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EXAMINING THE DEPARTMENT 

OF THE INTERIOR’S ACTIONS 

TO ELIMINATE ONSHORE 

ENERGY BURDENS 

OVERSIGHT HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY AND 

MINERAL RESOURCES 

OF THE

COMMITTEE ON NATURAL RESOURCES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

SECOND SESSION 

Thursday, January 18, 2018 

Serial No. 115–34 

Printed for the use of the Committee on Natural Resources 

( 

Available via the World Wide Web: http://www.govinfo.gov 

or 

Committee address: http://naturalresources.house.gov 

(II) 

COMMITTEE ON NATURAL RESOURCES 

ROB BISHOP, UT, Chairman 

RAU ́ L M. GRIJALVA, AZ, Ranking Democratic Member 

Don Young, AK 

Chairman Emeritus 

Louie Gohmert, TX 

Vice Chairman 

Doug Lamborn, CO 

Robert J. Wittman, VA 

Tom McClintock, CA 

Stevan Pearce, NM 

Glenn Thompson, PA 

Paul A. Gosar, AZ 

Rau ́l R. Labrador, ID 

Scott R. Tipton, CO 

Doug LaMalfa, CA 

Jeff Denham, CA 

Paul Cook, CA 

Bruce Westerman, AR 

Garret Graves, LA 

Jody B. Hice, GA 

Aumua Amata Coleman Radewagen, AS 

Daniel Webster, FL 

Jack Bergman, MI 

Liz Cheney, WY 

Mike Johnson, LA 

Jenniffer Gonza ́lez-Colo ́n, PR 

Greg Gianforte, MT 

Vacancy 

Grace F. Napolitano, CA 

Madeleine Z. Bordallo, GU 

Jim Costa, CA 

Gregorio Kilili Camacho Sablan, CNMI 

Niki Tsongas, MA 

Jared Huffman, CA 

Vice Ranking Member 

Alan S. Lowenthal, CA 

Donald S. Beyer, Jr., VA 

Norma J. Torres, CA 

Ruben Gallego, AZ 

Colleen Hanabusa, HI 

Nanette Diaz Barraga ́n, CA 

Darren Soto, FL 

A. Donald McEachin, VA 

Anthony G. Brown, MD 

Wm. Lacy Clay, MO 

Jimmy Gomez, CA 

Cody Stewart, Chief of Staff 

Lisa Pittman, Chief Counsel 

David Watkins, Democratic Staff Director 

SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES 

PAUL A. GOSAR, AZ, Chairman 

ALAN S. LOWENTHAL, CA, Ranking Democratic Member 

Louie Gohmert, TX 

Doug Lamborn, CO 

Robert J. Wittman, VA 

Stevan Pearce, NM 

Glenn Thompson, PA 

Scott R. Tipton, CO 

Paul Cook, CA 

Vice Chairman 

Garret Graves, LA 

Jody B. Hice, GA 

Jack Bergman, MI 

Liz Cheney, WY 

Vacancy 

Rob Bishop, UT, ex officio 

Anthony G. Brown, MD 

Jim Costa, CA 

Niki Tsongas, MA 

Jared Huffman, CA 

Donald S. Beyer, Jr., VA 

Darren Soto, FL 

Nanette Diaz Barraga ́n, CA 

Vacancy 

Vacancy 

Rau ́l M. Grijalva, AZ, ex officio 

(III) 

CONTENTS 

Page 

Hearing held on Thursday, January 18, 2018 ....................................................... 1 

Statement of Members: 

Gosar, Hon. Paul A., a Representative in Congress from the State of 

Arizona ........................................................................................................... 2 

Prepared statement of ............................................................................... 3 

Lowenthal, Hon. Alan S., a Representative in Congress from the State 

of California ................................................................................................... 4 

Prepared statement of ............................................................................... 5 

Statement of Witnesses: 

Culver, Nada, Senior Counsel and Director, BLM Action Center, The 

Wilderness Society, Denver, Colorado ......................................................... 18 

Prepared statement of ............................................................................... 19 

Kubat, Jarred, Vice President of Land, Legal & Regulatory, Wold Energy 

Partners, LLC, Denver, Colorado ................................................................ 14 

Prepared statement of ............................................................................... 15 

Schulz, Shane, Director, Government Affairs, QEP Resources, Inc., 

Denver, Colorado ........................................................................................... 29 

Prepared statement of ............................................................................... 31 

Steed, Brian, Deputy Director, Programs and Policy, Bureau of Land 

Management, Washington, DC .................................................................... 7 

Prepared statement of ............................................................................... 8 

Questions submitted for the record ......................................................... 12 

Van Tassell, Kevin T., District 26, Utah State Senate, Vernal, Utah ......... 27 

Prepared statement of ............................................................................... 28 

Additional Materials Submitted for the Record: 

List of documents submitted for the record retained in the Committee’s 

official files .................................................................................................... 59 

(1) 

OVERSIGHT HEARING ON EXAMINING THE 

DEPARTMENT OF THE INTERIOR’S ACTIONS 

TO ELIMINATE ONSHORE ENERGY 

BURDENS 

Thursday, January 18, 2018 

U.S. House of Representatives 

Subcommittee on Energy and Mineral Resources 

Committee on Natural Resources 

Washington, DC 

The Subcommittee met, pursuant to call, at 2:11 p.m., in room 

1324, Longworth House Office Building, Hon. Rob Bishop 

presiding. 

Present: Representatives Gosar, Lamborn, Tipton, Bergman, 

Bishop (ex officio), Lowenthal, Beyer, and Soto. 

Mr. BISHOP. Let me call this meeting to order. Mr. Gosar is on 

his way, but he has been detained for a second. So, I am going to 

start this thing, and if he gets upset with that, I will have to deal 

with that later. 

Anyway, we will gavel this to order. I also would like to get started simply because we will have votes that are going to interrupt 

in the middle of this, so I would like to get some of this done. 

So, let me welcome our witnesses who are here: Dr. Brian Steed, 

who is the Deputy Director, Bureau of Land Management; Mr. 

Jarred Kubat—if I come close to the name. 

Mr. KUBAT. Fine. 

Mr. BISHOP. You don’t have to worry, I will be gone in a few 

minutes anyway, so that is OK. 

Mr. Kubat is the Vice President of Land, Legal & Regulatory 

from Wold Energy Partners; Ms. Nada Culver, who is a Senior 

Counsel from the BLM Action Center with The Wilderness Society; 

Senator Kevin Van Tassell, one of my good constituents, but also 

a leader in the Utah State Senate, happy to have you here; and Mr. 

Shane Schulz, Director of Government Affairs at QEP Resources. 

We are happy to have all of you here. 

What normally happens at this time is that we will start this 

meeting with opening statements from the Chairman and the 

Ranking Member. So that we can get at least some testimony in 

before that happens, let me turn to Mr. Steed, who is also here 

from the BLM, to give your opening testimony first. When Mr. 

Gosar comes back, we will interrupt that. We will have his opening 

statement, the Ranking Member’s opening statement, any other instructions, and we will go from there. And then we will finish off 

with the rest of the testimony, if that is OK. Committee members, 

Ranking Member? 

Mr. LOWENTHAL. Fine. 

Mr. BISHOP. OK with it, are you sure? OK. 

2 

Brian, we are happy to have you here. Thank you for joining us. 

And we are happy to have you in the new position you have, even 

though you had to leave the Capitol to do it. But you actually don’t 

even need to do that, because Mr. Gosar can give his statement 

first. 

Dr. GOSAR [presiding]. The Subcommittee is meeting today to 

hear testimony on examining the Department of the Interior’s 

actions to eliminate onshore energy burdens. 

Under Committee Rule 4(f), any oral opening statements at hearings are limited to the Chairman, the Ranking Minority Member, 

and the Vice Chair. This will allow us to hear from our witnesses 

sooner and to help Members keep to their schedules. Therefore, I 

ask unanimous consent that all other Members’ opening statements be made part of the hearing record if they are submitted to 

the Subcommittee Clerk by 5 p.m. today. Without objection, so 

ordered. 

STATEMENT OF THE HON. PAUL A. GOSAR, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ARIZONA 

Dr. GOSAR. Today, the Subcommittee will review actions taken 

by the Department of the Interior to address regulatory burdens on 

oil and gas production and consider recommendations provided to 

the Department’s Energy Burdens report. 

The Energy Burdens report assessed regulatory activities that 

may impose unnecessary burdens on energy development, the 

Department’s progress in addressing such activities through policy 

directives, as well as the Department’s recommendations for which 

activities require further review and potential reform. 

To date, the Department has taken significant steps to address 

burdensome regulations that threaten energy development without 

providing requisite environmental or safety benefits. For example, 

the Department has rescinded the BLM’s hydraulic fracturing rule 

and suspended compliance dates for the venting and flaring rule, 

both of which were so-called solutions in search of problems. 

The report also details action taken by the Department to promote the development of our domestic resources. For instance, the 

Department conducted an updated resource assessment for 

Alaska’s North Slope region, including the Petroleum Reserve, indicating that the region holds significantly more technically recoverable resources than previously known, an estimated 8.5 billion 

barrels of oil and 25 trillion cubic feet of natural gas. Furthermore, 

the Department has, at the urging of this Committee, set a goal of 

returning to the practice of holding quarterly oil and gas lease 

sales, as required under the Mineral Leasing Act. 

While the Department has been proactive in addressing regulatory burdens that discourage energy production, much work 

remains in getting bureaucracy out of the way of responsible and 

timely development of our domestic resources. Presently, the onshore oil and gas leasing process takes at least 16 months from the 

time a parcel is nominated for sale to the award of a lease. In fact, 

operators have observed that it can take over a decade to obtain 

and begin production on a lease in some instances. These delays 

can largely be attributed to the over-analyzation of similar issues 

under the National Environmental Policy Act. Requirements to 

3 

conduct duplicative environmental reviews and comply with inconsistent leasing stipulations can add years to the initial timeline for 

production on a lease. 

Moreover, according to the Energy Burdens report, the previous 

administration made broad swathes of land unavailable for energy 

development by issuing inconsistent and overly restricted land use 

designations through the land use planning process. In fact, the 

amount of acreage open for energy development was reduced by 

over 42 percent from 2008 to 2016. With less land available, burdensome regulatory requirements, and uncertain approval 

timelines, operators have little choice but to take their business 

elsewhere, meaning lost mineral revenues for the Federal Government and states burdened with Federal land. 

Today, the Subcommittee will hear from witnesses who can provide unique perspectives on navigating the onshore oil and gas 

leasing process and attest to the adverse impacts of the regulatory 

uncertainty on energy production. These witnesses will demonstrate how delays in the oil and gas leasing process impact job 

creation beyond the oil and gas industry, as well as economic development in energy producing states. 

Finally, we will discuss the benefits that mineral revenues provide for states and how streamlining the leasing process will 

reduce uncertainty for the communities that count on mineral revenues to run their schools and provide essential services to our 

constituents. 

[The prepared statement of Dr. Gosar follows:] 

PREPARED STATEMENT OF THE HON. PAUL A. GOSAR, CHAIRMAN, SUBCOMMITTEE ON

ENERGY AND MINERAL RESOURCES

Today, the Subcommittee will review actions taken by the Department of the 

Interior to address regulatory burdens on oil and gas production and consider recommendations provided in the Department’s Energy Burdens report. 

The Energy Burdens report assessed regulatory activities that may impose unnecessary burdens on energy development, the Department’s progress in addressing 

such activities through policy directives, as well as the Department’s recommendations for which activities require further review and potential reform. 

To date, the Department has taken significant steps to address burdensome regulations that threaten energy development without providing requisite environmental 

or safety benefits. For example, the Department has rescinded the BLM’s hydraulic 

fracturing rule and suspended compliance dates for the venting and flaring rule, 

both of which were so-called ‘‘solutions’’ in search of problems. The report also details action taken by the Department to promote the development of our domestic 

resources. For instance, the Department conducted an updated resource assessment 

for Alaska’s North Slope region, including the Petroleum Reserve, indicating that 

the region holds significantly more technically recoverable resources than previously 

known—an estimated 8.7 billion barrels of oil and 25 trillion cubic feet of natural 

gas. Furthermore, the Department has, at the urging of this Committee, set a goal 

of returning to the practice of holding quarterly oil and gas lease sales, as required 

under the Mineral Leasing Act. 

While the Department has been proactive in addressing regulatory burdens that 

discourage energy production, much work remains in getting bureaucracy out of the 

way of responsible and timely development of our domestic resources. Presently, the 

onshore oil and gas leasing process takes at least 16 months from the time a parcel 

is nominated for sale to the award of a lease. In fact, operators have observed that 

it can take over a decade to obtain and begin production on a lease in some instances. These delays can largely be attributed to the over-analyzation of similar 

issues under the National Environmental Policy Act. Requirements to conduct duplicative environmental reviews and comply with inconsistent leasing stipulations can 

add years to the initial timeline for production on a lease. 

4 

Moreover, according to the Energy Burdens report, the previous administration 

made broad swathes of land unavailable for energy development by issuing inconsistent and overly restrictive land use designations through the land use planning 

process. In fact, the amount of acreage open for energy development was reduced 

by over 42 percent from 2008 to 2016. With less land available, burdensome regulatory requirements, and uncertain approval timelines, operators have little choice 

but to take their business elsewhere—meaning lost mineral revenues for the 

Federal Government and states burdened with Federal land. 

Today, the Subcommittee will hear from witnesses who can provide unique 

perspectives on navigating the onshore oil and gas leasing process and attest to the 

adverse impacts of regulatory uncertainty on energy production. These witnesses 

will demonstrate how delays in the oil and gas leasing process impact job creation 

beyond the oil and gas industry, as well as economic development in energy producing states. Finally, we will discuss the benefits that mineral revenues provide 

for states and how streamlining the leasing process will reduce uncertainty for the 

communities that count on mineral revenues to run their schools and provide 

essential services to our constituents. 

Dr. GOSAR. I now recognize the Ranking Member for his 

testimony. 

STATEMENT OF THE HON. ALAN S. LOWENTHAL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF 

CALIFORNIA 

Mr. LOWENTHAL. Thank you, Mr. Chairman. And thank you to 

the witnesses for being here today. 

We are almost one full year into the Trump administration and, 

unfortunately, during that year, we have seen a cascade of antienvironmental, anti-public health, and anti-taxpayer policies from 

the Department of the Interior in the name of what they call 

‘‘energy dominance.’’ They have never exactly defined that term, 

but over the past year, we have seen very clearly what it means. 

Energy dominance simply means letting the oil, gas, and coal industries do whatever they want, whenever they want, however they 

want, on our public lands. 

The Energy Burdens report developed by the Department in 

secret, behind closed doors, without any public input, reads like a 

wish list for the fossil fuel industries. Many of these wishes have 

already been met. 

While the public has been fascinated by the dysfunction of the 

White House over the past year, one area where this Administration has been ruthlessly competent is in fulfilling the desires of big 

oil and big coal. 

The BLM fracking rule, designed to set common-sense baseline 

standards for fracking on public lands, has been repealed. The 

BLM methane rule, which would cut down on the waste of natural 

gas and improve taxpayers’ returns, while also helping air quality, 

has been delayed multiple times, with the intent to eventually kill 

it. Even a technical rule dealing with how companies value oil, gas, 

and coal, which would have brought in an additional $78 million 

for taxpayers each year, has been repealed. The list goes on and 

on. 

Meanwhile, there are serious questions about the way the 

Department of the Interior is carrying out its drilling-first agenda. 

The Department has tried repealing multiple rules, in contravention of the Administrative Procedures Act. The Department is 

5 

canceling studies being conducted by the National Academies of 

Science, and not providing convincing explanations why, or an 

accounting of where that leftover money has gone. 

The Secretary changes the offshore drilling plan with a tweet, in 

potential contravention of the Outer Continental Shelf Lands Act. 

Data that used to be displayed on the BLM website is not being 

updated, and scores of letters from Congress remain unanswered. 

All of these issues are ripe for serious oversight yet, unfortunately, our Oversight Subcommittee held only six hearings last 

year, with only one witness from the Administration all year. 

I personally don’t think that is enough. We need to be conducting 

more oversight about the Department’s operations and hold more 

Administration witnesses accountable. 

I am very glad today that we have the Acting Director of the 

Bureau of Land Management here, and tomorrow we will have the 

Acting Director of the Bureau of Ocean Energy Management. 

Mr. Chairman, I hope we can keep that going, and also hold 

more hearings that fulfill this Subcommittee’s oversight responsibilities toward the Department of the Interior. 

Along those lines, I ask unanimous consent to submit two letters: 

one, a letter from 49 environmental, sportsmen, and public interest 

groups asking the Natural Resources Committee to conduct more 

rigorous oversight of the Department of the Interior; and the 

second, a letter from the Outdoor Alliance expressing concerns 

about the Department of the Interior’s energy agenda. 

Dr. GOSAR. Without objection, so ordered. 

Mr. LOWENTHAL. Thank you. 

This Administration has shown its true stripes over the past 

year. Its top priority is doing everything the oil, gas, and coal industries desire. What they have not shown any interest in, 

however, and which is completely absent from the Energy Burdens 

report, is the desire for families to breathe clean air, to have clean 

drinking water, the desires of sportsmen who wish to be able to 

continue to access public lands, and the desire of everyone who 

wants to see us protect fragile wild and special places and take action on climate change. 

Also absent from this report is anything about the burdens to renewable energy. I thought the report was supposed to look at all 

types of domestic energy. Perhaps I just have not received those 

pages yet; they will be in my mail. 

The Administration pays lip service to conservation and renewable energy, but actions speak louder than words, and those actions 

have made their priorities crystal clear: everything that does not 

promote drilling of oil or coal mining is simply a burden to be 

swept away. 

I thank the witnesses for being here, and I yield back the 

balance of my time. 

[The prepared statement of Mr. Lowenthal follows:] 

PREPARED STATEMENT OF THE HON. ALAN S. LOWENTHAL, RANKING MEMBER, 

SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES

Thank you, Mr. Chairman, and thank you to the witnesses for being here. 

We’re almost one full year into the Trump administration, and unfortunately during that year we have seen a cascade of anti-environmental, anti-public health, and 

anti-taxpayer policies from the Department of the Interior in the name of what they 

6 

call ‘‘energy dominance.’’ They’ve never exactly defined that term, but over the past 

year we’ve seen very clearly what it means. 

Energy dominance simply means letting the oil, gas, and coal industries do 

whatever they want, whenever they want, however they want on our public lands. 

The Energy Burdens report developed by the Department in secret, behind closed 

doors, without any public input, reads like a wish list for the fossil fuel industries. 

Many of these wishes have already been met. While the public has been fascinated 

by the dysfunction of the White House over the past year, one area where this 

Administration has been ruthlessly competent is in fulfilling the desires of Big Oil 

and Big Coal. 

The BLM fracking rule, designed to set common-sense baseline standards for 

fracking on public lands, has been repealed. The BLM methane rule, which would 

cut down on the waste of natural gas and improve taxpayer returns while also helping air quality, has been delayed multiple times with the likely intent to eventually 

kill it. Even a technical rule dealing with how companies value oil, gas, and coal, 

which would have brought in an additional $78 million for taxpayers each year, has 

been repealed. The list goes on and on. 

Meanwhile, there are serious questions about the way the Department of the 

Interior is carrying out its drilling-first agenda. The Department has tried repealing 

multiple rules in contravention of the Administrative Procedures Act. The Department is canceling studies being conducted by the National Academies of Sciences, 

and not providing convincing explanations why, or an accounting of where the leftover money has gone. 

The Secretary changes the offshore drilling plan with a tweet, in potential contravention of the Outer Continental Shelf Lands Act. Data that used to be displayed 

on the BLM website is not being updated, and scores of letters from Congress 

remain unanswered. 

All of these issues are ripe for serious oversight, yet unfortunately our Oversight 

Subcommittee only held six hearings last year, with only one witness from the 

Administration all year. I don’t think that’s enough. We need to be conducting more 

oversight about the Department’s operations, and hold more Administration 

witnesses accountable. 

I am very glad that today we have the Acting Director of the Bureau of Land 

Management here, and tomorrow we will have the Acting Director of the Bureau 

of Ocean Energy Management. Mr. Chairman, I hope we can keep that going, and 

also hold more hearings that fulfill this Subcommittee’s oversight responsibilities toward the Department of the Interior. 

Along those lines, I ask unanimous consent to submit a letter from 49 environmental, sportsmen, and public interest groups asking the Natural Resources 

Committee to conduct more rigorous oversight of the Department of the Interior. 

This Administration has shown its true stripes over the past year: its top priority 

is doing everything the oil, gas, and coal industries desire. 

What they have not shown any interest in, however, and is completely absent 

from the Energy Burdens report, is the desire for families to breathe clean air and 

have clean drinking water, the desires of sportsmen who wish to be able to continue 

to access public lands, and the desires of everyone who wants to see us protect 

fragile wild and special places and take action on climate change. 

Also absent from the report is anything about burdens to renewable energy. I 

thought the report was supposed to look at all types of domestic energy, so perhaps 

I just haven’t received those pages yet. 

The Administration pays lip service to conservation and renewable energy, but actions speak louder than words, and those actions have made their priorities crystal 

clear: everything that does not promote drilling or mining is simply a burden to be 

swept away. 

I thank the witnesses for being here, and yield back the balance of my time. 

Dr. GOSAR. How about our public lands alternative energy bill? 

Don’t forget about that. 

Mr. LOWENTHAL. That is true, but that is not in the burdens 

report. They left that out. 

Dr. GOSAR. Agreed. 

Now I will introduce our witnesses. First, Dr. Brian Steed, 

Deputy Director, Programs and Policy, Bureau of Land 

Management; Mr. Jarred Kubat, Vice President of Land, Legal & 

7 

Regulatory, Wold Energy Partners, LLC; Ms. Nada Culver, Senior 

Counsel and Director of the BLM Action Center, The Wilderness 

Society; Senator Kevin Van Tassell, District 26, Utah State Senate; 

and Mr. Shane Schulz, Director, Government Affairs, QEP 

Resources. 

Let me remind the witnesses that under Committee Rules, they 

must limit their oral statements to 5 minutes, but their entire 

statement will appear in the record. 

Our microphones are not automatic. The first 4 minutes you will 

see them at green; then it will turn yellow, you will have about a 

minute to summarize; and when it is red, please summarize and 

end the sentence. 

We will also ask the entire panel to give their testimony before 

questioning witnesses. 

With that, I will recognize Dr. Steed for your testimony. 

