[Senate Hearing 113-491]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 113-491
                                                       
                           BLM PERMIT PROCESSING

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                              
                      ENERGY AND NATURAL RESOURCES
                      
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                                   ON

BREAKING THE LOGJAM AT BLM: EXAMINING WAYS TO MORE EFFICIENTLY PROCESS 
  PERMITS FOR ENERGY PRODUCTION ON FEDERAL LANDS THE PURPOSE OF THIS 
   HEARING IS TO UNDERSTAND THE OBSTACLES IN PERMITTING MORE ENERGY 
   PROJECTS ON FEDERAL LANDS AND TO CONSIDER S. 279, THE PUBLIC LAND 
 RENEWABLE ENERGY DEVELOPMENT ACT OF 2013, AND S. 2440, THE BLM PERMIT 
         PROCESSING IMPROVEMENT ACT OF 2014, AND RELATED ISSUES

                               __________

                             JULY 29, 2014


                       Printed for the use of the
               Committee on Energy and Natural Resources



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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                   MARY L. LANDRIEU, Louisiana, Chair

RON WYDEN, Oregon                    LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            JOHN BARRASSO, Wyoming
MARIA CANTWELL, Washington           JAMES E. RISCH, Idaho
BERNARD SANDERS, Vermont             MIKE LEE, Utah
DEBBIE STABENOW, Michigan            DEAN HELLER, Nevada
MARK UDALL, Colorado                 JEFF FLAKE, Arizona
AL FRANKEN, Minnesota                TIM SCOTT, South Carolina
JOE MANCHIN, III, West Virginia      LAMAR ALEXANDER, Tennessee
BRIAN SCHATZ, Hawaii                 ROB PORTMAN, Ohio
MARTIN HEINRICH, New Mexico          JOHN HOEVEN, North Dakota
TAMMY BALDWIN, Wisconsin

                Elizabeth Leoty Craddock, Staff Director
                      Sam E. Fowler, Chief Counsel
              Karen K. Billups, Republican Staff Director
           Patrick J. McCormick III, Republican Chief Counsel


                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Barrasso, Hon. John, U.S. Senator From Wyoming...................     6
Christensen, Mark A., Chairman, Campbell County Board of 
  Commissioners, on Behalf of the Wyoming County Commissioners 
  Association....................................................    34
Haubenstock, Arthur, Chair of the Utility-Scale Solar Power 
  Division, Solar Energy Industries Association and Senior 
  Counsel, Perkins Coie LLP......................................    42
Heinrich, Hon. Martin, U.S. Senator From New Mexico..............     5
Heller, Hon. Dean, U.S. Senator From Nevada......................     5
Kidwell, Scott, Director of Government Affairs, Concho Resources, 
  Inc............................................................    28
Kornze, Neil, Director, Bureau of Land Management, Department of 
  the Interior...................................................     8
Landrieu, Hon. Mary L., U.S. Senator From Louisiana..............     1
Murkowski, Hon. Lisa, U.S. Senator From Alaska...................     4
Nichols, Scott, Permitting and Lands Manager, U.S. Geothermal, 
  Inc............................................................    49
Portman, Hon. Rob, U.S. Senator From Ohio........................     6
Sgamma, Kathleen, Vice President of Government and Public 
  Affairs, Western Energy Alliance...............................    32
Tester, Hon. Jon, U.S. Senator From Montana......................     3
Wichman, Commissioner Lorinda, Nye County Commission, President-
  Elect, Nevada Association of Counties..........................    39

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    61

                              Appendix II

Additional material submitted for the record.....................    69

 
                         BLM PERMIT PROCESSING

                              ----------                              


                         TUESDAY, JULY 29, 2014

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2:34 p.m. in room 
SD-366, Dirksen Senate Office Building, Hon. Mary L. Landrieu, 
chair, presiding.

 OPENING STATEMENT OF HON. MARY L. LANDRIEU, U.S. SENATOR FROM 
                           LOUISIANA

    The Chair. Good afternoon.
    I'd like to call our meeting of the Energy and Natural 
Resources Committee so that we can begin.
    We have a very short period in which to give some opening 
remarks. There have been 4 votes called at 2:45. I understand 
one is a record vote, the other by voice vote.
    So I'm going to open with a short statement, turn to you, 
Senator Tester, Senator Udall, when Senator Murkowski comes and 
if we can include Senator Barrasso, who's a lead sponsor of one 
of these bills, we will.
    Let me just quickly say, good afternoon. Welcome to our 
committee. This hearing is focused on the job killing backlog 
of pending permits for energy production on Federal land.
    A special welcome to Senator Tester and Senator Udall, who 
have been leaders in trying to break up this backlog, expedite 
permitting with a balance that is required and have in their 
bills some suggestions in which to accomplish that.
    The bounty and beauty of the American West has stirred the 
hopes and dreams of generations of Americans. The vast economic 
potential of the West was only a dream in 1804 when President 
Thomas Jefferson sent Lewis and Clark on their now famous and 
well documented journey.
    A little over 30 years later in 1837, Washington Irving 
published the epic following the adventures of the famous 
explorer, Captain Bonneville, in what would later become known 
as the Wyoming Territory. He searched for the fabled Tar 
Springs. After a great ordeal the men in his party discovered a 
slow stream of oil at the foot of a sand bluff just east of the 
Wind River Mountains.
    Fifty years later a Pennsylvania born Irishman named Mike 
Murphy drilled the first well in the Wyoming Territory on the 
very same spot.
    These examples of exploration and discovery began a 
transformation of American society that still rings true today. 
Today we have over 2.45 million acres of Western lands managed 
by the Bureau of Lands Management. It's so important that these 
lands are properly managed for the creation of wealth and 
prosperity for our Nation, the preservation of our environment 
and our way of life.
    One of the ways that land is disturbing, however, is that 
it's taking over 200 days to review and approve new 
applications for permits to drill, called APDs. Under the 
current law the permit process is supposed to take only 30 
days. We will explore the gap today.
    At today's hearing we'll also hear about other obstacles 
that are creating these delays and how this committee, working 
together, can eliminate or reduce them.
    We'll also explore some ideas how to best harness Federal 
lands for renewable energy production like wind, solar and 
geothermal.
    I'm going to submit the rest of my statement to the record.
    Senator Tester, you're welcome. Love you to begin. As soon 
as our colleague, Senator Udall, gets here we will turn to him 
for opening remarks.
    Thank you so much for your leadership, your understanding 
of these issues, being from the State of Montana, and thank you 
for spending your time with us this afternoon.
    [The prepared statement of Senator Tom Udall follows:]
   Prepared Statement of Hon. Tom Udall, U.S. Senator From New Mexico
    Chairwoman Landrieu, Ranking Member Murkowski, thank you for 
holding today's hearing S. 2440, the BLM Permit Processing Improvement 
Act of 2014. This bill is critical to continued energy development in 
the West. S. 2440 is bipartisan right down the middle--seven Democrats, 
seven Republicans, including Senators Barrasso, Henrich, Udall, Lee, 
Heller, and Hoeven on this committee. It is supported by the Western 
Governors' Association, by the Independent Petroleum Association of 
America, the American Petroleum Institute, and the American Oil and Gas 
Association. Kathleen Sgamma from the Western Energy Alliance is here 
to testify about her organization's support for the bill, as is Scott 
Kidwell of Concho Resources, the largest oil producer in New Mexico. 
We've heard from countless other oil and gas companies, large and 
small, who have expressed their support for this bill and the need to 
enact the law this year. BLM Director Neil Kornze is here to convey the 
Bureau's support for this bill.
    S. 2440 extends indefinitely a successful program from the Energy 
Policy Act of 2005. Section 365 of the EPACT authorized through 2015 a 
pilot program to provide additional resources to seven of the busiest 
field offices in the West, including two in my state-Carlsbad and 
Farmington. Last March, I visited with the BLM and energy producers in 
Carlsbad. One of the producers I met with told me that Carlsbad is the 
most effective office he's dealt with. Carlsbad has used the additional 
resources to hire more staff, work more closely with sister agencies, 
more through environmental review, and cut processing time to less than 
half of the national average. It is one of the busiest, and most 
effective, BLM offices in the nation. S. 2440 supports the work of the 
Carlsbad and Farmington offices, and by allowing the Secretary to 
designate new permit improvement offices to receive these funds, the 
bill ensures that the BLM can be responsive to new plays and changes in 
industry activity.
    S. 2440 also provides certainty for both the BLM and industry. For 
the BLM, it provides certainty that the funds needed to meet its oil 
and gas permitting obligations will be there. The harsh cuts of 
sequestration, coupled with the looming expiration of the pilot office 
program, have had a chilling effect on oil and gas processing 
throughout the west, including New Mexico. Positions are left unfilled, 
and investments in technological improvements are being delayed. This 
has carried over into other aspects of the BLM's oil and gas mission, 
such as lease sales and inspection/enforcement activity. This bill 
gives the BLM the security to hire the staff and make the investments 
needed to process oil and gas permits efficiently and with thorough 
environmental review. The last thing any of us want is a return to the 
``check the box'' approach to oil and gas permitting.
    For industry, the bill provides certainty as to cost and timing of 
oil and gas permits. It sets an APD fee that is almost 50% higher than 
the current fee but locks it in for 10 years. This, coupled with the 
continuation of the EPACT program, gives industry the assurance that 
the BLM will have the staffing resources it needs to efficiently 
process permits.
    S. 2440 provides additional resources to the BLM without further 
burdening the American taxpayer. In fact, the bill is paid for entirely 
by industry. But the benefits for the taxpayer are incredible. In 2013, 
oil and gas production on Federal onshore mineral estate generated $3 
billion in royalties. New Mexico's share was $479 million. This bill is 
good for the BLM, good for industry, and good for the American 
taxpayer.
    I am pleased that this committee is also considering S. 279, Public 
Land Renewable Energy Development Act, introduced by Senators Tester 
and Heller. I am proud to cosponsor this bill, which streamlines the 
permitting process for renewable energy projects on public lands. Since 
2009, the BLM has made great strides in permitting renewable energy on 
the public lands, but this new program has a lot of red tape. This bill 
cuts some of that red tape so that renewable energy projects will go 
through a similar permitting process as traditional energy resources. 
Critically, the bill also returns portions of royalty payments to local 
communities and supports investments in wildlife habitat.
    Together, these two bills will help streamline energy production on 
our public lands, and furthers a ``Do It All, Do It Right'' Energy 
Policy to take on the twin threats of global climate change and 
American dependence on foreign oil. With policies that encourage the 
production of clean energy, we can create a clean energy economy that 
leads the world in producing the jobs of the future, while we continue 
to develop our oil and gas resources efficiently and in an 
environmentally sound way.
    Chairwoman Landrieu, Ranking Member Murkowski--I thank you for 
considering these two important bills. I urge you to move them out of 
committee quickly for the consideration of the Senate as a whole.

          STATEMENT OF HON. JON TESTER, U.S. SENATOR 
                          FROM MONTANA

    Senator Tester. Thank you for those kind comments, Chairman 
Landrieu and thank you for being in this position of Chairman 
of Energy and Natural Resources.
    I would say the same for Ranking Member Murkowski if she 
was here, but let the record reflect that.
    I know that both of you, the leaders of this committee, 
spend a lot of time working to make smart investments in our 
Nation's energy infrastructure and streamlining the permit 
process.
    I'm happy to be here today to talk about a bill that does 
exactly that, my Public Land Renewable Energy Development bill 
has strong bipartisan support on this committee. I am proud to 
introduce it with many of the colleagues here today, Senator 
Heller and Senator Heinrich, along with the Udall cousins, Mark 
and Tom and Senator Risch.
    The companion bill which is also bipartisan is to receive a 
hearing today in the House. This is a popular bipartisan piece 
of legislation that will move this country forward. That's 
because it does a lot of good things.
    It does them in a balanced way that will grow our economy 
and create jobs.
    It will protect our environment and fund wildlife habitat 
protection.
    It will promote American energy security by tapping into 
some of the best renewable energy sites on public lands.
    It gives the department, the departments of our 
Administration, the tools that they need to streamline the 
leasing process for renewable energy development on public 
land, similar to what we do for oil and gas development.
    It sets aside 15 percent of the royalty revenues to 
expedite the permitting process and it reinvests half of the 
royalty revenues from these renewable energy projects into the 
hands of States and counties where the development occurs.
    Most importantly, 35 percent of the royalty revenues will 
go toward projects that protect wildlife habitat from renewable 
energy development. Protecting our public lands and keeping 
them public is vital to this American economy. Outdoor 
recreation generates $650 billion annually in consumer spending 
in the United States, supports more than 6 million direct jobs. 
I believe the expansion of wind and solar development is 
compatible with public land protection.
    America's wind energy potential is vast. When it is 
responsibly developed it can be a win for business, a win for 
communities and a win for wildlife.
    As a Montanan and as a farmer I understand our Nation's 
love affair with our treasured landscapes. That's why I'm so 
very proud of this bill. It will responsibly develop our energy 
resources and ensure that the revenues benefit the States and 
counties of our treasured lands.
    You talked about the job killing backlog. This bill will 
reduce that backlog.
    Finally, Madame Chair, I understand that you're also going 
to be discussing a bill today by Senator Tom Udall, the BLM 
Permit Processing Improvement Act. I am a co-sponsor of that 
bill. It is a good piece of legislation.
    The Energy Policy Act's pilot permitting office, one of 
them is located in Mile City. They do a great job out there and 
are absolutely critical to continuing the economic growth in 
the Bakken oil region of Eastern Montana. Fhat is why I 
strongly support that legislation as well.
    Thank you very much, Madame Chair, Ranking Member 
Murkowski, for your time.
    The Chair. Thank you very much, Senator Tester.
    Senator Murkowski, for an opening statement.

        STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR 
                          FROM ALASKA

    Senator Murkowski. Thank you, Madame Chairman. Appreciate 
the hearing this afternoon. I'm glad that we can spend some 
time focused on the pace of BLM's permitting and some of the 
many steps that we can do to better expedite it.
    I think that this is a particularly important topic 
because, clearly, we need to do all that we can to maximize 
energy and mineral production of all kinds on all of our lands 
and in an efficient and an effective manner.
    We also know that based on reported statistics, based on 
what we see happening on State and private lands and even based 
on a recent Inspector General's report that BLM must clearly 
improve in this area.
    In Alaska we face constant battles with the Administration 
as to whether or not our Federal lands will even be accessible. 
Just as one promising project in our national petroleum reserve 
finally reaches the permitting stage many of us are concerned 
that BLM's potential restrictions could render it uneconomic.
    The two bills before us today take on our permitting 
challenges, I think, in a very effective manner.
    S. 2440 proposes to make permanent the very successful BLM 
pilot program that has led to significant improvement in the 
speed with which applications for permits to drill, APDs, are 
processed. It provides the Interior Secretary with flexibility 
to designate new project offices to account for new oil and gas 
plays as well as shifting industry priorities.
    It also directs the Secretary to consider publicly 
available industry reports in determining how to allocate 
resources to ensure that the BLM is being proactive instead of 
reactive.
    S. 279, among other things, proposes to establish in the 
renewables arena, the same type of competitive leasing and 
royalty program that exists for offshore oil and gas 
production.
    It also directs that a portion of the royalties be utilized 
for processing applications in local BLM offices.
    Permitting efficiency is something that we should be 
tackling, as a committee, as a Senate and as a Congress. So I 
applaud the bipartisan leadership that we see in these bills. I 
look forward to the testimony of our witnesses today.
    The Chair. Thank you very much.
    Senator Heller and Senator Portman, Senator Heinrich, you 
all have joined us. I think Senator Heinrich you were the early 
bird.
    Does anyone want to say any just brief remarks? Then I 
think we're going to break for the vote and then come back.
    Senator, would you care to add anything?

STATEMENT OF HON. MARTIN HEINRICH, U.S. SENATOR FROM NEW MEXICO

    Senator Heinrich. Thank you, Madame Chair.
    I just want to say both of these bills are really an 
example, a positive example, of how we can work together to 
produce energy more effectively on this committee. They're both 
bipartisan. They're both based on things that work. I'm really 
excited to see this hearing today.
    I think these are bills that will positively affect the 
energy industry throughout the West. I'm looking forward to 
hearing from our witnesses.
    The Chair. Senator Heller.

          STATEMENT OF HON. DEAN HELLER, U.S. SENATOR 
                          FROM NEVADA

    Senator Heller. Thank you, Madame Chair. I want to thank 
you and the Ranking Member for this hearing.
    I'd like to submit my comments, opening statement, for the 
record if there are no objections.
    The Chair. Without objection.
    Senator Heller. But I'd also like to make one quick 
introduction, if I may.
    We have with us the Nye County Commissioner, Lorinda 
Wichman, at the committee today. I'd like to welcome her here. 
She's a friend and an important leader in our State.
    She works tirelessly, not only for her constituents in Nye 
County, but for the entire State on natural resource related 
issues. It's a pleasure to have her here. I want to thank her 
for making the cross country trip on such a short notice.
    Nye County, her county, has some of the best sunshine for 
solar development in the entire country. We just need to get 
the Federal Government out of the way so it can be utilized.
    So anyway, Madame Chairman, and to her, thank you very much 
for being here and for taking time.
    Thank you.
    The Chair. Thank you very much.
    Senator Portman.

          STATEMENT OF HON. ROB PORTMAN, U.S. SENATOR 
                           FROM OHIO

    Senator Portman. Madame Chair, thank you. I really 
appreciate your holding this hearing.
    I listened to Senator Tester there for a moment as I came 
in. He's the Chair of our Subcommittee on Governmental Affairs 
that has held a number of hearings on this topic. I'm the 
Ranking Member.
    One thing we talked about in that hearing on is the Federal 
Permitting Improvement Act of 2013 which is bipartisan and gets 
at this broader issue. There is a challenge out here, not just 
on public lands, but on private lands the United States 
continues to lag behind. We are now number 17 in the annual IMF 
study for the ease of doing business as it relates to the 
permits necessary to green light something, actually build 
something.
    As we've already seen in some of the testimony here this 
morning, I'm sure on the public lands the average number of 
days and the amount of investment and time and effort it takes 
is even greater than on private lands. So I look forward to 
hearing the testimony today.
    We will continue to push our broader Federal Permitting 
Improvement act. I think it makes a lot of sense. It's 
bipartisan and has a lot of just very sensible changes to the 
way the Federal permits go. But also I'm very interested in 
this legislation that relates directly to public lands, more 
specifically, BLM lands.
    So thank you for your having this hearing. We look forward 
to the testimony.
    The Chair. Thank you.
    Senator Barrasso, unfortunately, I just got a note that 
Senator Udall is going to be unable to make the meeting. He is 
required for quorum in the Foreign Relations Committee.
    So, Senator Barrasso, we'll hear from you. Then we'll break 
for the votes. Then we'll come back to hear our panel.

         STATEMENT OF HON. JOHN BARRASSO, U.S. SENATOR 
                          FROM WYOMING

    Senator Barrasso. Thank you very much, Madame Chairman. 
Thank you for holding today's hearing.
    Last month Senator Tom Udall and I introduced S. 2440, the 
BLM Permit Processing Improvement Act of 2014. This bipartisan 
piece of legislation would reauthorize and make permanent the 
Bureau of Land Management's pilot office program. Enacted in 
2005 the program has helped provide BLM offices in Wyoming and 
other States the resources necessary to process oil and gas 
permits. The program is set to expire September 2015.
    We need to reauthorize the program so the people of Wyoming 
and other States can create jobs, grow their economies.
    For years Federal policies have put Federal lands at a 
competitive disadvantage with the State lands and private 
lands. This is especially true when it comes to oil and natural 
gas production.
    Last month the Energy Information Administration, EIA, 
found that between 2012 and 2013 there was, ``A 9 percent drop 
in Federal, onshore, natural gas production with most of the 
decreases in Wyoming.''
    EIA also found that since 2009 Federal onshore natural gas 
production has decreased by 16 percent, decreased 16 percent. 
In fact, EIA found that Federal onshore natural gas production 
makes up a smaller percentage of total U.S. gas production that 
it has in 10 years.
    In 2003 Federal onshore natural gas production made up 35 
percent of total U.S. gas production, but 10 years later in 
2013, Federal onshore natural gas production made up only 16 
percent of total U.S. gas production.
    Federal onshore oil production also makes up a smaller 
percentage of total U.S. oil production than it has in 7 years.
    While these numbers reflect new energy production on State 
and private lands, they also show that Federal lands are 
becoming less competitive with State and private lands. Energy 
production on Federal lands puts money in the Federal Treasury. 
It reduces our budget deficit. We could stop making--we should 
make it--we should stop making it harder to produce energy on 
Federal lands.
    S. 2440 is one way to do that.
    This bill would give local BLM offices the financial 
resources necessary to process oil and gas permits in a timely 
manner. It will also give BLM the ability to anticipate where 
permitting backlogs may develop in the future and take steps to 
prevent them from occurring.
    So I want to thank Senator Udall and his leadership on this 
bill. He's been a great partner to work with.
    I would also like to thank the 6 other Democrat co-sponsors 
and 6 other Republican co-sponsors, including Senator Heinrich, 
Senator Heller, Senator Hoeven, Senator Lee and Senator Mark 
Udall, who are all members of this committee.
    I'd also like to thank the witnesses, especially welcome 
Mark Christensen, Chairman of the Campbell County Commissioners 
for coming here to testify all the way from Gillette, Wyoming.
    Thank you very much, Madame Chairman. I look forward to the 
testimony.
    The Chair. Thank you, Senator, for your leadership.
    I think we're going to go ahead and take a break. They've 
called the vote. So the committee will stand in recess for 
about 15 minutes. We'll resume, hopefully, right at half past 
the hour.
    [RECESS.]
    The Chair. Ladies and Gentlemen, if you'll take your seats 
our meeting will come to order from a brief recess.
    Director Kornze, you want to take a seat?
    Director Kornze is a Bureau of Land Management for the 
Department of Interior. We've asked you to give 5 minutes 
opening remarks and take questions for this hearing.
    So please proceed. Thank you.

