[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]


   EXAMINING THE DEPARTMENT OF THE INTERIOR'S ACTIONS TO ELIMINATE 
                        ONSHORE ENERGY BURDENS

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

                           OVERSIGHT HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON ENERGY AND
                           MINERAL RESOURCES

                                 OF THE

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                       Thursday, January 18, 2018

                               __________

                           Serial No. 115-34

                               __________

       Printed for the use of the Committee on Natural Resources
       
       
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                     COMMITTEE ON NATURAL RESOURCES

                        ROB BISHOP, UT, Chairman
            RAUL M. GRIJALVA, AZ, Ranking Democratic Member

Don Young, AK                        Grace F. Napolitano, CA
  Chairman Emeritus                  Madeleine Z. Bordallo, GU
Louie Gohmert, TX                    Jim Costa, CA
  Vice Chairman                      Gregorio Kilili Camacho Sablan, 
Doug Lamborn, CO                         CNMI
Robert J. Wittman, VA                Niki Tsongas, MA
Tom McClintock, CA                   Jared Huffman, CA
Stevan Pearce, NM                      Vice Ranking Member
Glenn Thompson, PA                   Alan S. Lowenthal, CA
Paul A. Gosar, AZ                    Donald S. Beyer, Jr., VA
Raul R. Labrador, ID                 Norma J. Torres, CA
Scott R. Tipton, CO                  Ruben Gallego, AZ
Doug LaMalfa, CA                     Colleen Hanabusa, HI
Jeff Denham, CA                      Nanette Diaz Barragan, CA
Paul Cook, CA                        Darren Soto, FL
Bruce Westerman, AR                  A. Donald McEachin, VA
Garret Graves, LA                    Anthony G. Brown, MD
Jody B. Hice, GA                     Wm. Lacy Clay, MO
Aumua Amata Coleman Radewagen, AS    Jimmy Gomez, CA
Daniel Webster, FL
Jack Bergman, MI
Liz Cheney, WY
Mike Johnson, LA
Jenniffer Gonzalez-Colon, PR
Greg Gianforte, MT
Vacancy

                      Cody Stewart, Chief of Staff
                      Lisa Pittman, Chief Counsel
                David Watkins, Democratic Staff Director
                                 ------                                

              SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES

                      PAUL A. GOSAR, AZ, Chairman
            ALAN S. LOWENTHAL, CA, Ranking Democratic Member

Louie Gohmert, TX                    Anthony G. Brown, MD
Doug Lamborn, CO                     Jim Costa, CA
Robert J. Wittman, VA                Niki Tsongas, MA
Stevan Pearce, NM                    Jared Huffman, CA
Glenn Thompson, PA                   Donald S. Beyer, Jr., VA
Scott R. Tipton, CO                  Darren Soto, FL
Paul Cook, CA                        Nanette Diaz Barragan, CA
  Vice Chairman                      Vacancy
Garret Graves, LA                    Vacancy
Jody B. Hice, GA                     Raul M. Grijalva, AZ, ex officio
Jack Bergman, MI
Liz Cheney, WY
Vacancy
Rob Bishop, UT, ex officio
                                 ------                                
                                
                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Thursday, January 18, 2018.......................     1

Statement of Members:

    Gosar, Hon. Paul A., a Representative in Congress from the 
      State of Arizona...........................................     2
        Prepared statement of....................................     3
    Lowenthal, Hon. Alan S., a Representative in Congress from 
      the State of California....................................     4
        Prepared statement of....................................     5

Statement of Witnesses:

    Culver, Nada, Senior Counsel and Director, BLM Action Center, 
      The Wilderness Society, Denver, Colorado...................    18
        Prepared statement of....................................    19
    Kubat, Jarred, Vice President of Land, Legal & Regulatory, 
      Wold Energy Partners, LLC, Denver, Colorado................    14
        Prepared statement of....................................    15
    Schulz, Shane, Director, Government Affairs, QEP Resources, 
      Inc., Denver, Colorado.....................................    29
        Prepared statement of....................................    31
    Steed, Brian, Deputy Director, Programs and Policy, Bureau of 
      Land Management, Washington, DC............................     7
        Prepared statement of....................................     8
        Questions submitted for the record.......................    12
    Van Tassell, Kevin T., District 26, Utah State Senate, 
      Vernal, Utah...............................................    27
        Prepared statement of....................................    28

Additional Materials Submitted for the Record:

    List of documents submitted for the record retained in the 
      Committee's official files.................................    59
                                     


 
OVERSIGHT HEARING ON EXAMINING THE DEPARTMENT OF THE INTERIOR'S ACTIONS 
                  TO ELIMINATE ONSHORE ENERGY BURDENS

                              ----------                              


                       Thursday, January 18, 2018

                     U.S. House of Representatives

              Subcommittee on Energy and Mineral Resources

                     Committee on Natural Resources

                             Washington, DC

                              ----------                              

    The Subcommittee met, pursuant to call, at 2:11 p.m., in 
room 1324, Longworth House Office Building, Hon. Rob Bishop 
presiding.
    Present: Representatives Gosar, Lamborn, Tipton, Bergman, 
Bishop (ex officio), Lowenthal, Beyer, and Soto.
    Mr. Bishop. Let me call this meeting to order. Mr. Gosar is 
on his way, but he has been detained for a second. So, I am 
going to start this thing, and if he gets upset with that, I 
will have to deal with that later.
    Anyway, we will gavel this to order. I also would like to 
get started simply because we will have votes that are going to 
interrupt in the middle of this, so I would like to get some of 
this done.
    So, let me welcome our witnesses who are here: Dr. Brian 
Steed, who is the Deputy Director, Bureau of Land Management; 
Mr. Jarred Kubat--if I come close to the name.
    Mr. Kubat. Fine.
    Mr. Bishop. You don't have to worry, I will be gone in a 
few minutes anyway, so that is OK.
    Mr. Kubat is the Vice President of Land, Legal & Regulatory 
from Wold Energy Partners; Ms. Nada Culver, who is a Senior 
Counsel from the BLM Action Center with The Wilderness Society; 
Senator Kevin Van Tassell, one of my good constituents, but 
also a leader in the Utah State Senate, happy to have you here; 
and Mr. Shane Schulz, Director of Government Affairs at QEP 
Resources. We are happy to have all of you here.
    What normally happens at this time is that we will start 
this meeting with opening statements from the Chairman and the 
Ranking Member. So that we can get at least some testimony in 
before that happens, let me turn to Mr. Steed, who is also here 
from the BLM, to give your opening testimony first. When Mr. 
Gosar comes back, we will interrupt that. We will have his 
opening statement, the Ranking Member's opening statement, any 
other instructions, and we will go from there. And then we will 
finish off with the rest of the testimony, if that is OK. 
Committee members, Ranking Member?
    Mr. Lowenthal. Fine.
    Mr. Bishop. OK with it, are you sure? OK.
    Brian, we are happy to have you here. Thank you for joining 
us. And we are happy to have you in the new position you have, 
even though you had to leave the Capitol to do it. But you 
actually don't even need to do that, because Mr. Gosar can give 
his statement first.
    Dr. Gosar [presiding]. The Subcommittee is meeting today to 
hear testimony on examining the Department of the Interior's 
actions to eliminate onshore energy burdens.
    Under Committee Rule 4(f), any oral opening statements at 
hearings are limited to the Chairman, the Ranking Minority 
Member, and the Vice Chair. This will allow us to hear from our 
witnesses sooner and to help Members keep to their schedules. 
Therefore, I ask unanimous consent that all other Members' 
opening statements be made part of the hearing record if they 
are submitted to the Subcommittee Clerk by 5 p.m. today. 
Without objection, so ordered.

   STATEMENT OF THE HON. PAUL A. GOSAR, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF ARIZONA

    Dr. Gosar. Today, the Subcommittee will review actions 
taken by the Department of the Interior to address regulatory 
burdens on oil and gas production and consider recommendations 
provided to the Department's Energy Burdens report.
    The Energy Burdens report assessed regulatory activities 
that may impose unnecessary burdens on energy development, the 
Department's progress in addressing such activities through 
policy directives, as well as the Department's recommendations 
for which activities require further review and potential 
reform.
    To date, the Department has taken significant steps to 
address burdensome regulations that threaten energy development 
without providing requisite environmental or safety benefits. 
For example, the Department has rescinded the BLM's hydraulic 
fracturing rule and suspended compliance dates for the venting 
and flaring rule, both of which were so-called solutions in 
search of problems.
    The report also details action taken by the Department to 
promote the development of our domestic resources. For 
instance, the Department conducted an updated resource 
assessment for Alaska's North Slope region, including the 
Petroleum Reserve, indicating that the region holds 
significantly more technically recoverable resources than 
previously known, an estimated 8.5 billion barrels of oil and 
25 trillion cubic feet of natural gas. Furthermore, the 
Department has, at the urging of this Committee, set a goal of 
returning to the practice of holding quarterly oil and gas 
lease sales, as required under the Mineral Leasing Act.
    While the Department has been proactive in addressing 
regulatory burdens that discourage energy production, much work 
remains in getting bureaucracy out of the way of responsible 
and timely development of our domestic resources. Presently, 
the onshore oil and gas leasing process takes at least 16 
months from the time a parcel is nominated for sale to the 
award of a lease. In fact, operators have observed that it can 
take over a decade to obtain and begin production on a lease in 
some instances. These delays can largely be attributed to the 
over-analyzation of similar issues under the National 
Environmental Policy Act. Requirements to conduct duplicative 
environmental reviews and comply with inconsistent leasing 
stipulations can add years to the initial timeline for 
production on a lease.
    Moreover, according to the Energy Burdens report, the 
previous administration made broad swathes of land unavailable 
for energy development by issuing inconsistent and overly 
restricted land use designations through the land use planning 
process. In fact, the amount of acreage open for energy 
development was reduced by over 42 percent from 2008 to 2016. 
With less land available, burdensome regulatory requirements, 
and uncertain approval timelines, operators have little choice 
but to take their business elsewhere, meaning lost mineral 
revenues for the Federal Government and states burdened with 
Federal land.
    Today, the Subcommittee will hear from witnesses who can 
provide unique perspectives on navigating the onshore oil and 
gas leasing process and attest to the adverse impacts of the 
regulatory uncertainty on energy production. These witnesses 
will demonstrate how delays in the oil and gas leasing process 
impact job creation beyond the oil and gas industry, as well as 
economic development in energy producing states.
    Finally, we will discuss the benefits that mineral revenues 
provide for states and how streamlining the leasing process 
will reduce uncertainty for the communities that count on 
mineral revenues to run their schools and provide essential 
services to our constituents.

    [The prepared statement of Dr. Gosar follows:]
Prepared Statement of the Hon. Paul A. Gosar, Chairman, Subcommittee on 
                      Energy and Mineral Resources
    Today, the Subcommittee will review actions taken by the Department 
of the Interior to address regulatory burdens on oil and gas production 
and consider recommendations provided in the Department's Energy 
Burdens report.
    The Energy Burdens report assessed regulatory activities that may 
impose unnecessary burdens on energy development, the Department's 
progress in addressing such activities through policy directives, as 
well as the Department's recommendations for which activities require 
further review and potential reform.
    To date, the Department has taken significant steps to address 
burdensome regulations that threaten energy development without 
providing requisite environmental or safety benefits. For example, the 
Department has rescinded the BLM's hydraulic fracturing rule and 
suspended compliance dates for the venting and flaring rule, both of 
which were so-called ``solutions'' in search of problems. The report 
also details action taken by the Department to promote the development 
of our domestic resources. For instance, the Department conducted an 
updated resource assessment for Alaska's North Slope region, including 
the Petroleum Reserve, indicating that the region holds significantly 
more technically recoverable resources than previously known--an 
estimated 8.7 billion barrels of oil and 25 trillion cubic feet of 
natural gas. Furthermore, the Department has, at the urging of this 
Committee, set a goal of returning to the practice of holding quarterly 
oil and gas lease sales, as required under the Mineral Leasing Act.
    While the Department has been proactive in addressing regulatory 
burdens that discourage energy production, much work remains in getting 
bureaucracy out of the way of responsible and timely development of our 
domestic resources. Presently, the onshore oil and gas leasing process 
takes at least 16 months from the time a parcel is nominated for sale 
to the award of a lease. In fact, operators have observed that it can 
take over a decade to obtain and begin production on a lease in some 
instances. These delays can largely be attributed to the over-
analyzation of similar issues under the National Environmental Policy 
Act. Requirements to conduct duplicative environmental reviews and 
comply with inconsistent leasing stipulations can add years to the 
initial timeline for production on a lease.
    Moreover, according to the Energy Burdens report, the previous 
administration made broad swathes of land unavailable for energy 
development by issuing inconsistent and overly restrictive land use 
designations through the land use planning process. In fact, the amount 
of acreage open for energy development was reduced by over 42 percent 
from 2008 to 2016. With less land available, burdensome regulatory 
requirements, and uncertain approval timelines, operators have little 
choice but to take their business elsewhere--meaning lost mineral 
revenues for the Federal Government and states burdened with Federal 
land.
    Today, the Subcommittee will hear from witnesses who can provide 
unique perspectives on navigating the onshore oil and gas leasing 
process and attest to the adverse impacts of regulatory uncertainty on 
energy production. These witnesses will demonstrate how delays in the 
oil and gas leasing process impact job creation beyond the oil and gas 
industry, as well as economic development in energy producing states. 
Finally, we will discuss the benefits that mineral revenues provide for 
states and how streamlining the leasing process will reduce uncertainty 
for the communities that count on mineral revenues to run their schools 
and provide essential services to our constituents.

                                 ______
                                 

    Dr. Gosar. I now recognize the Ranking Member for his 
testimony.

 STATEMENT OF THE HON. ALAN S. LOWENTHAL, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Lowenthal. Thank you, Mr. Chairman. And thank you to 
the witnesses for being here today.
    We are almost one full year into the Trump administration 
and, unfortunately, during that year, we have seen a cascade of 
anti-environmental, anti-public health, and anti-taxpayer 
policies from the Department of the Interior in the name of 
what they call ``energy dominance.'' They have never exactly 
defined that term, but over the past year, we have seen very 
clearly what it means.
    Energy dominance simply means letting the oil, gas, and 
coal industries do whatever they want, whenever they want, 
however they want, on our public lands.
    The Energy Burdens report developed by the Department in 
secret, behind closed doors, without any public input, reads 
like a wish list for the fossil fuel industries. Many of these 
wishes have already been met.
    While the public has been fascinated by the dysfunction of 
the White House over the past year, one area where this 
Administration has been ruthlessly competent is in fulfilling 
the desires of big oil and big coal.
    The BLM fracking rule, designed to set common-sense 
baseline standards for fracking on public lands, has been 
repealed. The BLM methane rule, which would cut down on the 
waste of natural gas and improve taxpayers' returns, while also 
helping air quality, has been delayed multiple times, with the 
intent to eventually kill it. Even a technical rule dealing 
with how companies value oil, gas, and coal, which would have 
brought in an additional $78 million for taxpayers each year, 
has been repealed. The list goes on and on.
    Meanwhile, there are serious questions about the way the 
Department of the Interior is carrying out its drilling-first 
agenda. The Department has tried repealing multiple rules, in 
contravention of the Administrative Procedures Act. The 
Department is canceling studies being conducted by the National 
Academies of Science, and not providing convincing explanations 
why, or an accounting of where that leftover money has gone.
    The Secretary changes the offshore drilling plan with a 
tweet, in potential contravention of the Outer Continental 
Shelf Lands Act. Data that used to be displayed on the BLM 
website is not being updated, and scores of letters from 
Congress remain unanswered.
    All of these issues are ripe for serious oversight yet, 
unfortunately, our Oversight Subcommittee held only six 
hearings last year, with only one witness from the 
Administration all year.
    I personally don't think that is enough. We need to be 
conducting more oversight about the Department's operations and 
hold more Administration witnesses accountable.
    I am very glad today that we have the Acting Director of 
the Bureau of Land Management here, and tomorrow we will have 
the Acting Director of the Bureau of Ocean Energy Management.
    Mr. Chairman, I hope we can keep that going, and also hold 
more hearings that fulfill this Subcommittee's oversight 
responsibilities toward the Department of the Interior.
    Along those lines, I ask unanimous consent to submit two 
letters: one, a letter from 49 environmental, sportsmen, and 
public interest groups asking the Natural Resources Committee 
to conduct more rigorous oversight of the Department of the 
Interior; and the second, a letter from the Outdoor Alliance 
expressing concerns about the Department of the Interior's 
energy agenda.
    Dr. Gosar. Without objection, so ordered.
    Mr. Lowenthal. Thank you.
    This Administration has shown its true stripes over the 
past year. Its top priority is doing everything the oil, gas, 
and coal industries desire. What they have not shown any 
interest in, however, and which is completely absent from the 
Energy Burdens report, is the desire for families to breathe 
clean air, to have clean drinking water, the desires of 
sportsmen who wish to be able to continue to access public 
lands, and the desire of everyone who wants to see us protect 
fragile wild and special places and take action on climate 
change.
    Also absent from this report is anything about the burdens 
to renewable energy. I thought the report was supposed to look 
at all types of domestic energy. Perhaps I just have not 
received those pages yet; they will be in my mail.
    The Administration pays lip service to conservation and 
renewable energy, but actions speak louder than words, and 
those actions have made their priorities crystal clear: 
everything that does not promote drilling of oil or coal mining 
is simply a burden to be swept away.
    I thank the witnesses for being here, and I yield back the 
balance of my time.