STATEMENT OF BRIAN STEED, DEPUTY DIRECTOR, 

PROGRAMS AND POLICY, BUREAU OF LAND MANAGEMENT, 

WASHINGTON, DC 

Mr. STEED. Thank you, Chairman Gosar, Chairman Bishop, 

Ranking Member Lowenthal, and members of the Committee. I am 

pleased to join you today to discuss the BLM’s efforts to reduce the 

burdens facing onshore energy development. 

As this Committee is well aware, domestic energy and the production thereof, whether it comes from oil, gas, geothermal, wind, 

or solar, creates jobs, promotes a strong economy, and reduces dependence on foreign sources of energy. Low-cost energy additionally 

benefits the American consumer and enhances American manufacturing competitiveness. The President and Secretary Zinke are 

strong proponents of an all-of-the-above approach to energy development and are truly committed to increasing domestic energy 

production. 

I was specifically asked today to address Federal onshore oil and 

gas activities. Oil and gas development is just one of many activities the BLM oversees as part of its multiple-use and sustainedyield mandate. The BLM currently has 26 million surface acres 

under lease for oil and gas development. Collectively, these lands 

contain energy and mineral resources which power millions of 

homes and businesses and produce a sizable economic impact for 

the Nation. 

Additionally, oil and gas activities provide a significant non-tax 

source of revenue for state and Federal treasuries. Roughly 50 

percent of revenue from lease sales goes to the state where the oil 

and gas activity is occurring, while the rest goes to the U.S. 

Treasury. States and counties use these funds to construct roads, 

schools, and meet other important community needs. 

In 2017, for instance, the BLM held 28 onshore oil and gas lease 

sales, which generated about $360 million in bonus bids, rentals, 

and fees, about half of which went back to state coffers. 

In March 2017, the President, through Executive Order 13783, 

asked Federal agencies to assess the burdens placed on domestic 

energy and to determine whether existing policy unduly burdened 

its production. Since then, Secretary Zinke has issued a number of 

8 

Secretarial Orders, and the BLM has reviewed its relevant 

business practices to implement these new policies. 

After conducting a review of the rules impacting energy production on public lands, the BLM found that the 2016 venting and 

flaring rule and the 2015 hydraulic fracturing rule were inconsistent with E.O. 13783. 

On December 8, 2017, the BLM temporarily suspended certain 

requirements of the venting and flaring rule. Delaying the implementation of this rule will provide the BLM sufficient time to review and consider revising its requirements. On December 29, 

2017, the BLM also rescinded the rule on hydraulic fracturing, 

which never went into effect due to ongoing litigation. 

Second, the BLM is currently assessing its internal regulations 

governing oil and gas development. Specifically, the agency is reviewing Onshore Orders Nos. 3, 4, and 5 to determine if additional 

revisions are needed beyond those already implemented through an 

extended phase-in period. 

Third, the BLM is examining its resource management planning 

process. Resource management plans, or RMPs, are the tool the 

BLM uses to plan and weigh competing uses within a planning 

area. For the purposes of oil and gas leasing, lands are identified 

as open under standard leasing terms, open with restrictions, or 

closed to leasing. The BLM is evaluating lease stipulations and 

conditions of approval that may conflict with BLM’s multiple-use 

objectives. It is also examining the myriad of land use designations 

identified within land use plans for consistency with multiple use. 

Throughout 2017, the BLM worked hard on building efficiencies 

into its leasing and permitting processes. The overall APD average 

processing time for the BLM dropped to 93 days, on average, in 

Fiscal Year 2017 from 139 days the previous fiscal year. 

The BLM is also revising its internal oil and gas instruction 

memoranda. It is considering doing away with master leasing 

plans. It is clarifying rules leasing in sage-grouse habitat and is 

working to reduce superfluous protests, which have dramatically 

increased in recent years. 

In Fiscal Year 2017, for instance, 88 percent of parcels offered for 

lease were protested, compared to 17 percent protested in Fiscal 

Year 2012. Such protests can delay payment of the state’s share of 

the bonus bids, which occurred most recently in the state of New 

Mexico, where a $70 million payment to the state was held up for 

250 days as the BLM resolved a number of protested parcels. 

As can be noted from the foregoing discussion, the BLM has been 

working hard to reduce burdens facing domestic energy production 

on public lands. 

Thank you again for the opportunity to present this information, 

and thank you to this Committee for your hard work on these 

issues. I look forward to answering any questions you may have in 

the time we have remaining. Thank you so much. 

[The prepared statement of Mr. Steed follows:] 

PREPARED STATEMENT OF BRIAN C. STEED, DEPUTY DIRECTOR, POLICY AND

PROGRAMS, BUREAU OF LAND MANAGEMENT, U.S. DEPARTMENT OF THE INTERIOR

Chairman Gosar, Ranking Member Lowenthal, and members of the 

Subcommittee, I am pleased to join you today to discuss the Bureau of Land 

Management’s (BLM) efforts to address the burdens that inhibit the development 

9 

of the Nation’s onshore Federal energy resources, specifically oil and gas resources. 

Under Secretary Zinke’s leadership we are reviewing, revising, and creating new oil 

and gas program policies, procedures, and guidelines to help secure American 

energy dominance, create jobs, and build a strong economy. 

PUBLIC LANDS’ CONTRIBUTION TO ENERGY DOMINANCE

Reducing the United States’ dependence on other nations by developing domestic 

energy resources leads to a stronger America. Public lands support an ‘‘America 

First’’ Energy Agenda that fosters domestic energy production in order to keep 

energy prices low for American families, businesses, and manufacturers. Every drop 

of oil, cubic foot of natural gas or Megawatt of geothermal, wind and solar energy 

produced here in the United States creates jobs, promotes a strong economy, and 

frees us from dependence on foreign energy resources. Beyond gaining America’s 

energy security, low cost energy benefits the American consumer and enhances 

American manufacturing competitiveness, making American businesses more 

competitive globally. 

The BLM manages about 245 million surface acres and 700 million subsurface 

acres, located primarily in 12 western states, including Alaska and North Dakota. 

The BLM administers this diverse portfolio of lands on behalf of the American 

people as part of the agency’s multiple-use mission—including energy and mineral 

development, livestock grazing, timber production, recreation, and conservation, 

among others. Onshore oil and gas production on BLM-managed public lands is a 

significant part of this strategy and makes an essential contribution to the Nation’s 

energy supply—playing a significant role in supporting jobs for hardworking 

Americans. 

The BLM has 26 million surface acres currently under lease for oil and gas development, including over 94,000 active wells and about 40,000 leases. The BLM 

oversees onshore oil and gas development on Federal lands and lands held in trust 

for the benefit of various tribes. Collectively, these lands contain world-class 

deposits of energy and mineral resources which power millions of homes and businesses. The BLM’s most recent economic study estimates the Federal onshore oil 

and natural gas program alone provides approximately $42 billion in economic output and supported approximately 200,000 jobs nationwide. 

Further, the BLM is a key revenue producer for the Federal Government by providing a significant non-tax source of funding to state and Federal treasuries, and 

is an important economic driver for local communities across the country. Roughly 

50 percent of the revenue from lease sales goes to the state where the oil and gas 

activity is occurring, while the rest goes to the U.S. Treasury. If wells commence 

oil and gas production on the lease parcel, the royalties paid on the Federal 

minerals are also shared with the state. States and counties in turn often use these 

funds to support roads, schools, and other important community needs. 

Under Secretary Zinke’s commitment to the advancement of energy dominance, 

and in accordance with Secretarial Order 3354 to conduct quarterly lease sales, the 

BLM in 2017 held 28 onshore oil and gas lease sales. This is almost a 30 percent 

increase from the 20 onshore oil and gas lease sales held in 2016. These sales generated about $360 million in bonus bids, rentals and fees—an 87 percent increase 

over the previous year’s results of $193 million. Among these sales, which together 

were the highest in nearly a decade, rights to a total of 949 parcels, covering 

792,823 acres, were sold. 

The BLM is also working diligently to improve its permitting process. In Fiscal 

Year 2017, the BLM approved 2,486 Applications for Permit to Drill (APDs) on 

Federal lands, and operators drilled 1,424 wells on Federal lands. The overall APD 

average processing time for the BLM dropped to 93 days on average in Fiscal Year 

2017, from 139 days on average in Fiscal Year 2016. By the end of Fiscal Year 2017 

the BLM had 76 more pending APDs compared to the end of Fiscal Year 2016 despite an increase of 1,582 additional APDs received in Fiscal Year 2017. The Fiscal 

Year 2018 budget request reflects this emphasis with a significant increase for the 

oil and gas management program. 

BLAZING THE PATH TO ENERGY DOMINANCE IN AMERICA

Under President Trump’s vision of empowering the private sector, as well as state 

and local governments, Secretary Zinke has issued a number of Secretarial Orders 

to reduce unnecessary and burdensome regulations while maintaining environmental protections and public health. The BLM has followed suit by reviewing all 

relevant business practices in an effort to implement these new policies. 

In implementing Executive Order (E.O.) 13783, Promoting Energy Independence 

and Economic Growth, (March 28, 2017), Secretary Zinke issued nine Secretarial 

10 

Orders that direct Interior bureaus and offices to take immediate and specific actions to identify and alleviate or eliminate burdens on domestic energy development. 

The most overarching Secretarial Order reducing burdens on energy development is 

Secretarial Order 3349, American Energy Independence (March 29, 2017), which directed bureaus to examine specific actions impacting oil and gas development, and 

any other actions affecting other energy development. Secretarial Order 3354, 

Supporting and Improving the Federal Onshore Oil and Gas Leasing Program and 

Federal Solid Mineral Leasing Program (July 6, 2017), directed the BLM to hold 

quarterly oil and gas lease sales, and to identify ways to promote the exploration 

and development of Federal onshore oil and gas and solid mineral resources, including improving quarterly lease sales, enhancing the Federal onshore solid mineral 

leasing program, and improving the permitting processes. On May 31, 2017, 

Secretary Zinke signed Secretarial Order 3352 to jump-start Alaskan energy production in the National Petroleum Reserve-Alaska (NPR-A) and update resource assessments for areas of the North Slope, helping to unleash Alaska’s energy potential. 

As a result, on December 22, the Secretary released an updated resources assessment for the NPR-A, which estimates oil and gas resources to be 8.7 billion barrels 

of oil and 25 trillion cubic feet of natural gas. Finally, most recently, the Department issued Secretarial Order 3360, Rescinding Authorities Inconsistent with 

Secretarial Order 3349, American Energy Independence, which rescinded several reports and manuals that were inconsistent with current policy. 

ELIMINATING BURDENSOME REGULATIONS

In response to the Secretarial Orders, the BLM reviewed all regulations related 

to domestic oil and natural gas development on public lands; the results include 

temporarily suspending and postponing certain requirements and determining, 

through a rulemaking process, whether it is appropriate to rescind or revise the 

Venting and Flaring Rule; rescind the Hydraulic Fracturing rule, assessing Onshore 

Orders Nos. 3, 4, and 5 and revising a number of oil and gas leasing IMs and policies. Following is a brief description of the actions the BLM has taken to reduce 

the burdens associated with its onshore oil and gas program. 

Postponing, Reviewing, and Rescinding the 2016 Venting and Flaring Rule 

The BLM found that the 2016 venting and flaring final rule was inconsistent with 

E.O. 13783, and that implementing some parts of the rule could unnecessarily burden industry. On December 8, 2017, the BLM finalized a temporary suspension or 

delay of certain requirements to prevent costs on operators for requirements that 

may be rescinded or significantly revised in the near future. Suspending and delaying the 2016 final rule will provide the BLM sufficient time to review and consider 

revising or rescinding its requirements. This step will also provide industry additional time to plan for and engineer responsive infrastructure modifications that will 

comply with the regulation. The BLM also submitted a draft proposed rule to the 

Office of Management and Budget (OMB) for interagency review on November 1, 

2017, and expects to publish a proposed rule in the near future. 

Rescinding the Hydraulic Fracturing Rule 

On December 29, 2017, the BLM rescinded the 2015 rule on hydraulic fracturing, 

which never went into effect due to pending litigation, as the 2015 rule imposes administrative burdens and compliance costs that are not justified. The BLM found 

that all 32 states with Federal oil and gas leases, as well as some tribes currently 

have laws or regulations that address hydraulic fracturing operations, and that preexisting BLM regulations ensure that operators will conduct oil and gas operations 

in an environmentally sound manner. Therefore, rescinding the rule would reduce 

regulatory burdens by enabling oil and gas operations to occur under more streamlined and less duplicative regulations within each state or tribal lands. The BLM 

expects that eliminating this duplicative rule will lead to additional interest in oil 

and gas development on public lands, especially under higher commodity prices. 

Assessing Onshore Orders Nos. 3, 4, and 5 

The BLM is currently assessing the Onshore Orders 3, 4, and 5 to determine (1) 

if additional revisions are needed beyond the already-implemented phase-in period 

for certain provisions; (2) the ability for industry to introduce new technologies 

through a defined process, rather than through an exception request; and (3) the 

built-in waivers or variances. The BLM completed its assessment of possible 

changes to alleviate burdens that may have added to constraints on energy production, economic growth, and job creation. As a result of this assessment, the BLM 

is considering policy guidance to address some of the issues raised. 

11 

PLANNING FOR ENERGY DOMINANCE

The BLM’s land use planning process provides—among many other multiple use 

considerations—a standardized procedure for analyzing the opportunities for oil and 

gas development on public lands, while also ensuring that such development is done 

in an environmentally responsible manner. Resource Management Plans (RMPs) 

reflect the BLM’s efforts to weigh the many resources and competing uses within 

a planning area. For purposes of oil and gas leasing, lands within a planning area 

are identified as fitting into one of three categories—lands open under standard 

lease terms, lands open with restrictions, and lands closed to leasing. 

The BLM holds competitive lease sales quarterly in each of the state offices where 

lands have been nominated and are available. After the lease sale is held, a lessee 

may then submit an APD for a specific area within their lease, and working with 

the BLM, the appropriate conditions and terms of the lease are developed. 

The BLM recognizes that lease stipulations and additional Conditions of Approval 

(added at the permitting stage can overly burden energy development on public 

lands by adding additional development costs; increasing the complexity of the drilling operations; and extending project time frames. As such, the BLM is also evaluating the need for the numerous land use designations and lease stipulations that 

may conflict with BLM’s multiple use objectives, as a part of the ongoing review of 

the planning process, and is committed to working with state, local, and tribal partners to update policies. The BLM is also identifying potential actions it could take 

to streamline its planning and National Environmental Policy Act (NEPA) review 

procedures. 

IMPLEMENTING SMART INTERNAL POLICIES AND PROCEDURES

As part of a comprehensive effort to reduce burdens, the BLM is revising and rescinding its internal oil and gas Instruction Memorandums (IMs) and policies. 

Changes to IMs will result in streamlined administrative processes, reductions of 

duplicative actions, and elimination of redundant NEPA reviews—reducing burdens 

on industry and providing savings to the American taxpayers without sacrificing 

environmental protections. 

Leasing Reforms 

The BLM is replacing its Oil and Gas Leasing Reform—Land Use Planning and 

Lease Parcel Reviews IM (2010–117), which unnecessarily increased time frames associated with analyzing and responding to protests and appeals, as well as longer 

lead times for BLM to clear and make parcels available for oil and gas lease sales. 

As such, the BLM has undertaken an effort to revise and reform its leasing policy 

and to streamline the leasing process from beginning (i.e. receipt of an EOI) to end 

(competitively offering the nominated acreage in a lease sale). Under existing policies and procedures, the process can take up to 16 months, and sometimes longer, 

from the time lands are nominated to the time a lease sale occurs. The BLM is examining ways to significantly reduce this time by as much as 10 months. The 

President’s Fiscal Year 2018 Budget Request includes an additional $16 million for 

the BLM’s oil and gas program. This includes a net increase of about 71 full-timeequivalent employees to enhance the core capacity for processing APDs, EOIs, and 

rights-of-way. 

Eliminating Master Leasing Plans 

The BLM is rescinding its Oil and Gas Leasing Reform—Master Leasing Plans 

(MLPs) IM (2013–101), which introduced the concept of MLPs. This needless 

bureaucratic layer resulted in duplication of NEPA and certain processes and also 

the BLM deferring many areas open to oil and gas leasing from leasing while awaiting the completion of the public scoping and analysis for the MLPs. The BLM will 

re-establish the BLM RMPs as the source of lands available for fluid minerals leasing. Removing these unnecessary process-related steps will decrease uncertainty, 

increase efficiency, and encourage fiscal responsibility without sacrificing environmental protections. The BLM expects that this rescission will result in more streamlined NEPA analysis and a shorter time frame for acreage nominations to make it 

to a competitive lease sale. 

Clarifying Leasing in Sage-Grouse Habitat 

On December 29, 2017, the BLM published Oil and Gas Leasing and Development 

Prioritization IM (2018–026), updating a number of existing policies that provide onthe-ground guidance for BLM’s management actions related to oil and gas leasing 

and development in sage-grouse habitat management areas. The new guidance clarifies that the BLM does not need to lease and develop entirely outside of habitat 

management areas before it can consider leasing and development within sageVerDate Mar 15 2010 14:12 May 08, 2018 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6621 J:\115TH CONGRESS\ENERGY & MINERAL\01-18-18\28337.TXT DARLEN
12 

grouse habitat management areas as long as appropriate protective stipulations and 

COAs are applied to protect sage-grouse. The BLM will continue to work cooperatively with respective stakeholders to find leasing and drilling locations with the 

least impact to Greater Sage-Grouse and other resources, to the greatest extent possible, and will require the use of the best available science in its decision-making 

process. 

Eliminating Superfluous Protests 

Current BLM regulations allow any party to file a protest on a BLM decision, 

such as a protest on a land use plan or on a subsequent decision to include a parcel 

in an oil and gas lease sale. Historically protests were parcel-specific on issues 

unique to the parcel in question. In recent years, the number and reasons for 

protesting every parcel in the sale has increased and become broad-based and nonparcel specific. In Fiscal Year 2017, 88 percent of parcels offered for lease were protested, compared to in Fiscal Year 2012, when only 17 percent of parcels received 

protests. The number of parcels offered on the original sale notice decreased from 

2,247 in Fiscal Year 2012 to 1,427 in Fiscal Year 2017. To date, many BLM state 

offices are receiving protests on every oil and gas parcel offered through the Notice 

of Competitive Lease Sale process. 

While the BLM can still hold a lease sale for parcels with pending protests, the 

protest must be resolved prior to the lease being issued. This in turn can delay payment of the state’s share of the bonus bids—which occurred most recently in the 

state of New Mexico. In September 2016, BLM hosted a record-setting lease sale 

generating $145 million in revenue, of which approximately $70 million was owed 

to the state under the Mineral Leasing Act revenue sharing provision. As a result 

of the number of protested parcels and the length of time it took to resolve all protests, the payment to the state of New Mexico was delayed by approximately 250 

days. To address this unnecessary burden on both states and industry, the BLM is 

considering regulatory changes to limit redundant protests that hinder orderly 

development. 

CONCLUSION

The BLM remains committed to promoting responsible oil and gas production that 

helps create and sustain jobs, promotes a robust economy, and contributes to 

America’s energy dominance, while also protecting consumers, public health, and 

sensitive public land resources and uses. The BLM’s oil and gas leasing program 

is a critical component of the Nation’s energy infrastructure and is an important 

Federal revenue generator. Thank you for the opportunity to present this testimony. 

I will be glad to answer any questions. 

QUESTIONS SUBMITTED FOR THE RECORD TO MR. BRIAN STEED, DEPUTY DIRECTOR, 

BUREAU OF LAND MANAGEMENT

Mr. Steed did not submit responses to the Committee by the appropriate 

deadline for inclusion in the printed record. 

Questions Submitted by Rep. Lowenthal 

Question 1. Director Steed, please answer the following questions regarding BLM’s 

workforce: 

a. How many full-time permanent employees currently work for BLM? 

b. How many unfilled full-time employee equivalent positions (FTEs) does the BLM 

currently have? Please provide a list broken down by state and field office. How 

many of those does the BLM intend to fill? 

c. How many filled and unfilled FTEs does BLM currently have in the Oil and 

Gas Management, Coal Management, Other Mineral Resources, and Renewable 

Energy Management subactivities? How have those FTE numbers changed since 

January 20, 2017, and what changes does BLM expect to make to those numbers 

in Fiscal Year 2018? 

d. What is the geographic breakdown of BLM employees, by state office and field 

office? How many employees in the BLM Washington Office are located in the 

Washington, DC metropolitan area, and how many are located outside of it? 

How many BLM employees in the Washington, DC metropolitan area work for 

the Eastern States office? 

13 

e. How many BLM personnel have been moved to different duty stations since 

January 20, 2017? How many of those were GS-15 or members of the Senior 

Executive Service? 

Question 2. Please provide the number of enforcement actions taken by the BLM 

per year for the past 5 years, including the number of notices of violation and the 

number and amount of civil penalties assessed. 

Question 3. What is BLM’s plan and timeline to have the entire Inspection and 

Enforcement strategy be risk-based and in the Automated Fluid Minerals Support 

System? 

Question 4. Please provide the current number of idle wells overseen by each BLM 

field office, broken down by the number of wells idle for less than 2 years, the number of wells idle for 2–6 years, the number of wells idle 7–25 years, and the number 

of wells idle more than 25 years. 

Question 5. How was the decision made to exclude renewable energy resources from 

BLM’s review of energy burdens? What policies and regulations at DOI impose a 

burden on the development of wind, solar, and geothermal energy on public lands? 

Question 6. Please provide the amount of natural gas vented or flared, as well as 

the total amount of natural gas produced but not subject to royalty, in Fiscal Year 

2017 by state. 

Question 7. Please provide the number of approved but unused drilling permits as 

of the end of Fiscal Year 2017, broken down by field office. What are the 20 

companies that hold the most approved but unused drilling permits, and how many 

do they each hold? Why has BLM stopped providing updated data on the number 

of approved but unused permits on its website? 

Question 8. Please provide the total acreage under oil and gas lease by company 

by state. 

Question 9. What steps has BLM taken so far to prepare for a lease sale in the 

Arctic National Wildlife Refuge? What are the next steps, and what is the timeline 

for BLM to complete those steps? 

Question 10. What steps did BLM take to implement each of the provisions of the 

Methane and Waste Prevention Rule that came into effect in 2017? Did BLM send 

guidance to field staff directing them how to implement those provisions? If so, please 

provide copies of the guidance. How many APDs received by BLM in 2017 were 

accompanied by waste minimization plans? 

