    [House Hearing, 114 Congress]
    [From the U.S. Government Publishing Office]

                       EXAMINING BLM PUBLIC LANDS LEASING

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

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                                  THE INTERIOR

                                     OF THE

                             COMMITTEE ON OVERSIGHT
                             AND GOVERNMENT REFORM
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 MARCH 23, 2016

                                   __________

                               Serial No. 114-110

                                   __________

    Printed for the use of the Committee on Oversight and Government Reform

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                  COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                         JASON CHAFFETZ, Utah, Chairman
    JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland,
    MICHAEL R. TURNER, Ohio                  Ranking Minority Member
    JOHN J. DUNCAN, Jr., Tennessee       CAROLYN B. MALONEY, New York
    JIM JORDAN, Ohio                     ELEANOR HOLMES NORTON, District of
    TIM WALBERG, Michigan                    Columbia
    JUSTIN AMASH, Michigan               WM. LACY CLAY, Missouri
    PAUL A. GOSAR, Arizona               STEPHEN F. LYNCH, Massachusetts
    SCOTT DesJARLAIS, Tennessee          JIM COOPER, Tennessee
    TREY GOWDY, South Carolina           GERALD E. CONNOLLY, Virginia
    BLAKE FARENTHOLD, Texas              MATT CARTWRIGHT, Pennsylvania
    CYNTHIA M. LUMMIS, Wyoming           TAMMY DUCKWORTH, Illinois
    THOMAS MASSIE, Kentucky              ROBIN L. KELLY, Illinois
    MARK MEADOWS, North Carolina         BRENDA L. LAWRENCE, Michigan
    RON DeSANTIS, Florida                TED LIEU, California
    MICK MULVANEY, South Carolina        BONNIE WATSON COLEMAN, New Jersey
    KEN BUCK, Colorado                   STACEY E. PLASKETT, Virgin Islands
    MARK WALKER, North Carolina          MARK DeSAULNIER, California
    ROD BLUM, Iowa                       BRENDAN F. BOYLE, Pennsylvania
    JODY B. HICE, Georgia                PETER WELCH, Vermont
    STEVE RUSSELL, Oklahoma              MICHELLE LUJAN GRISHAM, New Mexico
    EARL L. ``BUDDY'' CARTER, Georgia
    GLENN GROTHMAN, Wisconsin
    WILL HURD, Texas
    GARY J. PALMER, Alabama

                       Jennifer Hemingway, Staff Director
                     David Rapallo, Minority Staff Director
             William McGrath, Interior Subcommittee Staff Director
                        Sharon Casey, Deputy Chief Clerk

                                     ------

                          Subcommittee on the Interior

                      CYNTHIA M. LUMMIS, Wyoming, Chairman
    PAUL A. GOSAR, Arizona               BRENDA L. LAWRENCE, Michigan,
    BLAKE FARENTHOLD, Texas                  Ranking Minority Member
    KEN BUCK, Colorado, Vice Chair       MATT CARTWRIGHT, Pennsylvania
    STEVE RUSSELL, Oklahoma              STACEY E. PLASKETT, Virgin Islands
    GARY J. PALMER, Alabama

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on March 23, 2016...................................     1

                                   WITNESSES

    The Hon. Neil Kornze, Director, Bureau of Land Management, U.S.
      Department of the Interior
        Oral Statement...............................................     2
        Written Statement............................................     5

