[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:]
    
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    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.]


                               APPENDIX

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