U.S. GOVERNMENT PUBLISHING OFFICE

30–350 PDF WASHINGTON : 2018

DISCUSSION DRAFT H.R. ____, TO AUTHORIZE THE SECRETARY 

OF THE INTERIOR TO RECOVER THE COST OF PROCESSING 

ADMINISTRATIVE PROTESTS FOR OIL AND GAS LEASE SALES, 

APPLICATIONS FOR PERMITS TO DRILL, AND RIGHT OF WAY 

APPLICATIONS, AND FOR OTHER PURPOSES; DISCUSSION 

DRAFT H.R. ____, TO CLARIFY THE CATEGORICAL EXCLUSIONS 

AUTHORIZED BY THE ENERGY POLICY ACT OF 2005 AND 

AUTHORIZE ADDITIONAL CATEGORICAL EXCLUSIONS TO 

STREAMLINE THE OIL AND GAS PERMITTING PROCESS, AND 

FOR OTHER PURPOSES; DISCUSSION DRAFT H.R. ____, TO 

AMEND THE MINERAL LEASING ACT TO AUTHORIZE NOTIFICATIONS OF PERMIT TO DRILL, AND FOR OTHER PURPOSES; AND 

DISCUSSION DRAFT H.R. ____, TO CLARIFY THAT BUREAU OF 

LAND MANAGEMENT SHALL NOT REQUIRE PERMITS FOR OIL 

AND GAS ACTIVITIES CONDUCTED ON NON-FEDERAL SURFACE 

ESTATE TO ACCESS SUBSURFACE MINERAL ESTATE THAT IS 

LESS THAN 50 PERCENT FEDERALLY OWNED, AND FOR OTHER 

PURPOSES 

LEGISLATIVE 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 

Wednesday, June 6, 2018 

Serial No. 115–47 

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 

John R. Curtis, UT 

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 

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 

Nydia M. Vela ́zquez, NY 

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 

John R. Curtis, UT 

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 

Nydia M. Vela ́zquez, NY 

Vacancy 

Rau ́l M. Grijalva, AZ, ex officio 

(III) 

CONTENTS 

Page 

Hearing held on Wednesday, June 6, 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: 

Baza, John, Director, Utah Division of Oil, Gas and Mining, Utah Department of Natural Resources, Salt Lake City, Utah ..................................... 22 

Prepared statement of ............................................................................... 23 

MacGregor, Katharine, Deputy Assistant Secretary, Land and Minerals 

Management, U.S. Department of the Interior, Washington, DC ............ 26 

Prepared statement of ............................................................................... 27 

Questions submitted for the record ......................................................... 32 

Martinez, Hon. Susana, Governor, State of New Mexico, Santa Fe, 

New Mexico ................................................................................................... 7 

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

McQueen, Hon. Ken, Secretary, Energy, Minerals and Natural Resources 

Department, State of New Mexico, Santa Fe, New Mexico ....................... 9 

Prepared statement of ............................................................................... 11 

Questions submitted for the record ......................................................... 13 

Willis, Dennis, Price, Utah .............................................................................. 16 

Prepared statement of ............................................................................... 17 

(1) 

LEGISLATIVE HEARING ON DISCUSSION DRAFT H.R. ____, TO 

AUTHORIZE THE SECRETARY OF THE INTERIOR TO 

RECOVER THE COST OF PROCESSING ADMINISTRATIVE 

PROTESTS FOR OIL AND GAS LEASE SALES, APPLICATIONS 

FOR PERMITS TO DRILL, AND RIGHT OF WAY APPLICATIONS, AND FOR OTHER PURPOSES; DISCUSSION DRAFT 

H.R. ____, TO CLARIFY THE CATEGORICAL EXCLUSIONS 

AUTHORIZED BY THE ENERGY POLICY ACT OF 2005 AND 

AUTHORIZE ADDITIONAL CATEGORICAL EXCLUSIONS TO 

STREAMLINE THE OIL AND GAS PERMITTING PROCESS, AND 

FOR OTHER PURPOSES; DISCUSSION DRAFT H.R. ____, TO 

AMEND THE MINERAL LEASING ACT TO AUTHORIZE NOTIFICATIONS OF PERMIT TO DRILL, AND FOR OTHER PURPOSES; 

AND DISCUSSION DRAFT H.R. ____, TO CLARIFY THAT 

BUREAU OF LAND MANAGEMENT SHALL NOT REQUIRE 

PERMITS FOR OIL AND GAS ACTIVITIES CONDUCTED ON 

NON-FEDERAL SURFACE ESTATE TO ACCESS SUBSURFACE 

MINERAL ESTATE THAT IS LESS THAN 50 PERCENT 

FEDERALLY OWNED, AND FOR OTHER PURPOSES 

Wednesday, June 6, 2018 

U.S. House of Representatives 

Subcommittee on Energy and Mineral Resources 

Committee on Natural Resources 

Washington, DC 

The Subcommittee met, pursuant to notice, at 2:06 p.m., in room 

1324, Longworth House Office Building, Hon. Paul Gosar 

[Chairman of the Subcommittee] presiding. 

Present: Representatives Gosar, Lamborn, Pearce, Cheney, 

Gianforte, Curtis; Lowenthal, Grijalva, Beyer, and Soto. 

Also present: Representative Luja ́n. 

Dr. GOSAR. The Subcommittee on Energy and Mineral Resources 

will come to order. The Subcommittee is meeting today to hear 

testimony on four discussion drafts related to onshore oil and gas 

energy development. 

With unanimous consent, Mr. Luja ́n will sit and participate 

through the duration of the hearing. 

Without objection, so ordered. 

Under Committee Rule 4(f), oral opening statements at the 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 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 5:00 p.m. today. 

Without objection, so ordered. 

I now recognize myself for a 5-minute opening statement. 

2 

STATEMENT OF HON. PAUL A. GOSAR, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF ARIZONA 

Dr. GOSAR. Last month, my colleagues across the aisle and across 

the dome held a press conference at a gas station here on Capitol 

Hill to call attention to the recent rise in gas prices. A follow-up 

letter was also sent, calling on President Trump to engage with 

OPEC and leaders from other oil-producing nations, including 

Russia’s Vladimir Putin, to increase world oil production to remedy 

higher prices at the pump. 

I actually agree with Senator Schumer on one point: increasing 

oil supply would benefit hardworking Americans who need low gas 

prices to get to work and make ends meet. But I would argue that 

relying on Russia, Iran, and Venezuela to meet our energy needs 

at home is not in the national interest, nor in the environmental 

interests of the world. We can lower gas prices and we can do it 

responsibly by increasing domestic oil production on Federal and 

non-Federal lands here in the United States. 

Today, the Subcommittee will consider four bills that will 

streamline the oil and gas permitting and leasing process on our 

Federal lands, and do so in an environmentally sound manner. 

Embracing policies that enhance our energy dominance will 

strengthen our national and economic security, create well-paying 

jobs, and more importantly, lower gas prices for our constituents. 

The first bill, sponsored by Representative Pearce, would clarify 

language in the Energy Policy Act of 2005, also known as EPAct 

05, to expand the use of categorical exclusions in approving permits 

and right-of-ways that will have minimal environmental impacts. 

Although EPAct 05 authorized five categorical exclusions for oil 

and gas, the previous administration chose not to use them, even 

when a drilling permit clearly qualified for an exclusion under the 

law. 

This bill would require the Bureau of Land Management to use 

categorical exclusions whenever they are applicable, and updates 

the exclusions to reflect advances in drilling technology. This minor 

update removes unnecessary bureaucratic hurdles, allowing the 

BLM to focus more effort on those drilling proposals that require 

rigorous environmental assessments. 

The second bill, also sponsored by Representative Pearce, 

prohibits the BLM from requiring permits for oil and gas drilling 

activities on private or state-owned surface, unless the Federal 

Government owns over 50 percent of the mineral estate impacted 

by such activities. Under the previous administration, the BLM 

required operators to obtain Federal drilling permits for surface 

impacting operations that occurred on state and private land, causing significant delays and uncertainty in the permitting process. 

These requirements discourage energy development on non-Federal 

lands, imposing unnecessary costs on private landowners and the 

states without providing additional environmental benefits. 

The third bill, sponsored by Representative Curtis, would authorize an expedited oil and gas permitting process for certain drilling 

operations. For oil and gas operations with little or no environmental impact, operators can submit a Notification for Permit to 

Drill, or NPD, instead of going through the existing Application for 

Permit to Drill, or APD, process. The bill will allow operators to 

3 

proceed with the drilling activities described in the NPD without 

further approval from the BLM, so long as the BLM does not issue 

objections within 45 days. Because permits for low-impact drilling 

operations will move more quickly through the process, BLM will 

be able to utilize its limited resources to prioritize evaluating and 

approving drilling activities with a larger environmental footprint. 

The final bill would authorize DOI to recover the cost of processing protests on lease sales. Currently, funds used to process protests on oil and gas lease sales are drawn from DOI’s budget. Some 

of these protests are 1,000 to 1,500 pages in length, and take 

months to process. Under this bill, DOI will be authorized to assess 

a fee on each protest submitted to aid in recovering the cost of 

processing such protests. 

Today, we will hear from witnesses representing two energyproducing states that will be directly impacted by these legislative 

proposals. These witnesses will provide valuable insight regarding 

whether and how these proposals will streamline the permitting 

and leasing process managed by the BLM in their states. 

We will also discuss the impact of oil and gas production on job 

creation and how inefficiencies in the permitting and leasing 

process impact local economies. 

[The prepared statement of Dr. Gosar follows:] 

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

ENERGY AND MINERAL RESOURCES

Last month, my colleagues across the aisle and across the dome held a press conference at a gas station here on Capitol Hill to call attention to the recent rise in 

gas prices. A follow-up letter was also sent, calling on President Trump to engage 

with OPEC and leaders of other oil producing nations, including Russia’s Vladimir 

Putin, to increase world oil production to remedy higher prices at the pump. Well, 

I actually agree with Senator Schumer on one point—increasing oil supply would 

benefit hardworking Americans who need low gas prices to get to work and make 

ends meet. But I would argue that relying on Russia, Iran and Venezuela to meet 

our energy needs at home is not in the national interest—nor in the environmental 

interests of the world. We can lower gas prices and we can do it responsibly by increasing domestic oil production on Federal and non-Federal lands here in the 

United States. 

Today, the Subcommittee will consider four bills that will streamline the oil and 

gas permitting and leasing process on our Federal lands, and do so in an environmentally sound manner. Embracing policies that enhance our energy dominance will 

strengthen our national and economic security, create well-paying jobs, and importantly, lower gas prices for our constituents. 

The first bill, sponsored by Representative Pearce, would clarify language in the 

Energy Policy Act of 2005 (‘‘EPAct 05’’) to expand the use of categorical exclusions 

in approving permits and right-of-ways that will have minimal environmental impacts. Although EPAct 05 authorized five categorical exclusions for oil and gas, the 

previous administration chose not to use them, even when a drilling permit clearly 

qualified for an exclusion under the law. This bill would require the Bureau of Land 

Management to use categorical exclusions whenever they are applicable, and updates the exclusions to reflect advances in drilling technology. This minor update 

removes unnecessary, bureaucratic hurdles allowing the BLM to focus more effort 

on those drilling proposals that require rigorous environmental assessments. 

The second bill, also sponsored by Representative Pearce, prohibits the BLM from 

requiring permits for oil and gas drilling activities on private or state-owned 

surface, unless the Federal Government owns over 50 percent of the mineral estate 

impacted by such activities. Under the previous administration, the BLM required 

operators to obtain Federal drilling permits for surface-impacting operations that occurred on state and private land, causing significant delays and uncertainty in the 

permitting process. These requirements discourage energy development on nonFederal lands, imposing unnecessary costs on private landowners and the states 

without providing additional environmental benefit. 

4 

The third bill, sponsored by Representative Curtis, would authorize an expedited 

oil and gas permitting process for certain drilling operations. For oil and gas operations with little or no environmental impact, operators can submit a ‘‘Notification 

for Permit to Drill’’ or ‘‘NPD’’ instead of going through the existing Application for 

Permit to Drill or ‘‘APD’’ process. The bill would allow operators to proceed with the 

drilling activities described in the NPD without further approval from the BLM, so 

long as BLM does not issue objections within 45 days. Because permits for low impact drilling operations will move more quickly through the process, BLM will be 

able to utilize its limited resources to prioritize evaluating and approving drilling 

activities with a larger environmental footprint. 

The final bill would authorize DOI to recover the cost of processing protests on 

lease sales. Currently, funds used to process protests on oil and gas lease sales are 

drawn from DOI’s budget. Some of these protests are 1,000 to 1,500 pages in length 

and take months to process. Under this bill, DOI will be authorized to assess a fee 

on each protest submitted to aid in recovering the cost of processing such protests. 

Today, we will hear from witnesses representing two energy-producing states that 

will be directly impacted by these legislative proposals. These witnesses will provide 

valuable insight regarding whether and how these proposals will streamline the permitting and leasing process managed by the BLM in their states. We will also discuss the impact of oil and gas production on job creation and how inefficiencies in 

the permitting and leasing process impact local economies. 

Dr. GOSAR. I recognize the gentleman to my left, the Ranking 

Member, Mr. Lowenthal, for his 5 minutes. 

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

CALIFORNIA 

Dr. LOWENTHAL. Thank you, Mr. Chairman, and thank you to 

the witnesses for being here today. 

I have concerns with all four of the draft bills we are discussing 

today. My biggest concern is a common theme that runs through 

all of them, and through this Administration’s approach to oil and 

gas on public lands. 

Simply put, that theme is: let the industry do whatever it wants 

and keep the public in the dark. It appears to be a guiding 

principle of this Administration: government exists for the benefit 

of the wealthy and the well-connected, while everyday Americans 

are inconveniences that need to be silenced or ignored. 

Nothing demonstrates that better than the constant attacks on 

the National Environmental Policy Act, also known as NEPA. I will 

bet most people in the country have never heard of NEPA. But 

NEPA is often the only reason that people hear about anything 

else. 

One of the foundational principles of NEPA is involving the 

public in government decisions. People should be told what the 

government intends to do in their communities, in their neighborhoods, and in their backyards. And people should not just be 

informed of decisions that have already been made, they should 

have a voice in the process. But that ability is under attack. 

Earlier this year, the Bureau of Land Management reversed a 7- 

year-old policy and made it completely optional to involve the 

public in the review of proposed oil and gas leases. The BLM also 

shortened the time available to protest leases, from 30 days to just 

10. Although maybe that is helpful, given that one of today’s bills 

would create a per-page fee for filing a protest. With only 10 days 

to write one, chances are that it is going to be shorter and cheaper. 

5 

Meanwhile, these bills would also mandate the broad use of 

categorical exclusions for drilling permits—again, shutting the 

public out of the process. 

The problem with this approach isn’t limited just to the clear 

effort to make sure that the public sees, hears, and speaks no evil 

when it comes to oil drilling. This is an attack on the environment, 

as well. 

The Government Accountability Office and others have shown 

that the widespread use of categorical exclusions leads to piecemeal 

development that creates far more surface disturbance than necessary. These bills are effectively providing an incentive for oil and 

gas companies to do more damage to our public lands. 

As with so many of the Republican energy bills in this 

Committee, the underlying premise behind them is entirely false. 

Despite the repeated claims by the Majority, oil production on 

Federal lands is robust, and that is not because of President 

Trump. Onshore oil production on Federal lands went up 78 

percent under President Obama. Companies hold over 14 million 

acres of oil and gas leases that aren’t producing oil or gas. They 

have also stockpiled nearly 8,000 drilling permits that they are not 

using. 

There are fewer pending drilling permits now than at any time 

in the past decade. And, according to the most recent data put out 

by the Bureau of Land Management with their new computer system, they are able to process permits in only 50 days. 

Waiving environmental laws and shutting the public out simply 

to allow companies to drill faster is unnecessary and, more importantly, it is wrong. 

The Trump administration is relentlessly trying to remove anything that might be a burden to the oil and gas industry. But 

informing people of what is happening in their backyard is not a 

burden. Giving people a voice is not a burden. And responsible, balanced management of public lands is not a burden. 

Unfortunately, these bills don’t reflect that, and I believe they 

should be sent back to the drawing board. 

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

balance of my time. 

[The prepared statement of Dr. 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. 

I have serious concerns with the four draft bills that we are discussing today. The 

biggest concern is a common theme that runs through all of them, and through this 

Administration’s approach to oil and gas on public lands. 

Simply put, that theme is: let the industry do what it wants, and keep the public 

in the dark. It appears to be the guiding principle of this Administration: government exists for the benefit of the wealthy and the well-connected, while every-day 

Americans are inconveniences that need to be silenced or ignored. 

Nothing demonstrates that better than the constant attacks on the National 

Environmental Policy Act, also known as NEPA. I bet that most people in the country have never heard of NEPA. But NEPA is often the only reason that people hear 

about anything else. 

One of the foundational principles of NEPA is involving the public in government 

decisions. People should be told what the government intends to do in their communities, in their neighborhoods, and in their backyards. And people should not just 

6 

be informed of decisions that have already been made. They should have a voice in 

the process. But that ability is under attack. 

Earlier this year, the Bureau of Land Management reversed a 7-year-old policy 

and made it completely optional to involve the public in the review of proposed oil 

and gas leases. The BLM also shortened the time available to protest leases from 

30 days to just 10. Although maybe that’s helpful, given that one of today’s bills 

would create a per-page fee for filing a protest. With only 10 days to write one, 

chances are it’ll be shorter and cheaper. 

Meanwhile, these bills would also mandate the broad use of categorical exclusions 

for drilling permits, again shutting the public out of the process. 

The problem with this approach isn’t limited to the clear effort to make sure the 

public sees, hears, and speaks no evil when it comes to oil drilling. This is an attack 

on the environment as well. 

The Government Accountability Office and others have shown that the widespread use of categorical exclusions leads to piecemeal development that creates far 

more surface disturbance than necessary. These bills are effectively providing an incentive for oil and gas companies to do more damage to our public lands. 

And, as with so many Republican energy bills in this Committee, the underlying 

premise behind them is entirely false. Despite the repeated claims by the Majority, 

oil production on Federal lands is robust. And it’s not because of President Trump. 

Onshore oil production on Federal lands went up 78 percent under President 

Obama. Companies hold over 14 million acres of oil and gas leases that aren’t producing oil or gas. They have also stockpiled nearly 8,000 drilling permits that 

they’re not using. 

There are fewer pending drilling permits now than at any time in the past decade. 

And according to the most recent data put out by the Bureau of Land Management, 

with their new computer system they’re able to process permits in only 50 days. 

Waiving environmental laws and shutting the public out simply to allow 

companies to drill faster is unnecessary, and more importantly, it is wrong. 

The Trump administration is relentlessly trying to remove anything that might 

be a burden to the oil and gas industry. But informing people of what is happening 

in their backyard is not a burden. Giving people a voice is not a burden. And 

responsible, balanced management of public lands is not a burden. 