                                    APPENDIX

    RESPONSE from Director Kornze-BLM to Chairman Lummis QFRs........    22

                       EXAMINING BLM PUBLIC LANDS LEASING

                                  ----------

                           Wednesday, March 23, 2016

                      House of Representatives,
                          Subcommittee on the Interior,
                  Committee on Oversight and Government Reform,
                                                       Washington, D.C.
        The subcommittee met, pursuant to call, at 9:15 a.m., in
    Room 2247, Rayburn House Office Building, Hon. Cynthia M.
    Lummis [chairman of the subcommittee] presiding.
        Present: Representatives Lummis, Gosar, Buck, Palmer,
    Lawrence, and Plaskett.
        Mr. Gosar. The Subcommittee on Interior will come to order.
    Without objection, the chair is authorized to declare a recess
    at any time. I'm going to introduce myself for an introductory
    statement.
        Good morning. Today the Subcommittee on the Interior will
    examine the Bureau of Land Management's recent difficulties
    with oil and gas lease sales. The Mineral Leasing Act requires
    the BLM to hold quarterly lease sales for oil and natural gas
    in States where lands are available for leasing, but it has had
    several lease sales canceled either due to weather or lack of
    space.
        Congress has already provided BLM authorization to conduct
    online auctions instead of in-person sales, through language
    included in the 2015 National Defense Authorization Act. The
    Secretary was given the authority to conduct on-shore lease
    sales through Internet-based bidding methods. BLM has already
    selected a vendor and conducted a pilot on lease sales auction
    in 2009 when it was previously given authorization to do so
    through the fiscal year 2008 Consolidated Appropriations Act.
        We have a video clip of some of the folks who the BLM want
    to ensure gets a chance to bid on these leases. Can we play the
    video?
        [video shown.]
        Mr. Gosar. That is folks pretending to be hit by a car in
    an effort to disrupt a lease sale in Lakewood, Colorado. This
    is just plain crazy. To help us understand what is going on
    with this problem and other leasing issues at the BLM like the
    coal lease sale moratorium, Director Neil Kornze is here.
        Director Neil Kornze, I appreciate you being here to answer
    our questions. I hope we can learn today when we can expect BLM
    to utilize its authority to conduct online lease sales. And
    with that, I am going to acknowledge Mrs. Lawrence for her
    introductory statement. Thank you Mrs. Lawrence.
        Mrs. Lawrence. Good morning, and thank you, Chairman, for
    holding this important hearing. I thank our witness, Director
    Kornze for his time and testimony.
        Our discussion today will focus on the management of oil
    and gas lease sales by the Bureau of Land Management.
        Congress has entrusted this agency with the stewardship of
    millions of acres of public lands. The agency is capably
    managing grazing, recreation, and the development of natural
    resources on public land. For energy production, the agency is
    also managing public lands in Wyoming that produce the majority
    of the Nation's coal. Solar, wind, and geothermal energy, our
    renewable energy sources, are also responsibly managed by the
    agency.
        During the Obama Administration, the agency has approved
    enough drilling permits to sustain oil and gas development on
    public lands for the next 4 years. Some people accuse the
    agency of hindering oil, gas, or coal production on public
    land. I think the facts speak otherwise. BLM has offered over 4
    million acres of land to lease for oil and gas development. But
    industry has only bid on a fraction of that land.
        Let us examine all of the circumstances to see how best we
    can use the land that is now under energy development leases.
    Once that assessment is complete, it will then be appropriate
    to revisit the question on whether more public lands should be
    made available for development. I am looking forward to this
    discussion, and I yield back.
        Mr. Gosar. Thank you, Mrs. Lawrence. I will hold the record
    open for 5 legislative days for any members who would like to
    submit a written statement.
        Mr. Gosar. We will now recognize our distinguished witness.
    I am pleased to welcome The Honorable Neil Kornze, the director
    of the Bureau of Land Management at the U.S. Department of
    Interior. Welcome, Mr. Kornze. Pursuant to committee rules,
    witnesses will be sworn in before they testify.
        Will you please rise and raise your right hand.
        Do you solemnly swear or affirm that the testimony you are
    about to give will be the truth, the whole truth and nothing
    but truth?
        Mr. Kornze. Yes.
        Mr. Gosar. Thank you. Please be seated.
        Let the record reflect that the witness answered in the
    affirmative.
        In order to allow time for discussion, please limit your
    oral testimony to 5 minutes. Your entire written statement will
    be made part of the record. Mr. Kornze, you are recognized for
    5 minutes.