    [The prepared statement of Mr. Lowenthal follows:]
   Prepared Statement of the Hon. Alan S. Lowenthal, Ranking Member, 
              Subcommittee on Energy and Mineral Resources
    Thank you, Mr. Chairman, and thank you to the witnesses for being 
here.
    We're almost one full year into the Trump administration, and 
unfortunately during that year we have seen a cascade of anti-
environmental, anti-public health, and anti-taxpayer policies from the 
Department of the Interior in the name of what they call ``energy 
dominance.'' They've never exactly defined that term, but over the past 
year we've seen very clearly what it means.
    Energy dominance simply means letting the oil, gas, and coal 
industries do whatever they want, whenever they want, however they want 
on our public lands.
    The Energy Burdens report developed by the Department in secret, 
behind closed doors, without any public input, reads like a wish list 
for the fossil fuel industries. Many of these wishes have already been 
met. While the public has been fascinated by the dysfunction of the 
White House over the past year, one area where this Administration has 
been ruthlessly competent is in fulfilling the desires of Big Oil and 
Big Coal.
    The BLM fracking rule, designed to set common-sense baseline 
standards for fracking on public lands, has been repealed. The BLM 
methane rule, which would cut down on the waste of natural gas and 
improve taxpayer returns while also helping air quality, has been 
delayed multiple times with the likely intent to eventually kill it. 
Even a technical rule dealing with how companies value oil, gas, and 
coal, which would have brought in an additional $78 million for 
taxpayers each year, has been repealed. The list goes on and on.
    Meanwhile, there are serious questions about the way the Department 
of the Interior is carrying out its drilling-first agenda. The 
Department has tried repealing multiple rules in contravention of the 
Administrative Procedures Act. The Department is canceling studies 
being conducted by the National Academies of Sciences, and not 
providing convincing explanations why, or an accounting of where the 
leftover money has gone.
    The Secretary changes the offshore drilling plan with a tweet, in 
potential contravention of the Outer Continental Shelf Lands Act. Data 
that used to be displayed on the BLM website is not being updated, and 
scores of letters from Congress remain unanswered.
    All of these issues are ripe for serious oversight, yet 
unfortunately our Oversight Subcommittee only held six hearings last 
year, with only one witness from the Administration all year. I don't 
think that's enough. We need to be conducting more oversight about the 
Department's operations, and hold more Administration witnesses 
accountable.
    I am very glad that today we have the Acting Director of the Bureau 
of Land Management here, and tomorrow we will have the Acting Director 
of the Bureau of Ocean Energy Management. Mr. Chairman, I hope we can 
keep that going, and also hold more hearings that fulfill this 
Subcommittee's oversight responsibilities toward the Department of the 
Interior.
    Along those lines, I ask unanimous consent to submit a letter from 
49 environmental, sportsmen, and public interest groups asking the 
Natural Resources Committee to conduct more rigorous oversight of the 
Department of the Interior.
    This Administration has shown its true stripes over the past year: 
its top priority is doing everything the oil, gas, and coal industries 
desire.
    What they have not shown any interest in, however, and is 
completely absent from the Energy Burdens report, is the desire for 
families to breathe clean air and have clean drinking water, the 
desires of sportsmen who wish to be able to continue to access public 
lands, and the desires of everyone who wants to see us protect fragile 
wild and special places and take action on climate change.
    Also absent from the report is anything about burdens to renewable 
energy. I thought the report was supposed to look at all types of 
domestic energy, so perhaps I just haven't received those pages yet.
    The Administration pays lip service to conservation and renewable 
energy, but actions speak louder than words, and those actions have 
made their priorities crystal clear: everything that does not promote 
drilling or mining is simply a burden to be swept away.

    I thank the witnesses for being here, and yield back the balance of 
my time.

                                 ______
                                 

    Dr. Gosar. How about our public lands alternative energy 
bill? Don't forget about that.
    Mr. Lowenthal. That is true, but that is not in the burdens 
report. They left that out.
    Dr. Gosar. Agreed.
    Now I will introduce our witnesses. First, Dr. Brian Steed, 
Deputy Director, Programs and Policy, Bureau of Land 
Management; Mr. Jarred Kubat, Vice President of Land, Legal & 
Regulatory, Wold Energy Partners, LLC; Ms. Nada Culver, Senior 
Counsel and Director of the BLM Action Center, The Wilderness 
Society; Senator Kevin Van Tassell, District 26, Utah State 
Senate; and Mr. Shane Schulz, Director, Government Affairs, QEP 
Resources.
    Let me remind the witnesses that under Committee Rules, 
they must limit their oral statements to 5 minutes, but their 
entire statement will appear in the record.
    Our microphones are not automatic. The first 4 minutes you 
will see them at green; then it will turn yellow, you will have 
about a minute to summarize; and when it is red, please 
summarize and end the sentence.
    We will also ask the entire panel to give their testimony 
before questioning witnesses.
    With that, I will recognize Dr. Steed for your testimony.

STATEMENT OF BRIAN STEED, DEPUTY DIRECTOR, PROGRAMS AND POLICY, 
           BUREAU OF LAND MANAGEMENT, WASHINGTON, DC

    Mr. Steed. Thank you, Chairman Gosar, Chairman Bishop, 
Ranking Member Lowenthal, and members of the Committee. I am 
pleased to join you today to discuss the BLM's efforts to 
reduce the burdens facing onshore energy development.
    As this Committee is well aware, domestic energy and the 
production thereof, whether it comes from oil, gas, geothermal, 
wind, or solar, creates jobs, promotes a strong economy, and 
reduces dependence on foreign sources of energy. Low-cost 
energy additionally benefits the American consumer and enhances 
American manufacturing competitiveness. The President and 
Secretary Zinke are strong proponents of an all-of-the-above 
approach to energy development and are truly committed to 
increasing domestic energy production.
    I was specifically asked today to address Federal onshore 
oil and gas activities. Oil and gas development is just one of 
many activities the BLM oversees as part of its multiple-use 
and sustained-yield mandate. The BLM currently has 26 million 
surface acres under lease for oil and gas development. 
Collectively, these lands contain energy and mineral resources 
which power millions of homes and businesses and produce a 
sizable economic impact for the Nation.
    Additionally, oil and gas activities provide a significant 
non-tax source of revenue for state and Federal treasuries. 
Roughly 50 percent of revenue from lease sales goes to the 
state where the oil and gas activity is occurring, while the 
rest goes to the U.S. Treasury. States and counties use these 
funds to construct roads, schools, and meet other important 
community needs.
    In 2017, for instance, the BLM held 28 onshore oil and gas 
lease sales, which generated about $360 million in bonus bids, 
rentals, and fees, about half of which went back to state 
coffers.
    In March 2017, the President, through Executive Order 
13783, asked Federal agencies to assess the burdens placed on 
domestic energy and to determine whether existing policy unduly 
burdened its production. Since then, Secretary Zinke has issued 
a number of Secretarial Orders, and the BLM has reviewed its 
relevant business practices to implement these new policies.
    After conducting a review of the rules impacting energy 
production on public lands, the BLM found that the 2016 venting 
and flaring rule and the 2015 hydraulic fracturing rule were 
inconsistent with E.O. 13783.
    On December 8, 2017, the BLM temporarily suspended certain 
requirements of the venting and flaring rule. Delaying the 
implementation of this rule will provide the BLM sufficient 
time to review and consider revising its requirements. On 
December 29, 2017, the BLM also rescinded the rule on hydraulic 
fracturing, which never went into effect due to ongoing 
litigation.
    Second, the BLM is currently assessing its internal 
regulations governing oil and gas development. Specifically, 
the agency is reviewing Onshore Orders Nos. 3, 4, and 5 to 
determine if additional revisions are needed beyond those 
already implemented through an extended phase-in period.
    Third, the BLM is examining its resource management 
planning process. Resource management plans, or RMPs, are the 
tool the BLM uses to plan and weigh competing uses within a 
planning area. For the purposes of oil and gas leasing, lands 
are identified as open under standard leasing terms, open with 
restrictions, or closed to leasing. The BLM is evaluating lease 
stipulations and conditions of approval that may conflict with 
BLM's multiple-use objectives. It is also examining the myriad 
of land use designations identified within land use plans for 
consistency with multiple use.
    Throughout 2017, the BLM worked hard on building 
efficiencies into its leasing and permitting processes. The 
overall APD average processing time for the BLM dropped to 93 
days, on average, in Fiscal Year 2017 from 139 days the 
previous fiscal year.
    The BLM is also revising its internal oil and gas 
instruction memoranda. It is considering doing away with master 
leasing plans. It is clarifying rules leasing in sage-grouse 
habitat and is working to reduce superfluous protests, which 
have dramatically increased in recent years.
    In Fiscal Year 2017, for instance, 88 percent of parcels 
offered for lease were protested, compared to 17 percent 
protested in Fiscal Year 2012. Such protests can delay payment 
of the state's share of the bonus bids, which occurred most 
recently in the state of New Mexico, where a $70 million 
payment to the state was held up for 250 days as the BLM 
resolved a number of protested parcels.
    As can be noted from the foregoing discussion, the BLM has 
been working hard to reduce burdens facing domestic energy 
production on public lands.
    Thank you again for the opportunity to present this 
information, and thank you to this Committee for your hard work 
on these issues. I look forward to answering any questions you 
may have in the time we have remaining. Thank you so much.

    [The prepared statement of Mr. Steed follows:]
   Prepared Statement of Brian C. Steed, Deputy Director, Policy and 
  Programs, Bureau of Land Management, U.S. Department of the Interior
    Chairman Gosar, Ranking Member Lowenthal, and members of the 
Subcommittee, I am pleased to join you today to discuss the Bureau of 
Land Management's (BLM) efforts to address the burdens that inhibit the 
development of the Nation's onshore Federal energy resources, 
specifically oil and gas resources. Under Secretary Zinke's leadership 
we are reviewing, revising, and creating new oil and gas program 
policies, procedures, and guidelines to help secure American energy 
dominance, create jobs, and build a strong economy.
             public lands' contribution to energy dominance
    Reducing the United States' dependence on other nations by 
developing domestic energy resources leads to a stronger America. 
Public lands support an ``America First'' Energy Agenda that fosters 
domestic energy production in order to keep energy prices low for 
American families, businesses, and manufacturers. Every drop of oil, 
cubic foot of natural gas or Megawatt of geothermal, wind and solar 
energy produced here in the United States creates jobs, promotes a 
strong economy, and frees us from dependence on foreign energy 
resources. Beyond gaining America's energy security, low cost energy 
benefits the American consumer and enhances American manufacturing 
competitiveness, making American businesses more competitive globally.
    The BLM manages about 245 million surface acres and 700 million 
subsurface acres, located primarily in 12 western states, including 
Alaska and North Dakota. The BLM administers this diverse portfolio of 
lands on behalf of the American people as part of the agency's 
multiple-use mission--including energy and mineral development, 
livestock grazing, timber production, recreation, and conservation, 
among others. Onshore oil and gas production on BLM-managed public 
lands is a significant part of this strategy and makes an essential 
contribution to the Nation's energy supply--playing a significant role 
in supporting jobs for hardworking Americans.
    The BLM has 26 million surface acres currently under lease for oil 
and gas development, including over 94,000 active wells and about 
40,000 leases. The BLM oversees onshore oil and gas development on 
Federal lands and lands held in trust for the benefit of various 
tribes. Collectively, these lands contain world-class deposits of 
energy and mineral resources which power millions of homes and 
businesses. The BLM's most recent economic study estimates the Federal 
onshore oil and natural gas program alone provides approximately $42 
billion in economic output and supported approximately 200,000 jobs 
nationwide.
    Further, the BLM is a key revenue producer for the Federal 
Government by providing a significant non-tax source of funding to 
state and Federal treasuries, and is an important economic driver for 
local communities across the country. Roughly 50 percent of the revenue 
from lease sales goes to the state where the oil and gas activity is 
occurring, while the rest goes to the U.S. Treasury. If wells commence 
oil and gas production on the lease parcel, the royalties paid on the 
Federal minerals are also shared with the state. States and counties in 
turn often use these funds to support roads, schools, and other 
important community needs.
    Under Secretary Zinke's commitment to the advancement of energy 
dominance, and in accordance with Secretarial Order 3354 to conduct 
quarterly lease sales, the BLM in 2017 held 28 onshore oil and gas 
lease sales. This is almost a 30 percent increase from the 20 onshore 
oil and gas lease sales held in 2016. These sales generated about $360 
million in bonus bids, rentals and fees--an 87 percent increase over 
the previous year's results of $193 million. Among these sales, which 
together were the highest in nearly a decade, rights to a total of 949 
parcels, covering 792,823 acres, were sold.
    The BLM is also working diligently to improve its permitting 
process. In Fiscal Year 2017, the BLM approved 2,486 Applications for 
Permit to Drill (APDs) on Federal lands, and operators drilled 1,424 
wells on Federal lands. The overall APD average processing time for the 
BLM dropped to 93 days on average in Fiscal Year 2017, from 139 days on 
average in Fiscal Year 2016. By the end of Fiscal Year 2017 the BLM had 
76 more pending APDs compared to the end of Fiscal Year 2016 despite an 
increase of 1,582 additional APDs received in Fiscal Year 2017. The 
Fiscal Year 2018 budget request reflects this emphasis with a 
significant increase for the oil and gas management program.
            blazing the path to energy dominance in america
    Under President Trump's vision of empowering the private sector, as 
well as state and local governments, Secretary Zinke has issued a 
number of Secretarial Orders to reduce unnecessary and burdensome 
regulations while maintaining environmental protections and public 
health. The BLM has followed suit by reviewing all relevant business 
practices in an effort to implement these new policies.
    In implementing Executive Order (E.O.) 13783, Promoting Energy 
Independence and Economic Growth, (March 28, 2017), Secretary Zinke 
issued nine Secretarial Orders that direct Interior bureaus and offices 
to take immediate and specific actions to identify and alleviate or 
eliminate burdens on domestic energy development. The most overarching 
Secretarial Order reducing burdens on energy development is Secretarial 
Order 3349, American Energy Independence (March 29, 2017), which 
directed bureaus to examine specific actions impacting oil and gas 
development, and any other actions affecting other energy development. 
Secretarial Order 3354, Supporting and Improving the Federal Onshore 
Oil and Gas Leasing Program and Federal Solid Mineral Leasing Program 
(July 6, 2017), directed the BLM to hold quarterly oil and gas lease 
sales, and to identify ways to promote the exploration and development 
of Federal onshore oil and gas and solid mineral resources, including 
improving quarterly lease sales, enhancing the Federal onshore solid 
mineral leasing program, and improving the permitting processes. On May 
31, 2017, Secretary Zinke signed Secretarial Order 3352 to jump-start 
Alaskan energy production in the National Petroleum Reserve-Alaska 
(NPR-A) and update resource assessments for areas of the North Slope, 
helping to unleash Alaska's energy potential. As a result, on December 
22, the Secretary released an updated resources assessment for the NPR-
A, which estimates oil and gas resources to be 8.7 billion barrels of 
oil and 25 trillion cubic feet of natural gas. Finally, most recently, 
the Department issued Secretarial Order 3360, Rescinding Authorities 
Inconsistent with Secretarial Order 3349, American Energy Independence, 
which rescinded several reports and manuals that were inconsistent with 
current policy.
                   eliminating burdensome regulations
    In response to the Secretarial Orders, the BLM reviewed all 
regulations related to domestic oil and natural gas development on 
public lands; the results include temporarily suspending and postponing 
certain requirements and determining, through a rulemaking process, 
whether it is appropriate to rescind or revise the Venting and Flaring 
Rule; rescind the Hydraulic Fracturing rule, assessing Onshore Orders 
Nos. 3, 4, and 5 and revising a number of oil and gas leasing IMs and 
policies. Following is a brief description of the actions the BLM has 
taken to reduce the burdens associated with its onshore oil and gas 
program.
Postponing, Reviewing, and Rescinding the 2016 Venting and Flaring Rule
    The BLM found that the 2016 venting and flaring final rule was 
inconsistent with E.O. 13783, and that implementing some parts of the 
rule could unnecessarily burden industry. On December 8, 2017, the BLM 
finalized a temporary suspension or delay of certain requirements to 
prevent costs on operators for requirements that may be rescinded or 
significantly revised in the near future. Suspending and delaying the 
2016 final rule will provide the BLM sufficient time to review and 
consider revising or rescinding its requirements. This step will also 
provide industry additional time to plan for and engineer responsive 
infrastructure modifications that will comply with the regulation. The 
BLM also submitted a draft proposed rule to the Office of Management 
and Budget (OMB) for interagency review on November 1, 2017, and 
expects to publish a proposed rule in the near future.
Rescinding the Hydraulic Fracturing Rule
    On December 29, 2017, the BLM rescinded the 2015 rule on hydraulic 
fracturing, which never went into effect due to pending litigation, as 
the 2015 rule imposes administrative burdens and compliance costs that 
are not justified. The BLM found that all 32 states with Federal oil 
and gas leases, as well as some tribes currently have laws or 
regulations that address hydraulic fracturing operations, and that pre-
existing BLM regulations ensure that operators will conduct oil and gas 
operations in an environmentally sound manner. Therefore, rescinding 
the rule would reduce regulatory burdens by enabling oil and gas 
operations to occur under more streamlined and less duplicative 
regulations within each state or tribal lands. The BLM expects that 
eliminating this duplicative rule will lead to additional interest in 
oil and gas development on public lands, especially under higher 
commodity prices.
Assessing Onshore Orders Nos. 3, 4, and 5
    The BLM is currently assessing the Onshore Orders 3, 4, and 5 to 
determine (1) if additional revisions are needed beyond the already-
implemented phase-in period for certain provisions; (2) the ability for 
industry to introduce new technologies through a defined process, 
rather than through an exception request; and (3) the built-in waivers 
or variances. The BLM completed its assessment of possible changes to 
alleviate burdens that may have added to constraints on energy 
production, economic growth, and job creation. As a result of this 
assessment, the BLM is considering policy guidance to address some of 
the issues raised.
                     planning for energy dominance
    The BLM's land use planning process provides--among many other 
multiple use considerations--a standardized procedure for analyzing the 
opportunities for oil and gas development on public lands, while also 
ensuring that such development is done in an environmentally 
responsible manner. Resource Management Plans (RMPs) reflect the BLM's 
efforts to weigh the many resources and competing uses within a 
planning area. For purposes of oil and gas leasing, lands within a 
planning area are identified as fitting into one of three categories--
lands open under standard lease terms, lands open with restrictions, 
and lands closed to leasing.
    The BLM holds competitive lease sales quarterly in each of the 
state offices where lands have been nominated and are available. After 
the lease sale is held, a lessee may then submit an APD for a specific 
area within their lease, and working with the BLM, the appropriate 
conditions and terms of the lease are developed.
    The BLM recognizes that lease stipulations and additional 
Conditions of Approval (added at the permitting stage can overly burden 
energy development on public lands by adding additional development 
costs; increasing the complexity of the drilling operations; and 
extending project time frames. As such, the BLM is also evaluating the 
need for the numerous land use designations and lease stipulations that 
may conflict with BLM's multiple use objectives, as a part of the 
ongoing review of the planning process, and is committed to working 
with state, local, and tribal partners to update policies. The BLM is 
also identifying potential actions it could take to streamline its 
planning and National Environmental Policy Act (NEPA) review 
procedures.
          implementing smart internal policies and procedures
    As part of a comprehensive effort to reduce burdens, the BLM is 
revising and rescinding its internal oil and gas Instruction 
Memorandums (IMs) and policies. Changes to IMs will result in 
streamlined administrative processes, reductions of duplicative 
actions, and elimination of redundant NEPA reviews--reducing burdens on 
industry and providing savings to the American taxpayers without 
sacrificing environmental protections.
Leasing Reforms
    The BLM is replacing its Oil and Gas Leasing Reform--Land Use 
Planning and Lease Parcel Reviews IM (2010-117), which unnecessarily 
increased time frames associated with analyzing and responding to 
protests and appeals, as well as longer lead times for BLM to clear and 
make parcels available for oil and gas lease sales. As such, the BLM 
has undertaken an effort to revise and reform its leasing policy and to 
streamline the leasing process from beginning (i.e. receipt of an EOI) 
to end (competitively offering the nominated acreage in a lease sale). 
Under existing policies and procedures, the process can take up to 16 
months, and sometimes longer, from the time lands are nominated to the 
time a lease sale occurs. The BLM is examining ways to significantly 
reduce this time by as much as 10 months. The President's Fiscal Year 
2018 Budget Request includes an additional $16 million for the BLM's 
oil and gas program. This includes a net increase of about 71 full-
time-equivalent employees to enhance the core capacity for processing 
APDs, EOIs, and rights-of-way.
Eliminating Master Leasing Plans
    The BLM is rescinding its Oil and Gas Leasing Reform--Master 
Leasing Plans (MLPs) IM (2013-101), which introduced the concept of 
MLPs. This needless bureaucratic layer resulted in duplication of NEPA 
and certain processes and also the BLM deferring many areas open to oil 
and gas leasing from leasing while awaiting the completion of the 
public scoping and analysis for the MLPs. The BLM will re-establish the 
BLM RMPs as the source of lands available for fluid minerals leasing. 
Removing these unnecessary process-related steps will decrease 
uncertainty, increase efficiency, and encourage fiscal responsibility 
without sacrificing environmental protections. The BLM expects that 
this rescission will result in more streamlined NEPA analysis and a 
shorter time frame for acreage nominations to make it to a competitive 
lease sale.
Clarifying Leasing in Sage-Grouse Habitat
    On December 29, 2017, the BLM published Oil and Gas Leasing and 
Development Prioritization IM (2018-026), updating a number of existing 
policies that provide on-the-ground guidance for BLM's management 
actions related to oil and gas leasing and development in sage-grouse 
habitat management areas. The new guidance clarifies that the BLM does 
not need to lease and develop entirely outside of habitat management 
areas before it can consider leasing and development within sage-grouse 
habitat management areas as long as appropriate protective stipulations 
and COAs are applied to protect sage-grouse. The BLM will continue to 
work cooperatively with respective stakeholders to find leasing and 
drilling locations with the least impact to Greater Sage-Grouse and 
other resources, to the greatest extent possible, and will require the 
use of the best available science in its decision-making process.
Eliminating Superfluous Protests
    Current BLM regulations allow any party to file a protest on a BLM 
decision, such as a protest on a land use plan or on a subsequent 
decision to include a parcel in an oil and gas lease sale. Historically 
protests were parcel-specific on issues unique to the parcel in 
question. In recent years, the number and reasons for protesting every 
parcel in the sale has increased and become broad-based and non-parcel 
specific. In Fiscal Year 2017, 88 percent of parcels offered for lease 
were protested, compared to in Fiscal Year 2012, when only 17 percent 
of parcels received protests. The number of parcels offered on the 
original sale notice decreased from 2,247 in Fiscal Year 2012 to 1,427 
in Fiscal Year 2017. To date, many BLM state offices are receiving 
protests on every oil and gas parcel offered through the Notice of 
Competitive Lease Sale process.
    While the BLM can still hold a lease sale for parcels with pending 
protests, the protest must be resolved prior to the lease being issued. 
This in turn can delay payment of the state's share of the bonus bids--
which occurred most recently in the state of New Mexico. In September 
2016, BLM hosted a record-setting lease sale generating $145 million in 
revenue, of which approximately $70 million was owed to the state under 
the Mineral Leasing Act revenue sharing provision. As a result of the 
number of protested parcels and the length of time it took to resolve 
all protests, the payment to the state of New Mexico was delayed by 
approximately 250 days. To address this unnecessary burden on both 
states and industry, the BLM is considering regulatory changes to limit 
redundant protests that hinder orderly development.
                               conclusion
    The BLM remains committed to promoting responsible oil and gas 
production that helps create and sustain jobs, promotes a robust 
economy, and contributes to America's energy dominance, while also 
protecting consumers, public health, and sensitive public land 
resources and uses. The BLM's oil and gas leasing program is a critical 
component of the Nation's energy infrastructure and is an important 
Federal revenue generator. Thank you for the opportunity to present 
this testimony. I will be glad to answer any questions.