STATEMENT OF NEIL KORNZE, DIRECTOR, BUREAU OF LAND MANAGEMENT, 
                   DEPARTMENT OF THE INTERIOR

    Mr. Kornze. Thank you, Chair, and other members of the 
committee.
    The Department is proud to be playing a major role in the 
Nation's energy economy. In the realm of conventional energy we 
have good news to share in production, oil production from 
public lands is at a 10-year high.
    We also have good news in the permitting realm. Permitting 
numbers have come down by about a third in the last two to 3 
years. We also, through the hard work of BLM and other 
agencies, have nearly 7,000 APDs or drilling permits that have 
been approved and are sitting with industry today that are 
available for drilling with no further action by the Bureau of 
Land Management.
    So if you compare that number to the fact that the average 
number of wells spud on public lands each year is about 3,000 
there's about 2 years worth of headroom available to industry. 
We're very proud of providing that opportunity.
    In the realm of leasing we also have a positive story to 
tell. Last year the Bureau of Land Management made 5.7 million 
acres of land available for leasing across the system. Yet only 
19 percent of that land received a bid from industry. So in 
many cases we are outpacing industry demand when it comes to 
leasing.
    When it comes to inspection and enforcement we have a less 
positive story to tell. General accounting--Government 
Accounting Office has been reviewing our program recently and 
has highlighted the fact that we are only accomplishing 60 
percent of our high priority drilling inspections and roughly 
82 percent of our high priority production inspections. So with 
a record number of wells on public lands, we have a great 
responsibility. We must do better.
    As part of a solution we had put in front of Congress, 
through the budgets, the President's budget proposal, an 
inspection and enforcement fee system which would make sure 
that we can be responsive to industry need and that we can 
fulfill 100 percent of our inspection and enforcement need.
    Briefly on renewable energy.
    The Nation's renewable energy production has doubled during 
this Administration. The Bureau of Land Management is proud to 
be part of that effort. Through that we have helped authorize 
more than 50 utility scale, renewable energy projects, solar, 
wind and geothermal, that have the potential to produce over 
14,000 megawatts of power.
    Specifically on the two bills in front of us today, S. 
2240, the BLM Permit Processing Improvement Act. We appreciate 
the bipartisan nature of this effort and Senators Udall and 
Barrasso introducing it very recently. The bill is important to 
the Bureau of Land Management and the efforts seen in the 
Energy Policy Act of 2005 have made a difference in our ability 
to move drilling permits.
    75 percent of the drilling activity in the permits that we 
see come into our offices come into the top 5 oil and gas 
offices within our system. So the ability to move resources to 
the high producing, the high need offices, makes a huge amount 
of difference to us.
    The $9,500 APE fee and the ability to move that with 
inflation over the years is also greatly appreciated. That 
tracks much better with the cost of what it takes to do that 
work. We appreciate, overall, the greater flexibility in this 
legislation including the ability given the Secretary, the 
opportunity to look at which offices should be prioritized at 
any given time because the focus in the areas of high 
production change as we have seen over the last decade.
    We look forward to working with the committee on some small 
and technical changes to that legislation.
    S. 279, the Public Land Renewable Energy Development Act, 
we are also very favorable to this legislation. We see it as a 
shared vision with a lot of the work that the Department of the 
Interior and the Bureau of Land Management have completed 
through Administrative means in recent years.
    BLM has worked extensively to develop what we call the 
Western Solar Plan or the Solar Programmatic EIS which 
identified 17 low conflict, high prospectivity areas around the 
West that are good for solar leasing. We're very pleased to see 
a competitive offering of the Dry Lake zone in Southern Nevada 
recently that produced over, nearly, $6 million in bids for the 
acres that were offered.
    We look forward to working with the committee to mesh these 
BLM efforts and the programs that we've built including a 
competitive leasing rule that we're currently working on with 
the legislation's objectives. We see this as a step forward.
    We appreciate the opportunity to share this testimony and 
look forward to answering any questions you might have.
    [The prepared statement of Mr. Kornze follows:]
     Prepared Statements of Neil Kornze, Director, Bureau of Land 
                 Management, Department of the Interior
                               on s. 2440
    Thank you for the opportunity to testify on S. 2440, the Bureau of 
Land Management (BLM) Permit Processing Improvement Act of 2014 (Act), 
which would reauthorize and expand the BLM's oil and gas project 
offices. The BLM supports the goal of S. 2440 to improve coordination 
and processing of oil and gas use authorizations and to better conform 
the project office authority to permitting demands that shift over 
time--thus facilitating the safe, responsible, and efficient 
development of domestic oil and gas resources on Federal and Indian 
Land. The BLM would like to work with the sponsor and the Committee on 
technical and clarifying modifications to the bill.
Background
    Since the beginning of the Obama Administration, the Department of 
the Interior (Department) has made it a priority to permit 
environmentally-sound development of conventional energy and mineral 
resources on the Nation's public lands. The Department has been at the 
forefront of the Administration's efforts, outlined in the Blueprint 
for a Secure Energy Future, to create jobs and to reduce the Nation's 
dependence on fossil fuels and oil imports.
    The BLM administers over 245 million surface acres--more than any 
other Federal agency--which are located primarily in 12 western States, 
including Alaska, as well as approximately 700 million acres of onshore 
subsurface mineral estate throughout the Nation. The BLM, together with 
the Bureau of Indian Affairs (BIA), also provides permitting and 
oversight services on approximately 56 million acres of land held in 
trust by the Federal government on behalf of tribes and individual 
Indian owners.
    The BLM administers a robust and responsible oil and gas program on 
Federal public lands. While oil and gas development is a market-driven 
activity, Federal onshore oil production is the highest it has been in 
a decade and has risen for the fifth year in a row. Indeed, Federal 
onshore oil production last year rose 7 percent from the previous year 
and has risen 30 percent since 2008. Production from Indian trust lands 
last year rose 47 percent from the previous year and has more than 
tripled since 2008. In FY 2013 the BLM generated over $3 billion in oil 
and gas revenue, with approximately half of this amount disbursed to 
the states from the oil and gas production on federal lands within 
their borders, and over $850 million for Indian tribes and individual 
Indian owners.
    Onshore, nearly 36.1 million acres of Federal public land were 
under lease to oil and gas companies last year. Of those acres, only 
12.6 million acres were actively producing oil and gas, though that is 
the highest acreage under production since 2008. Last year, the BLM 
held 30 separate oil and gas lease sales, offering 5.7 million acres 
for lease by industry, the most in a decade; industry submitted bids on 
fewer than one-in-five of these acres.
    The BLM continues to offer leasing opportunities far in excess of 
industry demand. The BLM has scheduled 28 lease sales for 2014, and has 
already held 14 of those sales. The BLM continues to improve its system 
for responsibly permitting oil and gas operations. Since 2008 the BLM 
has approved more than 27,000 Applications for Permits to Drill (APDs). 
The average processing time for onshore APDs is the lowest it has been 
in eight years. Industry now has nearly 7,000 approved drilling permits 
that are ready for drilling but currently sitting unused. If you 
compare that figure against the fact that an average of about 3,000 
wells are spud on public lands each year, it becomes apparent that 
industry has ample opportunities to develop leased resources.
    As part of the BLM's ongoing efforts to ensure efficient processing 
of oil and gas permit applications, the BLM is preparing to implement a 
new automated tracking system that could reduce the review period for 
drilling permits and expedite the sale and processing of Federal oil 
and gas permits. The new system for drilling permits will track 
applications through the entire review process and quickly flag any 
missing or incomplete information industry applicants need to provide, 
greatly reducing the back-and-forth between the BLM and applicants to 
amend paper applications.
    The BLM's top priority for oil and gas is to ensure that operations 
are conducted safely and responsibly. The BLM performs thousands of 
inspections each year on oil and gas leases to check for safe, 
environmentally responsible operations, and to ensure a fair return to 
the taxpayer. But with an oil and gas budget that has declined by 
roughly 20 percent since 2007 when accounting for inflation, the 
challenges are considerable.
    The BLM intends to continue its emphasis on high priority 
production inspections, which are critical for ensuring proper 
accounting of the billions of dollars of oil and gas produced and 
associated royalties collected from the public lands. However, our 
current funding system limits our ability to effectively meet this 
responsibility and ensure protection of both environmental and economic 
resources. Between 2009 and 2012, the BLM completed only 60 percent of 
high priority drilling inspections and in FY 2013, we completed just 82 
percent of high priority production inspections.
    In response to these challenges, the President's FY 2015 budget 
proposal asks Congress for the authority to charge an inspection and 
enforcement fee that reflects the actual cost of performing this 
function in order to strengthen our inspection and oversight 
capability. This fee system will help the BLM become more responsive to 
industry needs while also improving production accountability and 
safety and environmental protection of oil and gas operations. A 
similar fee system was authorized by Congress for offshore oil and gas 
inspections and has proven to be a successful model for industry and 
the relevant agencies.
Energy Policy Act of 2005
    Section 365 of the Energy Policy Act of 2005 (EPAct) established 
the Federal Permit Streamlining Pilot Project with the intent to 
improve the efficiency of processing oil and gas use authorizations and 
environmental stewardship on Federal lands. It designated the following 
seven pilot project offices: Miles City, Montana; Buffalo and Rawlins, 
Wyoming; Vernal, Utah; Grand Junction/Glenwood Springs, Colorado; and 
Farmington and Carlsbad, New Mexico. On December 26, 2013, President 
Obama signed PL 113-69, which expanded the boundaries of two of the 
project offices--Miles City, to include the expanding Bakken 
development, and Buffalo--in response to changing demand for 
development of Federal oil and gas resources.
    Section 365 also established the Permit Processing Improvement 
Fund, an account that has varied from about $23 million to about $18 
million annually, to support the pilot project for 10 years. 
Specifically, it directed 50 percent of the income derived from Federal 
onshore oil and gas lease rental payments outside of Alaska to the 
Fund. For FY 2006 through FY 2015, Section 365 made the Fund available 
to the Secretary of the Interior for expenditure without further 
appropriation to enhance coordination and processing of oil and gas use 
authorizations on Federal land under the jurisdiction of the designated 
pilot project offices.
    In addition, Section 365 authorized the Secretary to transfer 
monies from the Permit Processing Improvement Fund as necessary for 
permit coordination and processing to other agencies involved in the 
process, including the U.S. Fish and Wildlife Service, the Bureau of 
Indian Affairs, the U.S. Forest Service, the Environmental Protection 
Agency, the Army Corps of Engineers, and the states of Wyoming, 
Montana, Colorado, Utah, and New Mexico. It also prohibited the BLM 
from establishing cost recovery fees for processing oil and gas 
drilling permits, although the Congress has implemented permit fees 
through annual appropriations language since 2007. The President's 2015 
budget proposes to repeal this fee prohibition.
    The agencies involved in the pilot project have made significant 
progress in a number of areas. Additional resources, such as personnel 
devoted to processing oil and gas use authorizations, have enabled the 
various bureaus and agencies to increase the pace of permitting and 
completing environmental reviews, particularly given the complex 
resource issues we face. The time taken for interagency consultations 
has been reduced due to improved communication and through programmatic 
streamlining efforts, which have been used in multiple projects and 
permits. The increased staffing in the pilot project offices has also 
allowed the BLM to help new industry permitting specialists understand 
the BLM's requirements for obtaining an oil and gas use authorization.
    In FY 2013, the top ten BLM offices with the highest industry 
interest in oil and gas development on Federal and Indian Lands managed 
over 86 percent of the total APDs processed during the year. However, 
only four of those offices were among the originally identified pilot 
offices.
S. 2440
    S. 2440 reauthorizes and expands the BLM's oil and gas project 
office program. The bill would amend the Energy Policy Act of 2005 to 
extend the use of oil and gas lease rental receipts from the BLM Permit 
Processing Improvement Fund through 2026 for the coordination and 
processing of oil and gas use authorizations in BLM's oil and gas 
project offices. Also, under the bill, the geographic scope of the oil 
and gas project office program would be expanded to include any BLM 
State, district, or field office as determined appropriate by the 
Secretary to improve use authorization coordination and processing. The 
bill would establish a $9,500 APD processing fee indexed for inflation 
through 2026, and would prohibit the Secretary from implementing a 
rulemaking that would enable an increase in fees to recover additional 
costs related to processing APDs. Finally, the bill would require an 
annual report on the allocation of funds and the accomplishments of 
each project office.
    The BLM supports the reauthorization and expansion of the agency's 
oil and gas pilot office program, which has been extremely valuable in 
improving oil and gas permit coordination and processing. The BLM 
supports the expanded geographic scope provided by the bill which will 
allow the BLM to better allocate resources based on current permitting 
demands and new exploration and development of oil and gas fields and 
plays. This flexibility would be especially useful in the future for 
allocating funds to coordinate and process use authorizations in those 
offices where industry forecasts increased development of oil and gas 
resources and the BLM offices had not previously been identified as 
project offices. For example, in FY 2013, the Pinedale Field Office in 
Wyoming received 383 APDs; the Bakersfield Field Office in California 
received 212 APDs; and the White River Field Office in Colorado, 
received 198 APDs. Although these offices have received high volumes of 
drilling permit applications in recent years, none were previously 
designated as pilot project offices under the EPAct because they were 
not experiencing such extensive development at the time of the bill's 
enactment. In contrast, the Rawlins Field Office, identified as a pilot 
office in the EPAct, only received 42 permit applications during FY 
2013.
    The continuation of the program provided by S. 2440 will also 
support our partner agencies, such as the U.S. Fish and Wildlife 
Service, the Bureau of Indian Affairs, the U.S. Forest Service, the 
Environmental Protection Agency, the Army Corps of Engineers, and the 
appropriate State government offices, in devoting staff to the 
increased workload in these new areas. This coordination with our 
partner agencies is a crucial part of the BLM's success in this 
program.
    The BLM also welcomes the bill's establishment of a $9,500 APD 
processing fee indexed for inflation through 2026. This is an increase 
from the $6,500 fee that the Congress has implemented through annual 
appropriations and the increased fee more closely reflects the true 
average cost of processing APDs on the Federal and Indian Trust mineral 
estate. This fee is an important component of the funding for the BLM's 
permitting program and will allow the BLM to continue to process 
permits and maintain a robust onshore oil and gas permitting program. 
The BLM does not, however, support the bill's prohibition of the 
Secretary from implementing a rulemaking that would enable an increase 
in fees to recover additional costs from industry related to processing 
its applications for permits to drill. While not currently envisioned, 
the BLM would like to maintain the option of designing a fee system 
that reflects the varying costs associated with different APDs. This 
would be barred under the existing and proposed moratorium.
    Finally, the Administration has generally not supported the 
extension of the special pilot office funding rental receipts, as 
rental receipts are not strongly correlated to program funding needs 
and diverting these revenues from the Treasury would require spending 
offsets elsewhere. Instead, we have proposed that program operating 
funds come from a combination of user fees and regular discretionary 
appropriations. However, if the Committee wishes to continue this 
rental receipts approach, BLM recommends that the bill be amended to 
increase BLM's flexibility in how and where the funds are spent. In 
particular, we recommend clarifying that the permit processing funds 
may be made available for the processing and coordination of oil and 
gas use authorizations for both Federal and Indian Trust oil and gas 
assets.
Conclusion
    The BLM supports the goals of S. 2440 and looks forward to working 
with the Committee on technical and clarifying modifications to the 
bill. Thank you for the opportunity to provide testimony on S. 2440.
                               on s. 279
    Thank you for the opportunity to present the views of the 
Department of the Interior on S. 279, the Public Land Renewable Energy 
Development Act of 2013. The legislation seeks to expedite the 
development of geothermal, wind, and solar energy projects on Federal 
lands managed by the Departments of the Interior, Agriculture, and 
Defense. This statement addresses the provisions relevant to the 
Department of the Interior (Department).
    The Department and the Bureau of Land Management (BLM) are 
committed to responsibly mobilizing the tremendous renewable energy 
resources available on public lands, and share the Committee's interest 
in identifying efficiencies in the development of those resources, 
consistent with environmental protection and public involvement in 
agency decision-making. The Department supports the goals of S. 279, 
and would like to work with the sponsor and the Committee on our shared 
objective of furthering geothermal, wind, and solar energy development 
while continuing to protect our nation's public land and water 
resources.
Renewable Energy Development on Public Lands
    As part of the Administration's ``All-of-the-Above'' energy 
strategy, the Department has made the development of the New Energy 
Frontier on America's public lands one of its top priorities. Due in 
large part to a permitting process for renewable energy projects 
emphasizing early consultation with partners and stakeholders, in 2012, 
the BLM successfully accomplished the Energy Policy Act of 2005 (EPAct) 
goal of authorizing over 10,000 megawatts (MWs) of renewable energy on 
public lands--three years ahead of schedule. In support of the 
President's Climate Action Plan to ensure America's continued 
leadership in clean energy, the Department is now working to reach 
20,000 MWs of permitted renewable energy capacity on public lands by 
2020. The BLM is already making great strides toward achieving that 
goal, which would provide enough clean energy to power more than 6 
million homes.
    In 2009, there were no commercial solar energy projects on or under 
development on public lands. Since that time, the BLM has approved 52 
renewable energy projects; including 29 utility-scale solar facilities, 
11 wind farms, and 12 geothermal plants, each with associated 
transmission corridors and infrastructure to connect with established 
power grids. If fully built, these projects will provide more than 
14,000 MWs of power, which will and support approximately 21,000 
construction and operations jobs.
    The BLM recently announced it will prioritize 13 renewable energy 
projects (11 solar and two wind) that it will focus on in 2014 and 
2015. The 13 projects represent approximately 3,030 MWs in potential 
clean energy. The recent successful auction of solar energy leases in 
the Dry Lake Solar Energy Zone in Nevada is also likely to result in 
additional projects and increased generation.
    Renewable energy projects authorized by the BLM constitute a major 
contribution to not only the nation's energy grid, but also the 
national economy. Projects on public lands have already garnered an 
estimated $8.6 billion in total capital investments, and the potential 
for approved projects pending construction is estimated at $28 billion. 
Through efficient and environmentally-responsible permitting, the BLM 
is helping to bring tens of billions of dollars in investments to the 
United States.
    The BLM intends to further these contributions by moving from an 
application-by-application approach for solar energy projects to a 
competitive leasing process in designated development areas called 
Solar Energy Zones (SEZs). In October 2012, the Department finalized a 
Solar Energy Programmatic Environmental Impact Statement, more commonly 
called the Western Solar Plan, which identified 17 SEZs and established 
a blueprint for utility-scale solar energy permitting with access to 
existing or planned transmission infrastructure. The Western Solar Plan 
also provides the foundation for the BLM's current rulemaking process 
to implement competitive solar and wind energy leasing within 
designated areas.
    In authorizing existing projects, reviewing proposed projects, and 
developing a competitive leasing rule, the BLM has focused on managing 
renewable energy development in an accelerated but responsible manner 
which ensures the protection of signature landscapes, wildlife 
habitats, and cultural resources. This ``smart from the start'' 
approach is consistent with the Administration's goal of authorizing 
safe and sustainable geothermal, wind, and solar energy projects on 
public lands. The BLM achieves these collaborative goals through close 
working relationships with local communities, state regulators, private 
industry, and other Federal agencies.
    Under land use plans and environmental analyses informed by public 
involvement and early consultation with these partners, the BLM is 
leading the nation toward the New Energy Frontier through active 
geothermal, wind, and solar energy programs.
S. 279, Public Land Renewable Energy Development Act of 2013
    S. 279 aims to increase renewable energy development on public 
lands, primarily through the reestablishment of a special account for 
processing geothermal energy authorizations and the creation of a 
competitive wind and solar leasing pilot program. The bill would also 
establish a royalty system for wind and solar energy authorizations, 
create a conservation fund to address some of the impacts of wind and 
solar energy development on public lands, and require the Secretary of 
the Interior and of Agriculture to determine the feasibility of 
carrying out a conservation banking program. The bill's provisions are 
directed toward all public and National Forest System lands that have 
not been excluded from solar or wind energy development by a land use 
plan, Resource Management Plan, or Federal law.
    The bill would also require the Secretary of Agriculture and of 
Defense to separately analyze potential renewable energy development 
impacts and opportunities on the respective lands they manage. The 
Department of the Interior and Department of Defense would need to 
coordinate on the review of public lands withdrawn for military 
purposes to ensure that any development would be congruent with 
existing authorities, current military needs, as well as long-term 
public interests.
    Since this bill and previous versions were introduced, the 
Department has utilized administrative authorities to implement the 
Western Solar Plan and expand solar, wind, and geothermal development 
opportunities on public lands. The Department supports the goals of S. 
279, and we are excited to work with the Committee and the sponsor to 
further harness the vast renewable resources on public lands while 
continuing to ensure a fair return to U.S. taxpayers.
    S. 279 would amend the Energy Policy Act of 2005 to reestablish the 
geothermal special account, which expired in 2010, through Fiscal Year 
2020 to provide funds for the processing of geothermal leases and use 
authorizations. Under current law, 50 percent of geothermal revenues 
are directed to the state in which the project is located, with the 
remaining funds divided evenly between the county in which the project 
is located and the Treasury. Under S. 279, the states would continue to 
receive 50 percent of geothermal revenues; while the BLM would receive 
an amount subject to appropriation and without fiscal year limitation 
from the total directed to the Treasury. The BLM estimates the proposed 
special account would generate $4 million per year in funding for the 
program, which is currently supported by $7 million in appropriated 
funds. The Department has generally proposed funding geothermal program 
operations through a combination of cost recovery fees and the regular 
appropriations process. We look forward to working with this Committee 
and the Interior appropriations committees in evaluating funding 
options for the geothermal leasing program.
    Section 203 of S. 279 would establish a pilot program for the 
competitive leasing of wind and solar energy sites on Federal lands. 
The bill requires the pilot program be established within 180 days of 
enactment and expanded to all covered lands within two years of 
enactment following a joint determination by the Secretaries of the 
Interior and of Agriculture. Under the proposed pilot program, the 
Secretary would select two solar and wind project sites within 90 days 
of the program's establishment to be made available for development 
through competitive leasing. The section also outlines various 
competitive leasing requirements, including the payment of royalties, 
fees, and bonuses; lease terms and readjustments; and the issuance of 
regulations for reclamation and restoration bonding requirements.
    The Department shares goals similar to those of Section 203, and 
through its existing authorities, is currently developing a competitive 
leasing program for solar and wind energy projects on public lands. In 
2012, the BLM completed its Western Solar Plan which designated 17 
Solar Energy Zones (SEZs) and included the decision to proceed with 
competitive leasing for solar projects in those areas. The BLM recently 
completed a successful competitive leasing auction in the Dry Lake SEZ 
in Nevada, which resulted in $5.8 million in high bids. The BLM plans 
to build on the success of the Dry Lake auction, and anticipates 
publishing a proposed competitive leasing rule by the end of 2014. This 
rule will give additional detail to the competitive leasing program for 
the solar and wind energy programs. The BLM's current rulemaking 
process reflects the goals of S. 279 in implementing a competitive 
leasing process, and the agency would like to work with the sponsor and 
the Committee on improvements to the proposed language.
    The Department also shares the legislation's goal of capturing the 
fair market value of leased projects as part of its commitment to 
ensure an appropriate return to U.S. taxpayers. While the BLM currently 
ensures a fair return to the public from solar and wind energy 
authorizations through an annual acreage rent and MW capacity fee, the 
agency is also supportive of efforts which could improve and simplify 
how that return is captured. The Department is glad to work with the 
sponsor and the Committee on exploring alternative ways to secure an 
appropriate return to taxpayers from solar and wind projects' use of 
public lands.
    The Department is concerned, however, that the royalty system 
proposed under S. 279 would not provide a fair return from projects 
during periods without electric generation. We recommend the Committee 
augment the legislation to include a revenue collection system covering 
all phases of project development and operation.
    Section 206 of S. 279 would require the development of a 
comprehensive inspection, collection, fiscal, and production accounting 
and auditing system by the BLM and Department's Office of Natural 
Resources Revenue. Replacing the existing annual acreage and MW 
capacity fee with the system necessary to accurately determine 
royalties would require the Department to collect, track, and audit 
significantly different types of information from what is currently 
collected. The Department would need additional time and resources to 
develop a robust royalty auditing system capable of ensuring a fair 
return. The Department looks forward to working with Committee to 
determine the best way to meet the revenue capturing objectives of the 
legislation.
    Section 204 of S. 279 provides for the allocation of royalty and 
bonus revenues from solar and wind energy leases to states (25 
percent), counties (25 percent), a Renewable Energy Resource 
Conservation Fund (35 percent), and the Treasury (15 percent). Under 
the bill, funds deposited in the Treasury are to be directed to the BLM 
or other Federal or state agencies to assist in the processing of 
renewable energy permits for 15 years, after which the 15 percent of 
total revenue from solar and wind authorizations would be redirected to 
the Conservation Fund. Currently all such revenues from solar and wind 
energy authorizations on public lands go to the Treasury.
    Finally, section 210 of the bill would revoke the rental fee 
exemptions provided under the Rural Electrification Act (REA) for solar 
and wind projects with a capacity of 20 MWs or more. While the BLM has 
not yet approved any eligible projects under the REA, future projects 
may qualify for rental exemptions under existing authorities. The BLM 
supports the removal of the rental fee exemption as provided under S. 
279.
Conclusion
    Facilitating the responsible development of renewable energy 
resources on public lands remains a cornerstone of the Administration's 
broad energy strategy. The Department and BLM both support efforts to 
safely advance geothermal exploration and renewable energy 
opportunities on public lands, and we look forward to working with the 
Committee and sponsors of the legislation on these shared goals.