                           WITNESS STATEMENT

                 STATEMENT OF THE HONORABLE NEIL KORNZE

        Mr. Kornze. Thank you, Chairman, Ranking Member Lawrence,
    and the other members of the committee. It is a pleasure to be
    with you today.
        The Bureau of Land Management manages 250 million acres on
    the surface of this Nation and about 700 million acres of its
    subsurface minerals. We manage these lands under the dual
    framework of multiple use and sustained yield which is a
    mandate from Congress which has its 40th anniversary this year.
        We at the BLM take seriously our obligation under this
    framework to ensure the Federal Government's on-shore energy
    resources, both renewable and conventional, are developed in a
    safe and responsible manner. Every year we face the challenge
    of meeting this obligation while also moving forward with some
    of the most advanced and largest energy projects in the world.
        The BLM's oil and gas program continues to provide critical
    resources to our Nation's energy supply. In fact, on lands
    where you need a BLM permit to drill, oil production has more
    than doubled during this administration, which outpaces
    production increases seen nationwide over that same time
    period.
        In fiscal year 2015 on-shore oil and gas royalties from
    Federal leases exceeded $1.8 billion, approximately half of
    that money goes back to the States where the development
    occurred. Over the same period, tribal royalties exceeded $850
    million all of which went to tribal or individual Indian
    mineral owners.
        In addition to overseeing this growth in production, the
    BLM continues to offer leasing and drilling opportunities far
    in excess of industry demand. For instance, last year, the BLM
    offered more than 4 million acres of lease sales, yet industry
    only bid on 15 percent of that acreage. Similarly, industry
    currently has 32 million acres under lease, an area roughly the
    size of Alabama. However, only 12 million of those acres or
    less than 40 percent are producing oil. And last year the BLM
    approved more than double the number of drilling permits than
    there were wells drilled on the lands where they could be used.
        Furthermore, by the end of the year, there were nearly 4
    years worth of permits ready to drill without any additional
    work or review by the Bureau of Land Management. These permits
    have been approved and are on the shelf in the hands of
    industry today.
        Part of what we see in these important statistics is that
    as is always the case, current oil prices, market conditions,
    and geographic considerations drive development decisions. With
    respect to leasing, the BLM's actions are guided by the Mineral
    Leasing Act which instructs the BLM to hold quarterly lease
    sales in States where lands are available. In the lower 48, the
    leasing process starts with the public identifying parcels that
    they would like offered at a lease sale. The BLM decides
    whether to include a particular parcel in a lease sale based on
    allocation decisions made in applicable land use plans, our
    evaluation of resource conflicts, and compliance with other
    statutory requirements and management objectives.
        Once we identify those parcels that are appropriate for
    potential inclusion in a sale, the BLM prepares an
    environmental analysis in order to give the public and the BLM
    an opportunity to look more closely at the management
    considerations surrounding an individual parcel in order to
    inform the ultimate leasing decision on that parcel.
        Given the extraordinary demands placed on public lands and
    the resources they contain, the BLM works closely with
    stakeholders throughout the process to ensure the development
    is directed to the right places that have the fewest resource
    conflicts. After completing the necessary reviews, the BLM
    offers parcels at a lease sale. Normally the sale schedule is
    announced at the beginning of the year. However, from time to
    time there have to be adjustments and occasionally
    postponements. This happens if there are no lands available,
    the applicable presale requirements have not been completed, or
    in isolated cases unpredictable events or safety concerns
    justify a postponement.
        When an unpredictable event or safety concern prompts a
    postponement, all of the parcels that would have been offered
    at that postponed sale are offered at a subsequent sale,
    typically that same year, often just a few months later.
        Recognizing that there are always opportunities to improve
    the BLM is making important investments in our leasing process
    consistent with our larger effort to modernize our oil and gas
    program. Notably, since receiving new permanent statutory
    authority, the BLM has been working to stand up an Internet-
    based leasing system and we intend to phase in this new process
    with online lease sales later this year.
        Thank you for the opportunity to be here. I look forward to
    your questions.
        [Prepared statement of Mr. Kornze follows:]