                                 ______
                                 

Questions Submitted for the Record to Mr. Brian Steed, Deputy Director, 
                       Bureau of Land Management

Mr. Steed did not submit responses to the Committee by the appropriate 
deadline for inclusion in the printed record.

                 Questions Submitted by Rep. Lowenthal
    Question 1. Director Steed, please answer the following questions 
regarding BLM's workforce:

    a.  How many full-time permanent employees currently work for BLM?

    b.  How many unfilled full-time employee equivalent positions 
(FTEs) does the BLM currently have? Please provide a list broken down 
by state and field office. How many of those does the BLM intend to 
fill?

    c.  How many filled and unfilled FTEs does BLM currently have in 
the Oil and Gas Management, Coal Management, Other Mineral Resources, 
and Renewable Energy Management subactivities? How have those FTE 
numbers changed since January 20, 2017, and what changes does BLM 
expect to make to those numbers in Fiscal Year 2018?

    d.  What is the geographic breakdown of BLM employees, by state 
office and field office? How many employees in the BLM Washington 
Office are located in the Washington, DC metropolitan area, and how 
many are located outside of it? How many BLM employees in the 
Washington, DC metropolitan area work for the Eastern States office?

    e.  How many BLM personnel have been moved to different duty 
stations since January 20, 2017? How many of those were GS-15 or 
members of the Senior Executive Service?

    Question 2. Please provide the number of enforcement actions taken 
by the BLM per year for the past 5 years, including the number of 
notices of violation and the number and amount of civil penalties 
assessed.

    Question 3. What is BLM's plan and timeline to have the entire 
Inspection and Enforcement strategy be risk-based and in the Automated 
Fluid Minerals Support System?

    Question 4. Please provide the current number of idle wells 
overseen by each BLM field office, broken down by the number of wells 
idle for less than 2 years, the number of wells idle for 2-6 years, the 
number of wells idle 7-25 years, and the number of wells idle more than 
25 years.

    Question 5. How was the decision made to exclude renewable energy 
resources from BLM's review of energy burdens? What policies and 
regulations at DOI impose a burden on the development of wind, solar, 
and geothermal energy on public lands?

    Question 6. Please provide the amount of natural gas vented or 
flared, as well as the total amount of natural gas produced but not 
subject to royalty, in Fiscal Year 2017 by state.

    Question 7. Please provide the number of approved but unused 
drilling permits as of the end of Fiscal Year 2017, broken down by 
field office. What are the 20 companies that hold the most approved but 
unused drilling permits, and how many do they each hold? Why has BLM 
stopped providing updated data on the number of approved but unused 
permits on its website?

    Question 8. Please provide the total acreage under oil and gas 
lease by company by state.

    Question 9. What steps has BLM taken so far to prepare for a lease 
sale in the Arctic National Wildlife Refuge? What are the next steps, 
and what is the timeline for BLM to complete those steps?

    Question 10. What steps did BLM take to implement each of the 
provisions of the Methane and Waste Prevention Rule that came into 
effect in 2017? Did BLM send guidance to field staff directing them how 
to implement those provisions? If so, please provide copies of the 
guidance. How many APDs received by BLM in 2017 were accompanied by 
waste minimization plans?

    Question 11. Please provide copies of all Instructional Memoranda 
and other policy guidance distributed to field staff since January 20, 
2017, and that are not available to the public on the BLM website.

    Question 12. How many congressional oversight requests to BLM are 
currently pending? Does BLM intend to respond to each of these 
requests? How many FOIA requests to BLM submitted after January 20, 
2017, are currently pending? How many personnel does BLM have dedicated 
to responding to FOIA requests? Does BLM believe the number of 
personnel dedicated to responding to FOIA requests is adequate? Why 
does BLM not participate in FOIAonline?

                    Questions Submitted by Rep. Soto
    Question 1. There was a citing of 14 million to 34 million 
compliance cost savings. Was there any additional costs determined 
under Medicaid, Medicare, or other healthcare costs due to increase 
case of cancer, as a result of not disclosing these types of chemicals? 
Was there any health study conducted of what the costs would be in the 
proposing of this rule?

                                 ______
                                 

    Dr. Gosar. Thank you, Dr. Steed.
    I now recognize Mr. Kubat for his testimony. Thank you.

 STATEMENT OF JARRED KUBAT, VICE PRESIDENT OF LAND, LEGAL AND 
    REGULATORY, WOLD ENERGY PARTNERS, LLC, DENVER, COLORADO

    Mr. Kubat. Thank you, Mr. Chairman, and members of the 
Subcommittee. And thank you for the opportunity to speak here 
today on behalf of our company and other small businesses like 
ours that are operating Federal leases in the West.
    These delays we are seeing of uncertainties, 
inefficiencies, and inconsistent application of rules are 
creating unnecessary delays that disproportionately impact our 
small business.
    Small business is not big oil. We are regionally located 
businesses that do not have assets in multiple states, let 
alone countries. Maybe we have assets in multiple counties 
within a single state.
    As small businesses, we do have an interest in protecting 
public health, the environment, and resources of concern and, 
importantly, the taxpayers' money. But to do so, there needs to 
be a common-sense approach with regulatory certainty.
    Our company is a 4-year-old entrepreneurial endeavor with 
37 full-time employees and 7 contractors, the epitome of a 
small business. We were founded to pursue the development of 
oil and gas resources in the Rocky Mountain region, and we are 
committed to environmentally responsible and safe development.
    Our operations are entirely within the Powder River Basin 
in the state of Wyoming, where we operate 119 wells, we are 
partner in 82 additional wells, and we have acreage totaling 
143,000 net acres. Seventy-one percent of this leasehold is 
federally owned. This requires daily interaction with the 
Federal agencies who oversee these lands. This asset is the 
product of 192 acquisitions in this 4-year period. It is a 
small business. It is hard work, diligence, persistence, 
getting up every day in the pursuit of that American Dream.
    Today, I want to briefly touch on two impact areas that we 
are seeing with small businesses. The first area is delayed 
Federal leasing. This is a deterrent to the development of 
Federal oil and gas leases and serves as a disincentive for the 
small business investor. The 415-day delay average our company 
faces between parcel nomination and offering for sale is too 
long. This is contrasted with the 45-day period we see at the 
state level.
    Similarly, the process for reinstatement of a lease 
requires revision. Why should a lease be subject to subsequent 
and redundant NEPA reviews for minor errors? These are examples 
of unnecessary delays due to bureaucratic inefficiencies.
    The second area involves development planning. Once issued, 
leases are subject to subsequent and unforeseen stipulations, 
changing conditions of drilling approval and ad hoc 
requirements in the process for development and planning. These 
are often due to subsequent land use designations and 
restrictions that are subsequent to the lease issuance. 
Navigating this unpredictable process creates delays, sometimes 
adding up to years of review, creating paralysis by analysis.
    This addition of unnecessary and protracted periods between 
initial investment and subsequent return on that drilling 
investment harms our small business and significantly impacts 
our economic return, the period of time from when we purchase 
that lease to when we are allowed to develop it. This is the 
cost of capital and is contrasted with businesses focused 
exclusively on private mineral development in other states or 
larger businesses that have the luxury of owning assets in 
multiple states, basins, and possibly countries, where capital 
can be redeployed during such purgatory periods we face during 
these delays.
    There is a need for specific guidance and policy for these 
field offices in this area. As an operator, we are subject to 
staffing discretion on all of these decisions.
    These are just a few very small examples of where delays 
are negatively impacting business investment, especially for 
small businesses like ours, job growth and economies in the 
cities and states where Federal lands are located. From a 
business planning perspective, as the commodity price of our 
industry fluctuates, as we all have seen it done in the last 4 
to 5 years, these delays further impact the realization of 
optimal commodity pricing, not only the commodity pricing 
received by us, the investor, but the commodity pricing 
received by the Federal Government and the royalty revenue 
received.
    So, what can be done? Shorten review periods and provide 
businesses with certainty in the process of acquiring and 
maintaining the rights of development. Significantly reduce the 
delays between lease nomination and offering by requiring 
specific time frames for review. Amend the process for 
reinstatement of leases by giving specific guidance as to when 
a lease requires subsequent NEPA review and when it does not. 
Eliminate unnecessary and protracted periods of approved 
drilling and development by clearly defining what might have 
the potential to cause effects. Eliminate the retroactive 
stipulations, conditions of drilling approval, and ad hoc 
requirements.
    Eliminating these regulatory uncertainties, inefficiencies, 
and inconsistent applications of the rules will help eliminate 
these unnecessary delays. It is the guidance that the field 
office staff themselves seek to understand. There needs to be a 
common-sense approach that eliminates inconsistent regulatory 
rule application.
    I want to thank you for your time here today, seeing that I 
am almost out of time, and I appreciate the opportunity to 
speak on behalf of my company and other small businesses like 
ours operating in the West.

    [The prepared statement of Mr. Kubat follows:]
Prepared Statement of Jarred R. Kubat, Vice President of Land, Legal & 
                 Regulatory, Wold Energy Partners, LLC
    Regulatory uncertainties, inefficiencies, and inconsistent 
application of rules related to Federal oil and gas leases are leading 
to unnecessary delays in the development of the energy resources of the 
United States. These delays negatively and disproportionately impact 
small businesses, the backbone of the economy, and the citizens of the 
states where these resources are located. Ultimately, these 
uncertainties reduce domestic energy production, add unemployment, and 
increase reliance on foreign energy. Small businesses have an interest 
in protecting the public health, environment, resources of concern, and 
the taxpayer's money; to do so, there needs to be a common-sense 
approach with regulatory certainty.
                    about wold energy partners, llc

    Wold Energy Partners, LLC (``WEP'') is a 4-year-old entrepreneurial 
endeavor with 37 full-time employees and 7 contractors; a small 
business. WEP was founded to pursue the development of oil and gas 
resources in the Rocky Mountain Region and is committed to 
environmentally responsible and safe development.

    Efforts of WEP are focused entirely within the Powder River Basin 
in Wyoming. The Powder River Basin is a prolific oil and gas resource 
basin with a proven 5,000 foot column of stacked pay zones. Within the 
Powder River Basin, WEP operates 119 wells, is a partner in 82 
additional wells, and has acreage totaling 143,000 net mineral acres 
(264,000 gross acres) with greater than 1 billion barrels of 
recoverable reserves. The acreage position of WEP is the product of 192 
acquisitions and trades, and consists of 71 percent Federal oil and gas 
leases (394 individual Federal leases). Exposure to Federal oil and gas 
leases of this level requires daily interaction with the requisite 
Federal agencies and adherence to rules related to Federal oil and gas 
leasing and development.
                        delayed federal leasing

    To encounter delays from the outset is a deterrent to the 
development of Federal oil and gas leases and serves as a disincentive 
for investment, especially for small businesses. The delay between 
lease nomination and sale needs to be reduced significantly. Similarly, 
the process for reinstatement of leases requires revision to shorten 
the review time and to provide businesses with certainty in the process 
of acquiring and maintaining the rights of development granted in these 
leases.

     Nomination and Deferral--the 415-day average delay WEP 
            faces between parcel nomination and lease offering for sale 
            is too long. Delays in lease offerings and sale are rooted 
            in the National Environmental Policy Act (``NEPA'') 
            analysis at the field office level, where review for 
            conformance with a Federal Resource Management Plan 
            (``RMP'') entails an uncertain timeline. Inquiries 
            regarding the review status of nominated Federal lands are 
            then met with added uncertainty and ambiguity. This is 
            distinguished from the added layer of review a Master 
            Leasing Plan (``MLP'') may impose. Within WEP's initial 
            focus area there have been several parcels nominated since 
            2014 that are still within the NEPA review process and yet 
            to be offered for sale. Should parcels be deferred, they 
            are effectively lost unless a company or individual 
            continues to nominate the same parcel. There is a need for 
            transparency regarding why parcels are not being offered 
            and when they may be available for offering in the future 
            if deferred.

