer permitting of oil and gas activities on your public lands to the states. We all want a secure and prosperous energy future. The question is how to get there. The proposed "Opportunities for the Nation and States to Harness Onshore Resources Act" or ONSHORE Act takes us in the wrong direction.
Minimum Protections—Ensuring Clean Air and Clean Water for All
Our system of environmental law is built on cooperation between the states and the federal government. Laws like the Clean Air Act and the Clean Water Act give states flexibility to determine how best to achieve certain goals like the level of healthy air quality. But it is the federal government that sets the standard for what counts as healthy. States are often free to set standards that are more stringent than the minimum federal protections, but cannot use weaker standards. There is good reason behind this approach—every person should have a right to clean air and water no matter where they live.
Another basic protection provided by current federal law is the right to participate in decisions that affect our daily lives. Such right is at the core of our democratic government. It is enshrined in the laws that govern the operation of federal agencies such as the Environmental Protection Agency and the Department of the Interior. The public lands at issue are our lands. Don't we deserve a say in how they get used and who profits from them?
The lands at issue in the legislation being considered are the millions of acres that are managed by the Bureau of Land Management and the Forest Service for the benefit of all Americans. The two statutes that govern these lands—the Federal Land Policy and Management Act and the National Forest Management Act—provide the public the same basic opportunity to participate in planning, leasing and permitting decisions no matter where these lands are located.
The ONSHORE Act takes away these basic rights to participate. A state might provide something comparable, but there is no guarantee. The statutory language included in the ONSHORE Act would arguably supersede the protections currently provided under existing law. Permitting would become a state, rather than a federal, decision. Without a federal decision involved, the National Environmental Policy Act would not apply. Neither would protections provided under the National Historic Preservation Act and the Endangered Species Act.
Multiple Use—Balancing Competing Needs
The ONSHORE Act cuts at the heart of another fundamental element of the legal framework protecting our public lands—the multiple use mandate. BLM’s governing statute—the Federal Land Policy and Management Act—requires that our public lands be used in the “combination that will best meet the present and future needs of the American people.” 43 U.S.C. 1702(c). Such mandate requires balance—BLM cannot lock up all land to be preserved untouched; but it also cannot turn all land over to drilling excluding other uses such as hunting, hiking, camping and grazing.
States do not have a similar mandate. This is probably one reason why states at times issue permits faster than BLM. But sacrificing the multiple use mandate for speed in oil and gas permitting is something few Americans want. Poll after poll show that Americans across the country and across party lines value the recreational opportunities our public lands provide. They value the beauty that our public lands hold. And they value the role that our public lands play in our national identity. In fact, sacrificing the multiple use mandate as the proposed legislation would do for permitting speed is a deal that not even many oil and gas workers would likely take. These workers are the same people who treasure the chance to take their families out into the wide open spaces to hunt, fish and enjoy the outdoors that our public lands currently provide.
Effective Enforcement—Holding Companies Accountable
Finally, what’s at stake in delegating permitting on federal land to states is not simply how quickly permits get issued. Issuing permits is the easy part compared to enforcing them. Enforcement requires staff and money. Inspectors are needed to ensure permit conditions protecting health, safety and the environment are met. Money and staff are also needed to ensure that production is accurately accounted for and appropriate royalties are paid.
The proposed legislation fails to address this critical issue. The bill specifies what a state must demonstrate in order to receive exclusive authority over the issuance and enforcement of drilling permits and plans. A state’s application must address the substance of its regulatory program, but nowhere is there any requirement to address the staff and money available to enforce the new responsibilities that bill would transfer to the states. Many states are already strapped to inspect oil and gas wells for which they are now responsible. Adding thousands of new wells on federal land will only stretch the limited resources of the states further.
BLM’s enforcement is far from perfect. Inspection and enforcement research by the Western Organization of Resource Councils shows that both federal and state oil and gas inspection and enforcement programs are consistently understaffed and underfunded. For example, the research found that the number of inspectors continues to decline relative to the number of active wells in most states, although this number increased for the BLM from 2006 until 2011. As a result, all state agencies studied except for the North Dakota Oil and Gas Division have very high ratios of active wells to inspectors, as does the BLM despite the increased inspection resources. More staff and funds through higher permit fees is the answer to these problems, rather than changing who has the authority to permit.
By the Numbers: BLM approved 2,184 Applications for Permits to Drill (APD) in FY16. Of these, 626 were in Wyoming. As of September 30, 2016, BLM managed 12,771,830 acres actively producing oil and gas. Of this total, 4,020,073 acres were in Wyoming. BLM is responsible for inspecting approximately 32,000 wells annually. Inspection activities include compliance with environmental conditions and identifying Drilling Without Approval or trespass wellbores. Inspection responsibilities also include ensuring proper reporting of production. In 2014, BLM spent $113 million on oil and gas permitting and inspection activities.
BLM also has responsibility for plugging and reclaiming orphan oil and gas wells drilled by previously existing oil and gas companies. While companies are required to post bonds to cover the cost of plugging a well, these bonds rarely are sufficient to cover the actual cost of doing so. As one example, between 1997 and 2014, it cost the State of Wyoming $11 million in total to plug orphaned wells, and only $3 million was covered by bonds. Is this a responsibility that states are willing to take on for the thousands of wells on federal land? If not, why should the cost be left to federal taxpayers when states desire the control over and revenue from drilling permit approvals? Wyoming’s state bond requirements are better than some, but where exactly does the ONSHORE Act leave the clean up responsibility and from where will the funds come to pay for it?
I have the privilege of testifying before the Committee considering this legislation this morning. My vision of a secure and secure and prosperous energy future is different from some of the Members of Congress before whom I will testify. I, like NRDC, believe that we must invest in efficiency and renewable energy, rather than continuing to rely on dirty fossil fuels. We need to lead into the future, rather than remain stuck in the past. That said, we can’t shut down all our oil and gas wells tomorrow. Figuring out the most effective and efficient way to regulate them is important. Federal oversight is far from perfect. Too much, however, is lost in simply turning oversight to the states. Minimum federal standards matter. So does a multiple use mandate. And so does effective enforcement. Americans deserve a secure and prosperous energy future. The proposed legislation takes us in the wrong direction.