    The Chair. Thank you, Mr. Kornze.
    Listening in the reading in your testimony you would, I 
guess, you would think that there were no problems that either 
the Democrats or the Republicans on this committee have pointed 
out in their opening statements. I'm just having a hard time, 
kind of, understanding the tenor or tone, as well as some of 
the issues that you raised in your opening statement.
    Tell me again what percentage of the land you have under 
management for oil and gas production? What's your total 
acreage is and how much you have under lease?
    Mr. Kornze. So the Bureau of Land Management manages about 
245 million acres, about 36 million acres is currently leased.
    The Chair. So 36 million acres is a small percentage of 
245. Not that, I mean, significant, but I mean, still a 
relatively small percentage.
    No. 2, how many permits have you issued in the last 4 years 
for solar production on BLM land?
    Mr. Kornze. About 29, I believe is the number.
    The Chair. Twenty-nine permits. There are 29 projects under 
construction?
    Mr. Kornze. There are, I believe, I could get the exact 
numbers, but I would say about 15 of the projects have been 
built among the 52 renewable energy projects we've authorized 
and about another----
    The Chair. On public land.
    Mr. Kornze. About another 10 are under construction.
    The Chair. OK.
    Mr. Kornze. Yes.
    The Chair. Then go through those production numbers again 
because I'm just having a hard time figuring out whether we are 
producing more, producing less, producing the same. So go ahead 
and give that testimony again about the amount of production on 
Federal land from oil and gas?
    Mr. Kornze. So when it comes to oil the numbers are up.
    The Chair. Up?
    Mr. Kornze. We're at a 10-year high.
    The Chair. OK.
    On public land.
    Mr. Kornze. On public land, 7 percent up from last year, 
about 30 percent up since the beginning of the Administration.
    The Chair. Do you have the volumes that you can testify to?
    Mr. Kornze. I can provide those to the committee.
    The Chair. OK. By barrels.
    Mr. Kornze. Sure.
    The Chair. Then what about natural gas?
    Mr. Kornze. When it comes to natural gas, natural gas is 
down.
    The Chair. By what percentage? Over what time period?
    Mr. Kornze. I'll find that before you before we're done 
talking.
    The Chair. OK. If you could give, I think, an outlook for 
10 years is helpful so we're, you know, trying to be fair in 
our analysis and not pick the high year or the low year.
    Mr. Kornze. Yes.
    The Chair. So over the last ten.
    Part of the reason we called this hearing and these bills 
have been introduced is because the IG report says that some of 
these permits are waiting more than, I think that they said, an 
average and at least in the testimony that I saw, an average of 
200 days.
    Do you dispute that or are you agreeing with that?
    Mr. Kornze. So let me give you some natural gas information 
and then I'll go to the permitting.
    Natural gas is down 9 percent from last year and down 12 
percent since 2008. We can get you a 10-year figure.
    The Chair. If you could get a 10-year that would be 
terrific.
    Mr. Kornze. You bet.
    So when it comes to permitting in 2011 our average was over 
300 days. Two years ago it was 225 days. Last year it was 196.
    The Chair. But doesn't the law require a 30-day turn 
around?
    Mr. Kornze. The law asks us that within 30 days we make a 
decision as to whether or not to approve, deny or indicate that 
more evaluation is needed. So there is a roughly a 30-day goal, 
but it is not rigid.
    The Chair. So there are maybe 95 percent of your reviews 
have resulted in more information is needed within that 30-day.
    Mr. Kornze. Many do, yes.
    The Chair. Can you, after, maybe just by your preparation 
for this meeting, give this committee categories of some of the 
types of permits that are falling into that need more 
information. Either people aren't knowing exactly or companies 
aren't having enough detail about what you're looking for. So 
they're either not receiving it correctly or you're not giving 
it out correctly.
    There's got to be some issue that that percentage of 
applications would fall into the need more information 
category. I mean, these are pretty experienced drillers, not a 
lot of fly by night operators that come in. I mean, you've got 
to have some standing to do this work.
    So could you provide our committee with a little deeper 
analysis of that so that we could help you figure out how to 
get better in compliance with what, I think, this committee 
wants to do which is clear, transparent, relatively short, 
comprehensive, not, you know, skimping on the review in any 
way, for the benefit of multiple land use. But I think those 
numbers, 300-day delays, are pretty shocking, at least to me.
    Mr. Kornze. Yes.
    The Chair. Senator, I have a few other questions. I want to 
turn that over to you though now and we'll go through a round 
of questioning.
    Senator Murkowski. Great. Thank you.
    Madame Chairman, I think it's very important the questions 
that you're asking in trying to really distill these numbers 
here. I want to make sure that we're comparing apples to apples 
here because as I understand it back in June when EIA released 
this report on Federal and Indian lands. Again, this was over 
the past 10 years.
    They say that coal production is down 8 percent.
    Crude oil and lease condensate production are down 11 
percent.
    Natural gas production is down 43 percent.
    So overall, over the past decade, fossil fuel production 
from Federal and Indian lands declined by 21.2 percent overall.
    Now some of the smart guys back behind me are saying well, 
maybe your figures aren't counting the subsurface mineral 
estate. I want to make sure that we're all counting the same 
way because it's real easy to throw numbers around here. I want 
to really try to understand exactly what we're talking about 
here.
    So if we can drill down into that. Ha Ha Ha.
    [Laughter.]
    Senator Murkowski. I would appreciate it.
    Sorry.
    The Chair. No pun intended.
    Senator Murkowski. I can't help myself.
    Mr. Kornze, I wanted to ask you a couple questions on the 
status of things in the NPRA. The President keeps talking about 
oil and gas development up in NPRA as part of the all of the 
above, but really beyond holding lease sales I'm not really 
seeing much that's being done by the Administration to ensure 
that project in the petroleum reserve can be successfully 
developed.
    Greater Mooses Tooth 1 is the project that we're following 
very, very closely right now. It's going to be the first 
production in NPRA, expected to add 30,000 barrels of oil per 
day to TAPS. Of course, given what we're seeing with the 5 and 
6 percent decline in TAPS, this is really critical that we get 
online.
    So we've got a couple issues with regards to the timing 
here.
    I'm concerned that the date for the release of the final 
supplemental EIS is going to slip. As I understand that 
timeline now, the EIS must be released in October to allow the 
Corps to begin the processing here of the 404 permit to allow 
road construction for the winter.
    Already we've got 120-day minimum review period for the 
Corps. This would push a 404 permit to January.
    So the problem is if this EIS slips any further this 
construction season is going to be lost and the project delayed 
for yet another year which, in my view, is absolutely 
unacceptable.
    So the question to you this afternoon is does the BLM plan 
to issue the final supplemental EIS by October so that we can 
get this project moving forward in 2015?
    Mr. Kornze. So I appreciate you raising this. The National 
Petroleum Reserve is an incredible resource for the country. We 
are working expeditiously through that process right now. We're 
also in conversation with, in order to get to a final EIS, to 
make sure that there are answers and more information for the 
public to evaluate.
    We're also in conversation with the Army Corps of Engineers 
to see if they can get started on their review independently. 
We've seen some favorable indications that they might be able 
to start soon.
    So I'm optimistic that the timelines will work out.
    Senator Murkowski. So you think you can stick to this 
timeline so that everything that needs to happen in order to 
begin work in 2015 can commence?
    Mr. Kornze. We are headed in that direction.
    Senator Murkowski. OK.
    One of the concerns that we're hearing, of course, is that 
BLM may proceed with only approving GMT 1 as a road less 
project which would make the project just uneconomic. So can 
you commit to me that BLM will not proceed with a road less or 
even a seasonally road less alternative?
    Mr. Kornze. So one of our alternatives does include road 
less analysis. That's something that we are looking and going 
to have to evaluate as we evaluate all the alternatives.
    Senator Murkowski. But would you agree that if you take 
that approach and you go road less or even seasonally road 
less, what that does to the economics of this project?
    Mr. Kornze. We will pay close attention to the viability of 
the project with whatever option is ultimately chosen.
    Senator Murkowski. You know, this is a project that is 
supported as a roaded development by both the regional and the 
native village corporation, both ASRC and Kuukpik Corporation. 
The locals have come out strongly in favor of the proposal. 
Without road access the reality is is the only alternative that 
is available then is by aircraft which, of course, puts greater 
stress on the caribou as they are traveling around, greater 
stress on the subsistence hunting.
    So I want to make sure. I know that you've been up there. 
But I want to make sure that you are aware of the very high 
level of local support for a road to GMT 1.
    Mr. Kornze. Yes, I certainly am. I did greatly appreciate 
the opportunity to get up there in February. I think it was 
about 40 below that day. We went out to see the sites.
    Senator Murkowski. Nice day?
    Mr. Kornze. It was beautiful.
    We also had a community meeting in Nuiqsut where folks 
expressed, very clearly, the same sentiment that you have 
shared.
    Senator Murkowski. I appreciate that you went up there. I 
guess I would just, again, reinforce the timeliness of these 
decisions is absolutely key because if we lose yet another 
season. Again, that goes to the economics of a project. Then if 
the option is road less or seasonally road less, I think it 
just kills it which again, would not be in keeping with this 
Administration's mantra that they support an all of the above 
policy.
    Thank you, Madame Chairman.
    The Chair. Thank you.
    Senator Heinrich.
    Senator Heinrich. Thank you, Chair Landrieu and thank you 
for holding this timely hearing.
    I thought I'd start and just by point a few things out 
simply because I appreciate the effort by the Chair and Ranking 
Member to, sort of, try and get at some apples to apples 
comparisons.
    In New Mexico oil production is up. We're at 46 million 
barrels last year. The No. 1, western producer on Federal land, 
I believe, at the moment.
    But at the same time natural gas is down.
    Those are very much tied to, in large part, commodity 
prices. Price plays a real role as to whether or not something 
is going to be produced or not. The depression in natural gas 
prices has meant there has been places that are very viable 
under different price arrangements that are simply not being 
produced today.
    However, given the stability in the oil market, that 
relative high price, we have seen that very successful in the 
last few years.
    I'd also just point out in terms of the percentage leased, 
at least from my point of view in the State of New Mexico, the 
leasing is largely going to be focused in places where there's 
actually oil and gas. So within the San Juan Basin on BLM land 
within the Permian Basin on BLM land and basins that may be 
developed in the future, you see a lot of leasing going on.
    In the Southwest part of the State, for example, there's a 
good deal of BLM land that you're not going to see a lot of 
leasing in simply because there's no resource there or it 
hasn't been discovered if there is.
    I want to ask Director Kornze, I think, by all accounts 
from everybody you've heard from the pilot process--the pilot 
offices have been incredibly successful in promoting oil and 
gas development on both Federal and tribal lands. With the 
authorization expiring next year are you starting to see an 
impact of that uncertainty in future funding, in terms of the 
Bureau of Land Management's ability to fill staff vacancies?
    Mr. Kornze. I appreciate that question.
    The short answer is yes. We are seeing some uncertainty in 
the hiring process because we want to be able to offer folks 
some long term view of sustainability of their positions with 
that authorization expiring next year. We have over 200 
positions within the Bureau of Land Management that have a 
question mark around them.
    So it matters to those teams. Last week or the week before, 
I was in Silt, Colorado at one of our pilot offices. They were 
able to double the size of their team with this funding. So 
half of that office is focused and funded through this 
authorization. So it makes a difference for sure.
    Senator Heinrich. Great.
    About what fraction of the BLM's staff in New Mexico State 
office are funded under the pilot program? Do you know?
    Mr. Kornze. So I believe we have about 650 BLM employees in 
New Mexico and about 10 percent of those, I think, would be an 
appropriate number that would funded through this program.
    Senator Heinrich. With the main original pilot program is 
Carlsbad office, are those employees able to focus on leasing 
demand anywhere in the State? In other words if, you know, if 
demand surges in the San Juan Basin verses the Permian Basin 
are they able to help with, balance that out over time?
    Mr. Kornze. It does get complicated in terms of what kind 
of funding we put behind various activities. So we can often 
find a way to make that work, but having the flexibility that's 
built into this new version.
    Senator Heinrich. Yes.
    Mr. Kornze. Is going to make our lives and those 
authorizations easier.
    Senator Heinrich. That's very helpful.
    Under existing law, Director Kornze, where do the revenues 
from renewable energy projects on Federal lands used for and 
are any of those revenues retained by the BLM to cover the cost 
of just doing the permitting?
    Mr. Kornze. Yup.
    So all the revenues we collect from renewable energy 
projects go back to the Treasury.
    Senator Heinrich. So none of it can be used to pay for the 
overhead that is required to actually permit those--or those 
projects?
    Mr. Kornze. No.
    Senator Heinrich. If the BLM did have dedicated funding to 
cover administrative costs what impact do you think that would 
have on your ability to offer leases and process permits in a 
more timely manner?
    Mr. Kornze. The ability to have some sustained funding 
would allow us, not unlike in the oil and gas realm, to have 
some sustained, well trained, well experienced teams that we 
could put together that could help really drive this because 
when you put new folks on a project, just like in any 
situation, it takes a while to come up to speed.
    Senator Heinrich. Since the completion of the solar energy 
zones in 2012 how many of those zones have an active auction or 
application process?
    Mr. Kornze. We've had two auctions. At this point we 
actually don't. We need a rule which we're working on to give 
us leasing authority within those zones, competitive leasing 
authority.
    But right now if we do see multiple applications within a 
zone we can go through a very--it's almost like a competitive 
process.
    Senator Heinrich. Thank you very much.
    Madame Chair.
    The Chair. Thank you.
    I think it's Senator Portman and then Senator Risch? I'm 
sorry, Senator Risch. I'm sorry, I like to depend on the staff.
    Senator Portman.
    Senator Portman. Thank you, Madame Chair.
    You know, I snuck in earlier on you, Jim, sorry.
    Senator Risch. You got off the elevator ahead of me. You 
elbowed me back.
    Senator Portman. Yes.
    [Laughter.]
    Senator Risch. As usual.
    Senator Portman. I snuck over earlier today and I made some 
comments already on this, but Mr. Kornze what I want to talk 
about is the general issue of permitting. I do think these two 
bills we have before us make sense. I congratulate those on the 
committee who moved these forward.
    But we've got a bigger problem in this country. Under our 
current permitting system, including for energy projects, we 
take so much time that investors often tend to leave and go 
elsewhere including overseas to make their investments. I 
mentioned earlier that there is a study by the IMF saying we're 
17th in the world in terms of green lighting a project.
    The World Bank has its own ease of doing business study and 
they show we're now 34th in the world in terms of countries 
dealing with the requirements of permitting.
    By the way, we were 30th last year. So we're going in the 
wrong direction.
    What I hear from people and I heard this in Ohio initially 
from actually some folks trying to put hydro on the Ohio River, 
believe it or not, is, you know, it's just impossible to wait 
the 5, 6, 7 years sometimes it takes so these investors are 
going somewhere else.
    We have legislation to deal with this. It's broader that 
would deal with BLM lands and other public lands, but also 
deals with this broader issue. You may be familiar with it.
    If you are, I'd love to have your opinion on it. But it's 
called the Federal Permitting Improvement Act. Senator 
McCaskill and I are the authors of it. We have 7 Democrats on 
board now including the Chair, Senator Landrieu. I appreciate 
that support. Senator Manchin and others, Senator Barrasso is 
one of the original co-sponsors.
    It just makes sense. It basically says let's take all these 
recommendations from the President's Jobs Council from business 
round table, chamber of commerce and others and try to put them 
to work to better coordinate the Federal permitting process to 
set some deadlines. There's testimony recently before the 
Subcommittee on Energy and Power in the House saying that there 
could be as many as 35 separate Federal permits required for a 
single energy project. That's part of the problem that requires 
the coordination.
    We also, though, set up better transparency, more 
stakeholder participation earlier. We just, like, litigation 
delays, as you probably know. That's one of the huge issues 
that reduces the statute of limitations from 6 years to 150 
days.
    I just think we need this desperately if we're going to be 
able to get on track for more investment and move forward, 
including taking advantage of these great resources we have in 
this country and getting some of this permitting done.
    I would ask you about your process, you know, through the 
preparation of this hearing been hearing some about some of the 
timeframes being longer timeframes than on private lands, 
obviously, but when you're processing an energy permit for a 
project on BLM land, does BLM have an institutionalized process 
for consulting with the other Federal agencies?
    Mr. Kornze. It's been a big focus over the last 4 or 5 
years to increase those early conversations in coordination 
with other agencies.
    I should say, off the top, that getting to an answer, a no, 
a yes, is important, right? So we acknowledge that. We share 
that, that vision, that having, you know, evaluations that go 
on for years and years and years doesn't provide the certainty 
and the type of back and forth that is more productive.
    So when it comes to renewable energy one of the ways that 
we've helped stand up that program, it was through some very 
aggressive coordination between agencies because, frankly, 
there was very, very little, just miniscule renewable energy 
that had been authorized on public lands prior to this 
Administration. So that's been a focus.
    One of the things that we----
    Senator Portman. That includes some of the renewable 
projects you've done in California where you fast tracked them?
    Mr. Kornze. It does.
    Senator Portman. Are those same fast track procedures 
effective with regard to other renewables wind, say, and with 
regard to oil and gas?
    Mr. Kornze. Yes. The same teams are working on those 
projects.
    Senator Portman. Are you using those for oil and gas 
production, for instance, in other States?
    Mr. Kornze. We are. So that was my next point is that what 
this program from the Energy Policy Act has allowed us to do is 
to actually help pay for individuals from other agencies to 
work with us, so Fish and Wildlife Service, the Army Corps of 
Engineers, State Historical Preservation Officer.
    We use some of the funding for BLM employees. We also use 
some of that funding to pay other agencies to bring employees 
to the table and to work with us on clearances.
    Senator Portman. Do you have a lead agency in that case? Is 
it you?
    Mr. Kornze. In these energy authorizations we're talking 
about, yes, we would be the lead.
    Senator Portman. Do you have dashboard, you know, the 
transparency that's been talked about in our bill and other 
recommendations where people can find out what the process is, 
how long it's taking, what the hold ups are?
    Is there some transparency there for stakeholders?
    Mr. Kornze. We provide annual numbers and most project 
proponents have a very close relationship with the office that 
they're working through. So they would have a fair amount of 
insight into what's happening.
    Senator Portman. When another Federal agent says it wants 
to review a permit how does BLM notify the project sponsor 
about that?
    Let's say a Federal agency steps in and says, hey, I'd like 
to have my own review here. Do you have a way to notify the 
project sponsors?
    Mr. Kornze. So we coordinate with Federal agencies all the 
time. So we stay in close touch with project proponents and let 
them know, you know, what step we're at, which--it's no 
surprise to folks working on major projects that the various 
agencies will come to the table. Often we will hold an initial 
pre-application meeting that will have all the relevant 
agencies might even come to the table.
    Senator Portman. My time has expired. Governor Risch is 
here and he's got to run too.
    But I just, if you could take a look at this legislation, 
this broader legislation, and give us your opinion. That would 
be very helpful given you know a lot about permitting now and, 
you know, again, this doesn't relate solely to public lands 
much less BLM lands. But we would like your input on it.
    Again, this is legislation that's bipartisan, that meets 
some of the requirements that the President's own advisors 
through the President's Business Council have recommended.
    We'd appreciate your input on the Federal Permitting 
Improvement Act.
    Mr. Kornze. Thank you, Senator.
    One thing I would like to add in is that, so, we have made 
some improvements in our APD, our drilling permit processing 
recently, similar to the dashboard you mentioned. We are 
looking to pilot and then fully implement next year an online 
permitting system that will--right now we're using paper to go 
back and forth between drillers and ourselves. It's horribly 
inefficient, as you can imagine.
    So we have at least one office that's using an online 
system. Their numbers are half of our national numbers in terms 
of time. So we think there's huge efficiencies that can be had.
    Part of it is that an application is incomplete which 
happens very often. So Carlsbad, New Mexico which is the office 
I'm talking about that has a system in place that they designed 
locally. One out of 12, excuse me, only 1 out of 12 
applications that comes into them for drilling is complete on 
the first instance.
    The other 11 require a significant amount of back and 
forth.
    So having an online system where there is some transparency 
and some ability for the project proponent to know what more is 
needed on a very quick basis is something that we're headed 
toward and we're excited about.
    Senator Portman. Good. That sounds positive. Thank you.
    Thank you, Madame Chair.
    The Chair. Thank you for raising those important issues.
    Senator Barrasso. I'm sorry, Senator Risch.
    Senator Risch. Thank you, Madame Chairman.
    Mr. Kornze, thank you for what you do.
    There's a lot of people in America don't understand in 
States like the one I live in and other Western States, the 
tremendous reach of the Federal Government with the number of 
acres that it has, but more importantly the conflict between 
people who want to use or don't want to use those lands. Your 
job is to reconcile those.
    It's not an easy job. I understand that.
    The title of this hearing is Breaking the Logjam. So I want 
to talk to you about one of the logs. On May 7th I wrote a 
letter to the Secretary along with Senator Crapo, along with 
our two Congressman. It had to do with the proposed Boardman to 
Hemmingway transmission line.
    I don't know how familiar you are with that particular 
project. But I want to underscore to you, first of all, it's 
been since May 7th and we haven't heard back. That particular 
transmission project, the proposed date for the draft EIS, was 
in November 2012. We still haven't seen the draft.
    So finally I asked is this one of the draft EIS. It's been 
delayed for 6 times.
    Now I understand, of course, there's issues with the sage 
grouse and everything else with as is usual with these. I'd 
like to know when we're going to get a response to our letter. 
But you can forget about that if you can tell me when the draft 
EIS is going to come out.
    Can you shed any light on that for us?
    Mr. Kornze. OK. So this is a project I'm aware of. I can't 
tell you when the draft is going to come out. I can check on 
that and we can give your team a call.
    Senator Risch. I would appreciate that.
    Mr. Kornze. But we'll get that letter to you next week.
    Senator Risch. Thank you.
    Mr. Kornze. Share that information.
    Senator Risch. That's good service. I appreciate that.
    Mr. Kornze. OK.
    Senator Risch. We'd like to see it. Even more importantly 
we'd like to see the draft EIS.
    Mr. Kornze. Yes.
    Senator Risch. I know it's on the radar screen at BLM and 
it's important to us out there.
    So, thank you very much.
    Mr. Kornze. You bet.
    That is one project where I'll share that, you know, I 
think there's some steps along the way where we could have been 
more efficient to date. I've talked to my team about that.
    Also though, I think, we've had somewhat of slow response 
from the proponent on a few occasions. I think we're trying to 
work through that and hopefully the rest of the process will be 
much smoother.
    Senator Risch. Thanks, Mr. Kornze. That's good.
    Thank you, Madame Chair.
    The Chair. Thank you.
    I think we're ready to move to the second panel. But before 
we do let me just get something into the record. The estimates 
that we went over initially was that BLM currently has 3,500 
applications for permits for drilling that are backlogged. I 
think we're having some difficulty finding out what offices 
have the most pending of these permits.
    Do you all have that breakdown by office?
    I'm looking at a document that I'm going to submit for the 
record here that has, for instance.
    An Alaska total of 5 applications for permits to drill.
    But wells that have not been drilled in California, the 
total is 177.
    Colorado, 544.
    New Mexico, 1,337.
    Utah, 1,769.
    Then the big State, Wyoming, 2,446.
    So these are permits that have been granted, but wells that 
have not been drilled. That's one piece of information that's 
important.
    But what we really wanted the breakdown of backlogs by 
office. Do you have that you can send to us?
    Mr. Kornze. We sure do. We can get that to you.
    The Chair. OK. Could you give us, for the record, what is 
the leading office, the highest number of backlogs, what office 
is that?
    Mr. Kornze. Yes.
    Vernal has the great--Vernal, Utah.
    The Chair. OK. How many are pending or backlogged?
    What is the backlog, the number?
    Mr. Kornze. So there's a few numbers here that's important 
to parse out for what they mean, how BLM talks about them. So 
see if that's helpful to you.
    So we consider active applications. So we've got about 
3,500 active applications which we're working on.
    We consider that we've got about a thousand of those that 
are in the backlog category which means that they've been with 
us for 90 days and that they're complete because only about a 
third of those 3,500 applications that we're working on are 
complete.
    So we're still going back and forth with the applicant.
    Vernal has----
    The Chair. You may not call them a backlog, but I think 
that many members of this committee would call the whole 3,500 
a backlog.
    Mr. Kornze. Yes.
    The Chair. I'm having a very hard time really understanding 
for in--and we'll hear from the second panel, I think, more 
about this. This is not a new phenomena drilling or developing 
Federal land. It's been going on for decades.
    These companies are very, very familiar. So I'm just having 
a hard time understanding how so many of these applications can 
be incomplete when they come to you. What is the 
incompleteness, the nature of it. Is it a date that's not, a 
signature that's missing or is it a whole section of 
description of their project?
    I'm really going to drill down and find out because, you 
know, it just doesn't sound efficient to me that two thirds of 
the applications would come in would not be complete. I'd say 
90 percent of them should be complete. Ten percent, I mean, 
that would be what you'd roughly think, 10 percent of the 
people aren't paying attention. They're not really following 
the rules, but not, you know, that large a number.
    Then how quickly you can get them complete.
    But give us the office that has the most backlog and what 
it is under your definition of backlog.
    Mr. Kornze. So it's still Vernal, Utah.
    But, so and I can appreciate the view you provide on that 
3,500 being----
    The Chair. We'll drill down a little bit, but let's talk 
about Utah.
    Mr. Kornze. We're working through.
    But I think it's also important to lay over that that the 
BLM process is, on average, between 4 and 5,000 drilling 
permits each year. So that 3,500, we're actually doing what 
comes in the door and doing more. So we're working down that 
backlog list and getting better in the last number of years.
    We also have 7,000 drilling permits that are out there and 
available to use that have been authorized in the last few 
years.
    So, I think, I can understand the desire for efficiency. We 
share it. But I do think we also have a positive story to tell 
in terms of the improvements we've made largely under the 
efforts that have been made possible through the Energy Policy 
Act and the special program that we're talking about today.
    The Chair. OK, that's fair. But what is the pending number 
in the office in Utah?
    Mr. Kornze. So there's about, in our category of backlog, 
there's about 900 that are in backlog.
    The Chair. In that one office?
    Mr. Kornze. Out of about 1,050. That's because those APD 
applications come in and they basically with the understanding 
of the proponents they've been put to the side while a large 
EIS for a huge field is being developed. So there's two very 
large EISs taking place.
    Once those EISs are completed and we've done other big ones 
in Utah, like Gasco and West Tavaputs, those APDs just start 
rolling through.
    The Chair. Rolling.
    Mr. Kornze. Very, very quickly.
    The Chair. OK.
    Mr. Kornze. So our Vernal office is our highest producer. 
Those folks, they're very good at what they do.
    The Chair. I understand that.
    Go right ahead and then we'll move to the second panel.
    Senator Murkowski. Very quick follow on then.
    So with these permits that are part of this backlog, these 
pending permits have a 2-year life to their permit. What 
consideration then is being made to extending for an additional 
2 years, if you've got all this stuff that is then sitting in a 
backlog process?
    Mr. Kornze. So there is a provision. It used to be they 
were good for 1 year and you could extend for 1 year. The 
Energy Policy Act made it good for 2 years. You can extend for 
2 years.
    So folks have to come in. Talk to our offices. I think our 
offices are usually fairly kind in terms of providing an 
extension of that.
    Senator Murkowski. But you only have a one extension.
    Mr. Kornze. Yes.
    Senator Murkowski. So if you have a continued backlog that 
continues for a period of years you may run your first permit 
period and then your extension that is allowed. Then what 
happens? You're out of luck?
    Mr. Kornze. At that point in your application, well, are 
you thinking? So are you thinking that this EIS is taking place 
and what do you do?
    Senator Murkowski. I'm assuming the EIS is taking place is 
what you had said.
    Mr. Kornze. Yes. So in this case in Vernal so that the 
applications haven't been processed, so therefore it's that the 
clock hasn't started.
    Senator Murkowski. OK.
    Mr. Kornze. On the permit and that 2- to 4-year period. 
That would only start after the APD is issued.
    Senator Murkowski. But once it's issued you have one 
opportunity for a 2-year extension?
    Mr. Kornze. Yes. But it would be issued, the NEPA would be 
completed and you would be just fine to go out and start 
drilling. Right?
    So once you have that APD you have the authority to go.
    It's not that the larger EISs are holding up APDs that have 
been issued.
    Senator Murkowski. OK.
    The Chair. Excellent questions.
    Let's move to our second panel.
    I hope, Director, that you can stay, if your schedule would 
permit to listen to this panel of local and State experts. 
They've traveled a long way to come give their testimony. We'd 
appreciate it if you could hear them.
    Thank you very much.
    Mr. Kornze. Yes.
    The Chair. As you all come forward I'll introduce you. 
We're going to try to finish up by, you know, by 4:30 if we 
can.
    Mr. Scott Kidwell, Director of Government Affairs for 
Concho Resources. Mr. Kidwell has a background in regulatory 
affairs.
    Ms. Kathleen Sgamma representing Western Energy Alliance 
where she serves as the Vice President of Government and Public 
Affairs.
    Commissioner Mark Christensen, Chairman of Campbell County 
Board of Commissioners from Wyoming, Gillette, Wyoming. He's 
here on behalf of the Wyoming County Commissioner Association, 
representing 23 counties.
    We have Commissioner Lorinda Wichman, Vice Chair of Nye 
County Commission in Nevada. She's also President-Elect of 
Nevada Association of Counties.
    Mr. Arthur Haubenstock, Solar Energy Industry, he's an 
attorney that focuses on private and public sector experience 
in utility placement.
    Then we finally have Mr. Scott Nichols, who is here 
representing U.S. Geothermal, Inc., Permitting Lands Manager. 
He has a good deal of experience in geothermal, environmental 
data, mining and distribution.
    Senator Risch wanted to introduce, say a special word about 
one of our witnesses and say a word and then he's going to have 
to leave.
    We'll look forward to having all of your testimony.
    Senator Risch. Madame Chairman, thank you very much. I 
appreciate that.
    I want to welcome Scott Nichols to the committee today. 
It's been several years since he's last testified here. I 
welcome his insights on the NEPA and permitting issues.
    Mr. Nichols brings a unique perspective to this in that he 
is the Permitting Manager for U.S. Geothermal which is 
headquartered in Boise, Idaho. U.S. Geothermal is an electrical 
generating company that uses geothermal resources and has a 
very interesting way of creating electricity.
    I want to speak for just a moment on behalf of Senate Bill 
279, the Public Lands Renewable Energy Development Act. This 
bill would allow Federal Government to lease public lands to 
renewable energy firms. If enacted this bill would return the 
money collected to the State and county where the project 
occurs.
    Additionally, funding will be provided through that act to 
the Renewable Energy Resource Conservation Fund which would 
conserve vital wildlife habitat and enhance public access to 
Federal lands. I'm very pleased that the majority of the 
profits incurred will go directly to the State and local 
governments who can then decide for themselves how best to use 
those funds.
    Additionally the bill is widely supported by over 25 
sportsmen's organizations, who represent millions of Americans 
who enjoy accessing their public lands. Support has also been 
voiced by such groups as the Western Governors Association, the 
National Association of Counties, you'll be glad to hear, 
Commissioner, and the Congressional Sportsmen Foundation, to 
name a few.
    With all the positive feedback we've heard I urge my fellow 
Senators to support it as well. This is truly a bipartisan 
effort. I'm happy to work with my colleagues on both sides of 
the aisle to ensure final passage.
    It will go a long ways toward getting these renewable 
energy resources permitted and on track and do good things for 
the locals.
    Thank you very much, Madame Chairman.
    The Chair. Thank you, Senator.
    Mr. Kidwell, why don't we begin with you?
    As we noticed, 5 minutes each and we'll try to keep you to 
that time. We'll have a few questions afterwards.
    Please begin.

 STATEMENT OF SCOTT KIDWELL, DIRECTOR OF GOVERNMENT AND PUBLIC 
 AFFAIRS, COG OPERATING LLC, ON BEHALF OF CONCHO RESOURCES, INC

    Mr. Kidwell. Thank you, Madame Chair, Ranking Member 
Murkowski, members of the committee.
    Good afternoon, my name is Scott Kidwell. I am the Director 
of Government Affairs for Concho Resources. I'm here today to 
express Concho's strong support of S. 2440.
    By way of background I would like to tell you a little bit 
about Concho. We are a publicly traded, independent oil and gas 
producer, headquartered in Midland, Texas. The entirety of our 
assets are located in the Permian Basin which is in 
Southeastern New Mexico and West Texas.
    The Permian Basin currently is the largest onshore oil 
basin in the United States. Currently Concho is the largest 
producer of oil in the State of New Mexico by a factor of two 
to the nearest producer.
    Concho has significant BLM operations on BLM properties. We 
operate over 1,000 Federal wells in New Mexico. We have a non 
operating interest in several hundred other wells located on 
Federal lands.
    Concho estimates that it will invest 8 to $10 billion over 
the next 5 years in Eddy and Lea Counties, New Mexico which are 
where the most productive of the Federal lands lie in New 
Mexico.
    Because of the prolific potential that we see in the 
Permian Basin Concho has announced a 3-year acceleration plan 
in November 2013 whereby we hope to double our production of 
oil in the Permian Basin over the next 3 years. As a result you 
can tell that Concho is vitally concerned with the Federal 
Government's policy regarding development of energy on Federal 
lands.
    In Concho's experience in New Mexico the APD program, pilot 
program, has been a success to the extent that we have received 
more permits than we would have had there not--the program not 
been in place. Should the program expire in the Carlsbad office 
alone, who is already down 18 job positions, 41 vacancies would 
occur that are directly related to APD processing. That would 
have a catastrophic impact on the pace and volume of processing 
of APDs.
    The BLM field office will soon be asked to implement 
additional rules regarding hydraulic fracturing. These 
additional responsibilities will place additional strain on the 
work force thus making the expiration of the APD program, pilot 
program, a far worse disaster.
    Currently it takes a Concho permit an average of 133 days 
to be approved. This is in comparison to 2011 when the average 
APD time was 80 days. The number of filed APDs and the BLM 
processing time is increasing on a daily basis as additional 
companies, outside of Concho, turn their focus to drilling and 
exploring in the Permian Basin.
    The stakes at risk here are enormous. Oil and gas is the 
powerful economic driver and job creator in New Mexico.
    Oil and gas is responsible for 30,000 direct jobs in New 
Mexico.
    The 31.5 percent of the general fund for the State of New 
Mexico is derived from oil and gas activities.
    The 96.6 percent of the land grant general fund which funds 
New Mexico's educational system comes from oil and gas.
    Eighty-six percent of the State's severance taxes came from 
oil and gas production.
    In fiscal year 2013, $835 million of Federal royalties were 
paid for oil and gas production on Federal lands in New Mexico.
    Forty-eight percent of which is returned to the State of 
New Mexico.
    We anticipate, as a company, paying $105 million in Federal 
royalties this year for production in the State of New Mexico.
    As you can readily see the investment of a Federal dollar 
in the permitting program produces many multiples of that 
investment in return.
    With regard to the specifics of this bill, Concho believes 
the provision of the bill setting a statutory APD fee of $9,500 
with the guarantee that 75 percent of the revenues generated 
would go to the BLM State office where the fee gets collected 
to be an admirable compromise in bringing more timeliness and 
predictability to getting the permits you're going to encourage 
companies to invest in Federal lands.
    Concho also supports the provision of the bill that 
requires the Secretary to consider the factors that the 
Chairwoman mentioned earlier in her comments. All 4 of those 
factors are relevant and appropriate. It would bring a focus 
and an ability to transition to bring folks to offices that are 
important where the activity is thriving such as in the Permian 
Basin where we would be able to get proper staffing permit 
review commensurate with the production potential of the Basin.
    Failing to take steps to improve the permit approval times 
will absolutely ensure drilling starts on Federal lands 
decline. For a State like New Mexico, that's awfully bad news, 
particularly as the State is trying to climb out of the most 
recent recession.
    In summary, I would say that S. 2440 is a unique 
opportunity to increase drilling on Federal lands and increase 
all the jobs and economic opportunities that come with it. In a 
nutshell S. 2440 is a common sense jobs and economic 
opportunity bill. I would urge Congress that it do all it can 
to facilitate its enactment this year.
    On behalf of Concho I want to thank the committee for 
inviting me today to express our views on S. 2440. I'm happy to 
answer any questions and happy to provide any other information 
that might be helpful to the committee.
    Thank you.
    [The prepared statement of Mr. Kidwell follows:]
  Prepared Statement of Scott M. Kidwell, Director of Government and 
 Public Affairs, COG Operating LLC, on Behalf of Concho Resources, Inc
    My name is Scott M. Kidwell. I am the Director of Government and 
Public Affairs for COG Operating LLC, the operating arm of Concho 
Resources, Inc., (``Concho''). I am here today in strong support of S. 
2440, ``The BLM Permit Processing Improvement Act of 2014'', introduced 
initially by Senator Tom Udall and Senator John Barrasso, and co-
sponsored by a dozen of their bi-partisan colleagues, five of whom 
serve on this Committee. I urge the Committee to do all it can to move 
Congress to enact S. 2440 prior to the end of 2014 to avoid the 
scheduled expiration of the current authorization of the BLM's pilot 
program for expediting the processing of applications for drilling 
permits (APD).
    Concho is a publicly traded independent oil and gas producer 
headquartered in Midland, Texas. Concho is engaged in the acquisition, 
development and exploration of oil and natural gas properties. Concho's 
core operating areas are located in the Permian Basin region of 
Southeastern New Mexico and West Texas, the largest onshore oil and gas 
basin in the United States. Currently, Concho is one of the largest 
Permian oil and gas operators, producing over 100,000 Boepd in the 
first quarter of 2014 and running 33 drilling rigs. Concho is the 
largest oil producer in New Mexico by a factor of two compared to the 
next largest producer in that state. Concho has substantial operations 
on Bureau of Land Management (BLM) land in New Mexico, where we have 
over 257,000 gross acres of BLM land under lease. Illustrating the 
importance of our New Mexico presence, Concho operates over 1,000 
federal wells in New Mexico and has a non-operating interest in 
hundreds of other federal wells. Additionally, Concho has identified 
many promising undrilled locations on its BLM acreage and plans to 
spend between $8 and $10 billion over the next five years in Eddy and 
Lea Counties alone, which is where much of the most productive federal 
energy lands are located. Because of the prolific potential Concho sees 
in the Permian Basin, in November 2013 Concho announced a three year 
acceleration plan to double our production there. As a result, Concho 
is vitally concerned with the federal government's policy for energy 
development on federal lands.
    In Concho's view, the bi-partisan effort to reauthorize the BLM's 
program to improve the review process for APDs presents a welcome 
alignment of the interests held by the private sector, the federal 
government, and state government with regard to developing our national 
energy resources. All those entities have a common interest in the 
expanded supply of the nation's energy resources, the desire to create 
private sector jobs in energy development, and the need to generate 
royalty revenue to defray governmental expenditures during this 
challenging budgetary era. Recent technological advances in US oil and 
natural gas development have proved to be a ``game changer'' for 
America's energy security and the Nation's economic recovery, and have 
provided hundreds of thousands of jobs and billions of dollars in much-
needed federal and state government royalty revenues. As a Nation, we 
need to keep expanding that good fortune and not let the opportunity 
slip away.
    At the heart of this favorable development is the ability for 
domestic oil and gas producers to secure permits to develop energy 
properties on private and public lands. Recent oil and gas development 
on private lands has far exceeded development on federal lands. As far 
back as 2005, Congress recognized this critical reality and took action 
in Section 365 of the Energy Policy Act to improve oil and gas 
permitting in seven of the key BLM offices responsible for nearly 70% 
of the APDs BLM was handling. Congress's intent in Section 365 was to 
put more personnel and financial resources to work in these key offices 
to accelerate the APD review process in order to expedite issuance of 
federal permits to drill.
    In Concho's individual experience, that APD pilot program has been 
enormously successful and has been responsible for facilitating the 
issuance of many more APDs in New Mexico than would have otherwise been 
the case in the absence of the pilot program. But all of the benefits 
for the federal government, the state governments and the private 
sector derived from increased oil and gas production attributable to 
the pilot program are at risk should the authorization for the pilot 
program expire. We understand that should the pilot program expire, the 
Carlsbad office alone--which already has 18 vacant positions--stands to 
lose 41 positions currently authorized for APD review. This would have 
a catastrophic impact on the pace and volume of the processing of APDs 
and would dramatically reduce the production of the federal energy 
resources and its associated revenue that otherwise could be and would 
be developed were APDs to be issued. It is also important to recall 
that among the many demands placed on their time the BLM field offices 
will soon be required to implement new rules related to hydraulic 
fracturing, and possibly new requirements on venting and flaring. These 
additional responsibilities will place additional layers of work and 
strain on an already shorthanded workforce.
    Thus far in 2014, Concho has submitted 86 APDs to the Carlsbad 
field office and anticipates filing 120 more during the remainder of 
the year. Currently, it takes a Concho permit an average of 133 days to 
be approved. By way of comparison, Concho submitted 274 APDs in 2011 
with an average approval time of 80 days. The number of filed APDs and 
the BLM processing time is increasing on a daily basis as additional 
companies besides Concho sharpen their focus on drilling in the Permian 
Basin. The Carlsbad office's internal numbers evidence this increase in 
activity as they report having received 740 APDs through May of FY-14 
as compared to 581 APDs for the same time period in FY-13. It is also 
instructive to note that, except for geologists and engineers, the same 
BLM staff members who handle APDs are required to review right of way 
applications for energy development projects and it is estimated that 
right of way applications in the Carlsbad office have increased by a 
multiple of ten in calendar year 2014.
    Viewed through the perspective of our federal land operations in 
New Mexico, the stakes at risk are enormous because the oil and gas 
industry is such a powerful economic engine and job creator in New 
Mexico. It is estimated that the oil and gas industry creates 30,000 
direct jobs in New Mexico, a number which does not reflect the 
thousands of additional indirect jobs that are generated by the 
industry. Moreover, 31.5% of New Mexico's general fund revenues are 
attributable to oil and gas production in the state. As importantly, 
96.6% of the Land Grant Permanent Fund-which funds New Mexico's 
educational system-is derived from oil and gas development and 86% of 
the state's severance tax revenues come from oil and gas production. In 
FY-13, $835 million in royalties were paid to the Office of Natural 
Resource Revenue for oil and gas production on federal land in New 
Mexico, 48% of which was returned to New Mexico. Concho anticipates 
paying federal royalties approximating $105 million in 2014, of which 
48% will be forwarded to New Mexico. In addition, the local governments 
in New Mexico rely on oil and gas property tax assessments (ad valorem 
production taxes and production equipment taxes) which in FY-12 totaled 
$154 million. The simple fact is that federal, state and local 
government benefit mightily from increased oil and gas development in 
New Mexico and the pilot program has been critically important in 
facilitating oil and gas production and its attendant revenues that 
accrue to each level of government. The investment of a federal dollar 
in the permitting program produces many multiples of that investment in 
return. When these revenue streams are added to the value of the jobs 
and economic activity created by the oil and gas industry, the public 
policy case for continuation of the permitting program is compelling.
    With regard to the provisions of S. 2440 itself, we observe that it 
is a balanced piece of legislation that brings appropriate 
modifications to the management of the APD pilot program at a cost 
which industry can accept. We are not alone in that assessment given 
that the bill has drawn the support of a broad spectrum of our 
industry.
    In particular, I would like the Committee to recognize that Concho 
strongly supports the long term extension of the BLM's Processing 
Improvement Fund which pays for the permitting program. We find that 
the provision of the bill setting a statutory APD processing fee of 
$9,500 indexed annually for inflation, with the guarantee that 75% of 
the revenues generated would go to the BLM state office where the fee 
was collected, to be a fair compromise. That trade-off assures 
producers that they will see a direct benefit from paying the increased 
fee through having more BLM staff reviewers and a more responsive 
review process in the local BLM office for their projects. In bringing 
more timeliness and predictability to getting their permit applications 
reviewed, the compromise also will provide greater incentive to invest 
in developments on federal lands.
    Concho also supports the provision of the bill that requires the 
Secretary, in allocating funds raised by the bill among BLM offices, to 
consider the number of APDs received in an office, the backlog of APDs 
in an office, the publicly available industry forecast of development 
of oil and gas under the jurisdiction of an office, and opportunities 
for partnering with local industry to coordinate and process APDs. All 
those factors are relevant and appropriate and would, in our opinion, 
insure that priority federal lands such as the Permian Basin would get 
proper staffing for permit review commensurate with their production 
potential.
    We believe that with this increased funding from the new statutory 
APD fee, BLM will be able to compress review times for individual APDs 
by hiring and retaining sufficient competent personnel to conduct the 
reviews. It is not in Concho's interest as a key economic engine and 
employer in the state, nor is it in the interest of the federal 
government, state or local governments to create backlogs and slow 
processing times for permits. Failing to take steps to improve permit 
approval times will absolutely insure a decline in drilling starts on 
federal lands. Viewed in its local context, this failure would be 
particularly bad news for New Mexico. New Mexico's economy continues to 
struggle with a 6.5 percent unemployment rate. Employment figures from 
June 2014 indicate that for the first time in nine months the state 
just slightly increased the number of new jobs created compared to the 
number it lost. But the employment situation remains fragile. It is 
imperative that federal policy not make things worse.
    Ultimately it is the American people who benefit in so many ways 
from the increased development of the oil and gas resources they 
already own. Increased domestic production, particularly new production 
from federal lands which has not kept pace with the recent explosion of 
production on private land, improves the Nation's energy security, 
economic welfare, international competitiveness and strategic leverage 
in world commerce and politics. In S. 2440, we have the opportunity to 
increase drilling on federal lands and increase all the jobs and 
economic opportunity that comes with it. From that perspective, S. 2440 
is a common sense jobs and economic opportunity bill and Congress ought 
to do all it can to facilitate its enactment this year.
    In conclusion, I strongly urge the Energy Committee to do all it 
can to move S. 2440 to enactment this year. It is a well-balanced, 
important and bi-partisan piece of legislation that deserves your 
attention and effort.
    On behalf of Concho, I want to thank the Committee for inviting me 
today to express our views on S. 2440. I am happy to answer any 
questions or to provide any further information which might be helpful 
to the Committee.

    The Chair. Thank you very much.
    Ms. Sgamma.