Question 11. Please provide copies of all Instructional Memoranda and other policy 

guidance distributed to field staff since January 20, 2017, and that are not available 

to the public on the BLM website. 

Question 12. How many congressional oversight requests to BLM are currently 

pending? Does BLM intend to respond to each of these requests? How many FOIA 

requests to BLM submitted after January 20, 2017, are currently pending? How 

many personnel does BLM have dedicated to responding to FOIA requests? Does 

BLM believe the number of personnel dedicated to responding to FOIA requests is 

adequate? Why does BLM not participate in FOIAonline? 

Questions Submitted by Rep. Soto 

Question 1. There was a citing of 14 million to 34 million compliance cost savings. 

Was there any additional costs determined under Medicaid, Medicare, or other 

healthcare costs due to increase case of cancer, as a result of not disclosing these 

types of chemicals? Was there any health study conducted of what the costs would 

be in the proposing of this rule? 

Dr. GOSAR. Thank you, Dr. Steed. 

I now recognize Mr. Kubat for his testimony. Thank you. 

14 

STATEMENT OF JARRED KUBAT, VICE PRESIDENT OF LAND, 

LEGAL AND REGULATORY, WOLD ENERGY PARTNERS, LLC, 

DENVER, COLORADO 

Mr. KUBAT. Thank you, Mr. Chairman, and members of the 

Subcommittee. And thank you for the opportunity to speak here 

today on behalf of our company and other small businesses like 

ours that are operating Federal leases in the West. 

These delays we are seeing of uncertainties, inefficiencies, and 

inconsistent application of rules are creating unnecessary delays 

that disproportionately impact our small business. 

Small business is not big oil. We are regionally located businesses that do not have assets in multiple states, let alone countries. Maybe we have assets in multiple counties within a single 

state. 

As small businesses, we do have an interest in protecting public 

health, the environment, and resources of concern and, importantly, the taxpayers’ money. But to do so, there needs to be a 

common-sense approach with regulatory certainty. 

Our company is a 4-year-old entrepreneurial endeavor with 37 

full-time employees and 7 contractors, the epitome of a small business. We were founded to pursue the development of oil and gas 

resources in the Rocky Mountain region, and we are committed to 

environmentally responsible and safe development. 

Our operations are entirely within the Powder River Basin in the 

state of Wyoming, where we operate 119 wells, we are partner in 

82 additional wells, and we have acreage totaling 143,000 net 

acres. Seventy-one percent of this leasehold is federally owned. 

This requires daily interaction with the Federal agencies who oversee these lands. This asset is the product of 192 acquisitions in this 

4-year period. It is a small business. It is hard work, diligence, persistence, getting up every day in the pursuit of that American 

Dream. 

Today, I want to briefly touch on two impact areas that we are 

seeing with small businesses. The first area is delayed Federal 

leasing. This is a deterrent to the development of Federal oil and 

gas leases and serves as a disincentive for the small business investor. The 415-day delay average our company faces between parcel nomination and offering for sale is too long. This is contrasted 

with the 45-day period we see at the state level. 

Similarly, the process for reinstatement of a lease requires revision. Why should a lease be subject to subsequent and redundant 

NEPA reviews for minor errors? These are examples of unnecessary delays due to bureaucratic inefficiencies. 

The second area involves development planning. Once issued, 

leases are subject to subsequent and unforeseen stipulations, 

changing conditions of drilling approval and ad hoc requirements 

in the process for development and planning. These are often due 

to subsequent land use designations and restrictions that are subsequent to the lease issuance. Navigating this unpredictable process creates delays, sometimes adding up to years of review, 

creating paralysis by analysis. 

This addition of unnecessary and protracted periods between initial investment and subsequent return on that drilling investment 

harms our small business and significantly impacts our economic 

15 

return, the period of time from when we purchase that lease to 

when we are allowed to develop it. This is the cost of capital and 

is contrasted with businesses focused exclusively on private 

mineral development in other states or larger businesses that have 

the luxury of owning assets in multiple states, basins, and possibly 

countries, where capital can be redeployed during such purgatory 

periods we face during these delays. 

There is a need for specific guidance and policy for these field 

offices in this area. As an operator, we are subject to staffing discretion on all of these decisions. 

These are just a few very small examples of where delays are 

negatively impacting business investment, especially for small 

businesses like ours, job growth and economies in the cities and 

states where Federal lands are located. From a business planning 

perspective, as the commodity price of our industry fluctuates, as 

we all have seen it done in the last 4 to 5 years, these delays further impact the realization of optimal commodity pricing, not only 

the commodity pricing received by us, the investor, but the commodity pricing received by the Federal Government and the royalty 

revenue received. 

So, what can be done? Shorten review periods and provide businesses with certainty in the process of acquiring and maintaining 

the rights of development. Significantly reduce the delays between 

lease nomination and offering by requiring specific time frames for 

review. Amend the process for reinstatement of leases by giving 

specific guidance as to when a lease requires subsequent NEPA 

review and when it does not. Eliminate unnecessary and protracted 

periods of approved drilling and development by clearly defining 

what might have the potential to cause effects. Eliminate the retroactive stipulations, conditions of drilling approval, and ad hoc 

requirements. 

Eliminating these regulatory uncertainties, inefficiencies, and 

inconsistent applications of the rules will help eliminate these unnecessary delays. It is the guidance that the field office staff themselves seek to understand. There needs to be a common-sense 

approach that eliminates inconsistent regulatory rule application. 

I want to thank you for your time here today, seeing that I am 

almost out of time, and I appreciate the opportunity to speak on 

behalf of my company and other small businesses like ours 

operating in the West. 

[The prepared statement of Mr. Kubat follows:] 

PREPARED STATEMENT OF JARRED R. KUBAT, VICE PRESIDENT OF LAND, LEGAL & 

REGULATORY, WOLD ENERGY PARTNERS, LLC 

Regulatory uncertainties, inefficiencies, and inconsistent application of rules 

related to Federal oil and gas leases are leading to unnecessary delays in the development of the energy resources of the United States. These delays negatively and 

disproportionately impact small businesses, the backbone of the economy, and the 

citizens of the states where these resources are located. Ultimately, these uncertainties reduce domestic energy production, add unemployment, and increase reliance 

on foreign energy. Small businesses have an interest in protecting the public health, 

environment, resources of concern, and the taxpayer’s money; to do so, there needs 

to be a common-sense approach with regulatory certainty. 

16 

ABOUT WOLD ENERGY PARTNERS, LLC

Wold Energy Partners, LLC (‘‘WEP’’) is a 4-year-old entrepreneurial endeavor 

with 37 full-time employees and 7 contractors; a small business. WEP was founded 

to pursue the development of oil and gas resources in the Rocky Mountain Region 

and is committed to environmentally responsible and safe development. 

Efforts of WEP are focused entirely within the Powder River Basin in Wyoming. 

The Powder River Basin is a prolific oil and gas resource basin with a proven 5,000 

foot column of stacked pay zones. Within the Powder River Basin, WEP operates 

119 wells, is a partner in 82 additional wells, and has acreage totaling 143,000 net 

mineral acres (264,000 gross acres) with greater than 1 billion barrels of recoverable 

reserves. The acreage position of WEP is the product of 192 acquisitions and trades, 

and consists of 71 percent Federal oil and gas leases (394 individual Federal leases). 

Exposure to Federal oil and gas leases of this level requires daily interaction with 

the requisite Federal agencies and adherence to rules related to Federal oil and gas 

leasing and development. 

DELAYED FEDERAL LEASING

To encounter delays from the outset is a deterrent to the development of Federal 

oil and gas leases and serves as a disincentive for investment, especially for small 

businesses. The delay between lease nomination and sale needs to be reduced significantly. Similarly, the process for reinstatement of leases requires revision to 

shorten the review time and to provide businesses with certainty in the process of 

acquiring and maintaining the rights of development granted in these leases. 

• Nomination and Deferral—the 415-day average delay WEP faces between 

parcel nomination and lease offering for sale is too long. Delays in lease offerings and sale are rooted in the National Environmental Policy Act (‘‘NEPA’’) 

analysis at the field office level, where review for conformance with a Federal 

Resource Management Plan (‘‘RMP’’) entails an uncertain timeline. Inquiries 

regarding the review status of nominated Federal lands are then met with 

added uncertainty and ambiguity. This is distinguished from the added layer 

of review a Master Leasing Plan (‘‘MLP’’) may impose. Within WEP’s initial 

focus area there have been several parcels nominated since 2014 that are still 

within the NEPA review process and yet to be offered for sale. Should parcels 

be deferred, they are effectively lost unless a company or individual continues 

to nominate the same parcel. There is a need for transparency regarding why 

parcels are not being offered and when they may be available for offering in 

the future if deferred. 

• Reinstatement of Leases—an inefficient process riddled with uncertainty. 

Leases can require reinstatement for issues as trivial as incorrect rental payments of minor amounts ($1.50 versus $2.00). For example, WEP has a 

Federal oil and gas lease which is pending reinstatement for a payment discrepancy of $160.00 (less than 1 percent of the lease purchase price) and has 

been pending reinstatement since May 2015. The reinstatement delay is due 

to subsequent NEPA review and documentation of RMP conformance. This is 

an unnecessary delay due to bureaucratic inefficiency as the lease was within 

its primary term and had completed this same review process prior to its 

issuance. 

UNCERTAIN DEVELOPMENT PLANNING

Once issued, leases are subject to subsequent and unforeseen stipulations, changing conditions of drilling approval, and ad hoc requirements in development planning and approval. Navigating this unpredictable process creates delays sometimes 

adding up to years of review creating paralysis by analysis. This addition of unnecessary and protracted periods between initial investment (purchase of the lease) and 

subsequent approved drilling and development of the oil and gas lease (anticipated 

return on investment) harms small businesses and significantly impacts economic 

returns as compared to businesses focused exclusively on private mineral 

development. 

• Accessing the Lease for Development—is a tenuous exercise. Subsequent land 

use restrictions and designations can conflict with existing lease rights and 

significantly obstruct basic access to the oil and gas leases. WEP has seen 

examples of leases issued more than 30 years ago be subject to subsequent 

land use restrictions and designations that materially impact access and 

17 

development of the Federal oil and gas lease. Subsequent land use 

designations need to honor the valid existing rights contained within the 

original lease terms. 

• Gaining the Approved Right to Develop—encounters added delay. In practice, 

the delays faced initially in lease offerings and issuance are for the appropriate agency analysis. However, during the permitting stage for drilling, further NEPA, Endangered Species Act, National Historic Preservation Act, and 

other analysis are required effectively adding stipulations and conditions to 

the original lease grant. Opportunities to analyze projects within the frameworks of the Energy Policy Act of 2005 Section 390 categorical exclusions 

(e.g., development on existing well pads previously analyzed) are ignored and 

substituted with new survey requests for cultural, wildlife, and tribal considerations. An operator is subject to agency staffing discretion, and although a 

proposed action on existing disturbance may entirely lack the potential to 

cause effects it is made subject to additional review processes, procedures, 

and conditioned upon subsequent and unforeseen stipulations and conditions 

of drilling approval. 

DELAYS AND REGULATORY UNCERTAINTY HARM SMALL BUSINESSES AND CITIZENS

Delays negatively impact business investment, especially small businesses restricted by geographic area and asset base. The delays and regulatory uncertainty 

met in the development of Federal oil and gas leases impact investment, job growth, 

and the economies of the cities and states where Federal lands are located. As the 

commodity price of our industry fluctuates, these delays further impact the realization of optimal commodity pricing and royalty revenue received by the Federal 

Government (i.e. industry investment incentive in Federal lands may be strong 

when commodity pricing is higher, but agency delays prevent quick realization of 

this pricing advantage thereby deterring investment). 

RECOMMENDATIONS FOR CHANGE

Shorten the review periods and provide businesses with certainty in the process 

of acquiring and maintaining the rights of development granted in these leases: (1) 

Significantly reduce the delay between lease nomination and offering by efficiently 

reviewing nominated parcels according to existing RMPs within a specified time 

frame; and (2) Amend the process for reinstatement of leases by giving specific guidance as to when a lease requires subsequent NEPA review and documentation of 

RMP conformance and when it does not. 

Eliminate unnecessary and protracted periods between initial investment 

(purchase of the lease) and subsequent approved drilling and development of the oil 

and gas lease (anticipated return on investment): (1) Clearly define what might 

have the potential to cause effects; (2) Eliminate retroactive stipulations, conditions 

of drilling approval, and ad hoc requirements in development planning and approval; and (3) Set time limits on review and permitting approvals that agencies 

must follow. This can be accomplished by honoring valid existing lease rights and 

existing development on leases by giving detailed guidance to field office staff that 

is more specific to drilling applications they are processing and approving along 

with what criteria constitutes extraordinary circumstances requiring additional review periods and processes. 

Small businesses, the citizens of the states where Federal oil and gas leases are 

located, and the security of our energy future require eliminating regulatory uncertainties, inefficiencies, and inconsistent application of rules related to Federal oil 

and gas leases that are leading to unnecessary delays in the development of the 

energy resources of the United States. There needs to be a common-sense approach 

with regulatory certainty. 

Dr. GOSAR. Thanks, Mr. Kubat. 

I now recognize Ms. Culver for her testimony. 

18 

STATEMENT OF NADA CULVER, SENIOR COUNSEL AND 

DIRECTOR, BLM ACTION CENTER, THE WILDERNESS 

SOCIETY, DENVER, COLORADO 

Ms. CULVER. Good afternoon, Chairman Gosar, Ranking Member 

Lowenthal, and members of the Subcommittee. Thank you for the 

opportunity to share my views. 

My name is Nada Culver. I direct policy and planning efforts at 

The Wilderness Society, including development of lands and 

mineral resources. I have worked on energy permitting, planning, 

and policy issues for more than 20 years, including nearly a decade 

representing energy and industry clients in private practice. 

While they may be sincerely intentioned, the Department’s 

efforts to eliminate so-called burdens are unlikely to achieve the 

goal of increased energy production. More importantly, this agenda 

represents a growing threat to public health, recreation, wildlife, 

and other public interests. Public input, safeguards to protect people and communities, and Interior’s multiple-use mandate are not 

burdens; they are key to the proper management of our public 

lands. 

Many of the burdens that DOI has called out for elimination are 

actually important opportunities for public input and oversight. As 

the true owners of the public lands, the public is an integral part 

of evaluating the consequences of leasing and drilling on public 

lands. Our Federal laws wisely obligate the Department to involve 

the public. Similarly, these laws direct the Department to thoroughly consider the potential consequences, environmental and economic cost and benefits of energy development, and to look for 

ways to avoid harm. 

Unfortunately, the Department has targeted important requirements, like evaluating impacts, visiting lands before they are put 

up for lease, and applying measures to protect those lands before 

issuing leases or permits to drill. The BLM’s multiple-use mission 

does not permit the agency to raise energy development above all 

other uses and values, as numerous courts have acknowledged. 

Protection of sacred sites, big game habitat, and park visitor experiences are all part of the Department’s mission. They are not 

burdens and they cannot be ignored. 

In addition, the Department has been on notice for years that 

taxpayers are getting a bad deal from oil and gas development on 

public lands. Improving the financial return on development as 

well as addressing seemingly indefinite lease terms should be a 

focus of this Administration’s efforts. Such changes would also 

incentivize leasing on lands the industry will actually develop to 

produce revenue and energy. Notably, what the industry pays to 

lease and develop our public lands and minerals is well below market value, conflicting with obligations imposed by the Mineral 

Leasing Act, for instance, to maximize returns. 

Taxpayers are also getting shortchanged by the waste of natural 

gas through venting, flaring, and leaks. A congressional effort to 

revoke this rule failed, as have Administration efforts to delay it, 

which have been stopped in the courts. The Department should be 

seeking to strengthen this rule, not dismantle it. 

The Department’s evaluation of burdens essentially focuses on 

the wrong side of the equation, placing private interests above 

19 

public. While the current system should be improved, those improvements should not focus on just providing more land, more 

leases, and more permits. Leasing should be targeted in areas that 

have high energy potential, make economic sense for development, 

and do not needlessly conflict with other values and uses. 

The current system already provides the oil and gas industry 

with significantly more available land than they lease, more leases 

than they develop, and more permits than they drill. We have 

heard a lot from this Administration and the industry about 2,000 

permits to drill waiting to be processed. The more telling number 

is the approximately 8,000 permits the BLM processed and issued, 

but remain unused. At the same time, insufficient attention is 

being paid to the inspection and enforcement needed to ensure oil 

and gas development on our public lands is conducted in a way 

that protects health, safety, and the environment and compensates 

the American taxpayer for the profits made by companies. 

Increased support for inspection and enforcement should be a 

priority. 

We have learned important lessons from the courts and the 

American public when a previous administration treated our public 

lands as primarily a place to accommodate the oil and gas industry. 

As discussed in my statement, the conflicts resulting from this approach delayed leasing and permitting and ended with a court 

highlighting the overall dysfunction of the onshore leasing program. If the Department continues to ignore its obligations, there 

will not necessarily be more energy production, but there will be 

more conflict. 

In conclusion, we know that energy development will continue to 

be an important use of our public lands, but it is not the only important use. We do not need to relearn these lessons the hard way. 

We do not need to remove the safeguards designed to protect the 

American people and their water, air, and land. We do not need to 

ignore the other values and important uses of our public lands or 

treat them as merely burdens to energy development. Instead, we 

can continue to improve and modernize the onshore oil and gas 

program, addressing impacts, and ensuring that companies that demand land leases and permits will treat them responsibly. 

The Wilderness Society has and will continue to provide recommendations to improve the way onshore energy development is 

managed, and we look forward to continuing these discussions. 

Thank you again for this opportunity, and I am glad to answer any 

questions. 

[The prepared statement of Ms. Culver follows:] 

PREPARED STATEMENT OF NADA CULVER, SENIOR COUNSEL AND SENIOR DIRECTOR OF

AGENCY POLICY & PLANNING, THE WILDERNESS SOCIETY, DENVER, COLORADO

Good afternoon Chairman Gosar, Ranking Member Lowenthal, and members of 

the Committee. Thank you for the opportunity to share my views on this timely 

issue regarding onshore energy development. 

My name is Nada Culver. I direct The Wilderness Society’s policy and planning 

efforts, including providing input on energy development of lands and mineral resources managed by the Bureau of Land Management (BLM). The Wilderness 

Society (TWS) is a national public interest conservation organization with more 

than 1 million members and supporters. TWS’ mission is to protect wilderness and 

inspire Americans to care for our wild places. Our organization actively supports solutions that balance extractive uses like energy with conservation through open, 

20 

1 43 U.S.C. § 1732 (2012). 

2 Norton v. S. Utah Wilderness Alliance, 542 U.S. at 58 (internal quotations omitted). 3See, e.g., New Mexico ex rel. Richardson, 565 F.3d at 710 (‘‘BLM’s obligation to manage for 

multiple use does not mean that development must be allowed. . . Development is a possible 

use, which BLM must weigh against other possible uses—including conservation to protect 

environmental values, which are best assessed through the NEPA process.’’). 4 43 U.S.C. §§ 1732(a), 1712. 

sustainable, and science-based land management practices to maintain the longterm integrity of the landscape. 

I have worked on energy permitting, planning issues, and policy issues for more 

than 20 years. This includes representing the public interest for nearly 15 years at 

TWS, and representing industrial and energy clients as a lawyer in private practice. 

I meet extensively with career and political staff of the BLM and the Department 

of the Interior (DOI), as well as counterparts in industry and at state and tribal 

entities. I have visited numerous onshore oil and gas fields on public and private 

lands, and spent time in communities situated adjacent to energy production facilities across the West. 

Today’s hearing is especially timely. I appreciate you calling attention to the 

ongoing efforts at the Department of the Interior to seek out and address what are 

described as ‘‘burdens’’ to onshore energy development. While it may be sincere, I 

believe this effort as it has played out is unnecessary and unwise. The Department’s 

formal statements and commitments have, to such a large degree, focused on actions 

that would remove current opportunities for public engagement and weaken (or 

remove altogether) current obligations to consider the effects of leasing and development on communities, health, and other uses and values of our public lands. Accordingly, my testimony today focuses on the problems that arise from what appears to 

be a single-minded focus. I hope the issues highlighted below underscore the importance of the broader mission and responsibilities the Department and the BLM have 

to the public, the true owners of our public lands, and the lessons learned about 

the need for balanced, multiple use management. 

THE DEPARTMENT’S ACTIONS ARE UPSETTING A BALANCE DECADES IN THE MAKING

Our public lands are managed by the Federal Government’s Department of the 

Interior (DOI) for the benefit of current and future generations. That means more 

than just providing for extractive uses—it means public health, fiscal accountability, 

and recreation- and tourism-based economic interests, among others that can be impacted by irresponsible energy development. 

There is much talk about striking an ‘‘appropriate balance’’ in order to promote 

conservation stewardship. Doing so will, in our view, require meaningful discussion 

of—and plans to address—impacts to local communities, businesses, and other public interests, including conservation, and how those interests will be protected in the 

era of so-called ‘‘energy dominance.’’ 

In fact, a balanced approach is embedded in the Department’s responsibilities as 

laid out in the Federal Land Policy and Management Act (FLPMA). Under FLPMA, 

BLM is required to manage the public lands on the basis of multiple use and sustained yield.1 The Supreme Court has stated clearly that ‘‘[m]ultiple use management is a deceptively simple term that describes the enormously complicated task 

of striking a balance among the many competing uses to which land can be put, including, but not limited to, recreation, range, timber, minerals, watershed, wildlife 

and fish, and [uses serving] natural scenic, scientific, and historical values.’’ 2

Similarly, courts have repeatedly held that under FLPMA’s multiple use mandate, 

development of public lands is not required, but must instead be weighed against 

other possible uses, including conservation to protect environmental values.3 An approach in which BLM prioritizes energy development above other public lands uses 

and resources would violate the multiple-use mandate of FLPMA, which states in 

no uncertain terms that BLM ‘‘shall manage public lands under principles of multiple use and sustained yield’’ and contains specific provisions and procedures for 

conserving natural, historic and cultural resources, scenic values and fish and 

wildlife.4

Nevertheless, the Administration’s stated policy objective is to increase domestic 

energy production from public lands and expand energy-related jobs in pursuit of 

an over-arching goal of ‘‘energy dominance.’’ And the Department has wasted little 

time demonstrating what that means: 

• Less than 1 month after being confirmed, Secretary Zinke signed Secretarial 

Order 3349 designed to implement a presidential directive to ‘‘review all existing regulations, orders, guidance documents, policies, and any other similar 

21 

5 Executive Order 13783, March 28, 2017. 

6Letter from The Wilderness Society et al to Secretary Zinke, April 12, 2017. 

agency actions . . . that potentially burden the development or use of domestically produced energy resources.’’ 5 The order also rescinded or ordered the 

rescission of a number of important climate and mitigation policies, lifted the 

moratorium on new coal leases, and ordered the review of four common-sense 

regulations affecting oil and gas operations on National Park Service lands, 

fish and wildlife refuges, and other public lands. 