Unfortunately, these bills don’t reflect that, and I believe they should be sent back 

to the drawing board. 

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

Dr. GOSAR. I thank the gentleman. I now want to recognize our 

panel. 

First of all, we have the Honorable Susana Martinez, the 

Governor of the State of New Mexico—welcome; the Honorable Ken 

McQueen, Secretary, Energy, Minerals and Natural Resources 

Department, State of New Mexico—thank you; Mr. Dennis Willis, 

private citizen from Price, Utah—thanks for coming; Mr. John 

Baza, Director, Utah Division of Oil, Gas and Mining, Salt Lake 

City, Utah—welcome; and Ms. Katharine MacGregor, Deputy 

Assistant Secretary for Land and Minerals Management, Department of the Interior, right here in Washington, DC. 

Welcome back, Katie. 

Let me remind the witnesses that under our Committee Rules 

they must limit their oral statements to 5 minutes. But their entire 

statement will be appearing in the hearing record. 

Our microphones are not automatic, so you are going to see a 

light system. For the first 4 minutes it will be green, then it will 

turn to yellow. That gives you about a minute. When you see the 

red, please try to summarize because we want to get to questions. 

With that, I would like to recognize Governor Martinez for your 

5 minutes. 

7 

STATEMENT OF THE HON. SUSANA MARTINEZ, GOVERNOR, 

STATE OF NEW MEXICO, SANTA FE, NEW MEXICO 

Governor MARTINEZ. Thank you, Chairman Gosar, Ranking 

Member Lowenthal, and Subcommittee members. Thank you for 

the opportunity to speak with you today on an issue that is of incredible importance and urgency to the state of New Mexico, 

western states, and to the Federal Government. 

Today alone, my state will lose out on approximately $2 million 

in tax revenue due to a backlog of applications for permit to drill 

by the Bureau of Land Management in just our state. This same 

delay in application approvals will cost the Federal Government 

another $3.5 million in revenues, again, in a single day. 

But these applications are not just waiting a single day to be approved. The average approval time for BLM permits in New Mexico 

is 250 days, compared to just 10 days for the New Mexico Energy, 

Minerals and Natural Resources Department to approve those 

same permits. This has created a backlog of more than 800 BLM 

applications. Over the course of a year, these delays add up to a $713 million loss of revenue for the state of New Mexico and a $1.3 billion loss 

for the Federal Government, with those amounts increasing daily. 

I know that many other states are facing similar delays. If the Federal Government is losing $1.3 billion per year from New 

Mexico alone, it should concern all of us to think what the national 

loss in revenue must be. 

A large share of our state’s oil and gas royalties support our 

public school system in New Mexico. At a time when we are fighting to turn around struggling schools and ensure that our school 

campuses are safe and they are secure, we should not be letting a 

single dollar slip away. 

It is not just education. Revenue from oil and gas activity helps 

to fund all of our state’s vital services, like law enforcement, health 

and human service programs, emergency management, and infrastructure construction. 

In addition to impacting important services, delays in the approval of permits also affect job growth and rural economic development. Oil and gas activity contributes more than $11.3 billion to 

New Mexico’s economy, and is responsible for more than 100,000 

jobs. Keep in mind, the population in New Mexico is 2.1 million 

people. 

Each backlogged permit represents New Mexicans losing out on 

good-paying jobs and rural communities losing out on economic 

growth. We need a solution that will streamline layers of bureaucratic requirements and expedite the approval process. 

Five of my western governors, my peers, and I have presented 

four proposals to the Department of the Interior that would ensure 

the timelier handling of regular, run-of-the-mill applications for 

drilling permits. The draft legislation before the Committee today 

contains many of the same principles as our proposals, with one 

common objective: cut the duplicative and bureaucratic Federal red 

tape that is hampering energy production across the West. When I took office in 2011, I inherited a $450 million budget def- icit, nearly 9 percent of my $5.2 billion budget. We have made 

great progress since then. Our tax revenues are rising rapidly, 

8 

New Mexico’s economy is expanding and diversifying, and we have 

taken critical steps to protect the long-term stability of our state 

budget while amassing an $800 million budget surplus without increasing a single tax on our people or small businesses. 

We have cut unnecessary government red tape and improved efficiencies. We have expanded production in New Mexico, while at the 

same time cracking down on polluters and levying more fines than 

any prior administration did. And we are implementing our all-ofthe-above energy plan to aggressively develop all sources of energy 

in New Mexico. 

These four bills offer you an opportunity to improve Federal processes in a way that will make a measurable difference for all New 

Mexicans and millions of people across the western United States 

and the rest of our country. 

I thank you for your time and your consideration. 

[The prepared statement of Governor Martinez follows:] 

PREPARED STATEMENT OF SUSANA MARTINEZ, GOVERNOR OF NEW MEXICO

Chairman Bishop, Chairman Gosar, Ranking Member Lowenthal, and 

Subcommittee members, thank you for the opportunity to speak with you today on 

an issue that is of incredible importance and urgency to the state of New Mexico, 

western states, and the Federal Government. 

Today alone, my state will lose out on approximately $2 million in tax revenue 

due to a backlog for Applications for Permit to Drill by the Bureau of Land Management in New Mexico. This same delay in application approvals will cost the Federal 

Government another $3.5 million in revenues, again, in a single day. 

But these applications aren’t just waiting a single day. The average approval time 

for BLM permits in New Mexico is 250 days, compared to just 10 days for the New 

Mexico Energy, Minerals and Natural Resources Department to approve those same 

permits. This has created a backlog of more than 800 BLM applications. Over the course of a year, these delays add up to a $713 million loss of revenue for the state of New Mexico and a $1.3 billion loss for the Federal Government, with 

those amounts increasing daily. 

I know that many other states are facing similar delays. If the Federal Government is losing $1.3 billion per year from New Mexico alone, it should concern all 

of us to think what the national loss in revenue must be. 

A large share of our state’s oil and gas royalties support our public school system, 

and at a time when we’re fighting to turn around struggling schools and ensure that 

our school campuses are safe and secure, we shouldn’t be letting a single dollar slip 

away. 

It’s not just education. Revenue from oil and gas activity helps to fund all of our 

state’s vital services like law enforcement, health and human service programs, 

emergency management, and infrastructure construction. 

In addition to impacting important services, delays in the approval of permits also 

affect job growth and rural economic development. Oil and gas activity contributes 

more than $11.3 billion to New Mexico’s economy and is responsible for more than 

100,000 jobs. Each backlogged permit represents New Mexicans losing out on goodpaying jobs and rural communities losing out on economic growth. 

We need a solution that will streamline layers of bureaucratic requirements and 

expedite the approval process. Five of my western governor peers and I have presented four proposals to the Department of the Interior that would ensure the 

timelier handling of regular, run-of-the-mill applications for drilling permits. 

The draft legislation before the Committee today contains many of the same 

principles as our proposals, with one common objective: cut the duplicative and bureaucratic Federal red tape that is hampering energy production across the West. 

When I took office in 2011, I inherited nearly a half-billion dollar budget deficit 

and we have made great progress since then. Our tax revenues are rising rapidly, 

New Mexico’s economy is expanding and diversifying, and we have taken critical 

steps to protect the long-term stability of our state budget while amassing an $800 

million budget surplus without raising taxes once. 

We’ve cut unnecessary government red tape and improved efficiency, we’ve 

expanded production in New Mexico, while at the same time cracking down on 

polluters and levying more fines than any prior administration did. And, we’re 

9 

implementing our all-of-the-above energy plan to aggressively develop all sources of 

energy in New Mexico. 

These four bills offer you an opportunity to improve Federal processes in a way 

that will make a measurable difference for all New Mexicans and millions of people 

across the western United States and the rest of our country. 

Thank you for your time and consideration. 

Dr. GOSAR. Thank you, Governor. 

I now recognize Mr. McQueen for his 5 minutes. 

STATEMENT OF THE HON. KEN MCQUEEN, SECRETARY, 

ENERGY, MINERALS AND NATURAL RESOURCES DEPARTMENT, STATE OF NEW MEXICO, SANTA FE, NEW MEXICO 

Mr. MCQUEEN. Chairman Gosar, Ranking Member Lowenthal, 

and members of the Subcommittee, thank you for the opportunity 

to appear today to discuss oil and gas permitting on lands managed 

by the Federal Government. The overwhelming majority of Federal 

land ownership is concentrated in states west of the 100th 

meridian. 

In New Mexico, the Federal Government owns 35 percent of the 

state’s acreage, most of which is managed by the Bureau of Land 

Management. Oil and gas production in New Mexico is disproportionately produced on these Federal lands. In 2017, 57 percent of 

the oil and 65 percent of the New Mexico gas was produced from 

the Federal mineral estate. 

Today, the Permian Basin is one of the most active plays in the 

world. In fact, 45 percent of the entire U.S. rig fleet is currently 

working in the Permian Basin. The Basin stretches across two 

states—25 percent of the Basin falling in New Mexico and the remainder in Texas. Texas was blessed not only with a larger portion 

of the Basin, but also with no Federal lands. 

This all works to New Mexico’s disadvantage. In Texas, you can 

have a permit and a well drilled quicker than you can complete the 

APD Federal paperwork in New Mexico. The oil and gas industry 

is a very cyclical business with wide, unpredictable swings in activity. During the last price collapse, New Mexico saw drilling rigs 

drop from 103 to 13 in just 17 months. 

That is why it is so important to provide as many permits as possible while oil prices are high, as they are today. That way, when 

we move into the next slow-down, having a larger inventory of producing wells on-line will help buoy the state through the downcycle. My dad always told me to make hay while the sun shines. 

Because it seemed unlikely that a petition to redraw the Texas– 

New Mexico border to locate more of the Permian in New Mexico 

would succeed, we are here today encouraging you to examine and 

address process inefficiencies that will help put states like New 

Mexico with a heavy BLM presence on a more level playing field 

with states like Texas, who still wonders what BLM stands for. 

These proposals developed by Governor Martinez and endorsed 

by six other western state governors, including North Dakota, 

Oklahoma, Utah, Alaska, Idaho, and Wyoming, offers a practical 

and common-sense approach to addressing the mountain of backlogged permits on Federal lands. 

10 

Currently, there are over 850 applications for permit to drill, or 

what we call APDs, pending in the Carlsbad, New Mexico BLM 

field office. That is the heart of the Permian Basin. The BLM will 

eventually approve most, if not all of the APDs. However, marshaling each APD through the present process will take an average 

of 250 days. These delays present significant cost to the Federal 

Government and the state of New Mexico. 

Given current oil and gas prices, over a 1-year period these 

delays will cost the Federal Government over $1.3 billion, and New 

Mexico over $700 million. These revenues are not deferred because 

of substantive FLPMA, NEPA, or other objections. Rather, these 

revenues are deferred solely because of process inefficiencies. 

These proposals do not subjugate one statutory process to 

another. Rather, they ensure that when circumstances call for limitations on development, those limitations will be based on substance and not process alone. 

The first proposal right-sizes the geographic scope of a BLM 

APD. Under current processes, field offices require an APD for production and exploration activities situated on non-Federal surface 

if the activity penetrates Federal minerals. This proposal removes 

the APD requirement for production and exploration activities situated on non-Federal surface if the operator submits to BLM a 

state-issued permit to drill. 

The second proposal introduces practical NEPA categorical exclusions on certain activities conducted under the Mineral Leasing 

Act. Importantly, the new categories of activities are activities that 

mirror existing land use activities or are categories of activities 

that have already undergone NEPA analysis. 

The third proposal is perhaps the most impactful, and while 

novel in oil/gas context, it is not without precedent. The proposal 

shares attributes with the well-known Clean Water Act Section 404 

nationwide permitting scheme, which has been in existence for decades. Under the proposed program, an operator submits a notification of a permit to drill in lieu of an APD. The notification must 

include certain specified items. Assuming a complete notification, 

the operator can move forward with its proposed production activities, unless within 45 days it receives notice that the Secretary of 

the Interior objects to proposal and the production activity. 

In conclusion, the problem with energy development in New 

Mexico and similarly situated states is real. Waiting a year for a 

permit is an economic poisoned pill. These bills, like Governor 

Martinez’s proposal, present practical and executable solutions that 

eliminate process inefficiencies and get the process of developing 

energy and an economy back on track. To the extent that there are 

opportunities to pilot these or other similar proposals on a regional 

or state level, New Mexico is ready and willing to get started. 

Thank you. 

[The prepared statement of Mr. McQueen follows:] 

11 

1Federal Land Ownership: Overview and Data, Congressional Research Service, March 3, 

2017, (available at https://fas.org/sgp/crs/misc/R42346.pdf). 2 43 U.S.C. § 1701(a)(7)–(8). 

PREPARED STATEMENT OF KEN MCQUEEN, CABINET SECRETARY, ENERGY, MINERALS

& NATURAL RESOURCES DEPARTMENT, STATE OF NEW MEXICO

INTRODUCTION

Chairman Gosar, Chairman Bishop, Ranking Member Lowenthal, members of the 

Subcommittee, thank you for the opportunity to appear today to discuss oil and gas 

permitting on lands managed by the Federal Government. 

The Bureau of Land Management administers some 245 million surface acres (a 

tenth of the U.S. land base) and 700 million subsurface mineral acres. While no one 

here will be surprised by this fact, it nevertheless is worth mentioning that the 

overwhelming majority of Federal land ownership is concentrated in states west of 

the hundredth meridian. Consider that the Federal Government owns 48 percent of 

Wyoming, 61 percent of Idaho, 63 percent of Utah, 61 percent of Alaska, and 80 

percent of Nevada, whereas Federal ownership falls to nominal levels as you move 

east, with the Federal Government owning only 1.8 percent of Texas, 1.1 percent 

of Illinois, 2.1 percent of Pennsylvania, 1.2 percent of Massachusetts, and 0.6 

percent of New York.1 As everyone here knows, Federal land ownership, with its 

complex regulatory overlay, can stymie land use and development. With the bulk 

of western states’ lands falling under Federal ownership, the conclusion is not a 

hard one to reach that in the context of land management opportunities, western 

states are at a comparative disadvantage to their eastern sister-states. 

In New Mexico, the Federal Government owns 35 percent of the state’s acreage, 

most of which is managed by the Bureau of Land Management (BLM). Oil and gas 

production in New Mexico is disproportionately produced on those Federal lands. 

Consider that in 2017, 57 percent of New Mexico’s oil and 65 percent of New 

Mexico’s gas was produced from the Federal mineral estate. 

Today the Permian Basin is one of the most active plays in the world, in fact, 

45 percent (477 rigs) of the entire U.S. rig fleet is working in the Permian Basin. 

The Basin stretches across two states—25 percent of the basin falling in New 

Mexico and the remainder in Texas. Texas was blessed, not just with a larger portion of the basin, but also with no Federal lands. This all works to New Mexico’s 

disadvantage. In Texas you can have a permit and a rig on location quicker than 

you can fill out the paperwork to drill a well on Federal acreage in New Mexico. 

The oil and gas industry is a very cyclical business, with wide and unpredictable 

swings in activity. During the last price collapse, New Mexico saw utilized drilling 

rigs drop from 103 to 13 in 17 months. 

Why does this matter? 

It’s important to provide as many permits as possible while oil prices are high, 

as they are today. That way, when we move into the next slowdown, having a larger 

inventory of wells drilled and more production on-line will help buoy the state 

through the down cycle. 

Because it seemed unlikely that a petition to redraw the Texas-New Mexico 

border to locate more of the Permian in New Mexico would succeed, we are here 

today encouraging you to examine and address process inefficiencies that will help 

put states like New Mexico, with a heavy BLM presence, on a more level playing 

field with states like Texas, who still do not know what BLM stands for. This proposal, developed by Gov. Martinez, and signed on by five other western state 

governors, offers a practical and common-sense approach to addressing the mountain of backlogged permits on Federal lands. 

When the BLM makes decisions for the multiple-use lands under its management, 

specifically decisions regarding mineral development, the decisions are primarily 

governed by three statutes—the Federal Land Policy and Management Act of 1976 

(FLPMA), the National Environmental Policy Act (NEPA), and the Mineral Leasing 

Act. Often this collection of statutes has been perceived to be anti-development in 

nature. This perception is not in keeping with the statutory language. Consider the 

purposes of the statutes. 

FLPMA instructs the BLM to manage its resources ‘‘based on multiple use and 

sustained yield’’ and in a manner that protects ‘‘scenic, historical, ecological [and] 

environmental’’ resources and values.2

NEPA instructs the Federal Government to cooperate with state and local governments to ‘‘foster and promote the general welfare, to create and maintain conditions 

12 

3 42 U.S.C. § 4331(a). 

4 30 U.S.C. § 21a. 

under which man and nature can exist in productive harmony, and fulfill the social, 

economic, and other requirements of present and future generations of Americans.’’ 3

The Mineral Leasing Act instructs the Federal Government to ‘‘foster and encourage private enterprise in (1) the development of economically sound and stable 

domestic mining, minerals, metal and mineral reclamation industries, [and] (2) the 

orderly and economic development of domestic mineral resources, reserves, and reclamation of metals and minerals to help assure satisfaction of industrial, security 

and environmental needs.’’ 4

FLPMA promotes multiple-use and sustained yield and the Mineral Leasing Act 

encourages private enterprise and economic development. These pro-development 

mandates are balanced by NEPA’s environmental considerations. NEPA is not, 

however, intended to stymie development, rather implement a process to help find 

balance. Together these statutes promote both development and environmental protection. However, the current implementing processes under these statutes have 

been largely co-opted by anti-development interests with the intent of stalling and 

preventing through delay the multiple use sustained yield mandate. 

THE PROPOSALS

Currently, there are over 800 Applications for Permit to Drill (APDs) pending approval in the Carlsbad, New Mexico BLM field office—the heart of the Permian. The 

BLM will eventually approve most, if not all, of these APDs, however, marshalling 

each APD through the present process will take an average of 250 days. These 

delays present significant costs to the Federal Government and the state of New 

Mexico. Given current oil and gas prices, over a 1-year period these delays will cost 

the Federal Government over $1.3 billion and New Mexico over $700 million. These 

revenues are not deferred because of substantive FLPMA, NEPA, or other objections, rather these revenues are deferred solely because of process inefficiencies. 

The proposals before the Subcommittee eliminate process inefficiencies. They do 

not subjugate one statutory purpose to another, rather, they ensure that when circumstances call for limitations on development, those limitations will be based on 

substance and not process alone. Process for the sake of process should not be 

allowed to frustrate the multiple-use and economic development mandates. 

