American Oil and Gas Reporter - July 2018 - 104

ConventionSection: Western Energy Alliance

Revisions To NEPA Rules
Will Help Industry, U.S.
By Dan Holder
DENVER-The Bureau of Land Management's plans to streamline federal regulations that hamper energy development
on federal lands will overturn outdated
policies that are unresponsive to modern
needs and technologies, asserts Richard
Frommer, chairman of the Western Energy
Alliance.
Speaking in advance of the Alliance's
annual meeting, to be held Aug. 8-10, at
the Ritz-Carlton, Bachelor Gulch, in Avon,
Co., he notes BLM's plans to revise National Environmental Policy Act regulations are a monumental task. "When the
NEPA document was written in the 1980s,
it did not contemplate horizontal drilling
and how industry develops a modern
field with such a materially smaller footprint," says Frommer, president and chief
executive officer of the Denver-based

Western Energy Alliance
Annual Meeting
Avon, Co.
Wednesday, Aug. 8
3-6 p.m. Registration Desk Open, RitzCarlton, Bachelor Gulch
5-6 p.m. Opening Reception
6-8 p.m. Family Dinner
8-10 p.m. Cigars Under the Stars

Thursday, Aug. 9
7:30 a.m. Registration Desk Open, RitzCarlton, Bachelor Gulch
7:30-9 a.m. Family Breakfast
8:30 a.m.-12:15 p.m. Morning Session
Alliance Updates and Speakers
12:15-1:30 p.m. Family Lunch
1:30-4 p.m. Afternoon Session
Awards Presentations and Speakers
4:15-5 p.m. Membership Meeting
Board Elections
Passing of the Gavel from Board Chairman
Rich Frommer to Incoming Chairman
Jeff Lang, BIP Energy
5 p.m. Adjourn

Friday, Aug. 10
8:30 a.m. Golf Outing and Lunch, Red
Sky Club in Edwards, Co.
$250 a Player

Great Western Oil and Gas Company.
"What rewriting NEPA will do immediately is not so much affect companies'
bottom lines as much as it will re-engage
many companies into looking at exploring
on federal leases," he describes. "Many
companies have decided they don't have
the time or they can't manage the federal
requirements, so they decide to find oil
elsewhere. But, if we get some relief from
the NEPA process and some clearer execution timelines, that will bring companies
back to exploring on federal leases."
Alliance President Kathleen Sgamma
says the NEPA reforms in BLM's instruction memorandum are only one of
the positive signs coming out of Washington.
"It is nice not having a hostile administration, but the question becomes, how
do we make these policies permanent?"
she poses. "Some things are going through
a rule making, and they will be challenged
in court. But other things, such as leasing
policies and environmental analysis under
NEPA, can be undone by the next presidential administration. So, how do we
get some of these things embedded into
the DNA of the agencies so that they last
beyond this current administration?"
Revising NEPA
According to Sgamma, NEPA obligations are the lengthiest part of the federal
onshore permitting process, with some
projects' NEPA documents taking as long
as 10 years to finish, Sgamma says. The
Trump administration is working on
rewriting NEPA regulations, but if the
Department of Interior's latest instruction
memorandum is not backed up with congressional legislation, she predicts, a
liberal court or the next presidential administration could overturn those reforms.
"Western Energy Alliance is working
with the House Natural Resources Committee on a couple of bills to limit the
number of situations in which NEPA is
required," Sgamma says. "The biggest
one is one drilling a nonfederal horizontal
well, where the lateral touches some federal minerals. That situation-where that
nonfederal well just touches a minority

104 THE AMERICAN OIL & GAS REPORTER

of federal minerals-happens a lot in
Wyoming, Colorado and New Mexico.
Suddenly, that well gets sucked into the
full gamut of federal processes, even
though it primarily is a private well on
private surface accessing private minerals."
According to DOI, its NEPA revisions
will update the regulation's administrative
procedures, reduce duplicative actions
and eliminate redundant procedural reviews. Under the proposed BLM plan,
operators no longer must secure a federal
drilling permit when operating on nonfederal surface acreage if the share of
federal minerals is less than 50 percent.
While a state drilling permit still would
be necessary, operators no longer would
have to satisfy NEPA, National Historic
Preservation Act or Endangered Species
Act requirements.
"The BLM appreciates the goal of
this draft bill is to focus the BLM's
review of federal actions to federal lands.
The permitting on the nonfederal land
draft bill would no longer require the
BLM to analyze surface impacts to private
lands," Katharine MacGregor, principal
deputy assistant secretary for Land and
Minerals Management, told the House
Committee on Natural Resources in June.
Two situations frequently arise when
developing federal oil and gas leases involving private lands, MacGregor reported:
split-estate operations where the drill site
was on nonfederal surface lands overlying
federal oil and gas minerals, and long
lateral wells that developed a predominantly private surface to private minerals
along with a marginal amount of federally
owned minerals.
"In both instances, no federal surface
is impacted, yet, under current law, the
BLM must require an application for permit to drill for the federal mineral production," MacGregor said. "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."
American Oil and Gas Reporter - July 2018

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