• On that same day, the Secretary signed a charter reconstituting the Royalty 

Policy Committee. Members were formally selected on September 1, 2017, and 

included robust participation from several sectors of industry. Notably absent 

were representatives of taxpayer advocate or public interest organizations. 

• On May 2, 2017, the Department issued Secretarial Order 3351 aimed at 

eliminating ‘‘harmful regulations and unnecessary policies.’’ The order created 

a position with the express duty to identify regulatory burdens that unnecessarily encumber energy exploration development, production, transportation; 

and develop strategies to eliminate or minimize these burdens. 

• In October 2017, DOI published its ‘‘Energy Burdens Report,’’ which by the 

Department’s own press release, ‘‘outlines Trump administration’s bold approach to achieving American energy dominance.’’ The report identifies rules 

and policies that ‘‘burden’’ energy production such as the waste prevention 

rule, National Environmental Policy Act (NEPA) review of oil and gas leasing 

and permitting, mitigation policies, and the Endangered Species Act. 

• In June 2017, the Department issued Secretarial Order 3353, which directed 

a review of the rangewide plans addressing management of Greater Sagegrouse, which had led to a Fish and Wildlife Service finding that listing under 

the Endangered Species Act is no longer warranted. Citing Secretarial Order 

3349, the review and subsequent formal process to re-evaluate the plans are 

focused in large part on removing management to protect habitat from the 

harm caused by oil and gas development. 

Most striking about the actions taken to date is the lack of transparency and limited involvement afforded the very communities most affected by energy development. In early April 2017, we joined with more than a dozen other national 

conservation groups in calling on the Secretary to meaningfully engage the public 

before committing to a course of action.6 In that letter, we cautioned, ‘‘A Department of the Interior that works in darkness to change management policies will not 

maintain the trust of the American people. . . Decades of conflict and controversy 

have shown the public expects, and our public land laws require, more from these 

lands than extractive uses.’’ 

Unfortunately, the Department has chosen to eliminate common-sense safeguards 

and guidelines that protect the public interest and ensure Americans receive a fair 

return for development of publicly-owned lands and minerals. This approach reverses course on efforts to improve the Department’s management framework under 

Presidents Bush and Obama to make energy development more effective and sustainable. These reforms were put in place in response to decades of findings and recommendations from the Government Accountability Office (GAO), the Department’s 

Office of Inspector General (OIG), and sister agencies in Federal and state government, as well as the courts. Some of these findings and recommendations are discussed further in this testimony, including GAO’s inclusion of the ‘‘Management of 

Oil & Gas Resources’’ on its biennial list of ‘‘high-risk’’ Federal programs, which are 

chosen because of ‘‘their vulnerabilities to fraud, waste, abuse, and mismanagement, 

or are most in need of transformation,’’ and GAO’s findings that BLM’s venting and 

flaring practices prior to the 2016 waste prevention rule were costing taxpayers in 

terms lost revenue and increased air pollution. 

REGULATIONS AND POLICIES ARE NOT INHERENTLY BURDENSOME AND PROVIDE

MANY BENEFITS

The regulations and policies identified as ‘‘burdensome’’ to energy development, 

and therefore targeted to be weakened or eliminated, provide substantial benefits 

to the American people that are being ignored or undervalued. The legal and policy 

framework under which the Federal Government manages energy development in 

our country is intended to protect human health and communities, grow all facets 

of our economy, balance development with conservation of natural resources, ensure 

continued opportunities for other multiples uses such as outdoor recreation, yield a 

fair market value return to the American people for the resources they own, and 

22 

7See Final Rule at: https://www.regulations.gov/document?D=BLM-2016-0001-9126. 8Final Report: Review of the Department of the Interior Actions that Potentially Burden 

Domestic Energy at IV(A)(ii). 9 U.S. Department of the Interior. (2007). Report to the Royalty Policy Committee: Mineral 

Revenue Collection from Federal and Indian Lands and the Outer Continental Shelf. Available 

at: https://permanent.access.gpo.gov/lps96276/RPCRMS1207.pdf. 10Office of the Inspector General. (2010). Inspection Report: BLM and MMS Beneficial Use 

Deductions. Available at: https://www.doioig.gov/sites/doioig.gov/files/2010-I-00171.pdf; Government Accountability Office. (2010). Federal Oil and Gas Leases—Opportunities Exist to Capture 

Vented and Flared Gas, Which Would Increase Royalty Payments and Reduce Greenhouse Gases. 

Available at: https://www.gao.gov/products/GAO-11-34; and Government Accountability Office. 

(2016). OIL AND GAS—Interior Could Do More to Account for and Manage Natural Gas 

Emissions. Available at: https://www.gao.gov/products/GAO-16-607. 11See Final Rule at: https://www.regulations.gov/document?D=BLM-2016-0001-9126. The 

problem can also be seen in requests for flaring and venting submitted as Sundry Notices to 

BLM field offices. In 2005, the BLM received just 50 applications to vent or flare gas. In 2011, 

involve the public in decisions affecting public lands and minerals. These benefits 

must be considered and ultimately ensured when undertaking regulatory or policy 

changes. 

We are concerned that DOI’s actions and commitments to ‘‘eliminate energy 

burdens’’ appear to be focused primarily on measuring the financial impact to private companies, disregarding the Federal Government’s duty to the American people 

to ensure development on public lands takes into account other uses and resources 

while yielding a fair return. 

An immediate example of this concern is found in the ongoing efforts to dismantle 

the BLM’s 2016 methane waste prevention rule (the ‘‘methane rule’’). One year 

ago yesterday, on January 17, 2017, the BLM’s methane rule went into effect. The 

2016 rule would curb the waste of natural gas from Federal and tribal lands by requiring periodic leak detection and repair (LDAR) inspections, prohibiting venting, 

significantly limiting flaring, and establishing a number of equipment specific requirements. These elements would yield substantial health and fiscal benefits to the 

American people. According to BLM’s own estimates, full implementation of the rule 

would cut methane emissions by 49 percent (or 180,000 tons per year) and could 

result in net benefits of over $204 million annually.7

The rule has been the subject of repeated efforts to eliminate it over the past year. 

This rule went into effect shortly after a Wyoming district court denied a request 

from several industry trade associations and oil-and-gas producing states to block 

it. Just months later, the Senate rejected a proposal to nullify the rule on a bipartisan vote 51–49 despite a Secretarial letter assuring that such action was welcome. 

Nevertheless, the Department proceeded to administratively delay implementation 

in July—a move that was overturned by a California district court in October. The 

next day, the BLM initiated a formal process to halt implementation of the rule 

which was finalized in December (though that move is currently the subject of litigation). BLM is expected to initiate a process this month to substantially revise or 

rescind the 2016 rule, based on the finding in the Energy Burdens report that ‘‘the 

BLM recognizes that the 2016 final rule poses a substantial burden on industry.’’ 8

However, there is a well-documented history of the burden borne by taxpayers 

from management systems that allowed for significant amounts of waste that led 

to the 2016 rule. Starting in December 2007, a Royalty Policy Committee (RPC) 

report, Mineral Revenue Collection from Federal and Indian Lands and the Outer 

Continental Shelf, recommended that the BLM update its rules and identified 

specific actions to improve production accountability.9 This was followed by a March 

2010 report by the OIG, BLM, and Minerals Management Service on Beneficial Use 

Deductions; an October 2010 GAO report, Federal Oil and Gas Leases— 

Opportunities Exist to Capture Vented and Flared Gas, Which Would Increase 

Royalty Payments and Reduce Greenhouse Gases; and eventually the July 2016 GAO 

report entitled, ‘‘OIL AND GAS—Interior Could Do More to Account for and Manage 

Natural Gas Emissions.’’ 10 In particular, the 2010 GAO report found that ‘‘in 2008, 

about 128 billion cubic feet (Bcf) of natural gas was either vented or flared from 

Federal leases, about 50 Bcf of which was economically recoverable (about 40 

percent of the total volume lost). This economically recoverable volume represents 

about $23 million in lost Federal royalties and 16.5 million metric tons of carbon 

dioxide equivalent (CO2e) emissions.’’ 

And the Department is seeking to roll back the 2016 methane rule even though 

the waste of Federal resources is on the rise. The total amount of annual reported 

flaring from Federal and Indian leases increased by over 1000 percent from 2009 

through 2015. During this period, reported volumes of flared oil-well gas increased 

by 318 percent.11

23 

the BLM received 622 applications, and this doubled again within 3 years to 1,248 applications 

in 2014. 12Western Values Project. ‘‘Up in Flames: Taxpayers Left Out in the Cold as Publicly Owned 

Natural Gas is Carelessly Wasted.’’ May 2014. Available at: http://westernvaluesproject.org/ 

wpcontent/uploads/2014/05/Up-In-Flames.pdf. 13SUWA v. Allred, Case No. 1:08–cv–02187 (D.D.C.—January 17, 2009). (Plaintiffs showed 

likelihood of success on the merits of violations of National Environmental Policy Act and 

National Historic Preservation Act). 14 In March 2012, former BLM Director Bob Abbey testified to a Senate committee that the 

Administration ‘‘inherited an onshore oil and gas program that was on the verge of collapse.’’ 

http: / / rlch.org /news /drilling-leaves-fed-lands-because-state-private-acres-are-cheaper-says-blmchief. 15 BLM Instruction Memoranda 2010–117. 16Final Report: Review of the Department of the Interior Actions that Potentially Burden 

Domestic Energy at IV(A)(iv). 

This waste has very real financial and environmental impacts. According to a re- cent study, taxpayers could lose out on almost $800 million in royalties over the 

next decade due to natural gas being flared or vented from Federal lands.12 It also 

impacts the health of U.S. citizens. Along with methane, this natural gas waste contains volatile organic compounds (VOCs), including benzene and other hazardous air 

pollutants (some of which are known carcinogens); and leads to the production of 

smog-forming NOx and particulate matter, which can cause respiratory and heart 

problems. In addition to financial and public health impacts, methane is a greenhouse gas 84 times more potent than carbon dioxide. Its contribution to climate 

change is well-documented as are the potential ramifications of a warming planet 

on a global, national and regional scale. 

Similarly, DOI is also reversing common-sense policies that guide responsible 

energy development. One of the Department’s first acts was to scuttle a programmatic review of the ailing Federal coal leasing program. The review was designed to address deficiencies first documented three decades ago. Despite those 

known flaws, the Department is not taking any action to review or improve that 

program. 

Unfortunately, additional actions taken in the name of removing burdens will do 

much more than merely halt new reviews—they will actually erode progress made 

in establishing public trust in the BLM’s management of energy resources. 

A particularly distressing example of this about-face is found in the circumstances 

that led up to reforms of the BLM’s oil and gas leasing program. In December 

2008, a court formally prohibited the Bureau of Land Management from issuing 77 

leases sold in Utah. The court found the agency’s decision-making process to be fundamentally broken, which prompted the BLM to reconsider its entire management 

of onshore oil and gas leasing.13 The court’s decision was a culmination of years of 

protests and lawsuits challenging BLM oil and gas leasing decisions in planning, 

leasing, and permitting throughout the West; this was a clear declaration that the 

agency’s previous approach to managing oil and gas development was 

unsustainable.14

In response, the Department pulled together an interdisciplinary interagency 

team of experienced BLM, Forest Service, and National Park Service employees, led 

by Mark Stiles, then-Supervisor of the San Juan National Forest, which visited 

nearly all of the lease parcels and interviewed BLM staff. The final report (referred 

to as the Stiles Report) made recommendations on future handling of each lease 

parcel and on addressing critical problems with the BLM’s oil and gas leasing program. The recommendations of the Stiles Report ushered in a more balanced 

approach to oil and gas leasing and development on the public lands. These recommendations were implemented principally through BLM guidance that required 

consideration of the many multiple uses of the public lands while providing a path 

toward more certainty for both industry and the public.15 The reformed leasing process has strengthened protections for wilderness, wildlife and recreation, and reduced 

conflicts over leasing and drilling, even while production of oil and natural gas has 

increased on public lands. Prior to this guidance, Federal lease sales were twice as 

likely to be challenged in Federal court. Site-specific lease sale protests, concerning 

direct, on-the-ground conflicts with oil and gas development, have also decreased. 

Despite these across-the-board benefits to BLM’s oil and gas leasing program, DOI 

has committed to ‘‘revise and reform its leasing policy and to streamline the leasing 

process’’ and expects to complete revisions to the leasing process in the first quarter 

of FY 2018.16

An alarming example of important reforms that DOI has threatened to abandon 

is the case of Master Leasing Plans (MLPs). MLPs are a management tool for 

BLM to plan for oil and gas development at a more detailed level than a broad-scale 

24 

17Final Report: Review of the Department of the Interior Actions that Potentially Burden 

Domestic Energy at IV(A)(v). 18 Id at (vii). 

resource management plan. MLPs are a ‘‘smart from the start’’ approach that are 

intended to ensure oil and gas development occurs in a more balanced, responsible 

way by protecting important public lands resources including national parks, wildlife habitat, clean air and water, and other uses such as outdoor recreation, hunting, 

fishing, farming, and ranching. By addressing potential conflicts up-front, MLPs 

provide the oil and gas industry with more certainty and can streamline approvals 

for leasing and development. Although formally initiated by name in 2010, the approach came about under the leadership of former BLM James Caswell and Deputy 

Secretary Lynn Scarlett during the final years of President Bush’s second term. 

MLPs have been developed through collaborative stakeholder processes that bring 

all interests to the table to determine the appropriate pace and scale of development 

and how to protect other multiple uses while development occurs. This collaborative 

approach to energy development benefits multiple facets of our economy, protecting 

the interests of the outdoor recreation industry, tourism-based economies and public 

lands ranchers. MLPs also facilitate smart development that gives taxpayers a return on investment by driving oil and gas production to public lands most suitable 

for that purpose rather than providing for public lands that would be more productive for other commercial, recreational, and conservation uses to be held unused by 

non-producing speculators. Despite the value of such an approach to all public lands 

users, DOI has announced its intention to end this approach, stating that ‘‘the BLM 

expects to rescind this IM and complete the revision of the above BLM Handbook, 

as well as any other relevant BLM handbooks, in the first quarter of FY 2018.’’ 17

Finally, several of the policies targeted as ‘‘burdensome’’ were developed as collaborative endeavors with state and local interests, including years of extensive public involvement. Ripping up these compromise solutions with little or no engagement 

threatens the government’s ability to arrive at future agreements. There is no better 

example of this than the conservation plans for the Greater Sage-grouse. The 

sage-grouse conservation plans and associated guidance for implementing oil and 

gas leasing and development in important habitat benefit the American people by 

conserving our natural heritage and valuable hunting opportunities on our public 

lands. These plans are the largest collaborative conservation effort in U.S. history, 

created over a 6-year time frame with the input and cooperation of multiple Federal 

agencies, state and Federal legislators from both sides of the aisle, conservationists, 

ranchers, recreationists, scientists, and the energy industry. 

Despite the robust process that preceded it, DOI issued new instruction memoranda for implementing the sage-grouse conservation plans on December 27, 2017, 

that, among other things, eviscerates the requirement that BLM prioritize oil and 

gas leasing and drilling outside of important sage-grouse habitat.18 Specifically, the 

Department cited a requirement for BLM to weigh potential impacts to the Greater 

Sage-grouse before offering oil and gas lease as unduly burdensome in its final 

Energy Burdens report. This prioritization requirement had been intended to guide 

development to lower conflict areas while protecting important habitat. This approach would have reduced the time and cost associated with oil and gas leasing 

and development by avoiding sensitive areas in the first place, thereby minimizing 

the complexity of environmental review and analysis of potential impacts on sensitive species and decreasing the need for compensatory mitigation. It is unclear 

what approach the Department will institute instead that will avoid the need to list 

the Greater Sage-grouse under the Endangered Species Act, but in the meantime 

it appears leasing and drilling will proceed in these areas without due regard for 

the current plans. 

ENERGY DEVELOPMENT IS ALREADY A PREFERRED TENANT ON PUBLIC LANDS

The presupposition of the Administration’s hunt for ‘‘energy burdens’’ to achieve 

‘‘energy dominance’’ is that the industry is tied down by red tape. That claim is 

false—energy development continues to be the preferred use for almost all our multiple use public lands. Market forces outside of the Federal Government’s control are 

largely responsible for the decisions made by private companies; rescinding or 

revising these regulations will have little effect on Federal lands production. 

When it comes to our public lands, the oil and gas industry seems to have a problem of excess, not access. The vast majority of federally managed lands and waters 

are already open to oil and gas leasing—but oil and gas companies are having a 

difficult time using what they already have access to. The oil and gas industry already has access to as much Federal land as it desires. Our research shows that 

25 

19The Wilderness Society ‘‘Open for Business: How Public Lands Management Favors the Oil 

and Gas Industry.’’ Available at: http://wilderness.org/sites/default/files/TWS%20%20BLM%20 

report_0.pdf. 20The Wilderness Society ‘‘Land Hoarders: How Stockpiling Leases is Costing Taxpayers.’’ 

Available at: https://wilderness.org/sites/default/files/TWS%20Hoarders%20Report-web.pdf. 21The Wilderness Society ‘‘Public Land Energy Development By The Numbers 2017.’’ Available at: https://wilderness.org/sites/default/files/TWS%20Energy%20Fact%20Sheet_September_5_ 2017.pdf. 22https://www.blm.gov/programs/energy-and-minerals/oil-and-gas. 23 Crooks, Ed, ‘‘The U.S. Shale Revolution,’’ Financial Times (2015). Available at: https:// 

www.ft.com/content/2ded7416-e930-11e4-a71a-00144feab7de. 24 Brady, Jeff, ‘‘U.S. Likely To Become Net Exporter Of Energy, Says Federal Forecast.’’ NPR 

(2017). Available at: http://www.npr.org/sections/thetwoway/2017/01/05/508421943/u-s-likely-willbecome-net-exporter-of-energy-says-Federal-forecast. 25Scheyder, Ernest, ‘‘With oil price near $50, resilient U.S. shale producers eye new chapter.’’ 

Reuters (2016). Available at: https://www.reuters.com/article/us-oilshale/withoil-price-near-50- 

resilient-u-s-shale-producers-eye-new-chapter-idUSKCN0Z60CH; see also: Clemente, Jude, ‘‘The 

Great U.S. Oil Export Boom.’’ Forbes (2017). Available at: https://www.forbes.com/sites/ 

judeclemente/2017/05/21/the-great-u-s-oilexportboom/#144f26bc7e5b. 26 U.S. coal production data available at: https://www.eia.gov/coal/data.php#production; U.S. 

natural gas production data available at: https://www.eia.gov/dnav/ng/ 

ng_prod_sum_a_EPG0_FGW_mmcf_a.htm; U.S. crude oil production data available at: https:// 

www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbbl_a.htm; Federal production data available at: 

https://useiti.doi.gov/explore/. 

90 percent of BLM-managed subsurface mineral acres are open to oil and gas leasing. Yet, of the 27 million acres under lease in 2016, only 12.7 million acres were 

producing energy—meaning 14 million acres of publicly-owned minerals already 

leased are sitting idle.19 Of the 14 million unused acres, 3.25 are sitting in suspension, meaning companies pay no royalties and lose no time off the life of their 

leases. That’s nearly 10 percent of the leased mineral estate that’s essentially off 

the books, an awful deal for taxpayers.20

But even for those leases where the industry is trying to move ahead, there 

appear to be no real impediments from the BLM or from public engagement. The 

industry already holds 7,950 approved drilling permits that are not being used.21

In 2016 alone, BLM issued 2,184 drilling permits, but only 847 permits were used. 

This trend has been true for decades. Since 1985 there have been just 2 years where 

industry has used more permits than BLM has approved. 

The performance of recent lease sales underscores that BLM continues to offer 

significantly more acreage for lease than industry is willing to purchase. In 2015, 

only 15 percent of all land offered in lease sales were actually purchased. In 2017, 

only 6 percent of the total acreage offered was acquired by industry.22 This is astonishing by any measure, given that in most cases parcels are put up for sale because 

they were nominated by oil and gas companies. 

The Federal Government is clearly not standing in the way of energy development. Instead, trends in Federal energy production are largely dependent on market 

forces and parallel those trends seen on private and state lands. Over the past 15 

years, total U.S. production of oil and gas has dramatically increased while coal production has dropped. From 1990 to 2016, total U.S. natural gas production increased 

by 52 percent while crude oil production rose by 21 percent. Coal production however has continued its slow decline nationwide, down 22 percent since 2006, as demand has rapidly eroded. The increased production associated with the ‘‘shale 

revolution’’ drove down natural gas prices, providing a cheaper alternative to coal 

and leading to the increased use of natural gas use in electricity generation.23 The 

surplus of oil and gas introduced into the market also helped to move the United 

States into a position where exports of both have dramatically increased while imports have fallen, setting the country up to become a net exporter of both.24

However, beginning in 2014, the crude oil market bottomed out. Nevertheless, U.S. 

producers proved to be quite resilient. Their ability to cut production costs and remain profitable in a low-price environment allowed U.S. producers to take over a 

larger market share and increase exports.25

Development on public lands has been influenced by these same market forces. 

Crude oil production on public lands increased 26 percent from 2006 to 2015 while 

coal production dropped 16 percent. Despite declines in total acreage under lease, 

producing acreage has remained stable, down only 2 percent from 1990 to 2016. And 

despite a depressed market, energy extracted from our Federal lands and waters 

still accounted for 42 percent of all coal, 22 percent of all crude oil, and 15 percent 

of all natural gas produced in the United States in 2015.26

26 

27https://www.gao.gov/highrisk/overview. 28https://www.gao.gov/highrisk/management_Federal_oil_gas/why_did_study#t=0. 29 Id.; See also Congressional Budget Office, Options for Increasing Federal Income from 

Crude Oil and Natural Gas on Federal Lands at 8, available at https://www.cbo.gov/sites/default/ 

files/114th-congress-2015-2016/reports/51421-oil_and_gas_options.pdf. 30https://www.gao.gov/assets/690/685335.pdf. 31 Congressional Budget Office, Options for Increasing Federal Income from Crude Oil and 

Natural Gas on Federal Lands. https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/ 

reports/51421-oil_and_gas_options.pdf. 

