Producers say permits moving at snails pace
In the old days of oil, gas and mineral extraction, producers would just file a claim, set up a rig or mining operation, and hope that it would produce.
While that was great for the producers and investors who owned parts of the company, it was often messy for nearby landowners and often the environment.
Today when those who want to take riches out of the ground decide to do so, they face a myriad of paper work, permits, environmental assessments, public hearings, screenings, etc. etc. etc.
There was little balance in the early days, almost everyone admits that. But has the pendulum swung too far the other way?
"Getting approval even to explore for gas and oil extends to longer periods every year," says Dan Sullivan of Sullivan Natural Resources, a geophysical exploration company. "The permitting process continues to grow longer and become more and more expensive."
In the past this didn't really bother consumers very much because the costs didn't get passed onto them. But things are changing as the United States main domestic supplies of gas are becoming less and less abundant from traditional wells. This summer gas prices have more than doubled on the wholesale market largely because of expected natural gas shortages this fall and winter. Some predict that those higher prices will double or triple by the end of next winter. But these higher costs are not directly due to the higher cost of exploration or production. They are due to shortages because new sources that can be delivered to markets are becoming scarcer and scarcer.
"Just look at the statistics," states Sullivan. "Production in the wells that the country has relied on for years is dropping and the best sources of gas are in the west, on federal land. Yet only a small percentage of the gas that the country uses is from wells on those lands."
Sullivan explained that for years the main reason that gas wasn't pursued too heavily on lands in the west is because it was hard to bring the product to market. But new technology and expanded pipeline facilities in this part of the country are changing that. However, with exploration moving at snails pace due to restrictions and litigation, supplies are not coming on line fast enough to keep customers in product.
Much of the land where companies want to explore and drill are administered by the BLM, and some blame the agency for dragging it's feet in various area. But other federal agencies are involved in what seems to be a slowdown in permitting companies to explore and extract minerals, and it doesn't just fall in the category of gas and oil either. Some mining industry officials privately say that they have the same kinds of problems with other agencies such as the forest service as well. Many are reluctant to speak out because they feel that complaining about the situation will just create more problems for their operations.
A report this past winter by the Independent Petroleum Association of Mountain States claims that companies looking for oil and gas leases on federal lands are contending with growing uncertainties as well as what they call "extreme" delays in acquiring the necessary permits to operate. The report, saying it is using the BLM's own data, points out that an application to drill permit which should take 30 days to process now takes an average of 137 days to approve. According to the IPAMS the range of days it take to approve those permits has also grown tremendously in the past few years. In 2001, BLM offices processed permits within between 34 to 194 days. In 2002 that range increased even more with the period of time varying between 67 to 370 days.