     Reinstatement of Leases--an inefficient process riddled 
            with uncertainty. Leases can require reinstatement for 
            issues as trivial as incorrect rental payments of minor 
            amounts ($1.50 versus $2.00). For example, WEP has a 
            Federal oil and gas lease which is pending reinstatement 
            for a payment discrepancy of $160.00 (less than 1 percent 
            of the lease purchase price) and has been pending 
            reinstatement since May 2015. The reinstatement delay is 
            due to subsequent NEPA review and documentation of RMP 
            conformance. This is an unnecessary delay due to 
            bureaucratic inefficiency as the lease was within its 
            primary term and had completed this same review process 
            prior to its issuance.

                     uncertain development planning

    Once issued, leases are subject to subsequent and unforeseen 
stipulations, changing conditions of drilling approval, and ad hoc 
requirements in development planning and approval. Navigating this 
unpredictable process creates delays sometimes adding up to years of 
review creating paralysis by analysis. This addition of unnecessary and 
protracted periods between initial investment (purchase of the lease) 
and subsequent approved drilling and development of the oil and gas 
lease (anticipated return on investment) harms small businesses and 
significantly impacts economic returns as compared to businesses 
focused exclusively on private mineral development.

     Accessing the Lease for Development--is a tenuous 
            exercise. Subsequent land use restrictions and designations 
            can conflict with existing lease rights and significantly 
            obstruct basic access to the oil and gas leases. WEP has 
            seen examples of leases issued more than 30 years ago be 
            subject to subsequent land use restrictions and 
            designations that materially impact access and development 
            of the Federal oil and gas lease. Subsequent land use 
            designations need to honor the valid existing rights 
            contained within the original lease terms.

     Gaining the Approved Right to Develop--encounters added 
            delay. In practice, the delays faced initially in lease 
            offerings and issuance are for the appropriate agency 
            analysis. However, during the permitting stage for 
            drilling, further NEPA, Endangered Species Act, National 
            Historic Preservation Act, and other analysis are required 
            effectively adding stipulations and conditions to the 
            original lease grant. Opportunities to analyze projects 
            within the frameworks of the Energy Policy Act of 2005 
            Section 390 categorical exclusions (e.g., development on 
            existing well pads previously analyzed) are ignored and 
            substituted with new survey requests for cultural, 
            wildlife, and tribal considerations. An operator is subject 
            to agency staffing discretion, and although a proposed 
            action on existing disturbance may entirely lack the 
            potential to cause effects it is made subject to additional 
            review processes, procedures, and conditioned upon 
            subsequent and unforeseen stipulations and conditions of 
            drilling approval.

  delays and regulatory uncertainty harm small businesses and citizens
    Delays negatively impact business investment, especially small 
businesses restricted by geographic area and asset base. The delays and 
regulatory uncertainty met in the development of Federal oil and gas 
leases impact investment, job growth, and the economies of the cities 
and states where Federal lands are located. As the commodity price of 
our industry fluctuates, these delays further impact the realization of 
optimal commodity pricing and royalty revenue received by the Federal 
Government (i.e. industry investment incentive in Federal lands may be 
strong when commodity pricing is higher, but agency delays prevent 
quick realization of this pricing advantage thereby deterring 
investment).
                       recommendations for change
    Shorten the review periods and provide businesses with certainty in 
the process of acquiring and maintaining the rights of development 
granted in these leases: (1) Significantly reduce the delay between 
lease nomination and offering by efficiently reviewing nominated 
parcels according to existing RMPs within a specified time frame; and 
(2) Amend the process for reinstatement of leases by giving specific 
guidance as to when a lease requires subsequent NEPA review and 
documentation of RMP conformance and when it does not.

    Eliminate unnecessary and protracted periods between initial 
investment (purchase of the lease) and subsequent approved drilling and 
development of the oil and gas lease (anticipated return on 
investment): (1) Clearly define what might have the potential to cause 
effects; (2) Eliminate retroactive stipulations, conditions of drilling 
approval, and ad hoc requirements in development planning and approval; 
and (3) Set time limits on review and permitting approvals that 
agencies must follow. This can be accomplished by honoring valid 
existing lease rights and existing development on leases by giving 
detailed guidance to field office staff that is more specific to 
drilling applications they are processing and approving along with what 
criteria constitutes extraordinary circumstances requiring additional 
review periods and processes.

    Small businesses, the citizens of the states where Federal oil and 
gas leases are located, and the security of our energy future require 
eliminating regulatory uncertainties, inefficiencies, and inconsistent 
application of rules related to Federal oil and gas leases that are 
leading to unnecessary delays in the development of the energy 
resources of the United States. There needs to be a common-sense 
approach with regulatory certainty.

                                 ______
                                 

    Dr. Gosar. Thanks, Mr. Kubat.
    I now recognize Ms. Culver for her testimony.

  STATEMENT OF NADA CULVER, SENIOR COUNSEL AND DIRECTOR, BLM 
    ACTION CENTER, THE WILDERNESS SOCIETY, DENVER, COLORADO

    Ms. Culver. Good afternoon, Chairman Gosar, Ranking Member 
Lowenthal, and members of the Subcommittee. Thank you for the 
opportunity to share my views.
    My name is Nada Culver. I direct policy and planning 
efforts at The Wilderness Society, including development of 
lands and mineral resources. I have worked on energy 
permitting, planning, and policy issues for more than 20 years, 
including nearly a decade representing energy and industry 
clients in private practice.
    While they may be sincerely intentioned, the Department's 
efforts to eliminate so-called burdens are unlikely to achieve 
the goal of increased energy production. More importantly, this 
agenda represents a growing threat to public health, 
recreation, wildlife, and other public interests. Public input, 
safeguards to protect people and communities, and Interior's 
multiple-use mandate are not burdens; they are key to the 
proper management of our public lands.
    Many of the burdens that DOI has called out for elimination 
are actually important opportunities for public input and 
oversight. As the true owners of the public lands, the public 
is an integral part of evaluating the consequences of leasing 
and drilling on public lands. Our Federal laws wisely obligate 
the Department to involve the public. Similarly, these laws 
direct the Department to thoroughly consider the potential 
consequences, environmental and economic cost and benefits of 
energy development, and to look for ways to avoid harm.
    Unfortunately, the Department has targeted important 
requirements, like evaluating impacts, visiting lands before 
they are put up for lease, and applying measures to protect 
those lands before issuing leases or permits to drill. The 
BLM's multiple-use mission does not permit the agency to raise 
energy development above all other uses and values, as numerous 
courts have acknowledged. Protection of sacred sites, big game 
habitat, and park visitor experiences are all part of the 
Department's mission. They are not burdens and they cannot be 
ignored.
    In addition, the Department has been on notice for years 
that taxpayers are getting a bad deal from oil and gas 
development on public lands. Improving the financial return on 
development as well as addressing seemingly indefinite lease 
terms should be a focus of this Administration's efforts. Such 
changes would also incentivize leasing on lands the industry 
will actually develop to produce revenue and energy. Notably, 
what the industry pays to lease and develop our public lands 
and minerals is well below market value, conflicting with 
obligations imposed by the Mineral Leasing Act, for instance, 
to maximize returns.
    Taxpayers are also getting shortchanged by the waste of 
natural gas through venting, flaring, and leaks. A 
congressional effort to revoke this rule failed, as have 
Administration efforts to delay it, which have been stopped in 
the courts. The Department should be seeking to strengthen this 
rule, not dismantle it.
    The Department's evaluation of burdens essentially focuses 
on the wrong side of the equation, placing private interests 
above public. While the current system should be improved, 
those improvements should not focus on just providing more 
land, more leases, and more permits. Leasing should be targeted 
in areas that have high energy potential, make economic sense 
for development, and do not needlessly conflict with other 
values and uses.
    The current system already provides the oil and gas 
industry with significantly more available land than they 
lease, more leases than they develop, and more permits than 
they drill. We have heard a lot from this Administration and 
the industry about 2,000 permits to drill waiting to be 
processed. The more telling number is the approximately 8,000 
permits the BLM processed and issued, but remain unused. At the 
same time, insufficient attention is being paid to the 
inspection and enforcement needed to ensure oil and gas 
development on our public lands is conducted in a way that 
protects health, safety, and the environment and compensates 
the American taxpayer for the profits made by companies. 
Increased support for inspection and enforcement should be a 
priority.
    We have learned important lessons from the courts and the 
American public when a previous administration treated our 
public lands as primarily a place to accommodate the oil and 
gas industry. As discussed in my statement, the conflicts 
resulting from this approach delayed leasing and permitting and 
ended with a court highlighting the overall dysfunction of the 
onshore leasing program. If the Department continues to ignore 
its obligations, there will not necessarily be more energy 
production, but there will be more conflict.
    In conclusion, we know that energy development will 
continue to be an important use of our public lands, but it is 
not the only important use. We do not need to relearn these 
lessons the hard way. We do not need to remove the safeguards 
designed to protect the American people and their water, air, 
and land. We do not need to ignore the other values and 
important uses of our public lands or treat them as merely 
burdens to energy development. Instead, we can continue to 
improve and modernize the onshore oil and gas program, 
addressing impacts, and ensuring that companies that demand 
land leases and permits will treat them responsibly.
    The Wilderness Society has and will continue to provide 
recommendations to improve the way onshore energy development 
is managed, and we look forward to continuing these 
discussions. Thank you again for this opportunity, and I am 
glad to answer any questions.

    [The prepared statement of Ms. Culver follows:]
 Prepared Statement of Nada Culver, Senior Counsel and Senior Director 
 of Agency Policy & Planning, The Wilderness Society, Denver, Colorado
    Good afternoon Chairman Gosar, Ranking Member Lowenthal, and 
members of the Committee. Thank you for the opportunity to share my 
views on this timely issue regarding onshore energy development.
    My name is Nada Culver. I direct The Wilderness Society's policy 
and planning efforts, including providing input on energy development 
of lands and mineral resources managed by the Bureau of Land Management 
(BLM). The Wilderness Society (TWS) is a national public interest 
conservation organization with more than 1 million members and 
supporters. TWS' mission is to protect wilderness and inspire Americans 
to care for our wild places. Our organization actively supports 
solutions that balance extractive uses like energy with conservation 
through open, sustainable, and science-based land management practices 
to maintain the long-term integrity of the landscape.
    I have worked on energy permitting, planning issues, and policy 
issues for more than 20 years. This includes representing the public 
interest for nearly 15 years at TWS, and representing industrial and 
energy clients as a lawyer in private practice. I meet extensively with 
career and political staff of the BLM and the Department of the 
Interior (DOI), as well as counterparts in industry and at state and 
tribal entities. I have visited numerous onshore oil and gas fields on 
public and private lands, and spent time in communities situated 
adjacent to energy production facilities across the West.
    Today's hearing is especially timely. I appreciate you calling 
attention to the ongoing efforts at the Department of the Interior to 
seek out and address what are described as ``burdens'' to onshore 
energy development. While it may be sincere, I believe this effort as 
it has played out is unnecessary and unwise. The Department's formal 
statements and commitments have, to such a large degree, focused on 
actions that would remove current opportunities for public engagement 
and weaken (or remove altogether) current obligations to consider the 
effects of leasing and development on communities, health, and other 
uses and values of our public lands. Accordingly, my testimony today 
focuses on the problems that arise from what appears to be a single-
minded focus. I hope the issues highlighted below underscore the 
importance of the broader mission and responsibilities the Department 
and the BLM have to the public, the true owners of our public lands, 
and the lessons learned about the need for balanced, multiple use 
management.
 the department's actions are upsetting a balance decades in the making
    Our public lands are managed by the Federal Government's Department 
of the Interior (DOI) for the benefit of current and future 
generations. That means more than just providing for extractive uses--
it means public health, fiscal accountability, and recreation- and 
tourism-based economic interests, among others that can be impacted by 
irresponsible energy development.
    There is much talk about striking an ``appropriate balance'' in 
order to promote conservation stewardship. Doing so will, in our view, 
require meaningful discussion of--and plans to address--impacts to 
local communities, businesses, and other public interests, including 
conservation, and how those interests will be protected in the era of 
so-called ``energy dominance.''
    In fact, a balanced approach is embedded in the Department's 
responsibilities as laid out in the Federal Land Policy and Management 
Act (FLPMA). Under FLPMA, BLM is required to manage the public lands on 
the basis of multiple use and sustained yield.\1\ The Supreme Court has 
stated clearly that ``[m]ultiple use management is a deceptively simple 
term that describes the enormously complicated task of striking a 
balance among the many competing uses to which land can be put, 
including, but not limited to, recreation, range, timber, minerals, 
watershed, wildlife and fish, and [uses serving] natural scenic, 
scientific, and historical values.'' \2\
---------------------------------------------------------------------------
    \1\ 43 U.S.C. Sec. 1732 (2012).
    \2\ Norton v. S. Utah Wilderness Alliance, 542 U.S. at 58 (internal 
quotations omitted).
---------------------------------------------------------------------------
    Similarly, courts have repeatedly held that under FLPMA's multiple 
use mandate, development of public lands is not required, but must 
instead be weighed against other possible uses, including conservation 
to protect environmental values.\3\ An approach in which BLM 
prioritizes energy development above other public lands uses and 
resources would violate the multiple-use mandate of FLPMA, which states 
in no uncertain terms that BLM ``shall manage public lands under 
principles of multiple use and sustained yield'' and contains specific 
provisions and procedures for conserving natural, historic and cultural 
resources, scenic values and fish and wildlife.\4\
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    \3\ See, e.g., New Mexico ex rel. Richardson, 565 F.3d at 710 
(``BLM's obligation to manage for multiple use does not mean that 
development must be allowed. . . Development is a possible use, which 
BLM must weigh against other possible uses--including conservation to 
protect environmental values, which are best assessed through the NEPA 
process.'').
    \4\ 43 U.S.C. Sec. Sec. 1732(a), 1712.

    Nevertheless, the Administration's stated policy objective is to 
increase domestic energy production from public lands and expand 
energy-related jobs in pursuit of an over-arching goal of ``energy 
dominance.'' And the Department has wasted little time demonstrating 
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what that means:

     Less than 1 month after being confirmed, Secretary Zinke 
            signed Secretarial Order 3349 designed to implement a 
            presidential directive to ``review all existing 
            regulations, orders, guidance documents, policies, and any 
            other similar agency actions . . . that potentially burden 
            the development or use of domestically produced energy 
            resources.'' \5\ The order also rescinded or ordered the 
            rescission of a number of important climate and mitigation 
            policies, lifted the moratorium on new coal leases, and 
            ordered the review of four common-sense regulations 
            affecting oil and gas operations on National Park Service 
            lands, fish and wildlife refuges, and other public lands.
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    \5\ Executive Order 13783, March 28, 2017.

     On that same day, the Secretary signed a charter 
            reconstituting the Royalty Policy Committee. Members were 
            formally selected on September 1, 2017, and included robust 
            participation from several sectors of industry. Notably 
            absent were representatives of taxpayer advocate or public 
---------------------------------------------------------------------------
            interest organizations.

     On May 2, 2017, the Department issued Secretarial Order 
            3351 aimed at eliminating ``harmful regulations and 
            unnecessary policies.'' The order created a position with 
            the express duty to identify regulatory burdens that 
            unnecessarily encumber energy exploration development, 
            production, transportation; and develop strategies to 
            eliminate or minimize these burdens.

     In October 2017, DOI published its ``Energy Burdens 
            Report,'' which by the Department's own press release, 
            ``outlines Trump administration's bold approach to 
            achieving American energy dominance.'' The report 
            identifies rules and policies that ``burden'' energy 
            production such as the waste prevention rule, National 
            Environmental Policy Act (NEPA) review of oil and gas 
            leasing and permitting, mitigation policies, and the 
            Endangered Species Act.

     In June 2017, the Department issued Secretarial Order 
            3353, which directed a review of the rangewide plans 
            addressing management of Greater Sage-grouse, which had led 
            to a Fish and Wildlife Service finding that listing under 
            the Endangered Species Act is no longer warranted. Citing 
            Secretarial Order 3349, the review and subsequent formal 
            process to re-evaluate the plans are focused in large part 
            on removing management to protect habitat from the harm 
            caused by oil and gas development.