No Federal Permit Required for Production Activities on Non-Federal Surface 

The first proposal right-sizes the geographic scope of a BLM APD. Under current 

processes, field offices require an APD for production and exploration activities situated on non-Federal surface if the activity penetrates Federal minerals or if the 

operation is unitized/communitized with Federal minerals. Under these scenarios, 

production/exploration activities situated entirely on private land would require an 

APD and consequently NEPA process if, for example, the increasingly common 

multiple-mile horizontal well-bore penetrates, even slightly, Federal minerals, or if 

a well situated entirely on private surface that never penetrates Federal minerals 

but is unitized with Federal minerals. 

This proposal removes the APD requirement for production and exploration activities situated on non-Federal surface if the operator submits to the BLM a stateissued permit to drill and the United States owns less than 50 percent of the target 

minerals. 

NEPA Categorical Exclusions 

The second proposal introduces practical NEPA categorical exclusions for certain 

activities conducted under the Mineral Leasing Act. Importantly, the new categories 

of activities are activities that mirror existing land-use activities or are categories 

of activities that have already undergone NEPA analysis. For example, drilling an 

oil or gas well at a well pad site at which drilling has occurred previously, or drilling 

an oil and gas well at new well pad sites, provided the new disturbance does not 

exceed 20 acres or the amount of acreage evaluated in prior NEPA. 

I would recommend a slight tweak to the proposal as presently drafted and extend 

the time frame on current categorical exclusions to 10 years. This makes sense because the last two Resource Management Plans have taken nearly 5 years to 

complete. 

Notification of Permit to Drill (NPD) 

The third proposal is perhaps the most impactful, and while novel in the oil and 

gas context, is not without precedent. This proposal shares attributes with the wellknown Clean Water Act Section 404 nationwide permitting scheme, which has been 

13 

in existence for decades. Under the proposed program, an operator submits a notification of a permit to drill in lieu of an APD, which notification must include certain 

specified items, such as a surface use plan of operations, a drilling plan, a well plat, 

evidence of bond coverage, the appropriate fee, etc. Assuming a complete notification 

and that the operation meets certain additional specified criteria, the operator can 

move forward with its proposed production activity, unless within 45 days it receives 

notice that the Secretary of Interior objects to the proposed production activity. 

Like the Clean Water Act Section 404 nationwide permitting scheme, this 

proposal instructs the Secretary to develop regulations establishing procedures that 

will implement the program and further contemplates the preparation of a NEPA 

analysis as part of that rulemaking. The effect is to adjust the timing of the NEPA 

analysis. Rather than conducting NEPA upon receipt of an APD, the proposal contemplates a large, umbrella NEPA review contemplating oil and gas production activity within specified areas. Then, when an operator intends to move forward with 

production activity at a specific site, it must conduct a limited environmental review 

that must conclude that the actions described in the notification do not pose a significant effect to the environment or to threatened or endangered species. 

CONCLUSION

In conclusion, the problem with energy development in New Mexico and similarly 

situated states is real. Waiting a year for a permit is an economic development 

poison-pill. These bills, like Governor Martinez’s proposals, present practical and 

executable solutions that eliminate process inefficiencies and get the process of developing energy and an economy back on track. To the extent there are opportunities to pilot these or other similar proposals on a regional or state level, New Mexico 

is ready to get started. 

QUESTIONS SUBMITTED FOR THE RECORD TO THE HONORABLE KEN MCQUEEN, 

SECRETARY, NEW MEXICO ENERGY, MINERALS AND NATURAL RESOURCES

DEPARTMENT

Questions Submitted by Rep. Ben Ray Luja ́n 

Question 1. In a presentation to the New Mexico legislature in November 2017, 

Secretary McQueen presented figures purporting to estimate the scope of the methane 

waste and pollution problem in New Mexico, but these figures excluded the volume 

of methane leaked by the oil and gas industry. Scientific studies have shown that 

these fugitive emissions make up most of oil- and gas-related methane emissions. 

What steps has the New Mexico state government taken to correct these figures to 

fully account for all sources of oil- and gas-related methane pollution and waste? 

Question 2. During your confirmation hearing, Secretary McQueen, you stated that 

you believed the infamous hotspot of methane pollution over northwestern New 

Mexico—the most concentrated plume of methane found anywhere in the country— 

was due to ‘‘natural causes.’’ Now that scientific reports from top scientists at the 

National Oceanic and Atmospheric Administration (NOAA), the University of 

Michigan, and the University of Colorado have linked this pollution hot spot directly 

to problems with oil and gas wells in the San Juan Basin, have you changed your 

opinion? 

Question 3. We have been informed that the state of New Mexico’s Energy, Minerals 

and Natural Resources Department requires oil and gas operators to report monthly 

on their venting and flaring volumes, but that this information is not available or 

easily accessible to the public through the Oil Conservation Division’s statistics 

website. Why hasn’t this agency provided this information to the public? Will you 

provide summary statistics and public access to the raw data? 

Question 4. On March 8, 2017, the Director of New Mexico’s Oil Conservation 

Division issued a letter to operators that indicated a failure in compliance for operators reporting venting and flaring. What has the state done to rectify this problem? 

What is the current status of compliance? 

Question 5. Governor Martinez’s 2015 energy strategy listed methane as a ‘‘leading 

New Mexico emissions concern in the energy sector.’’ What has the Martinez administration implemented since 2015 to address this methane concern? 

14 

Question 6. The Governor’s 2015 Energy Strategy went on to state that the Oil 

Conservation Division ‘‘will be collaborating with several other state agencies to 

assess the economics and benefits to both the state and industry of better capturing 

methane emissions.’’ What is the current status of that analysis? 

Answers. 

In 2015 Governor Susana Martinez directed then-Cabinet Secretary, Dave Martin 

of the Energy, Minerals, and Natural Resources Department to convene a joint industry-government task force to study methane releases in New Mexico. The 

Governor’s directive was to: (1) quantify vented and flared volumes of methane in 

New Mexico and compare them to surrounding states; (2) identify technological advancements that could be employed to reduce vented and flared volumes; (3) 

consider possible regulatory approaches that might reduce vented and flared 

volumes; and (4) eliminate or adjust regulations that slow or otherwise impede technological implementation/innovation that could reduce venting and flaring. This Gas 

Capture Workgroup has met regularly since 2015. 

Workgroup recommendations and ongoing efforts to reduce methane 

emissions. 

The Workgroup has delivered several recommendations to the New Mexico Oil 

Conservation Division (OCD), all of which have been implemented. The first recommendation requires operators to quantify and report, monthly, non-transported, 

i.e. flared and vented, volumes. Effective October 19, 2015, OCD notified all 

Operators to report non-transported volumes on their C-115 production reporting. 

The change became effective for the November 2015 production month, with the 

first round of monthly reporting due no later than January 15, 2016. 

The Workgroup also recommended that all operators submit a Gas Capture Plan 

(GCP) to OCD with their Application to Drill (APD). The GCP outlines and specifies 

how an operator intends to avoid flaring and venting methane, which includes communicating with transport and processing companies for the potential increase in 

the volumes. OCD adopted this recommendation in May 2016. The New Mexico GCP 

form was subsequently adopted by the BLM for Federal APDs in New Mexico. 

Additionally, OCD regulations prohibit the venting or flaring of methane. The production or handling of crude petroleum oil or natural gas of any type or in any form, 

or the handling of products thereof, in such manner or under such conditions or in 

such amounts as to constitute or result in waste is prohibited. The exception to this 

prohibition is for limited completion activities, which allows an operator to flare or 

vent casinghead gas from a well for up to 60 days. 

Using data compiled from monthly non-transported volume reporting, the 

Workgroup evaluates reported volumes to help ensure compliance is achieved. 

Investigation of operators failing to report found 56 instances among 15 operators 

where vented or flared volumes may not have been properly reported. Follow-up 

continues with individual operators to validate and ensure correct C-115 reporting. 

Considering that approximately 60,000 active wells report monthly volumes in New 

Mexico, the incidence of non-reporting is miniscule. Operators who fail to report are 

subject to OCD enforcement, up to and including suspension of their approval to 

transport. Addressing this observation, OCD issued a notice to operators on March 

8, 2017, reiterating the reporting requirement. 

During the time the Workgroup has existed, New Mexico has seen its vented and 

flared volumes decreased by nearly 50 percent. Technological innovation is the primary driver behind the reductions, with many operators making significant expenditures to install new equipment, such as low-bleed controllers. By utilizing new and 

more advanced equipment as well as by adhering to evolving best-management 

practices, continued shale drilling is not expected to contribute additional volumes 

of methane. Furthermore, basic rules of economics mandate methane recovery over 

venting or flaring—every molecule of methane that is vented or flared is a molecule 

of methane that is not sold and thus represents lost revenue to the producer. 

Technological evolutions coupled with process innovations have and will no doubt 

continue to provide increased reductions in methane emissions. Some of the advancements and innovations driving the reduction in vented and flared volumes in 

New Mexico include: 

• Proactivity by operators in constructing takeaway facilities and pipelines in 

advance of drilling; 

• Replacement of high-bleed controllers with low-bleed controllers; 

• Operator owned gathering system in the San Juan Basin, facilitating 

blending of high-nitrogen gas before sales point; 

• Pad drilling (one gathering line supports multiple wells); 

15 

• Use of electric controllers on new facility installations; 

• Installation of solar powered controllers; 

• Well-site cryo unit to separate and collect hydrocarbon liquids. 

The Fruitland Coal outcrop is a significant source of naturally occurring 

methane. 

Regarding methane concentrations in northwestern New Mexico, consider this 

context. Methane originates from multiple sources, some man-made, some natural. 

Most of the data collected to date in northwest New Mexico has either been from 

qualitative methods or simulation. The San Juan Basin possesses a unique geologic 

feature—it is ringed on the west and north by an outcrop of the Fruitland Coal 

seam. This feature is a significant coal source and has been commercially mined for 

years. 

The coal outcrop not only provides ready access to coal but emits significant and 

steady volumes of methane. Certain voices have placed blame for methane concentrations in the northwest at the foot of New Mexico oil and gas producers, while 

ignoring the elephant-sized methane emitter which is the Fruitland Coal outcrop. 

As reported by the Colorado Oil and Gas Commission, in 2017, the 23-mile 

outcrop in LaPlata County, Colorado emitted 16,650 Mcf per day. Consider that an 

additional 40 miles of the outcrop exists across the Southern Ute Reservation and 

New Mexico. Those 63 miles of outcrop are responsible for approximately 45,606 Mcf 

per day of methane emission, which is equivalent to 77 percent of the total natural 

gas flared in New Mexico in April 2018. 

Impacts to Marginal Wells 

The economic impact of methane mitigation must be weighed against the value 

of continued production in marginal wells. At last count, New Mexico had 17,451 

marginal gas producers which make up 17 percent of the state’s total gas production. In the current price environment, many of these wells produce marginal profits 

at best, so imposition of additional operational costs will result in cessation of 

production from these wells. 

New Mexico is a leader in methane reductions. 

The U.S. Energy Information Administration (EIA) provides estimates of vented 

and flared volumes from several states. New Mexico compares very favorably to 

other reporting states. The available data is charted below: 

There are no lost royalties beyond the custody transfer site. 

Finally, some have raised concerns about revenue that is lost from methane that 

is leaked from transportation infrastructure, e.g. pipelines. This concern is unfounded. The custody transfer of natural gas generally occurs at the wellhead, 

meaning royalties are paid on volumes measured at that point. In other words, royalties on volume of methane leaked downstream of the custody transport site have 

already been paid—there is no lost revenue to the state. The only lost revenue on 

any methane that might be leaked downstream of the custody transfer site are 

revenues lost to the owner of the gas. 


30350.002.eps
16 

Dr. GOSAR. Thank you, Mr. McQueen. 

I now recognize Mr. Willis for his 5 minutes. 

STATEMENT OF DENNIS WILLIS, PRICE, UTAH 

Mr. WILLIS. I thank the Subcommittee for the opportunity of 

participating in today’s hearing. 

For 35 years, I was employed by the Bureau of Land Management. I worked in many aspects of the oil and gas program. And 

we always involved all stakeholders, regardless of their welfare or 

political influence. Since retiring, I have engaged in these processes 

as a board member of the Nine Mile Canyon Coalition, a local nonprofit. I am here today as a private citizen and resident of Carbon 

County, Utah. 

In Carbon County, we revel in a 130-year heritage of energy development and production. We value industry’s contributions to our 

economy, but we also expect them to be a good neighbor. We rely 

on the NEPA process to make sure companies learn about potential 

conflicts and are aware of community sensitivities. 

The most contentious project I worked on was the West Tavaputs 

drilling project, a 140,000-acre project involving Federal, state, and 

local agencies, several native tribes, 18 consulting parties, and we 

received over 58,000 public comments. In the end, no appeals were 

filed. Utah’s governor proclaimed the effort energy development 

done right. And I am sure, without NEPA, we would still be in 

litigation today. 

NEPA is a wonderfully democratic law, assuring that the public 

is not just informed of Federal actions, but can participate and see 

a response to their input. There is no justification for providing 

sweeping NEPA exemptions for an activity as potentially harmful 

as oil and gas development. CXs are for actions that do not have 

a significant effect on the environment. They are not available because some industry finds NEPA bothersome. 

We should be encouraging the industry to use the piles of unused 

permits and leases it already has. 

Eliminating site-specific reviews also eliminates the opportunity 

to modify proposals, minimize conflicts, protect human health and 

safety, and safeguard critical resources. 

Under the proposed notice and CX scheme, all BLM could do 

would be to catalog the damage and commiserate with citizens 

whose opportunities to enjoy public lands are unnecessarily 

diminished. 

These bills replace informed local decision making with a topdown rulemaking from Washington, DC, something members of 

this Committee have complained about for 40 years. 

My daughter is getting married in August on public lands. To get 

her recreation permit under a CX, her wedding party cannot occupy more than 3 acres, remove vegetation, and cannot exceed 14 

days of occupancy. How should a driller be allowed to bulldoze the 

same site to 10 acres, occupy the land for 50 years without any consideration of the consequences? 

In Carbon County, a group of citizens want to develop some 

mountain bike trails on public lands, so we worked with BLM 

through the NEPA process, including placing trails around oil and 

gas infrastructure. It is actually in a producing field. If a small 

17 

group of volunteers with no financial resources can figure this out, 

surely the burden is not too great for the paid professionals within 

the industry. 

We often hear industry brag about its ability to use technology 

to avoid harm. I, myself, have seen firsthand their very impressive 

results with directional drilling, noise reduction, visual mitigation, 

that sort of thing. Under the proposed rules, the company won’t 

even have to contemplate using such techniques, nor could BLM 

even suggest them. 

The proposed fees for protesting a lease are another onerous attempt to silence local voices. The purpose of a protest is to identify 

error in the agency decision. The more errors, the more expensive 

it would be for the public to point it out with the cost per page. 

In the meantime, anybody can nominate a lease parcel at any 

time for any reason. The nominator can remain anonymous. They 

pay no fees. They are not obligated to bid the parcel if it is offered 

for auction. And BLM incurs all the expenses of parcel valuation 

and lease preparation. There should not be a fee for reconsidering 

leasing for a good cause, but maybe there should be one for nominating a lease. 

These bills are a gift to the oil and gas industry at the expense 

of public lands resources and the people who live with and care 

about their public land heritage. Please don’t claim these bills 

make sense to the public, the public lands, to those tasked with 

managing them, or for communities in the West. Please don’t move 

them forward. 

Thank you for the opportunity to share my experience, and I 

thank the Committee. 

[The prepared statement of Mr. Willis follows:] 

PREPARED STATEMENT OF DENNIS WILLIS, PRICE, UTAH

I want to thank the Subcommittee for this opportunity to participate in this 

hearing and in our exercise of democracy. For most of 35 years, I was a public servant, employed by the Bureau of Land Management. During my career I worked in 

many aspects of the oil and gas leasing program. From the development of resource 

management plans (RMPs) to the preparation of lease sales, the permitting of an 

individual wildcat well to working on three environmental impact statement (EIS) 

documents for full field development. I saw the value of listening, learning and utilizing the good information and great passion the public brought to the process. The 

processes outlined in the Federal Land Policy and Management Act and the 

National Environmental Policy Act (NEPA) work because they seek involvement 

from all stakeholders regardless of the wealth, political influence, or popularity they 

may or may not enjoy. Since retiring, I have been involved in these processes as 

a member of the public and as board member of the Nine Mile Canyon Coalition, 

a small, local non-profit corporation. I am here today as a private citizen, a resident 

of Carbon County, an area blessed with both mineral wealth and awesome, iconic 

western landscapes. As the name suggests, my county has been heavily reliant on 

the production of fossil fuels for about 130 years. 

In Carbon County we revel in our heritage of coal and oil and gas production. We 

value the contributions those industries make to our economy, tax base and employment. We also love our legacy of public lands. Our ranchers use the land for livestock production; we enjoy night skies and the rare experience of reading a book 

by the light of the Milky Way. We use public lands to hunt, fish, hike, bike, go four 

wheeling and teach our children and grandchildren. We live in the desert; our scarce 

water resources and community watersheds are precious. We enjoy jaw dropping, 

spectacular scenery. Archaeological and historic sites tell the tale of people on these 

landscapes for over 8,000 years. 

We welcome oil and gas development but with the expectation the industry will 

be a good neighbor, considerate of community needs and sensitivities. When oil and 

gas projects happen, we do not dedicate the entire landscape to production. There 

18 

is an expectation that other uses and users will continue to enjoy the public lands 

without undue burden. The NEPA process is how the oil and gas companies learn 

about the potential user conflicts and community sensitivities. It is part of the way 

we all stay good neighbors. 

These bills are crafted solely to benefit the oil and gas industry by allowing them 

to avoid Federal environmental law and ride roughshod over local public interest. 

These bills shut out the local public from participating in the management of their 

public lands. It also bars participation of other Federal, state, and local agencies 

that routinely participate in the NEPA process. It denies the right of the public to 

freely petition their government, participate in the public NEPA process and have 

their concerns heard and addressed. It removes discretionary authority from the 

local public land managers and imposes a one-size-fits-all directive from the 

Congress. It ties the hands of land managers and local communities to identify, address and minimize conflicts administratively, leaving litigation as the only avenue 

to conflict resolution. 

The most contentious oil and gas project I worked on in my BLM days was the 

West Tavaputs Drilling Project. The West Tavaputs Plateau has almost every resource category found on BLM lands. There are wilderness issues, wild horses, deer, 

elk and bighorn sheep, outstanding archaeology, endangered plants, birds and fish, 

sage grouse and the list goes on. Every issue, resource and resource user conflict 

you can imagine all occur on that one 140,000 acre project area. The West Tavaputs 

EIS involved 5 Federal agencies, 5 state and local agencies, several Native American 

tribes, and 18 consulting parties, including local and national environmental groups. 