      [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mrs. Lummis. [Presiding.] I thank the gentleman, and we
    will, because Mrs. Lawrence has a markup, we will give her 5
    minutes to ask questions first.
        So thank you very much for your testimony, Mr. Kornze, and
    now Mrs. Lawrence, you are recognized for 5 minutes.
        Mrs. Lawrence. Thank you, Madam Chair. Good morning,
    Director. The management of our energy resources is of critical
    importance to our national and economic security. Those
    resources are not replaceable once they are gone, so it makes
    sense that we use them in the right way and at the right time.
        Could you please respond to this? Do you have an estimate
    of the share of oil and gas produced on Federal lands as
    compared to non-Federal lands? Can you respond to that? What is
    our level of production?
        Mr. Kornze. So in terms of production on lands where you
    need a BLM permit to drill, it is about 7 percent of the
    Nation's oil and about 11 percent of the Nation's gas.
        Mrs. Lawrence. And it seems reasonable to me that in
    deciding how to best manage our non-renewing resources, we need
    to have clarity on the current performance. How do gas and oil
    prices influence bids on the oil leases and later production
    levels?
        Mr. Kornze. We see a strong correlation between prices and
    interest in leasing. So, for instance, and there has been, of
    course, a steep decline in oil prices recently. And we have
    seen a very strong drop off in drilling, and in APD
    applications, drilling permit applications, particularly this
    year. It didn't go over the cliff last year, but right now we
    are seeing half or a third of what we were seeing just a year
    ago.
        Mrs. Lawrence. So with the active current lease lands, are
    they producing at a high capacity and are they contributing to
    our energy security?
        Mr. Kornze. So somewhere around 36, 37 percent of the lands
    that are leased are actually being used for production. When
    they are producing, they are producing important revenues for
    the country, and we are proud to be part of that.
        Mrs. Lawrence. Okay. We have heard recent reports about a
    proposed cancellation in the Thompson Divide region. The
    concern is about inconsistent environmental standards
    associated with the 25 leases. Did NEPA apply at the time of
    the approval on the sale of these leases, and if not, why not?
        Mr. Kornze. So we had some procedural errors in our leasing
    effort there. So the short story is that the Forest Service put
    forward a plan for approving potential leases in that area in
    the 1990s when we went forward with leases in the Aughts. We
    did not correctly link our analysis to the environmental
    analysis of the Forest Service. So they were issued with error,
    and the Interior Board of Land Appeals, IBLA immediately threw
    out three of them that were challenged and the rest of them
    continue to have difficulties.
        So we are going back, doing NEPA, evaluating the situation
    and we are working through that process right now.
        Mrs. Lawrence. Thank you, Madam Chair. I yield back.
        Mrs. Lummis. I thank the gentlelady. The gentleman from
    Arizona, Mr. Gosar is recognized for 5 minutes.
        Mr. Gosar. Thanks, Madam Chair. Mr. Kornze--I will scoot
    down here. That one has got a buzz.
        Thank you, Mr. Kornze, and thank you very much for getting
    back to me with regards for lands scheduled for disposal on the
    BLM. We look forward to the next month to seeing that up on the
    Web site.
        Mr. Kornze, I'm strongly opposed to the practice used by
    this administration which utilizes the Antiquities Act to
    unilaterally designate national monuments and to lap up
    millions of acres of land, BLM, or otherwise, from resource
    development. I find it especially egregious when the
    administration plays fast and loose with this authority at the
    behest of the extremist environmentalists and special interests
    that do not have American people's best interest as their
    motives.
        Mr. Kornze, Arizona already has 18 national monuments, more
    than any other State. Is the administration currently working
    on designating a new national monument in Arizona on BLM lands?
        Mr. Kornze. So I am going to have to refer you to the White
    House, the Antiquities Act is a Presidential power, and you
    know, any decisions that relate to that are under the auspices
    of ----
        Mr. Gosar. Well, I understand, but have they reached out
    and talked to you about any types of parcels particularly in
    western Arizona? No conversation whatsoever with the White
    House at all?
        Mr. Kornze. I am going to direct you to CEQ in the White
    House for information on what they are working on or what they
    are not working on.
        Mr. Gosar. So the White House hasn't reached out to you one
    iota with regard to any lands located in Arizona?
        Mr. Kornze. I would say we receive requests and interests
    from a lot of people from all types of stakeholders on these
    issues.
        Mr. Gosar. No, but this is a specific ask. I mean, you are
    under oath and I am asking you, did the White House or the
    administration talk with you or anybody underneath--the BLM in
    regards to any withdrawal potentials utilizing the antiquities
    in Arizona?
        Mr. Kornze. I have heard discussion related to multiple
    possibilities.
        Mr. Gosar. Multiple possibilities. Can you elaborate rate
    on those multiple possibilities?
        Mr. Kornze. I am talking about looking at the country and
    figuring out where would this be appropriate, where would it
    not?
        Mr. Gosar. So there is some conversation going on between
    the White House and BLM and agencies in regards to antiquities
    withdrawal?
        Mr. Kornze. Yes.
        Mr. Gosar. That is kind of--you misled me. I mean, you
    know, at the very, very beginning of that conversation, you
    said you will have to talk to the White House. So there is some
    coordination going on. Is there a Member of Congress that
    actually is involved in those conversations?
        Mr. Kornze. Well----
        Mr. Gosar. Remember, you are under oath.
        Mr. Kornze. I mean, it depends on what we are talking
    about, sir.
        Mr. Gosar. Is there a Member of Congress from Arizona