KNOWN DEFICIENCIES REMAIN UNADDRESSED

There are real challenges facing energy production on public lands, and there are 

always ways to do things faster, cheaper, and arrive at better outcomes for all 

stakeholders. Independent audits and investigations have laid out a number of 

areas where congressional interest could be focused—like making sure taxpayers are 

getting a fair deal for commercial development of the resources they own, and that 

the BLM is adequately protecting public safety and the environment through inspection and enforcement. 

As you are no doubt aware, the U.S. Government Accountability Office (GAO) has 

included the ‘‘Management of Oil & Gas Resources’’ on its biennial list of high-risk 

Federal programs since 2011. These programs are selected because of ‘‘their 

vulnerabilities to fraud, waste, abuse, and mismanagement, or are most in need of 

transformation.’’ 27 GAO has specifically cited DOI’s failure to obtain a fair return 

for taxpayers and to effectively inspect and monitor oil and gas operations to justify 

the program’s presence on the list.28 We fear that the singular focus only on burdens to energy producers will exacerbate these profound problems, shifting even 

more burdens onto taxpayers and those living near energy projects. 

First, by placing such an emphasis on cutting corners in the leasing and permitting process without first taking steps to modernize the onshore program’s flawed 

fiscal policies, the Administration is effectively allowing developers to continue to 

enjoy an implicit subsidy. As documented by the Congressional Budget Office, GAO, 

and other leading experts, DOI’s fiscal policies, including royalty rates and minimum bids, are woefully outdated and have not kept pace with inflation.29 In fact, 

the royalty rate has not changed since the Mineral Leasing Act was passed in 1920, 

and, at 12.5 percent, is considerably lower than the rates of many western states.30

As a direct result of the Administration’s energy-above-all policies and inaction on 

fiscal reform, millions, if not billions, of dollars that rightfully belong to American 

taxpayers will instead go directly into the already-deep pockets of the oil and gas 

industry. 

Second, by offering nearly every lease that is nominated by the oil and gas industry—regardless of market conditions and potential conflicts with national parks, 

wildlife, and other revenue-generators, like outdoor recreation—the Administration 

is pouring taxpayer dollars down the drain and threatening the economic foundations of western communities. In 2017, the Administration processed and offered at 

taxpayer expense almost 12 million acres of public lands nominated for leasing by 

the oil and gas industry. Yet, the industry purchased just 7 percent of those leases— 

about 791,000 acres. And these acres sold at fire-sale prices. Just 3 percent of the 

leases sold by the Administration accounted for 70 percent of total revenues from 

the onshore leasing program. In fact, one-third of the acres leased in 2017 went for 

$10 per acre or less, the majority of which sold for the minimum bid of $2 per acre— 

a 170 percent increase from 2016. The Congressional Budget Office reported that 

leases sold for $10 per acre or less are hardly ever drilled (only 8 percent of the 

time).31 By paring back reforms targeted at ensuring leases sold turn into wells 

drilled, the Administration’s focus on ‘‘energy burdens’’ is actually encouraging widespread and wasteful speculation by the industry. 

Finally, the Administration has made no commitment to addressing the onshore 

program’s chronically under-resourced inspection and enforcement division. Inspection and enforcement is tasked with ensuring operations are being conducted in 

compliance with applicable rules to protect health, safety, and the environment, as 

well as accurately reporting production activities and paying royalties owed on that 

production. This is alarming, given the Administration’s stated commitment to 

dramatically increase new permitting activity. The BLM oversees around 100,000 

wells across the country for which they have and must meet inspection and enforcement responsibilities by law. The President’s budget called for a 26 percent increase 

in oil and gas permitting activities at BLM, yet requested flat funding for inspections and enforcement activities for a division with a poor track record, largely due 

to resource constraints. The General Accountability Office recently reported that 

BLM failed to inspect some 40 percent of high-priority drilling operations during 

27 

2009–2012. Similarly, in recent years the BLM has been unable to complete all of 

its high-risk production inspections, which are critical for ensuring proper accounting of the billions of dollars of oil and gas produced from public lands. This perfect 

storm leads to significant breakdowns in performance and, ultimately, huge risks 

to taxpayers and the local communities living in the shadow of development. 

This problem is especially acute in communities like Livingston, Montana; Paonia, 

Colorado; and Moab, Utah, which the Administration is actively targeting for 

leasing and future development. These communities depend heavily on revenue from 

tourism and outdoor recreation on nearby public lands, and they will bear the brunt 

of spills, explosions, and other incidents that stem from lax inspection and 

enforcement. 

CONCLUSION

We believe energy development is a legitimate use of our public lands. We have 

worked for years with industry and Federal and state agencies to develop innovative 

solutions to improve the performance of Federal energy development on public lands 

for all stakeholders. But we have grave concern that the current focus on energy 

above all other uses will result in significant negative consequences—and will not 

likely even meet the Administration’s stated objectives. Energy development comes 

with many burdens, and we should not shift more of that burden from developers 

to taxpayers, local communities, and other users of our public lands. A careful 

balance—not the dominance of one use over all others—must be struck. 

Dr. GOSAR. Thanks, Ms. Culver. 

Votes have been called, but I am going to get to the two 

speakers, and then we will be in recess. We will come back for 

questions. 

I now recognize Senator Van Tassell for his comments. 

STATEMENT OF SENATOR KEVIN T. VAN TASSELL, 

DISTRICT 26, UTAH STATE SENATE, VERNAL, UTAH 

Mr. VAN TASSELL. Thank you very much. It is good to be here 

with you, Chairman, and to be with the rest of the Committee. I 

know a little bit about what that is. We go into session Monday, 

and we will be locked up for 45 days while we work with the Utah 

State budget as well as deal with the issues that are abundantly 

clear in Utah and throughout the Nation. So, I tell you I am grateful for this opportunity. 

My district is northeastern Utah. It is a portion of the state that 

has a lot of energy in it: natural gas, oil, as well as hydrocarbons 

and coal sands, tar sands or oil sands, as well as oil shale. And I 

know those are discussions that automatically send up things, but 

the resources are there and they are not in other places. So, the 

opportunity to produce those resources is something that in time 

we hope that the market will justify. 

I guess as the state of Utah and as a legislator for a very rural 

part of the state, the message that I have here today is that we 

need to see the funds and the lands leased. 

One of the issues that we have struggled with the last 6 or 7 

years is that we have had, because of the slowness in leasing 

Federal property, the small private portion of the state, which, 

with Utah, depending on what numbers you want to throw in, the 

65 percent public lands, that has shifted to the private area. 

In my area, 95 percent of the exploration work that has been 

done has been on private property. Granted, it is good for the 

leasers, the owners of the royalties. It is great for those that have 

those; but nevertheless, for those that happen to have a split 

28 

estate—the farmer that has the surface rights but the Federal 

Government having the subrights and the minerals—it puts 

burden upon all of those. 

So, I would encourage you to let the Federal lands take care and 

perform their function, as it is vital to the state. In the state of 

Utah, we take that money, the mineral lease money, and divide it. 

We have a Community Impact Board that does loans and some 

grants, but most of it is on 10- to 15-, 20-year long-term policies. 

It has rebuilt the fire infrastructure, almost all of the transportations that are non-state funded are funded in the rural parts of 

the state, particularly in the eastern part of the state where the 

production is from mineral lease funds. That program is working 

as it should, and it needs to be there. 

We have some issues in my written comments I submitted. We 

have a PAYGO issue that could come into effect that could cause 

a sequestration of those funds. It would be harmful. And although 

we are not hearing anything, those bean counters, the accountants 

in legislative research and finance, they have already put it on our 

agenda that we will be taking up next week. So, we will continue 

to be looking at that. 

One of the issues that I see that I believe needs to be considered 

by this Committee, in Utah, as well as throughout the Nation, we 

have many wonderful national monuments and state parks. 

Unfortunately, they are all very neglected in maintenance and 

modernizing. 

My recommendation to this Committee is that you take some of 

the mineral lease money that is coming on the Federal part and 

designate part of that to funding and maintaining of the national 

parks, so there is an ongoing source of revenue. It cannot be accomplished in a one-time deal. And it will benefit everybody, including 

those that don’t like energy development. But energy development 

is how we can maintain our parks, and I would encourage you to 

consider that. 

I want to thank the oil industry. In my area, we have 20,000 

people employed working in various stages. They provide good jobs. 

They provide opportunities to keep people in our local areas. The 

biggest issue that I have in the state of Utah is I have the Wasatch 

Front, which is as urban as any place in the state of Utah. And 

I get down in my area and we are almost nonexistent. 

I would encourage you to continue to develop and allow wherever 

the resource is to be developed. It is not everywhere, but it can be 

developed. It can be developed very practically and can be a 

successful tool. 

Thank you very much. 

[The prepared statement of Mr. Van Tassell follows:] 

PREPARED STATEMENT OF KEVIN T. VAN TASSELL, UTAH STATE SENATE, DISTRICT 26 

Thank you for the opportunity to testify to talk about economic interests in Utah. 

I come from the energy production center of the state of Utah. The fiscal impacts 

and the ongoing operation of mineral extraction are of a critical importance to our 

local economy as well as the state. 

As we all know, the energy extraction industry is a cyclical business and rises and 

falls with commodity pricing in the economy. We live with this constantly and we 

understand this is part of the market. The major problem that we struggle with is 

keeping a medium. In other words, flatten the highs and fill in the valleys. 

29 

In this latest downturn, with the decrease in Oil and Gas prices, local communities have experienced foreclosures on businesses, and homes have been 

repossessed or deeded in lieu of foreclosure. Many of the supplier companies have 

either gone out of business or retrenched significantly. Again, these occurrences are 

painful but not unusual. But, in a public lands state such as Utah, the withdrawal 

of leases or the failure to provide additional leases, together with burdensome requirements have a detrimental effect on local economies as well as to the state of 

Utah. We are very concerned that with the passing of the recent tax reform may 

trigger statutory PAYGO. Should an increase in the deficit trigger sequestration of 

several non-exempt mandatory programs, it could have a huge effect upon our local 

communities. My office has prepared a handout to go along with this letter. If a 10- 

year elimination of funding were to take place, it would impact many basic, needed 

services. Mineral lease funds have been applied to fire protection, transportation, 

and infrastructure, all of which increase the viability of the communities that support exploration and extraction. 

I would encourage you to find solutions to allow increases in leasing, and better 

planning for developments of lands, and true multiple-use of the land. 

***** 

The following documents were submitted as supplements to Senator Van Tassell’s 

testimony. These documents are part of the hearing record and are being retained 

in the Committee’s official files: 

—Issue Brief, Office of the Legislative Fiscal Analyst, January 16, 2018, Impact 

of Federal Tax Reform on State Mineral Lease Payments 

—Western Energy Alliance, Charts on Employment and Economic Impact in 

Duchesne and Uintah Counties, Utah: 2016 

Dr. GOSAR. Thank you, Senator. 

We have 5 minutes left in voting. Mr. Schulz, we will end with 

you, so let’s go ahead and have your testimony. 

STATEMENT OF SHANE SCHULZ, DIRECTOR, GOVERNMENT 

AFFAIRS, QEP RESOURCES, INC., DENVER, COLORADO 

Mr. SCHULZ. OK. I will try to be quick and precise and to the 

point. 

Thank you, Chairman Gosar, Ranking Member Lowenthal, and 

members of the Committee. Again, my name is Shane Schulz. I am 

the Director of Government Affairs for QEP Resources. Those 

duties include not only managing government affairs issues for 

Federal, state, and local issues, but tracking regulatory issues and 

commenting on the myriad of regulatory issues that happen at all 

those levels. 

QEP Resources is headquartered in Denver, Colorado. We have 

operations in two oil basins: the Williston Basin and the Permian 

Basin. In addition, we operate in the Haynesville Shale, producing 

natural gas there. And last and not least is the Uinta Basin, home 

to Senator Van Tassell as well as to Chairman Bishop. 

With operations located on private lands, on state trust lands 

and Federal lands, I think we provide a unique perspective on development and the contrast in corresponding government regulatory programs between all those. I think you can get it just from 

the other operator on the panel as well as us and through my written testimony that regulatory certainty has become a huge key 

issue for us to make business decisions. 

Over the past decade, U.S. onshore oil and gas development has 

been truly remarkable. But over that same period, we have not 

30 

seen the equivalent growth happen on Federal lands. In fact, approximately 96 percent of the production growth since 2007 has 

been on private lands, according to the Congressional Research 

Service. 

Obviously, there are a number of factors that operators consider 

when it comes to allocating capital to projects, such as geology and 

individual well economics. But another huge important factor, as I 

mentioned before, is the stability in the regulatory requirements. 

We are leery of making investments which will only turn into 

stranded capital. 

When we look at investments in states like Texas versus Federal 

lands, we know Texas has a regulatory regime that provides less 

risk and more certainty. We can start receiving returns on investments in a matter of days and months versus, in many cases, years 

on Federal lands. 

When it comes to leasing on the Federal Government, not only 

does it take years often to acquire those leases, as well as the permits, the risk of appeals, the risk of delays continue to add to that 

regulatory uncertainty. 

We do have a great working relationship in the field offices 

where we operate with BLM employees, but often they are hamstrung by the term that was used earlier. We call it analysis 

paralysis. Oftentimes, you will see projects that get caught in a 

quagmire of having to have multiple reviews or they get delayed. 

We had a project in southwest Wyoming that we eventually just 

pulled the plug on after 10-plus years. That often just becomes a 

death knell where proponents of projects pull the funding, pull the 

permit, and deploy it somewhere else. 

These delays, though, in fact, are part of the problem why you 

talk about having thousands of BLM APDs hanging out there, because oftentimes operators are submitting APDs because of the 

time frame it takes to get them, and the market conditions change. 

It is also important to know, when we submit an APD, we are paying money for that APD that sometimes we don’t get back because 

we don’t ever go drill on those wells. 

I want to refer you to the slides quickly. The first slide is the 

leasing to development slide. As you look at this, at this point you 

already have an RMP that is designated lands for leasing. 

Currently, there is a master leasing plan process in several states. 

I would argue that process is duplicative and unnecessary, but 

after you get through that process and you have put together the 

financing for the lease purchase and you have purchased the lease, 

which, again, takes years to do, you still are in the process of trying to put together your lease block. 

And putting together a lease block is critical, not only for us to 

have organized development, but it is critical in the sense of having 

development that lessens the environmental impact so that we can 

do liquids gathering lines, we can have less footprints from truck 

traffic, less roads, and organized tank batteries. 

The next slide is just the APD process which we go through. 

Again, this takes months to get through, and it is not to the fault 

of the BLM employees. Like I said, they are often hamstrung in 

what they have to deal with. 

31 

All of this being said, these are the processes that we go through 

that do create issues where it becomes a challenge for QEP and 

other operators to invest on Federal lands. I have made several recommendations in my written testimony. I won’t go over them again 

for the sake of time. 

With that, I will conclude my remarks and look forward to 

questions. 

[The prepared statement of Mr. Schulz follows:] 

PREPARED STATEMENT OF SHANE SCHULZ, DIRECTOR, GOVERNMENT AFFAIRS, QEP RESOURCES, INC. 

QEP Resources, Inc. (‘‘QEP’’) appreciates the opportunity to discuss ‘‘Examining 

the Department of the Interior’s Actions to Eliminate Onshore Energy Burdens’’ 

with the House Natural Resources Subcommittee on Energy and Natural Resources. 

We look forward to working with the Committee to discuss enhancing our Nation’s 

ability to reduce unnecessary burdens and promote oil and gas development on 

public lands. 

QEP is a publicly traded oil and gas company that is headquartered in Denver, 

Colorado. QEP is an industry leader in crude oil and natural gas exploration and 

production. We are focused on some of the most prolific natural resource plays in 

the United States—including two world-class crude oil provinces, the Permian Basin 

in Texas and Williston Basin in North Dakota; and two prominent natural gas 

plays, the Uinta Basin in Utah and Haynesville Shale in Louisiana. With operations 

located on private lands, state trust lands and Federal lands, we have a unique perspective on development and the contrast in corresponding government regulatory 

programs. 

Over the past decade, U.S. onshore oil and gas development has been truly remarkable. The growth in oil production, in states like North Dakota, Texas, New 

Mexico, Oklahoma, and Colorado, is something that many never thought they would 

see again in this industry. The same can be said for the growth in natural gas production throughout private lands in the United States, predominately in Louisiana, 

Texas, Pennsylvania, West Virginia, and Ohio. As oil and gas production grew, these 

states experienced an increase in tax revenues and job development. 

Technologies, like horizontal drilling and advances in hydraulic fracturing, have 

been the keys to the growth in oil and gas. These technologies have enabled industry to increase efficiency while dramatically reducing environmental impact. 

Although it may go without saying, such technological advancements are equally 

available on (and applicable to) state trust, private, and Federal land. 

Over this same time period of oil and gas production growth, we did not see equivalent growth on Federal lands. Development was underway, but it did not keep pace 

with development on private lands, where regulatory management is handled by the 

states. In fact, approximately 96 percent of the oil production growth since 2007 has 

been on private lands, according to the Congressional Research Service. 

There are a number of factors that operators consider when allocating capital to 

projects, such as geology and individual well economics. Another important factor 

is stability in the regulatory requirements. Where the regulatory landscape is ambiguous, many companies are leery that investment will only turn into stranded 

capital. 

Experiencing significant delays on Federal lands in the recent past dissuades companies from wanting to operate on Federal lands today because the return on capital 

may be slower and the risks of delay are all but guaranteed. When companies, such 

as QEP, look at investments in states like Texas versus investments on Federal 

lands, we know that the Texas regulatory regime provides less risk and more certainty. We can start seeing returns on those investments in a matter of days and 

months in Texas versus years in the case of working with the Bureau of Land 

Management (‘‘BLM’’) and other Federal agencies. As an example, with private surface and private minerals, an operator may be able to drill their first well within 

months of expending capital on the leases. In the case of leases with the Federal 

Government, not only would it take well over a year to get approval to drill a well, 

but the risks of appeals and other restrictions are great and result in further delays. 

QEP has a strong working relationship with the professionals at the BLM. But, 

BLM staff are often hamstrung by a number of unnecessary, duplicative, and/or 

misaligned laws and policies. Oftentimes, these same laws and policies create 

‘‘analysis paralysis.’’ ‘‘Analysis paralysis’’ is when the project and leases are caught 

in limbo, where the agency review never ends and/or a decision never happens. 

32 

Analysis paralysis then becomes the ‘‘death knell’’ of a project: project proponents 

eventually pull the necessary applications, reallocating resources and capital 

elsewhere. 

Note some (and not all) of the laws and policies the BLM and other Federal 

agencies must manage in order to issue permits: 

• Archeological and Historical Preservation Act 

• Bald and Golden Eagles Protection Act 

• Federal Land Policy and Management Policy Act 

• Changes in the nationwide permits (‘‘NWPs’’) by the Army Corps of Engineers 

• Clean Air Act 

• Clean Water Act 

• Endangered Species Act 

• Energy Policy Acts of 1992 and of 2005 

• Migratory Bird Treaty Act 

• Mineral Leasing Act 

• Lease Stipulations 

• Conditions of Approvals (‘‘COAs’’) for Applications for Permits to Drill 

(‘‘APDs’’) 

• National Historic Preservation Act 

• National Trails System Act 

• Safe Drinking Water Act 

• Spill Prevention and Control and Countermeasures Act 

• Wilderness Study Areas (‘‘WSAs’’) 

• Wild and Scenic Rivers Act 

• And many others 

The challenge of implementing these laws and policies created strained relationships between the BLM and state/local governments under the previous administration. The resulting BLM/Federal permitting delays and regulatory uncertainty 

created a tough investment climate for companies, which in turn can cost the states 

and local government’s tax revenue and jobs. When taking into account the jobs and 

tax revenue created by oil and gas development on Federal lands, Congress has a 

duty to ensure the BLM and other Federal agencies are fully engaged with the 

states and communities their decisions impact. The Federal Government has a duty 

to maximize its efficiency and provide the regulated community with regulatory 

certainty. 

I offer the following recommendations and solutions to this Committee and the 

Trump administration to create a positive investment climate for oil and gas 

companies: 

Enhanced Role of States 

Continue to evaluate methods to delegate more authority to states where it makes 

sense. Look at implementation of the Clean Air Act and Clean Water Act through 

the Environmental Protection Agency to State Department of Environmental 

Quality (‘‘DEQ’’) as one example. Additionally, the Surface Mining Control and 

Reclamation Act helps create a delegation program to states for surface mining operations. These are just a couple of examples where delegated authority is working. 

In addition to delegation, the Federal Government must also continue to reform existing programs that are duplicative of adequate state programs. A recent, promising example: BLM’s rescission of the 2015 Oil and Gas; Hydraulic Fracturing on 

Federal and Indian Lands, where the Bureau acknowledged that the rule was unnecessarily duplicative of state and some tribal regulations and imposed burdensome reporting requirements and other unjustified costs on the oil and gas industry. 

82 Fed. Reg. 61924–61949 (Dec. 29, 2017). 

Leasing, Protests, and Resource Management Plans 

The leasing process needs to be more predictable and stable. This means finding 

ways to shorten the process from nominating, protest periods, as well as competitively offering nominated parcels for lease. This is important because the oil and gas 

markets change quickly. By allowing the Department of the Interior to move quickly 

with those changing markets, the Federal Government could capture more value for 

those leases. For instance, the BLM should get back to regular lease sales including 

the elimination of the rotational lease sale process where only certain areas are 

33 

offered up on an annual basis. The rotational schedule limits development for high 

interest areas. For example, if the BLM offers up parcels for the Uinta Basin at 

every lease sale instead of once a year, it could capture more value for those leases 

during strong market conditions. 

Attached to my testimony is a flow chart from leasing to development on Federal 

lands. It is important to note that not all leases will be developed. There are multiple complex steps taken. First there is exploration and appraisal. This can help 

an operator decide how much a lease is worth. After an operator successfully obtains 

a lease, multiple delineation wells are drilled to assist in determining well space 

and other factors. This process can take years. After those years of investment, if 

positive results have been achieved, the operator considers full field development. 