The draft EIS generated 58,000 public comments. Through the NEPA process, extensive outreach and meetings with interested stakeholders concerning resource impacts and alternative ways to address them, a final decision was reached. Nobody 

got everything they wanted but everyone got their needs met. The industry gave up 

some drilling locations and surrendered some leases. Environmental groups made 

concessions on wilderness; archaeological and sportsmen’s groups also made compromise; and adversaries became good neighbors. When it was all over, there were 

no appeals filed. Utah Governor Gary Herbert proclaimed the effort as ‘‘energy 

development done right.’’ Members of the Utah congressional delegation agreed. 

Without the NEPA process bringing people to the table, the project would still be 

in litigation today, 8 years after. 

What might be fast and cheap for the energy industry may not be good for local 

communities in the West. The existing process, while not as fast as some would like, 

is effective at engaging communities, forging cooperation and results in a western 

landscape we can all thrive in. 

The suite of bills we are discussing today are of great concern. This legislation 

seeks to end the practice of local BLM decision making based on site specific conditions and input from nearby communities and the broader public. It would silence 

the ability of local citizens contribute local knowledge and identification of community needs. These bills would usurp informed, rational, local decision making with 

a top down, one-size-fits-all, dogmatic rule imposed by Washington, DC. This is 

exactly the type of action I have heard current and past members of this Committee 

rail against for the last 40 years. 

NEPA is one of this Nation’s bedrock environmental laws. It is also a wonderfully 

democratic law; assuring the public is fully informed of Federal actions, assuring the 

public the opportunity to participate and that public comments are not just received, 

but responded to. While it is sometimes cast as a villain of bureaucratic red tape 

or ‘‘paralysis by analysis,’’ it is important to remember the objectives is assuring 

Federal decision makers are making fully informed, rational decisions and the public is fully informed and allowed to contribute to the decision-making process. In my 

opinion, the most important NEPA regulation is found at 40 CFR 1500.1(c): 

Ultimately, it is not better documents but better decisions that count. 

NEPA’s purpose is not to generate paperwork—even excellent paperwork— 

but to foster excellent action. 

There is simply no good reason to exempt the oil and gas industry from NEPA 

review and block the public from the decision-making process for development on 

publicly-owned lands. 

CATEGORICAL EXCLUSIONS AND NOTICE OF PERMIT TO DRILL

BLM is tasked with multiple use management accommodating all competing 

resources. The site-specific review process affords the BLM and the public the opportunity to review and modify proposals to minimize conflicts between competing interests, protect human health and safety, and safeguard critical resources. It also 

19 

enables the BLM the opportunity to make modifications and, enact appropriate and 

reasonable drilling stipulations on development proposals. The proposed CX expansion would eliminate these site-specific evaluations. It would also eliminate the 

public’s right to participate in the NEPA process. Critically, the proposed legislation 

would eliminate BLM’s discretionary ability—in coordination with affected communities and members of the public—to implement solutions that will help avoid needless resource use conflicts. This proposal is a recipe for increased conflicts over 

public lands, as if there were not enough of that already. It takes away the opportunity to work through the NEPA process, and will instead lead to increased conflict 

between development and other uses of public lands. 

The proposed use of a Notice system and categorical exclusions (CXs) for oil and 

gas drilling permits are unwise and unwarranted. The Council on Environmental 

Quality guidance on CXs is to define categories of actions which do not individually 

or cumulatively have a significant effect on the human environment and which are 

therefore exempt from requirements to prepare an environmental impact statement 

(40 CFR 1500.5k). In BLM they mostly cover minor administrative actions like inventory and monitoring, or to transfer an authorization from one entity to another 

where there is no change on the land. They are also used to cover maintenance of 

existing facilities, placing directional signs and the like. 

Oil and gas wells simply do not fit the criteria for a CX given that these activities 

are among the most impacting activities permitted by BLM on a regular basis. They 

deserve the scrutiny provided by the NEPA process. An oil and gas well site can 

have major impacts. The associated access roads and pipelines that are affiliated 

with oil and gas development can frequently have bigger impact issues than the 

wells itself. The overarching consideration for creating a CX is a lack of impact from 

the activity, not the project proponent finding the application of NEPA a bother. 

And when BLM is deciding whether or not to apply a CX, it is supposed to conduct 

a review to see whether known extraordinary circumstances or, in the case of some 

CXs, other information indicating environmental review is needed are applicable. If 

they are present, the process ensures that the BLM can require additional NEPA 

documentation in order to ensure a better decision. 

This proposed legislation is also out of proportion with other BLM CX provisions. 

For example, this proposal allows heavy equipment surface disturbance on up to 10 

acres individually and 150 acres cumulatively. My daughter is getting married on 

public land in August. For her wedding to obtain a recreation permit using a CX, 

the wedding party cannot occupy more than 3 acres, removal of vegetation and 

earth moving are not allowed, and occupancy of site is limited to no more than 14 

days. If a simple family wedding is held to a limit of 3 acres, it begs the question 

why a drilling company could bulldoze the entire site to 10 acres and occupy the 

area for upwards of 50 years. 

These bills seem to assume that BLM has already evaluated the site-specific 

impacts of drilling. But that is seldom the case prior to the permitting stage. 

Rather, BLM’s planning leasing and permitting processes actually anticipate more 

intensive environmental analysis prior to issuing permits to drill. When BLM conducts an RMP process, the areas open to oil and gas leasing are drawn on a very 

large-scale map with low resolution and the majority of lands are left open to leasing. At the leasing stage, BLM may decide that the area is generally suitable for 

leasing but under current BLM policy, there is no requirement to conduct a detailed 

analysis of potential impacts. As a result, when applications for permits to drill 

(APDs) come in, that is the only time oil and gas development gets looked at on 

a site specific, small scale, high resolution basis. BLM needs to retain discretion at 

all phases of leasing and development to meet its multiple use mandate, these lands 

are not presumably sacrifice zones for oil and gas development. Yet, these bills 

would largely prevent BLM from considering harm from drilling and from taking 

any measures to prevent such harm. 

The site-specific evaluation and NEPA review of APDs are critical. Decisions to 

site wells commit resources for decades; they are long-term, irreversible, irretrievable commitments of resources. They frequently involve major alteration of the topography and landscape. Conflicts can frequently be avoided by moving the well, 

sometimes by a matter of feet; and, in other cases, BLM can find a more suitable 

site for a developer within a few miles. Design changes can be incorporated at the 

APD stage to minimize impacts to scenic resources, protect water, reduce noise 

impacts, and prevent wildlife injury. Without the application of NEPA, there is no 

opportunity for the local manager or local land users to make changes or otherwise 

address and avoid conflicts; this seems to virtually encourage litigation as the 

avenue for resolution. 

The proposed Notice and CX process provides no opportunity to mitigate conflicts. 

A Notice may place a well on a National Historic Trail or on an important scenic 

20 

1 Energywire, June 1, 2018, ‘‘Royalty panel recommendation could rehash NEPA controversy’’ 

https://www.eenews.net/energywire/2018/06/01/stories/1060083159. 

overlook. It may be located in especially sensitive and critical wildlife habitat or a 

community water source. Under the current process, BLM can address and mitigate 

these conflicts. Under the proposed Notice/CX scheme proposed here, all BLM could 

do is catalog the damage and commiserate with citizens whose opportunities to 

enjoy public lands are unnecessarily diminished, if they are notified at all. 

There is also a basic fairness issues among public land users. In Carbon County, 

a group of citizens formed a committee to develop some singletrack mountain bike 

trails on public lands. These trails provide recreational riding opportunities and 

helped to link towns and communities. The committee worked through the NEPA 

process in cooperation with the BLM. Public input was solicited, and through the 

process we developed a better, more cohesive trail system than was originally proposed. NEPA worked as intended, it required a look at alternatives and resulted in 

a better project. NEPA on APDs work in much the same way. If a small group of 

community volunteers with no financial resources can wade through the system for 

a non-motorized singletrack trail, surely the burden is not too great for the paid professionals within the oil and gas industry. How do you explain to a volunteer group 

their non-motorized trail, constructed with hand tools requires a NEPA analysis but 

an oil company can bulldoze roads, pipelines and operate a well pad without any 

NEPA consideration? Much of our trail system is in a producing coalbed methane 

field. The trails were placed to avoid industry infrastructure. With the proposed 

Notice system and CXs, a drilling company could plop down facilities that obliterate 

our trails with no consideration or mitigation. 

There is simply no justification for providing an activity that is as widespread and 

potentially harmful as oil and gas development with such sweeping exemptions from 

the NEPA process. The oil and gas industry already has thousands of unused drilling permits in Utah and throughout the West, and millions of acres of idle leases, 

which raises questions of why these bills are even under consideration and whether 

this Committee should instead be examining ways to force the industry to use the 

permits and leases it already has. 

Additionally, as drafted, the CX provisions have a major logical flaw. The 

proposed CX covers wells drilled in a field within 5 miles of an existing well. It is 

obvious a 5-mile radius covers a lot of country, approximately 78 square miles. That 

is 78 square miles where BLM will not have the opportunity to review critical areas 

and resources and the public will not have any say in the matter. An example from 

our area is known as the Tavaputs Plateau. The plateau is highly dissected by deep 

canyons. The canyon bottoms contain highly sensitive riparian and archaeological 

resources. The company that filed the original drilling proposal for this area requested multiple wells in the canyon bottoms. Through the NEPA process, and after 

the public provided information documenting the potential for impacts on cultural 

and natural resources, it was decided there would be no wells in the canyon and 

those targets would be drilled directionally from the top of the plateau. Those 

canyon bottoms are well within the 5-mile radius. The next Notification of a Permit 

to Drill could locate a well in the sensitive canyon bottom. The proposed CX would 

eliminate the ability of the local BLM office to require directional drilling from the 

plateau, resulting in the loss of critical resources unnecessarily, and without any 

mitigation. More broadly, the CXs included in the bills are so sweeping and generally written that they would lead to many of the same problems that plagued the 

use of the Energy Policy Act CXs. According to a recent statement from the 

Government Accountability Office: ‘‘These problems, in a nutshell, were that BLM 

did not have good internal controls or guidance for how and when to use categorical 

exclusions. Therefore they were using them inappropriately in many cases and 

perhaps not using them when it was appropriate.’’ 1

We have often heard the industry brag about its ability to use technology like 

directional drilling to avoid occupying sensitive sites. I have seen their abilities in 

directional drilling, noise reduction and visual mitigation firsthand and they are impressive. Under the proposed Notice and CX process, the company will not have to 

contemplate whether such techniques are appropriate and BLM would not be in a 

position to even suggest them. 

The proposed Notice/CX process eliminates the ability of the BLM to manage 

public lands in areas with oil and gas activity. It will create conflict and litigation 

where the conflict could easily be mitigated. It denies the public and local citizens 

from having their rightful say in the management of public lands. 

21 

PROTEST PROCESS REVIEW

The proposed fees for protesting an oil and gas lease are onerous, burdensome and 

a further attempt to silence the local public. The Nine Mile Canyon Coalition has 

protested oil and gas leases in the past. But the decision to protest is not arrived 

at easily and preparation of a protest is difficult and stressful. Nobody files a protest 

frivolously or as a gratuitous exercise of free expression. Protests are only filed 

when the protester believes the BLM made a substantial error in their evaluation 

of the lease nomination. It is a continuation of the public participation in the NEPA 

process. The protest points out an error in agency decision making, gives BLM the 

opportunity to correct it and issue a better decision. 

It is rather strange to have the BLM charge the public a fee for pointing out and 

helping BLM correct its errors. 

Once again, there is an inherent unfairness in the process. Anybody can nominate 

any lease parcel at any time, for any reason, or no reason at all. A nomination can 

be frivolous, arbitrary and capricious. Once nominated, the BLM incurs all the expense of parcel evaluation and lease preparation. The nominator pays no fees and 

is under no obligation to bid on the parcel once it is offered. The nominator can 

choose to remain anonymous. Once BLM makes a decision to lease, a protester must 

present substantive reasons and show that the agency has made demonstrable 

errors within 10 days to have BLM reconsider its decision. The protester cannot 

choose to be anonymous. Requesting a Federal agency to reconsider a decision for 

good cause should hardly be the type of action requiring the public pay a fee. Why 

should the public pay a fee for correcting/improving the work of an agency? It is 

the nomination of a lease that should be subject to a cost recovery provision (see 

Sec 304 of Federal Land Policy and Management Act). 

Along with the proposed fees having a chilling effect on public participation, the 

proposed structure is simply silly. The purpose of a protest is to point out demonstrable error in the agency decision. The more error, the longer the protest is likely 

to be. The proposed fee structure provides and inducement for the BLM to do poor 

quality work and then charge a fee to the public for correcting it. 

MINORITY FEDERAL MINERALS

While I do not have direct experience with these situations, the proposed bill 

raises two concerns in need of further consideration. 

1. The development and production of the Federal mineral estate is a Federal 

action. The proposed legislation attempts to redefine Federal action in this 

particular instance. I would question whether this is a rational or proper determination. The Federal agency still is responsible for resource recovery, and protection of 

other resources in production of the Federal oil and gas, as well as for consideration 

of cumulative impacts. This bill removes Federal responsibility for everything but 

production verification and royalty recovery. The agency should not be relieved of 

its responsibility to human health and safety in the development of Federal 

minerals. The Federal agency must be able to hold operators accountable if one of 

these wells blows out due to an overpressure on the Federal lease or when down 

hole failures result in the contamination of ground or surface waters. 

2. The proposed bill seems to provide an incentive to game the system. Using 

directional drilling techniques, an operator could fully develop the Federal mineral 

estate while avoiding all BLM review and oversight, and hence also all accountability to the public 

CONCLUSION

What the oil and gas industry sees as burdensome red-tape, are critical protections, due process, rules of fair play, and economic lifelines for other public land 

users. The rules of the game should not be upended simply because of an inconvenience to one stakeholder, one industry, or one interest; they need to work for all the 

stakeholders at the table. What one industry sees as ‘red tape’ another industry sees 

as a lifeline, a local community sees as their ability to protect community interests, 

and a parent sees as the future western landscape and lifestyle their child inherits. 

These bills are a pure gift to the oil and gas industry. An expensive gift benefiting 

one industry at the expense of public lands and resources, and detrimental to people 

who live with and care about their public land heritage. Please don’t claim these 

bills make sense for the public or public lands or those tasked managing them, or 

communities in the West. Please don’t move them forward. 

Thank you for the opportunity to share my experience as a retired BLM employee, 

board member of Nine Mile Canyon Coalition, and resident of Carbon County, Utah. 

22 

Dr. GOSAR. Thank you, Mr. Willis. 

I now recognize Mr. Baza for his 5 minutes. 

STATEMENT OF JOHN BAZA, DIRECTOR, UTAH DIVISION OF 

OIL, GAS AND MINING, UTAH DEPARTMENT OF NATURAL 

RESOURCES, SALT LAKE CITY, UTAH 

Mr. BAZA. Chairman Gosar, Ranking Member Lowenthal, and 

members of the Committee, thank you for the opportunity to speak 

to you today. My name is John Baza, and I am the Director of the 

Utah Division of Oil, Gas and Mining within the Utah Department 

of Natural Resources. 

My division of Utah State government, which I will refer to as 

OGM, is the principal regulator for the petroleum and mineral extractive industries in the state of Utah. Our statutory charge is fostering the responsible development of Utah’s mineral resources, 

while avoiding impacts that are detrimental to the public safety 

and welfare, and to preserve the environment to provide subsequent use of the lands affected by such development. 

Because the bills being discussed today relate to oil and gas 

activities on Federal lands, I will focus mainly on the oil and gas 

regulatory processes that we perform pertaining to those activities. 

The approval of drilling and production operations on Federal 

lands in Utah runs along two parallel tracks. One track is the 

Federal BLM process of reviewing and approving drilling applications for any well drilled upon a BLM mineral lease. The second 

track is a similar state process performed by OGM that not only 

includes permitting on Federal land, but on state, tribal, and 

private land as well. 

This state process is conducted under state law that requires 

OGM to process drilling permits, and also be the repository of 

public data related to the drilling production of any well within the 

boundaries of the state. Companies doing business in Utah often 

feel that this is redundant, requiring separate drilling permit approvals from both the BLM and OGM for wells drilled on Federal 

land in Utah. 

To further compare the parallel processes, OGM has developed a 

history of approving most applications to drill, or APDs, in 30 to 

90 days. Some APDs that are more complex or sensitive may take 

longer, but these are the exceptions and not the standard. Yet, for 

Federal lands, BLM drilling approvals in Utah often take 12 to 18 

months. 

And lest you think the BLM process is more robust, that is simply not true. I assure you that the OGM process that has been in 

existence in one form or another since the year 1955 is focused on 

achieving responsible development with due regard to public health 

and safety and protection of the environment, and has met those 

goals with remarkable consistency. In fact, I would challenge anyone to compare wells drilled on Federal leases adjacent to those 

drilled on state or private leases to find any notable differences in 

operational conditions, land use impacts, or potential for environmental impact from those wells. 

So, it is reasonable to ask, if outcomes are identical, then what 

justifies such vastly different processes to achieve the same results? I believe that thoughtful and creative thinkers could find 

23 

ways to accomplish the necessary objectives of requiring safe and 

protective oil and gas development on all lands, including those on 

Federal mineral estate. 

As I have reviewed the draft language for the bills in question 

today, especially the proposed bill by Representative Curtis of 

Utah, I feel that they are trying to accomplish those same objectives. There needs to be an element of risk potential included in the 

Federal drilling analysis and approval process. If wells are to be 

drilled in lower-risk areas that have already been analyzed for 

environmental impact or in well-established areas of drilling and 

production, then let’s find a more streamlined path to resource development than what exists today. 

I believe that there are some missed opportunities for valuable 

yet reasonable mineral resource development on Federal lands if 

lengthy permitting processing times could be improved. With this 

in mind, I provide OGM’s support for the process improvements 

suggested by the draft bills. 

I might add that there may be more streamlining concepts that 

could be considered, as suggested by the aforementioned letter of 

Governor Martinez of New Mexico. This was a letter dated January 

16, 2018 from six U.S. governors, including Governor Martinez and 

Governor Herbert of Utah, addressed to Secretary Zinke of the 

Department of the Interior. For your convenience, I have included 

that letter in my written testimony. 

Thank you again for your time, and I stand ready to answer any 

questions. 

[The prepared statement of Mr. Baza follows:] 

PREPARED STATEMENT OF JOHN BAZA, DIRECTOR, UTAH DIVISION OF OIL, GAS AND

MINING, UTAH DEPARTMENT OF NATURAL RESOURCES

Chairman Gosar, Ranking Member Lowenthal, and members of the Committee, 

thank you for the opportunity to speak to you today. My name is John Baza and 

I am the Director of the Utah Division of Oil, Gas and Mining within the Utah 

Department of Natural Resources. My division of Utah State Government (which I 

will refer to as ‘‘OGM’’) is the principal regulator for the petroleum and mineral 

extractive industries in the state of Utah. Our statutory charge is fostering the responsible development of Utah’s mineral resources while avoiding impacts that are 

detrimental to the public safety and welfare, and to preserve the environment to 

provide subsequent use of the lands affected by such development. Because the bills 

being discussed today relate to oil and gas activities on Federal lands, I will focus 

mainly on the oil and gas regulatory processes that we perform pertaining to those 

activities. 