    regarding those discussions with BLM and the White House?
        Mr. Kornze. Is there a Member of Congress involved? Not
    that I am aware of, but I am going to refer you to the White
    House for more information on what they are working on.
        Mr. Gosar. My office currently has a FOIA request at the
    Department of Interior regarding the proposals, and the
    coordination between land agencies and environmental groups.
    Will that request collaborate the information that you shared
    here today?
        Mr. Kornze. I don't know what--I don't know the request you
    are referring to, so----
        Mr. Gosar. The request we sent was by multiple Members of
    Congress, was submitted on 12-3-2015, and we have received
    nothing of substance to date, absolutely shameful. So much for
    being the most transparent administration in history. Any idea
    when your administration will respond to that request?
        Mr. Kornze. I am not familiar with that request so I
    couldn't tell you.
        Mr. Gosar. We will make sure that it is reissued then. And
    we will look for an expedited conversation.
        In July of last year the House of Representatives passed an
    amendment to block pending national monuments throughout the
    country where there is significant local opposition. Do you
    support pursuing the designation of a monument that blatantly
    ignores the will of local governments and overrides every clear
    opposition from local communities who will be negatively be
    targeted by such action?
        Mr. Kornze. So it has been a consistent position of this
    administration to make sure that any use of the Antiquities Act
    is done through community conversation, that it is responding
    to local interests.
        Mr. Gosar. So we would have a scheduled public hearing in
    regards to those withdrawals?
        Mr. Kornze. There have been public hearings before other
    designations. So----
        Mr. Gosar. I am going to be more specific about Arizona.
    When have those conversations occurred? Would you enlighten me?
        Mr. Kornze. Which?
        Mr. Gosar. Well, I mean, you made the comment today that
    there has been some conversations between the White House and
    your office in regards to potential liquidity of some lands, so
    when are we expecting to have these conversations with the
    public out in Arizona?
        Mr. Kornze. I presume if a decision is made to pursue with
    interest that sort of concept, that there would be a public
    process involved.
        Mr. Gosar. So you would tell me that that is actually going
    to happen prior to, not afterwards?
        Mr. Kornze. That has been the practice of this
    administration to make sure that there is a public process.
        Mr. Gosar. Can you provide for the record those that have
    applied prior to for the record so that we can actually have a
    record of that?
        Mr. Kornze. Yeah, you sure can.
        Mr. Gosar. I would appreciate it. Madam Chair, I thank you
    very, very much for the questions.
        Mrs. Lummis. I thank the gentleman and I will now take my 5
    minutes. Thank you, Mr. Kornze, for joining us today.
        I want to start by visiting about the coal lease sale
    moratorium. Even with the leasing moratorium in place, you and
    Secretary Jewell have suggested that some leases might continue
    and that some leasing could take place under certain
    circumstances.
        Can you provide some more assurances that some lease sales
    will be completed, and when?
        Mr. Kornze. So a lot of it depends on industry interests.
    All right, so we have, I believe, five different projects in
    Wyoming alone that have received records of decision, or near
    that point in the process and are able to move forward. A very
    large portion of what we have on the list to continue to move
    forward are projects that have essentially been approved but
    are sitting on the shelf because industry has asked us to
    pause. So there is a considerable amount of leasing that is
    available to move in Wyoming in addition to other States.
        Mrs. Lummis. Now I want to shift to oil and gas. We had
    given you authority to do online leasing. Hopefully, that would
    alleviate some of the concerns that you have expressed that you
    have to cancel meetings because the rooms are too small or the
    weather is too bad. You mentioned that you are moving forward
    this summer, but now I heard you say earlier later this year.
        Mr. Kornze. Yeah.
        Mrs. Lummis. So what does that mean? At one point I had
    heard, I thought I had heard it would happen this summer. Now I
    am hearing later this year.
        Mr. Kornze. So I will clarify. We intend to have one lease
    sale online this summer, hope to have two or three this fall.
    And then if those are a success, we should be using it broadly
    next year.
        Mrs. Lummis. And what is taking so long?
        Mr. Kornze. So I think part of it is, you know, looking at
    a regulatory scheme and seeing if the authority that was given
    to us matches with our regulations and how we thread that
    needle. Because there is an odd requirement for us that it be
    oral bidding, so we are trying to figure out how do you meld
    oral bidding with an online system.
        And then other than that, you know, finding a contractor,
    getting the contract in place, putting together our rules of
    the road and our guidance for our team, so I can understand the
    desire to move faster and we are almost there.
        Mrs. Lummis. You have yet to make the fiscal year 2015
    leasing data for oil and gas public. When do you plan on
    releasing that data?
        Mr. Kornze. Let me consult with my staff. It should be very
    soon. Okay. It should be within the next few weeks.
        Mrs. Lummis. As in several months.
        Mr. Kornze. No, next 2 weeks, let's say.
        Mrs. Lummis. Very good. Thank you. Some State offices cover
    multiple States. There were only three lease sales in New
    Mexico which has some very high interest areas in the Permian
    Basin because the Oklahoma field office had a sale. Do you have
    plans to ensure four quarterly sales occur in New Mexico,
    Montana, North Dakota, and the other States with Federal oil
    and gas lands?
        Mr. Kornze. We, just to make sure I--correct me if I don't
    get to the point of your question here, we are intending to