Infrastructure planning is a key component of any long-term plan. Permitting both 

the wells and the infrastructure can take years. 

Additionally, it rarely occurs where all the leases a company is pursuing on a 

Federal sale get offered at once. It is not uncommon for operators to wait several 

years to put together their leased acreage block before they want to go drill a well. 

If you were to compare that to private lands, the leasing and drilling process could 

and would likely happen within a year. This gets to my earlier point about the ability to deploy capital and see returns in a more efficient process. 

The protesting of leasing also creates challenges. The public has the ability to 

comment and participate in the decisions. The Resource Management Plan (‘‘RMP’’) 

for the area is the first opportunity and then the leasing Environmental Assessment 

(‘‘EA’’) of Notice of Competitive Lease Sale. The protest process has morphed into 

a tool for obstructionists who oppose oil and gas development all together. This is 

unproductive and strains BLM resources. In the past, environmental groups would 

submit large protests to challenge all or large portions of the parcels being offered 

for lease. The protests would rely on broad arguments rather than specific localized 

issues. These challenges create further uncertainty, which I referenced earlier. 

The long-term deferral and failure to lease these parcels can prevent companies 

from assembling the necessary leasehold to proceed with testing the geology and 

reservoir and potential development. The Federal mineral laws are based on orderly 

development of resources. Federal units and participating areas are designed to ensure Federal resources are not stranded (left in the ground) and the infrastructure 

consolidated to minimize surface impacts. Current leasing approaches often result 

in scattered acreage. This practice results in inefficiencies and can actually have 

more environmental impact by not allowing organized development or organized 

surface locations, tank batteries, or liquids gathering systems. The deferrals and 

delays not only cost the Federal Government money but also state governments who 

share in those royalties. While we appreciate Secretarial Order 3354, which stresses 

the importance of American energy security and directs the BLM to improve the 

Federal oil and gas leasing program, Congress, in addition to the BLM, needs to develop an organized and efficient response to those protests to get leases out quickly. 

In the past, the BLM has deferred parcels in an entire planning area while updating an RMP for that area. This happens despite the existence of an earlier-approved 

RMP for the area. RMPs take many years to be updated, therefore, these parcels 

are deferred far too long. When the BLM does lease parcels while an RMP is being 

updated, the Bureau attaches stipulations to those leases which are not specified 

under the acting RMP. It is as if the stipulations are foretelling what the new RMP 

will require before it is finalized. Additionally, when parcels are nominated for lease 

there is no transparent process as to why they are not being offered up for lease. 

Last, the development of Master Leasing Plans (‘‘MLP’’) under the previous administration are unnecessary and cause additional delays with no environmental 

benefit. The RMPs already designate the areas that are open for leasing, the areas 

that need special protections and outline the conditions for leasing where it is available. The MLP process creates a multi-year procedure and delays leasing within the 

area of the MLP. The Trump administration should abandon all ongoing MLP 

efforts and respect the current RMPs in place. 

National Environmental Policy Act (‘‘NEPA’’) 

Like other major Federal actions, NEPA analysis is required for all oil and gas 

projects on Federal lands. While the intent of the law was for agencies to analyze 

and disclose potential impacts, it has turned into a litigious tool that doesn’t add 

environmental benefits. Congress needs to address this process to provide more 

certainty. 

The NEPA process can either be an EA or an Environmental Impact Statement, 

depending on the size and scope of the project. The use of the ‘‘Federal nexus’’ 

dictates to BLM when they should be involved in a project. Sometimes the BLM 

uses the Federal nexus to be involved in oil and gas wells where the surface is 

34 

owned privately and a majority of the minerals are owned privately. When this happens, an operator still has to get a Federal APD and get some initial NEPA review 

in order to get the APD approved. This also requires a tribal consultation for cultural artifacts on private land which can create issues with private landowners who 

the companies already have worked with to locate a well. Congress needs to work 

to help bring NEPA back to its original intentions. 

Additionally, the Federal agencies could establish criteria what constitutes the 

circumstances that require NEPA as well as an appeal process to enable project proponents to challenge decisions regarding the level of environmental analysis required for a project prior to it being considered a final agency action. This would 

provide more certainty in the process while ensuring appropriate disclosure of 

issues. 

CONCLUSION

Affordable energy is essential to a strong and vibrant economy. Thankfully the 

United States has vast quantities of oil and gas within our borders and off our 

coasts. This massive supply of energy is limited only by the government policies we 

choose to adopt. The reason for the inequality between Federal and private lands 

is simple: the Federal Government policies and additional bureaucracy make it 

much more difficult to operate on public lands without providing additional health, 

safety, or environmental benefits. 

It is clear that there are efforts the Trump administration could undertake to 

make Federal lands more attractive for investment, which in turn would mean more 

dollars to the Federal Treasury in the form of bonus bids, royalties, and taxes. 

Remember that development in the western states where these Federal lands exist 

also benefits the state and local economies. I know this Administration has energy 

development and rural development as a focus and is working on making Federal 

policies more efficient. Promoting oil and gas development helps accomplish both of 

these important goals. 

In order to truly seek reforms and efficiencies one question must be answered: 

Does the U.S. Government want to be in the oil and gas business through leasing 

and management of Federal oil and gas minerals? 

***** 

ATTACHMENTS 


28337.001.eps
35 

Dr. GOSAR. Thank you so very much. 

Now we are going to take a quick recess. We have four votes, but 

then we will reconvene back after the votes. 

[Recess.] 

Dr. GOSAR. We are coming out of recess. 

I want to thank the panel for their testimony. Reminding 

members of the Committee that Rule 3(d) imposes a 5-minute limit 

on the questions. The Chairman will recognize Members for their 

questions they may want to ask the witnesses. 

I want to start us off with the questions. 

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. 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 unused permits on the table 

while pursuing leases elsewhere and other APDs for different 

locations. 

Mr. Schulz and Mr. Kubat, can you explain to the Committee 

why the backlog of permits exists and why it is necessary for companies to continue to pursue new leases and apply for APDs, even 

if they have leases and approved APDs that have not been developed? We will start with you, Mr. Kubat, and then move to Mr. 

Schulz. 

Mr. KUBAT. Thank you for the question. Yes, to start with the 

number of APDs and the backlog, Mr. Chairman, the number of 

APDs that a company pursues are due to the development, planning, and timeline lead that is necessary for us to accomplish our 

business goals and to create optionality in that forecasting and 

planning. 

For instance, an APD in a certain area may be subject to timing 

stipulations that are environmentally driven and conditions of approval to that permit that we referenced in a number of our testimonies here. Those stipulations and conditions of approval could 

block out large windows of time, up to half of the year, where you 

are unable to access that location for the development of it. 


28337.002.eps
36 

As well, when you drill and develop on leasehold, you are delineating your asset. You are 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. Also, there is optionality 

that is needed within that to allow for infrastructure to get there. 

I guess at a certain level, it is kind of like when you are baking 

a cake and you go to the grocery store, you may already have ingredients for that cake in your pantry or in your kitchen, but you go 

back and make another run to the grocery store again to add an 

ingredient. It is like why do you need to keep going to the grocery 

store? It is because the recipe you call for on that day, you may 

not always have all the ingredients in your refrigerator or in your 

pantry to prepare that. It requires more than just a rifled approach 

of a single target every single time, so that is why we pursue more 

than one APD and need an inventory, if you will. It is to create 

certainty in our development planning. 

Dr. GOSAR. Mr. Schulz, anything you want to add? 

Mr. SCHULZ. Yes, please, thank you. We have obviously touched 

a lot on the APD process. I think it is important to understand why 

we are out trying to acquire APDs. In the same time frame, we are 

also looking at getting more leases. And as you go out and you are 

trying to get together a lease block, if it is a Federal lease sale and 

it has had a long drawn-out process where it may take years—in 

the case of the previous administration, we had rotational lease 

sales where basins would only be offered up once a year—it may 

take you 3, 4, 5 years where you finally get all the acreage together 

that you want to get leased. 

So, part of that process is taking the time to get that together. 

And the reason you want that acreage lease block is it drives efficiencies, not only for operators—and I mentioned in my opening 

statement by having centralized tank batteries, by having less 

roads, maybe you can do a liquids gathering system—that not only 

benefits the operator—selfishly, economically, that is something we 

want—but it also lessens the environmental impact. You have less 

air emissions. You have less disturbance from a wildlife standpoint. 

That is part of what happens. 

And it is also important to know that not every lease is going to 

get developed. At the end of the day, you are going out and you 

are making a guess, an educated guess, on what you think that 

acreage holds from a potential. But at the end of the day, you may 

go file and get some permits, and you are still trying to decide am 

I going to drill this directionally, am I going to drill it horizontally? 

A lot of this is dictated by the rock and economics. Obviously, we 

are seeing an uptick in prices, but all these things are huge factors 

that can determine whether or not APDs get used and whether 

leases get approved. 

Dr. GOSAR. Got you. I am going to stop right there, because I am 

going to do a multiple round, just because it is a good time to stop. 

I will go to the gentleman from California. 

Mr. LOWENTHAL. Thank you, Mr. Chair. 

Ms. Culver, one of the things that is very concerning about this 

Administration’s energy policies is the way that they seem to be 

cutting down on opportunities for public involvement in the oil and 

gas leasing process. Mr. Steed, in his testimony, mentioned some 

37 

of the difficulties, as from his perception, around protests. I am 

also interested, in addition to protests, what has Interior been 

doing to cut down on public input? 

Ms. CULVER. Given that these are public lands, we feel it is extremely important for the public to be able to provide information 

and comment before lands are conveyed to the industry. But what 

we have seen already in states like New Mexico is the BLM 

proactively ceasing to permit early input into the leasing process. 

There used to be a scoping period where lands were posted and 

counties and interested parties could provide information. They 

have proactively just stopped doing that, citing the Administration’s agenda as a reason to cut the public and other interested 

stakeholders out. 

In addition, we are already seeing BLM not preparing full 

environmental assessments before leasing, even though they have 

a requirement to do that. Instead, they essentially prepare a checklist that does not consider impacts, does not consider alternatives, 

does not really provide an opportunity for the public, the county, 

or state agencies to propose changes to lease boundaries that might 

protect resources or other changes to how a lease might be 

provided. 

In addition, we have heard a little bit already about master 

leasing plans. That was another opportunity where the agency had 

determined, for instance, that more information was needed, more 

discussion was needed, more planning was needed to address conflicts that had already arisen and had begun to engage the public 

in developing an approach. Those have been abandoned. And we 

saw a lot of value from that input affecting—for instance, in New 

Mexico, communities were able to protect their water supply by 

just talking with the BLM during these processes. We are concerned about losing those. 

Mr. LOWENTHAL. Thank you. 

Mr. Steed, I have a question. As I mentioned in my opening 

statement, I feel like the Energy Burdens report is incomplete. I 

was going through it looking for mention and really detailed understanding of solar, wind, or geothermal energy, and what are some 

of the burdens to development. But with a few exceptions in the 

mention of hydropower, where that is mentioned a few times, there 

is almost a complete absence of these issues. 

I know the Executive Order told you to pay particular attention 

to fossil fuels and nuclear, but it did not tell you to exclude renewables. So, where is that? Did BLM analyze its policies for 

renewable energy burdens? 

Mr. STEED. Mr. Lowenthal, I appreciate the question, and I think 

it is a fair question. The previous administration did spend a fair 

amount of time focusing on renewable energy sources. And some 

would argue that there was insufficient attention paid to 

hydrocarbon energy sources. I think that created a bit of a backlog. 

In terms of what we are doing for renewable energy, our renewable energy program has not gone away. Just this morning, as a 

matter of fact, I received two additional applications on renewable 

energy—I have a short time frame there. But in my limited time 

frame, we have moved a large solar project, a large wind project, 

just beginning the regulatory process, as well as other projects that 

38 

are in consideration. So, I don’t think that because the report 

focused—— 

Mr. LOWENTHAL. The absence of it in this report. 

Mr. STEED. Yes. I don’t think it means that we are not doing it. 

Mr. LOWENTHAL. Will you be providing us with information 

about some of the difficulties and the burdens of renewables? I 

mean, you have gone on extensively about oil and gas, but we are 

not seeing anything about renewables. 

Mr. STEED. I understand that. And I am happy to provide that 

information, if so desired. 

Mr. LOWENTHAL. I think that would be very appropriate. 

The last question, and I don’t know if we are going to have time, 

is for Ms. Culver. You mentioned in your statement about the BLM 

moving away from multiple-use mandates which have been outlined in the Federal Land Policy and Management Act of 1976. Do 

you want to tell us briefly what you meant by that, to elaborate 

on that? 

Ms. CULVER. Sure. The BLM’s governing act, the Federal Land 

Policy and Management Act, defines multiple use and requires the 

BLM to manage in accordance with multiple use. And it explicitly 

includes wilderness, recreation, range, timber, watershed, fish, 

wildlife, scenic and historical values. It is not limited to energy 

development; it is one of the multiple uses. And it is a challenging 

job that the BLM has to balance amongst these multiple uses, but 

its mandate requires that effort to be made. 

Mr. LOWENTHAL. We will come back to that. 

I yield back. 

Dr. GOSAR. I thank the gentleman. 

The gentleman from Virginia, Mr. Beyer, is recognized for 5 

minutes. 

Mr. BEYER. Thank you, Mr. Chairman, very much. 

Mr. Steed, the GAO had a report that prior to 2016, and prior 

to the waste prevention rule, the BLM venting and flaring practices were costing the taxpayers about $204 million a year and 

180,000 tons of methane per year. Given that measurement and 

that that was what the rule was intended to address, how do you 

justify revising or rescinding that rule? 

Mr. STEED. Again, sir, I appreciate the question. As I mentioned 

in my testimony, we were presented an Executive Order to examine the various burdens facing energy development. In making that 

review, one of the things we particularly were asked to review was 

the venting and flaring rule. 

We went back and took a hard look at that. In all candor, much 

of that analysis took place before my time in the Bureau, but I will 

tell you some of the things we found. First of all, there was overlap 

between what the BLM was proposing to do and what the EPA has 

been charged with doing, in terms of air quality. We found that 

many states, especially after the publication of that rule, states 

with major venting and flaring activities complained that the rule 

itself did not take into consideration the local interests as well as 

the local opportunities and local circumstances that are found in 

those areas. 

Also, I would have to say that in looking at it, there are a variety 

of assumptions made in the model in terms of savings to the 

39 

American people. I am not sure that those pencil out under 

different assumptions. 

And last, I just point out that we do have currently and did have 

existing regulations, NTL-4A, for instance, that was to prevent and 

account for waste. Obviously, we can do that better, and I think the 

report that you reference pointed out some ways that we could 

improve NTL-4A, but just those responses. 

Mr. BEYER. Thank you very much. 

Ms. Culver, earlier this week, most of the members of the 

National Park Service Advisory Committee resigned in protest of 

Secretary Zinke’s agenda and the fact that the committee had not 

been convened in over a year, despite the law on that. 

BLM also has advisory committees, one called the Resource 

Advisory Council, that were suspended last year by Secretary 

Zinke. How important are these councils and what is their status? 

Ms. CULVER. As indicated by their names, they were created to 

provide advice to agencies like the National Park Service, the BLM, 

and they are made up of a specific balanced set of stakeholders 

with expertise ranging from local government to entities that profit 

from the public lands to tribal entities and other local businesses. 

These entities provide an important opportunity to get new perspectives. They are also open to the public, so they provide a forum 

for the public to be informed as to what the agencies are doing. 

And it is vital. 

Unfortunately, early on, this Administration shut down all resource advisory councils, stating they would be reviewed. Some 

councils, like the Wildlife and Hunting Heritage Conservation 

Council, have been formally disbanded. Others, primarily the BLM 

councils, are still not functioning. Their charters have not been 

signed. Their members have not been re-upped. And really, shutting them down has deprived the agencies and the public of important information. It has eroded public trust in the land managers, 

and it is actually fundamentally interfering with the operation of 

the Bureau of Land Management. 

Mr. BEYER. If I can continue, Ms. Culver, implicit in this discussion and in this Administration’s wholehearted embrace of fossil 

fuels is that climate change is not real, or if it is real, it is not relevant to us, that we can cope, that it is not, in fact, the existential 

problem threatening mankind that the rest of the world thinks it 

is. But if you just look and say we rescind all these rules, we cut 

all these timetables, we weaken NEPA, et cetera, what is the shortterm impact and the impact in our lifetimes on the lands that are 

being developed? Not the global climate change, but for people that 

live in Utah or Wyoming or Montana. 

Ms. CULVER. Well, some of the impacts will be to health. For 

instance, we know that there is well-documented in the Uinta 

Basin in Utah and the Front Range in Colorado, for instance, significant impacts to air quality already from oil and gas development. And it also increases the ground level ozone or smog, so that 

is already having health impacts and we will continue to see that. 

We also expect it will lead to direct impacts on air and water resources, wildlife habitat, all of the various resources that are damaged by surface disturbance and contamination, and all of that is 

aggravated by the impacts of climate change. 

40 

Mr. BEYER. For 5 more seconds, Mr. Chairman. There was a 

report this week that the cost of asthma in America was $80 billion 

per year. 

Mr. Chairman, I yield back. 

Dr. GOSAR. I am going to reclaim my 40 seconds, and then we 

will go to a second round. 

To the gentleman that I asked before, would the analogy be that 

you carry these APDs much like a doctor having multiple patients? 

Patients are at different stages of development and treatment, and 

different treatments are for different patients. Wouldn’t that be an 

aspect? So, it is more of a business plan. Mr. Schulz? 

Mr. SCHULZ. I think that is probably a fair analogy to put 

forward, yes. 

Dr. GOSAR. Yes, because as you unfold these geographic and 

geology layers, you are going to have to approach them very differently. One piece of land is totally different than another. Would 

you agree? 

Mr. SCHULZ. Yes. 

Dr. GOSAR. Mr. Kubat, would you have any problems? 

Mr. KUBAT. I would agree with that, and add to it that it is an 

investment and, to use another analogy, it could be looked at similarly to a retirement portfolio of investments when you look across 

the board, in that in your 401(k) or your retirement account, you 

might have legacy utility type investments that are strong and 

steady, and at the same time you diversify your portfolio with 

riskier assets and investments that might be new start-up 

companies. 

As we look across our investment as an oil and gas company, we 

have leases and APDs on those leases that are similar in that 

nature, some that are next to older producing fields, and then 

APDs and leases that are on the periphery of those fields and we 

have high hopes for. That is the reason why we made that investment. That is the reason why we purchased the lease and have 

paid the APD fees and went through the process necessary to try 

to gain that application, because we have high hopes for that, just 

as an investor would in their portfolio. 

Dr. GOSAR. So, you are applying the full rule of looking at each 

lease in a specific application and making sure it is tailored for 

that, as well as having a part of a business portfolio. 

Mr. KUBAT. Exactly. And to add to those dynamics that are taken 

into consideration, not every oil and gas lease, to use the term ‘‘oil 

and gas,’’ is prospected for oil or gas. 

Dr. GOSAR. Right. Mr. Schulz and Mr. Kubat, your companies operate on both Federal land as well as state and private land. Can 

you speak to the differences in the process for developing wells on 

Federal lands versus state or private? Does the difference in the 

regulatory environment on the Federal versus non-Federal lands 

influence your company’s decision on where and when you invest 

resources? And do states particularly like dirty water and dirty air, 

unlike the Federal Government? Mr. Schulz, you first. 

Mr. SCHULZ. The state process versus the Federal process—this 

is a good question. And I am going to answer your last question 

first. No state that we operate in wants dirty water or dirty air. 

The process of which we go forward through the state of Texas, the 

41 

state of Louisiana, the state of North Dakota, and even the state 

of Utah, when we have state lands or private lands, is just a much 

more efficient process in which we can go forward and get those 

APDs. You can move quicker on those permits and you can deploy 

capital quicker. 

It is the point of what I have said in my written testimony and 

also my oral testimony. It is that regulatory certainty. It is the 

ability to put together a project and go deploy on it in a matter of 

months instead of years. 

Dr. GOSAR. Mr. Kubat? 

Mr. KUBAT. To add to that, Mr. Chairman, it absolutely drives 

our investment decision analysis. 

And the states do care. For every well drilled, the state has to 

have its own APD approval process, if it is on Federal land or if 

it is not on Federal land. 

As a recent example, we have a location we just drilled within 

the last 30 days that the direction orientation and location of that 

well was purely driven by the lack of Federal nexus. And the unfortunate circumstance that it brought to the Federal Government 

was a lack of royalty revenue that could have been received but for 

a timely approval of a right-of-way that would have been a 

common-sense approval of a right-of-way. 

To bring the term ‘‘common sense’’ into play here, there is 

definitely a need for common sense because it is a very short rightof-way approval that could have been gained, could have deferred 

unnecessary surface impact, and, from that location, could have allowed Federal minerals to be developed without any disturbance to 

Federal surface. 

So, it is absolutely taken into account. 

Dr. GOSAR. Gotcha. 

Leasing policy changes put in place in 2010 have resulted in a 

situation in which the BLM is not fulfilling the Mineral Leasing 

Act’s requirements to hold a lease sale in every oil and gas state, 

at least quarterly. Rather than holding statewide sales with parcels 

from all areas where interest lies, each field office was limited to 

just one lease sale per year. 

Mr. Schulz and Mr. Kubat, how has this policy impacted your 

companies’ ability to acquire and develop leaseholds? 

Mr. Kubat first. 

Mr. KUBAT. It has impacted our ability to plan for development 

in the beginning phase of nominating a parcel, to Mr. Schulz’s comments earlier, in looking at an area in a wide range of development 

and how you are going to lay out your infrastructure in a prudent, 

conservative manner that will best complement the plan development for the area. 

When we nominate those parcels, we have seen a significant 

delay through the nomination process. If you are only holding cells 

on a period that is protracted, say, over a year, instead of on a 

quarterly basis, that combined with the review period that I mentioned in my oral testimony, and is also included in my written testimony, of 415-plus days on average, it absolutely impacts us in our 

ability to execute our business plans. 

Dr. GOSAR. Mr. Schulz? 

42 

Mr. SCHULZ. Good question, again. As we look at the rotational 

process and what it did, as I have talked about as my theme, regulatory certainty, but also the ability to put together an acreage 

block. If you are having a rotational lease sale once a year, and you 

own a basin, and you are trying to put together a prospective block 

of acreage, you don’t want to go drill on a couple leases if there is 

a bunch of open acreage around you. You want to try to get it all 

leased up that you think has good rock to it and you want to go 

drill. Because, again, it drives those efficiencies. 