STATEMENT OF KATHLEEN SGAMMA, VICE PRESIDENT OF GOVERNMENT AND 
            PUBLIC AFFAIRS, WESTERN ENERGY ALLIANCE

    Ms. Sgamma. Thank you, Madame Chair, Ranking Member 
Murkowski and members of the committee.
    I'm Kathleen Sgamma, Vice President of Government Affairs 
for Western Energy Alliance. We represent about 480 companies 
engaged in all aspects of environmentally responsible oil and 
natural gas exploration in the West. We are proud to provide 
about a quarter of the Nation's natural gas and about 21 
percent of its oil production while disturbing less than a 
tenth of a percent of public lands.
    Really appreciate the ability to talk today about S. 2440 
today. We have seen, as we've discussed earlier, you know, the 
dramatic production in oil and natural gas in this country. But 
it's mostly the result of private sector innovation on private 
and State lands. The Congressional Resource Service, the 
Research Service, found that about 96 percent of the increase 
in oil production since 2007 has been from private lands.
    So I think, you know, we were talking about the numbers 
earlier and it's a little hard, you know. In some places it's 
up, like New Mexico and Wyoming, where the Federal production 
is up for oil. But overall in the system it's simply not 
keeping pace with adjacent private and State lands. I think 
that's what the CRS found.
    So I think that S. 2440 is a partial solution to that 
problem in that by directing funding to those field offices 
that have the heaviest APD work flow we will see processing of 
those permits in a more timely manner, hopefully. We, Western 
Energy Alliance, particularly supports the bill because there's 
that direct funding to the originating field office so that 
unlike the current system where it's 7 named field offices. 
Funding will naturally flow to those field offices that have 
the heaviest work flow.
    So we appreciate that flexibility in the program that will 
be an improvement from the current pilot office program.
    We really emphasize and appreciate the committee holding 
this hearing today and taking up this bill. We think it needs 
to be put in place, as Mr. Kornze noted and other BLM field 
managers have noted to us and our members, is that without that 
long term ability to plan and provide assurance to new 
employees coming on, they're certainly hesitant to hire if they 
think the funding might run out in 2015. That's why we urge the 
committee to act on this bill this year and the Senate to act 
on this bill this year.
    Although companies already return $54.12 for every taxpayer 
dollar BLM spends administering the onshore oil and gas 
program, our members are willing to agree to the increase in 
the APD fee and the reduction in the royalty overpayment 
because of the fact, well for two reasons.
    First of all, the funding more naturally flows to the field 
offices with the heaviest work flow.
    Second, it provides regulatory certainty over the next 10 
years that that fee won't increase except with the cost of 
living.
    So that's why Western Energy Alliance strongly supports 
that bill and is willing to, you know, industry is willing to 
put that extra money on the table.
    I would note that since we already pay for inspections, 
administration, permitting, leasing, environmental analysis, 
any administration of that onshore program, more than 54 times 
over. We don't believe new fees should be enacted, but we are, 
you know, we are willing to support the fees in S. 2440.
    So we appreciate the bill and urge the Senate to act on it 
this year.
    Thank you very much for your time today.
    [The prepared statement of Ms. Sgamma follows:]
Prepared Statement of Kathleen Sgamma, Vice President of Government and 
                Public Affairs, Western Energy Alliance
    The dramatic growth in domestic oil and natural gas production has 
been truly transformational. States such as North Dakota and New Mexico 
are reaping huge economic rewards including significant tax and royalty 
revenue. North Dakota has experienced large budget surpluses over the 
last few years and has cut personal taxes because of the oil and 
natural gas industry. Other states in the West could experience that 
same type of economic growth if the administration would encourage 
development in areas where it has the most control--on federal public 
lands.
    The huge increase in U.S. oil and natural gas production over the 
last several years is the result of private sector investment in 
technology and improved techniques applied largely on private lands. 
96% of the oil production growth since 2007 has been on private and 
state lands, according to the Congressional Research Service. A recent 
Energy Information Administration (EIA) report shows that overall 
fossil fuel production on federal lands is down 7% from the last fiscal 
year. The report shows a 9% drop in federal onshore natural gas 
production, with most of the decrease coming from Wyoming where the 
percentage of federal production is the highest. Oil production on 
federal lands in the West is up 29% since 2008, but that significantly 
lags the 93% increase on adjacent private and state lands.
    S. 2440 the BLM Permit Processing Improvement Act of 2014 is a 
partial solution to reversing that trend. I would like to thank 
Chairman Landrieu for holding this hearing today, and Senator Tom Udall 
for the bill along with co-sponsoring Senators Barrasso, Bennet, Enzi, 
Hatch, Heinrich, Heitkamp, Heller, Hoeven, Inhofe, Lee, Tester, Udall 
and Walsh. The level of bipartisan support is truly encouraging.
    By ensuring a portion of the Application for Permit to Drill (APD) 
fee paid by oil and natural gas companies goes directly to APD 
processing at the originating field office, the bill will provide much-
needed resources to the Bureau of Land Management (BLM). By directing 
that funding to APD processing, the bill will ensure BLM has the 
resources to support revenue-generating oil and natural gas 
development, while strengthening western economies and the nation's 
energy security.
    Action is required on S. 2440 this year because the Pilot Office 
program for permitting, created by the Energy Policy Act of 2005, 
expires at the end of the 2015 fiscal year. The ten-year 
reauthorization provides an opportunity to inject some much needed 
flexibility into the program. The seven pilot offices designated in 
EPAct may have been busy in 2005, but ten years later market conditions 
have changed dramatically. Some pilot offices have seen activity fall 
off while other field offices that were relatively sleepy in 2005 have 
experienced huge increases in workload.
    If the program is allowed to lapse without a replacement, BLM will 
experience a significant reduction in the resources necessary to 
process APDs, and we would experience even longer processing times and 
less production on federal lands. The EPAct 2005 Pilot Office program, 
which directs rental fees to the seven named Pilot Offices, provided 
permit funding in a limited way. S. 2440 aims to replace that funding 
while providing more flexibility to ensure funds are spent at the field 
offices with the heaviest APD workflow, not just a static list of 
seven.
    Western Energy Alliance supports the bill's $3,000 increase in the 
APD fee, from the current $6,500, and the reduction in the interest 
rate for royalty overpayments to direct those funds to APD processing. 
Even though producers already return $54.12 for every taxpayer dollar 
BLM spends administering the entire onshore program, we are willing to 
agree to those two cost increases because the bill provides regulatory 
certainty that rulemaking to increase APD fees will not take place for 
the next ten years. In addition, targeting the funds more directly to 
BLM field offices according to APD workflow is important to Alliance 
members.
    Western Energy Alliance urges the Committee to act this year on 
S.2440. We hear reports from busy BLM field offices that they are 
already starting to feel the pinch of the impending September 2015 
deadline. Field managers cannot hire replacements to handle APD 
workloads when positions become available because they do not know 
whether the funding for those hires will continue beyond 2015. Rural 
communities across the West, such as Farmington, New Mexico, Vernal, 
Utah and Pinedale, Wyoming depend on oil and natural gas development on 
federal lands for a significant portion of their economic prosperity. 
Passage of S. 2440 will help ensure job creation in western 
communities.
About Western Energy Alliance
    Western Energy Alliance represents over 480 companies engaged in 
all aspects of environmentally responsible exploration and production 
of oil and natural gas across the West. The Alliance represents 
independents, the majority of which are small businesses with an 
average of fifteen employees. Because of the predominance of public 
lands in the West, our members regularly operate on public lands to 
provide to the American people the energy owned by all. Our members are 
proud to provide 25% of America's natural gas and 21% of its oil 
production while disturbing only 0.07% of public lands.

    The Chair. Thank you.
    Commissioner Christensen.

  STATEMENT OF MARK A. CHRISTENSEN, CHAIRMAN, CAMPBELL COUNTY 
    BOARD OF COMMISSIONERS, ON BEHALF OF THE WYOMING COUNTY 
                   COMMISSIONERS ASSOCIATION

    Mr. Christensen. Good afternoon, Madame Chair, Ranking 
Member Murkowski, Senator Barrasso and the distinguished 
members of the committee. Thank you for the opportunity to 
address you today regarding opportunities to more efficiently 
process permits for energy production on Federal lands.
    My name is Mark Christensen and I'm the Chairman of the 
Board of Campbell County Commissioners in Wyoming. I'm also 
here on behalf of the Wyoming County Commissioners Association, 
representing all 23 Wyoming counties.
    Campbell County produces approximately 10.6 quadrillion 
BTUs of energy annually providing from one county about 10 
percent of the entire country's energy demand. Many of you know 
we produce approximately 40 percent of the Nation's coal. What 
you may not know is that Campbell County is also the top 
producer of crude oil in Wyoming.
    Almost all of this coal and oil is produced on Federal 
lands. To produce energy to fuel America at this volume we are 
heavily dependent on the efficiency and effectiveness of our 
local BLM field office in Buffalo, Wyoming. This is why we are 
grateful to Senators Udall and Barrasso as well as the 
bipartisan co-sponsors of S. 2440, the BLM Permit Processing 
Improvement Act of 2014.
    The bill before you today was born from a pilot project 
which is particularly important to Campbell County as the BLM 
Buffalo field office was one of 7 pilot project offices 
designated by Congress in the Energy Policy Act of 2005 or 
EPACT 2005.
    At the start of the 21st century Wyoming and specifically 
Campbell County experienced a dramatic boom in coal bed methane 
or CBM drilling. Applications for permits to drill or APDs 
began to quickly stack up in the Buffalo field office. With a 
staff at the time of less than 30 people the BLM's Buffalo 
field office was simply unprepared to handle the volume of 
work.
    By 2003 the Buffalo field office had a backlog of around 
3,000 APDs with no end in sight.
    Campbell County along with our neighbor counties and 
private sector stakeholders sought relief from Congress through 
our Federal delegation and Congress delivered by creating the 
pilot project program in EPACT 2005. As a result the Buffalo 
field office was able to more than triple their staff and add 
about 25 additional people who were dedicated to oil and gas 
operations.
    The legislation before you today would remove the pilot 
from the pilot program and make necessary changes to allow for 
greater funds in offices with high permitting demands. The bill 
includes important flexibility for the Secretary of the 
Interior and State offices to redirect funds to new offices as 
demand dictates. Directing resources back to States and field 
offices that will generate significant revenue for the Federal 
Government is sound fiscal policy and also sound energy and 
environmental policy.
    In 2013 oil and gas production in Wyoming generated over 
$400 million in royalty revenue for the Federal Government. 
When you add in the rest of Wyoming's minerals, the total 
revenue collected and kept by the Federal Government was well 
in excess of $1 billion.
    S. 2440 would specifically direct the permit fees back to 
the States where those fees are collected. These fees will 
result in more timely issued APDs and therefore, greater 
Federal royalties.
    A critical component to the timely processing and approval 
of APDs is site visits. In Wyoming these site visits often 
require driving for several hours. These visits to multiple 
sites are long and remove the BLM employee from the office for 
days at a time resulting in time not spent doing the necessary 
analysis and work to ensure that permits are completed 
accurately.
    As permits are filed by the hundreds or even thousands, the 
permit backlog can quickly become unmanageable. Added staff 
capacity made possible by the bill means more teams covering 
site visits allowing for a much more efficient process.
    While 2003 was frustrating what we didn't face then was the 
dramatic pressure of private lands oil and gas development in 
places like North Dakota and Texas.
    Today operators know that if they cannot get a timely 
permit in Wyoming they have somewhere else to go. This is 
already happening with oil and gas production on Federal lands 
decreasing again last year as capital fled to private land 
plays. That is bad news for Federal coffers and terrible news 
for local economies and heavy public land States and counties.
    It is important to realize that the bill is also sound 
energy and environmental policy. Offices like the Buffalo field 
office have a great many responsibilities to manage public 
lands for multiple uses, including recreation and wildlife 
conservation. When an office is overwhelmed by sudden and 
dramatic increases in oil and gas related work all of their 
programs suffer.
    The increased production generated from the timely issuance 
of APDs by BLM benefits not just the State of Wyoming and its 
counties, but the entire U.S. because of the large Federal land 
and mineral ownership in Wyoming and shifts the reliance for 
energy from foreign sources to domestic.
    We strongly support speedy passage of S. 2440 for all the 
reasons already mentioned. We are particularly pleased by the 
oil and gas industry's willingness to increase permit fees in 
order to make this reauthorization possible. This is an example 
of all parties coming together to improve a process that 
benefits the U.S. Treasury, States, counties and industry.
    However, I'd be remiss if I didn't mention that producing 
quality environmental impact documents and accurate and timely 
permits cannot depend entirely on industry dollars alone. Local 
governments, State governments, private sector interest groups 
and Federal agencies all must play a role.
    Madame Chair, thank you for the opportunity today. I am 
happy to answer any questions you may have.
    [The prepared statement of Mr. Christensen follows:]
 Prepared Statement of Mark A. Christensen, Chairman, Campbell County 
 Board of Commissioners, on behalf of the Wyoming County Commissioners 
                              Association
    Good afternoon Madam Chair, Ranking Member Murkowski, Senator 
Barrasso, and distinguished members of the committee. Thank you for the 
opportunity to address you today regarding opportunities to more 
efficiently process permits for energy production on federal lands.
    My name is Mark Christensen, I am the Chairman of the Board of 
County Commissioners in Campbell County, Wyoming, located in 
northeastern Wyoming. I am also here on behalf of the Wyoming County 
Commissioners Association representing all 23 Wyoming counties. 
Campbell County produces approximately 10.6 quadrillion BTU's of energy 
annually, providing from one county about 10% of the entire country's 
energy demand.
    While a great many of those BTU's come from the enormous deposits 
of low sulfur coal in the Powder River Basin, Campbell County is also 
the top producer of crude oil in Wyoming. Almost all of this is 
produced on federal lands. To produce energy to fuel America at this 
volume, we are heavily dependent on the efficiency and effectiveness of 
our local BLM field office in Buffalo, Wyoming. That is why we are 
grateful to Senators Udall and Barrasso, as well as the bi-partisan co-
sponsors of S.2440, the BLM Permit Processing Improvement Act of 2014.
History of the Pilot Project Program in Campbell County
    The pilot project program is particularly important to us in 
Campbell County because the BLM Buffalo field office was one of seven 
pilot project offices designated by Congress in the Energy Policy Act 
of 2005 (EPAct 05). During the earliest years of the 21st century, 
Wyoming in general, but Campbell County in particular, experienced a 
dramatic boom in Coal Bed Methane, or CBM, drilling. CBM is a natural 
gas extracted from coal seams not yet mined. It is a process that 
produces high quality, pipeline-ready gas that requires little 
processing before sale.
    Applications for permits to drill (APDs) began to quickly stack up 
in the Buffalo field office. With a staff at the time of less than 30 
people, the BLM's Buffalo field office was simply unprepared to handle 
the volume of work about to fall on them. By 2003, the Buffalo field 
office had a backlog of around 3,000 APDs with no end in sight.
    Campbell County, along with our neighbor counties and private 
sector stakeholders, actively sought relief from Congress through our 
federal delegation; and at least for us, our delegation and Congress 
truly delivered by creating the pilot project program in EPAct 05. As a 
result, the Buffalo field office was able to more than triple their 
staff, and add about 25 additional people dedicated to oil and gas 
operations.
    Ten years later, I am here today because our on-the-ground 
experience with the pilot project leads us to believe that it should no 
longer be a pilot program, and should no longer be limited to 7 
offices. As a county association, we join our state partners at the 
Western Governors' Association in support of S.2440.
BLM Permit Processing Improvement Act of 2014
    The legislation before you today would remove the ``pilot'' from 
the pilot program, and make necessary changes to allow for greater 
funds in offices with high permitting demands. Additionally, the 
legislation gives greater flexibility to the BLM to direct these funds 
to new areas as production demands shift. I want to take a moment to 
discuss both of these important changes as it relates to my county and 
state.
    First, directing resources back to states and field offices that 
will generate significant revenue for the federal government is sound 
fiscal policy, and also sound energy and environmental policy.
    In 2013, oil and gas production in Wyoming generated over $400 
million dollars in royalty revenue for the federal government. When you 
add in the rest of Wyoming's minerals, the total revenue collected and 
kept by the federal government was well in excess of $1 billion 
dollars. Yet, the BLM's state office in Wyoming had a total 2013 budget 
of only $115 million dollars for all their programs statewide. S.2440 
would help correct that imbalance by specifically directing permit fees 
to return to the states where those fees are collected, providing a 
major return on investment to the U.S. Treasury.
    It isn't simply a matter of the dollar for dollar imbalance of what 
Wyoming generates and what BLM's Wyoming state office receives, rather; 
directing APD fees back to a state with high APD demand will help 
generate more timely permits. More timely permits will result in even 
greater federal royalties to the U.S. Treasury in a time when non-tax 
revenue is highly coveted. A concrete example of how the bill would 
result in faster permit times is simply to understand the work flow of 
a single APD filed in the Buffalo field office, where the length of 
time to issue an APD from Notice of Survey is approximately 300 days 
and the time once all information is received is approximately 9 days. 
This is a major improvement from pre-pilot project days, though we 
believe additional improvement may still be possible.
    A critical component to the timely processing and approval of APDs 
is site visits. In Wyoming, often these site visits require driving for 
several hours, often on gravel roads. When grouped together as they 
often are, these visits are long and remove the BLM employee from the 
office for days at a time. Those are days not spent doing the necessary 
analysis and work to ensure that permits are completed accurately. As 
permits are filed by the hundreds or even thousands, the permit backlog 
becomes unbearable as it did back in 2003. Added staff capacity made 
possible by the bill before you today means more teams covering site 
visits, allowing for a much more efficient process.
    While 2003 was frustrating, what we didn't face then was the 
dramatic pressure of private lands oil and gas development in places 
like North Dakota and Texas. Today, operators know that if they cannot 
get a timely permit in Wyoming, they have somewhere else to go. In 
fact, all the data on oil and gas production in the United States 
indicates that is already happening. Oil and gas production on federal 
lands decreased again last year as capital fled to these private lands 
plays. That is bad news for federal coffers and terrible news for local 
economies in heavy public lands states and counties.
    The energy companies within our state and county compete for 
capital with divisions across the U.S. Delays in the timely permitting 
of APDs makes states with federal lands, and the federal lands and/or 
mineral estates, less attractive for development. In a state and county 
which rely on severance taxes and ad-valorem taxes from the extraction 
of minerals, timely approvals of APDs is critical to the long-term 
health and prosperity of our citizens and our communities.
    It is important to realize that the bill before you today is also 
sound energy and environment policy. BLM offices like the Buffalo field 
office have a great many responsibilities to manage public lands for 
multiple uses, including recreation and wildlife conservation. When an 
office is completely overwhelmed by sudden and dramatic increases in 
oil and gas related work, all of their programs are impacted even if 
they are not directly related to oil and gas operations. This should be 
a concern to those interested in rangeland monitoring, sage grouse 
conservation activities, maintaining recreational activities, and the 
many other tasks of the BLM.
    The final important component of S.2440 that I want to briefly 
mention is the flexibility granted to the Secretary of the Interior and 
to state offices to redirect funds to new offices as demand dictates. 
Again, Wyoming has a unique perspective on this.
    Thanks to the leadership of U.S. Representative Cynthia Lummis, 
last year the pilot project dollars directed toward the Buffalo field 
office were redirected one rung up on the administrative ladder to the 
BLM's High Plains district office in Casper, Wyoming. This minor 
adjustment allowed BLM to shift resources from Buffalo to Casper to 
help meet the new demands coming from Converse County, my neighbor to 
the south. The Casper field office expects about 5,000 APDs to come 
their way from new oil and gas development in Converse County. It only 
makes sense to allow the flexibility of meeting new demands when they 
arise.
    The rates of growth we are talking about are significant. Year-
over-year oil production increase for Campbell County and Converse 
County between calendar year 2012 and calendar year 2013 was 33% and 
49% respectively. A comparison for the first five months of 2014 
indicates a production increase of 30% when compared to the 2013 
production for Campbell County, with an additional 25% production 
increase for Converse County. This increased production benefits not 
just the State of Wyoming and its counties, but the entire U.S. because 
of the large federal land and mineral ownership in Wyoming, and shifts 
the reliance for energy from foreign sources to domestic.
Industry Money isn't Everything
    We strongly support speedy passage of S.2440 for all the reasons 
already mentioned. We are particularly pleased by the oil and gas 
industry's willingness to increase permit fees in order to make this 
reauthorization possible. To us this is just another example of how the 
oil and gas industry of today is making great strides at being good 
neighbors in the communities they operate in.
    However, because the theme of this hearing is on examining ways to 
break the logjam of permits on federal lands, I would be remiss if I 
didn't mention that producing quality environmental impact documents 
and accurate and timely permits cannot entirely depend on industry 
dollars alone. Local governments, state governments, private sector 
interest groups and federal agencies all must play a constructive role.
    For us in Wyoming, we take that role seriously and engage with our 
federal partners at every possible opportunity. For those of us in a 
position to do so, we also have been willing to spend money from our 
own coffers to improve and bolster data on sensitive or protected 
species. Today, Campbell County is exploring ways to help the BLM 
gather comprehensive, region-wide data on raptors so that all of us are 
on the same page when it comes to where these birds are, and how 
activity affects their behavior. We have already completed an initial 
study identifying nests within Campbell County and Johnson County, and 
are working now to expand upon this project through a partnership with 
the Buffalo field office which would bring Campbell County monies into 
the effort. These kinds of partnerships are occurring all over Wyoming 
with industry, local governments, and environmental stewardship groups.
    If we want to take another large step toward reducing bottlenecks, 
it is exactly this kind of cooperative approach that should be 
encouraged and incentivized. By necessity, this will mean actively 
seeking to discourage and remove incentives for litigation. Decisions 
on land use in the West will almost always cause tension. However, that 
tension need not cause conflict, and litigation is by its very nature, 
conflict. Groups that spend all their time and effort in the courtroom 
are a major contributor to the overall backlog. Rather than trying to 
affect policy behind the closed doors of a courtroom, we are all better 
served by doing the difficult work of finding consensus and putting 
boots-on-the-ground toward actual environmental stewardship.
    I add that Wyoming is at the forefront with regard to laws and 
regulations which deal with environmental impact, and we take the 
environment within our state very seriously. Ranchers may have been 
Wyoming's original land stewards, but today, the energy industry is a 
major part of this process. Protection of Wyoming's environment also 
makes good financial sense. Though Wyoming's number one economic 
generator is mineral extraction, tourism is number two.
    Madam Chair, thank you again for the opportunity today. I am happy 
to answer any questions you may have.

    The Chair. Thank you, Commissioner. I am looking forward to 
visiting Campbell County. I'm very interested in what you all 
are doing there. So as soon as I can get there, I will.
    Thank you.
    Mr. Christensen. We would invite you.
    The Chair. Commissioner Wichman.

     STATEMENT OF COMMISSIONER LORINDA WICHMAN, NYE COUNTY 
  COMMISSION, PRESIDENT-ELECT, NEVADA ASSOCIATION OF COUNTIES

    Ms. Wichman. Yes, ma'am. Thank you.
    Thank you very much. I would like to thank Chairman 
Landrieu and the rest of this committee for this incredible 
opportunity to be here with you in our State capitol and to 
share a little bit with you from Nevada's outback, or actually 
the entire country's outback.
    I'd also like to take a moment to thank Senator Heller and 
his staff for making this possible for me to do this.
    In addition, a personal thank you to you for addressing the 
WIR in New Orleans. Everybody was extremely pleased with that.
    My name is Lorinda Wichman.
    I'm Commissioner from Nye County's District One.
    I'm Vice Chair of our Commission.
    I'm also the Chairman for the Nye, White Pine, Eureka and 
Lander County's Secure Rural Schools Resource Advisory Council.
    I'm the President Elect for the Nevada's Association of 
Counties, the Chairman of the Association's Committee on Public 
Lands and Natural Resources.
    I'm an appointee to the State Land Use Planning Advisory 
Board and Nevada's Representative on the Public Lands Steering 
Committee of the National Association of Counties.
    S. 279 and S. 2440 provide for a more equitable and 
efficient path to the development of our Nation's diversified 
energy portfolio. I was once told that a measure of a good 
legislation was when everyone in the room that left was angered 
by the legislation and this probably the first opportunity I 
have seen for the extremely diverse support that this 
legislation has.
    My testimony is in support of the bill on behalf of my 
neighbors, my Commission District, Nye County and Nevada's 
Association of Counties and the National Association of 
Counties. District One of Nye County which is possibly the 
largest Commissioner's District in the lower 48 States is 
17,933 square miles. The county itself is a little over 18,000 
square miles.
    Included within the boundaries of my district alone are the 
Nevada National Security site, portions of Nellis Air Force 
Base, that includes the Nevada test and training range, Ash 
Meadows National Wildlife Refuge, portions of Death Valley 
National Park, Yucca Mountain, the Yomba and Duckwater Indian 
Reservations, Round Mountain Gold, Railroad Valley oil field 
and the Crescent Dunes Renewable Energy project.
    I'm extremely proud to represent that district.
    My neighbors in Nye County are proud to host so many 
recognizable landmarks that provide for our Nation's security. 
98 percent of Nye County is owned, managed or controlled by 
Federal agencies. Ten communities and two reservations spread 
out over this 18,000 square mile area have forced us to 
maintain two separate centers of government that are over 150 
miles apart.
    For perspective once a month I travel 86 miles one way to 
attend the Commissioner's meeting in the county seat. Once a 
month I travel 252 miles one way to attend the second 
Commission meeting which is held in the population center. 
Gives you an idea of size.
    Our operating revenues have steadily declined since 2008, 
mostly due to the assessed evaluation of the properties which 
is now one-third of what it was prior to 2008. The county's 
operating budget for fiscal year 2014-2015 is now only 30 
million.
    We've reduced our work force by 15 percent. Unfortunately a 
large part of that reduction was in law enforcement.
    We have consolidated services. We've restricted the 
purchase of non essential supplies. Our infrastructure 
buildings and grounds are all suffering from lack of 
improvements or maintenance.
    Payments in lieu of taxes provide us with about 2 to $3.5 
million a year. That's 33 cents an acre.
    Our private, well, that is 10 percent of our budget, as you 
can tell from the figures. We rely heavily on the PILT program 
along with 2,000 other counties in this country. PILT is the 
only program that offsets the losses of our property taxes.
    S. 275 needs to be supplemental to that PILT program. It's 
extremely important to all of us.
    Our private property taxes are collected on only 2 percent 
of Nye County because of the overwhelming Federal presence. 
Despite the obstacles, Nevada's counties are required to 
provide essential services to all of the residents and their 
visitors. Therefore, it's easy to understand why Nye County, 
the State, the national association, Nevada's Association and 
all the industries are all in favor of this legislation.
    Nevada has an abundance of natural resources. The current 
management practices and permitting processes to reach our 
resources have discouraged many from pursuing projects on 
federally managed lands. The hearty industries that have 
persevered are building into their feasibility study as much as 
8 years and hundreds of thousands of dollars just to get 
through the process.
    The Nevada Associations of County Policy for Renewable 
Energy Development highlights the role of county officials 
working with the other agencies to permit appropriate projects 
on federally managed lands. The policies also promote the use 
of cooperating agency agreements to assist in the development 
of resource management plans throughout the State. Without a 
direct benefit to the host counties there isn't much incentive 
to spend the time or the taxpayer's money to promote anybody's 
policy.
    Nevada has abundant wind, solar, geothermal, mineral and 
land resources which position us to be one of the top States in 
attracting development of alternative energy projects. 
Streamlining the process to realize the benefits of production 
is paramount to our future success and allows counties to play 
a greater role in helping our State recover from the economic 
crisis.
    The Chair. I have to ask you to wrap up, if you could.
    Ms. Wichman. The passage of the legislation will lay the 
foundation to help industries to generate the funds needed, 
like counties, to provide critical services to my neighbors, 
Nye County, Nevada and this Nation.
    Thank you.
    [The prepared statement of Ms. Wichman follows:]
Prepared Statement of Commissioner Lorinda Wichman, Vice Chairman, Nye 
              County Commission, NV, on S. 279 and S. 2440
    Good afternoon, I would like to thank Chairman Landrieu and the 
Committee for this incredible opportunity to share a little with you 
from the outback of Nevada. I would also like to thank Senator Heller 
and his staff for making this opportunity possible.
    I am Lorinda Wichman, Commissioner of District 1 in Nye County, 
Nevada and Vice-Chair of the Board. I am also the Chairman of the Nye, 
White Pine, Eureka and Lander Counties SRS RAC. The President Elect of 
the Nevada State Association, Chairman of the Association's committee 
on Public Lands and Natural Resources. I am also a Governor's appointee 
to the State Land Use Planning Advisory Council and Nevada's 
representative on the Public Lands Steering Committee of the National 
Association of Counties.
    S.279 and S.2440 provide for a more equitable and efficient path to 
the development of our nation's diversified energy portfolio. I was 
once told that the measure of good legislation was when everyone was 
angered but this legislation has an extremely diverse base of support. 
My testimony in support of this bill is on behalf of my neighbors, my 
Commission District, Nye County, the Nevada Association of Counties and 
the National Association of Counties.
    District One of Nye County, which is possibly the largest County 
Commission District in the lower 48 states, is 17,933 sq. miles. The 
county itself is 18,210 square miles. Included within the boundaries of 
my commission district are the Nevada National Security Site, portions 
of Nellis Air Force Base that include the Nevada Test and Training 
Range, Ash Meadows National Wildlife Refuge, portions of the Death 
Valley National Park, Yucca Mountain, the Yomba and Duckwater Indian 
Reservations, Round Mountain Gold mine, Railroad Valley oil field and 
the Crescent Dunes renewable energy project.
    I am extremely proud to represent this district. My neighbors and 
Nye County are proud to host so many recognizable landmarks that 
provide for our nation's security. Ninety-eight percent of Nye County 
is owned, managed or controlled by the federal government. Ten 
communities and two reservations spread out over this 18,210 square 
mile area have forced us to maintain two separate centers of government 
more than 150 miles apart. For perspective; once a month I travel 86 
miles, one way, to attend a commission meeting in the County seat and 
once a month I travel 252 miles, one way, to attend the second 
commission meeting held in the population center.
    Our operating revenues have steadily declined since 2008 due mostly 
to the assessed values of property which is one third of the pre 2008 
values. The County operating budget for fiscal year 2014/2015 is now 
only $30 million. We have reduced our workforce by 15% and 
unfortunately a large part of the reduction was in law enforcement. We 
have consolidated services and restricted the purchase of non-essential 
supplies. Our infrastructure, buildings and grounds are suffering from 
lack of improvements. Payments in lieu of taxes provide us with $2 to 
$3.5 mil a year, or $.33 per acre. Our private property taxes are 
collected on only 2% of Nye County because of the overwhelming federal 
presence. Despite these obstacles Nevada Counties are required to 
provide essential services to all of their residents and visitors. 
Therefore, it is easy to understand why Nye County and the state and 
national associations are encouraging the revenue sharing.
    Nevada has an abundance of natural resources. The current 
management practices and permitting processes to reach our resources 
have discouraged many from pursuing projects on federally managed 
lands. The hardy industries that have persevered are building into 
their feasibility studies as much as eight years and hundreds of 
thousands of dollars just to get through those processes.
    The Nevada Association of Counties policy on renewable energy 
development highlights the role of County Officials working with other 
agencies to permit appropriate projects on federally managed lands. The 
policy also promotes the use of cooperating agency agreements to assist 
in the development of resource management plans throughout the state. 
Without a direct benefit to the host counties there isn't much 
incentive to spend time and taxpayers' money to promote any policy.
    Nevada has abundant wind, solar, geothermal, mineral and land 
resources which position us to be one of the top states in attracting 
development of alternative energy projects. Streamlining the process to 
realize the benefits of production is paramount to our future success 
and allows Counties to play a greater role in helping the state recover 
from its economic crisis.
    Passage of this legislation will lay the foundation to help 
industry to generate the funds needed by Counties to provide critical 
services to my neighbors, Nye County, the State of Nevada and our 
Nation.

    The Chair. Thank you very much for that beautiful 
testimony.
    Please continue.