    move ahead with everything that is on our schedule to the
    degree that we have lands that are available and the situations
    are, you know, we can provide for the safety and, you know,
    reasonable disposition of those sales.
        A lot of the difficulty we have had is, you know, adjusting
    to the level of public interest that has been brought to these
    lease sales. Historically, these have been quiet affairs, 15,
    20 people sitting together conducting these sales. And now we
    often times have hundreds of people attending so we had an
    adjustment period through December, January, but I think Utah
    is a great example where we had a lease sale that was postponed
    in December and we have successfully orchestrated and had that
    lease sale since then.
        Mrs. Lummis. And it was postponed for what reason?
        Mr. Kornze. We were surprised by the level of interest and
    so we were under the impression there were going to be hundreds
    of people attending.
        Mrs. Lummis. Was it interest by bidders, or was it interest
    by opposition demonstrations?
        Mr. Kornze. Generally demonstrators, yes.
        Mrs. Lummis. So are you required to make those bidding
    sessions public?
        Mr. Kornze. Well, it is part of the ethos of the agency to
    make sure that we have as much of a public process as we can.
    So if folks want to attend in a reasonable way, express
    opinion, yeah, that is something that we welcome.
        Mrs. Lummis. Was the information made available to you
    earlier that there may be protests, hence, that was not held,
    that lease sale?
        Mr. Kornze. Earlier as in----
        Mrs. Lummis. Well, you mentioned that it was postponed
    because you had a larger turnout. You anticipated a larger
    turnout, more interest, so to speak. So in other words, were
    you tipped off that some protesters were going to come?
        Mr. Kornze. We saw press releases a day, day-and-a-half in
    advance, and we had in Utah, traditionally held these in our
    State office and so, you know, having this kind of--having a
    15-person, you know, fairly docile meeting in the midst of our
    employee space was something we were very used to, a day-and-a-
    half in advance being able to find a place appropriate for a
    few hundred people, that, you know, with different levels of
    excitement, took us some time.
        So that was the reason that we postponed that sale and
    sought a different venue.
        Mrs. Lummis. I just find it interesting that a traditional
    practice conducted in a traditional place would be changed
    because of a press release a couple of days in advance that
    protesters intend to come. And protesters would have an
    opportunity to protest from a sidewalk, not disrupting the
    specific lease sale.
        Mr. Kornze. Uh-huh.
        Mrs. Lummis. And that sounds to me like an over-
    accommodation of a traditional, normal process in order to
    accommodate a protesting group. That sounds abnormal to me.
        Mr. Kornze. Well, we also we have had an abnormal security
    situation related to some public agencies, including ours. All
    right, we have had a situation where we have had militias. We
    have had people raising arms at different times and we are on
    heightened alert. Right.
        We are concerned about safety and so a situation which we
    are not used to separating out, who's a bidder and who's not in
    a routine way, you know, gives us some pause and led us to take
    a half step back and say, how do we do this in the very near
    future and do it in a reasonable way that ensures the safety of
    everyone involved?
        Mrs. Lummis. So the leases that were non-NEPA compliant
    that were Forest Service issued in the 1990s and then
    subsequently you had to walk them back because of FBLA
    requirements, non-NEPA compliant issuances, where were those
    leases? Do you remember what State they were in?
        Mr. Kornze. So the ones that Congresswoman Lawrence
    referred to, that was in Colorado.
        Mrs. Lummis. And what is their current status?
        Mr. Kornze. So----
        Mrs. Lummis. And let me ask first before I ask about their
    status. Had drilling begun in any of them, or were they dormant
    in pursuit of permitting?
        Mr. Kornze. So there's a range, there's about 65 different
    leases in Colorado that are being reviewed through this
    process. Some have active oil and gas production. And some have
    nothing. So there's the entire spectrum.
        Mrs. Lummis. Okay. And for those where production had
    begun, is production continuing?
        Mr. Kornze. Yes.
        Mrs. Lummis. In those where it had not begun, what is the
    process of reissuing them in a compliant manner?
        Mr. Kornze. So what is on the table right now in terms of a
    proposal is the Forest Service has redone their oil and gas
    land use plan for the White River National Forest so they have
    taken a fresh look based on recent information and said, here
    are the areas we think are appropriate for oil and gas. Here
    are the ones that we don't going forward. We have during our
    NEPA process incorporated that most recent information that
    they've provided and that they used and followed very similar
    lines. So places where they say we don't think oil and gas
    makes sense, we've followed a similar proposal or we have put
    forward a similar proposal and in places where they have said,
    you know, we think oil and gas is a good use of this land,
    we're proposing to leave those in place. But anyplace where
    there is existing production, that production will continue.
        Mrs. Lummis. With regard to the pilot office program, we
    were expecting a report on how that is going with regard to
    streamlining permitting approvals. That report we expected by
    February 1. Do you have that report?
        Mr. Kornze. We are working on that. I will be frank that we
    had some confusion as to which fiscal year it was desired in.
    And so we are doing a double quick effort to get that done and
    get that up to you.
        Mrs. Lummis. I am going to--now, I am going to switch topic
    as little bit and ask you some questions about the wild horse
    program.
        Mr. Kornze. Okay.
        Mrs. Lummis. A little bit off the oil and gas topic. Both
    your State and mine have overpopulations of wild horses. This
    is a program that continues to vex those who are administering