If you are worried about the environment, if you are worried 

about us drilling in an efficient, organized fashion, you want that 

all leased together, and you want us to try to develop it out in an 

organized fashion. Maybe we can put in a liquids-gathering system. 

Maybe we can do centralized tank batteries. Maybe we can cut 

down on the amount of roads that we need. All of that actually 

benefits not only us, but it benefits the area and it benefits potentially the environment, and it also adds more revenue back to those 

state and local governments. 

Additionally, and I think it is worth noting, oftentimes you have 

state sections, state leases that are managed for the state trust of 

the school kids. Sometimes it can hurt those lands, because if that 

comes up but there is stuff around it that is not leased, we may 

not bid it as high as we need to. Therefore, if it is leased and it 

is the last thing that we need to get, it is going to get a higher 

value. 

These leases tend to work together, and if you can get more of 

a block together, they are going to probably bring more money. So, 

the rotational aspect of it, we would argue, needs to be eliminated, 

and I think the Federal Government would receive more dollars on 

those leases. 

Dr. GOSAR. I am going to go over a little bit here, but I will give 

you the extra time. 

Senator, along those same lines, do you see that efficiency, from 

your perspective as a State Senator in Utah? 

Mr. VAN TASSELL. I, wholeheartedly, see that efficiency. I have 

seen the changes in the last 12 years that I have been in the 

Senate. I have seen the ability as the larger blocks have come together and the economic forces are at play, where we not only are 

trying to drive down cost but also improve the environment, all of 

those situations have come in. We are seeing multiple large-area 

gathering. We are cutting down on all of the things that create bad 

air, as well as truck traffic, and we are doing it more by pipeline. 

There is no way to be efficient by leasing small acreage and 

sending people. The infrastructure cost is too high to do that. So, 

in my opinion, by leasing smaller acreage, we just commit ourselves to accept less quality control because the economics are not 

there. This is an economic-driven decision. 

Dr. GOSAR. Yes. Thank you, sir. 

I recognize the gentleman from Virginia, Mr. Beyer. 

Mr. BEYER. Thank you, Mr. Chairman. 

You probably read the story this morning in the Washington 

Post, among many others, that 60 percent of a given species of 

antelope died in 3 weeks in Kazakhstan—200,000 saiga, s-a-i-g-a. 

43 

I am not sure how you pronounce it. And it was directly, all the 

scientists took it right to global warming. 

So, Mr. Steed, in this wholesale effort to promote oil, gas, and 

fossil fuels, how much effort is BLM doing to promote wind, geothermal, and solar in these massive public lands that you manage? 

Mr. STEED. First, I would not characterize this as a wholesale 

rush to oil and gas. And, honestly, we have spent a long time working on developing renewable resources. The previous administration put a lot of time and effort into that, and we have seen many 

of those efforts come to fruition over the last year. We continue to 

see permits flow in, as I mentioned in my previous answer. 

So, I do think that we still value wind, solar, and geothermal. It 

is one of those things that we are still pursuing and that we can 

consider as an important part of our portfolio. I don’t think that it 

is fair to characterize this as only emphasizing one over the other. 

Mr. BEYER. All right. Thank you very much. 

Ms. Culver, we have heard from the two operators here how frustrated they are with regulatory uncertainty, delays, things like 

that. How important is regulatory certainty? And why shouldn’t we 

prioritize that, too, as environmentalists? 

Ms. CULVER. Right, I think there is another side of regulatory 

certainty, which is for the public. I think when we see, for instance, 

almost 30 million acres under lease and far less than that under 

production, that is a lot of uncertainty. It is hard to commit to running your business on public lands for recreation if at any time 

that land could be developed for lease. That is the type of uncertainty that affects other users of the public land. 

Similarly, for the public to know what lands are going to be developed, what lands are available, and what lands are protected for 

other uses, be it recreation or wilderness, hunting and fishing, 

that’s another important part of regulatory certainty that does not 

seem to be getting a lot of attention in this discussion. 

Mr. BEYER. OK. 

Mr. Steed, not to blindside you, but do you know how many 

employees BLM has and how many of them are in Washington? 

Mr. STEED. I don’t know the exact number, but I am happy to 

get back to you on that. 

Mr. BEYER. Well, actually, we looked it up. 

Mr. STEED. OK. I wish I would have guessed then. 

Mr. BEYER. There are 8,906 permanent employees, and 503 are 

based in the Washington metropolitan area. 

I only bring that up because we often have the impression that 

this is all, to quote my friends, ‘‘nameless, faceless bureaucrats in 

Washington, DC,’’ when, in fact, the vast, vast majority are out in 

the states actually managing these projects and the lands. So, 

thank goodness. 

Mr. Kubat, you are a small business, and in your opening testimony you talked about the essential role that small business plays 

in developing oil and gas resources. I am sure there are many hundreds or thousands. But do you know what percentage of the fossil 

fuel we pull out is done by small business? 

Mr. KUBAT. I don’t know the exact percentage that is pulled out 

by small business, but—— 

Mr. BEYER. Any sense? I mean, do we have—— 

44 

Mr. KUBAT. I would say it is, and this is a hazard guess, but 

more than a majority of the production produced in the United 

States is a factor of small oil and gas companies and their efforts. 

Mr. BEYER. Do you have the sense of any large foreign entities 

that are part of this? 

Mr. KUBAT. I do not have a sense of large foreign entities that 

are a part of that. 

Mr. BEYER. So, you don’t see those in Wyoming, for example? 

Mr. KUBAT. Do I see large foreign companies in Wyoming making 

investment in oil and gas? Is that the question? I want to make 

sure I am clear on the question. 

Mr. BEYER. Yes. 

Mr. KUBAT. Again, I guess emphasis added that minding my 

business and our business as a small oil and gas operator in the 

state of Wyoming, our investment is domestic. I am an investor in 

our efforts. And as to the makeup of the individuals and their entities that are in pursuit of the extraction of oil and gas within the 

state, I have no proprietary knowledge of what the makeup of their 

investor structure is. 

Mr. BEYER. OK. 

Mr. Steed, one last question. In Ms. Culver’s testimony, she 

writes that there is a 20-percent increase in oil and gas permitting 

activities but flat funding for inspections and enforcement activities. And this despite the fact that the GAO had a report that the 

BLM had failed to inspect some 40 percent of high-priority drilling 

operations in 2009 to 2012. 

Why the imbalance in increasing all the permitting but not balancing that with the enforcement inspections that are so clearly 

necessary? 

Mr. STEED. The short answer, we were experiencing a large backlog on APDs and definitely wanted to improve our turn times on 

those APDs. As to the safety issue, we take safety very seriously 

and continue to do our jobs on that. 

Mr. BEYER. OK. Great. 

Mr. Chairman, I yield back. 

Dr. GOSAR. I thank the gentleman. 

The gentleman from Florida, Mr. Soto, is recognized for 5 

minutes. 

Mr. SOTO. Thank you, Chairman. Thank you for your courtesy. 

On the last business day of the year, on December 29, BLM 

moved to rescind a 2015 protection related to hydraulic fracking— 

quite an inauspicious rollout of such an important rule, at a time 

when a lot of people are not really paying attention and are spending time with their families. 

The first part of the rule, the protection, tightened standards for 

well construction and wastewater management. 

Deputy Director Steed, why would we want to keep such a rule 

on the books? And then, what was the reasoning for moving to get 

rid of that protection? 

Mr. STEED. You are referring to the hydraulic fracturing rule, 

correct? 

Mr. SOTO. That is correct. I will get to the disclosure of chemicals 

next, but just on the well construction and wastewater manageVerDate Mar 15 2010 14:12 May 08, 2018 Jkt 000000 PO 00000 Frm 00048 Fmt 6633 Sfmt 6602 J:\115TH CONGRESS\ENERGY & MINERAL\01-18-18\28337.TXT DARLEN
45 

ment, why were those rules put in place, and why is there a move 

to get rid of them? 

Mr. STEED. I can’t speak to why those rules were put into place. 

I can say, as part of the review put into place by the Executive 

Order leading us to look at burdens on energy and gas production, 

we took a wholesale look at the hydraulic fracturing rule. We noticed that there was overlap with state groundwater authority. 

Many states have their own regulations. 

We also noticed that there is a jurisdictional authority question 

with EPA and the states, and, indeed, that has not gone unnoticed 

by the courts. The courts enjoined the hydraulic fracturing rule and 

it has never been put into effect because they deemed that the 

BLM did not have the authority to do what they were proposing 

to do. And, to my knowledge, I am not sure that Congress has ever 

given us that authority to do it. 

Mr. SOTO. So, on Federal public lands, we don’t have the right 

to protect against hydraulic fracking by having tightened standards 

for well construction and wastewater management? 

Mr. STEED. I don’t believe that was my answer. I think that the 

proposed rule of the previous administration was deemed to be 

unlawful. 

Mr. SOTO. Was there a less offensive rule by virtue of jurisdiction 

that could have existed without eliminating the rule? 

Mr. STEED. Again, I think that we can defer to the states on this 

issue. The states have primacy over water resources within their 

states, especially groundwater. And I think the states are wellsuited to do that. 

Mr. SOTO. I have read in certain articles that Colorado, 

Wyoming, and New Mexico are the ones who this would particularly be slowed down for. Do those states have the same protections 

under state law right now? 

Mr. STEED. I am sorry, I am not sure what you are referring to. 

Mr. SOTO. Do those states have the tightened standards for well 

construction, wastewater management in their state laws? 

Mr. STEED. They have their own sets of rules, yes. 

Mr. SOTO. Is it to the same stringency as the Federal rule? 

Mr. STEED. No, sir, not to my knowledge. I have not independently reviewed each of those rules, but again, the previous rule was 

deemed to be unlawful. 

Mr. SOTO. And then, disclosure of the chemicals containing 

fracking fluid. It has been wildly reported that many of these 

chemicals have a carcinogenesis property to them. What was the 

reason that the disclosure rule was proposed to be removed? 

Mr. STEED. At the time the previous rule was put into place, I 

think there was some issue with regard to disclosure of those 

chemicals. Many states have been involved in gathering those 

chemicals, as well as FracFocus is by far more widely used by industry currently, and we think that it is sufficient to cover the 

concerns. 

Mr. SOTO. Wouldn’t we want all chemicals being used on public 

lands to be public knowledge, given that it could have a substantial 

effect on health in these individual states as well as to Americans 

from all over the states visiting these public lands? 

Mr. STEED. I don’t know the answer to that question, sir. 

46 

Mr. SOTO. There was citing of $14 million to $34 million compliance cost savings. Were there any additional costs determined 

under Medicaid, Medicare, or other healthcare costs due to increased cases of cancer as a result of not disclosing these types of 

chemicals? 

Mr. STEED. I don’t know. 

Mr. SOTO. Was there any health study conducted of what those 

costs would be in the proposing of this rule? 

Mr. STEED. I am happy to get back to you on that, sir. 

Mr. SOTO. OK. I would really appreciate it. 

I yield back. 

Dr. GOSAR. We are going to go another round, Darren, so if you 

want to stick around. 

Dr. Steed, I understand from the Energy Burdens report that the 

Bureau is seeking to return to a quarterly lease sale format. Can 

you update us on the Bureau’s progress on achieving that goal? 

Mr. STEED. On achieving lease sales, correct? 

Dr. GOSAR. Yes. 

Mr. STEED. Sure. Last year, we had 28 lease sales conducted. 

That is a sizable increase over the previous fiscal year. We will continue to do that and are trying to meet the Secretarial Order that 

mandates, indeed, that we have the quarterly lease sale as well as 

our obligations under the Mineral Leasing Act. 

Dr. GOSAR. Gotcha. 

Now, Mr. Kubat and Mr. Schulz, BLM’s primary statute, the 

Federal Land Policy and Management Act, or FLPMA, specifies the 

land use planning process. Resource management plans, RMPs, 

which are intended to guide planning for 15 to 20 years or more, 

specify the appropriate uses of public lands and are in effect until 

such time as a new RMP is completed. Updates take several years, 

usually 5 or more. However, under the previous administration, the 

BLM delayed leasing and other management decisions while it 

completes these multiple-year RMP updates. And they have added 

another layer of delay through the master leasing plan, or MLP, 

process. 

Mr. Kubat and Mr. Schulz, have you experienced delays in leasing as a result of the RMP amendment process and/or the MLP 

process? 

Mr. Schulz first. 

Mr. SCHULZ. Yes, we have. 

Dr. GOSAR. Mr. Kubat? 

Mr. KUBAT. Yes, we have also, Mr. Chairman. 

And I would add that the consideration in this scenario, we have 

had this recently with the sage-grouse amendment to a resource 

management plan within our focus area where we have seen deferred parcels within an area where we have significant plans for 

development be deferred for an extended period of time. This prevented them from being offered. 

But, in that review, you have the resource management plan, you 

mentioned the master leasing plan—which I would note is an unnecessary fourth layer of examination that is contemplated, and its 

consideration should be removed from the process. 

Dr. GOSAR. Gotcha. 

47 

Dr. Steed, I understand that the Energy Burdens report in your 

testimony—that the Bureau has received the MLP process and has 

decided to rescind this practice. How did the Bureau arrive at this 

decision? 

Mr. STEED. As was discussed in previous testimony, the idea of 

MLPs came to be because we could resolve, or in theory at least, 

resolve a number of concerns on the front end of the leasing process. The practical application of that has not come to fruition. 

And I will just share one anecdote with you, Mr. Chairman. We 

went through the whole master leasing process in Moab, Utah, 

with the expectation we were able to resolve a number of conflicts 

on the front end. When it came to the time of the lease sale, all 

43 of the leases were protested, and it appears that we did not 

achieve our goal of reducing that conflict. So, I will just conclude 

by saying, I think it was an unnecessary layer of bureaucracy that 

we can solve through other means. 

Dr. GOSAR. Let’s drill down a little further, literally. Even without the MLP process, the Bureau will still conduct several separate 

reviews under the NEPA process before an operator can drill or 

lease. Is that correct? 

Mr. STEED. That is correct. One at the RMP stage, the resource 

management plan stage, that will be reviewed at the leasing stage. 

And, again, a site-specific NEPA process will happen at the time 

of issuance of APD. 

Dr. GOSAR. Ms. Culver made a couple of comments that seem to 

contradict those types of statements, that the public is not part of 

the review. Can you address that? 

Mr. STEED. I don’t believe that to be the case. It is a very public 

process, and the public is afforded ample opportunity to comment 

on each of these lease sales as well as applications. 

Dr. GOSAR. Senator, where do you see the improvement in your 

years as a State Senator in the area that you represent? How have 

you seen this process work out, as Dr. Steed has talked about, as 

the operators have talked about, working with states for multiple 

jurisdictions? 

Mr. VAN TASSELL. I would preface this by saying that, in the last 

10 years, the school and institutional trust funds in the state of 

Utah have went from just over $600 million into the school trust 

fund that we only spend the interest on to $2.4 billion in the school 

trust fund that is now being disbursed to the students in the state 

of Utah. 

Most of that has been at a time when state leasing has been in 

public land primarily, the only available property because of all of 

the other requirements. The issues that have been concerning and 

wanted to be watched, we have not seen that. Our oil and gas 

board is very active. They do all of the qualifications. We are doing 

the research and the inspections that are necessary. 

Again, oil and gas is not located everywhere, but where it is located, we need to have access to it. And there is room enough to 

let the hunters and the sportsmen and all of the other people in 

there. As we do proper management, we really get a better 

moldable gas. But in the past, up until now, primarily with the 

Federal/state lands, I have viewed it as an opposition. We get ready 

to kick the field goal, and we move the goalpost. 

48 

And that has been a big issue for the producers and for my local 

economy. I have had businesses shut down. I work in banking 

when I am not at the Senate. We have had foreclosures, we have 

had businesses—there is always the ability as commodities go up 

and down that we will see fluctuation and adjustments made. 

But our issue is being able to have stability. If we can level out 

the mountains and fill in the valleys, get somewhere, instead of 

doing this and going kind of on a wave, our local economy, our children, our education, and all in the state of Utah will be benefited. 

Dr. GOSAR. Thank you. 

The gentleman from Virginia is recognized for his 5 minutes. 

Mr. BEYER. Thank you, Mr. Chairman. 

Ms. Culver, we heard from Mr. Steed about why the BLM is 

doing away with the master lease plans, the MLPs. I would love 

for you to offer a defense of them, especially since they came up 

during the Bush administration by the leadership at the BLM and 

the Deputy Secretary. The original idea was that it was to provide 

greater regulatory certainty by thinking, as you said, smart from 

the start, thinking this through from the beginning. 

How do we overcome Mr. Steed’s objection, and the operators’, 

that it is just another unnecessary bureaucratic layer? 

Ms. CULVER. I think part of the challenge is at the land use planning level we have multi-million acre field offices. We are not getting into detail about how to develop different resources. We see 

the vast majority under the average BLM land use plan—over 90 

percent of those lands are open for leasing and development. And 

as the Senator said, the oil and gas is where it is, yet these lands 

are open, even when they have no potential or very low potential 

for leasing. 

And the master leasing plan process allowed us to, if you will forgive me, drill down into the details of where the different resources 

were, how they could be safely developed, and involve communities. 

These plans, as you mentioned, started to be developed, the idea, 

in the previous administration, and it was to address places where 

we had a history of conflict—areas in Moab and Wyoming—that 

were also slowing down leasing and permitting because of wide 

protests and legal actions. 

So, I think we have just seen these plans start to work. They 

were just completed in the last few years. And I can say, from the 

perspective of our organization and others who were involved in 

that process, having an opportunity to submit information at a 

granular level of where we were concerned, how those concerns 

could be addressed, to hear the same concerns from the industry 

to prioritize the right places to lease, drill, and address the proximity of national parks was extremely valuable for us. 

Mr. BEYER. Thank you very much. 

Mr. Kubat, in his suggestions, complained about getting a land 

use designation and then later having the rules changed on him. 

And, specifically, he talked about the need to honor valid existing 

rights contained within the original lease terms. 

Ms. Culver, is that unreasonable? Or how would you respond to 

that? A businessperson who makes an investment and later finds 

that—— 

49 

Ms. CULVER. Right. As somebody who is making an investment, 

the lease specifies that there will be conditions imposed to address 

environmental concerns. It explicitly provides that if, for instance, 

endangered species are identified or cultural resources, those will 

need to be addressed. 

The BLM’s lease form is not particularly long. This is in 

Section 6 of the standard form. Companies are on notice. And that 

may be a little less certain, but they are on notice of that. 

And it is important because, again, if an area is made available 

for leasing based on a land use plan that is operating at the level 

of 4 million acres, we have not yet looked at what is in a given 

area. Lease stipulations allow us to address at a broader scale 

where big-game habitat could be, which Mr. Kubat mentioned, but 

that will not necessarily be identified at the land use planning 

stage. 

And, when we get down to conditions of approval on permits to 

drill, it is similar. The industry typically will take the position that 

environmental analysis cannot be done at the leasing stage or 

should not be done in too much depth until they get to the permitting stage because that is when they will decide, this is where the 

haul roads will go, this is where the well pads will go. If they are 

not going to make those decisions until we get closer to the development, that is when the agency will need to apply those 

conditions. 

So, that is all a part of the process of working together. 

Mr. BEYER. Yes. Thank you. That was very clear. 

Mr. Steed, you talked about how, 2012, only 17 percent of the 

leases were protested, and it was 88 percent in Fiscal Year 2017— 

in many of your offices, 100 percent. Why this explosive growth in 

lease protests? Are we leasing stuff that we wouldn’t have leased 

before? 

Mr. STEED. No. Again, I have not done a deep dive in this to determine why. It would be my guess, however, that people that are 

in opposition to oil and gas development are using the protest process in ways that it wasn’t used prior, especially as far back as 

2012. 

Mr. BEYER. So, they are driven by a larger concern about, say, 

climate change and using the protest process lease by lease? 

Mr. STEED. I honestly don’t know. 

Mr. BEYER. OK. 

Thank you, Mr. Chair. I yield back. 

Dr. GOSAR. I thank the gentleman. 

The gentleman from Florida, Mr. Soto, is recognized for 5 

minutes. 

Mr. SOTO. Thank you, Chairman. 

I want to go back to this Wyoming decision that has been utilized 

to justify removing the protections on hydraulic fracking. 

I think it is pretty commonplace that oil drilling is under the 

regulation of BLM and EPA, with its various responsibilities. But 

I think the American public would be really surprised to know, 

based upon the laws as interpreted in Wyoming, that the Federal 

Government has no regulatory role over fracking in the United 

States—something that is dangerous and has healthcare effects 

and environmental effects. 

50 

I just wanted to hear from you, Deputy Director Steed. Is it odd 

that allegedly, under current law, BLM and EPA have no 

regulatory authority for fracking? 

Mr. STEED. Sir, as I said before, there is certainly overlap with 

state jurisdiction whenever we are dealing with groundwater, also 

overlap with EPA. Was your question that there was no Federal 

overlap, or was there a question on no BLM overlap? 

Mr. SOTO. I am speaking exactly to the Wyoming case, where 

they say that Congress specifically exempted out fracking from 

EPA—that was the ruling in the case—and how BLM then could 

not come in and substitute. And you said, because of that case, that 

those rules were being pulled out. 

So, I am just asking more as an administrator, is that odd, that 

something that affects interstate commerce, health, natural 

resources is exempted out from BLM? Do you think it should be 

regulated by BLM? 

Mr. STEED. Sir, that is not a question for me to answer. That is 

a question for Congress to direct on. And, to my knowledge, 

Congress has never directed us to regulate. 

And I think that is exactly the court’s finding in that case, especially when considering that it determined that Congress explicitly 

prohibited the EPA from acting, and, by extrapolation, to say that 

the BLM had less groundwork based on what Congress has said. 

Mr. SOTO. Thank you, Deputy Director. 

And for Ms. Culver—sorry, my time is limited—do you think that 

Congress should be given the authority to regulate this? Should 

EPA and BLM be involved in something such as regulating hydraulic fracking in the United States? 

Ms. CULVER. We believe that the BLM does have this authority 

under a number of its different legal statutes. And on behalf of the 

agency, if they don’t want to defend their authority on their own, 

we have appealed the decision and are seeking to have our interpretation confirmed. Again, to us, it does not make sense. 

Mr. SOTO. What specific jurisdiction grounds do you think there 

are, to be brief? 