The approval of drilling and production operations on Federal lands in Utah runs 

along two parallel tracks: one track is the Federal BLM process of reviewing and 

approving drilling applications for any well drilled upon a BLM mineral lease. The 

second track is a similar state process performed by OGM that not only includes 

permitting on Federal land, but on state, tribal and private land as well. This state 

process is conducted under state law that requires OGM to process drilling permits, 

and also be the repository of public data related to the drilling and production of 

any well within the boundaries of the state. Companies doing business in Utah often 

feel that this is redundant, requiring separate drilling permit approvals from both 

the BLM and OGM for wells drilled on Federal land in Utah. 

To further compare the parallel processes, OGM has developed a history of 

approving most applications to drill (or APDs) in 30–90 days. Some APDs that are 

more complex or sensitive may take longer, but these are the exceptions and not 

the standard. Yet for Federal lands, BLM drilling approvals in Utah often take 12– 

18 months. And lest you think the BLM process is more robust, that’s simply not 

true. I assure you that the OGM process that has been in existence in one form or 

another since the year 1955, is focused on achieving responsible development with 

due regard to public health and safety and protection of the environment, and has 

24 

met those goals with remarkable consistency. In fact, I would challenge anyone to 

compare wells drilled on Federal leases adjacent to those drilled on state or private 

leases to find any notable differences in operational conditions, land use impacts, 

or potential for environmental impact from those wells. So it is reasonable to ask, 

if outcomes are identical, then what justifies such vastly different processes to 

achieve the same results? I believe that thoughtful and creative thinkers could find 

ways to accomplish the necessary objectives of requiring safe and protective oil and 

gas development on all lands, including those on Federal mineral estate. As I have 

reviewed draft language for the bills in question today, especially the proposed bill 

by Representative Curtis of Utah, I feel that they are trying to accomplish those 

same objectives. There needs to be an element of risk potential included in the 

Federal drilling analysis and approval process. If wells are to be drilled in lower risk 

areas that have already been analyzed for environmental impact or in wellestablished areas of drilling and production, then let’s find a more streamlined path 

to resource development than what exists today. 

To put these concepts in perspective, let me provide you with some current statistics in Utah. There are 16,203 existing oil and gas wells in Utah. Of these, 9,222 

(57 percent) are on Federal lands, 2,947 (18 percent) are tribal, and 4,034 (25 

percent) are on state or private lands. For the state and private wells, OGM is the 

sole regulatory authority monitoring the drilling and production from those wells. 

Yet Federal minerals land area in Utah amounts to more than 66 percent of land 

acreage in the state. This suggests that there may be some ‘‘missed opportunities’’ 

for valuable yet reasonable mineral resource development on Federal lands if 

lengthy permit processing times could be improved. 

With this in mind, I provide OGM’s support for the process improvements 

suggested by the draft bills. I might add that there may be more streamlining concepts that could be considered as suggested by a January 16, 2018, letter from six 

U.S. governors (including Governor Herbert of Utah) to Secretary Zinke of the 

Department of the Interior. For your convenience, I have included that letter in my 

written testimony. 

Thank you again for your time and I stand ready to answer any questions. 

***** 

25 

ATTACHMENT 

January 16, 2018 

The Honorable Ryan K. Zinke 

Secretary of the Interior 

U.S. Department of the Interior 

1849 C Street, NW 

Washington, DC 20240 

Dear Mr. Secretary: 

Western states are home to abundant and diverse wildlife, agricultural, water, 

cultural, and energy resources. However, efforts to conserve, manage, and develop 

these resources have been stymied far too often by federal bureaucracy and overreach. Because federal lands comprise much of the West, we are at a disadvantage 

to states east of the 100th meridian where federal land ownership accounts for less 

than 5 percent. 

In the context of energy development, specifically our abundant oil and gas resources, federal processes managed by the Bureau of Land Management (BLM) are 

dearly costing our states and the federal government. Consider that due to BLM 

permitting delays, New Mexico fails to realize approximately $831,000 per day in 

state severance tax and the federal government fails to realize approximately 

$1,473,000 per day in federal royalties. Annually, that’s over $300 million lost to 

New Mexico and over $500 million lost to the federal government from lands located 

in New Mexico alone. 

Working together, and representing six western states, we have prepared the enclosed proposal, which will streamline the federal oil and gas permitting process, 

while protecting our irreplaceable wildlife, agricultural, water, and cultural 

resources. 

Our proposal contains four specific streamlining opportunities: 

1. A Permit by Rule process, which will allow operators to proceed with development upon submission of an administratively complete application; 

2. Affirmative recognition by BLM that it will not exercise jurisdiction over 

surface operations situated on non-federal lands, regardless of whether the 

drilling operation may contact federal minerals; 

3. Renewed implementation of the 2005 Energy Policy Act NEPA categorical 

exclusions; and 

4. Delegation by the BLM of its review of drilling, completion, recompletion, and 

plugging and abandonment to the relevant state authority. 

We are confident that our proposal will result in more efficient deployment of 

federal and state personnel resources, reduce unnecessary bureaucracy, continue to 

protect our lands and waters, and achieve healthier local and national economies. 


30350.001.eps
26 

We encourage you to review and implement this proposal and look forward to 

discussing further opportunities to streamline these processes with you and your 

staff. 

Sincerely, 

Susana Martinez, Bill Walker, 

Governor of New Mexico Governor of Alaska 

C.L. ‘‘Butch’’ Otter, Doug Burgum, 

Governor of Idaho Governor of North Dakota 

Mary Fallin, Gary R. Herbert, 

Governor of Oklahoma Governor of Utah 

Enclosures 

Dr. GOSAR. Thank you, Mr. Baza. I now recognize Ms. 

MacGregor for her 5 minutes. 

Welcome back, Kate. 

STATEMENT OF KATHARINE MACGREGOR, DEPUTY ASSISTANT 

SECRETARY, LAND AND MINERALS MANAGEMENT, U.S. 

DEPARTMENT OF THE INTERIOR, WASHINGTON, DC 

Ms. MACGREGOR. Thank you, Chairman Gosar, Ranking Member 

Lowenthal, and members of the Subcommittee. I am pleased to join 

you to discuss the Department’s efforts and accomplishments on 

streamlining the Federal onshore oil and gas leasing program, as 

well as the draft legislative proposals before the Subcommittee. 

Under President Trump and Secretary Zinke’s leadership, the 

Department has embraced innovation, best science, and best practices to help unleash our Nation’s vast domestic energy resources. 

The BLM has 26 million surface acres currently under lease, including over 94,000 active wells on about 24,000 producing leases. 

Collectively, public lands power millions of homes and businesses, 

support approximately 200,000 jobs nationwide, and in Fiscal 

Year 2017 generated approximately $2.2 billion in Federal 

revenues. 

Under Secretary Zinke’s commitment to energy dominance, the 

BLM now consistently conducts quarterly lease sales. In calendar 

year 2017, the BLM held 28 onshore oil and gas lease sales, an almost 30 percent increase from 2016. These sales generated about 

$360 million in bonus bids, rentals, and fees, an 87 percent 

increase over the previous year. 

The BLM is working diligently to improve its permitting process, 

and our efforts are beginning to show results. In calendar year 

2017, the BLM approved 3,293 applications for permit to drill, or 

APD, on Federal and Indian lands, which generated approximately 

$30.5 million in APD fees. The average APD processing time for an 

administratively complete application also continues to drop, now 

averaging 113 days, of which 50 days was spent with the BLM. We 

hope to further improve this figure. 

We appreciate the Subcommittee’s efforts to find reasonable 

solutions to expedite leasing and permitting on Federal lands. 

Representative Pearce’s categorical exclusion draft proposal revises Section 390 of the Energy Policy Act, or EPAct 05, clarifies 

27 

the appropriate use of categorical exclusions, and authorizes a 

number of new, common-sense CXs, as we call them. This includes 

codifying existing ones that are already being used by other agencies right now, today. CXs can be an effective tool for reducing 

delays and costs associated with permitting, especially in instances 

where operators are improving or streamlining their operations 

and have minimal environmental impact to their existing footprint. 

The Department notes that a CX is not an exemption or a waiver 

of NEPA review, but instead is a tool within the NEPA review 

process. In many cases, it is likely that NEPA analysis on a DOI 

project has occurred at least twice, providing both sufficient 

environmental analysis and multiple opportunities for public 

engagement. 

Under Representative Pearce’s permitting on non-Federal land 

draft proposal, operators would no longer submit a Federal APD if 

there is less than a 50 percent Federal mineral interest and zero 

Federal surface disturbance. This would focus BLM operations on 

where the estate is more fully within its jurisdiction, update 

Federal authorities to catch up with directional drilling technology, 

and it would reduce duplicative state and Federal permit requirements. We appreciate the inclusion of language that would maintain the Department’s authority to audit and invoke civil penalties 

for any misreported production. 

Finally, the cost recovery draft proposal directs the Secretary to 

recover costs associated with processing administrative protests received for leases, rights-of-way, or APDs filed. In Fiscal Year 2012, 

17 percent of BLM lease sale parcels were protested. By 2017, that 

number grew to 88 percent. 

To date, many BLM state offices are receiving protests on every 

oil and gas parcel offered. And in some cases, the protests are hundreds of pages, as seen right here. This one is 1,500 pages. This 

protest alone resulted in an 8-month delay, this protest of $70 

million in revenue to the state of New Mexico. The protest requires 

significant BLM staff time, and in many cases provide little to no 

tangible environmental benefits. 

The uptick in protests seem aimed at disrupting a lease sale, 

which is not the intent of the protest period. 

The potential tools provided by these draft bills will help the 

BLM significantly reduce permit times and focus on complex development scenarios. 

The drafts also acknowledge innovative development technologies 

that have reduced surface impacts nationwide, and help to foster 

additional development on public lands. In turn, this could contribute to increased revenues and energy production to meet our 

Nation’s energy needs. 

Thank you for the opportunity to present this testimony. I would 

be glad to answer any of your questions. 

[The prepared statement of Ms. MacGregor follows:] 

PREPARED STATEMENT OF KATHARINE MACGREGOR, PRINCIPAL DEPUTY ASSISTANT

SECRETARY, LAND AND MINERALS 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 Department’s efforts 

and accomplishments about streamlining the Federal onshore oil and gas leasing 

and permitting processes to address backlogs and inefficiencies. The discussion 

28 

drafts the Subcommittee is considering today have the potential to further bolster 

our work to streamline administrative processes, reduce duplicative actions, and 

eliminate redundant procedural reviews, and we look forward to working with the 

Committee as these bills are refined. Our shared goals are to reduce burdens on 

industry and provide savings to the American taxpayers without sacrificing environmental protections. 

While all potentially affected Federal agencies have not had sufficient time to 

meaningfully consider the details in the four discussion drafts, the Department supports the goals of the discussion drafts, to help modernize the Bureau of Land 

Management’s (BLM) application of NEPA reviews for leasing, permitting and other 

actions associated with Federal oil and gas development. We appreciate the 

Committee’s focus on finding reasonable solutions to expedite leasing and permitting on Federal lands. Under Secretary Zinke’s leadership, the BLM has made it a 

top priority to unleash the vast domestic energy reserves on public lands in pursuit 

of America’s energy dominance. By reviewing and streamlining oil and gas regulations and policies that encumber development, the Department is helping to lower 

energy costs, create jobs, and keep our economy strong for generations to come. 

PUBLIC LANDS’ CONTRIBUTION TO ENERGY DOMINANCE

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

acres, located primarily in 12 western states. The BLM administers this diverse 

portfolio of lands on behalf of the American people, in coordination with the U.S. 

Department of Agriculture’s Forest Service, 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 on about 24,000 producing 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 and support the broader economy. Sales of onshore oil and gas from Federal 

and Indian lands accounted for approximately 5.3 percent of all oil and 9.3 percent 

of all natural gas production in the United States in Fiscal Year (FY) 2017. 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 Federal and state governments 

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. In 

FY 2017, production from Federal lands generated approximately $2.2 billion in 

Federal royalties, rental payments and bonus bids. Roughly 48 percent of this revenue is shared with the state where the oil and gas activity is occurring, while the 

rest goes to the U.S. Treasury. States and counties in turn often use these funds 

to support the building and maintaining of roads, schools, and other important 

community needs. 

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

the BLM now consistently conducts quarterly lease sales. In calendar year 2017, the 

BLM 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 and our 

efforts are generating real results. In calendar year (CY) 2017, the BLM approved 

3,293 Applications for Permit to Drill (APDs) on Federal and Indian lands. By 

prioritizing permitting, modernizing its databases, and shifting resources across the 

BLM offices, the average APD processing time for an administratively complete application continues to drop—now averaging 113 days of which 50 days was spent 

with the BLM. And it does not stop there. With the Department managing 1 in 

every 5 acres of land in the United States, the BLM also has a tremendous role in 

permitting pipelines, power lines and right-of-ways (ROWs). To date, the BLM has 

approved roughly 360,000 miles of pipeline ROWs on public lands and approximately 10,000 miles of pipelines ROWs on other Federal agency land. 

29 

PATH TO AMERICAN ENERGY DOMINANCE

The Trump administration has made responsible energy development at the 

Department a priority. Executive Order (E.O.) 13783 (Promoting Energy Independence and Economic Growth) and E.O. 13795 (Implementing an America-First 

Offshore Energy Strategy) have together called upon the Department, and other 

Federal agencies, to increase access to and reduce burdens on energy development 

on public lands. E.O. 13807 (Establishing Discipline and Accountability in the 

Environmental Review and Permitting Process for Infrastructure Projects) ignited 

an Administration-wide assessment as to how best to address inefficiencies in current infrastructure project decisions that delay investments, decrease job creation, 

and are costly to the American taxpayer. By utilizing best science, best practices, 

and harnessing innovative technologies, the BLM encourages investment on public 

lands to expedite and increase domestic energy development, promote job growth, 

and keep energy prices low for American families and businesses. 

As a result, the Department has been proactive in these efforts, specifically focusing on environmental reviews and permitting authorizations for energy and infrastructure projects. One such example is Secretarial Order (S.O.) 3355 (Streamlining 

National Environmental Policy Act Reviews and Implementation of Executive Order 

13807), which provides a number of internal DOI directives to streamline environmental reviews, including setting page and time limits on all NEPA analysis. 

Secretary Zinke also issued four S.O.s. to reduce unnecessary and burdensome 

regulations while maintaining environmental protections and public health. The 

most overarching one is S.O. 3349 (American Energy Independence), which directed 

bureaus to examine specific actions impacting oil and gas development, and any 

other actions affecting other energy development. S.O. 3354 (Supporting and 

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

Mineral Leasing Program) 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. 

In addition, on May 31, 2017, Secretary Zinke signed S.O. 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 technically recoverable 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 S.O. 3360 (Rescinding 

Authorities Inconsistent with Secretary’s Order 3349, American Energy Independence) which rescinded several reports and manuals that were inconsistent with 

current policy. 

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

to domestic oil and natural gas development on public lands—resulting in several 

rulemaking and policy changes. In December 2017, the BLM sought to suspend or 

delay certain requirements contained in its 2016 final Waste Prevention Rule as 

part of the goal of reducing the burden of Federal regulations on energy development. The suspension and delay stemmed from the BLM’s determination that immediate implementation of some parts of these rules would unnecessarily burden 

energy producers, especially those operators of marginal or low-producing wells. 

Shortly thereafter in February 2018, the BLM announced a proposal to revise the 

2016 final Waste Prevention Rule, and is currently analyzing the comments it received from the public. Further, in December 2017, the BLM published a final rule 

to rescind the 2015 final rule on hydraulic fracturing after finding 32 of the 32 

states with Federal oil and gas leases have regulations that address hydraulic fracturing. Finally, in January 2018, the BLM issued Instructional Memorandum 2018– 

034 (Updating Oil and Gas Leasing Reform—Land Use Planning and Lease Parcel 

Reviews). This new policy simplifies and streamlines the leasing process, expedites 

offering of lands for lease, and ensures quarterly oil and gas lease sales are held. 

Furthermore, the BLM is improving policies to minimize negative impacts on 

wildlife during energy, transmission, and infrastructure development to use the best 

available science and technologies. We believe the Department’s efforts to accelerate 

and streamline NEPA compliance will also help continue to pave the path for 

American energy dominance. 

ONSHORE OIL & GAS LEGISLATIVE DISCUSSION DRAFTS

The Discussion Drafts the Subcommittee considers at this hearing would expand 

the use of categorical exclusions for certain oil and gas operations, revise processes 

for permitting on non-Federal surface estate when the subsurface mineral estate is 

less than half Federal, and authorize cost recovery for lease protests. While we have 

30 

not yet fully assessed the potential impacts of these changes and will need time to 

coordinate with other affected agencies, I will outline some of our initial thoughts 

on the bills. 

Expanding Use of Categorical Exclusions (The CX Draft) 

The CX Draft revises Section 390 of the Energy Policy Act of 2005 (EPAct 2005) 

to clarify the appropriate use of categorical exclusions (CXs) from further NEPA 

analysis. The CX Draft also authorizes a number of new CXs to improve processing 

of not only APDs, but also sundry notices, lease reinstatements, ROW applications, 

and subsequent modification applications. 

The Department supports efforts to streamline the environmental analysis process 

associated with energy development, and believes CXs can be an effective tool for 

reducing delays and costs associated with permitting. The Department is fully committed to fulfilling NEPA responsibilities, but recognizes that some NEPA implementation has become an overly complex paperwork exercise, rather than a tool 

used to adopt sound decisions based on an informed understanding of environmental 

consequences as originally intended by Congress. 

We appreciate the sponsor’s efforts to work with the BLM in tandem to help identify opportunities to further increase efficiencies associated with energy development. The EPAct 2005 authorized certain CXs for activities conducted pursuant to 

the Mineral Leasing Act for the purposes of oil and gas exploration or development. 

The use of statutory CXs has helped reduce unnecessary paperwork and delays, 

thereby better utilizing the agency’s limited resources. The Department notes that 

a CX is not an exemption or waiver of NEPA review, but instead is a tool to be 

used to help fulfill the NEPA review process in a more efficient manner. When used 

appropriately, CXs result in efficient and streamlined approval of agency actions 

that, individually or cumulatively, do not have significant impacts to the natural 

environment. 

By further clarifying the situations where it is appropriate to use a CX and by 

providing consistent direction and authorization of when the BLM can use this tool, 

the CX Draft appears to respond to concerns identified by the U.S. Government 

Accountability Office. For example, the lack of clarity on key elements of Section 

390 of EPAct 2005 led to differing interpretations, inconsistent application of the 

Section 390 CXs among BLM field offices, and resulted in increased litigation. The 

Department supports clarifying that in instances where the BLM has already done 

site-specific NEPA and does not significantly deviate from that NEPA analysis, the 

bureau’s requirements would be fulfilled. 