    the wild horse program and the States that are trying to
    protect the quality of the range.
        Can you give me an update on what the status is of the
    program, what options you are considering that would make this
    program function better for especially for Wyoming and Nevada.
        Mr. Kornze. Yeah, well, I appreciate the question. Those
    two States do have the largest numbers of horses and are a
    serious concern. So for those that are less oriented on wild
    horses and burros just as an entry level discussion, there are
    about 50,000 horses on the range--excuse me 60,000 horses on
    the range in the West. About 50,000 that we have removed and
    are now in long-term holding pastures, usually in Midwestern
    States. Our own internal recommendation as to how many horses
    should be on the range is somewhere just south of 30,000. So we
    are nearly double what it should be range wide. In some places,
    some individual spaces it is many fold over where it should be.
    So we have two difficulties here. One is that the reproductive
    rate is 15, 20 percent per year. These populations can double
    in 3-and-a-half years, and on the back end of the program,
    adoptions which is the outlet of the program have declined
    precipitously. We used to adopt out nearly 10,000 horses a year
    and now we are lucky if we get 2,000 adopted.
        So a couple of things that we are doing, one, we are trying
    to be more vocal about this. And so I appreciate you asking the
    question. I think more public dialogue is needed. But we are
    very focused on birth control methods and looking at, you know,
    both drugs that can provide a 2-, 3-, 4-, 5-year window of
    birth control because right now we have PZP, but PZP will only,
    you know, reduce fertility for a year. And so we need a longer-
    term tool because we can't get out and touch every horse every
    year. It is just simply not possible with the budgets we have.
    So we have invested nearly $11 million in roughly 20 different
    projects, 15, 20 different projects. So we are working with
    USGS. We are working with big universities trying to pull
    together a research program that if we have success, it can be
    verified, it can be duplicated. A lot of what we have seen in
    the past has been smaller teams, smaller researchers, some of
    which couldn't be replicated. So we are taking a big science
    approach in hopes that we can truly find a solution on that
    side.
        We are also looking at issues of spaying and neutering. We
    have to be creative about what's possible. I think in the
    medium term, spaying and neutering horses as we spay and neuter
    our dogs and cats may be something that we need to do. And so
    we are researching that as well and the best tools and the best
    ways. So that's part of our program.
        We are also trying to talk vocally about the actual cost of
    the program. One of the questions that I asked my team when I
    joined the agency was, how much are we spending? Because, you
    know, the team sat with me one day and said, here are three
    scenarios for potential gathers next year. How many should we
    do? And I said, well, what's the long-term cost that comes with
    each one of those choices? And we didn't have an answer. It
    took as you while to figure out lifetime costs, but that
    lifetime cost is approximately $50,000, or up to $50,000 per
    horse over the course of its life. So that is a lot of money
    that could be invested into a lot of very important public
    programs. So it is important for us that we find more adopters,
    that we have fewer horses coming into the system, that we find
    some broad--some broad ways to move forward. So if you have
    other ideas, we are very open and I appreciate you asking the
    question.
        Mrs. Lummis. Well, thank you. It was pretty open-ended
    because I don't have any better ideas, so I appreciate that.
    And I want to thank the gentleman for indulging this lengthy
    discussion. The gentleman, Mr. Palmer, is recognized for 5
    minutes.
        Mr. Palmer. Thank you, Madam Chairman. On the horse issue,
    I have one constituent that this is a big deal with her and she
    will be delighted that I asked about this. But does the Bureau
    of Land Management engage in the sale of wild horses, for
    instance, to Asian markets?
        Mr. Kornze. We do not sell outside of the country that I am
    aware of.
        Mr. Palmer. Is there a sale for meat products, dog food,
    things like that?
        Mr. Kornze. No.
        Mr. Palmer. So there's no sale conducted by the Bureau of
    Land Management, just a management of the herd issue?
        Mr. Kornze. Yeah, our focus is on making sure that there's
    a humane situation for the horses; that they end up with good
    homes.
        Mr. Palmer. Okay, thank you. I want to get to some of the
    other questions here. The Bureau of Land Management is
    considering implementing a rule an methane emissions. The EPA
    is already doing this. Seems to me that this is an unnecessary
    overlap and I bring this up because prior to 2008, and I've
    raised this point in hearing after hearing, there were 100,000
    new businesses started up each year, more than businesses that
    closed; 100,000 more businesses open than closed. Since 2008,
    it is now 70,000 more businesses closing than opening up. We
    now rank 12th in the world among the industrialized nations in
    entrepreneurism. And one of the things that we consistently
    hear about, particularly the small business, is being
    overregulated and the complexity of the regulations and the
    uncertainty that it creates in trying to make a decision
    whether to open a business, expand a business, invest capital.
        It just seems to me that if the EPA is already regulating
    methane emissions at the wellhead, natural gas wells, it seems
    to be just adding to the regulatory burden. Can you respond to
    that?
        Mr. Kornze. So we'll say that we are, EPA does have a
    proposal that relates to venting. I don't believe it looks at
    flaring. Our regulatory approach looks at both. We have been
    working closely with EPA to make sure that we are not providing
    duplication. In fact, we have a portion of our rule that speaks
    to the fact that if you are meeting EPA requirements, that you
    can step back from requirements that we have. So, and part of
    what traditionally the EPA does is they look forward and say