    Most striking about the actions taken to date is the lack of 
transparency and limited involvement afforded the very communities most 
affected by energy development. In early April 2017, we joined with 
more than a dozen other national conservation groups in calling on the 
Secretary to meaningfully engage the public before committing to a 
course of action.\6\ In that letter, we cautioned, ``A Department of 
the Interior that works in darkness to change management policies will 
not maintain the trust of the American people. . . Decades of conflict 
and controversy have shown the public expects, and our public land laws 
require, more from these lands than extractive uses.''
---------------------------------------------------------------------------
    \6\ Letter from The Wilderness Society et al to Secretary Zinke, 
April 12, 2017.
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    Unfortunately, the Department has chosen to eliminate common-sense 
safeguards and guidelines that protect the public interest and ensure 
Americans receive a fair return for development of publicly-owned lands 
and minerals. This approach reverses course on efforts to improve the 
Department's management framework under Presidents Bush and Obama to 
make energy development more effective and sustainable. These reforms 
were put in place in response to decades of findings and 
recommendations from the Government Accountability Office (GAO), the 
Department's Office of Inspector General (OIG), and sister agencies in 
Federal and state government, as well as the courts. Some of these 
findings and recommendations are discussed further in this testimony, 
including GAO's inclusion of the ``Management of Oil & Gas Resources'' 
on its biennial list of ``high-risk'' Federal programs, which are 
chosen because of ``their vulnerabilities to fraud, waste, abuse, and 
mismanagement, or are most in need of transformation,'' and GAO's 
findings that BLM's venting and flaring practices prior to the 2016 
waste prevention rule were costing taxpayers in terms lost revenue and 
increased air pollution.
regulations and policies are not inherently burdensome and provide many 
                                benefits
    The regulations and policies identified as ``burdensome'' to energy 
development, and therefore targeted to be weakened or eliminated, 
provide substantial benefits to the American people that are being 
ignored or undervalued. The legal and policy framework under which the 
Federal Government manages energy development in our country is 
intended to protect human health and communities, grow all facets of 
our economy, balance development with conservation of natural 
resources, ensure continued opportunities for other multiples uses such 
as outdoor recreation, yield a fair market value return to the American 
people for the resources they own, and involve the public in decisions 
affecting public lands and minerals. These benefits must be considered 
and ultimately ensured when undertaking regulatory or policy changes.
    We are concerned that DOI's actions and commitments to ``eliminate 
energy burdens'' appear to be focused primarily on measuring the 
financial impact to private companies, disregarding the Federal 
Government's duty to the American people to ensure development on 
public lands takes into account other uses and resources while yielding 
a fair return.
    An immediate example of this concern is found in the ongoing 
efforts to dismantle the BLM's 2016 methane waste prevention rule (the 
``methane rule''). One year ago yesterday, on January 17, 2017, the 
BLM's methane rule went into effect. The 2016 rule would curb the waste 
of natural gas from Federal and tribal lands by requiring periodic leak 
detection and repair (LDAR) inspections, prohibiting venting, 
significantly limiting flaring, and establishing a number of equipment 
specific requirements. These elements would yield substantial health 
and fiscal benefits to the American people. According to BLM's own 
estimates, full implementation of the rule would cut methane emissions 
by 49 percent (or 180,000 tons per year) and could result in net 
benefits of over $204 million annually.\7\
---------------------------------------------------------------------------
    \7\ See Final Rule at: https://www.regulations.gov/document?D=BLM-
2016-0001-9126.
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    The rule has been the subject of repeated efforts to eliminate it 
over the past year. This rule went into effect shortly after a Wyoming 
district court denied a request from several industry trade 
associations and oil-and-gas producing states to block it. Just months 
later, the Senate rejected a proposal to nullify the rule on a 
bipartisan vote 51-49 despite a Secretarial letter assuring that such 
action was welcome. Nevertheless, the Department proceeded to 
administratively delay implementation in July--a move that was 
overturned by a California district court in October. The next day, the 
BLM initiated a formal process to halt implementation of the rule which 
was finalized in December (though that move is currently the subject of 
litigation). BLM is expected to initiate a process this month to 
substantially revise or rescind the 2016 rule, based on the finding in 
the Energy Burdens report that ``the BLM recognizes that the 2016 final 
rule poses a substantial burden on industry.'' \8\
---------------------------------------------------------------------------
    \8\ Final Report: Review of the Department of the Interior Actions 
that Potentially Burden Domestic Energy at IV(A)(ii).
---------------------------------------------------------------------------
    However, there is a well-documented history of the burden borne by 
taxpayers from management systems that allowed for significant amounts 
of waste that led to the 2016 rule. Starting in December 2007, a 
Royalty Policy Committee (RPC) report, Mineral Revenue Collection from 
Federal and Indian Lands and the Outer Continental Shelf, recommended 
that the BLM update its rules and identified specific actions to 
improve production accountability.\9\ This was followed by a March 2010 
report by the OIG, BLM, and Minerals Management Service on Beneficial 
Use Deductions; an October 2010 GAO report, Federal Oil and Gas 
Leases--Opportunities Exist to Capture Vented and Flared Gas, Which 
Would Increase Royalty Payments and Reduce Greenhouse Gases; and 
eventually the July 2016 GAO report entitled, ``OIL AND GAS--Interior 
Could Do More to Account for and Manage Natural Gas Emissions.'' \10\ 
In particular, the 2010 GAO report found that ``in 2008, about 128 
billion cubic feet (Bcf) of natural gas was either vented or flared 
from Federal leases, about 50 Bcf of which was economically recoverable 
(about 40 percent of the total volume lost). This economically 
recoverable volume represents about $23 million in lost Federal 
royalties and 16.5 million metric tons of carbon dioxide equivalent 
(CO2e) emissions.''
---------------------------------------------------------------------------
    \9\ U.S. Department of the Interior. (2007). Report to the Royalty 
Policy Committee: Mineral Revenue Collection from Federal and Indian 
Lands and the Outer Continental Shelf. Available at: https://
permanent.access.gpo.gov/lps96276/RPCRMS1207.pdf.
    \10\ Office of the Inspector General. (2010). Inspection Report: 
BLM and MMS Beneficial Use Deductions. Available at: https://
www.doioig.gov/sites/doioig.gov/files/2010-I-00171.pdf; Government 
Accountability Office. (2010). Federal Oil and Gas Leases--
Opportunities Exist to Capture Vented and Flared Gas, Which Would 
Increase Royalty Payments and Reduce Greenhouse Gases. Available at: 
https://www.gao.gov/products/GAO-11-34; and Government Accountability 
Office. (2016). OIL AND GAS--Interior Could Do More to Account for and 
Manage Natural Gas Emissions. Available at: https://www.gao.gov/
products/GAO-16-607.
---------------------------------------------------------------------------
    And the Department is seeking to roll back the 2016 methane rule 
even though the waste of Federal resources is on the rise. The total 
amount of annual reported flaring from Federal and Indian leases 
increased by over 1000 percent from 2009 through 2015. During this 
period, reported volumes of flared oil-well gas increased by 318 
percent.\11\
---------------------------------------------------------------------------
    \11\ See Final Rule at: https://www.regulations.gov/document?D=BLM-
2016-0001-9126. The problem can also be seen in requests for flaring 
and venting submitted as Sundry Notices to BLM field offices. In 2005, 
the BLM received just 50 applications to vent or flare gas. In 2011, 
the BLM received 622 applications, and this doubled again within 3 
years to 1,248 applications in 2014.
---------------------------------------------------------------------------
    This waste has very real financial and environmental impacts. 
According to a recent study, taxpayers could lose out on almost $800 
million in royalties over the next decade due to natural gas being 
flared or vented from Federal lands.\12\ It also impacts the health of 
U.S. citizens. Along with methane, this natural gas waste contains 
volatile organic compounds (VOCs), including benzene and other 
hazardous air pollutants (some of which are known carcinogens); and 
leads to the production of smog-forming NOx and particulate matter, 
which can cause respiratory and heart problems. In addition to 
financial and public health impacts, methane is a greenhouse gas 84 
times more potent than carbon dioxide. Its contribution to climate 
change is well-documented as are the potential ramifications of a 
warming planet on a global, national and regional scale.
---------------------------------------------------------------------------
    \12\ Western Values Project. ``Up in Flames: Taxpayers Left Out in 
the Cold as Publicly Owned Natural Gas is Carelessly Wasted.'' May 
2014. Available at: http://westernvaluesproject.org/wpcontent/uploads/
2014/05/Up-In-Flames.pdf.
---------------------------------------------------------------------------
    Similarly, DOI is also reversing common-sense policies that guide 
responsible energy development. One of the Department's first acts was 
to scuttle a programmatic review of the ailing Federal coal leasing 
program. The review was designed to address deficiencies first 
documented three decades ago. Despite those known flaws, the Department 
is not taking any action to review or improve that program.
    Unfortunately, additional actions taken in the name of removing 
burdens will do much more than merely halt new reviews--they will 
actually erode progress made in establishing public trust in the BLM's 
management of energy resources.
    A particularly distressing example of this about-face is found in 
the circumstances that led up to reforms of the BLM's oil and gas 
leasing program. In December 2008, a court formally prohibited the 
Bureau of Land Management from issuing 77 leases sold in Utah. The 
court found the agency's decision-making process to be fundamentally 
broken, which prompted the BLM to reconsider its entire management of 
onshore oil and gas leasing.\13\ The court's decision was a culmination 
of years of protests and lawsuits challenging BLM oil and gas leasing 
decisions in planning, leasing, and permitting throughout the West; 
this was a clear declaration that the agency's previous approach to 
managing oil and gas development was unsustainable.\14\
---------------------------------------------------------------------------
    \13\ SUWA v. Allred, Case No. 1:08-cv-02187 (D.D.C.--January 17, 
2009). (Plaintiffs showed likelihood of success on the merits of 
violations of National Environmental Policy Act and National Historic 
Preservation Act).
    \14\ In March 2012, former BLM Director Bob Abbey testified to a 
Senate committee that the Administration ``inherited an onshore oil and 
gas program that was on the verge of collapse.'' http: / / rlch.org /
news /drilling-leaves-fed-lands-because-state-private-acres-are-
cheaper-says-blm-chief.
---------------------------------------------------------------------------
    In response, the Department pulled together an interdisciplinary 
interagency team of experienced BLM, Forest Service, and National Park 
Service employees, led by Mark Stiles, then-Supervisor of the San Juan 
National Forest, which visited nearly all of the lease parcels and 
interviewed BLM staff. The final report (referred to as the Stiles 
Report) made recommendations on future handling of each lease parcel 
and on addressing critical problems with the BLM's oil and gas leasing 
program. The recommendations of the Stiles Report ushered in a more 
balanced approach to oil and gas leasing and development on the public 
lands. These recommendations were implemented principally through BLM 
guidance that required consideration of the many multiple uses of the 
public lands while providing a path toward more certainty for both 
industry and the public.\15\ The reformed leasing process has 
strengthened protections for wilderness, wildlife and recreation, and 
reduced conflicts over leasing and drilling, even while production of 
oil and natural gas has increased on public lands. Prior to this 
guidance, Federal lease sales were twice as likely to be challenged in 
Federal court. Site-specific lease sale protests, concerning direct, 
on-the-ground conflicts with oil and gas development, have also 
decreased. Despite these across-the-board benefits to BLM's oil and gas 
leasing program, DOI has committed to ``revise and reform its leasing 
policy and to streamline the leasing process'' and expects to complete 
revisions to the leasing process in the first quarter of FY 2018.\16\
---------------------------------------------------------------------------
    \15\ BLM Instruction Memoranda 2010-117.
    \16\ Final Report: Review of the Department of the Interior Actions 
that Potentially Burden Domestic Energy at IV(A)(iv).
---------------------------------------------------------------------------
    An alarming example of important reforms that DOI has threatened to 
abandon is the case of Master Leasing Plans (MLPs). MLPs are a 
management tool for BLM to plan for oil and gas development at a more 
detailed level than a broad-scale resource management plan. MLPs are a 
``smart from the start'' approach that are intended to ensure oil and 
gas development occurs in a more balanced, responsible way by 
protecting important public lands resources including national parks, 
wildlife habitat, clean air and water, and other uses such as outdoor 
recreation, hunting, fishing, farming, and ranching. By addressing 
potential conflicts up-front, MLPs provide the oil and gas industry 
with more certainty and can streamline approvals for leasing and 
development. Although formally initiated by name in 2010, the approach 
came about under the leadership of former BLM James Caswell and Deputy 
Secretary Lynn Scarlett during the final years of President Bush's 
second term.
    MLPs have been developed through collaborative stakeholder 
processes that bring all interests to the table to determine the 
appropriate pace and scale of development and how to protect other 
multiple uses while development occurs. This collaborative approach to 
energy development benefits multiple facets of our economy, protecting 
the interests of the outdoor recreation industry, tourism-based 
economies and public lands ranchers. MLPs also facilitate smart 
development that gives taxpayers a return on investment by driving oil 
and gas production to public lands most suitable for that purpose 
rather than providing for public lands that would be more productive 
for other commercial, recreational, and conservation uses to be held 
unused by non-producing speculators. Despite the value of such an 
approach to all public lands users, DOI has announced its intention to 
end this approach, stating that ``the BLM expects to rescind this IM 
and complete the revision of the above BLM Handbook, as well as any 
other relevant BLM handbooks, in the first quarter of FY 2018.'' \17\
---------------------------------------------------------------------------
    \17\ Final Report: Review of the Department of the Interior Actions 
that Potentially Burden Domestic Energy at IV(A)(v).
---------------------------------------------------------------------------
    Finally, several of the policies targeted as ``burdensome'' were 
developed as collaborative endeavors with state and local interests, 
including years of extensive public involvement. Ripping up these 
compromise solutions with little or no engagement threatens the 
government's ability to arrive at future agreements. There is no better 
example of this than the conservation plans for the Greater Sage-
grouse. The sage-grouse conservation plans and associated guidance for 
implementing oil and gas leasing and development in important habitat 
benefit the American people by conserving our natural heritage and 
valuable hunting opportunities on our public lands. These plans are the 
largest collaborative conservation effort in U.S. history, created over 
a 6-year time frame with the input and cooperation of multiple Federal 
agencies, state and Federal legislators from both sides of the aisle, 
conservationists, ranchers, recreationists, scientists, and the energy 
industry.
    Despite the robust process that preceded it, DOI issued new 
instruction memoranda for implementing the sage-grouse conservation 
plans on December 27, 2017, that, among other things, eviscerates the 
requirement that BLM prioritize oil and gas leasing and drilling 
outside of important sage-grouse habitat.\18\ Specifically, the 
Department cited a requirement for BLM to weigh potential impacts to 
the Greater Sage-grouse before offering oil and gas lease as unduly 
burdensome in its final Energy Burdens report. This prioritization 
requirement had been intended to guide development to lower conflict 
areas while protecting important habitat. This approach would have 
reduced the time and cost associated with oil and gas leasing and 
development by avoiding sensitive areas in the first place, thereby 
minimizing the complexity of environmental review and analysis of 
potential impacts on sensitive species and decreasing the need for 
compensatory mitigation. It is unclear what approach the Department 
will institute instead that will avoid the need to list the Greater 
Sage-grouse under the Endangered Species Act, but in the meantime it 
appears leasing and drilling will proceed in these areas without due 
regard for the current plans.
---------------------------------------------------------------------------
    \18\ Id at (vii).
---------------------------------------------------------------------------
    energy development is already a preferred tenant on public lands
    The presupposition of the Administration's hunt for ``energy 
burdens'' to achieve ``energy dominance'' is that the industry is tied 
down by red tape. That claim is false--energy development continues to 
be the preferred use for almost all our multiple use public lands. 
Market forces outside of the Federal Government's control are largely 
responsible for the decisions made by private companies; rescinding or 
revising these regulations will have little effect on Federal lands 
production.
    When it comes to our public lands, the oil and gas industry seems 
to have a problem of excess, not access. The vast majority of federally 
managed lands and waters are already open to oil and gas leasing--but 
oil and gas companies are having a difficult time using what they 
already have access to. The oil and gas industry already has access to 
as much Federal land as it desires. Our research shows that 90 percent 
of BLM-managed subsurface mineral acres are open to oil and gas 
leasing. Yet, of the 27 million acres under lease in 2016, only 12.7 
million acres were producing energy--meaning 14 million acres of 
publicly-owned minerals already leased are sitting idle.\19\ Of the 14 
million unused acres, 3.25 are sitting in suspension, meaning companies 
pay no royalties and lose no time off the life of their leases. That's 
nearly 10 percent of the leased mineral estate that's essentially off 
the books, an awful deal for taxpayers.\20\
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    \19\ The Wilderness Society ``Open for Business: How Public Lands 
Management Favors the Oil and Gas Industry.'' Available at: http://
wilderness.org/sites/default/files/TWS%20%20BLM%20 report_0.pdf.
    \20\ The Wilderness Society ``Land Hoarders: How Stockpiling Leases 
is Costing Taxpayers.'' Available at: https://wilderness.org/sites/
default/files/TWS%20Hoarders%20Report-web.pdf.
---------------------------------------------------------------------------
    But even for those leases where the industry is trying to move 
ahead, there appear to be no real impediments from the BLM or from 
public engagement. The industry already holds 7,950 approved drilling 
permits that are not being used.\21\ In 2016 alone, BLM issued 2,184 
drilling permits, but only 847 permits were used. This trend has been 
true for decades. Since 1985 there have been just 2 years where 
industry has used more permits than BLM has approved.
---------------------------------------------------------------------------
    \21\ The Wilderness Society ``Public Land Energy Development By The 
Numbers 2017.'' Available at: https://wilderness.org/sites/default/
files/TWS%20Energy%20Fact%20Sheet_September_5_ 2017.pdf.
---------------------------------------------------------------------------
    The performance of recent lease sales underscores that BLM 
continues to offer significantly more acreage for lease than industry 
is willing to purchase. In 2015, only 15 percent of all land offered in 
lease sales were actually purchased. In 2017, only 6 percent of the 
total acreage offered was acquired by industry.\22\ This is astonishing 
by any measure, given that in most cases parcels are put up for sale 
because they were nominated by oil and gas companies.
---------------------------------------------------------------------------
    \22\ https://www.blm.gov/programs/energy-and-minerals/oil-and-gas.
---------------------------------------------------------------------------
    The Federal Government is clearly not standing in the way of energy 
development. Instead, trends in Federal energy production are largely 
dependent on market forces and parallel those trends seen on private 
and state lands. Over the past 15 years, total U.S. production of oil 
and gas has dramatically increased while coal production has dropped. 
From 1990 to 2016, total U.S. natural gas production increased by 52 
percent while crude oil production rose by 21 percent. Coal production 
however has continued its slow decline nationwide, down 22 percent 
since 2006, as demand has rapidly eroded. The increased production 
associated with the ``shale revolution'' drove down natural gas prices, 
providing a cheaper alternative to coal and leading to the increased 
use of natural gas use in electricity generation.\23\ The surplus of 
oil and gas introduced into the market also helped to move the United 
States into a position where exports of both have dramatically 
increased while imports have fallen, setting the country up to become a 
net exporter of both.\24\ However, beginning in 2014, the crude oil 
market bottomed out. Nevertheless, U.S. producers proved to be quite 
resilient. Their ability to cut production costs and remain profitable 
in a low-price environment allowed U.S. producers to take over a larger 
market share and increase exports.\25\
---------------------------------------------------------------------------
    \23\ Crooks, Ed, ``The U.S. Shale Revolution,'' Financial Times 
(2015). Available at: https://www.ft.com/content/2ded7416-e930-11e4-
a71a-00144feab7de.
    \24\ Brady, Jeff, ``U.S. Likely To Become Net Exporter Of Energy, 
Says Federal Forecast.'' NPR (2017). Available at: http://www.npr.org/
sections/thetwoway/2017/01/05/508421943/u-s-likely-will-become-net-
exporter-of-energy-says-Federal-forecast.
    \25\ Scheyder, Ernest, ``With oil price near $50, resilient U.S. 
shale producers eye new chapter.'' Reuters (2016). Available at: 
https://www.reuters.com/article/us-oilshale/withoil-price-near-50-
resilient-u-s-shale-producers-eye-new-chapter-idUSKCN0Z60CH; see also: 
Clemente, Jude, ``The Great U.S. Oil Export Boom.'' Forbes (2017). 
Available at: https://www.forbes.com/sites/judeclemente/2017/05/21/the-
great-u-s-oilexportboom/#144f26bc7e5b.
---------------------------------------------------------------------------
    Development on public lands has been influenced by these same 
market forces. Crude oil production on public lands increased 26 
percent from 2006 to 2015 while coal production dropped 16 percent. 
Despite declines in total acreage under lease, producing acreage has 
remained stable, down only 2 percent from 1990 to 2016. And despite a 
depressed market, energy extracted from our Federal lands and waters 
still accounted for 42 percent of all coal, 22 percent of all crude 
oil, and 15 percent of all natural gas produced in the United States in 
2015.\26\
---------------------------------------------------------------------------
    \26\ U.S. coal production data available at: https://www.eia.gov/
coal/data.php#production; U.S. natural gas production data available 
at: https://www.eia.gov/dnav/ng/ng_prod_sum_a_EPG0_FGW_mmcf_a.htm; U.S. 
crude oil production data available at: https://www.eia.gov/dnav/pet/
pet_crd_crpdn_adc_mbbl_a.htm; Federal production data available at: 
https://useiti.doi.gov/explore/.
---------------------------------------------------------------------------
                 known deficiencies remain unaddressed
    There are real challenges facing energy production on public lands, 
and there are always ways to do things faster, cheaper, and arrive at 
better outcomes for all stakeholders. Independent audits and 
investigations have laid out a number of areas where congressional 
interest could be focused--like making sure taxpayers are getting a 
fair deal for commercial development of the resources they own, and 
that the BLM is adequately protecting public safety and the environment 
through inspection and enforcement.
    As you are no doubt aware, the U.S. Government Accountability 
Office (GAO) has included the ``Management of Oil & Gas Resources'' on 
its biennial list of high-risk Federal programs since 2011. These 
programs are selected because of ``their vulnerabilities to fraud, 
waste, abuse, and mismanagement, or are most in need of 
transformation.'' \27\ GAO has specifically cited DOI's failure to 
obtain a fair return for taxpayers and to effectively inspect and 
monitor oil and gas operations to justify the program's presence on the 
list.\28\ We fear that the singular focus only on burdens to energy 
producers will exacerbate these profound problems, shifting even more 
burdens onto taxpayers and those living near energy projects.
---------------------------------------------------------------------------
    \27\ https://www.gao.gov/highrisk/overview.
    \28\ https://www.gao.gov/highrisk/management_Federal_oil_gas/
why_did_study#t=0.
---------------------------------------------------------------------------
    First, by placing such an emphasis on cutting corners in the 
leasing and permitting process without first taking steps to modernize 
the onshore program's flawed fiscal policies, the Administration is 
effectively allowing developers to continue to enjoy an implicit 
subsidy. As documented by the Congressional Budget Office, GAO, and 
other leading experts, DOI's fiscal policies, including royalty rates 
and minimum bids, are woefully outdated and have not kept pace with 
inflation.\29\ In fact, the royalty rate has not changed since the 
Mineral Leasing Act was passed in 1920, and, at 12.5 percent, is 
considerably lower than the rates of many western states.\30\ As a 
direct result of the Administration's energy-above-all policies and 
inaction on fiscal reform, millions, if not billions, of dollars that 
rightfully belong to American taxpayers will instead go directly into 
the already-deep pockets of the oil and gas industry.
---------------------------------------------------------------------------
    \29\ Id.; See also Congressional Budget Office, Options for 
Increasing Federal Income from Crude Oil and Natural Gas on Federal 
Lands at 8, available at https://www.cbo.gov/sites/default/files/114th-
congress-2015-2016/reports/51421-oil_and_gas_options.pdf.
    \30\ https://www.gao.gov/assets/690/685335.pdf.
---------------------------------------------------------------------------
    Second, by offering nearly every lease that is nominated by the oil 
and gas industry--regardless of market conditions and potential 
conflicts with national parks, wildlife, and other revenue-generators, 
like outdoor recreation--the Administration is pouring taxpayer dollars 
down the drain and threatening the economic foundations of western 
communities. In 2017, the Administration processed and offered at 
taxpayer expense almost 12 million acres of public lands nominated for 
leasing by the oil and gas industry. Yet, the industry purchased just 7 
percent of those leases--about 791,000 acres. And these acres sold at 
fire-sale prices. Just 3 percent of the leases sold by the 
Administration accounted for 70 percent of total revenues from the 
onshore leasing program. In fact, one-third of the acres leased in 2017 
went for $10 per acre or less, the majority of which sold for the 
minimum bid of $2 per acre--a 170 percent increase from 2016. The 
Congressional Budget Office reported that leases sold for $10 per acre 
or less are hardly ever drilled (only 8 percent of the time).\31\ By 
paring back reforms targeted at ensuring leases sold turn into wells 
drilled, the Administration's focus on ``energy burdens'' is actually 
encouraging widespread and wasteful speculation by the industry.
---------------------------------------------------------------------------
    \31\ Congressional Budget Office, Options for Increasing Federal 
Income from Crude Oil and Natural Gas on Federal Lands. https://
www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/51421-
oil_and_gas_options.pdf.
---------------------------------------------------------------------------
    Finally, the Administration has made no commitment to addressing 
the onshore program's chronically under-resourced inspection and 
enforcement division. Inspection and enforcement is tasked with 
ensuring operations are being conducted in compliance with applicable 
rules to protect health, safety, and the environment, as well as 
accurately reporting production activities and paying royalties owed on 
that production. This is alarming, given the Administration's stated 
commitment to dramatically increase new permitting activity. The BLM 
oversees around 100,000 wells across the country for which they have 
and must meet inspection and enforcement responsibilities by law. The 
President's budget called for a 26 percent increase in oil and gas 
permitting activities at BLM, yet requested flat funding for 
inspections and enforcement activities for a division with a poor track 
record, largely due to resource constraints. The General Accountability 
Office recently reported that BLM failed to inspect some 40 percent of 
high-priority drilling operations during 2009-2012. Similarly, in 
recent years the BLM has been unable to complete all of its high-risk 
production inspections, which are critical for ensuring proper 
accounting of the billions of dollars of oil and gas produced from 
public lands. This perfect storm leads to significant breakdowns in 
performance and, ultimately, huge risks to taxpayers and the local 
communities living in the shadow of development.
    This problem is especially acute in communities like Livingston, 
Montana; Paonia, Colorado; and Moab, Utah, which the Administration is 
actively targeting for leasing and future development. These 
communities depend heavily on revenue from tourism and outdoor 
recreation on nearby public lands, and they will bear the brunt of 
spills, explosions, and other incidents that stem from lax inspection 
and enforcement.
                               conclusion
    We believe energy development is a legitimate use of our public 
lands. We have worked for years with industry and Federal and state 
agencies to develop innovative solutions to improve the performance of 
Federal energy development on public lands for all stakeholders. But we 
have grave concern that the current focus on energy above all other 
uses will result in significant negative consequences--and will not 
likely even meet the Administration's stated objectives. Energy 
development comes with many burdens, and we should not shift more of 
that burden from developers to taxpayers, local communities, and other 
users of our public lands. A careful balance--not the dominance of one 
use over all others--must be struck.