  STATEMENT OF ARTHUR HAUBENSTOCK, CHAIR OF THE UTILITY-SCALE 
 SOLAR POWER DIVISION, SOLAR ENERGY INDUSTRIES ASSOCIATION AND 
                SENIOR COUNSEL, PERKINS COIE LLP

    Mr. Haubenstock. Good afternoon and thank you, Chair 
Landrieu, Ranking Member Murkowski and members of this 
committee for your leadership, your support of solar energy and 
this opportunity to provide testimony on behalf of the Solar 
Energy Industries Association, known at SEIA.
    My name is Arthur Haubenstock. I'm Chair of the Utility-
Scale Power Division of SEIA. We're grateful that the committee 
recognizes the increasingly important contributions solar is 
making to our Nation's energy supply and the role that our 
public lands play in achieving the promise of solar energy for 
the benefit of the Nation.
    SEIA represents the entire solar industry including 1,000 
member companies and nearly 143,000 American citizens that the 
industry employs. Solar power transforms the endless, free 
energy provided by the sun into electric power that drives 
commerce, industry and our way of life. It is doing so at 
decreasing cost, without air, water or other emissions and with 
minimal environmental impact overall.
    Solar is a young industry, but it's growing fast. Solar 
capacity in the United States is now the equivalent of 
approximately 6 nuclear power plants, enough to power 3 million 
homes. In the first quarter of this year alone, solar comprised 
74 percent of all new electric capacity in the United States. 
Of that number 75 percent came from utility-scale solar power 
plants both photovoltaic, known as PV plants and concentrating 
solar power CSP. This phenomenal growth is the result of 
private investment, technological innovation, a maturing 
industry and smart Federal and State policies including the 
Investment Tax Credit.
    Since the inception of the Investment Tax Credit there's 
been 3,000 percent growth in solar. That's about a compound of 
growth rate of 77 percent annually. That has been a tremendous 
investment for the Federal Government. It has received a very 
strong return and great results. We wanted to thank Senator 
Heller for his co-sponsorship of the bill to enable the 
Investment Tax Credit to continue its benefits.
    The Investment Tax Credit is currently planned to expire in 
2016. That's already creating a chilling effect on investment 
in the solar industry because of the advanced time needed for 
financers who are concerned about its expiration. The change in 
the trigger to commence construction which is what applies to 
other renewable energy technologies would be tremendously 
beneficial to ensure that solar continues its tremendous growth 
and continues to serve the country.
    Solar is an energy source that's available in every U.S. 
Congressional District. It has a supply chain that stretches 
from coast to coast. Its potential to serve the Nation is far 
greater than what it's accomplished to date and there's every 
reason for the United States to be the world leader in solar.
    Right now it's not. Germany is actually the solar leader in 
the world. The solar resource in Germany is equivalent to that 
of the great State of Alaska. That is very interesting in that 
June, just this last month, half of the electric supply for 
Germany came from solar power.
    That says two things.
    One is that Alaska has great potential to be a solar leader 
in the world.
    Also that the United States isn't quite living up to its 
potential yet.
    There's much that can be done to make sure that that 
happens.
    The opportunities for utility-scale solar are really 
tremendous across the Southwest, in particular. Much of the 
best solar resources in the world are located in the Southwest 
both because of the quality of the sunlight and the proximity 
to cities and to industrial centers throughout the Southwest. 
But currently right now only 23 percent of the operating solar 
capacity of utility-scale is on public lands even though so 
much of the best resources are on public lands.
    But right now there's about a gigawatt of solar power 
plants under construction on public lands. Only 36 percent of 
all utility-scale megawatts under construction are on public 
lands.
    We are grateful for the work of the Department of the 
Interior and the BLM for its implementation of the solar energy 
program which we are continuing to work with them in their 
leadership. We want to thank Neil Kornze, Ray Brady and many 
others for their extensive work to try to improve the 
opportunities for solar on public lands.
    The most important step that could be taken to ensure that 
the promised incentives of the solar energy program which have 
not yet materialized are two things.
    One is to continue work on the SMART and the STAR program 
that the Administration has undertaken.
    But also to go back to some of the aspects of the fast 
track permitting processes that were in place in 2010.
    In particular the need to establish clear deadlines to have 
milestone schedules, corrective action when schedules are not 
met and the opportunity to have corrective action and true 
accountability at the highest level of agencies enables Federal 
and State agencies to work very closely together and achieve 
tremendous permitting processes and timelines. We've seen great 
results. Those results are starting to slip. But we need to 
make sure that we can continue that progress.
    I want to thank you again for this opportunity to testify 
and look forward to your questions.
    [The prepared statement of Mr. Haubenstock follows:]
 Prepared Statement of Arthur Haubenstock, Chair of the Utility-Scale 
 Solar Power Division, Solar Energy Industries Association and Senior 
                       Counsel, Perkins Coie LLP
    Madam Chairwoman, Ranking Member Murkowski, and Members of the 
Committee,
    Thank you for the opportunity to provide testimony on potential 
improvements to solar energy development on public lands. I am Arthur 
Haubenstock, and I serve as Chair of the Utility-Scale Solar Power 
Division of the Solar Energy Industries Association (SEIA). I am also a 
Senior Counsel with Perkins Coie, LLP, and my clients include companies 
developing solar projects on both federal and private lands. I am 
testifying on behalf of SEIA's 1,000 member companies and the nearly 
143,000 American citizens employed by the solar industry. SEIA 
represents the entire solar industry, encompassing all major solar 
technologies (photovoltaics, concentrating solar power and solar water 
heating\1\) and all points in the value chain, including financiers, 
project developers, component manufacturers and solar installers. 
Before I begin my testimony, let me thank Chairwoman Landrieu and 
Ranking Member Murkowski for their leadership and support of solar 
energy. We are grateful that the Committee recognizes the increasingly 
important contributions to our energy supply, as well as the role that 
our public lands play in achieving the promise of solar energy for the 
benefit of the nation.
---------------------------------------------------------------------------
    \1\ For more information on each of these solar technologies, 
please see SEIA, ``Solar Technology,'' available at http://
www.seia.org/policy/solar-technology.
---------------------------------------------------------------------------
I. Introduction
    The Solar Energy Industries Association is celebrating its 40th 
year as the national trade association of the U.S. solar energy 
industry, having been established in 1974. Through advocacy and 
education, SEIA and its 1,000 member companies are building a strong 
solar industry to power America. As the voice of the industry, SEIA 
works to make solar a mainstream, significant energy source by 
expanding markets, removing market barriers, strengthening the industry 
and educating the public on the benefits of solar energy.
    Our nation is graced with some of the world's best solar resources, 
in both the quality and quantity of the sunlight we receive as well as 
the proximity of our best solar areas to some of the country's largest 
cities and industries. While excellent opportunities for solar 
deployment exist throughout the country, much of the best solar 
resources are in the Southwest, and on public lands.
    Our exceptionally rich solar resources have much to offer the 
nation, its economy and its environment. Solar can contribute 
substantially to a clean, sustainable domestic energy supply to power 
growth and prosperity for many decades to come. Its prospects for doing 
so depend greatly on whether we properly foster this still young, but 
rapidly maturing, industry. Stable, long-term policies, including tax 
policies as well as improved permitting processes and access to the 
nation's best solar resources, are the keystones to realizing solar's 
promise for the nation.
    S. 279, the Public Land Renewable Energy Development Act of 2013, 
currently before the Senate, demonstrates the remarkable, bipartisan 
recognition of the tremendous value that solar offers the nation and 
the commitment to make its benefits available to all Americans. This 
bill reflects the need to craft policies today that will provide for a 
clean energy future for tomorrow, one in which our energy comes from 
renewable, domestic sources. While we have some concerns with the 
details of this legislation, SEIA looks forward to working with the 
sponsors to address our concerns. We are pleased to have this 
opportunity to address them and other factors needed to maintain the 
U.S. as a worldwide solar leader.
II. The U.S. Solar Industry: Recent Highlights & Future Prospects
    In recent years, America's solar industry has come a long way in 
converting its solar resources to the electrical energy our economy 
needs to thrive. Solar energy is a young industry, but it is growing 
fast. In the first quarter of this year, solar comprised 74% of all of 
the new electric capacity in the U.S.\2\ The vast majority of this new 
capacity, over 75%, came from utility-scale solar power plants, both 
photovoltaic (PV) and concentrating solar power (CSP), which 
collectively added approximately 1,260 MWac to the energy supply.\3\ 
Solar capacity in the U.S. now exceeds 12,820 MWac,\4\ the equivalent 
of approximately six nuclear power plants,\5\ and enough to power 3 
million homes.\6\ The following graph* illustrates solar's remarkable 
growth since 2000, including anticipated installations this year:
---------------------------------------------------------------------------
    \2\ SEIA, ``Solar Energy Facts: Q1 2014'' (June 16, 2014), a copy 
of which is included as Attachment 3.
    \3\ Id.; note that an average 85% conversion factor from DC to AC 
ratings was applied to reported PV statistics (using 2013 estimates 
from the National Renewable Energy Laboratory (NREL); see Ong et al, 
``Land-Use Requirements for Solar Power Plants in the United States'' 
at p. 5 (June 2013)(hereinafter ``NREL Land Use Requirements''), 
available at http://www.nrel.gov/docs/fy13osti/56290.pdf).
    \4\ Id. (see fn.3 re: conversion factor for PV).
    \5\ The Duane Arnold Energy Center, for example, has a capacity of 
1,912 MW; see U.S. Nuclear Regulatory Commission, ``Duane Arnold Energy 
Center,'' available at http://www.nrc.gov/info-finder/reactor/duan.html 

    \6\ SEIA, ``Solar Energy Facts: Q1 2014.''
    * Graph has been retained in committee files.
---------------------------------------------------------------------------
    This phenomenal growth is the result of private investment, 
technological innovation, a maturing industry and smart federal and 
state policies. The federal government has received a strong return on 
its investment of public dollars, with benefits to our economy that far 
exceed their costs.
    Solar is an energy source available in every U.S. Congressional 
district. Although Germany's solar resource is the equivalent of 
Alaska's, which has comparatively less solar potential than most other 
States, Germany continues to lead the world in solar installations-with 
a cumulative 35.7 GWp installed through 2013.\7\ In June 2014, for the 
first time, solar production met over half of Germany's peak demand.\8\ 
The United States, with its far better solar resources, could easily 
become the world leader in solar energy production.
---------------------------------------------------------------------------
    \7\ German Solar Industry Association, ``Statistic Data on the 
German Solar Power (Photovoltaic) Industry'' (April 2014), available at 
http://www.solarwirtschaft.de/fileadmin/media/pdf/2013_2_BSW-
Solar_fact_sheet_solar_power.pdf
    \8\ Germany Trade and Invest, ``German Solar Breaks Three Records 
Within Two Weeks'' (June 18, 2014), available at http://www.gtai.de/
GTAI/Navigation/EN/Meta/press,did=1034630.html
---------------------------------------------------------------------------
    Although solar is growing quickly, the nation has just begun to tap 
into its solar resources. Solar's potential to serve the nation is far 
greater than its remarkable success to date. Solar power transforms the 
endless, free energy we receive from the sun into electric power to 
drive commerce, industry and our way of life, at decreasing costs; 
without air, water or any other emissions; and with minimal 
environmental impact overall. Solar power plants can provide the nation 
with enough domestic, fully secure energy to meet the entire country's 
peak needs, using only a fraction of the solar resources available to 
us. The recently-released annual forecast published by the U.S. Energy 
Information Administration (U.S. EIA) projects that through 2040, 
nearly 40 GW of solar capacity will be installed in this country--
approximately three times the currently installed solar capacity, and 
nearly half of the renewable energy expected to be deployed over the 
same timeframe.\9\ The Bureau of Land Management (BLM) reports that 
designated Solar Energy Zones on federal lands alone could provide 
nearly 24 GW of this domestic, clean power;\10\ federal lands 
potentially available for new zones or individual projects could 
provide much more. Our nation can--and should--depend on its 
exceptional solar resources to power its exceptional future.
---------------------------------------------------------------------------
    \9\ U.S. EIA, ``EIA Projects Modest Needs for New Electric 
Generation Capacity'' (July 16, 2014), available at http://www.eia.gov/
todayinenergy/detail.cfm?id=17131 (summarizing U.S. EIA's projection, 
in its ``Annual Energy Outlook 2014,'' that 39 GWac of the total 83 
GWac of renewables in 2040 would come from solar).
    \10\ BLM, ``Obama Administration Approves Roadmap for Utility-Scale 
Solar Energy Development on Public Lands'' (Oct. 12, 2012), available 
at http://www.blm.gov/wo/st/en/info/newsroom/2012/october/
NR_10_12_2012.html
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    As solar provides increasing amounts of energy to the country, its 
costs are decreasing dramatically. As shown in the charts below, PV 
system prices are generally decreasing in every market segment, year-
over-year.\11\ Solar deployment is paying great dividends to the 
American economy and continues to act as catalyst to drive down future 
costs.
---------------------------------------------------------------------------
    \11\ SEIA, Solar Energy Facts: Q1 2014.
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    The solar industry relies on an increasing labor force and a host 
of other domestic industries throughout the country, all of which are 
sharing in solar's success. With increased solar deployment, both the 
number of direct and indirect jobs, and companies in solar's supply 
chain, have grown as well. For example, the supply chain for utility-
scale solar power plants (see Attachment 2*) stretches across 44 
states, from coast to coast.
---------------------------------------------------------------------------
    * Attachment has been retained in committee files.
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    Solar offers the nation an inexhaustible supply of energy that it 
can rely on to power the future, while protecting the nation's 
environment and conservation values. We are grateful for the 
Committee's support for this emerging, and increasingly important, 
national asset.
III. Solar and Land Use: Accomplishments & Opportunities
    Solar power plants are more efficient than coal in using the 
nation's land, over the plants' lifetimes, when the generation facility 
and all of the land needed for fuel are considered.\12\ In a June 2013 
report, the National Renewable Energy Laboratory (NREL) found that 
current utility-scale solar technology averages 8.9 acres per MW,\13\ 
meaning that the entire U.S. peak demand\14\ could be met with less 
than 0.3% of the nation's land area. America can count on a small 
fraction of its valued land to supply the energy it needs well into the 
future, by using the nation's best solar areas, much of which is 
located on federal lands, and by supporting solar's continuing 
innovation, which is certain to increase its efficiency and reduce its 
land requirements.
---------------------------------------------------------------------------
    \12\ Fthenakis & Kim, ``Land Use and Electricity Generation: A 
Life-Cycle Analysis,'' Renewable and Sustainable Energy Reviews 13, 
1465-1474, at p. 1473 (2009).
    \13\ NREL Land Use Requirements at p.17.
    \14\ Approximately 768 GW; see U.S. EIA, ``Electric Power Annual 
2012'' (Dec. 2013), Table 8.6.A., ``Noncoincident Peak Load by North 
American Electric Reliability Corporation Assessment Area, 2002 - 2012, 
Actual,'' available at http://www.eia.gov/electricity/annual/pdf/
epa.pdf.
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    Depending on the size of the project, the electricity purchaser, 
and the goals of the developer, public lands may be attractive for 
solar power plant siting. The relative complexity of permitting on 
federal lands, and the overall expense of siting on federal lands 
relative to private lands, have often led solar developers elsewhere. 
The vast majority of utility-scale solar projects in the U.S. are built 
on private lands. Currently, only 23 percent of operating utility-scale 
solar capacity is located on public lands. Another 1,018 MW of solar 
power plants are under construction on public lands, comprising 36 
percent of all utility-scale megawatts under construction.
    In October 2012, the Department of the Interior issued the Record 
of Decision for the Solar Programmatic Environmental Impact Statement, 
launching the BLM's Solar Energy Program. The Record of Decision 
designated 17 areas on BLM-managed lands as priorities for solar 
development, totaling approximately 285,000 acres. BLM also designated 
approximately 19 million additional acres that could be made available 
for solar development through ``variance'' applications, or through 
identification of new Solar Energy Zones (two of which have since been 
established), although far more--nearly 80 million acres of public 
land--was excluded from solar development.\15\ The Solar Energy Program 
is intended to provide ``incentives for development within'' the Solar 
Energy Zones, including ``access to existing or planned 
transmission.''\16\
---------------------------------------------------------------------------
    \15\ U.S. Department of the Interior, ``Programmatic Environmental 
Impact Statement for Solar Energy Development in Six Southwestern 
States ,'' available at http://www.doi.gov/news/
loader.cfm?csModule=security/getfile&pageid=321960
    \16\ BLM, ``Fact Sheet: Renewable Energy: Solar'' (updated May 
2014), available at http://www.blm.gov/pgdata/etc/medialib/blm/wo/
MINERALS_REALTY_AND_RESOURCE_PROTECTION_/energy/
solar_and_wind.Par.99571.File.dat/fact_Solar.pdf.
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    At present, the promised incentives remain a work in progress. 
Perhaps the most important step that the Department of the Interior 
could take, working with other federal and state agencies, is to adopt 
the most successful aspect of the ``fast track'' renewable energy 
program applied to renewable energy projects in 2010. That process 
demonstrated federal and state agencies could promptly and efficiently 
assess permit applications when working with clear and agreed-upon 
deadlines, adopting milestone schedules subject to both strategic and 
tactical oversight as well as corrective action when schedules appeared 
to slip, and being held accountable to the highest levels of each 
agency. In the absence of clear deadlines and a high level of 
commitment, the permitting process cannot attain that high level of 
effectiveness.
    Another effort underway, for which BLM is to be commended, is its 
regional mitigation program. Piecemeal mitigation undertaken 
individually by each developer is inefficient, expensive, and less 
likely to be useful to the species intended to benefit from mitigation 
than comprehensive solutions. Initial regional mitigation attempts have 
appeared to be more expensive than other options available to renewable 
energy developers, and may threaten to provide a disincentive, rather 
than an incentive, to develop in Solar Energy Zones. Aggregating 
mitigation requirements should provide economies of scale that decrease 
costs, and care must be taken to ensure that regional mitigation 
efforts serve both species and development needs, perhaps by 
considering use of private land trusts and other innovative means of 
achieving regional mitigation's multiple goals.
    Access to transmission linking solar energy development areas to 
major electricity demand centers continues to be a gating item for 
solar development, whether in or outside of Solar Energy Zones. 
Transmission access to major demand centers is one major factor that 
differentiates the De Tilla Gulch and Los Mogotes East Solar Energy 
Zones in Colorado, where BLM's first attempt to hold competitive 
auctions for solar development failed,\17\ from the Dry Lake Solar 
Energy Zone in Nevada, where BLM's second competitive auction attempt 
appears to have been successful. Other issues undoubtedly factored into 
these starkly different results, such as the demand for additional 
renewable energy in nearby markets, but there can be no doubt that 
successful solar development requires prompt, reliable permitting of 
adequate infrastructure, and cannot be successfully developed without 
it.
---------------------------------------------------------------------------
    \17\ Montgomery, ``BLM Reloading After Colorado Solar Land Auction 
No-Shows,'' Renewable Energy World (Oct. 29, 2013), available at http:/
/www.renewableenergyworld.com/rea/news/article/2013/10/blm-reloading-
after-colorado-solar-land-auction-no-shows.
---------------------------------------------------------------------------
    SEIA remains engaged with the BLM on the development of the Solar 
Energy Program and hopeful that the promised incentives for development 
in Solar Energy Zones--as well as the flexibility to develop in the 
many prime solar resource areas outside of those zones--will become 
permanent features of the program.
IV. Making the Most of the Nation's Exceptional Solar Assets: Policy 
        Priorities
    As with any industry, and particularly an emerging one, long-term 
policy certainty is critical to solar achieving its potential. 
Increased investment, innovation, and deployment are needed for the 
solar industry to continue to reduce costs and attain its potential as 
one of the largest contributors to our nation's energy supply. A steady 
tax policy, providing comparable treatment with other renewable 
technologies and avoiding ``cliff'' dates that stop investment cold 
long before programs actually expire is essential. For this reason, 
SEIA strongly advocates adoption of a ``commence construction'' 
eligibility standard for the solar Investment Tax Credit (ITC).
    The ITC has been a major contributor to the rapid growth of the 
solar industry. In spite of the national economic downturn, solar 
installations have grown by 3000 percent since the ITC took effect in 
2006, a compound annual growth rate of 77 percent. As financers require 
substantial schedule margins to avoid risk of losing tax benefits, 
however, the statutory deadline for the ITC is already casting a shadow 
on solar growth.
    To qualify for either the Section 45 Production Tax Credit (PTC) or 
the Section 48 ITC, all renewable energy facilities had been required 
to be ``placed in service''\18\ before a statutory deadline. The 
American Tax Relief Act of 2012 (ATRA) changed the eligibility standard 
for certain renewable energy technologies\19\ under Section 45 of the 
tax code, allowing projects using those technologies to qualify for the 
PTC, so long as the projects ``commence construction'' prior to the 
expiration of the tax credit. Notably, this legislation did not 
encompass solar energy, fuel cells, combined heat and power, or 
microturbine property. The ``commence construction'' modification 
passed in ATRA should be applied to all Section 45 and 48 clean energy 
incentives, regardless of technology.
---------------------------------------------------------------------------
    \18\ I.e., the facility was required to be complete and capable of 
generating power substantially equal to its nameplate capacity.
    \19\ These technologies include wind; open- and closed-loop 
biomass; geothermal; small irrigation power; municipal solid waste; 
hydropower; marine and hydrokinetic energy.
---------------------------------------------------------------------------
    Ensuring a consistent ``commence construction'' trigger for clean 
energy tax incentives is especially urgent for utility-scale solar 
projects. Analysis of the dozen largest solar projects expected to be 
online by 2016 reveals the median time from the early steps of 
development to commencement of construction is just over three years, 
and the median time from development to commercial operation is nearly 
six years. A ``commence construction'' standard would ease timing 
pressures on developers by two years or more, pressures that are 
building now as the ITC deadline looms at the end of 2016. This tax 
policy improvement would certainly drive the installation of an 
additional solar capacity that might otherwise not occur.
The Public Land Renewable Energy Development Act of 2013
    Stable, appropriate policies encouraging solar deployment on 
federal lands, such as aspects of the Public Land Renewable Energy 
Development Act of 2013, if properly implemented, the BLM's Solar 
Energy Program, are also needed to ensure the nation is making the most 
of its solar prospects. The commitments and compromises embodied in the 
Solar Programmatic Environmental Impact Statement process, including 
enhancing project development prospects in Solar Energy Zones as well 
as access to other appropriate development areas (referred to as 
``variance'' lands), must be carried through if the nation is to 
receive the full benefit of its outstanding public solar resources. 
Permitting improvements for both solar projects and the transmission 
needed to bring its power to American homes and businesses must be 
institutionalized if we are to realize solar's potential on public 
lands.
    First, we support the following elements of S. 279:

   Revenue sharing with states and local government.--While 
        solar development provides many net benefits to the communities 
        hosting solar plants, and provides a substantial net 
        environmental benefit overall, no development is without any 
        impact. We agree that a portion of the revenues from solar 
        development on federal lands should be directed to the states 
        and local communities hosting solar power plants, which will 
        help ensure that all fully share in the benefits solar 
        development brings to the nation. We applaud efforts to fund 
        increasing conservation and recreation needs on federal lands, 
        but caution against burdening renewable energy with the costs 
        of doing so, particularly in isolation. To the extent that 
        monies from the solar industry are paid into a conservation 
        fund, care must be taken to account for those contributions 
        when determining the mitigation requirements for solar power 
        plants.
   Improved Permitting Processes.--With appropriate funding and 
        prioritization, the ``fast track'' projects demonstrated that 
        permitting processes can be timely and effective. High-level 
        interagency coordination across federal and state governments, 
        milestone schedules with clear deadlines, corrective action 
        when necessary, high-level accountability and transparency are 
        all necessary elements to permitting success. The focused 
        funding that S. 279 would potentially make available to 
        institutionalize improved permitting processes is not only 
        appropriate; it is a good investment for improved returns for 
        the public. S. 1397, the Federal Permitting Improvement Act of 
        2013, while not the subject of today's hearing, seeks to 
        achieve these same goals of transparent milestones, clear 
        deadlines, and agency accountability.

    We remain concerned about the certain elements of the Public Lands 
Renewable Energy Development Act of 2013, including the following 
aspects, and look forward to working with the sponsors to tailor these 
provisions to better ensure solar benefits to the nation:

   Competitive Bidding is Counterproductive for an Emerging 
        Industry.--Competitive bidding works best with fully mature 
        industries, where multiple well-established companies can drive 
        costs down by making existing practices more efficient, 
        allowing some of the benefits of those efficiencies to be 
        shared with the landowners-in this case, the federal 
        government. Competitive bidding is not well-suited to an early-
        stage industry like utility-scale solar, as it encourages 
        incumbent technologies and speculators and discourages the 
        innovation that could ultimately reduce costs for energy 
        customers, increase solar production from federal lands while 
        decreasing land requirements, and provide far greater benefit 
        to the public than could be realized by competitive bidding 
        revenues. Competitive bidding would most likely increase the 
        costs of developing utility-scale solar projects on public 
        lands, and thereby decrease opportunities for innovation that 
        will help make the most of the public lands that are used for 
        renewable energy. Combined with high rental rates, bonds, and 
        other costs, some developers that might have pursued projects 
        on public lands will pursue projects on private lands or not at 
        all.

    Recent experience with competitive bidding could not be more 
        varied, with one experiment in Colorado yielding no bidders and 
        a second, in Nevada, yielding apparent success. If competitive 
        bidding is to be pursued, the pilot project approach in the 
        bill is essential to determine whether it can truly work on a 
        sustainable basis, and if so, what factors lead to success or 
        failure. It is essential that any pilot program is not overly 
        prescriptive, allowing the BLM the flexibility to build on 
        success and eliminate factors that deter from it, based on its 
        own analysis as well as feedback from the solar industry. Most 
        importantly, BLM should allow itself the flexibility to 
        continue its current solar permitting regime while any 
        competitive bidding program is evaluated. If the pilot project 
        is considered unsuccessful, BLM should retain the ability to 
        reject the use of competitive bidding and to rely on technical 
        and financial criteria to decide among competing applications.
   Readjustment of Lease Terms Introduces Unfinanceable Risk.--
        The proposal to open lease terms for renegotiation 15 years 
        into a 25-year lease is simply not financeable. Financers need 
        certainty of sufficient revenues throughout the term of debt 
        financing to ensure repayment. The potential that increased 
        lease costs could eat into revenues by unknown amounts would 
        create unconstrained risk. To ensure financeability of solar 
        power plants and avoid unnecessary risk, which increases costs 
        to electricity consumers, lease terms should remain consistent 
        for the duration of the lease (typically 30 years for a solar 
        right-of-way, which is commensurate with long-duration power 
        purchase agreements).
   Royalties payments.--No royalty payments should be required, 
        regardless of whether competitive bidding is adopted. Solar 
        energy generation does not result in the depletion of the 
        resource, which is the economic rationale for imposing a 
        royalty. Increased solar production from federal lands should 
        be incentivized, not penalized. Royalties charged on an output 
        basis, particularly using a flat percentage, decreases the 
        incremental value to solar developers of maximizing solar 
        generation per acre. Existing rental values for federal lands 
        have already contributed to make those lands less favorable 
        than private lands, and switching to a royalty system could 
        further reduce solar production from federal lands and 
        ultimately provide less, not more, solar revenue for the 
        federal government.
IV. Conclusion
    Thank you once again for inviting SEIA to submit this testimony. 
SEIA is grateful for the tremendous support that solar has across the 
nation, which is reflected in the great interest and extensive efforts 
of this Committee. We look forward to working with the Committee to 
establish the long-term, stable policies needed to make the most of 
America's exceptional solar assets, delivering solar's benefits to the 
nation in the form of large quantities of cost-effective, clean and 
sustainable power, growing numbers of jobs throughout the country, and 
outstanding economic opportunity.

    The Chair. Thank you very much.
    Mr. Nichols.

STATEMENT OF SCOTT NICHOLS, PERMITTING AND LANDS MANAGER, U.S. 
                        GEOTHERMAL, INC.

    Mr. Nichols. Thank you.
    As I have watched this time wind down my mouth has gotten 
drier, so pardon me if I trip over my tongue.
    Madame Chair, Senator Murkowski and members of the 
committee, first I want to thank you for the knowledge that has 
been demonstrated by your questions this morning. I am 
absolutely amazed at your in depth knowledge of the National 
Environmental Policy Act and the implementation of the rules 
that go along with our natural resource development.
    That said, I am the Manager of Permitting and Lands for 
U.S. Geothermal. We're a publicly traded, geothermal power 
company based in Boise, Idaho. We have operations in 3 States, 
actually 4 States now. We're working on an operation overseas. 
I've been with the company the last 6 and a half years.
    Prior to that I spent over 20 years working cooperatively 
with the BLM and Forest Service on streamlining permitting at 
the State level working with staff at both Forest Service and 
BLM to overlay and implement processes that we felt could 
shorten up these timeframes and provide the best product 
available when I was working as a regulator.
    What I can tell you is that both of the bills you have here 
today are outstanding bills, I think. We support those bills. 
But I wanted to provide a perspective from the logjam side of 
things and from the renewable energy perspective.
    It's not simply money that changes the logjam in 
permitting. It's also the quality of the decisions that are 
being made. After spending so many years developing processes 
what I found is it is not the process that's makes a better 
decision. It's more specific requirements and the ability to 
make those decisions that gives our staff the confidence that 
they can move forward with the decisions they make.
    Because right now our staff have lost the technical 
capability to implement the knowledge they have on the ground. 
I talked with my friends in the BLM and in the Forest Service 
day in and day out. I'd like to use a commissioner from my 
county as a fine example.
    She has many, many years of on the ground, day to day 
experience with the resources in her county. Nobody can replace 
that. So when we ask biologists to come in and manage wild 
horses or geothermal resources, who has never been on the 
ground, they have no history, they have no background. They're 
relegated to checking a NEPA box to ensure that that box has 
been checked and that they are free of liability under a 
lawsuit. That's all it becomes.
    If we're going to continue on that path we no longer need 
people that are experts in the resource to be able to manage 
the resource. We need people that can check boxes 
administrators. I don't think that was the intent of the 
National Environmental Policy Act. It was not the intent of 
Congress or the House. It's our intent to make good decisions 
on the ground, but we can't make those good decisions without 
empowering those individuals to do that.
    I've got a minute and 52 seconds and I want to give you an 
example of the amount of work that goes into the NEPA process 
for geothermal development.
    From the solar industry it sounds like you're working on a 
programmatic environmental impact statement. The geothermal 
industry worked on a programmatic environmental impact 
statement with the BLM. That programmatic EIS identified the 
lands that were suitable for development. Subsequent to that 
every district in the Western United States identified the 
lands that were also suitable for geothermal development. Each 
of those industries will do the same thing.
    Even after two environmental impact statements that are 
required under Federal regulation to find that there is no 
opportunity for undue and unnecessary degradation, we still 
find ourselves bound up in environmental assessments on 
projects for drilling on a pad that is literally in my 
discussions this morning with my staff in Nevada, not much 
bigger than this office, on an existing area where we are 
currently producing geothermal resources.
    So with that background I want to tell you that there are 
extensive rules in place, extensive rules in place, to support 
an opportunity for categorical exclusions, streamlining, the 
ability to make better decisions and empower our BLM staff.
    Those are included in the CEQ regulations themselves, 
40CFR1500.5.
    The Department of Interior's Federal regulations, 43CFR3201 
which I just cited with regard to undue and unnecessary 
degradation.
    The Environmental Policy Act of 2005 provides categorical 
exclusions for oil and gas that have not even been considered 
for geothermal resources.
    BLM's NEPA handbook, 1790-1, provides the categorical 
exclusions for the forestry industry, the realty industry, for 
mining, should also be applied to other areas including 
geothermal. Yet we have staff that are unable to administer 
those CXs across programs because of administrative concern.
    That said, we are working with the Department of Energy on 
a project in the Santa Medio desert. The Department of Energy 
recognizes that drilling should be allowed to be conducted 
within a developed geothermal field. So the Department of 
Energy is in a situation where they're ready to approve a drill 
pad, less than one acre in size, that includes no new road 
building. Yet the BLM has spent over 180 days and $60,000 and 
more of our company's consulting funds to be able to determine 
whether we should be able to put a hole in the ground in an 
existing geothermal producing field.
    That said, I want to summarize by saying that streamlined, 
measureable, performance based requirements is what the 
industry needs.
    Again, I want to go back to the opening statement. It's not 
better process. It's the ability to make better decisions with 
the professional staff that we have on the ground. I thank you 
for your time and I stand for any comments.
    [The prepared statement of Mr. Nichols follows:]
  Prepared Statement of Scott Nichols, Manager of Permitting & Lands, 
              U.S. Geothermal Inc., on S. 279 and S. 2440
    Mr. Chairman and members of the Subcommittee, my name is Scott 
Nichols and I am here today representing U.S. Geothermal Inc. U.S. 
Geothermal is a publicly traded company that explores for, develops, 
builds and operates utility scale geothermal power plants. We are a 
member of the board of directors of the Geothermal Energy Association, 
a trade association composed of U.S. companies who support the expanded 
use of geothermal energy and who are developing geothermal resources 
worldwide for electrical power generation and direct-heat uses. The 
membership of the Geothermal Energy Association includes large 
utilities and Independent Power Producers like U.S. Geothermal, 
equipment suppliers, drilling companies, technical and financial 
service providers. These companies are primarily focused on the 
exploration, development and generation of clean, base load electricity 
from our country's geothermal resource base.
    Professionally, I have 28 years of environmental management 
experience at the state management level, as a consultant and as a 
corporate environmental and regulatory compliance manager.
    My comments are focused on the BLM and USFS (Agencies's) evolving 
approach in administering the National Environmental Policy Act (NEPA), 
the geothermal industry's evolving approach to environmental 
management, and support for action requiring agencies to rigidly 
defined NEPA implementation and federal regulations.
    The NEPA was enacted and implemented as a planning and decision 
making tool to involve the public in planning and decisions regarding 
major federal actions significantly affecting the quality of the human 
environment.\1\
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    \1\ 42 USC Sec.  4331 SEC. 102
---------------------------------------------------------------------------
    The environmental protection industry learned to utilize the 
judicial system to expand the scope of the NEPA to include any federal 
action and decision. At this time all industries and proposals driven 
by the NEPA process not environmental performance. More paperwork is 
generated by staff, checklists are completed, and consultants are hired 
by proponents. Better science is not implemented, requirements are not 
streamlined, and state efforts are duplicated. Experienced agency field 
staff with local knowledge and understanding of natural resources are 
required to document NEPA compliance. Their expertise is replaced by 
contracted consultants paid for by industry. Agency resources are 
overloaded by misused environmental policy and process requirements, 
not by the volume of new industry proposals. This position is supported 
by the work of state engineers and environmental regulators who can 
respond to a dynamic development process.
    The geothermal industry is using environmental baseline evaluations 
proactively to determine whether an area is suitable for development 
and to avoid resource conflicts. Unfortunately proactive environmental 
evaluations and avoidance policy cannot circumvent processes mandated 
by NEPA. Support for specific exclusions and more defined regulations 
is found under two existing sections of the BLM's CFR's. 43CFR 
Sec. 3201.11 requires that the BLM will not issue leases for Lands 
where the Secretary has determined that issuing the lease would cause 
unnecessary or undue degradation of public lands and resources. 43CFR 
Sec. 3261.12 requires an applicant's operating plan to include the 
items specified and ``you must submit any other information that BLM 
may require.''
    Our overwhelming experience is that management decisions are now 
driven by lawsuits, attorneys and the Office of General Counsel 
combined with a need for more data and longer evaluation periods. 
Documentation has become more important than good science. 
Environmental protection along with healthy plant and animal 
communities, clean water and air are the basis of our need for 
renewable energy. In order to accomplish that goal in a reasonable time 
and under reasonable costs it is incumbent upon our elected leadership 
to mandate the regulatory changes that will to provide flexibility for 
renewable energy developments that also provide streamlined, 
measureable, performance based requirements for out federal resource 
managers to work within.