    new or modified operations, we'll follow their regulation,
    whereas we already have 100,000 different oil and gas wells
    open on public lands. So we have a regulatory responsibility
    there. And the bigger issue is that there are--sort of brings
    this all together for us and brings us the urgency is that
    there's roughly $400 million worth of American energy going up
    in the air. It is either being flared, or it's just being
    vented so it's really a conversation about is there a way to
    more productively in a reasonable fashion get more of the
    energy in the pipelines and used in American homes because, you
    know, I believe the statistic is something, it is enough energy
    to power 5 million homes. So that is a loss that I am not sure
    we are prepared to take, so we're taking a look at that and
    that's why we are having a public comment on our rule.
        Mr. Palmer. Are you applying this just on Federal lands or
    is this across the board?
        Mr. Kornze. Ours is just public lands. Yeah.
        Mr. Palmer. Okay. Well, the interesting thing is, there's a
    University of Texas study that they did in collaboration with
    the Environmental Defense Fund that shows that the majority of
    the hydraulically fractured well completions which were were
    sampled during the study had equipment in place that reduced
    methane emissions by 99 percent. So I just, it appears that the
    technology is ahead of the curve, so to speak, and I do agree
    with you, one of my concerns was--about the flaring is that we
    are basically burning resources.
        I wanted to ask you also about this 20-year moratorium on
    coal leases that Secretary Jewell announced. Will that--do you
    know or have any idea if there is an intention to apply that to
    oil and natural gas leases as well?
        Mr. Kornze. So it's a 3-year pause and then a programmatic
    review which mimics what was done in the Nixon administration
    and during the Reagan administration. I have not heard any
    discussion of doing something similar with oil and gas.
        Mr. Palmer. How about timber?
        Mr. Kornze. No.
        Mr. Palmer. All right. One of the things that I have
    pointed out is that the United States is literally an energy
    super power.
        Mr. Kornze. Yeah.
        Mr. Palmer. I mean, I think we have only explored 15
    percent of our offshore resources. We've got--and from what I
    have gotten from the Bureau of Land Management in my own
    research, enormous reserves of oil and natural gas. Just
    stunning amounts. What I would like, if you don't mind and my
    time is--has run out here, you could respond in writing to
    this. I would like for, if you could, to send to my office your
    estimated reserves on Federal lands for oil, natural gas, coal
    and timber, you know, your latest estimates on Federal lands.
        Mr. Kornze. You bet. We would be happy to do that.
        Mr. Palmer. Thank you, Madam Chairman. I yield back.
        Mrs. Lummis. I was extremely indulgent with my own time,
    and Mr. Palmer, I appreciate your being more timely than I was.
    Do you have any further questions?
        Mr. Palmer. No, I think I am fine.
        Mrs. Lummis. Okay, I appreciate it very much. I have a
    couple of followup questions, Mr. Kornze, before we let you go.
    And thank you for appearing this morning in this abbreviated
    week in Congress.
        With regard to the BLM Permit Processing Improvement Act of
    2014, how many employees has BLM hired since this became law?
        Mr. Kornze. I am going to have to track that down for you.
        Mrs. Lummis. Okay, I'd appreciate it. We'd love to have
    those numbers so we understand specifically the exact field
    offices where hiring of inspectors and other positions have
    taken place.
        Mr. Kornze. You bet.
        Mrs. Lummis. So if we could have it at that level of
    detail, I think that would be very instructive to us as to the
    direction that is being taken as this law is implemented.
        We also are interested in the allocation of funds to each
    field office for the previous fiscal year and the
    accomplishments of each field office relating to the
    coordination and processing of oil and gas use authorizations.
    So the question being, and this is a report that I believe the
    agency is required to have completed. It would be helpful to us
    to have it completed as soon as possible, or get us even some
    information as we go into this appropriation cycle so we can
    better understand the approach that you are taking with regard
    to human resource allocations----
        Mr. Kornze. Yeah.
        Mrs. Lummis. --and how this law is being implemented. Has
    that information been given to interior environment approps? Am
    I asking for redundant information, or----
        Mr. Kornze. I don't believe we have. I mean, if this mimics
    the information that would come from the report that we
    referred to earlier, if you can provide, you know, specific
    data requests, you know, we might be able to get that to you,
    you know, in a fairly efficient manner.
        Mrs. Lummis. Okay, well, we will do that and we'll ask the
    staff of this subcommittee to follow up with you in hopes that
    we can better understand as we prepare our request to the
    interior environment approps committee that we understand the
    allocation of human resources in these various offices. And
    understand the manpower needs and what we hear from our
    constituents about whether they are being met or not. We would
    appreciate that very much.
        Thank you very much for appearing before this subcommittee
    today. It is an abbreviated week in Congress, and lots is going
    on. We're trying to cram 4 days of business into 3, and
    consequently, everyone is running hither, thither and yon, but
    your time and attention this morning this deeply appreciated by
    this committee, and I should probably go to whatever--see if--I
    guess there's no further business.
        The announcements were made about how members have extra
    time. We've asked you the questions we need to, so there is no
    further business. We thank you, again. Without objection, the
    subcommittee stands adjourned.
        Mr. Kornze. Okay. Thank you very much.
        [Whereupon, at 9:59 a.m., the subcommittee was adjourned.]

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