                                 ______
                                 

    Dr. Gosar. Thanks, Ms. Culver.
    Votes have been called, but I am going to get to the two 
speakers, and then we will be in recess. We will come back for 
questions.
    I now recognize Senator Van Tassell for his comments.

 STATEMENT OF SENATOR KEVIN T. VAN TASSELL, DISTRICT 26, UTAH 
                   STATE SENATE, VERNAL, UTAH

    Mr. Van Tassell. Thank you very much. It is good to be here 
with you, Chairman, and to be with the rest of the Committee. I 
know a little bit about what that is. We go into session 
Monday, and we will be locked up for 45 days while we work with 
the Utah State budget as well as deal with the issues that are 
abundantly clear in Utah and throughout the Nation. So, I tell 
you I am grateful for this opportunity.
    My district is northeastern Utah. It is a portion of the 
state that has a lot of energy in it: natural gas, oil, as well 
as hydrocarbons and coal sands, tar sands or oil sands, as well 
as oil shale. And I know those are discussions that 
automatically send up things, but the resources are there and 
they are not in other places. So, the opportunity to produce 
those resources is something that in time we hope that the 
market will justify.
    I guess as the state of Utah and as a legislator for a very 
rural part of the state, the message that I have here today is 
that we need to see the funds and the lands leased.
    One of the issues that we have struggled with the last 6 or 
7 years is that we have had, because of the slowness in leasing 
Federal property, the small private portion of the state, 
which, with Utah, depending on what numbers you want to throw 
in, the 65 percent public lands, that has shifted to the 
private area.
    In my area, 95 percent of the exploration work that has 
been done has been on private property. Granted, it is good for 
the leasers, the owners of the royalties. It is great for those 
that have those; but nevertheless, for those that happen to 
have a split estate--the farmer that has the surface rights but 
the Federal Government having the subrights and the minerals--
it puts burden upon all of those.
    So, I would encourage you to let the Federal lands take 
care and perform their function, as it is vital to the state. 
In the state of Utah, we take that money, the mineral lease 
money, and divide it. We have a Community Impact Board that 
does loans and some grants, but most of it is on 10- to 15-, 
20-year long-term policies. It has rebuilt the fire 
infrastructure, almost all of the transportations that are non-
state funded are funded in the rural parts of the state, 
particularly in the eastern part of the state where the 
production is from mineral lease funds. That program is working 
as it should, and it needs to be there.
    We have some issues in my written comments I submitted. We 
have a PAYGO issue that could come into effect that could cause 
a sequestration of those funds. It would be harmful. And 
although we are not hearing anything, those bean counters, the 
accountants in legislative research and finance, they have 
already put it on our agenda that we will be taking up next 
week. So, we will continue to be looking at that.
    One of the issues that I see that I believe needs to be 
considered by this Committee, in Utah, as well as throughout 
the Nation, we have many wonderful national monuments and state 
parks. Unfortunately, they are all very neglected in 
maintenance and modernizing.
    My recommendation to this Committee is that you take some 
of the mineral lease money that is coming on the Federal part 
and designate part of that to funding and maintaining of the 
national parks, so there is an ongoing source of revenue. It 
cannot be accomplished in a one-time deal. And it will benefit 
everybody, including those that don't like energy development. 
But energy development is how we can maintain our parks, and I 
would encourage you to consider that.
    I want to thank the oil industry. In my area, we have 
20,000 people employed working in various stages. They provide 
good jobs. They provide opportunities to keep people in our 
local areas. The biggest issue that I have in the state of Utah 
is I have the Wasatch Front, which is as urban as any place in 
the state of Utah. And I get down in my area and we are almost 
nonexistent.
    I would encourage you to continue to develop and allow 
wherever the resource is to be developed. It is not everywhere, 
but it can be developed. It can be developed very practically 
and can be a successful tool.
    Thank you very much.

    [The prepared statement of Mr. Van Tassell follows:]
Prepared Statement of Kevin T. Van Tassell, Utah State Senate, District 
                                   26
    Thank you for the opportunity to testify to talk about economic 
interests in Utah. I come from the energy production center of the 
state of Utah. The fiscal impacts and the ongoing operation of mineral 
extraction are of a critical importance to our local economy as well as 
the state.
    As we all know, the energy extraction industry is a cyclical 
business and rises and falls with commodity pricing in the economy. We 
live with this constantly and we understand this is part of the market. 
The major problem that we struggle with is keeping a medium. In other 
words, flatten the highs and fill in the valleys.
    In this latest downturn, with the decrease in Oil and Gas prices, 
local communities have experienced foreclosures on businesses, and 
homes have been repossessed or deeded in lieu of foreclosure. Many of 
the supplier companies have either gone out of business or retrenched 
significantly. Again, these occurrences are painful but not unusual. 
But, in a public lands state such as Utah, the withdrawal of leases or 
the failure to provide additional leases, together with burdensome 
requirements have a detrimental effect on local economies as well as to 
the state of Utah. We are very concerned that with the passing of the 
recent tax reform may trigger statutory PAYGO. Should an increase in 
the deficit trigger sequestration of several non-exempt mandatory 
programs, it could have a huge effect upon our local communities. My 
office has prepared a handout to go along with this letter. If a 10-
year elimination of funding were to take place, it would impact many 
basic, needed services. Mineral lease funds have been applied to fire 
protection, transportation, and infrastructure, all of which increase 
the viability of the communities that support exploration and 
extraction.
    I would encourage you to find solutions to allow increases in 
leasing, and better planning for developments of lands, and true 
multiple-use of the land.

                                 *****

The following documents were submitted as supplements to Senator Van 
Tassell's testimony. These documents are part of the hearing record and 
are being retained in the Committee's official files:

    --Issue Brief, Office of the Legislative Fiscal Analyst, January 
            16, 2018, Impact of Federal Tax Reform on State Mineral 
            Lease Payments

    --Western Energy Alliance, Charts on Employment and Economic Impact 
            in Duchesne and Uintah Counties, Utah: 2016

                                 ______
                                 

    Dr. Gosar. Thank you, Senator.
    We have 5 minutes left in voting. Mr. Schulz, we will end 
with you, so let's go ahead and have your testimony.

 STATEMENT OF SHANE SCHULZ, DIRECTOR, GOVERNMENT AFFAIRS, QEP 
               RESOURCES, INC., DENVER, COLORADO

    Mr. Schulz. OK. I will try to be quick and precise and to 
the point.
    Thank you, Chairman Gosar, Ranking Member Lowenthal, and 
members of the Committee. Again, my name is Shane Schulz. I am 
the Director of Government Affairs for QEP Resources. Those 
duties include not only managing government affairs issues for 
Federal, state, and local issues, but tracking regulatory 
issues and commenting on the myriad of regulatory issues that 
happen at all those levels.
    QEP Resources is headquartered in Denver, Colorado. We have 
operations in two oil basins: the Williston Basin and the 
Permian Basin. In addition, we operate in the Haynesville 
Shale, producing natural gas there. And last and not least is 
the Uinta Basin, home to Senator Van Tassell as well as to 
Chairman Bishop.
    With operations located on private lands, on state trust 
lands and Federal lands, I think we provide a unique 
perspective on development and the contrast in corresponding 
government regulatory programs between all those. I think you 
can get it just from the other operator on the panel as well as 
us and through my written testimony that regulatory certainty 
has become a huge key issue for us to make business decisions.
    Over the past decade, U.S. onshore oil and gas development 
has been truly remarkable. But over that same period, we have 
not seen the equivalent growth happen on Federal lands. In 
fact, approximately 96 percent of the production growth since 
2007 has been on private lands, according to the Congressional 
Research Service.
    Obviously, there are a number of factors that operators 
consider when it comes to allocating capital to projects, such 
as geology and individual well economics. But another huge 
important factor, as I mentioned before, is the stability in 
the regulatory requirements. We are leery of making investments 
which will only turn into stranded capital.
    When we look at investments in states like Texas versus 
Federal lands, we know Texas has a regulatory regime that 
provides less risk and more certainty. We can start receiving 
returns on investments in a matter of days and months versus, 
in many cases, years on Federal lands.
    When it comes to leasing on the Federal Government, not 
only does it take years often to acquire those leases, as well 
as the permits, the risk of appeals, the risk of delays 
continue to add to that regulatory uncertainty.
    We do have a great working relationship in the field 
offices where we operate with BLM employees, but often they are 
hamstrung by the term that was used earlier. We call it 
analysis paralysis. Oftentimes, you will see projects that get 
caught in a quagmire of having to have multiple reviews or they 
get delayed. We had a project in southwest Wyoming that we 
eventually just pulled the plug on after 10-plus years. That 
often just becomes a death knell where proponents of projects 
pull the funding, pull the permit, and deploy it somewhere 
else.
    These delays, though, in fact, are part of the problem why 
you talk about having thousands of BLM APDs hanging out there, 
because oftentimes operators are submitting APDs because of the 
time frame it takes to get them, and the market conditions 
change. It is also important to know, when we submit an APD, we 
are paying money for that APD that sometimes we don't get back 
because we don't ever go drill on those wells.
    I want to refer you to the slides quickly. The first slide 
is the leasing to development slide. As you look at this, at 
this point you already have an RMP that is designated lands for 
leasing. Currently, there is a master leasing plan process in 
several states. I would argue that process is duplicative and 
unnecessary, but after you get through that process and you 
have put together the financing for the lease purchase and you 
have purchased the lease, which, again, takes years to do, you 
still are in the process of trying to put together your lease 
block.
    And putting together a lease block is critical, not only 
for us to have organized development, but it is critical in the 
sense of having development that lessens the environmental 
impact so that we can do liquids gathering lines, we can have 
less footprints from truck traffic, less roads, and organized 
tank batteries.
    The next slide is just the APD process which we go through. 
Again, this takes months to get through, and it is not to the 
fault of the BLM employees. Like I said, they are often 
hamstrung in what they have to deal with.
    All of this being said, these are the processes that we go 
through that do create issues where it becomes a challenge for 
QEP and other operators to invest on Federal lands. I have made 
several recommendations in my written testimony. I won't go 
over them again for the sake of time.
    With that, I will conclude my remarks and look forward to 
questions.