    The Chair. Thank you all very much for that excellent 
testimony.
    Let me begin with a question to each of you. Actually Mr. 
Nichols got to this question in his testimony, but I want to go 
ahead and ask it anyway.
    What, in addition to increased staff, is necessary to make 
the process move more smoothly and comprehensively? Not cutting 
corners, just move more smoothly.
    Is it just an increased staff or is it also some of the 
things that Mr. Nichols said directly and alluded to in his 
testimony?
    How would you answer that question, Mr. Kidwell?
    Mr. Kidwell. I couldn't agree more on a lot of things that 
Commissioner said, I believe it's Commissioner. I apologize. A 
lot of the streamlining ideas he had are directly on point and 
would apply to the oil and gas side too.
    In speaking directly, what I can speak to is the Carlsbad 
field office. What we've seen there as where we've been able to 
have better process at times is through communication and 
through working with a State director, who communicates that 
we're not the bad guy, that we're in this to work together and 
that going back to something you brought up earlier in your 
questioning is guiding us and letting us know what, on these 
permits, on these APDs, you know, we drill a lot of Federal 
wells out there. We feel like we've got the process down pretty 
good.
    So those types of things, more guidance and that if there's 
something specific, but I do think it's important the 
communication that we have and the idea that comes from a State 
director that we're working together in this and we're not a 
bad actor, a bad person.
    The Chair. What would you do in addition to just increase 
personnel?
    Ms. Sgamma. I think political will. You've got a situation 
where NEPA is being held up. There's not a will to move that 
through.
    You have a situation where field offices can add 
requirement on top of requirement on APDs so that packet never 
gets completed.
    You've got a situation where leasing is often just deferred 
indefinitely because a field manager or the State office 
doesn't want to face controversy. They know they're not going 
to get support from Washington.
    So I think political will is big element.
    The Chair. Commissioner.
    Mr. Christensen. Madame Chair, I would like to bring two 
things to point.
    One, as I noted earlier, we are down from a 3,000 well 
backlog that we saw in 2003. We're now at 156 conventional and 
59 CBM permits.
    The thing I'd like to add though is that I think some of it 
has to do with terminology. So BLM tells us that the time that 
they use is 9 days. Nine days is the time it takes to turn 
around an APD. That is specifically timed once the APD is 
considered complete.
    What we are told, though, was from notice of survey to 
completion it's 300 days. That's for our local Buffalo field 
office.
    The Chair. Right. This committee, look, I went through this 
nightmare after the Mercando spill so I am not an expert yet. 
But I am extremely knowledgeable about the different 
characterizations of when a permit is pending, when it starts, 
etcetera.
    We're going to put it on a sheet of paper from the time 
somebody expresses an interest in drilling until the end. We're 
going to see what that backlog actually is. We're not going to 
be confused with just different terminologies. That's what 
happened to us in the Gulf of Mexico.
    So I have some sympathy with this. We're going to work with 
the agency very carefully because waiting a couple of years is 
not--capital can go anywhere these days. It will. It will go to 
other counties. It will go to other places. It will go to other 
countries. It is not going to wait for inefficient government 
processes.
    So I'm, you know, not coming to any hard, you know, final 
here. But thank you, yes. We're going to lay that process out 
in writing.
    But go ahead. I didn't want to interrupt you. Go ahead and 
finish your thought.
    Mr. Christensen. I think some of that, as you were saying 
too, as was mentioned beside me, is political will. Where we 
are we have a very good relationship with the Buffalo field 
office. But unfortunately they answer to people up above them. 
They also receive feedback from Washington.
    The thing I would add as well is that Campbell County has 
been fortunate now. But if you would have looked to Park County 
which is where Cody, Wyoming is, they've had APDs deferred for 
almost 5 years. Some of that's been waiting on a RMP revision. 
But unfortunately what happens when you have 5 years of 
deferrals is the capital has left Park County.
    The Chair. Yes, absolutely.
    Mr. Christensen. Yes.
    The Chair. The people just cannot wait that long.
    Mr. Christensen. They have noticed a decrease in 
assessment.
    The Chair. Let's go, real quick.
    What else, in addition to staffing, what would you say? In 
addition to more personnel, what would be needed?
    Ms. Wichman. Political capital was the nice or the 
political will to make something happen was a nice way to put 
it. But it's, from my perspective and what I've seen, is that 
it's much easier on in our local field offices for them to put 
off making decisions by stating something is incomplete simply 
because they have a--they're managing the resource for the 
judicial system. They're not managing the resource for the sake 
of the resource or the folks who live there.
    As a very brief example, we filed for a permit on a road 
that had been maintained and managed by the county for 40 
years. We had to pay for and wait for the archeological survey.
    The Chair. OK.
    Next, real quickly then I've got to turn to my colleagues.
    Mr. Haubenstock. Sure.
    Chair Landrieu, I think you're on exactly the right track 
when you talked about laying things out on a sheet of paper.
    If we look at what's worked in the past you can't manage 
what you don't measure. What has really worked well is putting 
things on a dashboard.
    Identifying what the deadlines are.
    Identifying milestone schedules to get there.
    Having corrective action when things fall off.
    Having the transparency and accountability that a dashboard 
provides.
    Another idea is to have an ombudsperson. That has worked 
very, very well in the past, someone who can see through all 
the different issues that are coming up and guide developers 
through to success.
    The Chair. Thank you.
    Mr. Nichols, if you don't mind holding because your 
testimony was basically an answer to that question. I'm going 
to turn to Senator Murkowski.
    Then I have one more question about revenue sharing to the 
local counties, but let me recognize my Ranking Member.
    Senator Murkowski. Thank you, Madame Chairman.
    I think the comments that we've received from you all have 
been very helpful because I think what we're trying to do here 
is not just vent and say we've got a problem. But what are some 
of the potential solutions here. I think we've gotten some good 
proposals.
    Mr. Nichols, you talked about the quality of decisions. But 
I think we also recognize that a lot of times that means you've 
got to have quality people that actually know what it is that 
they are processing, that have some familiarity, as you used in 
your example.
    I think sometimes within our agencies that presents a 
challenge because the real knowledgeable folks get scooped up 
by industry. They get scooped up by others who are able to pay 
them more. Mr. Concho probably, or excuse me, Mr. Kidwell 
probably has some of them working for him at Concho there.
    But the issue that you raise, just briefly here, Mr. 
Haubenstock, about the accountability because I think you 
suggested that sometimes when you don't have the political will 
it's just easier to defer, delay. If there's no accountability 
for a timely decision, if you can just continue, kind of, 
putting it off, putting it off. Sometimes folks give up.
    That's certainly what we've seen in Alaska. After a while 
it seems like the agency is just trying to wait you out or kind 
of a slow bleed. Eventually you give up. That's not the goal 
here.
    Mr. Kidwell, I wanted to ask you with your experience there 
in New Mexico. I think you indicated that in terms of the 
permits and I believe this was on the Federal lands back in 
2011 you said 80 days. Now we're up to 133 days. Is that what I 
understood correctly?
    Mr. Kidwell. That's correct, Senator. 133 is our average. 
That's a Concho specific average of 133 days.
    Senator Murkowski. OK.
    Mr. Kidwell. Up from 80 days in 2011.
    Senator Murkowski. How does that compare with the 
timeliness of getting a lease or a permit from the State of New 
Mexico?
    Mr. Kidwell. With regard to the State of New Mexico we're 
able to get a permit within anywhere from 3 days to 2 weeks at 
a far end.
    Senator Murkowski. So 3 days to 2 weeks verses 133 days?
    Tell me why, if this is all in the Permian Basin there in 
New Mexico and you've indicated it's a pretty prolific field 
and the resource is great there.
    Tell me why you would even choose to pursue leasing on 
Federal lands, on our public lands, when you can move to 
exploration production and making money on State lands within a 
couple weeks?
    Mr. Kidwell. Yes.
    No, that's a great question, Senator. Obviously, we do. We 
have a lot of State lands also.
    But as you look at the Permian Basin what we're dealing 
with there is two counties, Eddy and Lee County, New Mexico, is 
where the Permian Basin, essentially is. So you've got a lot of 
Federal lands there.
    Senator Murkowski. Alright.
    Mr. Kidwell. It's such a productive basin, obviously, a lot 
of this resource is covered by Federal BLM lands. So as we look 
to develop that resource we're, kind of, you know, going to 
have to develop BLM lands.
    Obviously if you're sitting there looking at it and a lot 
of factors going into make a decision as to whether you're 
going to drill a well. The timing factor is certainly is one of 
those. I mean if I could go here, if I've got an opportunity to 
drill two sections over in 2 weeks, in 3 weeks, you know, in a 
much faster timeframe, obviously that's going to be something 
that's appealing.
    But because of the amount of resource potential that we see 
and have experienced and is there, we, kind of, deal with what 
we have to deal with. That's why I think it's, this bill, is so 
important that we bring people in there. It's a focused bill, 
as you know, to bring specific people and address this specific 
issue of bringing those time periods down.
    So we can go develop the resource that's----
    Senator Murkowski. Would you all agree that the discussion 
that we were having with Director Kornze earlier about what 
we're seeing in terms of increases or decreased productivity on 
our public lands? Would you all concur that a part of what 
we're seeing with the decline is this disparity with how 
quickly you can move on State and private lands verses the 
delays on Federal lands?
    Ms. Sgamma. Absolutely, yes.
    Our members will, you know, go to the State and private 
lands and only to Federal lands when they have to you when, you 
know, it's just part of the lease hold. You can't avoid it in 
the West.
    Senator Murkowski. Mr. Nichols.
    Mr. Nichols. With geothermal operations also we selectively 
target private lands and that BLM lands are a last resort.
    Senator Murkowski. Last resort.
    Mr. Haubenstock.
    Mr. Haubenstock. For solar as well what we have seen is 
that solar developers will go to private land instead of public 
land because it is much more complex, timely and expensive to 
go on Federal land. There's a promise of improvements and we're 
looking forward to seeing those improvements made concrete.
    Senator Murkowski. We'd like to make some improvements 
here.
    Thank you.
    The Chair. Senator Barrasso, thank you for being a part of 
this important hearing.
    Senator Barrasso. Thank you, Madame Chairman.
    I appreciate it.
    Commissioner Christensen, in your testimony you said that 
delays in the timely permitting of oil and gas wells makes 
States with Federal lands less attractive for development. You 
explained the energy companies within our State and in your 
county, they compete with capital within other divisions across 
the United States. You go on to say that energy companies know 
that if they can't get a timely permit in Wyoming they're just 
going to go someplace else.
    For this reason you say that timely approval is critical to 
the long term health and prosperity of the citizens of our 
communities in terms of the impacts.
    So I just wanted to visit with you a little bit as a County 
Commissioner and ask if you'd maybe discuss in greater detail 
how these delays in approving the oil and gas permits, how it 
impacts communities with significant amounts of Federal land?
    Mr. Christensen. Thank you, Senator Barrasso.
    It's actually, it's a multi tiered piece. To provide a 
little bit of background on the way that revenues work in 
Campbell County, for example.
    The county collects ad valorem taxes on natural resource 
production. Unfortunately those revenues come in 16 months 
after the production itself happens. So if you're in a county 
you're seeing the impacts of the production up front before 
you're seeing the revenue.
    You have to make decisions related to infrastructure 
improvements, roadways, hospital expansions, schools, any 
number of other things, almost on a hunch, that these permits 
are going to continue to be turned around quickly and that 
you're going to continue to see revenue.
    It's the same thing for the companies that operate where we 
do. Unlike much of Wyoming, Campbell County is fortunate 
because 92 percent or a little over 80 percent of our surface 
is private. But because of the split estate issues within 
Campbell County, you see over 90 percent of the mineral estate 
being BLM.
    So what happens is is through control of that mineral 
estate BLM drives the issues on the surface. It adds to the 
complexity and adds to the time.
    When we look at the issues for the community as well what 
you see when you have this kind of development is you have 
people who come in, they move. If you want to make your 
community attractive and basically advance it from, like, a 
commuter community, you have to invest in quality of life.
    The only way to invest in quality of life is to know that 
those revenues are going to be there long term.
    Senator Barrasso. So it's a budget impact in terms of 
roads, hospitals, schools. It has a man power impact in terms 
of from a community level, law enforcement, EMTs, fire fighters 
and also a work force issue related to the companies and their 
hiring patterns and housing, I'd imagine.
    Mr. Christensen. I would agree.
    One of the things that we're actually fortunate, we're 
undergoing a bit of an oil boom right now. Fortunately the 
community is in a better position to handle it than it was 
during the methane gas.
    When methane gas happened Gillette's town that went from 
about 25,000 people to 35,000 people in 4 years and you have 
huge growth. You have huge infrastructure needs. Like I said, 
it takes a while for that revenue to catch up with the 
infrastructure demand.
    Unfortunately the methane gas fell off as we see the shale 
plays and the natural gas development. Methane isn't cost 
effective to produce.
    The thing that is helping the community this time around is 
the fact that a lot of those workers who were there for methane 
gas are going back to work for oil and gas. Without that 
certainty it makes it difficult for those companies and for 
those workers to have a good, long term, sustained presence in 
your community.
    Senator Barrasso. OK.
    Ms. Sgamma, in your testimony you encouraged the committee 
to act quickly on S. 2440. As you said, your organization has 
heard reports from busy BLM field offices that they're already 
starting to feel a pinch of the impending September 2015 
deadline. I think you say that the field managers can't hire 
replacements to handle the workloads because they don't know 
whether the funding for those hires will continue beyond that 
2015 date.
    Will you just expand a little bit upon why it's important 
that Congress reauthorize the permitting program this year?
    Ms. Sgamma. I think it's for that reason is that, you know, 
it might be a deadline in 2015, but it's causing effects today 
in 2014. If that funding, you know, if there's no certainty 
that that funding is going to come in then I don't think we're 
going to see those BLM offices staff up.
    Senator Barrasso. I think you also said that targeting the 
funds more directly to the BLM field offices is important to 
your alliance members, making sure the money actually goes 
where it's supposed to go. Is it fair to say your members 
wouldn't be supporting any kind of higher permit fees if the 
bill directed revenues, say, just to the Department of the 
Treasury?
    Ms. Sgamma. Absolutely correct, yes.
    Senator Barrasso. Thank you, Madame Chairman.
    The Chair. Thank you.
    Let me just wrap up with this question to Campbell County.
    How do you share in revenues? We understand how Wyoming 
happily shares its partnership with the Federal Government. 
Many of our Western States have about a 50/50 split. That's not 
the same situation, sadly, for coastal States which we're 
trying to rectify.
    But how does Wyoming share with Campbell County? Do you all 
have a split of revenues at the County level?
    Mr. Christensen. We're fortunate in--and I'll honestly tell 
you I've been looking at other States. I think the Wyoming 
model, we're very fortunate in the way that it works.
    The State assesses a severance tax when the mineral is 
extracted. That's paid monthly.
    The County then assesses an ad valorem tax with the 
property taxes the following year.
    That's where I say in that for us, the revenue may be up to 
16 months delayed.
    In that particular case, we assess at a mill against it at 
market value and----
    The Chair. OK, so you all assess an additional ad valorem 
tax. You don't share directly in the State of Wyoming's 
revenue.
    In other words they don't send back to the counties a 
portion of the severance royalties, etcetera, etcetera?
    Mr. Christensen. They do not directly.
    The Chair. Directly.
    But you get the ad valorem increase?
    Mr. Christensen. We do.
    Now the one thing that does happen is the Governor and the 
legislature does do direct distribution. Those are moneys from 
the general fund which go directly to county and municipal 
government.
    The other thing is that----
    The Chair. Is it based on production or is it a formula 
that drives it otherwise?
    Mr. Christensen. It's actually, it's based on politics.
    [Laughter.]
    Mr. Christensen. So----
    The Chair. Which we are familiar with that on this 
committee. But----
    Mr. Christensen. Which means that there is a complicated 
formula based on population, an inverse of assessed valuation 
and then a number of other things to offset.
    The Chair. But it's not directly related to production?
    Mr. Christensen. No.
    The one exception is there is a program through the slip 
board which will approve funds that is directly for energy 
impacted communities. That is something that the State has put 
in place knowing that these communities have major impacts and 
they will help you, basically, get started until you start to 
see those revenues come in.
    The Chair. OK.
    I think this has been an excellent panel. We've exceeded 
our time slightly, but with our recess I think we're right on 
time.
    But let me just say that the Ranking Member and I are very 
committed to increasing the production of all the above, solar, 
wind, geothermal and traditional production on Federal land and 
balance it with the environmental needs, generating some 
additional funding for the Federal Government, but also making 
sure that the counties that serve as hosts for the productions 
are fairly treated, not only by the Federal Government but I 
think, also by their host States.
    So we, you know, if somewhat limited reach as between the 
States and the counties. But we can have some influence. I 
think it is important for the government to understand that the 
revenues that are generated are being generated at very local 
levels and they need schools, hospitals, sewer systems, roads.
    Senator Murkowski struggles with that in Alaska with a 
population that's sometimes sparse. We struggle with that in 
Louisiana along our coast as well.
    So your testimony has really been very timely. Thank you 
all very much.
    The record will stay open for 2 weeks. Additional testimony 
is welcome.
    We do look forward to moving these bills forward as soon as 
we can.
    Thank you all very much.
    Meeting adjourned.
    
    [Whereupon, at 4:45 p.m. the hearing was adjourned.]
    
                               APPENDIXES

                              ----------                              


                               Appendix I

                   Responses to Additional Questions

                              ----------                              

                                   Western Energy Alliance,
                                       Denver, CO, August 18, 2014.
Hon. Mary Landrieu,
U.S. Senate Committee on Energy and Natural Resources, Washington, DC.
    Dear Chairman Landrieu: Thank you for the opportunity to appear 
before your committee for the hearing to understand the obstacles to 
permitting energy projects on federal lands and S.2440, the BLM Permit 
Processing Improvement Act of 2014.
    I also appreciate the chance to respond to questions; my answers to 
questions from committee members are attached. Given the confusion on 
the oil and natural gas production numbers discussed during the hearing 
and permit processing times, I would ask that the attached documents 
are included in the record for the hearing:

   The Congressional Research Service report U.S. Crude Oil and 
        Natural Gas Production in Federal and Non-Federal Areas. The 
        report documents the federal production numbers, but also puts 
        those in context with non-federal production. The report shows 
        a declining federal percentage.
   An analysis from Norton Rose Fulbright of BLM permitting 
        times. Using data obtained from a FOIA request, Norton attorney 
        Poe Leggette describes how BLM tracking of permitting times is 
        wildly inconsistent, rendering BLM assessments of how long it 
        takes to process a permit inaccurate: ``By exaggerating 
        `Industry' days, BLM deflects responsibility for slow 
        processing.''

    Thank you again for including Western Energy Alliance in the 
hearing, and for the ability to provide follow-up information.
            Sincerely,
                                        Kathleen M. Sgamma,
                     Vice President of Government & Public Affairs.
[Enclosure.]
              Response to Question From Senator Murkowski
    Question 1. Ms. Sgamma, you said something in your testimony that 
got my attention. You testified that S. 2440 is only a partial solution 
to addressing the barriers to production on federal lands. In your 
view, what are other steps we can take to enhance production on federal 
lands?
    Answer. S.2440 is only a partial solution because it only addresses 
one stage of the three stage onshore process. Looking very broadly at 
the steps required to develop oil and natural gas on federal lands, 
there are three main processes: leasing, environmental analysis under 
the National Environmental Policy Act (NEPA), and permitting. There are 
currently many impediments and bureaucratic inefficiencies in all three 
main processes, while S. 2440 addresses only a subset of one phase of 
the federal onshore process. See the attached chart which shows the 
length of time it can take from leasing through to production.
                            phase 1 leasing
    Currently it can take many years for leases to become available. An 
operator starts by doing some exploratory work, determines what areas 
may be prospective for oil and/or natural gas, and attempts to put a 
leasehold together, which often consists of a mixture of private, state 
and federal lands. After the company submits a nomination for a federal 
parcel, it may wait years before that land is offered at a lease sale. 
Meanwhile, they develop on adjacent private and state lands, and the 
American taxpayer loses revenue from federal royalties. Other 
indications of leasing delays include:

   Since the leasing policy changes in 2010, leasing times have 
        lengthened significantly. Wyoming reports for example that the 
        time from nomination to lease sale extended from three to six 
        months to 12 to 18 months after the 2010 policy changes.
   2013 marked a new low for BLM. The 1.17 million acres leases 
        issued that year were the lowest on record. The record dates 
        back to 1988.
   BLM Director Neil Kornze claimed in his testimony that 
        because industry did not bid on all the acreage it offered, 
        then BLM is ahead of industry demand. Rather, this may indicate 
        that BLM is offering leases that companies are either no longer 
        interested in after waiting for years, or the leases may have 
        such onerous restrictions placed on them that companies cannot 
        economically develop those leases.
   Also, the fact that some acreage is offered but not bid on 
        does not erase the fact that there are millions of acres that 
        companies are interested in that is not offered for sale. For 
        example, in the West in 2013, 2,661 parcels were nominated by 
        companies, but 1,416 (53%) were deferred. Once a parcel is 
        deferred it is generally deferred indefinitely, often for 
        years.
                         phase 2 nepa analysis
    In the NEPA phase, inefficiencies and bureaucratic delays are also 
readily apparent. Since 2009, this Administration has approved only 
three major oil and natural gas projects on federal lands: the West 
Tavaputs, Greater Natural Buttes and Gasco Natural Gas projects. 
Western Energy Alliance tracks the outstanding major project NEPA that 
is awaiting government action, using a study from SWCA Environmental 
Consultants. Outstanding NEPA analyses of over three years duration 
represent 2,055 potential wells annually which could provide nearly 
79,000 jobs and $17.8 billion in annual economic impact. Some of the 
projects have been held up in the NEPA process for over eight years.
    Meanwhile, several other major projects are indefinitely stalled, 
and even minor Environmental Assessments for small numbers of wells can 
take many years. Small companies often wait four years for NEPA 
approval of small projects, often of just ten wells.
                           phase 3 permitting
    After the NEPA documentation is approved, a company can finally 
submit an Application for Permit to Drill (APD). S.2440 provides 
funding for this phase, but does not take care of problems inherent in 
the APD phase. For example, despite statutes requiring permits to be 
handled within thirty days, BLM claims to take 194 days on average to 
process a permit. For various reasons, we believe that number is not 
accurate (see the analysis from Norton Rose Fulbright of BLM permitting 
times), yet even given that it is a low estimate, it is considerably 
more than state processing times. Providing funding is not a guarantee 
that the timelines will improve.
    Another problem at the permitting stage is that several field 
offices are requiring companies to undergo additional analysis which 
are not required by law or policy. These ad hoc requirements add 
considerably to APD processing times. BLM will often attribute that 
processing time to the companies, even though BLM is adding to the 
timeframe. Our members have been required to conduct additional 
wildlife, cultural, floodplain, and other analyses beyond what is 
required by regulation or policy. S.2440 will not change that 
situation; only better management, adherence to statute and policy, and 
political will will correct those additional bureaucratic 
inefficiencies.
    However, despite the fact that S.2440 is only a partial solution, 
it is a critical one. Without adequate funding, we can almost guarantee 
that permitting times will increase. Western Energy Alliance would 
rather see incremental steps taken to support efficient APD processing, 
rather than wait for one solution that fixes everything.
              Responses to Questions From Senator Barrasso
    Question 1. In his testimony, Mr. Kornze states that:

          ``[l]ast year, the BLM held 30 separate oil and gas lease 
        sales, offering 5.7 million acres for lease by industry, the 
        most in a decade; industry submitted bids on fewer than one-in-
        five of these acres.''

          A. I understand that of the 5.7 million acres offered for 
        lease in FY 2013, about 1.2 million acres were leased in the 
        lower 48 and 4.5 million acres were offered in Alaska's 
        National Petroleum Reserve. Is that correct?

    Answer. Yes. The source of these data is a spreadsheet with offered 
and sold parcels for FY 2009 to 2013.

          B. I understand that the 1,172,808 issued in the lower 48 in 
        FY 2013 was the smallest number of issued in the lower 48 since 
        FY 1988, the last year of available data. Is that correct?

    Answer. Yes with the refinement that the source of these numbers is 
the ``number of acres leased spreadsheet'' which should more correctly 
be labeled ``number of acres issued.'' I am only aware of one 
consolidated source of offered and sold data from BLM, and that data 
set only covers FY 2009 to 2013, so it is not the source for statement 
B.
    Again, the incomplete data have caused confusion. BLM's imprecise 
use of the term ``leased'' and the fact that the numbers hover around 
1.2 million for both issued and offered acres may be the source of 
confusion. The number of acres issued by BLM in 2013 was 1,172,808, but 
the acreage offered was 1,282,320. Some acreage offered in years prior 
to 2013 was invariably included in the amount issued in 2013, and some 
offered in 2013 had not yet been issued in 2013.

          C. I understand that industry submitted bids on approximately 
        65 percent of the 1.2 million acres offered for lease in the 
        lower 48 in FY 2013. Is that correct?

    Answer. Yes. Of the 1,282,320 acres offered in the lower 48, bids 
were received on 836,673 acres. As Western Energy Alliance covers oil 
and natural gas issues for the lower 48 and Alaska's circumstances and 
regulations differ quite a bit from those in the lower 48, I cannot 
offer insight into why BLM offered so much acreage in Alaska with such 
little interest from industry. However, I do know that Mr. Kornze 
lumped the acreage together in his testimony to try to make the case 
that BLM is far ahead of industry demand. His contention certainly does 
not apply to the lower 48, and in fact BLM continues to defer millions 
of acres across the West that industry has nominated, but BLM will not 
bring up for sale. Offering millions of acres in Alaska that is of 
little interest to Alaskan producers doesn't compensate for the fact 
that there are millions of acres that western producers cannot lease 
because of indefinite deferrals. In fact, of the 2,661 parcels 
nominated in 2013, 53% were deferred, or 1,416. That does not include 
the backlog of parcels nominated in prior years that have yet to be 
offered.
    The statements are generally correct with the following refinement. 
Because of incomplete data and imprecise use of terms in BLM's released 
statistics, there seems to be some slight confusion.
    On BLM's main oil and gas statistics page is a chart entitled 
``Number of Acres Leased During the Fiscal Year.'' ``Leased'' is an 
imprecise term. As far as we can tell, this chart refers to acres 
issued during the fiscal year. Since leases are often sold in one 
fiscal year but not issued until another, it would be better if BLM 
released standard charts with all of the following lease points for 
both numbers of parcels and acres:

   Nominated-lands are not considered for leasing until someone 
        expresses interest by nominating parcels.
   Considered-BLM conducts a leasing Environmental Assessment 
        (EA), including a public comment period, for a subset of 
        nominated parcels.
   Posted-BLM then decides from those parcels analyzed in the 
        leasing EA which ones it will post for sale, and issues a 
        formal sale notice. The sale notice has all the potential 
        parcels that will be considered for inclusion in an upcoming 
        state sale.
   Protested-After the sales notice is issued, a public comment 
        period commences. Often individuals or groups will protest the 
        inclusion of specific parcels for an upcoming sale.
   Deferred-Based on the protests, BLM will often pull parcels 
        from the sales list, deferring them until some future date. We 
        find that it is often years before deferred parcels will be 
        noticed for sale again.
   Offered-After the initial parcel list is winnowed down, 
        usually a smaller subset from the original sales notice are 
        actually offered at a lease sale.
   Sold-Parcels actually receiving bids at the lease sale or 
        via the post-sale non-competitive process.
   Issued-Once BLM receives the bonus bids and first year's 
        rental for the sold parcels, it can issue the leases. There is 
        usually a minimum of sixty days after sale until a lease is 
        issued, but there are many cases where it is years until 
        parcels are issued.