The Department also appreciates the efforts of Congress to recognize that there 

are many instances where operators have opportunities to improve and streamline 

their operations in ways that would have minimal environmental impact from their 

existing footprint. An example of this includes adding new wells to an existing pad 

or needing approvals for additional infrastructure within an existing footprint. 

Providing the BLM with tools like these CXs, responds directly to stakeholders’ 

feedback that development on public lands has become increasingly onerous and 

cost prohibitive. 

Permitting for Non-Federal Surface Land (Permitting on Non-Federal Land Draft) 

The Permitting on Non-Federal Land Draft eliminates the requirement that an 

operator submit to the BLM a Federal APD in instances where surface drilling and 

production operations and facilities are located on non-Federal surface estate if 

there is less than a 50 percent Federal mineral interest. Under the bill, the operator 

would be required to provide the Secretary of the Interior a copy of the state approved drilling permit, and NEPA, the National Historic Preservation Act (NHPA) 

and the Endangered Species Act (ESA) requirements for the exploration, development or production of oil and gas would no longer apply. The Permitting on NonFederal Land Draft also specifies that nothing in the bill alters the amount of 

royalties due the United States from production of oil and gas or the Secretary’s 

authority to conduct audits and collect civil penalties. 

The BLM appreciates the goal of this draft bill to focus the BLM’s review of 

Federal actions to Federal lands. The Permitting on Non-Federal Land Draft bill 

would no longer require the BLM to analyze surface impacts to private lands. 

The BLM frequently encounters two different situations related to the development of Federal oil and gas leases involving private lands. First are the split estate 

operations where the drill site is located on non-Federal surface lands overlying the 

Federal oil and gas minerals. Second, as technology has increased, operations have 

allowed for development from predominantly private surface to private minerals, 

and only producing a marginal amount Federally-owned minerals. In both instances 

no Federal surface is impacted, yet, under current law, the BLM must require an 

31 

APD for the Federal mineral production. For these APDs, the BLM still fulfils requirements of NEPA, NHPA, and ESA. 

We appreciate the sponsor’s efforts to reduce redundant state and Federal permit 

requirements and to eliminate uncertainty related to these APD and environmental 

review requirements as directional drilling technology has significantly reduced 

surface impacts. The Department recognizes that in instances where there is minimal Federal interest, it may not be necessary for the BLM to conduct NEPA and 

ESA review and for NHPA consultation to be triggered. In these instances, the 

Permitting on Non-Federal Land draft bill would explicitly state that analysis and 

consultation on non-Federal surface would not be required. The bill could allow the 

Department to better use its limited resources while decreasing unnecessary 

analysis on non-Federal split estate lands. 

These changes could help reduce burdens on industry and the BLM by making 

the planning and NEPA process more efficient and less expensive, and could allow 

the BLM to focus on surface and downhole implications where the estate is more 

fully within its jurisdiction. We also appreciate the sponsor’s inclusion of language 

intended to maintain the Department’s authority—via the Office of Natural 

Resources Revenue—to audit and invoke penalties for any misreported production 

under Federal Oil & Gas Royalty Management Act, in order to ensure that resources are property accounted for and the American taxpayer is protected. 

Cost Recovery-Eliminating Superfluous Protests (Cost Recovery Draft) 

The Cost Recovery Draft directs the Secretary to recover costs associated with 

processing an administrative protest received for leases, ROWs, or APDs filed. The 

fees collected would help the BLM recover considerable costs when processing significant numbers of protests. 

The BLM is committed to being a good neighbor that is responsible and accountable to our stakeholders. This includes providing the public ample opportunity to 

participate in the Federal decision-making process. Current BLM regulations, however, allow any party to file a protest on a BLM decision, including on a land use 

plan or on a subsequent decision to include a parcel in an oil and gas lease sale. 

While historically protests addressed parcel-specific 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, non-parcel specific, and a method of disrupting the offering of parcels at competitive sale. In FY 2017, 88 percent of parcels 

offered for lease were protested, compared to in FY 2012, when only 17 percent of 

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

decreased from 2,247 in FY 2012 to 1,427 in FY 2017. To date, many BLM state 

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

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 disbursement to the state of New Mexico was delayed by approximately 

250 days. 

This uptick in these protests and resulting use of BLM resources to respond is 

a burden on oil and natural gas development on public lands. The cost recovery 

draft may help reduce non-parcel specific protests by encouraging interested parties 

to more carefully consider protests, and allow the BLM to conduct business in a 

more efficient manner. The BLM appreciates the Subcommittee’s work to address 

this issue. 

CONCLUSION

The Department 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. The Department supports the goals of the four discussion drafts to help streamline the BLM’s permitting processes and to alleviate 

administrative burdens on private landowners by reducing unnecessary environmental analyses on non-Federal surface estate. Thank you for the opportunity to 

present this testimony. I will be glad to answer any questions. 

32 

QUESTIONS SUBMITTED FOR THE RECORD TO MS. KATE MACGREGOR, DEPUTY

ASSISTANT SECRETARY, LAND AND MINERALS MANAGEMENT, U.S. DEPARTMENT OF

THE INTERIOR

Ms. MacGregor did not submit responses to the Committee by the 

appropriate deadline for inclusion in the printed record. 

Questions Submitted by Rep. Lowenthal 

Question 1. What is the cost for the Bureau of Land Management to process an 

expression of interest (EOI) for an oil and gas lease from acceptance of the EOI to 

the date the parcel is offered? How many staff hours are involved in each phase of 

the process? 

Question 2. Please describe the precise steps that are taken under current BLM 

policy for an Application for Permit to Drill (APD) that will receive a categorical 

exclusion (CX) under Section 390 of the Energy Policy Act of 2005 (for each of the 

three CXs that relate to oil and gas drilling). 

Question 3. What steps are taken to inform, and solicit comments from, the 

National Park Service for leases or APDs that may potentially impact units of the 

National Park System? How would those steps change if the Department moves to 

common regional boundaries as envisioned in the FY19 DOI Budget? Is the National 

Park Service notified of APDs that will be processed using a Section 390 CX? 

Question 4. Many Resource Management Plans (RMPs) are out of date, written in 

a time before hydraulic fracturing and without the foresight to contemplate domestic 

drilling on a scale it is now occurring. What is the plan for undertaking new environmental review processes for out-of-date RMPs? Given the Congressional Review Act 

elimination of the Resources Management Planning rule (81 FR 89580), what steps 

is BLM taking, or planning on taking, in order to improve the process of updating 

RMPs? 

Question 5. About a dozen of the oil and gas lease parcels in the September 2018 

lease sale in the BLM New Mexico (NM) Carlsbad Field Office (FO) are in areas 

identified by the Federal Government as having critical or high cave-karst potential 

in the areas adjacent to Carlsbad Caverns National Park. Can you please outline the 

actions the BLM is taking as part of this lease sale to protect sensitive and connected 

cave/karst systems under the area? 

Question 6. A March 2018 lease sale in the BLM NM Farmington FO was deferred 

to allow for better study of the precious archaeological and cultural resources in the 

area around Chaco Culture National Historic Park. Can you please update us on the 

status of that effort and outline opportunities for public comment and information 

during this process? 

Question 7. Please provide the most current list of Entities in Noncompliance with 

Section 17(g) of the Mineral Leasing Act. 

Question 8. Since Fiscal Year 2002, how many protests, broken down by year, 

resulted in modifications and/or suspensions of parcels?. 

Questions Submitted by Rep. Pearce 

Question 1. Protest Funding 

1a. Does the BLM currently charge protesters in order to process the protest? 

1b. If not, where does the money to process these permits come from? 

1c. How long did it take and how much did it cost to process the protest made 

to the September 2016 lease sale in New Mexico discussed in the hearing? 

Question 2. Carlsbad Field Office 

2a. What was the average number of staffers in the BLM’s Carlsbad Field Office 

throughout 2017 and up to this point in 2018? 

2b. How many APDs were received by the BLM Carlsbad office in 2017 and 2018? 

2c. How many APDs were processed in 2017 and 2018? Please provide monthly 

breakdowns if possible. 

Question 3. AFMSS II 

3a. How much was spent on developing AFMSS II by the BLM? 

33 

3b. What is the BLM doing to ensure that it works for the Carlsbad Field Office? 

Question 4. Non-Federal Surface 

4a. How many APDs currently awaiting approval are for wells on non-Federal 

surface that also affect less than 50 percent Federal minerals? 

Dr. GOSAR. Thanks, Ms. MacGregor. I thank the panel for their 

testimony. 

Reminding the members of the Committee that Rule 3(d) imposes 

a 5-minute limit on the questions, I will now recognize the gentleman from New Mexico, Mr. Pearce, for his 5 minutes. 

Mr. PEARCE. Thank you, Mr. Chairman. I appreciate you yielding 

first to me. I have an amendment on the Floor we are juggling, so 

thank you. 

Ms. MacGregor, as I read the testimony of Mr. Willis, he makes 

a statement there that they cause great concern because they will 

bypass the local BLM office’s capabilities to really review. I just 

wondered if you would like to address that particular insight that 

he offers there. 

Ms. MACGREGOR. That this proposal would bypass our ability? 

Mr. PEARCE. Yes, the statement is that it is not going to be good 

for local communities, it seeks to end a practice of local BLM 

decision making. 

Ms. MACGREGOR. Sure. I think it is important, as I pointed out 

in my testimony, the fact that a categorical exclusion would somehow prevent NEPA from occurring, environmental analysis, local 

community input, is not true. 

During the land management process, when we consider multiple 

uses for those Federal lands, we do NEPA alongside that. That includes a reasonable foreseeable development and also has multiple 

opportunities for public comment in that process. 

So, in many ways, BLM will still be doing NEPA on all of these 

acres prior to any action. 

Mr. PEARCE. What is the backlog from that Carlsbad office? Do 

you happen to know that right now, approximately? 

Ms. MACGREGOR. I do have that. I believe it is about 300 APDs, 

but I could pull that up for you right now. 

Mr. PEARCE. It may be closer to 800. That is OK. The idea, 

though, is that it is taking a tremendously long time. 

The Permian Basin sits right there in Texas, crossing the border 

into New Mexico. And just so that our other witness might have 

an understanding of the damage that it is doing, in Texas they 

don’t have quite the quality of oil, they don’t have quite the quantity of oil that we do in the Permian Basin right there, right now. 

So, there are 380 rigs running right across the border. You can see 

them running from New Mexico. We have roughly 80 working in 

New Mexico. Each one of those penalizes jobs, revenues—and you 

heard the testimony from Ms. MacGregor that probably the cost to 

New Mexico is $70 million on one well. 

That really is what we are trying to drive at. This area has multiple locations. It is not like it has never been touched before. We 

have run multiple studies. Many times the wells are separated by 

a half-mile, maybe a quarter of a mile. So, it is actually just a very 

common-sense problem saying we have already run the EIS, we 

34 

have run the NEPA studies on all these other locations. If we have 

one close enough, that maybe we should lower the backlog just a 

bit, maybe we should let New Mexico experience the growth of its 

economy that is there, ready to happen, except for the Federal 

rules. 

It is a huge question for us, and one that we are trying to deal 

with. 

The other bill that we have simply makes the assertion that if 

the Federal Government owns less than 50 percent of the mineral 

rights, that maybe we don’t need an application for permit to drill. 

Let’s let the state rules work, let’s let the private rules work, 

whichever one that they are sharing with, so these bills really are 

very common sense, trying to cut back the bureaucracy to allow 

some of the efficiencies that we might be able to accommodate. 

Mr. McQueen, I don’t know if you have done an in-depth study. 

Have you been able to assess pretty much the cost in New Mexico 

of these regulations that are standing in the way of drilling 

projects moving forward in New Mexico? 

Mr. MCQUEEN. Mr. Chairman and Representative, we have 

looked at those numbers, and I offered those numbers a bit earlier 

in my testimony. But we estimate the impact of these backlogged 

permits in the Carlsbad office to represent about $1.3 billion per 

year to the Federal Government and about $700 million, $713 

million, to the state of New Mexico. 

Mr. PEARCE. So, $700 million to the state of New Mexico. Again, keep in mind that their budget is around $6 billion, so you are 

talking a very significant impact on a state that really struggles for 

revenue. 

Again, these two bills are designed not to bypass anything, not 

to cause great destruction in the environment, but to be practical, 

common-sense approaches to how do we reach the economic potential of a state where that potential is ready to happen. It is just 

that the rules lie in the way of making it possible. I have heard estimates of as high as $1 million per rig, just in 

daily income to the state, just by the tax basis of all the crews that 

are working, all the services that are provided. So, again, you are 

talking a huge economic impact to a state that typically struggles 

for revenue. So, these bills, to me, made common sense that we 

would introduce them, and we would urge that the Committee look 

favorably on those. 

With that, Mr. Chairman, I yield back. 

Dr. GOSAR. I thank the gentleman from New Mexico. The 

gentleman from California is recognized. 

You are going to get a little extra time, so don’t worry. 

Dr. LOWENTHAL. As it should be. 

Dr. GOSAR. The timer was asleep here, so I am sorry. 

Dr. LOWENTHAL. That is quite all right. 

Mr. Willis, I want to follow up on what you spoke about before. 

Why is it so important to involve the public in decisions about oil 

and gas development? You began to talk about that, but tell me, 

why is it so important that they be part of this process? 

Mr. WILLIS. Basically, because none of us is as smart as all of 

us, and when we get people to the table and working through the 

process, projects get better. 

35 

Dr. LOWENTHAL. OK, so they may raise issues that the companies or BLM may not even think about, that it just improves the 

process is what you are saying. 

Mr. WILLIS. Right. They frequently have new information 

brought forward that the agency isn’t aware of, yes. 

Dr. LOWENTHAL. Thank you, Mr. Willis. 

Ms. MacGregor, we sent you a questionnaire for the record last 

year asking for an office-by-office breakdown of the number of drilling permits approved but unused as of September 30, 2016. Over 

9 months later, you responded with a number of permits approved, 

but only in Fiscal Year 2016 that hadn’t been used. 

You know permits are good for 4 years, and we asked you for the 

number of unused permits as of 2016. So, that response really 

didn’t help us, or just a little bit, because it really only gave 1 year. 

Let me ask you a two-part question. Can you tell me the total 

number of approved permits that haven’t been used as of the end 

of Fiscal Year 2017? 

Ms. MACGREGOR. I can tell you that the BLM estimates, as of 

May 31, 2018, there were 2,606 pending APDs and 7,267 approved 

APDs at that time that had not yet been drilled. 

Dr. LOWENTHAL. All right, so approximately, as I said earlier, 

there are 8,000 permits that have been approved that are just sitting there, about 8,000, which is the lowest number approved that 

we have had in almost a decade. Is that not true? 

Ms. MACGREGOR. I am sorry, the lowest number of approved 

APDs? 

Dr. LOWENTHAL. The number that are pending approval, you 

know, the number that are out there that are pending approval? 

Ms. MACGREGOR. The total number today that are pending 

approval are 2,603. 

Dr. LOWENTHAL. And that is the lowest in a decade. 

Ms. MACGREGOR. I don’t have the annual numbers right in front 

of me, but I could get that for you. 

Dr. LOWENTHAL. But that is a low number if you look at it over 

the last decade. 

Ms. MACGREGOR. I would have to look at the numbers. 

Dr. LOWENTHAL. All right, we would like to hear that number. 

And, also, will you provide the Committee with the breakdown 

of all the permits that have been approved as of the end of Fiscal 

Year 2017 by field office? Can you provide that within a short 

period of time, say 30 days? 

Ms. MACGREGOR. I believe we can do that. 

Dr. LOWENTHAL. That would be very helpful, to follow that up. 

Thank you. 

Ms. MACGREGOR. I do have some stats, if you want them. In 

2017, over $5 million was received by the BLM and we were able 

to retain from expired APDs. 

Dr. LOWENTHAL. Thank you. We look forward to seeing that. 

Mr. Willis, I want to return. Do you think categorical exclusions 

are appropriate for oil and gas drilling? And what is the impact of 

eliminating the extraordinary circumstances review? 

Mr. WILLIS. I don’t think CXs are appropriate for something that 

has as much potential to be a long-term, irreversible, irretrievable 

36 

commitment of resources as a drilling operation and since occupied 

the land for upwards of 50 years. 

The Council on Environmental Quality guidance on CXs say that 

they use those to identify categories of actions that don’t have 

potential to cause significant effects, and that certainly is not the 

description of oil and gas development. 

And in terms of extraordinary circumstances, that is a process 

that in BLM CXs, everything that is proposed to be authorized 

under a CX, BLM looks at to make sure that there isn’t anything 

that is special, unique, or unusual that would make the CX not 

appropriate in that case. 

Dr. LOWENTHAL. Thank you. So, it is fair to say that if BLM 

doesn’t look at extraordinary circumstances, there is more of an 

analysis in installing a stop sign than in drilling an oil well. 

Mr. WILLIS. That would be correct. 

Dr. LOWENTHAL. Thank you. 

Governor Martinez and Secretary McQueen, in both of your 

written testimonies, you mention the 800 pending permit applications in New Mexico, and you both mentioned how much money 

this is costing the state. That makes it sound like companies are 

completely unable to get permits, and are sitting around waiting 

for them. 

But in my understanding, the data doesn’t support that. In the 

beginning of Fiscal Year 2016, drillers in New Mexico held nearly 

1,700 approved permits that they hadn’t already used—exactly 

1,682. Then BLM approved another 891 drilling permits that year; 

618 of them, over two-thirds, went unused. So, I am not too sympathetic about the 800 pending permits when there are roughly twice 

that many approved ones that are already out there just waiting 

to be used. 

Does New Mexico receive any revenue from approved permits 

that aren’t being used? 

Mr. MCQUEEN. Mr. Chairman and Representative Lowenthal, let 

me start with your last question first. 

New Mexico does not receive any revenue for unused Federal 

permits. I will say there are many reasons for having unused 

permit inventory among oil and gas companies. New Mexico, for example, has two predominant producing basins, the San Juan Basin 

in the northwest and the Permian in the southeast. And because 

of poor natural gas prices, we have seen the drilling count in the 

San Juan Basin go from as high as 45 rigs to 3 rigs today. 

So, companies reallocate resources based on a whole number of 

factors, including product prices. In the southeast, in the Permian 

Basin, we have seen a number of companies, new entrances, new 

acquisitions by companies in the southeast. Each company has 

their own idea of the best place to drill. So—— 

Dr. LOWENTHAL. Let me go on, and I will finish up with the last 

part of the question. 

Another interesting piece of data is that in Fiscal Year 2016, 

companies in New Mexico drilled 297 wells that they didn’t complete. That is, they drilled a hole, but didn’t produce any oil and 

gas from it. Presumably, they are sitting on many of these, waiting 

for higher prices. So, then the same question is, does New Mexico 

37 

receive any revenue from wells that are drilled but not producing 

any oil and gas? 