Ms. CULVER. Both the Federal Land Policy and Management Act 

and the Mineral Leasing Act, as well as another couple of Acts that 

I am going to end up in long acronyms if I go into about governing 

oil and gas on public lands and the regulatory authority of the 

Department of the Interior. 

Mr. SOTO. So, you believe there is already jurisdiction? 

Ms. CULVER. Absolutely. 

Mr. SOTO. Let’s accept for argument’s sake that BLM’s current 

line does not have jurisdiction. Should BLM and EPA be regulating 

hydraulic fracking in the United States? 

Ms. CULVER. Absolutely. If this is occurring on Federal lands, 

then they need to have a say. What we have seen with the states 

is there is variation among the states in terms of the level of concern. FracFocus, which was mentioned, is voluntary. There are 

wide opportunities to hide information and declare it proprietary, 

which it may or may not be, but we don’t have a way to see that. 

Right now, if the American people’s minerals are being leased to 

companies, then we have a right to know what chemicals are being 

51 

used and to ensure that the Department of the Interior is 

regulating that activity. 

Mr. SOTO. Do you think there could be health effects from this 

lack of regulation right now? 

Ms. CULVER. Absolutely. As you mentioned, there are a variety 

of chemicals used in hydraulic fracturing, and those chemicals are 

being injected deep into the ground and also being potentially 

spilled on the ground, so they do have an ability to affect our 

groundwater. 

Mr. SOTO. Short of cancer, what other types of ailments could 

possibly befall the public unwittingly if we don’t regulate this? 

Ms. CULVER. There are a variety of aspects of the fracking process. For instance, even just air quality impacts from the various 

equipment that is used to conduct fracking, and then just general 

pollution of water sources that would then affect drinking water 

writ large. 

Mr. SOTO. Thank you. 

I yield back. 

Dr. GOSAR. Ms. Culver, you are an attorney, right? 

Ms. CULVER. Guilty. 

Dr. GOSAR. OK. What makes your opinion better than the judge 

in the case of this? You said that you feel that there is adequate 

jurisdiction to imply that. Tell me why your jurisdiction is better 

than the judge. 

Ms. CULVER. In the initial briefs filed by, the initial position of 

the Bureau of Land Management for years has been that they have 

this authority. So, I think we feel we are—— 

Dr. GOSAR. But it is not actually supported by law. 

Ms. CULVER. We think that the interpretation that the judge had 

in that case—— 

Dr. GOSAR. You think. 

Ms. CULVER. That is why we have appealed to the court of 

appeals. 

Dr. GOSAR. Well, we will find out, but, to me, it seems like it is 

very amiss in that recall. 

There are plenty of jurisdictions that we saw in the last administration that usurped adequate jurisdiction within the statute. The 

Clean Power Rule, that is an unusual one, where the Supreme 

Court actually ruled that you could not even go into the process of 

putting rules in place till they decided it. That is how over-reaching 

that administration was. Agreed? 

Ms. CULVER. I am not going to argue with your summary of the 

rulings on the Clean Power Plan. 

In the context of the fracking rule, having read the court’s 

decision and read the applicable statutes, our interpretation is different, and we expect that the court of appeals will agree with our 

interpretation. 

Dr. GOSAR. Well, not if it is not going to the Ninth Circuit, I 

doubt. 

But, anyway, Senator Van Tassell, can you explain to us how the 

State of Utah School and Institutional Trust Lands Administration, 

known as SITLA, manages land held in trust to provide public 

services and how mineral revenues are utilized in the state of 

Utah? 

52 

Mr. VAN TASSELL. They are a fully independent board operated 

with the trustee of the schoolchildren of the state of Utah. They 

lease the property out on state leases. 

There have been a number of school sections that were isolated 

in the state of Utah that have been conjoined and traded with the 

Bureau of Reclamation. We have increased those into large blocks 

instead of stand-alone sections because it has become obvious that 

that is not the way you develop property anymore, that there is a 

bigger value by consolidating. And that has been done and is in 

process on one or two other outliers, along with some of the Indian 

nations. 

The other things that are doing pretty well are operated under 

oil, gas, and mining—most of the time it is under their guidelines. 

Some of this would have some BLM because of the mixed nature 

in the field. So, sometimes BLM, but the majority of the SITLA 

school trust lands are handled through oil, gas, and mining. 

Dr. GOSAR. Mr. Schulz and Mr. Kubat, if a state lease that you 

are looking to develop is adjacent to federally owned land or 

minerals, does uncertainty regarding the Federal leasing and permitting process influence your decision or ability to develop the 

state-owned lease? 

Mr. Kubat first. 

Mr. KUBAT. Absolutely. I would refer back to the testimony I 

gave a moment ago related to our recent development example of 

where we, strategically and out of necessity, had to adjust a development plan due to those very circumstances. 

Dr. GOSAR. Mr. Schulz? 

Mr. SCHULZ. It definitely impacts it. At times, it can benefit the 

state lease, because that is where we know we can go drill a well 

and are able to work with whatever timing stipulations there 

might be. State lands and those private lands often provide 

flexibility. 

But, in the same sense, if there are acreage blocks that are not 

leased around that state lease and there is interest in those 

Federal leases, it can discount the state lease as well, until you can 

get that whole block together. 

Dr. GOSAR. Dr. Steed, what are the next steps that the BLM 

plans to take to further improve the onshore oil and gas leasing 

process on Federal lands? 

Mr. STEED. As mentioned, we are currently reviewing our instruction memoranda processes to make sure that they are in line 

with Secretarial direction, as well as the presidential Executive 

Order. 

We are currently in the process of staffing appropriately in order 

to reduce both leasing times as well as APD turn times and to 

make sure that we have our resources in the areas where they are 

best suited. 

Dr. GOSAR. And you are interested in increasing time to oversee 

dangerous wells, right? 

Mr. STEED. Absolutely. 

Dr. GOSAR. Seriously? Increasing time. I don’t think that is what 

you want to do, right? 

Mr. STEED. Did I say that, sir? 

Dr. GOSAR. Yes. 

53 

Mr. STEED. OK, no. I am sorry, I don’t know what I just said. 

Dr. GOSAR. That you are not interested in increasing the time for 

oversight. 

Mr. STEED. No, we are interested in decreasing the time for 

oversight. Thank you. 

Dr. GOSAR. Thank you. The gentleman from Virginia is 

recognized. 

Mr. BEYER. Thank you, Mr. Chairman. 

Ms. Culver, this Administration’s energy dominance agenda feels 

as if we are going back to the rhetoric in the agenda of decadesold energy policies, particularly when BLM talks about undoing 

some of the Obama administration’s leasing reforms. 

From your perspective, what were some of the leasing problems 

that we saw under President Bush that President Obama’s BLM 

was attempting to deal with? I mean, why did we have these things 

that Mr. Steed has to deal with now? 

Ms. CULVER. Well, I think we saw a similar policy of making oil 

and gas the dominant use of public lands. And part of that was 

there no site visits, there was no public input, and there was no 

environmental analysis prior to leasing. 

And we got to the point where we saw areas mistakenly put up 

for sale that conflicted with the governing use the BLM had or 

state uses or local uses, and that led to a very strong pushback 

from local communities and the public. And, by 2008, many lease 

sales were being invalidated by the BLM itself and in the courts, 

and it was resolving these problems that were causing so many 

delays. 

And the ultimate ruling on this came from a court that formally 

prohibited the Bureau of Land Management from issuing 77 leases 

sold in Utah. And that is a very extreme action for a court, but it 

was based on the abject failure of the agency to look at impacts to 

neighboring national parks, the air quality, and other resources. It 

basically sent a message to the BLM that the system was fundamentally broken. 

The message was received, and an interdisciplinary team of 

career BLM, Forest Service, and Park Service employees reviewed 

the process, and they concluded that environmental reviews were 

needed, public input was needed, consultation with sister Federal 

and state agencies would all identify conflicts up-front and reduce 

the likelihood that we would have invalid sales. 

And they actually found that the BLM employees required more 

guidance to understand that the agency’s multiple-use mandate did 

not permit oil and gas development to be the main use of our 

public lands. 

And I would note that that is different from the SITLA lands 

that the Senator was discussing. State lands do not have a 

multiple-use mandate. They do not have an obligation to consider 

all of the things that the Department of the Interior has to consider 

as the steward of our public lands. So, that mandate has to be 

followed. 

The current approach that we use now has required consideration of other multiple uses and has strengthened protections for 

wilderness, wildlife, and recreation, but it has also reduced 

54 

conflicts, even while we have seen production of oil and gas 

increasing on our public lands. 

So, at that point, at the end of the Bush administration, Federal 

lease sales were twice as likely to be challenged in Federal court 

than they are now. And site-specific sale protests, those that are 

tied to certain values in certain places, have continued to decrease 

since then. 

Mr. BEYER. Thank you. 

Mr. Steed, one of the things that the Democrats typical push 

back to our Republican friends is we say, ‘‘Look at all those leases 

you approved that nobody is using. Why do we need to have new 

leases?’’ In fact, to give you some numbers, at the end of Fiscal 

Year 2016, there were 7,950 BLM permits that had not been used, 

and yet last year we approved 1,000 more permits. 

Help us with the math. Why do we need to be aggressively doing 

so many new permits when so many existing permits are outstanding? Are those outstanding permits on essentially dry land? 

There is no oil, there is no gas. And if so, didn’t we know that 

ahead of time, when the permits were issued? 

Mr. STEED. Sir, I think as pointed out by Mr. Kubat and Mr. 

Schulz at the beginning of questioning, there are a variety of 

factors that lead to that. 

Some of them are that lease stipulations, for instance, may prohibit drilling during certain time frames, or other reasons that may 

be better for business overall. And, honestly, I think that they may 

be in a better position to address the concerns on their business 

community than—— 

Mr. BEYER. Mr. Schulz, you have been so quiet. 

Mr. SCHULZ. Thank you for the question. 

From a vantage point of QEP, not every lease is going to be a 

viable economic oil and gas lease. It is just the nature of the way 

the business still works. You go out and we lease, and we file for 

APDs, but at times the market conditions can change, especially if 

you have an APD process that takes 8 months to a year to get an 

APD. The markets can change a lot in that time frame. 

But when you go out and you are trying to put together an acreage block, at times you may realize that part of those acres are not 

viable. The Pinedale example is a great one, where we had a big 

acreage position that was leased. It was about 15,000, 18,000 acres 

of core acreage. 

There were acres on the flanks, as they called it, of this ridge. 

And those flanks, in order to get the approval for the project-wide 

EIS, which I will remind you is another method where the public 

gets a chance to comment, we decided to suspend those leases. So, 

therefore, the BLM approved suspending those leases so that they 

would not be drilled because they were marginal acres, but it was 

still held by the operators in order to build out and drill those 

wells. 

And that is just one example where there are times where marginal acreage in a marginal price environment for natural gas did 

not make sense. There is still oil and gas under there; it is just 

whether or not it is produceable with an economic return during 

the current environment. 

55 

Dr. GOSAR. Senator, you talked about looking at the economics 

as well as caretaking of the environment. I don’t think they are 

mutually exclusive. In fact, just last summer, we went up to the 

North Slope and actually saw and witnessed the increased caribou 

herds along the pipeline. Do you see the same type of effect in 

Utah? 

Mr. VAN TASSELL. Are you referring to wildlife? 

Dr. GOSAR. Yes. 

Mr. VAN TASSELL. The biggest factor that we have in wildlife, we 

have been very progressive and aggressive in reclaiming and bringing pin ̃ on cedar forests that produce almost no feeder habitat for 

wildlife into production, into rehabbing it, bringing it in for the 

sage-grouse as well as deer, antelope, moose, and the other things 

that we have. We are seeing a great increase right now. 

Dr. GOSAR. So, you are very successful at your state management 

plans, right? 

Mr. VAN TASSELL. Our state management plans have been very 

successful. And I think we are just now getting to a land mass 

large enough where we will see huge events in the next few years. 

Dr. GOSAR. In fact, in previous hearings, we have heard the destitution in regards to the derogatory comments to state management plans, when we have seen Fish and Wildlife Service’s plans, 

particularly, like the Mexican gray wolf, be anemic, in fact malpracticed, if you were looking for a term, in those aspects. 

Why not start working with the states and empowering states in 

a collaborative aspect? I mean, you really like dirty air and dirty 

water, right? 

Mr. VAN TASSELL. Not where I live. 

Dr. GOSAR. Well, that is what I thought. 

Mr. VAN TASSELL. The comment I would make on that is that in 

2017, we had no exceedance in the Uinta Basin of bad air quality. 

We have some unique things that we are trying to figure out what 

the science is and how to prevent that. But when you can go 1 year 

and have 30 days of pretty bad air because of snow on the ground 

and then when you don’t, you get some others. But that is another 

different story. We won’t go there today. 

But I think that we have some great opportunities to increase— 

I am sorry, I forgot what you asked. 

Dr. GOSAR. Increase habitat and—— 

Mr. VAN TASSELL. Increase habitat. I think there is a partnership between not only the industry but also for the locals in making sure anyone that lives in my area is a hunter, as a result, and 

a fisherman. That is one of the reasons we live there, because you 

can be 10 minutes out of town and hit a reservoir or 25 minutes 

to a good hunting area, and that is what we want to preserve and 

protect. 

Dr. GOSAR. It is not mutually exclusive, right, is what I am 

getting to. 

Mr. VAN TASSELL. That is not. 

Dr. GOSAR. Yes, I agree. 

The multiple-use doctrine is very important. And Ms. Culver 

brought up the multiple-use doctrine. So, revenues, aren’t they substantial in oil and gas, Ms. Culver? 

56 

Ms. CULVER. Yes, they are one of the substantial revenue 

sources. 

Dr. GOSAR. Yes, so mineral extraction is very substantial, right? 

Ms. CULVER. Substantial in terms of? 

Dr. GOSAR. Revenues from mineral extraction are very, very 

high, right? 

Ms. CULVER. Yes. 

Dr. GOSAR. So, part of the multiple doctrine agreement with the 

states is shared revenues for maximizing those revenues, right? 

Ms. CULVER. The states do get approximately half of the revenue. 

Dr. GOSAR. Not anymore. It is 52–48 since the Murray-Ryan 

budget. The royalties are split 52 to the Federal Government, 48 

to the states, and those have been declining. And the reason they 

have been declining is because we have predicated not full use of 

the multiple-use doctrine. 

That is part of the contract with the Federal Government with 

states and local municipalities. They pay for our education. They 

pay for our infrastructure. They pay for all those and above. So, 

what we see is the floundering of rural Arizona, rural Utah, and 

rural Colorado because we see the diminishing returns on that contract, so it is all of the above. 

You brought up the Wilderness Society. And when you brought 

up the multiple-use doctrine, you also brought up timber sales. I 

would sure like to really see you guys on the forefront of adjudicating that instead of having these catastrophic wildfires, instead 

of going into court. 

When we start utilizing the multiple-use doctrine, it was an 

agreement with western states that have these big swathes of 

Federal lands for the perpetuity of preserving those but also reinvesting in those local communities and states. I think we really 

need to make sure that we understand that properly, make sure 

that it is done right. I am all for doing things right, but I am also 

following the letter of the law. 

Ms. CULVER. Interestingly, the letter of the FLPMA specifically 

says that ‘‘multiple use’’ means looking at the best balance of resources for the American public, not just those with the greatest 

economic return. So, I agree we need to consider both of those 

things. 

Dr. GOSAR. Absolutely. Thank you. 

The gentleman from Virginia is recognized. 

Mr. BEYER. Thank you, Mr. Chairman. 

I would like to add that addressing climate change might help 

with those catastrophic wildfires also, as would restoring the 

Forest Service budget, which has been progressively gobbled up 

with wildfire fighting, as you know. 

And to put proper context with the decline in revenues in rural 

Arizona and rural Utah, places like that, Mr. Steed, in your written 

testimony, you pointed out that BLM sold just under 800,000 acres 

of oil and gas leases in 2017. That is with this progressive rollback 

of the Obama-era protections. It is an increase from 2016, but it 

is 40 percent lower than it was during the 8 years of the Obama 

administration. They did 1.35 million acres per year. In 2011, it 

was over 2 million acres, so two and a half times what you did last 

year. 

57 

So, even with Interior de-regulating across the board and trying 

to make things as easy as possible for industry, leasing is still 

down. What do you think is the predominant factor in that drop? 

Or how do you possibly assign that drop to things like master 

leasing plan? 

Mr. STEED. I am not sure I am qualified to answer that question, 

sir. I can speculate that there are certainly market conditions that 

drive ups and downs. In addition to that, I would have to point out 

that the oil and gas industry is something that has long lag times 

between when you stand up something and when it actually comes 

to fruition. And my colleagues here can certainly address that as 

well. 

However, I would say that I don’t know if that is the best metric 

to whether we are doing our job or not. We are trying very hard 

to do the work of the American people, and we are trying very hard 

to facilitate oil and gas development, as well as renewable development, as well as promoting our multiple-use objectives for access, 

for hunting and fishing, and for all of the other things that we do 

at the BLM. So, I think that, in totality, we are trying as hard as 

we can to meet our obligations. 

Mr. KUBAT. If I may, I would like to help Dr. Steed with this one. 

Mr. BEYER. Sure. 

Mr. KUBAT. In the sense of, from an industry perspective, is it 

not true that in the Obama era, in its administration, that the fewest number of parcels were offered for auction during that administration? That is accurate. And is it not also true that that probably 

correlates with the highest commodity pricing that we have seen in 

decades? That is also true. So, therefore, the price a company can 

pay for a leased parcel was at its apex during that period. 

Mr. BEYER. That all sounds completely plausible. But I think the 

overall point is that, looking at the 800,000 acres in Fiscal Year 

2017, it still compares unfavorably to the 1,350,000 each year 

through the Obama administration. 

Mr. KUBAT. I think the point that is being missed here from a 

purpose of APDs is that we are a for-profit pursuit, and so we have 

to meet a cash-flow mechanism. We have to have a return on investment for our capital. We are not a special interest group that 

is a dark hole of capital that goes into it without an expectation 

of returns. 

When we purchase a lease and then apply for an ADP, we are 

doing that with an anticipation of a return on that investment. So, 

when you have higher commodity prices, you are at an ability to 

pay more for a lease, which would correlate for the increased 

revenue from those lease sales during that period. 

Mr. BEYER. Thank you. 

Mr. KUBAT. That is the absolute correlation. 

Mr. BEYER. I think you made my point beautifully, which is that 

the decline has to do with the price of oil and gas rather than with 

the environmental burdens or non-burdens that the Administration 

is proposing. 

Mr. KUBAT. The amount you can pay is directly correlated with 

the price you receive for your products, so yes. 

Mr. BEYER. That is exactly right. So, the higher the prices, the 

more money we can have for Arizona schools. 

58 

Ms. Culver, one of Chairman Bishop’s top priorities is the 

SECURE Act, which would turn over all oil and gas permitting on 

U.S. Federal lands to the states. What will happen to BLM if we 

do that? And is this a good idea? 

Ms. CULVER. I think the biggest concern is something that we 

touched on here on this panel, that the states do not have to provide an opportunity for public input, they don’t have to look at environmental values, they don’t have the National Environmental 

Policy Act, they don’t have a multiple-use mandate. And that would 

really put our clean air and water in our public lands at risk if that 

were to happen. That is one of our biggest concerns. 

Mr. BEYER. I imagine it would shrink the mandate of the BLM 

pretty significantly too. 

Ms. CULVER. Well, maybe they could look more into inspection 

and enforcement of the existing wells with the additional personnel 

time they would have. That would be fine. As well as looking at 

the maintenance backlogs and how to better support recreation, 

wilderness, and wildlife on other lands too. 

Mr. BEYER. Thank you very much, Mr. Chairman. 

Dr. GOSAR. I am sorry, I have to intercede here. 

So, Dr. Steed, if it was turned over to the states, they would still 

be required on numerous occasions for oversight, right? Please 

explain. 

Mr. STEED. I think that you are accurate. 

Ms. CULVER. It is exempted in the SECURE Act from the—— 

Dr. GOSAR. No, you would still be required under NEPA provisions and everything else. So, that is not an appropriate question. 

Would you agree, Mr. Schulz? 

Mr. SCHULZ. Yes. From what I understand about the SECURE 

Act, the way it has been drafted, I think there is still very much 

a role for BLM to play in the leasing process. 

Dr. GOSAR. So, Mr. Kubat, would you agree? 

Mr. KUBAT. Yes, I would agree. 

Dr. GOSAR. How about you, State Senator? 

Mr. VAN TASSELL. I would say so. 

Dr. GOSAR. I agree. 

I think there is a lot of supposition in your statements, and I find 

that very misleading. I think, from that standpoint, we have to be 

very careful where we go. 

Go ahead. I yield. 

Mr. BEYER. Can I ask Mr. Kubat or Mr. Schulz or the Senator 

if they have read the SECURE Act? 

Mr. SCHULZ. I have had a chance to read through most of it. 

Obviously, it has been several months since I last looked at it, but 

I did read through it. 

Mr. VAN TASSELL. I have not read clear through it. I have seen 

parts of it, dealt with a part of it, but, primarily, I think I understand it. 

I would also say that I have so much faith in—I think our local/ 

state government entities, that would control the work with 

fracking and the oil industry, are as up to speed and on the ground 

as anyone could be. 

59 

Dr. GOSAR. Well, sorry that you had to hear from the two of us 

quite a bit, but you traveled all that way, so we wanted to make 

sure that you got your full share. 

I thank the witnesses for their valuable testimony and the 

Members for their questions. 

The members of the Committee may have some additional questions for the witnesses, and we will ask you to respond to those in 

writing. Under Committee Rule 3(o), members of the Committee 

must submit witness questions within 3 business days following 

the hearing by 5:00 p.m., and the hearing record will be held open 

for 10 business days for those responses. 

If there is no further business, without objection, the 

Subcommittee stands adjourned. 

[Whereupon, at 4:46 p.m., the Subcommittee was adjourned.] 

[LIST OF DOCUMENTS SUBMITTED FOR THE RECORD RETAINED IN THE

COMMITTEE’S OFFICIAL FILES]

Rep. Lowenthal Submissions 

—Letter addressed to Chairman Bishop and Ranking Member 

Lowenthal from the Wilderness Society, National Parks 

Conservation Association, Earthjustice, et al. dated January 

17, 2018. 

—Letter addressed to Chairman Gosar and Ranking Member 

Lowenthal from the Outdoor Alliance dated January 18, 

2018. 

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