    [The prepared statement of Mr. Schulz follows:]
 Prepared Statement of Shane Schulz, Director, Government Affairs, QEP 
                            Resources, Inc.
    QEP Resources, Inc. (``QEP'') appreciates the opportunity to 
discuss ``Examining the Department of the Interior's Actions to 
Eliminate Onshore Energy Burdens'' with the House Natural Resources 
Subcommittee on Energy and Natural Resources. We look forward to 
working with the Committee to discuss enhancing our Nation's ability to 
reduce unnecessary burdens and promote oil and gas development on 
public lands.
    QEP is a publicly traded oil and gas company that is headquartered 
in Denver, Colorado. QEP is an industry leader in crude oil and natural 
gas exploration and production. We are focused on some of the most 
prolific natural resource plays in the United States--including two 
world-class crude oil provinces, the Permian Basin in Texas and 
Williston Basin in North Dakota; and two prominent natural gas plays, 
the Uinta Basin in Utah and Haynesville Shale in Louisiana. With 
operations located on private lands, state trust lands and Federal 
lands, we have a unique perspective on development and the contrast in 
corresponding government regulatory programs.
    Over the past decade, U.S. onshore oil and gas development has been 
truly remarkable. The growth in oil production, in states like North 
Dakota, Texas, New Mexico, Oklahoma, and Colorado, is something that 
many never thought they would see again in this industry. The same can 
be said for the growth in natural gas production throughout private 
lands in the United States, predominately in Louisiana, Texas, 
Pennsylvania, West Virginia, and Ohio. As oil and gas production grew, 
these states experienced an increase in tax revenues and job 
development.
    Technologies, like horizontal drilling and advances in hydraulic 
fracturing, have been the keys to the growth in oil and gas. These 
technologies have enabled industry to increase efficiency while 
dramatically reducing environmental impact. Although it may go without 
saying, such technological advancements are equally available on (and 
applicable to) state trust, private, and Federal land.
    Over this same time period of oil and gas production growth, we did 
not see equivalent growth on Federal lands. Development was underway, 
but it did not keep pace with development on private lands, where 
regulatory management is handled by the states. In fact, approximately 
96 percent of the oil production growth since 2007 has been on private 
lands, according to the Congressional Research Service.
    There are a number of factors that operators consider when 
allocating capital to projects, such as geology and individual well 
economics. Another important factor is stability in the regulatory 
requirements. Where the regulatory landscape is ambiguous, many 
companies are leery that investment will only turn into stranded 
capital.
    Experiencing significant delays on Federal lands in the recent past 
dissuades companies from wanting to operate on Federal lands today 
because the return on capital may be slower and the risks of delay are 
all but guaranteed. When companies, such as QEP, look at investments in 
states like Texas versus investments on Federal lands, we know that the 
Texas regulatory regime provides less risk and more certainty. We can 
start seeing returns on those investments in a matter of days and 
months in Texas versus years in the case of working with the Bureau of 
Land Management (``BLM'') and other Federal agencies. As an example, 
with private surface and private minerals, an operator may be able to 
drill their first well within months of expending capital on the 
leases. In the case of leases with the Federal Government, not only 
would it take well over a year to get approval to drill a well, but the 
risks of appeals and other restrictions are great and result in further 
delays.
    QEP has a strong working relationship with the professionals at the 
BLM. But, BLM staff are often hamstrung by a number of unnecessary, 
duplicative, and/or misaligned laws and policies. Oftentimes, these 
same laws and policies create ``analysis paralysis.'' ``Analysis 
paralysis'' is when the project and leases are caught in limbo, where 
the agency review never ends and/or a decision never happens. Analysis 
paralysis then becomes the ``death knell'' of a project: project 
proponents eventually pull the necessary applications, reallocating 
resources and capital elsewhere.

    Note some (and not all) of the laws and policies the BLM and other 
Federal agencies must manage in order to issue permits:

     Archeological and Historical Preservation Act

     Bald and Golden Eagles Protection Act

     Federal Land Policy and Management Policy Act

     Changes in the nationwide permits (``NWPs'') by the Army 
            Corps of Engineers

     Clean Air Act

     Clean Water Act

     Endangered Species Act

     Energy Policy Acts of 1992 and of 2005

     Migratory Bird Treaty Act

     Mineral Leasing Act

     Lease Stipulations

     Conditions of Approvals (``COAs'') for Applications for 
            Permits to Drill (``APDs'')

     National Historic Preservation Act

     National Trails System Act

     Safe Drinking Water Act

     Spill Prevention and Control and Countermeasures Act

     Wilderness Study Areas (``WSAs'')

     Wild and Scenic Rivers Act

     And many others

    The challenge of implementing these laws and policies created 
strained relationships between the BLM and state/local governments 
under the previous administration. The resulting BLM/Federal permitting 
delays and regulatory uncertainty created a tough investment climate 
for companies, which in turn can cost the states and local government's 
tax revenue and jobs. When taking into account the jobs and tax revenue 
created by oil and gas development on Federal lands, Congress has a 
duty to ensure the BLM and other Federal agencies are fully engaged 
with the states and communities their decisions impact. The Federal 
Government has a duty to maximize its efficiency and provide the 
regulated community with regulatory certainty.

    I offer the following recommendations and solutions to this 
Committee and the Trump administration to create a positive investment 
climate for oil and gas companies:
Enhanced Role of States
    Continue to evaluate methods to delegate more authority to states 
where it makes sense. Look at implementation of the Clean Air Act and 
Clean Water Act through the Environmental Protection Agency to State 
Department of Environmental Quality (``DEQ'') as one example. 
Additionally, the Surface Mining Control and Reclamation Act helps 
create a delegation program to states for surface mining operations. 
These are just a couple of examples where delegated authority is 
working. In addition to delegation, the Federal Government must also 
continue to reform existing programs that are duplicative of adequate 
state programs. A recent, promising example: BLM's rescission of the 
2015 Oil and Gas; Hydraulic Fracturing on Federal and Indian Lands, 
where the Bureau acknowledged that the rule was unnecessarily 
duplicative of state and some tribal regulations and imposed burdensome 
reporting requirements and other unjustified costs on the oil and gas 
industry. 82 Fed. Reg. 61924-61949 (Dec. 29, 2017).
Leasing, Protests, and Resource Management Plans
    The leasing process needs to be more predictable and stable. This 
means finding ways to shorten the process from nominating, protest 
periods, as well as competitively offering nominated parcels for lease. 
This is important because the oil and gas markets change quickly. By 
allowing the Department of the Interior to move quickly with those 
changing markets, the Federal Government could capture more value for 
those leases. For instance, the BLM should get back to regular lease 
sales including the elimination of the rotational lease sale process 
where only certain areas are offered up on an annual basis. The 
rotational schedule limits development for high interest areas. For 
example, if the BLM offers up parcels for the Uinta Basin at every 
lease sale instead of once a year, it could capture more value for 
those leases during strong market conditions.

    Attached to my testimony is a flow chart from leasing to 
development on Federal lands. It is important to note that not all 
leases will be developed. There are multiple complex steps taken. First 
there is exploration and appraisal. This can help an operator decide 
how much a lease is worth. After an operator successfully obtains a 
lease, multiple delineation wells are drilled to assist in determining 
well space and other factors. This process can take years. After those 
years of investment, if positive results have been achieved, the 
operator considers full field development. Infrastructure planning is a 
key component of any long-term plan. Permitting both the wells and the 
infrastructure can take years.
    Additionally, it rarely occurs where all the leases a company is 
pursuing on a Federal sale get offered at once. It is not uncommon for 
operators to wait several years to put together their leased acreage 
block before they want to go drill a well. If you were to compare that 
to private lands, the leasing and drilling process could and would 
likely happen within a year. This gets to my earlier point about the 
ability to deploy capital and see returns in a more efficient process.
    The protesting of leasing also creates challenges. The public has 
the ability to comment and participate in the decisions. The Resource 
Management Plan (``RMP'') for the area is the first opportunity and 
then the leasing Environmental Assessment (``EA'') of Notice of 
Competitive Lease Sale. The protest process has morphed into a tool for 
obstructionists who oppose oil and gas development all together. This 
is unproductive and strains BLM resources. In the past, environmental 
groups would submit large protests to challenge all or large portions 
of the parcels being offered for lease. The protests would rely on 
broad arguments rather than specific localized issues. These challenges 
create further uncertainty, which I referenced earlier.
    The long-term deferral and failure to lease these parcels can 
prevent companies from assembling the necessary leasehold to proceed 
with testing the geology and reservoir and potential development. The 
Federal mineral laws are based on orderly development of resources. 
Federal units and participating areas are designed to ensure Federal 
resources are not stranded (left in the ground) and the infrastructure 
consolidated to minimize surface impacts. Current leasing approaches 
often result in scattered acreage. This practice results in 
inefficiencies and can actually have more environmental impact by not 
allowing organized development or organized surface locations, tank 
batteries, or liquids gathering systems. The deferrals and delays not 
only cost the Federal Government money but also state governments who 
share in those royalties. While we appreciate Secretarial Order 3354, 
which stresses the importance of American energy security and directs 
the BLM to improve the Federal oil and gas leasing program, Congress, 
in addition to the BLM, needs to develop an organized and efficient 
response to those protests to get leases out quickly.
    In the past, the BLM has deferred parcels in an entire planning 
area while updating an RMP for that area. This happens despite the 
existence of an earlier-approved RMP for the area. RMPs take many years 
to be updated, therefore, these parcels are deferred far too long. When 
the BLM does lease parcels while an RMP is being updated, the Bureau 
attaches stipulations to those leases which are not specified under the 
acting RMP. It is as if the stipulations are foretelling what the new 
RMP will require before it is finalized. Additionally, when parcels are 
nominated for lease there is no transparent process as to why they are 
not being offered up for lease.
    Last, the development of Master Leasing Plans (``MLP'') under the 
previous administration are unnecessary and cause additional delays 
with no environmental benefit. The RMPs already designate the areas 
that are open for leasing, the areas that need special protections and 
outline the conditions for leasing where it is available. The MLP 
process creates a multi-year procedure and delays leasing within the 
area of the MLP. The Trump administration should abandon all ongoing 
MLP efforts and respect the current RMPs in place.
National Environmental Policy Act (``NEPA'')
    Like other major Federal actions, NEPA analysis is required for all 
oil and gas projects on Federal lands. While the intent of the law was 
for agencies to analyze and disclose potential impacts, it has turned 
into a litigious tool that doesn't add environmental benefits. Congress 
needs to address this process to provide more certainty.
    The NEPA process can either be an EA or an Environmental Impact 
Statement, depending on the size and scope of the project. The use of 
the ``Federal nexus'' dictates to BLM when they should be involved in a 
project. Sometimes the BLM uses the Federal nexus to be involved in oil 
and gas wells where the surface is owned privately and a majority of 
the minerals are owned privately. When this happens, an operator still 
has to get a Federal APD and get some initial NEPA review in order to 
get the APD approved. This also requires a tribal consultation for 
cultural artifacts on private land which can create issues with private 
landowners who the companies already have worked with to locate a well. 
Congress needs to work to help bring NEPA back to its original 
intentions.
    Additionally, the Federal agencies could establish criteria what 
constitutes the circumstances that require NEPA as well as an appeal 
process to enable project proponents to challenge decisions regarding 
the level of environmental analysis required for a project prior to it 
being considered a final agency action. This would provide more 
certainty in the process while ensuring appropriate disclosure of 
issues.
                               conclusion
    Affordable energy is essential to a strong and vibrant economy. 
Thankfully the United States has vast quantities of oil and gas within 
our borders and off our coasts. This massive supply of energy is 
limited only by the government policies we choose to adopt. The reason 
for the inequality between Federal and private lands is simple: the 
Federal Government policies and additional bureaucracy make it much 
more difficult to operate on public lands without providing additional 
health, safety, or environmental benefits.
    It is clear that there are efforts the Trump administration could 
undertake to make Federal lands more attractive for investment, which 
in turn would mean more dollars to the Federal Treasury in the form of 
bonus bids, royalties, and taxes. Remember that development in the 
western states where these Federal lands exist also benefits the state 
and local economies. I know this Administration has energy development 
and rural development as a focus and is working on making Federal 
policies more efficient. Promoting oil and gas development helps 
accomplish both of these important goals.
    In order to truly seek reforms and efficiencies one question must 
be answered: Does the U.S. Government want to be in the oil and gas 
business through leasing and management of Federal oil and gas 
minerals?

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                              ATTACHMENTS