Mr. MCQUEEN. Mr. Chairman and Representative Lowenthal, 

New Mexico does not receive revenue on oil and gas wells until production begins. But, again, back in 2016, the reason for not 

completing, or at least deferring completions on those wells, was all 

related to the price of crude oil. 

Dr. LOWENTHAL. Thank you. So, I think it is unfair to blame the 

BLM for costing the state hundreds of millions of dollars, when 

that is clearly not the issue here. 

Thank you, and I yield back. 

Dr. GOSAR. I thank the gentleman. We may now have the 

question answered for when will time stand still. It was 4:32, and 

it was 10 seconds before that. So, that clock may not be working, 

so you will get your cue from me. 

I will now go to Mr. Lamborn from Colorado for his 5 minutes. 

Mr. LAMBORN. Thank you, and thank you all for being here. 

Ms. MacGregor, it is good to see you again. 

Governor, thank you for being here. 

And you have all traveled, and I appreciate that. 

One of the bills, in my opinion, would do a real common-sense 

thing. It says that you don’t have to do an APD, you can do a notification if, for instance, it is in an existing field which had already 

been assessed for environmental impact and so on. 

Does anyone here on this panel think that you should have to go 

through the whole process over again in an existing field? 

Governor MARTINEZ. No, I do not believe that it is necessary. 

That is what causes the delays, causes the inability for the industry to grow, causes the delay for people to be hired at good-paying 

jobs. You can have an 18-year-old who can earn $80,000 with a CDL 

license in the oil and gas industry and be able to support their 

families. 

So, to do something again when it already exists is simply 

duplication and a bureaucratic process that is unnecessary. 

Mr. LAMBORN. Thank you. 

Mr. Willis? 

Mr. WILLIS. I would like to respectfully disagree. I have worked 

on a number of large-field NEPA projects, and it depends on the 

degree of detail. If you have examined all the well locations and 

looked at those, it probably doesn’t make a lot of sense to run each 

APD through full-on NEPA. But if you have a field that was done 

more programmatically, and someone decides they want to pop a 

well out there somewhere within the 5-mile radius of another well, 

and that location has not been looked at site-specifically, it may 

well have some issues. 

Mr. LAMBORN. OK, thank you. I want to build on a question that 

was asked. 

Mr. McQueen, you were starting to answer this a few minutes 

ago, and that is if an oil or gas company has in its inventory permits that it is not actively drilling on, what might be some of the 

explanations for that situation? 

Mr. MCQUEEN. Mr. Chairman and Representative, there are a 

number of explanations for that, but each time an operator drills 

38 

a well, they learn more about the geology, they learn more about 

the rock structure, they learn more about where the better placement of these horizontal laterals should be made. 

So, each time these operators increase their knowledge base, they 

are re-evaluating every opportunity to drill. And in some cases they 

find that their first choice for drilling a well may not be the best 

choice. That is part of the reason that operators go back and repermit wells in different places. 

There are also other logistical issues related to oil and gas drilling, and operators many times can streamline their operations by 

taking advantage of logistical opportunities. 

For example, if you have a rig drilling in a field and you have 

six or eight other locations adjacent to that location, it is much 

more economic to move that rig to those locations and drill them, 

rather than moving the rig maybe 100 miles to a location where 

you do have a permit. So, there is a need for flexibility, and there 

is a need for inventory, for operators in looking at drilling oil and 

gas wells. 

Mr. LAMBORN. I sometimes have gotten the impression that people that don’t understand the situation assume that if there are unused permits in the inventories out there, then it really doesn’t 

matter if there are huge delays going on, because it is not that big 

of a deal, they must not care that much if they are sitting on unused permits, or it is not that important from a business perspective, or the government has already done its job and so slow-downs 

don’t really matter. 

Would you agree with that line of reasoning? 

Mr. MCQUEEN. Representative, I would agree with that. Unless 

you have worked in the oil and gas business, it is really difficult 

to understand the complex logistics that are required in order to 

pull off continued operations. 

Back to your earlier question, another reason that operators 

often elect to change locations is the availability of infrastructure. 

In New Mexico, we have been trying to do what we can to encourage operators to deliver their associated natural gas to pipeline for 

sales. So, again, operators are looking at locations that are closer 

to existing infrastructure or anticipated infrastructure in order to 

get their products sold. 

Mr. LAMBORN. Thank you. Thank you all for being here. 

Mr. Chairman, I yield back. 

Dr. GOSAR. I thank the gentleman from Colorado. The gentleman 

from Virginia, Mr. Beyer, is recognized for 5 minutes. 

Mr. BEYER. Yes, thank you, Mr. Chairman, very much. And 

again, thank you all for coming. 

Principal Deputy Assistant Secretary MacGregor, Mr. Willis 

wrote that the CX provisions in these bills have a major flaw, a logical flaw, that the 5-mile radius, when you do π R2, it ends up being 

78 square miles where BLM wouldn’t have any opportunity to review critical areas and resources, and the public not having any 

say in the matter. 

When you think of a 5-mile radius, you don’t think about it being 

78 square miles. And he points out that Tavaputs Plateau, which 

is a plateau highly dissected by deep canyons—how do you answer 

39 

his objection that 78 square miles is far too large to qualify for a 

categorical exclusion? 

Ms. MACGREGOR. I believe, in referring to the 5-mile radius, that 

is in the Curtis bill? 

Mr. BEYER. Our audience is saying yes. Yes. 

Ms. MACGREGOR. OK. We do not have formal comment on that 

legislation, the draft bill, given that we received it on Friday, but 

we are more than willing to work with the Committee on every 

step, as required, and information that is needed. 

I will say, when it comes to a categorical exclusion—and again, 

to debunk the myth that somehow NEPA is not being done at all— 

when we do our resource management planning through FLPMA, 

we are required to do quite a bit of public comment, work with our 

local communities, working with our governor’s office—we have a 

pending one in New Mexico right now that is pretty important. 

And on top of that, we do an EIS related to that. And, again, in 

that EIS, that environmental impact statement, to adhere to NEPA 

we evaluate quite a bit of different impacts to those properties and 

to all of that acreage, including promulgating a reasonable foreseeable development scenario that in some cases accounts for pad size 

of development and other—— 

Mr. BEYER. Let me move on. The Governor, in her opening statement, talked about the average of 250 days and the 800 permanent 

backlog, which, of course, makes BLM look really bad right out of 

the box. 

Yet, you talked about all the work you are doing. You have it 

down to 113 days, 115 days, and only 50 days at BLM. 

We have reduced it by 80 percent already with your leadership. 

Do we actually need this legislation? Or are you going to be able 

to do something very efficient just with better management? 

Ms. MACGREGOR. You are so kind, sir. By statute we are required to do these APDs in 30 days. Federal law is telling us to 

do these in 30 days. Sometimes we cannot even do the NEPA in 

30 days, so we aspire to, working with our state partners, and in 

accordance with the Secretary’s priority to restore trust with a lot 

of our local governments who are concerned about our lags in permitting, potentially restricting rural economic development, we are 

trying to improve our process. 

I don’t think it is good enough. We are going to try to do better. 

Mr. BEYER. Thank you very much. 

Mr. Willis, one of the interesting pieces is this notion of a no 

Federal permit required for production activities that are on nonFederal surfaces. So, the drill is going on a non-Federal surface, 

and with long horizontal shafts is accessing Federal minerals. 

Why does this not make sense? What is the public argument that 

if deep down, thousands of feet, you are accessing or unitizing Federal minerals, it should all be part of the NEPA process, or subject 

to NEPA review, et cetera? 

Mr. WILLIS. Well, for starters, the NEPA statute isn’t tied to land 

ownership as to what triggers NEPA. What triggers NEPA is a 

Federal action. And I would hope that the leasing and production 

of Federal minerals is a Federal action with some Federal 

oversight. 

40 

The other thing is that even though it is taking place down a 

hole, that doesn’t mean that there isn’t potential to be affecting 

groundwater aquifers, surface water, all sorts of other things that 

is in the interest of the Federal Government to keep an eye on. 

So, I would say, based on being a Federal action, and the 

resources at risk, that it is reasonable for the Federal Government 

to have a say in the permitting on that. 

Mr. BEYER. I only have 30 seconds left. Can you talk about the 

unintended consequence of charging a fee for those who protest 

without anonymity, but allowing anyone to apply for a permit 

anonymously with no fee? 

Mr. WILLIS. Not quite sure how to answer that one, other than 

the fact that the process appears to be fundamentally unfair, and 

the whole protest fee—we don’t routinely charge people a fee for 

asking the Federal Government to correct its mistakes. 

Mr. BEYER. It was interesting, your comment about actually 

incentivizing the Federal Government to make mistakes so that 

they can generate revenue. 

Mr. Chairman, I will yield back. 

Dr. GOSAR. For clarification, if you go to page 3 of the draft, line 

6, the question is very outlined: ‘‘a developed field, where there are 

existing oil and gas wells within a 5-mile radius and for which an 

approved land use plan or environmental review was prepared 

within the last 10 years under the National Environmental Policy 

Act of 1969 (42 U.S.C. 4321) that analyzed such drilling operations 

as a reasonably foreseeable activity.’’ So, that is defined. 

And also, it is for surface disturbances of less than 10 acres. So, 

just for clarification on your original point, those are a part of that. 

The gentlewoman from Wyoming is recognized for 5 minutes. 

Ms. Cheney. 

Ms. CHENEY. Thank you very much, Mr. Chairman. Thank you 

to all of our witnesses for being here today. I am in support of all 

of these bills. I want to thank my colleagues, Mr. Curtis and Mr. 

Pearce, in particular. I think that these proposals really provide 

common-sense answers to help to streamline this process and, 

frankly, help to clarify what the law is and how we ought to be operating. 

Governor Martinez, thank you, also. I was particularly struck by 

your testimony and the simplicity of it, in terms of explaining the 

real-world impact of the red tape that we are facing. And I would 

commend it to anybody who hasn’t read it. It is short, to the point, 

and really gets at the economic benefit of these resources and the 

detriment that is being caused by the red tape. So, thank you very 

much for that. 

As we have discussed, the issues of split estate in particular are 

ones that are crucial for us in Wyoming. I want to thank Deputy 

Assistant Secretary MacGregor for the work that has already been 

done. In Wyoming, we have seen a tremendous improvement in the 

timing, in terms of the APDs. We have seen the backlog be diminished, which, I think, is a good thing. 

But I would like to get some sense—I understand that the 

Department has been supportive of some of these pieces of legislation. You are reviewing Mr. Curtis’. But in the meantime, while we 

are waiting on legislative action, could you give me a sense of 

41 

additional work the Department is going to do and the kind of 

guidance that you are giving to the local offices, in terms of split 

estate? 

And as you do that, let me ask you to address Mr. Willis’ description just now, which I was struck by, which would basically, it 

seemed like, extend Federal Government permitting authority to 

basically any activity anywhere that deals with minerals at all, regardless of the ownership of the minerals or the ownership of the 

surface area. 

Ms. MACGREGOR. I am happy to touch on that. And to that point, 

for awareness, as far as the BLM goes, in total all-time we have 

approved over 26,000 applications for permit to drill on nonFederal surface land. To give you sort of perspective on our workload, when we are getting through permits, these are also permits 

that we are processing when there is zero Federal surface 

disturbance. 

But the Department is working on instruction memoranda and 

guidance within the Bureau of Land Management to further direct 

and help assist our field directors on the front lines understand the 

use of statutory categorical exclusions that are tools that have already been provided to us by the U.S. Congress to help expedite a 

lot of these processes. I can commit to you that that should be out 

by the close of business today. 

We are also working on further memoranda and internal guidance to help clarify where BLM jurisdiction ends and private land 

begins. And a lot of this is—when we talk about, and others may 

describe us as circumventing NEPA through a categorical exclusion, I think it is important to remember on site-specific impacts 

that we are focused on where our jurisdiction is. 

A lot of these split estate tracks can be extremely difficult. In 

some cases we have looked at, I have had our office analyze and 

we have looked at some parcels where the subsurface estate, we 

will own less than 2 percent of the minerals, and yet an APD is 

still required. 

So, I think there are some common-sense solutions that we can 

work on together to make improvements to that process. 

Ms. CHENEY. Thank you. In terms of the guidance that you mentioned that is coming out by close of business today, as you know 

from time here in this Committee and now time in the executive 

branch, we really did see during the last administration an effort 

not to grant categorical exclusions that were, in many ways, clearly 

justifiable by the law. I think it is one of the things that—one of 

the pieces of legislation Mr. Pearce is putting forward does, in 

terms of making clear that those shall be granted. 

Is it your view that the guidance that is being issued today will 

be as strong an admonition in favor of abiding by existing law, as 

we saw for 8 years, in terms of, frankly, ignoring the law in order 

to stop the development of our fossil fuels? 

Ms. MACGREGOR. Absolutely. And it is important to decipher— 

there is an important distinction between statute-driven categorical 

exclusions and those that are promulgated under regulations by 

CEQ. Those are statute-provided categorical exclusions that direct 

us how to use them. They are for our use by the U.S. Congress. 

It is the law of the land. 

42 

Ms. CHENEY. Thank you very much. 

I yield back, Mr. Chairman. 

Dr. GOSAR. I thank the gentlewoman. The gentleman from 

Florida, Mr. Soto, is recognized for 5 minutes. 

Mr. SOTO. Thank you, Chairman. New Mexico recently approved 

permits that do not require oil and gas wells to check for leaks and 

methane or other pollutants. 

Governor Martinez, does New Mexico think methane is harmful 

to its residents? 

Governor MARTINEZ. Certainly there is a measure of making sure 

that it is not harmful, flaring, et cetera, taking place. We are not 

doing it in an irresponsible way because we do think that in the 

production of the oil and gas in our state, the producers live there 

and understand the damage or danger that any kind of pollutant 

is also affecting their families. 

Therefore, that is why I believe very strongly that they protect 

the land in which they are drilling. And therefore, the methane 

that may be produced is minimized as much as possible. 

However, it is a product that does come from the production of 

oil and gas, and I think that making sure that it is minimized as 

much as possible is of importance to them. 

Mr. SOTO. Is this new methane leakage rule the reason why it 

only takes 10 days now to get a permit in New Mexico? 

Governor MARTINEZ. No. Actually, when I took office there were 

boxes and boxes and boxes of permits being requested by the oil 

and gas industry of the state government, and they were just not 

being addressed at all. And one way to destroy an industry is to 

not give them a response at all, not an approval or a denial. 

So, we attacked those permits, and did them in a responsible 

way, gave a response, and then gave them the answers—— 

Mr. SOTO. Thank you, Governor. Excuse me, my time is limited. 

New Mexico’s leaking methane law—according to Mr. Pearce’s bill, 

if the Federal permits for the land, if the land is less than 50 percent owned, there will no longer be a Federal permit. 

Deputy Assistant Secretary MacGregor, would the new methane 

leakage law in New Mexico apply to these Federal lands, if Mr. 

Pearce’s bill is passed? 

Ms. MACGREGOR. Thank you for that question. That new regulation is not final yet. 

Mr. SOTO. I am not talking about the Federal regulation. What 

Mr. Pearce’s bill would say is that there would be no requirement 

of Federal permit if there was less than 50 percent of the land 

owned by the Feds. So, would it then kick to the New Mexico rule 

in those cases, if Mr. Pearce’s bill is passed? 

Ms. MACGREGOR. I believe, as is the case today in most of the 

western lands and western states, there are two—there is a 

Federal APD for anything touching Federal minerals, and there is 

also a state APD. 

States, in many cases, work under the auspices of the Clean Air 

Act and the Clean Water Act to enforce many of those provisions, 

which are not directed to us to enforce. 

When it comes to issuing the APD, I believe how it would work 

under Congressman Pearce’s bill would be that an APD at the state 

level adhering to state laws and then, of course, adhering to the 

43 

Clean Water Act and Clean Air Act, would be transmitted to the 

Department of the Interior, to the BLM, and we would take that 

as accounting for—— 

Mr. SOTO. Thank you. Studies show that New Mexico is losing between $182 million to $244 million in lost methane a year. Governor, are those methane 

losses factored into this $700 million in lost revenue? 

And are environmental clean-up costs and health care costs from 

New Mexicans breathing polluted air factored into the lost revenue 

that we are talking about here today? 

Governor MARTINEZ. If I may, I will defer to Secretary McQueen, 

please. 

Mr. MCQUEEN. Representative, those numbers are based on a 

number of assumptions that probably don’t hold up to the test. 

In New Mexico, gas is sold at the wellhead. 

Mr. SOTO. OK, and so I understand, since I have limited time, 

you dispute those numbers. 

Last, NASA in 2014 discovered a 2,500-square-mile methane hot 

spot over the Four Corners region of New Mexico. Does New 

Mexico have an obligation to states like Florida, who, because of 

climate change, face severe weather and natural disasters in rising 

seas? Is there not an obligation for your state to care about my 

state and others? 

I will leave that to the Governor for my remaining time. 

Governor MARTINEZ. I think every state certainly should be very 

interested and care about their environment, their state in which 

they live, work, raise their children, and employ others. I strongly 

believe that we are very responsible. We have taken measures. 

The technology that this industry has done and invested in to 

make matters better is far better than any other industry I have 

seen, because it interests them because they live there, and they 

want to make a better product and make it safer for them to live 

there. 

I do not see them skimping and making sure that their ability 

to drill is in any way, that they are not turning their money around 

re-investing in how do they do it better, and leave a smaller imprint or footprint on a land. 

So, I am very supportive of this agency, not just because of the 

revenues, but also because it is something that makes us independent, as a state and as a country, for the fuel that we have in 

our state, great minerals, and that exist in one single state that we 

would love to be a part of for our national security. 

Dr. GOSAR. I thank the gentleman. His time has expired. 

The gentleman from Utah is recognized for his 5 minutes. 

Mr. CURTIS. Thank you, Mr. Chairman and Mr. Ranking 

Member. And special thanks to our witnesses, every time we do 

this, I really appreciate your willingness to travel. 

Mr. Willis, you come from my district, and welcome. It is nice to 

have you here, as well. I think your very presence demonstrates 

the difficulty of these issues, and I appreciate your messages today. 

I would like to direct my comments to Mr. Baza. 

I appreciate you coming from the district, as well. I have been 

thinking about your testimony and this gap in time between—I 

think you said 12 to 18 months it can take to go through the 

44 

Federal process, and the state of Utah is doing it in 30 to 90 days. 

I would like you to articulate a little bit about the differences in 

the processes, what some may say is missing from that process, if 

anything. And why are you able to do it in such a reduced amount 

of time? 

Mr. BAZA. Mr. Curtis and members of the Committee, I do 

believe that I am very expert on the way the state of Utah does 

business. I am less expert on how the BLM does business. 