    Having all these data points gives the complete picture of the 
leasing process, and only with all these points can solid conclusions 
be drawn about the leasing process. I've offered some refinements to 
the statements in the question based on my understanding of the limited 
data BLM has released publicly.
    Question 2. In his testimony, Mr. Kornze stated:

          ``Industry now has nearly 7,000 approved drilling permits 
        that are ready for drilling but currently sitting unused. If 
        you compare that figure against the fact that an average of 
        about 3,000 wells are spud on public lands each year, it 
        becomes apparent that industry has ample opportunities to 
        develop leased resources.''

    How do you respond to Mr. Kornze's statement?
    Answer. Generally, we heard in Director Kornze's testimony that all 
is well in the onshore oil and natural gas program and BLM is staying 
ahead of market demand. BLM offers statistics to support that view, but 
its selective release of statistics tells only one side of the story 
and papers over vast inefficiencies in the system. I believe Chair 
Landrieu's frustration with trying to understand the selective 
production statistics discussed during the hearing is indicative of the 
general frustration industry also faces. The current Administration has 
implemented policies to slow oil and natural gas development on federal 
lands, but then masks the true effects of those policies by releasing 
those statistics that appear to support its contention that BLM is 
supporting development. BLM also selectively releases statistics that 
attempt to point the finger at producers as the sources of the problem, 
accusing companies of not using permits or producing on leased acreage.
    Fewer bureaucratic obstacles would lead to more efficient 
development on federal lands and more production. Instead, we've seen a 
decrease on federal lands, absolutely in the case of natural gas and 
relatively with oil, and producers are extremely frustrated with the 
system. BLM's attempts to gloss over those real concerns are not 
helpful, when in fact inefficiencies in the bureaucracy cause 
distortions in the system not seen on non-federal lands. For example, 
because producers have no certainty on how long it will take to get a 
BLM APD approved, they must submit many more APDs in advance than they 
may actually use in the hopes that some will make it through the system 
in time for them to develop. Producers must have enough permits in hand 
to stay ahead of their rigs, because idle rigs are extremely costly. 
Producers are attempting to avoid a situation of having to lay down a 
rig because they cannot get approved permits from BLM.
    As a result, there are permits in the federal system that may go 
unused for long periods of time, a situation not observed on non-
federal lands. Since producers know how long a state permit takes, 
generally around thirty days on average, they do not have to try to 
anticipate years in advance how many permits they need and stockpile 
them as they must with federal permits.
    BLM Director Kornze mentioned that about 7,000 permits have been 
approved but not drilled. (BLM statistics show that number is actually 
6,711 as of September 2013, the most recent data released by BLM.) 
Companies would not have to stockpile permits if there were more 
regulatory certainty on the timeframe for receiving those permits, but 
it is not uncommon to have to wait two years or more for a permit. Once 
an initial well is drilled, the producer may determine that the area is 
not as productive as originally thought, and may decide that the 
additional permits that it had obtained for adjacent wells are not 
worth drilling. Since producers know the length of time it takes to 
obtain a state permit, there is no need to stockpile permits for non-
federal lands in advance.
    Market conditions may also change years later from the original APD 
submission. Many permits for natural gas lie unused because there came 
to be a glut of natural gas in the U.S. Many of those permits may not 
be drilled until demand again increases for natural gas. In a more 
efficient system, such as on non-federal lands, producers would not 
have to have obtained those permits years in advance, and there would 
not be such as large stock of unused permits. But the inefficiencies in 
the federal system compel that stockpiling. Furthermore, the fact that 
there are unused natural gas permits does not mean that there are not 
plenty of producers waiting for permits for oil wells, some delayed 
years.
                                 ______
                                 
   Response of Commissioner Lorinda Wichman to Question From Senator 
                               Murkowski
    Question 1. In your testimony you state that ``the current 
practices and permitting processes to reach our resources have 
discouraged many from pursuing projects on federally managed lands.'' 
Could you give some examples? To what extent does the legislation 
address those challenges?
    Answer. Prior to the introduction and hope of passage of S.2440 
there have been O&G parcels offered in Railroad Valley, Nye County, 
Nevada. During conversations with perspective producers I have been 
told the cost and time involved to meet all the permitting requirements 
have rendered projects economically unattainable.
    Since the introduction of S.2440, Nye County has seen an increase 
in successful BLM O&G lease auctions, as recently as June of this year.
    That is my personal observation as it relates to O&G leases. I am 
hoping that this legislation will provide a process that can be 
duplicated in other areas of disposal or permitting on BLM managed 
lands.
    In May of 2010, I completed an application for a R&PP lease of a 
historically significant community cemetery in Manhattan, NV. It was 
nearly a year later when I received the first response to my 
application in which it was suggested that I apply for a direct sale to 
avoid the reversionary clause of the R&PP patent. So Nye County did as 
requested and applied for a direct sale. The paperwork was completed in 
August of 2011. Yesterday August 5, 2014 the board of county 
commissioners approved an offer for sale of the cemetery and approved 
the purchase for $6,500.
    I shake my head while wondering how much of the tax payers money 
was spent in the last four years and three months to finalize a sale of 
7.5 acres at $6,500.
    With time I can gather specific examples as it relates to renewable 
energy projects, mineral exploration and geothermal projects however at 
this moment they would only be antidotal.
                                 ______
                                 
  Responses of Mark A. Christensen to Questions From Senator Murkowski
    Question 1. What is the typical APD backlog at Wyoming offices 
today? What do expect it would be if you did not have this program in 
place?
    Answer. The Bureau of Land Management in Wyoming is comprised of 
three (3) Districts and ten (10) Field Offices. As of today, there are 
898 pending applications for permits to drill (APDs). The volume of 
APDs is significantly higher in the Field Offices located adjacent to 
energy development areas in the State. The Casper, Buffalo and Pinedale 
Offices account for ninety percent (90%) of the current pending APDs.
    Two (2) Field Offices in Wyoming were selected to participate in 
the BLM Pilot Project Program: Buffalo and Rawlins. If the pilot 
project program were not in place, the additional Staffing Team to 
process the APDs would not exist and the impact would be considerable. 
As reported in my earlier testimony, at the height of the Coal Bed 
Methane (CBM) boom the Buffalo Field Office alone had 3,000 pending 
APDs. Once an Office gets behind, it is very difficult to catch up. 
Representative Lummis took the lead in the past year to successfully 
allow for pilot project funding to be re-directed from the Buffalo 
Field Office to the Casper Field Office, thereby averting the potential 
for an unmanageable number of APDs to accumulate and managing the 
resources wisely.
    Question 2. You testified that in the Buffalo field office, it 
takes approximately 300 days from the Notice of Survey to when a permit 
to drill is issued. In addition to the benefits the pilot program is 
providing, what are some other examples of ways to expedite the 
processing of an APD?
    Answer. The achievements of the pilot project program for Wyoming 
and specifically the Buffalo Field Office have been substantial. The 
ongoing keys to success are: retention of the seasoned personnel 
facilitating the APDs, insuring applications initially submitted are 
complete and accurate, addressing all deficiencies promptly, on-site 
inspections are conducted in a timely manner and cooperatively with the 
Operator, adhering to schedules and sustaining effective communication 
between all parties. The complexity of the current APD's is much 
greater than with the previous CBM wells, necessitating a more thorough 
understanding of the environmental, archaeological and engineering 
aspects of each drilling permit. It is also important to acknowledge 
the immense area for which the Buffalo Field Office is responsible; the 
three (3) counties of Campbell, Johnson and Sheridan include over 
11,500 square miles.
                                 ______
                                 
     Responses of Scott Nichols to Questions From Senator Murkowski
    Question 1. What specific regulatory changes would you recommend be 
made to improve access to geothermal energy?
    Answer. The regulatory changes necessary to improve access to 
geothermal energy are associated with geothermal lease auctions and 
drilling application standards of the federal regulations, 43 CFR 3200.

          1) We believe the federal geothermal lease program should be 
        amended to incentivize private exploration and reduce 
        speculative leasing. The current requirement to limit the 
        initial offer of geothermal lands only by way of a competitive 
        bid inhibits private exploration. When local and regional BLM 
        planning documents include geothermal development scenarios the 
        land that agency staff has not listed for competitive lease 
        should be open and available for non-competitive leasing at a 
        premium rent.
          2) The federal regulations governing geothermal operation 
        plans and review should be amended to reduce ambiguity and 
        establish performance based application, review, and approval 
        standards. The amendments should also include a time period for 
        agency review and automatic approval if staff is unable to 
        respond. The backlog of permit applications and extended review 
        periods are the result of personal interpretation and biases of 
        internal resource specialists (wild horses, wildlife, range, 
        recreation) not the review ability of the agency's engineer. 
        Performance based requirements and reducing ambiguity provides 
        regulatory certainty and legal protection.

    Question 2. Given your experience, do you have any suggestions on 
how we might implement NEPA?
    Answer. Our suggestions are related to NEPA implementation and 
include eliminating the need for multiple NEPA analyses on the same 
project, development of appropriate categorical exclusions and the 
designation of geothermal NEPA analysis team.

          1) At least three independent NEPA analyses are currently 
        completed for a geothermal project. Multiple decision points 
        create uncertainty and delay funding. If the BLM has conducted 
        a NEPA analysis for leasing and issued a Finding of No 
        Significant Impact, subsequent development activity should be 
        exempt from further NEPA review. All subsequent operations 
        should be administered under performance based regulations (as 
        previously discussed) and exempt from further NEPA review.
          2) Geothermal resource exploration is one of the most 
        ``environmentally friendly'' natural resource developments that 
        can be proposed; yet, the proposed activities are scrutinized 
        in more detail than most other land use activities with greater 
        consequences. A new list of geothermal categorical exclusions 
        should be developed for the industry. A comprehensive list of 
        categorically excluded activities would promote exploration and 
        reduce development times.
          3) Many BLM offices are subject to high staff turnover that 
        prevent resource experts from learning the unique resource 
        characteristics of the Field Office. We recommend the 
        development of a geothermal NEPA compliance team. A dedicated 
        geothermal NEPA team would establish intrastate and interstate 
        knowledge of the resource and provide consistent assessments of 
        resource impacts. A dedicated NEPA team would build the 
        technical expertise to provide consistently defensible 
        Assessments. Finally, individual projects would be less 
        susceptible to local bias and personal staff agendas.

    Thank you for the opportunity to provide additional comments and 
recommendations regarding the Bureau of Land Management's regulatory 
programs and NEPA implementation.
                                 ______
                                 
           Responses of Arthur Haubenstock to Questions From
    Question 1. What is the most significant difference between seeking 
to build utility scale power plants on public lands and private lands 
in terms of permitting and other government requirements?
    Answer. The most significant difference between building a utility-
scale power plant on public lands, rather than private lands, is 
ultimately the cost--in significant part, because time is money, 
particularly for project developers. The cost difference is evidenced 
in several different ways. First, the process through which a developer 
obtains a permit to access and build a power plant on the land is 
typically much longer in the federal process versus a state or private 
land process. The increased amount of time spent on the permit 
translates directly into an increased expenditure of funds by the 
developer, as well as lost opportunity costs. In other words, the 
developer could have been building more projects in that time, 
providing greater contributions to national renewable energy goals, and 
enabling them to earn more revenue in the same amount of time. While 
the BLM has proven that it can act quickly in processing solar project 
approvals, as it did with the projects potentially qualifying for ARRA 
benefits, it has not maintained that pace nor fully institutionalized 
systems that could achieve consistent, prompt results. BLM did issue 
Environmental Assessments for the projects located within the Dry Lake 
Solar Energy Zone promptly, and should be commended for that, but it 
should be recognized that the Environmental Impact Statement those 
recent documents ``tiered'' from took approximately four years to 
complete. By adopting consistent approval milestones, clear dashboards 
for assessing progress, and corrective action when approvals fall 
behind schedule, BLM can significantly improve its processes.
    Second, the annual rents, annual capacity fee payments, and bonus 
bids collected by the BLM are often greater than the leasing fees a 
developer would pay to a private landowner, and ultimately may be a 
greater than the cost of acquiring the land outright. Once the project 
is running, ongoing efforts to monitor the site for unanticipated 
impacts can prove to be more costly on federal lands, and the risk that 
BLM will require additional mitigation measures adds costs to financing 
projects due to uncertainty in addition to whatever the direct 
mitigation costs may be. Finally, BLM requires expensive, up-front 
posting of costs for restoration of the lands (this is in addition to 
the mitigation for the use of the lands), unlike most private land 
arrangements.
    [Responses to the following questions were not received at 
the time the hearing went to press:]

             Question for Neil Kornze From Senator Landrieu
    Question 1. If S. 279 was enacted into law, a royalty would be 
assessed for the first time on solar and wind development on public 
land. In this scenario, would you be supportive of the sharing of 
revenues from Federal resources, so that counties get some piece of the 
economic development that is occurring? Also, in this scenario, would 
you be supportive of a portion of the revenue sharing being directed to 
go toward the restoration of those areas impacted by development?
            Question for Neil Kornze From Senator Mark Udall
    Question 1. It is my understanding that the BLM is working to 
implement the recommendations in the June 2013 OIG audit and the 
December 2013 GAO report, which raised concerns that leases in several 
states appear to have been leased at less than fair market value, 
resulting in less revenue for both federal and state coffers. The 
problems identified in that report must be addressed. The royalties 
paid by coal companies--and energy development of all kinds on federal 
lands--provide critical support for local schools, roads and other 
services that Colorado families count on.
    However, there is an appropriate balance that ensures that the 
government is paid fairly while providing applicants with a decision in 
a timely manner. Some of my constituents have expressed concerns that 
while BLM is revamping its lease application approval process, delays 
in processing applications are creating economic hardship that may 
result in job losses and delay additional hiring.
    Can you provide specific examples of the actions BLM has/is taking 
to address the audit and report recommendations and steps that BLM is 
taking to improve the permitting of mine leases?
            Questions for Neil Kornze From Senator Murkowski
    Question 1. The President continues to tout oil and gas development 
from NPR-A as part of his ``all of the above'' energy strategy, but 
beyond holding lease sales, it is not clear to me what the 
Administration is doing to help ensure a project in the petroleum 
reserve may be successfully developed. I have followed the Greater 
Moose's Tooth 1 project very closely. If approved, this will be the 
first production from NPR-A. The project is expected to add 30,000 
barrels of oil per day to TAPS. And given the annual 5-6-percent 
decline in throughput, GMT-1 is vital to TAPS continued operation. Can 
you describe how you see the National Petroleum Reserve-Alaska fitting 
into the President's energy strategy?
    Question 2. Why have there been significant difficulties 
encountered by your agency regarding oil and gas Environmental Impact 
Statements not being able to withstand judicial review?
    Question 3. I know your agency is working with the Fish and 
Wildlife and others in preparation for a decision on listing Sage 
Grouse next September. Such a listing could have significant impacts on 
energy production on public lands. What is the status of your agency's 
contribution to the decision making process? Given the enormous amount 
of analysis that must be undertaken to make such a decision, is there 
enough time to make an adequate determination?
              Question for Neil Kornze From Senator Heller
    Question 1. The National Association of Counties are strong 
supporters of the legislation, in large part to the additional 
resources the royalty laid out in the bill would generate for public 
lands counties.
    There is a small concern that the agency would take these revenues 
into account when calculating PILT payments. The sponsors' intention is 
for these dollars to supplement PILT, not be used as a replacement.
    How would the BLM interpret the current language?

                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

      Statement of the American Wind Energy Association, on S. 279
    On behalf of the over 1,000 members of the American Wind Energy 
Association (AWEA\1\), we appreciate the opportunity to share our views 
on S. 279, the ``Public Lands Renewable Energy Development Act of 
2013.''
---------------------------------------------------------------------------
    \1\ AAWEA is the national trade association representing a broad 
range of entities with a common interest in encouraging the deployment 
and expansion of wind energy resources in the United States. AWEA's 
members include wind turbine manufacturers, component suppliers, 
project developers, project owners and operators, financiers, 
researchers, renewable energy supporters, utilities, marketers, 
customers and their advocates.
---------------------------------------------------------------------------
    AWEA is generally supportive of the existing right-of-way and 
rental fee structure for siting on BLM lands. On paper, at least, it is 
a reasonable process that results in a fair return to taxpayers. The 
industry has much less experience with the Forest Service. Only a 
single wind project has ever been permitted on Forest Service land, and 
it has not yet been constructed.
    That said, even under the current processes for BLM and the Forest 
Service, it is much more complex, takes longer, and costs more to 
develop wind energy projects on public lands than private lands. That 
is why 98.6% of the currently installed wind energy capacity is on 
private lands.
    AWEA is concerned that moving to competitive leasing will add 
complexity, time and expense, and in turn uncertainty, to developing on 
public lands, which will continue the trend of wind energy developers 
looking elsewhere. It is particularly complex for wind energy, which 
requires 1-2 years of testing for wind speeds before a company can 
determine whether a site is economically viable to develop or not. It 
is unlikely wind energy companies will bid for the right to put up a 
meteorological tower to test wind speeds without any explicit right to 
later apply to construct at that site. At the same time, it will be 
difficult to bid on a site as a package--the right to put up the tower 
that also comes with a right to apply to construct--without having the 
wind speed data up front, which cannot be accurately obtained without 
on-site testing.
    AWEA recognizes and appreciates the intent of the bill supporters 
in making wind energy permitting more closely mirror other activities 
permitted on public lands and to ensure a fair return to taxpayers. The 
bill does include some worthy elements that AWEA supports, including 
directing a portion of the revenue paid by wind and solar projects back 
into BLM and state agencies to improve permitting for additional 
projects, sharing revenue with states and counties, and providing funds 
for conservation. However, AWEA is unsure that the 15 percent 
allocation for improved permitting will provide sufficient resources 
for this purpose, particularly given needs of the U.S. Fish and 
Wildlife Service and state agencies, and would appreciate the 
opportunity to further discuss this with the committee. S. 279 also 
includes helpful language changes that address some concerns raised by 
AWEA on previous versions of the bill. However, AWEA recommends 
additional changes; these recommendations are outlined below.
    Further, it is important to understand the impact of S. 279 will be 
marginal, at best, if Congress fails to renew the production tax credit 
(PTC) for renewable energy, and create a long-term stable tax policy 
which treats all energy producers equally. Keeping taxes low on wind 
energy has contributed to a major American success story.
Status of wind energy in the U.S.
    The U.S. wind industry:

   Has attracted over $15 billion annually in investment into 
        U.S. communities over the past 5 years;
   Supports more than 50,000 U.S. jobs; and,
   Has more than 550 manufacturing facilities in 44 states 
        supplying the industry.

    Wind energy is widely available. Presently, there are 61 gigawatts 
of wind energy installed in 39 states and Puerto Rico. Wind energy 
projects are being developed in many of the remaining 11 states without 
utility scale wind turbines, and several of those states are currently 
buying wind energy from outside their states to serve their customers 
because it is the lowest cost option available.
    Wind energy is affordable. DOE data shows the average cost of wind 
energy has fallen 43 percent over the last four years, and that 
electric rates have increased less than half as much in the 10 states 
with the most wind energy compared to the 40 that have lesser amounts 
or none.
    Wind energy is reliable. On an average annual basis, wind energy 
already provides more than 25% of the electricity in two states and 10% 
or more in nine states. At the regional level, wind energy at times has 
provided upwards of 20% to 40% of electric generation in the plains 
states, Texas, California and the Pacific Northwest. All of this is 
without reliability concerns.
Specific suggestions for S. 279
          1. The transition language should be more specific that 
        projects under development on public lands under the existing 
        system will be grandfathered and not be subject to competitive 
        leasing: Developers have pursued right-of-way authorizations in 
        good faith, including spending significant time and dollars to 
        collect data on wind speeds, conduct environmental reviews and 
        other preliminary activities. It creates too much business 
        uncertainty and investment risk, and, frankly, is not fair, to 
        change the ground rules mid-process and make such sites 
        available to the highest bidder.
        Although page 17, lines 12-25, and page 18, lines 1-12, 
        establishes that existing projects will be grandfathered under 
        the existing rules, this section as currently written limits 
        this to projects that have filed a Plan of Development (POD).
        Besides existing Right-of-Ways (ROW) that have been granted, 
        AWEA proposes grandfathering any project that has a pending: 
        (1) application for a ROW at the time any wind energy 
        competitive leasing pilot program is established and, if that 
        project is subsequently granted a permit, files for a Plan of 
        Development (POD) within one year of expiration of the ROW 
        permit; or (2) an application for site testing or development 
        ROW as of the date the final regulations for the wind energy 
        competitive leasing program are issued and submits a POD within 
        one year of expiration of the ROW permit.
        Existing ROW grants must be honored and holders of a Type II 
        ROW for site testing should retain the right of first refusal 
        to apply for Type III ROW for construction and operation 
        without being subject to competitive leasing provisions.
        Type II ROWs should be renewable for an unlimited number of 
        times so long as a Type III ROW is being processed and a Plan 
        of Development (POD) has been submitted.
        Holders of Type III ROWs should also be allowed to proceed 
        under the current rules and should not be subject to 
        competition on an existing ROW. The need to accommodate these 
        circumstances can be seen, for example, in a case where a 
        developer with a Type II ROW needs more time to make the 
        decision regarding whether to proceed with a Type III ROW 
        application.
        Furthermore, Page 10, lines 23-25 and Page 11, lines 1-7, gives 
        credit in a competitive lease sale under the proposed pilot 
        program for projects with a pending application. As indicated 
        above, projects with a pending application should not be part 
        of the proposed pilot program and instead should be 
        grandfathered under the existing system.
          2. Clarify the definition of a notice of intent with regards 
        to ineligible sites: The language on Page 8, lines 4-7, 
        indicates that sites where a notice of intent has been issued 
        will not be selected for the pilot program. AWEA recommends 
        clarification regarding what this notice of intent is with 
        respect to BLM or the Forest Service.

    AWEA appreciates the opportunity to provide comments on this 
legislation. We look forward to working with the subcommittee on this 
important issue.
                                 ______
                                 
 Statement of Shawn Bolton, Rio Blanco County, Commissioner, CCI Board 
      of Directors, President, and John Martin, Garfield County, 
   Commissioner, Western Interstate Region, President, Public Lands 
                Committee, Colorado Counties Inc., Chair
    Dear Senate Udall,
    On behalf of Colorado Counties, Inc. (CCI), I am writing to express 
our support of the Public Lands Renewable Energy Development Act (S. 
279). This legislation extends royalties and lease income from solar 
and wind projects developed on Federal lands to home states and 
counties.
    Similar to existing revenue sharing models for alternative energy 
development, for example, geothermal, the Act would share revenues with 
states and counties, while providing reinvestment in BLM renewable 
energy programs and sharing critical funds to sustain wildlife and 
recreational uses of nearby land. Revenues sharing arrangements with 
local governments are needed to support county operations impacted by 
local energy development and production.
    Countless counties nationwide have Federal lands within their 
boundaries that have been developed or are suitable for alternative 
energy development. Counties have historically been indispensable 
advocates for the development of alternative energy production in the 
United States. Future revenue sharing dollars will contribute to the 
delivery of critical governmental services and the development of much 
needed capital improvement projects such as road maintenance, public 
safety and law enforcement, conservation easements, capital for 
leveraging federal and state resources, and the critical stabilization 
of operations budgets in tough economic times.
    Again, CCI applauds the introduction of the Public Land Renewable 
Energy Development Act of 2013 and respectfully ask for swift passage 
of this landmark legislation.
                                 ______
                                 
  Statement of Colorado Trout Unlimited * San Juan Angler * Scott Fly 
  Rods * Global Wetlands * Rep Your Water * Dvorak Expeditions * The 
  Sportsman Outdoors * Theodore Roosevelt Conservation Partnership * 
 Colorado Wildlife Federation * Confluence Casting * Mayfly Media/Fly 
   Fishing Film Tour * Western Angling Properties * Waterfall Ranch 
 Outfitters * Fort Lewis College Fly Fishing Club * Duranglers Flies & 
  Supplies * Bull Moose Sportsmen * Colorado Backcountry Hunters and 
                                Anglers
    We write on behalf of thousands of Colorado hunters and anglers in 
support of the Public Lands Renewable Energy Development Act. We 
appreciate your support for this legislation, and ask that you continue 
working to advance the bills during the remainder of this year.
    Colorado's public lands provide some of our best opportunities to 
hunt and fish. These same public lands also hold great potential for 
wind and solar energy development. In fact, Colorado is one of six 
western states with designated public land solar energy development 
zones. We support the development of renewable energy resources on 
public lands as long as it is done in the right places and in a manner 
that conserves fish and wildlife habitat.
    The provisions of the Public Lands Renewable Energy Development Act 
that establish a pilot leasing program for wind and solar energy 
development on public lands and apply a substantial portion of royalty 
revenue to offsetting impacts to fish and wildlife habitat and hunting 
and fishing access are essential to balancing development and hunting 
and fishing opportunities. The Public Lands Renewable Energy 
Development Act would help wind and solar development move forward on 
appropriate public lands in a way that sustains our sporting heritage.
    Support for this legislation is broad. In addition to sportsmen, 
the bill is supported by Colorado Counties, Inc., the Southwest 
Colorado Council of Governments, and the Western Governors' 
Association, among others. Again we thank you for supporting this 
important legislation, and we look forward to working with you to move 
the bill through the legislative process this year.
                                 ______
                                 
    Statement of Dan Naatz, Vice President, Federal Resources, The 
              Independent Petroleum Association of America
    The Independent Petroleum Association of America (IPAA) supports S. 
2440, the ``BLM Permit Processing Improvement Act of 2014,'' and urges 
the Senate Committee on Energy and Natural Resources to take quick 
action on this important legislation.
    IPAA is a national trade association representing the thousands of 
independent oil and natural gas explorers and producers, as well as the 
service and supply industries that support their efforts. Independent 
producers drill about 95 percent of American oil and natural gas wells; 
produce more than 50 percent of American oil, and more than 85 percent 
of American natural gas.
    ``The BLM Permit Processing Improvement Act'' is a bipartisan piece 
of legislation that reauthorizes and makes reforms to the successful 
BLM pilot project initiative authorized in the Energy Policy Act of 
2005 (EPACT). It is vital that the Senate take action on this 
legislation during the 113th Congress because the program has a 10-year 
sunset provision and is set to expire in 2015. U.S. shale oil and 
natural gas development has been a game changer for our nation's energy 
picture. Efficient production on federal lands will not only help 
enhance American energy security, but provide millions of dollars of 
much-needed revenue to federal and state governments.
    The pilot office program has a proven track record of success in 
the seven field offices where it was originally implemented under 
EPACT. When the program was launched, the seven offices identified in 
EPACT processed nearly 70 percent of the applications for permits to 
drill (APD) that were received by the BLM. This legislation expands on 
that successful model and improves the program by providing additional 
flexibility to the Secretary of the Interior to designate new project 
offices, accounting for shifting industry priorities as new plays are 
discovered on federal lands. The bill also allows the APD fee to remain 
at the BLM state office, providing the agency even more flexibility to 
respond to activity levels and responsibilities.
    Production of oil and natural gas on federal lands will remain a 
key part of America's energy portfolio in the coming years. In 
addition, this exploration and production benefits the U.S. economy 
through job growth, government revenues, and enhanced American energy 
security. However, oil and natural gas production on federal lands 
continues to decline, and BLM permitting times get ever-longer. Last 
month, the Department of the Interior released a report from its own 
Inspector General's (IG) office citing inefficiencies with the BLM 
permitting process. Specifically, the IG report found that 
inefficiencies within the BLM impede production, dates for completion 
of individual APDs are rarely set or enforced, and the review process 
may continue indefinitely. The report found that on average the APD 
approval process on BLM lands takes 228 calendar days, and in many 
offices around the Intermountain West, the numbers are much higher. 
Although S. 2440 will not be able to solve all of the issues outlined 
in the IG's report, it can make a significant difference in addressing 
key permitting questions.
    IPAA would like to thank Senators Tom Udall and John Barrasso for 
their leadership regarding S. 2440. We would also like to thank the 
Chair of the Energy and Natural Resources Committee Mary Landrieu, 
Ranking Member Lisa Murkowski and all of the members of the Committee 
for making passage of this important bill a priority.
    Industry's goal is, and has always been to achieve reasonable time 
frames for APD processing on public lands and reduce undue permitting 
backlogs. This bipartisan legislation is a commonsense measure that 
will help achieve that goal. The bill is the result of long, bipartisan 
negotiations in which all parties had to compromise to achieve results. 
The bill reflects the best traditions of the Senate, and we ask that 
the Energy Committee move this legislation to the Senate floor as soon 
as possible.
                                 ______
                                 
    Statement of Bobby McEnaney, Senior Deputy Director of Western 
         Renewables Project, Natural Resources Defense Council
    Dear Chairman Landrieu and Ranking Member Murkowski,
    The Natural Resources Defense Council (NRDC) appreciates this 
opportunity to submit comments to the Senate Committee on Energy and 
Natural Resources in its work to consider additional opportunities to 
improve how federal renewable resources are permitted on the public 
lands managed by the Bureau of Land Management (BLM). NRDC and its over 
one million members and activists support the responsible siting of 
renewable resources on the nation's public lands, particularly as a 
means to address the tangible and negative consequences poised by 
global climate change, whether such development is from wind, solar, or 
geothermal energy. NRDC also strongly supports the protection and 
conservation of our nation's incomparable natural landscapes that 
bestow our nation with immeasurable benefits.
    Given these multiple goals, NRDC has worked diligently to support 
mechanisms that strive to deploy renewables in a manner that also 
protects the nation's most sensitive lands and wildlife. By embracing a 
``Smart from the Start'' approach, which diligently contemplates and 
anticipates the best places to site renewables in a more deliberate 
fashion while also protecting ecological important areas, it has been 
demonstrated that such a process can be key to achieving the dual goal 
of encouraging renewable energy development and conservation. But 
additional tools and mechanisms will be necessary in order to 
permanently ensure that the recent and substantial gains that have been 
achieved in deploying renewables on BLM lands can continue in a 
meaningful manner.
    For these reasons, NRDC supports S. 279, the Public Land and 
Renewable Energy Development Act of 2013 (PLREDA). This important 
legislation is a critical step in modernizing the methods the BLM 
employs in permitting and managing solar and wind energy resources. The 
legislation seeks to improve the current BLM permitting system for wind 
and solar by proposing a series remedies that would phase out a number 
archaic and institutionalized regulatory mechanisms that are currently 
inadequate in addressing the needs of renewable energy development 
while also adequately balancing the additional environmental, economic, 
and social considerations incurred from wind and solar generation.
    Fundamentally, the BLM system for permitting renewable resources is 
encumbered by an antiquated administrative construct. This is due to 
the fact that Congress has prescribed that onshore federal wind and 
solar resources are to be managed under Title V of the Federal Land 
Policy and Management Act,\1\ which advises that permits to lease these 
resources are to be treated as linear-right-of-ways (ROWs). A linear 
right-of-way lease under Title V is a temporary conveyance whose 
administrative underpinnings date back to the 19th century, where ROWs 
were permitted primarily for linear applications and other like 
infrastructure including roads, ditches, and railways. Agency 
discretion to modify these permits was an inherent part of the ROW 
construct, granting the agency needed flexibility to move and/or modify 
ROW permits when circumstances dictated. Given that a ROW does not 
convey a right, but merely a privilege, the BLM retains a great deal of 
administerial latitude in reserving the right to modify, suspend, 
relocate or even terminate (under certain prescribed conditions) a ROW 
permit. However, the regulations of ROWs did not anticipate the 
technological needs and scale associated with the generation of utility 
scale solar and wind resources, nor the permanency associated with such 
investments. Hence, solar and wind developers are severely 
disadvantaged by the fact that the BLM retains broad latitude to 
potentially modify investments made by renewable energy developers. 
Given the substantial and permanent nature of utility scale renewable 
infrastructure, such a level of regulatory uncertainty undermines the 
efforts to scale renewables on federal lands.
---------------------------------------------------------------------------
    \1\ 43 U.S.C. Sec. Sec. 1701-1785
---------------------------------------------------------------------------
    In contrast, the management of fluid minerals--derived from 
longstanding mineral law--has established that leases confer a 
compensable right or interest once issued, which cannot be summarily 
terminated (without due cause on part of the managing agency). And even 
then, a lease holder is often entitled to compensation if a lease is 
cancelled by an agency. From a purely financial perspective, a mineral 
lease holds greater attraction than a ROW given the financial and 
temporal certainty that is provided by possessing such an interest.
    The other practical difference between a mineral lease and a ROW is 
related to the differing financial obligations that must be met, as 
demonstrated by the following table:

                     FINANCIAL OBILGATIONS: MINERAL LEASES versus ONSHORE RENEWABLE ROWs\2\
----------------------------------------------------------------------------------------------------------------
                                                                    Mineral Lease         Onshore Renewable ROW
----------------------------------------------------------------------------------------------------------------
                      Competitive Lease                          Yes, in most cases--     No--first come, first
                                                               price is determined by               serve basis
                                                                    fair market value
          Cost Recovery for Project Applications\3\               Varies depending on   Minimal. As low as $100
                                                                            feedstock             to file a ROW
                                                                                                    application
                           Rental                             Yes--minimal, as low as     Yes--Annual rents for
                                                               $1.50 an acre annually   solar range from $17 an
                                                                                             acre to as high as
                                                                                           $6,897 an acre. Wind
                                                                                                    rentals are
                                                                                          approximately half as
                                                                                                  low as solar.
                           Royalty                            Yes--varies depending on                       No
                                                              feedstock, but for most
                                                                  energy types, it is
                                                                fixed at no less than
                                                                                12.5%
----------------------------------------------------------------------------------------------------------------
\2\ This chart is derived from: Pamela Baldwin, ``Fair Market Value for Wind and Solar Development on Public
  Land,'' November 2010. Accessed July 26, 2014, at http://wilderness.org/sites/default/files/Fair-Market-Value-
  Whitepaper.pdf
\3\ Does not include NEPA permitting costs

    Of all these items, the most notable difference is the fact that 
mineral leases are required to pay a royalty. In contrast, the largest 
financial obligation of a ROW permit is associated with a rental. 
Royalties, from NRDC's perspective, are a superior way to track and 
assess projects given that they are technologically neutral and only 
assess power that is generated. In addition, given the methodology that 
the BLM has used to determine rentals for varying solar technologies, 
the current BLM rental scheme penalizes more efficient solar 
technologies that use less land than other comparable solar collection 
methods, such as concentrated solar projects.\4\
---------------------------------------------------------------------------
    \4\ See: ``Uncle Sam, Solar Landlord, Is Under Fire,'' New York 
Times, http://green.blogs.nytimes.com/2010/06/17/uncle-sam-solar-
landlord-is-under-fire/
---------------------------------------------------------------------------
    Given these aforementioned inadequacies, S. 279 grants the BLM the 
discretion to contemplate the adoption of additional mechanisms that 
could result in the transition to a competitive, royalty-based leasing 
system that treats wind and solar generation much the same as oil, 
geothermal, and gas. With the adoption of such a royalty system, PLREDA 
would establish a number of mechanisms that would direct revenues 
generated to further facilitate the responsible development of wind and 
solar resources. First, a portion royalty revenues would be directed to 
the states and counties where a project is developed, providing an 
additional incentive for these communities to partner with developers 
and land managers in promoting the development of renewables in their 
communities. In addition, the legislation also provides greater 
certainty for developers by dedicating a portion of receipts collected 
from rents and royalties to support better decision making by the 
agencies by funding planning, monitoring, and data collection. The same 
funds would also be directed toward the efficient processing of permit 
applications, which is quite similar to the Permit Process Improvement 
Fund that oil and gas development benefits from currently.
    Lastly, and most critically from a conservation perspective, S. 279 
also proposes a mechanism that would establish a mitigation system by 
dedicating a small portion of receipts to measures that would enhance 
the conservation of natural resources as a means to offset the 
inevitable impacts associated with large scale renewable energy 
development. We believe that a royalty system, in concert with locality 
and mitigation payments, is a superior process to ensure that the 
communities and habitats that will be host to renewable energy 
development are compensated in a fashion that will address and mitigate 
for some of the inevitable impacts associated with energy development--
for development that will take place at an unprecedented scale. This 
also provides opportunities for developers to achieve the goals of 
becoming good stewards and good neighbors. The current rental system 
unfortunately does not provide these kinds of payments, and none of the 
receipts from the BLM rental system are provided for mitigation, 
locality payments, or adequate cost recovery. And nearly as important, 
by shifting to a leasing system, land managers can work with 
communities and developers to diligently identify in a prescribed 
manner what areas should be offered for leasing based upon the richness 
of the renewable resource, while also weighing the relative 
environmentally suitability to host such large scale development.
    For these reasons, we again want to express our support for the 
Public Land and Renewable Energy Development Act of 2013 and appreciate 
this opportunity to submit comments for the record. Sincerely, Bobby 
McEnaney Senior Deputy Director of Western Renewables Project Natural 
Resources Defense Council
                                 ______
                                 
      Statement of Michael Yohn, Chairman, San Luis Valley County 
  Commissioners Association, Alamosa, Conejos, Costilla, Mineral, Rio 
                       Grande, Saguache Counties
    Dear Representative Tipton, Senator Udall, Senator Bennet:
    The San Luis Valley County Commissioners Association would like to 
thank you for your support of the Public Lands Renewable Energy 
Development Act (HR 596 and S279). This legislation will level the 
playing field by requiring renewable energy resource development to pay 
a fair share of the revenues created through energy production just 
like other forms of energy development.
    This legislation is fair and balanced and it will provide states 
and counties with revenues to help mitigate the impacts renewable 
energy development will have on their communities. Additionally, it 
will provide revenues by which the Department of the Interior can use 
to help pay for the cost of administering those industries.
    The proposed legislation will also support the common goals of 
water resource protection and fish and wildlife conservation, through 
habitat restoration and protection and through improved public access. 
All of which are priority concerns for the residents of Colorado.
    Our only concern regarding this Act is that it not modify PILT, or 
affect any PILT payment amounts, or the Secure Rural Schools Act 
payments in any way. Payments to the counties from royalties, generated 
from renewable energy resources must be in addition to PILT. We would 
also like to take this opportunity to let you know that we oppose any 
reductions in PILT payments due to gains from any other Federal Revenue 
Sharing programs.
    Because of the importance of this Bill, we encourage you to take 
appropriate actions that will move this legislation through the 
legislative process. Again, we thank you for cosponsoring this 
important legislation and we look forward to working with you as the 
legislation moves forward.
                                 ______
                                 
 Statement of Michael E. Whiting, Chairman, Southwest Colorado Council 
                             of Governments
    Dear Senator Udall,
    The Southwest Colorado Council of Governments (SWCCOG) would like 
express our support for the Public Lands Renewable Energy Development 
Act (S. 279). The five counties of Archuleta, Dolores, La Plata, 
Montezuma, and San Juan contain over 1.6 million acres of public lands, 
including Mesa Verde National Park. Much of these lands are suitable 
for alternative energy development.
    As you know, this legislation will require renewable energy 
resource development to pay royalties from energy production on 
renewable energy projects on Federal lands. Providing reinvestment in 
renewable energy programs while sharing funds for the support of 
waterways, wildlife habitat, and recreational uses is a benefit for all 
citizens.
    The potential future revenue will help the five counties of the 
SWCCOG provide critical governmental services, help fund the backlog of 
infrastructure improvement projects, and stabilize budgets still 
impacted by slow growth and the economic recession. Furthermore, these 
revenues will also help counties manage the impacts of energy 
development.
    The 12 municipalities and 5 counties of Southwest Colorado Council 
of Governments are committed to working with the Federal government as 
partners to encourage sound, responsible energy development. The 
expansion of alternate energy industries through this legislation will 
help create a more sustainable regional economy while protecting our 
public lands and our way of life.
    Thank you for your strong support of the Public Lands Renewable 
Energy Development Act.
                                 ______
                                 
Statement of Chase Huntley, Senior Director of Government Relations for 
                     Energy, The Wilderness Society
    Dear Chairwoman Landrieu and Ranking Member Murkowski,
    The Wilderness Society appreciates the opportunity to submit this 
statement in regard to energy permitting and development on public 
lands managed by the Bureau of Land Management. The Wilderness Society 
works on behalf of its 500,000 members and supporters to protect 
wilderness and inspire Americans to care for our wild places. This 
includes working to ensure that the development of needed new energy 
resources is done in a way that protects wild lands, recreational 
opportunities, and local communities.
    We support efforts to sustainably develop energy resources found on 
our public lands and forests. As with any form of development, not all 
places are appropriate for energy projects. Some places are simply too 
wild or too sensitive to develop. And where development occurs, it must 
take place in a responsible manner and impacts fully offset to ensure 
the health and safety of local community and other land users.
    We do not believe that there is a logjam for energy development 
permits for our public lands -our experience is that permitting is 
moving apace, and efforts underway at the agency promise to further 
enhance the efficiency and effectiveness of permitting efforts. 
Following are our views on the bills that are the focus of today's 
discussion. Thank you for the opportunity to offer this statement for 
the record.
                               attachment
Public Lands Renewable Energy Development Act
    The Public Lands Renewable Energy Development Act (S. 279) presents 
a conservative, balanced approach to ensuring renewable energy 
resources are developed in a manner that safeguards and enhances the 
health of our public lands, counties and recreational opportunities. 
The bill provides land managers with additional direction and 
authorities to aid in developing clean energy projects on public lands.
    Under the bill, federal land managers would consider how best to 
develop these resources to the benefit of taxpayers, project proponents 
and other land users. In particular, the bill proposes a move to a 
lease-based system, rather than rights-of-way currently in use. Such a 
system has been advocated by industry watchers,\1\ the solar 
industry,\2\ and public land law scholars\3\ as providing greater 
certainty for all parties. And the bill considers whether alternative 
fee structures, such as a royalty, would be more appropriate for these 
industries in lieu of the current rental system, which has been 
criticized by the industry and other stakeholders. The bill has the 
potential to modernize wind and solar development on public lands. It 
can help put renewable energy on a level playing field with energy 
sources that have been developed on public lands for over a century, 
which have thrived on public lands in part due to the stable leasing 
system in place.
---------------------------------------------------------------------------
    \1\ E.g., see Scott Bank, ``Practical Advice: Wind and Solar 
Projects on BLM (Bureau of Land Management ) Lands,'' Project Finance 
Newsletter. Chadbourne & Parke LLP. November 2011. Accessed July 26, 
2014, at http://www.chadbourne.com/
practicaladvice_bureau_of_land_management_nov11_projectfinance/.
    \2\ Solar Energy Industries Association, "Comments to BLM on 
Proposed Rulemaking Regarding Competitive Process for Leasing Public 
Lands for Solar and Wind Development." February 2012. Accessed July 26, 
2014, at http://www.seia.org/research-resources/comments-blm-proposed-
rulemaking-regarding-competitive-process-leasing-public.
    \3\ Pamela Baldwin, "Fair Market Value for Wind and Solar 
Development on Public Land," November 2010. Accessed July 26, 2014, at 
http://wilderness.org/sites/default/files/Fair-Market-Value-
Whitepaper.pdf
---------------------------------------------------------------------------
    Importantly, the bill would establish a mechanism to reinvest in 
the counties, states and communities most impacted by projects. It 
reauthorizes the current system of payments for geothermal energy 
development, and creates a similar system for counties and states from 
the rents or royalties collected from wind and solar development. These 
funds are needed to address the concerns that infrastructure, public 
services and quality of life are stressed by the intense activities 
that come with utility-scale renewable energy development.
    The bill also creates a system that returns a portion of rents and 
royalties from wind and solar to improving permitting that can help 
make it more efficient to review and process applications. These funds 
would support the data collection, monitoring and planning activities 
essential to smart permitting decisions, and would be available for 
transfer to cooperating agencies as well. This provision is similar to 
the Permit Process Improvement Fund already available for oil and gas 
development.
    Most significantly, the bill makes a commitment to enhance natural 
resource conservation and stewardship as a part of renewable energy 
development and production. The bill establishes a fish and wildlife 
conservation fund that would support expanding recreational access, 
conservation and restoration work and other important stewardship 
activities. In the face of shrinking federal resources, these funds are 
essential to keep pace with the new challenges facing federal and state 
land managers. These conservation investments would not supplant or 
compete with traditional mitigation, but would instead create the 
opportunity to improve our lands and waters as we develop energy 
resources. Putting revenue already collected from renewable energy to 
work for conservation will link conservationists, sportsmen, 
recreationists and the renewable energy industry together.
BLM Permit Processing Improvement Act
    The BLM Permit Processing Improvement Act (S. 2440) reauthorizes 
and modifies the BLM Permit Processing Improvement Fund created by the 
Energy Policy Act of 2005. We applaud the bill author and original 
cosponsors for their efforts to enhance the efficiency and improve the 
environmental outcomes for oil and gas drilling on public lands. We are 
supportive of efforts to keep dedicated agency staff with necessary 
skills and experience in these offices. Importantly, these offices 
address a broad range of issues well beyond processing applications for 
permits to drill--but also monitor reclamation efforts and spill 
cleanup, oversee diligence, and conduct inspections and enforcement 
activities. We believe the bill could be substantially strengthened by 
expanding the range of activities covered by the Improvement Fund-
specifically the Rental Account-to include all the necessary activities 
undertaken by these offices. In particular, this should include 
inspections and enforcement activities which recent independent 
investigators have found is sorely in need of attention but for which 
the agency has stated it simply does not have sufficient resources.
                                 ______
                                 
 Statement of Tex G. Hall, Chairman Mandan, Hidatsa and Arikara Nation 
             of the Fort Berthold Reservation, New Town, ND
    Chairwoman Landrieu, Ranking Member Murkowski, and Members of the 
Committee on Energy and Natural Resources, thank you for the 
opportunity to testify on ``Breaking the Logjam at BLM: Examining Ways 
to More Efficiently Process Permits for Energy Production on Federal 
Lands.'' My name is Tex Hall. I am the Chairman of the Mandan Hidatsa 
and Arikara Nation (MHA Nation) of the Fort Berthold Reservation.
    Although this hearing is focused on the Bureau of Land Management 
(BLM) and energy permitting on Federal lands, one of the bills before 
the Committee, S. 2440, the BLM Permit Processing Improvement Act of 
2014, would have a dramatic impact on energy development on Indian 
lands. As currently drafted, S. 2440 would increase Application for 
Permit to Drill (APD) fees on Indian lands, but would not provide any 
benefits for energy permitting on Indian lands.
    As I explain in my testimony, the MHA Nation requests that the 
Committee amend S. 2440 to include a proposal developed by the 
Coalition of Large Tribes (COLT) to create an Indian Energy Regulatory 
Office that would provide the leadership and agency coordination we 
need for Indian energy permitting. This new Office would utilize 
existing resources and could be supported by S. 2440's proposed 
increase APD fees. If amended to include the entire COLT proposal, S. 
2440 would provide long needed improvements to energy permitting on 
Indian lands.
    The MHA Nation has a detailed understanding of the Federal energy 
permitting process and the need for improvements. The MHA Nation's Fort 
Berthold Reservation sits in the heart of the Bakken Formation-the most 
active oil and gas play in the United States. Currently, on our 
Reservation there are 30 drilling rigs, more than 27,000 semi-trucks, 
and about 1,300 oil and gas wells producing in excess of 300,000 
barrels of oil per day. Our Reservation, located in west-central North 
Dakota, is the equivalent of the 7th highest producing oil and gas 
state in the Country.
    The MHA Nation has struggled with BLM, the Bureau of Indian Affairs 
(BIA) and other Federal agencies for every single energy permit needed 
to get these wells into production. For too long, Indian energy 
permitting has been subject to a bureaucratic maze of Federal agencies. 
Former Senator Dorgan estimated that each individual oil and gas permit 
had to make its way through 4 agencies and a 49-step process. We now 
count 7 agencies and 100 or more steps.
    As currently drafted, S. 2440 would further increase the barriers 
to Indian energy development by raising APD fees to $9,500. The BLM 
applies APD fees to energy permits on Indian lands even though our 
lands are not Federal public lands. Instead of increasing barriers to 
Indian energy development, the MHA Nation asks that S. 2440 be amended 
to include the entire COLT proposal for an Indian Energy Regulatory 
Office and use funding from the increased fees to benefit energy permit 
processing on Indian lands.
    The COLT proposal mirrors the successes of BLM's Federal Permit 
Coordination Offices created by Section 365 of the Energy Policy Act of 
2005 but provides an office focused on development of Indian energy 
resources. This Office would utilize existing Department of the 
Interior resources located in Denver, Colorado to streamline and 
coordinate energy permitting on Indian lands. The COLT proposal is 
attached my testimony along with resolutions from COLT and NCAI 
approving the proposal.
    There are a variety of reasons the Committee should amend S. 2440 
to include the entire COLT proposal and take this opportunity to 
improve energy permitting on Indian lands. First, it is time to bring 
the federal government's oversight and management of Indian energy 
resources into the 21st Century. The Indian Energy Regulatory Office 
proposed by COLT would provide the leadership, staff and expertise 
needed for coordinated review of Indian energy permits across the 
Federal government.
    Second, as currently drafted, S. 2440 increases APD fees on Indian 
lands to $9,500, but none of this funding is used to support energy 
permitting on Indian lands. Instead, all of the funding would go to 
BLM's Federal Permit Coordination Offices and permitting on Federal 
lands. APD fees are already a burden for energy development on Indian 
lands. Under S. 2440, energy development on Indian land gets all of the 
burdens and none of the benefits. We ask that the entire COLT proposal 
be included in the bill and that APD fees be used to support an Indian 
Energy Regulatory Office.
    Third, Congress, at a minimum, should give energy development on 
Indian lands the same attention and focus as energy development on 
Federal lands. The benefits of energy development on Indian lands far 
exceed the benefits of energy development on Federal lands, yet 
Congress has done little to improve energy permitting on Indian lands. 
Energy development on Indian lands provides needed jobs and training, 
economic development, and, if managed properly, long-term investment in 
reservation infrastructure. With increased revenues and resources, 
tribal governments are also able to provide vital services to our 
members.
    Finally, the COLT proposal should be included as separate section 
in S. 2440 to specifically address energy permitting on Indian lands. 
Indian lands and BIA responsibilities cannot simply be included as a 
part of the existing BLM Offices. Indian lands are not public lands, 
yet the Tribe must fight every day to prevent Federal agencies from 
applying public land management standards to Indian lands. We need 
legislation to create a new office that is focused on Indian lands.
    The Indian Energy Regulatory Office proposed by COLT would be 
guided by basic principles of Federal Indian law that have been lost in 
the current unorganized system for overseeing energy development on 
Federal Indian trust lands. The Office would treat Indian lands 
according to federal trust management standards and would provide 
technical support to tribes as we enter a new era of self-determination 
and we manage and regulate energy development ourselves.
    The MHA Nation asks that you act quickly to amend S. 2440 to 
include the entire COLT proposal for an Indian Energy Regulatory 
Office. Amending the bill to include the COLT proposal would not only 
avoid damaging energy development on our Reservation, and a number of 
other Indian reservations, but would also provide needed improvements 
to energy permitting on Indian lands. The MHA Nation looks forward to 
working with the Committee to make needed changes to S. 2440. Thank you 
for the opportunity to provide this testimony.
                                 ______
                                 
        Statement of Chris Wood, Trout Unlimited, Arlington, VA
    Chairwoman Landrieu and Ranking Member Murkowski,
    I write on behalf of Trout Unlimited (TU) and its 155,000 members 
to thank you for holding a hearing on S. 279, the Public Lands 
Renewable Energy Development Act. I ask that this letter be included in 
the hearing record.
    TU strongly supports the Public Lands Renewable Energy Development 
Act because it can help set us on a path to responsible energy 
development that takes care of the interests of hunters and anglers, 
and the fish and wildlife habitat we depend on.
    Wind and solar energy projects are a relatively new, but growing 
presence on western public lands. Since the beginning of 2009, 29 solar 
projects totaling more than 8,000 megawatts, and 11 wind projects 
totaling more than 4,000 megawatts, have been approved on public lands 
in the U.S.
    TU supports responsible energy development on public lands. We take 
pride in our efforts to work with traditional energy developers and 
federal land managers to ensure that development is balanced with 
fishing and hunting opportunities.
    It is important to understand the context for energy development on 
public lands. Numerous stressors on the western landscape affect fish 
and wildlife habitat and hunting and angling opportunity. These 
include: traditional energy development, insect and disease outbreaks, 
intense and more frequent wildfire, invasive plants, private land 
development, and drought conditions in already over-subscribed basins. 
If we are going to add large-scale wind and solar development to this 
picture it must be done in a thoughtful way.
    Processes such as the Solar Programmatic EIS, which identified 
zones suitable for development, are helping to guide sound siting 
decisions that avoid and minimize impacts to fish and wildlife habitat. 
Even with the best siting decisions, however, large-scale wind and 
solar projects will take up big chunks of land for long periods of 
time, and some impacts will be unavoidable. The Public Lands Renewable 
Energy Development Act provides an answer to this challenge.
    The bill offers a way to offset unavoidable impacts on fish, 
wildlife, and water resources by creating a conservation fund derived 
from royalties and other revenues from public land wind and solar 
energy development. This conservation fund is essential to our ability 
to balance wind and solar energy development with the kind of 
unparalleled hunting and fishing opportunities that make our western 
public lands a prime destination for sportsmen and women from around 
the country.
    The conservation fund would be used in regions where renewable 
energy development takes place so that work can be done to improve our 
lands and waters. For example, invasive plant treatment could be done 
to enhance big game habitat to improve the health of the herd. Projects 
to increase irrigation efficiency could be used to stretch the water 
supply and provide flows for fish, even as new water demands for energy 
development are met. Where an area previously used by hunters becomes a 
wind or solar project, voluntary access easements could be used to gain 
better access to surrounding public lands. If we have the resources to 
do these types of activities we will be able to balance wind and solar 
development with fishing and hunting opportunities on a landscape 
scale.
    Finding a balance between wind and solar development and the 
conservation of fish and wildlife on public lands will be essential to 
the future of renewable energy on public lands. Wind and solar offer 
the prospect of much-needed jobs and increased energy security for our 
nation. We need for these benefits to coexist with the outstanding 
cultural and economic benefits of hunting and fishing. A survey by the 
Fish & Wildlife Service found that 91.1 million U.S. residents fished, 
hunted, or wildlife watched in 2011, and they spent $145 billion on 
their activities. This is a large, and growing, contributor to our 
economy: 11 percent more people fished in 2011 than in 2006, and 9 
percent more people hunted. We need high quality, accessible habitat to 
sustain this economic activity. The conservation fund created by the 
Public Lands Renewable Energy Development Act would support the work 
needed to maintain our public land natural resource values.
    The sportsmen's community is one that is naturally inclined to work 
collaboratively to solve problems. Trout Unlimited's 155,000 members 
annually dedicate more than 600,000 volunteer hours to conservation. 
Hunters and anglers are strong conservationists, and our members take 
great pride and joy in planting trees along streams, removing invasive 
plants, or working with agencies to reconnect streams. The Public Lands 
Renewable Energy Development Act, by providing the resources needed to 
do habitat improvement work in the field, will help position the 
sportsmen's community as partners as wind and solar projects are built 
on public lands.
    I'm an angler, as are almost all Trout Unlimited members. 
Conservation is the most affirmative, hopeful, and optimistic idea that 
America ever gave the rest of the world. And fishing is inherently an 
act of optimism. Each time you cast a fly, it is with the hope that you 
are about to hook a fish-even if your last 100 casts have come up 
empty. That spirit of optimism permeates Trout Unlimited's work. We 
clean up abandoned mines and get fish back into streams where they had 
been wiped out for decades. We work with ranchers to conserve water and 
restore trout to streams that had previously run dry. We partner with 
landowners to improve old water diversion structures and enable fish to 
reach upstream habitat. These projects start with the idea that we can 
make things better than they are today, and they succeed through hard 
work and cooperation.
    The Public Lands Renewable Energy Development Act embodies this 
spirit of optimism. It is a demonstration of how people of good will 
can come together to apply common sense to common problems for the 
common good. With it we can develop energy resources, bolster local 
economies, diversify county revenue streams, and make the fishing and 
hunting better than we found it. That is why it has attracted the 
support of 60 cosponsors in the House, from both sides of the aisle and 
every point on the political spectrum. It is cosponsored by members of 
your committee from both parties.
    Again I thank you for holding a hearing on S. 279. We appreciate 
the leadership of Senators Tester and Heller on this bill. And we look 
forward to working with you to advance the Public Lands Renewable 
Energy Development Act.
                                 ______
                                 
Statement of Chairman Gordon Howell, Ute Tribal Business Committee, Ute 
            Indian Tribe of the Uintah and Ouray Reservation
    Chairwoman Landrieu, Ranking Member Murkowski, and Members of the 
Committee on Energy and Natural Resources, thank you for the 
opportunity to testify. My name is Gordon Howell. I am the Chairman of 
the Business Committee for the Ute Indian Tribe of the Uintah and Ouray 
Reservation. The Ute Indian Tribe consists of three Ute Bands: the 
Uintah, the Whiteriver and the Uncompahgre Bands. Our Reservation is 
located in northeastern Utah.
    While this hearing was focused on the Bureau of Land Management 
(BLM) and energy permitting on Federal lands, one of the bills before 
the Committee, S. 2440, the BLM Permit Processing Improvement Act of 
2014, would have a significant impact on energy development on Indian 
lands. As currently drafted, S. 2440 would increase Application for 
Permit to Drill (APD) fees for oil and gas development on Indian lands 
to $9,500 without providing any benefits to Indian energy development.
    As you may know, the Bureau of Land Management (BLM) currently 
charges APD fees for permits to drill on Indian lands as well as 
Federal lands. On Indian lands this additional charge is yet another 
barrier to Indian energy development. Even worse, none of the funding 
BLM currently collects in APD fees benefits energy permitting on Indian 
lands. In fact, BLM's delays and inaction in processing permits on 
Indian lands is one of the biggest impediments to Indian energy 
development. S. 2440 would further this problem by increasing APD fees 
while still not providing support for energy permitting on Indian 
lands.
    To resolve this issue, we ask that the Committee include in S. 2440 
a proposal developed by the Coalition of Large Tribes' (COLT) and also 
adopted by the National Congress of American Indians (NCAI). The COLT 
proposal would create an Indian Energy Regulatory Office to mirror the 
success of BLM's Federal Permit Coordination Offices created by Section 
365 of the Energy Policy Act of 2005 but provide an office focused on 
development of Indian energy resources. This Office would utilize 
existing Department of the Interior resources located in Denver, 
Colorado to streamline and coordinate energy permitting on Indian 
lands. The COLT proposal is attached my testimony along with 
resolutions from COLT and NCAI approving the proposal.
    The Ute Indian Tribe, as well as many members of COLT, has a 
detailed understanding of the problems with energy permit processing 
and the solutions needed. The Ute Tribe is a major oil and gas 
producer. Production of oil and gas began on our Reservation in the 
1940's and has been ongoing for the past 70 years with significant 
periods of expansion. The Tribe leases about 400,000 acres for oil and 
gas development. We have about 7,000 wells that produce 45,000 barrels 
of oil a day. We also produce about 900 million cubic feet of gas per 
day. And, we have plans for expansion. The Tribe is in process of 
opening up an additional 150,000 acres to mineral leases on our 
Reservation with an $80 million investment dedicated to exploration.
    The Tribe relies on its oil and gas development as the primary 
source of funding for our tribal government and takes an active role in 
the development of its resources. However, despite our progress, the 
Tribe's ability to fully benefit from its resources is limited by the 
federal agencies overseeing oil and gas development on our Reservation. 
As the oil and gas companies who operate on our Reservation often tell 
the Tribe, the federal oil and gas permitting process is the single 
biggest risk factor to operations on the Reservation.
    In order for the Tribe to continue to grow and expand our economy 
the federal permitting process needs to be streamlined and improved. 
For example, we need 10 times as many permits to be approved by the BLM 
and the Bureau of Indian Affairs. Currently, about 48 Applications for 
Permits to Drill (APD) are approved each year for oil and gas 
operations on our Reservation. We estimate that 450 APDs will be needed 
each year as we expand operations.
    S. 2440 should be amended to avoid damaging the energy development 
we have worked so hard to create while also providing an opportunity to 
improve energy permitting on Indian lands. We ask that S. 2440 be 
amended to include the COLT proposal and specifically address Indian 
lands. As we describe below, there are a variety of reasons the 
Committee should take this opportunity to improve energy permitting on 
Indian lands.
    First, it is time to bring the federal government's oversight and 
management of Indian energy resources into the 21st Century. For too 
long, Indian energy permitting has been subject to a bureaucratic maze 
of Federal agencies. Six years ago, former Senator Dorgan estimated 
that each individual oil and gas permit had to make its way through 4 
agencies and a 49-step process. The Indian Energy Regulatory Office 
proposed by COLT would provide the leadership, staff and expertise 
needed for coordinated review of Indian energy permits across the 
Federal government.
    Second, S. 2440 would increase APD fees to $9,500, but none of this 
funding would be used to support energy permitting on Indian lands. 
Instead, all of the funding would go to BLM's Federal Permit 
Coordination Offices and permitting on Federal lands. APD fees are 
already a burden for energy development on Indian lands. Under S. 2440, 
energy development on Indian land gets all of the burdens and none of 
the benefits. We ask that the COLT proposal be included in the bill and 
that APD fees be used to support an Indian Energy Regulatory Office.
    Third, Congress, at a minimum, should give energy development on 
Indian lands the same attention and focus as energy development on 
Federal lands. The benefits of increased energy development on Indian 
lands far exceed the benefits of energy development on Federal lands, 
yet Congress has done little to improve energy permitting on Indian 
lands. Energy development on Indian lands provides needed jobs and 
training, economic development, and, if managed properly, long-term 
investment in reservation infrastructure. With increased revenues and 
resources, tribal governments are also able to provide vital services 
to our members.
    Finally, the COLT proposal should be included as separate section 
in S. 2440 to specifically address energy permitting on Indian lands. 
Indian lands and the Bureau of Indian Affairs cannot simply be included 
as a part of the existing BLM Offices. Indian lands are not public 
lands, yet the Tribe must fight every day to prevent Federal agencies 
from applying public land management standards to Indian lands. We need 
legislation to create a new office that is focused on Indian lands.
    The Indian Energy Regulatory Office proposed by COLT would be 
guided by basic principles of Federal Indian law that have been lost in 
the current unorganized system for overseeing energy development on 
Federal Indian trust lands. The Office would treat Indian lands 
according to federal trust management standards and would provide 
technical support to tribes as we enter a new era of self-determination 
and we manage and regulate energy development ourselves.
    The Tribe asks that you act quickly to avoid damaging the energy 
development on our Reservation that we have worked so hard to create. 
The Tribe stands ready to work with the Committee on S. 2440 and to 
improve energy permitting on Indian lands. I would like to thank the 
Committee for the opportunity to present this testimony on behalf of 
the Ute Indian Tribe.

                                    

      
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