Mr. CURTIS. OK, fair enough. 

Mr. BAZA. To make that comparison may be somewhat unfair. 

But I think if you looked at our process and what we accomplish 

in 30 to 90 days, it is very environmentally sensitive. We have people out on the ground who live and work in those areas that are 

actually inspecting those wells prior to drilling to ensure that the 

environmental impacts and the land use impacts are minimized for 

every well that is drilled. 

And we take great pride in that process, and we don’t want to 

shortcut any of it for the citizens of Utah. I do believe that if we 

were to model some of what we do at the BLM’s level, there could 

be some time frames that could be shortened. 

Mr. CURTIS. You make a good point, and I don’t want to put 

words in your mouth, so I will let you decide if you agree with me 

on this. A lot of times in Utah we feel like we actually do care 

about the land, and actually better sometimes than those far away. 

And I am assuming you would agree with the fact that those in 

Utah who are doing this permitting in 30 to 90 days do care about 

the environment and want to make sure it is done well. 

Mr. BAZA. Absolutely. We live and work in those areas, and we 

want them to be as pristine as possible. 

Mr. CURTIS. We have heard a little bit about New Mexico and 

the impact specifically in New Mexico. Are you familiar enough 

with the delays and the impact in Utah, and how that is impacting 

Utah? 

Mr. BAZA. Not specifically, but I certainly could go find some 

information and get back to you very quickly. 

Economic development is a very touchy thing in Utah. We don’t 

have the number of rigs operating in Utah that are going on in 

New Mexico, although we are seeing more production from state 

and private lands in the last few years than we have ever seen. 

Much of that is due to new horizontal drilling technology, which is 

catching on like wildfire. 

We see a great window of opportunity into the future of developing more resources like that, but we have to be careful that the 

impedance that comes from the Federal side doesn’t dissuade operators from making those investments in Utah. 

Mr. CURTIS. Is it accurate to say that the rural part of Utah is 

disproportionately impacted by this, most of this is happening in 

rural Utah? 

Mr. BAZA. Yes, correct. There is no real drilling going on in the 

urbanized areas, it is all in the rural communities. 

Mr. CURTIS. Yes, where we are struggling. 

The state of Utah, it has been mentioned here, this letter, with 

five other states sent a letter to Secretary Zinke advocating for legislation that is actually pretty similar to this draft legislation. 

45 

Are you familiar with that letter? Can you tell us a little bit 

about why the letter was sent, and how it is felt this will impact 

Utah? 

Mr. BAZA. Yes, I am familiar with that letter, and it is part of 

my written testimony I have submitted. The letter is actually very 

detailed, in terms of what procedures should be followed. I think 

your bill and the other bills that are coming out of the Committee 

today are much more broadly based, in terms of what can be done 

to improve the processes. 

In the bill that you proposed, I believe it is wise to look at 

triaging APDs that come into the Federal Government. Not all 

Federal lands are created equal. And I think that we could look at 

what are the lower-risk areas that could be developed much 

quicker than devote our time to the more sensitive areas and those 

APDs that will be more complex. 

Mr. CURTIS. Thank you. I appreciate all of you. I am out of time, 

and I will yield, Mr. Chairman. 

Dr. GOSAR. I thank the gentleman from Utah. The gentleman 

from Arizona, Mr. Grijalva, is recognized for 5 minutes. 

Mr. GRIJALVA. Thank you, Chairman Gosar, I appreciate it. And 

thank you to the witnesses. 

Secretary MacGregor, back to the line of questioning that 

Ranking Member Lowenthal started having to do with the unused 

drilling permits, much of that has been explored already. 

My question, or maybe it is a request, of those permits, do we 

have a company-by-company, individual-by-individual breakdown 

of the holders of those permits? 

Ms. MACGREGOR. I don’t believe I have that information. 

Mr. GRIJALVA. Is that information available? 

Ms. MACGREGOR. It is not readily available. I think we could try 

to get it. 

Mr. GRIJALVA. The reason I ask is about the redundancy of it, 

that someone after that 4-year period, the 2, and then the automatic 2, then after 4 years are we seeing the same companies, 

same names being consistently the ones that are renewing permits 

over and over again that have already been permitted to drill? 

Ms. MACGREGOR. That is a good question, and I have spent some 

time in Wyoming talking to our reservoir management team on 

that. Because I think what companies are starting to do is apply 

for a lot of these APDs in tranches, and planning for a potential 

long waiting period for the APD to be filed. So, they might file a 

bunch of APDs expecting that it might take a couple of years. 

Mr. GRIJALVA. OK. 

Ms. MACGREGOR. In some cases, I think we have some that have 

been pending for over 5 years when I started in January. 

Mr. GRIJALVA. I am talking specifically about those that are 

unused that have the drilling permit, per se. 

But I ask that because other motivations might be market 

motivations, speculation, holding on to something. 

Do you support any kind of concept now or in the future about 

using them or losing them, and allowing the opportunity to be extended to others who might more readily be prepared to utilize 

that? 

46 

Ms. MACGREGOR. I think that is an interesting concept. It is 

pretty much how we operate right now. 

When an APD is issued, a company has 2 years. It can be renewed once, and then you are done and we keep all of the revenue 

associated with the filing of that APD. And that is why, in 2017, 

we still have $5 million that went to the BLM and to the Treasury 

from expired APDs. 

Mr. GRIJALVA. OK, but you see my point? Once knowing who 

they are and what is the lack of—I can’t find the right word— 

recidivism of the people applying over and over again for these, it 

would be good to be able to make some sort of analysis about that, 

and possibly promote a use it or lose it concept that hasn’t been 

promoted as readily as it should. 

Anyway, Secretary McQueen, part of the discussion today is 

NEPA, public participation, fee for protest. What is the process in 

New Mexico regarding public participation? Resembling NEPA? 

Something different? If you could, just maybe outline how the 

public and New Mexico gets involved in the decision making when 

you are issuing a permit or siting something. 

Mr. MCQUEEN. In New Mexico, most of the permits that would 

fall under our jurisdiction are either state or private leases. And 

the state land office in New Mexico is responsible for overseeing 

the environmental review of state leases. 

Mr. GRIJALVA. At what point does the public interject itself into 

that process? When do they have the right to know about what is 

going on in New Mexico? 

Mr. MCQUEEN. All of our regulatory proceedings in New Mexico 

are open for public comment. 

Mr. GRIJALVA. And there is a protest period, and then there are 

comment periods, and all that? 

Mr. MCQUEEN. There is an opportunity to make public comment 

through our hearing process. Yes, sir. 

Mr. GRIJALVA. And, again, for Mr. McQueen, for extraction of 

let’s say minerals on state land, does New Mexico collect royalties 

on that? 

Mr. MCQUEEN. Representative, yes, they do. 

Mr. GRIJALVA. What is it? 

Mr. MCQUEEN. The oil and gas royalties are set by statute in 

New Mexico, and those have changed through the course of time. 

But they varied between 12.5 and 20 percent royalties on state 

lands. 

Mr. GRIJALVA. Since we hear a lot about the states leading by 

example, do you feel that the Federal Government should also be 

charging some form of royalty on all the minerals that are 

extracted from its public lands? 

Mr. MCQUEEN. Representative, I believe the Federal Government 

is receiving royalty on oil and gas that is being produced. 

Mr. GRIJALVA. No, I am talking about mineral extraction. 

Dr. GOSAR. The gentleman’s time is expired. 

Mr. GRIJALVA. Thank you. 

Dr. GOSAR. I thank the gentleman. The gentleman from New 

Mexico, Mr. Luja ́n, is recognized for 5 minutes. 

Mr. LUJA ́ N. Chairman Gosar, Ranking Member Lowenthal, thank 

you for the indulgence of allowing me to sit on the Committee 

47 

today, even though I am not a member of the Committee, at least 

not a current member of the Committee. 

Mr. Gosar, it was an honor to serve with you and Mr. Grijalva 

and Mr. Lowenthal before. 

Governor Martinez, while I know we are here on permitting, I 

am going to take this opportunity to ask a different question at the 

top. And I want to thank you for going down, as you have done 

with other natural disasters in New Mexico, to see the impacted 

area on Saturday. And I know that your team has been on the 

ground there with all the firefighters, over 36,000 acres that have 

been burned in and around Cimarron, northern New Mexico, 

Eagles Nest, Ute Park, into Colfax County. 

What I wanted to ask, Governor, is does the state of New Mexico 

have the resources it needs to address this fire? And do you expect 

to make any additional requests of FEMA or the Federal 

Government? 

Governor MARTINEZ. Thank you, Mr. Chairman and Representative Luja ́n. Yes, the state does have the resources, and we do receive those resources and have asked for FEMA requests, as well. 

We have about 500 firefighters fighting this fire. It will continue 

to burn for probably another 11⁄2 to 2 weeks. But we are trying to 

and have been successful in making sure that the community of 

Cimarron, Ute Park are also protected, we have not lost life and/ 

or property, except for outhouse type of buildings, where people do 

not live. So, we do feel strongly that our budget is healthy and is 

able to participate in the percentage that we put in when we make 

those FEMA requests. 

Mr. LUJA ́ N. I appreciate that, Governor. And I know we were all 

pleased when FEMA accepted the state of New Mexico’s request for 

the fire management assistance grants, as well. 

But the reason I wanted to ask that question is I know I have 

visited with many of my colleagues, and we all stand ready to 

make sure we are working together. But thank you for your leadership in that effort. 

On the permitting side, Secretary McQueen, I am going to push 

back a little bit. Congressman Grijalva asked some questions about 

public notification and comment procedures from the state of New 

Mexico. What sort of public notification and comment procedures 

does the state have when it receives drilling permit applications? 

Mr. MCQUEEN. Representative Luja ́n, our public comment period 

related to oil and gas operations largely fall within the LCD 

hearing process. So, for a typical oil and gas permit that is applied 

in southeastern New Mexico, typically there wouldn’t be a public 

comment in that. 

Mr. LUJA ́ N. If I may, I want to seize on that. My research says 

there is basically none. And I think that the notion that there can 

be public comment when there are no requirements is one of the 

challenges that we have that we need to correct. 

We hear a lot about how much more quickly states can process 

drilling permits, but I think that we also have to acknowledge that 

there should be a process that allows the public to comment, as 

well. And I think that is something that needs to be addressed in 

New Mexico. 

48 

Governor Martinez, in responding to Congressman Soto’s line of 

questioning around methane, what requirements does the state of 

New Mexico have in place, in your words, to minimize methane 

exposure and waste? 

Governor MARTINEZ. It is my understanding, Mr. Chairman and 

Representative Luja ́n, that the flaring is one of those issues, and 

that they are trying to recapture, and using technology through the 

industry to make sure that that is being used in a different way, 

and so that we are not having those issues. 

Mr. LUJA ́ N. Since my time is going to expire, you said try to 

capture. Is there a requirement in New Mexico for capturing of 

methane? 

Governor MARTINEZ. No, but the responsibility—well, I—— 

Mr. LUJA ́ N. No is the correct answer. I mean I appreciate that. 

And Secretary—— 

Governor MARTINEZ. I don’t know that it is the correct answer, 

and I would like Mr. McQueen to—— 

Mr. LUJA ́ N. Well, Secretary McQueen, if I could, you also pushed 

back on the basis of the numbers that Darren Soto presented to 

you, the 570,000 tons of methane each year due to intentional 

emissions, unintentional leaks and flaring of gas, $182 to $244 

million. If those numbers are incorrect, what are your numbers? 

Mr. MCQUEEN. The state is currently venting about .1 percent of 

its total gas production and about 1.2 percent of its total gas 

production is being flared. 

Mr. LUJA ́ N. How much is that costing the state? 

Mr. MCQUEEN. If you compare those numbers to peer oil and gas 

states, you will find that those are very comparable numbers. 

Mr. LUJA ́ N. How much money is New Mexico losing because we 

don’t have any requirements to capture this? 

Mr. MCQUEEN. Well, natural gas is selling for $1.60, $1.70 

an—— 

Mr. LUJA ́ N. Mr. Chairman, as my time expires here, I think that 

those are some questions I will work with the Committee to 

submit. 

We need to get some answers here, because we cannot just push 

back on estimates that are being put forth that there is not a 

response associated with what has been calculated. 

It has been admitted that this methane is not being captured in 

New Mexico, it is being wasted, and we know that there is revenue 

being lost. We need to maximize this. In New Mexico, every dollar 

counts. 

So, Mr. Chairman, again I thank you for the indulgence. I will 

work with you and the Committee to see if we can get some 

answers to these questions, as well. 

Dr. GOSAR. I thank the gentleman. 

Mr. LUJA ́ N. I thank you so much for being here, as well. 

Dr. GOSAR. Thank you. I am going to recognize myself to go last. 

First of all, I need to clear up a couple things because there is 

some confusion as to what these bills actually do and what type of 

drilling operations actually qualify for the permitting mechanisms 

that we create under these bills. 

Mr. Willis states in his testimony that under the new NPD 

process, ‘‘a notice may place a well on a national historical trail or 

49 

in especially sensitive and critical wildlife habitat or a community 

water source.’’ I want to make it perfectly clear that these operations are not what we are talking about here in this language. We 

are talking about drilling activities that pose no significant effects 

to human environment, threatened or endangered species, or cultural or historical properties. The bill makes this perfectly clear. 

The Secretary also has the ability to object to an NPD based on 

these grounds, and require consultation under the ESA or NHPA 

to remedy such concerns with additional conditions if so needed. 

We are not exempting anything under NEPA. These drilling operations are ones for which the BLM has already conducted the study 

under the NEPA, and are in areas where the drilling has actually 

occurred, and they are eligible for a categorical exclusion, or a 

study is produced to show that there are no such impacts. 

Once again, Mr. Willis, please make sure that you understand. 

You have been with the BLM. You should be able to read this and 

understand that. So, get the facts straight. 

Secretary MacGregor, under the bills we have here before you 

today, it would allow the Department of the Interior to recover the 

cost of processing leases through the assessment of administrative 

processing fees. How many lease sales are protested? And can you 

describe the type of objections these protests are making in the 

BLM lease sales? 

Ms. MACGREGOR. Absolutely. To date, I mean in Fiscal 

Year 2017, nearly 88 percent of all leases were protested. And I 

think it is important to decipher a protest period is not the public 

comment period. On multiple occasions leading up to a Federal 

lease sale, there are several different opportunities for the public 

to share their opinion, and we want that. In many cases, we have 

published our notice of potential lease sale, put the acreage out, 

and then, when we conduct the actual lease sale, sometimes 5 to 

10 percent of the acreage has already been deferred because of the 

public comments that we have received. And we really try to get 

ahead of that before the lease sale is actually conducted. 

The protest period comes after the lease sale has been conducted. 

And again, that, in some cases, has significantly delayed our ability 

to adhere to our revenue-sharing obligations under the Mineral 

Leasing Act and provide states like New Mexico, in the case of 

2016, waiting over 7 months to get a $70 million payment. 

But, again, our staff, when we discuss this concept that you are 

sharing with us in the form of a draft bill, we have looked at some 

protests where, in fact, there have been copied-and-pasted sections 

where a protest has been filed in Wyoming and identically filed in 

the state of Colorado or New Mexico. And if the intent of some of 

these protests is to stop the lease sale from occurring, that is an 

abuse of what protests are supposed to be. We would like to focus 

on protests where it is a rancher who has a serious concern with 

something going on in proximity to his lands. 

But if it is an attempt through 1,500 pages of our review—and 

we have letters outstanding to Mr. Lowenthal and others—to get 

through these, and then be able to make a payment and have our 

staff spend hours to do that, that is a little bit different. And we 

do charge, I mean there are FOIA fees. We have had a multitude 

of FOIAs, and that hasn’t prevented anyone from filing FOIAs with 

50 

the Department, God knows, because we have quite a few right 

now. 

We respect public comment, we absolutely want to ensure that. 

But when it gets abused and over 88 percent of our leases are protested, I think we have a little bit of an issue developing. 

Dr. GOSAR. Can you give me a range of time in which those 

challenges take to resolve? 

Ms. MACGREGOR. Well, this is just a bad example, because our 

team has to go through and read every single page. I mean this is 

printed double-sided so it could actually fit on the desk, but there 

are others that won’t take as long. But it really depends on how 

many and how many pages we have. There are some good reports 

in there. And making sure that our comments address every issue 

that is raised in that protest tends to be one of the most consuming 

aspects of a protest. 

Dr. GOSAR. Governor Martinez, when you have such a delay in 

the issuance of a lease sale, what does that mean to the state of 

New Mexico? 

Governor MARTINEZ. It is one of our largest industries. We rely 

heavily on the Federal Government, because we have four military 

bases and three national labs, so many coming from the Federal 

Government. That is one of our largest industries, and all of these 

subcontracts to that. 

And the second one is our oil and gas industry, which employs 

100,000 people and is a revenue generator of, 35 percent of our 

general budget comes from the oil and gas industry. 

We also have a $23 billion permanent fund that, should oil and 

gas ever be depleted in the state of New Mexico, that permanent 

fund then will be the replacing dollars for building those schools, 

$1,800 and $19 million every year from the permanent fund, and 

the revenue that is received from those investments goes straight 

into the budget, as well. 

So, when we do not have timely, responsible ways of requesting 

permits, those kinds of dollars for a $6 billion budget is 

detrimental. 

Dr. GOSAR. One last question, Ms. MacGregor. In regards to the 

methane rule, what is the biggest impediment in regards to 

methane from the producers? 

Ms. MACGREGOR. Well, methane is natural gas. It is a 

commodity. So, I do believe producers want to take every effort to 

capture that commodity and bring it to market to make money off 

of it. 

In some cases, producers will have to vent or flare for emergency 

purposes, or for completion, or there are a multitude of reasons 

that are unavailable. But there are other instances, if they have to 

do it on an avoidable basis under current regulations, then we 

charge them revenue. We charge them a royalty. 

Dr. GOSAR. But you get my point. It is a commodity, right? 

Ms. MACGREGOR. Right. 

Dr. GOSAR. And it is a sellable commodity. 

Let me ask you another question. Have leases gone up? Has 

more drilling occurred in the United States? 

Ms. MACGREGOR. Yes. 

51 

Dr. GOSAR. Has methane gone up, the release of methane in the 

environment gone up, or run down? 

Ms. MACGREGOR. The last report I read from the EPA had, I 

believe, said it has gone down. 

Dr. GOSAR. Considerably. Considerably, because of industry. So, 

why would you want to actually impugn the industry who is trying 

to capture it for criminy sakes? I don’t get it. 

Well, anyway, you satisfied my curiosity, so we will have to leave 

it with that. 

I want to 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 ask 

that you respond to these in writing. 

Under Committee Rule 3(o), members of the Committee may 

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 their responses. 

If there is no further business, without objection, the Committee 

is adjourned. 

[Whereupon, at 3:45 p.m., the Subcommittee was adjourned.] 

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