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    Dr. Gosar. Thank you so very much.
    Now we are going to take a quick recess. We have four 
votes, but then we will reconvene back after the votes.
    [Recess.]
    Dr. Gosar. We are coming out of recess.
    I want to thank the panel for their testimony. Reminding 
members of the Committee that Rule 3(d) imposes a 5-minute 
limit on the questions. The Chairman will recognize Members for 
their questions they may want to ask the witnesses.
    I want to start us off with the questions.
    It has been reported recently that BLM has a backlog of 
permits to drill that have been approved, yet companies 
continue to submit APDs for other projects. My colleagues on 
the other side of the dais seem to believe there is a smoking 
gun here as to why companies would leave undeveloped leases and 
unused permits on the table while pursuing leases elsewhere and 
other APDs for different locations.
    Mr. Schulz and Mr. Kubat, can you explain to the Committee 
why the backlog of permits exists and why it is necessary for 
companies to continue to pursue new leases and apply for APDs, 
even if they have leases and approved APDs that have not been 
developed? We will start with you, Mr. Kubat, and then move to 
Mr. Schulz.
    Mr. Kubat. Thank you for the question. Yes, to start with 
the number of APDs and the backlog, Mr. Chairman, the number of 
APDs that a company pursues are due to the development, 
planning, and timeline lead that is necessary for us to 
accomplish our business goals and to create optionality in that 
forecasting and planning.
    For instance, an APD in a certain area may be subject to 
timing stipulations that are environmentally driven and 
conditions of approval to that permit that we referenced in a 
number of our testimonies here. Those stipulations and 
conditions of approval could block out large windows of time, 
up to half of the year, where you are unable to access that 
location for the development of it.
    As well, when you drill and develop on leasehold, you are 
delineating your asset. You are learning more about it as each 
well progresses from one to the next, and that will drive where 
you go in the development and drilling program. Also, there is 
optionality that is needed within that to allow for 
infrastructure to get there.
    I guess at a certain level, it is kind of like when you are 
baking a cake and you go to the grocery store, you may already 
have ingredients for that cake in your pantry or in your 
kitchen, but you go back and make another run to the grocery 
store again to add an ingredient. It is like why do you need to 
keep going to the grocery store? It is because the recipe you 
call for on that day, you may not always have all the 
ingredients in your refrigerator or in your pantry to prepare 
that. It requires more than just a rifled approach of a single 
target every single time, so that is why we pursue more than 
one APD and need an inventory, if you will. It is to create 
certainty in our development planning.
    Dr. Gosar. Mr. Schulz, anything you want to add?
    Mr. Schulz. Yes, please, thank you. We have obviously 
touched a lot on the APD process. I think it is important to 
understand why we are out trying to acquire APDs. In the same 
time frame, we are also looking at getting more leases. And as 
you go out and you are trying to get together a lease block, if 
it is a Federal lease sale and it has had a long drawn-out 
process where it may take years--in the case of the previous 
administration, we had rotational lease sales where basins 
would only be offered up once a year--it may take you 3, 4, 5 
years where you finally get all the acreage together that you 
want to get leased.
    So, part of that process is taking the time to get that 
together. And the reason you want that acreage lease block is 
it drives efficiencies, not only for operators--and I mentioned 
in my opening statement by having centralized tank batteries, 
by having less roads, maybe you can do a liquids gathering 
system--that not only benefits the operator--selfishly, 
economically, that is something we want--but it also lessens 
the environmental impact. You have less air emissions. You have 
less disturbance from a wildlife standpoint. That is part of 
what happens.
    And it is also important to know that not every lease is 
going to get developed. At the end of the day, you are going 
out and you are making a guess, an educated guess, on what you 
think that acreage holds from a potential. But at the end of 
the day, you may go file and get some permits, and you are 
still trying to decide am I going to drill this directionally, 
am I going to drill it horizontally? A lot of this is dictated 
by the rock and economics. Obviously, we are seeing an uptick 
in prices, but all these things are huge factors that can 
determine whether or not APDs get used and whether leases get 
approved.
    Dr. Gosar. Got you. I am going to stop right there, because 
I am going to do a multiple round, just because it is a good 
time to stop.
    I will go to the gentleman from California.
    Mr. Lowenthal. Thank you, Mr. Chair.
    Ms. Culver, one of the things that is very concerning about 
this Administration's energy policies is the way that they seem 
to be cutting down on opportunities for public involvement in 
the oil and gas leasing process. Mr. Steed, in his testimony, 
mentioned some of the difficulties, as from his perception, 
around protests. I am also interested, in addition to protests, 
what has Interior been doing to cut down on public input?
    Ms. Culver. Given that these are public lands, we feel it 
is extremely important for the public to be able to provide 
information and comment before lands are conveyed to the 
industry. But what we have seen already in states like New 
Mexico is the BLM proactively ceasing to permit early input 
into the leasing process. There used to be a scoping period 
where lands were posted and counties and interested parties 
could provide information. They have proactively just stopped 
doing that, citing the Administration's agenda as a reason to 
cut the public and other interested stakeholders out.
    In addition, we are already seeing BLM not preparing full 
environmental assessments before leasing, even though they have 
a requirement to do that. Instead, they essentially prepare a 
checklist that does not consider impacts, does not consider 
alternatives, does not really provide an opportunity for the 
public, the county, or state agencies to propose changes to 
lease boundaries that might protect resources or other changes 
to how a lease might be provided.
    In addition, we have heard a little bit already about 
master leasing plans. That was another opportunity where the 
agency had determined, for instance, that more information was 
needed, more discussion was needed, more planning was needed to 
address conflicts that had already arisen and had begun to 
engage the public in developing an approach. Those have been 
abandoned. And we saw a lot of value from that input 
affecting--for instance, in New Mexico, communities were able 
to protect their water supply by just talking with the BLM 
during these processes. We are concerned about losing those.
    Mr. Lowenthal. Thank you.
    Mr. Steed, I have a question. As I mentioned in my opening 
statement, I feel like the Energy Burdens report is incomplete. 
I was going through it looking for mention and really detailed 
understanding of solar, wind, or geothermal energy, and what 
are some of the burdens to development. But with a few 
exceptions in the mention of hydropower, where that is 
mentioned a few times, there is almost a complete absence of 
these issues.
    I know the Executive Order told you to pay particular 
attention to fossil fuels and nuclear, but it did not tell you 
to exclude renewables. So, where is that? Did BLM analyze its 
policies for renewable energy burdens?
    Mr. Steed. Mr. Lowenthal, I appreciate the question, and I 
think it is a fair question. The previous administration did 
spend a fair amount of time focusing on renewable energy 
sources. And some would argue that there was insufficient 
attention paid to hydrocarbon energy sources. I think that 
created a bit of a backlog.
    In terms of what we are doing for renewable energy, our 
renewable energy program has not gone away. Just this morning, 
as a matter of fact, I received two additional applications on 
renewable energy--I have a short time frame there. But in my 
limited time frame, we have moved a large solar project, a 
large wind project, just beginning the regulatory process, as 
well as other projects that are in consideration. So, I don't 
think that because the report focused----
    Mr. Lowenthal. The absence of it in this report.
    Mr. Steed. Yes. I don't think it means that we are not 
doing it.
    Mr. Lowenthal. Will you be providing us with information 
about some of the difficulties and the burdens of renewables? I 
mean, you have gone on extensively about oil and gas, but we 
are not seeing anything about renewables.
    Mr. Steed. I understand that. And I am happy to provide 
that information, if so desired.
    Mr. Lowenthal. I think that would be very appropriate.
    The last question, and I don't know if we are going to have 
time, is for Ms. Culver. You mentioned in your statement about 
the BLM moving away from multiple-use mandates which have been 
outlined in the Federal Land Policy and Management Act of 1976. 
Do you want to tell us briefly what you meant by that, to 
elaborate on that?
    Ms. Culver. Sure. The BLM's governing act, the Federal Land 
Policy and Management Act, defines multiple use and requires 
the BLM to manage in accordance with multiple use. And it 
explicitly includes wilderness, recreation, range, timber, 
watershed, fish, wildlife, scenic and historical values. It is 
not limited to energy development; it is one of the multiple 
uses. And it is a challenging job that the BLM has to balance 
amongst these multiple uses, but its mandate requires that 
effort to be made.
    Mr. Lowenthal. We will come back to that.
    I yield back.
    Dr. Gosar. I thank the gentleman.
    The gentleman from Virginia, Mr. Beyer, is recognized for 5 
minutes.
    Mr. Beyer. Thank you, Mr. Chairman, very much.
    Mr. Steed, the GAO had a report that prior to 2016, and 
prior to the waste prevention rule, the BLM venting and flaring 
practices were costing the taxpayers about $204 million a year 
and 180,000 tons of methane per year. Given that measurement 
and that that was what the rule was intended to address, how do 
you justify revising or rescinding that rule?
    Mr. Steed. Again, sir, I appreciate the question. As I 
mentioned in my testimony, we were presented an Executive Order 
to examine the various burdens facing energy development. In 
making that review, one of the things we particularly were 
asked to review was the venting and flaring rule.
    We went back and took a hard look at that. In all candor, 
much of that analysis took place before my time in the Bureau, 
but I will tell you some of the things we found. First of all, 
there was overlap between what the BLM was proposing to do and 
what the EPA has been charged with doing, in terms of air 
quality. We found that many states, especially after the 
publication of that rule, states with major venting and flaring 
activities complained that the rule itself did not take into 
consideration the local interests as well as the local 
opportunities and local circumstances that are found in those 
areas.
    Also, I would have to say that in looking at it, there are 
a variety of assumptions made in the model in terms of savings 
to the American people. I am not sure that those pencil out 
under different assumptions.
    And last, I just point out that we do have currently and 
did have existing regulations, NTL-4A, for instance, that was 
to prevent and account for waste. Obviously, we can do that 
better, and I think the report that you reference pointed out 
some ways that we could improve NTL-4A, but just those 
responses.
    Mr. Beyer. Thank you very much.
    Ms. Culver, earlier this week, most of the members of the 
National Park Service Advisory Committee resigned in protest of 
Secretary Zinke's agenda and the fact that the committee had 
not been convened in over a year, despite the law on that.
    BLM also has advisory committees, one called the Resource 
Advisory Council, that were suspended last year by Secretary 
Zinke. How important are these councils and what is their 
status?
    Ms. Culver. As indicated by their names, they were created 
to provide advice to agencies like the National Park Service, 
the BLM, and they are made up of a specific balanced set of 
stakeholders with expertise ranging from local government to 
entities that profit from the public lands to tribal entities 
and other local businesses. These entities provide an important 
opportunity to get new perspectives. They are also open to the 
public, so they provide a forum for the public to be informed 
as to what the agencies are doing. And it is vital.
    Unfortunately, early on, this Administration shut down all 
resource advisory councils, stating they would be reviewed. 
Some councils, like the Wildlife and Hunting Heritage 
Conservation Council, have been formally disbanded. Others, 
primarily the BLM councils, are still not functioning. Their 
charters have not been signed. Their members have not been re-
upped. And really, shutting them down has deprived the agencies 
and the public of important information. It has eroded public 
trust in the land managers, and it is actually fundamentally 
interfering with the operation of the Bureau of Land 
Management.
    Mr. Beyer. If I can continue, Ms. Culver, implicit in this 
discussion and in this Administration's wholehearted embrace of 
fossil fuels is that climate change is not real, or if it is 
real, it is not relevant to us, that we can cope, that it is 
not, in fact, the existential problem threatening mankind that 
the rest of the world thinks it is. But if you just look and 
say we rescind all these rules, we cut all these timetables, we 
weaken NEPA, et cetera, what is the short-term impact and the 
impact in our lifetimes on the lands that are being developed? 
Not the global climate change, but for people that live in Utah 
or Wyoming or Montana.
    Ms. Culver. Well, some of the impacts will be to health. 
For instance, we know that there is well-documented in the 
Uinta Basin in Utah and the Front Range in Colorado, for 
instance, significant impacts to air quality already from oil 
and gas development. And it also increases the ground level 
ozone or smog, so that is already having health impacts and we 
will continue to see that.
    We also expect it will lead to direct impacts on air and 
water resources, wildlife habitat, all of the various resources 
that are damaged by surface disturbance and contamination, and 
all of that is aggravated by the impacts of climate change.
    Mr. Beyer. For 5 more seconds, Mr. Chairman. There was a 
report this week that the cost of asthma in America was $80 
billion per year.
    Mr. Chairman, I yield back.
    Dr. Gosar. I am going to reclaim my 40 seconds, and then we 
will go to a second round.
    To the gentleman that I asked before, would the analogy be 
that you carry these APDs much like a doctor having multiple 
patients? Patients are at different stages of development and 
treatment, and different treatments are for different patients. 
Wouldn't that be an aspect? So, it is more of a business plan. 
Mr. Schulz?
    Mr. Schulz. I think that is probably a fair analogy to put 
forward, yes.
    Dr. Gosar. Yes, because as you unfold these geographic and 
geology layers, you are going to have to approach them very 
differently. One piece of land is totally different than 
another. Would you agree?
    Mr. Schulz. Yes.
    Dr. Gosar. Mr. Kubat, would you have any problems?
    Mr. Kubat. I would agree with that, and add to it that it 
is an investment and, to use another analogy, it could be 
looked at similarly to a retirement portfolio of investments 
when you look across the board, in that in your 401(k) or your 
retirement account, you might have legacy utility type 
investments that are strong and steady, and at the same time 
you diversify your portfolio with riskier assets and 
investments that might be new start-up companies.
    As we look across our investment as an oil and gas company, 
we have leases and APDs on those leases that are similar in 
that nature, some that are next to older producing fields, and 
then APDs and leases that are on the periphery of those fields 
and we have high hopes for. That is the reason why we made that 
investment. That is the reason why we purchased the lease and 
have paid the APD fees and went through the process necessary 
to try to gain that application, because we have high hopes for 
that, just as an investor would in their portfolio.
    Dr. Gosar. So, you are applying the full rule of looking at 
each lease in a specific application and making sure it is 
tailored for that, as well as having a part of a business 
portfolio.
    Mr. Kubat. Exactly. And to add to those dynamics that are 
taken into consideration, not every oil and gas lease, to use 
the term ``oil and gas,'' is prospected for oil or gas.
    Dr. Gosar. Right. Mr. Schulz and Mr. Kubat, your companies 
operate on both Federal land as well as state and private land. 
Can you speak to the differences in the process for developing 
wells on Federal lands versus state or private? Does the 
difference in the regulatory environment on the Federal versus 
non-Federal lands influence your company's decision on where 
and when you invest resources? And do states particularly like 
dirty water and dirty air, unlike the Federal Government? Mr. 
Schulz, you first.
    Mr. Schulz. The state process versus the Federal process--
this is a good question. And I am going to answer your last 
question first. No state that we operate in wants dirty water 
or dirty air. The process of which we go forward through the 
state of Texas, the state of Louisiana, the state of North 
Dakota, and even the state of Utah, when we have state lands or 
private lands, is just a much more efficient process in which 
we can go forward and get those APDs. You can move quicker on 
those permits and you can deploy capital quicker.
    It is the point of what I have said in my written testimony 
and also my oral testimony. It is that regulatory certainty. It 
is the ability to put together a project and go deploy on it in 
a matter of months instead of years.
    Dr. Gosar. Mr. Kubat?
    Mr. Kubat. To add to that, Mr. Chairman, it absolutely 
drives our investment decision analysis.
    And the states do care. For every well drilled, the state 
has to have its own APD approval process, if it is on Federal 
land or if it is not on Federal land.
    As a recent example, we have a location we just drilled 
within the last 30 days that the direction orientation and 
location of that well was purely driven by the lack of Federal 
nexus. And the unfortunate circumstance that it brought to the 
Federal Government was a lack of royalty revenue that could 
have been received but for a timely approval of a right-of-way 
that would have been a common-sense approval of a right-of-way.
    To bring the term ``common sense'' into play here, there is 
definitely a need for common sense because it is a very short 
right-of-way approval that could have been gained, could have 
deferred unnecessary surface impact, and, from that location, 
could have allowed Federal minerals to be developed without any 
disturbance to Federal surface.
    So, it is absolutely taken into account.
    Dr. Gosar. Gotcha.
    Leasing policy changes put in place in 2010 have resulted 
in a situation in which the BLM is not fulfilling the Mineral 
Leasing Act's requirements to hold a lease sale in every oil 
and gas state, at least quarterly. Rather than holding 
statewide sales with parcels from all areas where interest 
lies, each field office was limited to just one lease sale per 
year.
    Mr. Schulz and Mr. Kubat, how has this policy impacted your 
companies' ability to acquire and develop leaseholds?
    Mr. Kubat first.
    Mr. Kubat. It has impacted our ability to plan for 
development in the beginning phase of nominating a parcel, to 
Mr. Schulz's comments earlier, in looking at an area in a wide 
range of development and how you are going to lay out your 
infrastructure in a prudent, conservative manner that will best 
complement the plan development for the area.
    When we nominate those parcels, we have seen a significant 
delay through the nomination process. If you are only holding 
cells on a period that is protracted, say, over a year, instead 
of on a quarterly basis, that combined with the review period 
that I mentioned in my oral testimony, and is also included in 
my written testimony, of 415-plus days on average, it 
absolutely impacts us in our ability to execute our business 
plans.
    Dr. Gosar. Mr. Schulz?
    Mr. Schulz. Good question, again. As we look at the 
rotational process and what it did, as I have talked about as 
my theme, regulatory certainty, but also the ability to put 
together an acreage block. If you are having a rotational lease 
sale once a year, and you own a basin, and you are trying to 
put together a prospective block of acreage, you don't want to 
go drill on a couple leases if there is a bunch of open acreage 
around you. You want to try to get it all leased up that you 
think has good rock to it and you want to go drill. Because, 
again, it drives those efficiencies.
    If you are worried about the environment, if you are 
worried about us drilling in an efficient, organized fashion, 
you want that all leased together, and you want us to try to 
develop it out in an organized fashion. Maybe we can put in a 
liquids-gathering system. Maybe we can do centralized tank 
batteries. Maybe we can cut down on the amount of roads that we 
need. All of that actually benefits not only us, but it 
benefits the area and it benefits potentially the environment, 
and it also adds more revenue back to those state and local 
governments.
    Additionally, and I think it is worth noting, oftentimes 
you have state sections, state leases that are managed for the 
state trust of the school kids. Sometimes it can hurt those 
lands, because if that comes up but there is stuff around it 
that is not leased, we may not bid it as high as we need to. 
Therefore, if it is leased and it is the last thing that we 
need to get, it is going to get a higher value.
    These leases tend to work together, and if you can get more 
of a block together, they are going to probably bring more 
money. So, the rotational aspect of it, we would argue, needs 
to be eliminated, and I think the Federal Government would 
receive more dollars on those leases.
    Dr. Gosar. I am going to go over a little bit here, but I 
will give you the extra time.
    Senator, along those same lines, do you see that 
efficiency, from your perspective as a State Senator in Utah?
    Mr. Van Tassell. I, wholeheartedly, see that efficiency. I 
have seen the changes in the last 12 years that I have been in 
the Senate. I have seen the ability as the larger blocks have 
come together and the economic forces are at play, where we not 
only are trying to drive down cost but also improve the 
environment, all of those situations have come in. We are 
seeing multiple large-area gathering. We are cutting down on 
all of the things that create bad air, as well as truck 
traffic, and we are doing it more by pipeline.
    There is no way to be efficient by leasing small acreage 
and sending people. The infrastructure cost is too high to do 
that. So, in my opinion, by leasing smaller acreage, we just 
commit ourselves to accept less quality control because the 
economics are not there. This is an economic-driven decision.
    Dr. Gosar. Yes. Thank you, sir.
    I recognize the gentleman from Virginia, Mr. Beyer.
    Mr. Beyer. Thank you, Mr. Chairman.
    You probably read the story this morning in the Washington 
Post, among many others, that 60 percent of a given species of 
antelope died in 3 weeks in Kazakhstan--200,000 saiga, s-a-i-g-
a. I am not sure how you pronounce it. And it was directly, all 
the scientists took it right to global warming.
    So, Mr. Steed, in this wholesale effort to promote oil, 
gas, and fossil fuels, how much effort is BLM doing to promote 
wind, geothermal, and solar in these massive public lands that 
you manage?
    Mr. Steed. First, I would not characterize this as a 
wholesale rush to oil and gas. And, honestly, we have spent a 
long time working on developing renewable resources. The 
previous administration put a lot of time and effort into that, 
and we have seen many of those efforts come to fruition over 
the last year. We continue to see permits flow in, as I 
mentioned in my previous answer.
    So, I do think that we still value wind, solar, and 
geothermal. It is one of those things that we are still 
pursuing and that we can consider as an important part of our 
portfolio. I don't think that it is fair to characterize this 
as only emphasizing one over the other.
    Mr. Beyer. All right. Thank you very much.
    Ms. Culver, we have heard from the two operators here how 
frustrated they are with regulatory uncertainty, delays, things 
like that. How important is regulatory certainty? And why 
shouldn't we prioritize that, too, as environmentalists?
    Ms. Culver. Right, I think there is another side of 
regulatory certainty, which is for the public. I think when we 
see, for instance, almost 30 million acres under lease and far 
less than that under production, that is a lot of uncertainty. 
It is hard to commit to running your business on public lands 
for recreation if at any time that land could be developed for 
lease. That is the type of uncertainty that affects other users 
of the public land.
    Similarly, for the public to know what lands are going to 
be developed, what lands are available, and what lands are 
protected for other uses, be it recreation or wilderness, 
hunting and fishing, that's another important part of 
regulatory certainty that does not seem to be getting a lot of 
attention in this discussion.
    Mr. Beyer. OK.
    Mr. Steed, not to blindside you, but do you know how many 
employees BLM has and how many of them are in Washington?
    Mr. Steed. I don't know the exact number, but I am happy to 
get back to you on that.
    Mr. Beyer. Well, actually, we looked it up.
    Mr. Steed. OK. I wish I would have guessed then.
    Mr. Beyer. There are 8,906 permanent employees, and 503 are 
based in the Washington metropolitan area.
    I only bring that up because we often have the impression 
that this is all, to quote my friends, ``nameless, faceless 
bureaucrats in Washington, DC,'' when, in fact, the vast, vast 
majority are out in the states actually managing these projects 
and the lands. So, thank goodness.
    Mr. Kubat, you are a small business, and in your opening 
testimony you talked about the essential role that small 
business plays in developing oil and gas resources. I am sure 
there are many hundreds or thousands. But do you know what 
percentage of the fossil fuel we pull out is done by small 
business?
    Mr. Kubat. I don't know the exact percentage that is pulled 
out by small business, but----
    Mr. Beyer. Any sense? I mean, do we have----
    Mr. Kubat. I would say it is, and this is a hazard guess, 
but more than a majority of the production produced in the 
United States is a factor of small oil and gas companies and 
their efforts.
    Mr. Beyer. Do you have the sense of any large foreign 
entities that are part of this?
    Mr. Kubat. I do not have a sense of large foreign entities 
that are a part of that.
    Mr. Beyer. So, you don't see those in Wyoming, for example?
    Mr. Kubat. Do I see large foreign companies in Wyoming 
making investment in oil and gas? Is that the question? I want 
to make sure I am clear on the question.
    Mr. Beyer. Yes.
    Mr. Kubat. Again, I guess emphasis added that minding my 
business and our business as a small oil and gas operator in 
the state of Wyoming, our investment is domestic. I am an 
investor in our efforts. And as to the makeup of the 
individuals and their entities that are in pursuit of the 
extraction of oil and gas within the state, I have no 
proprietary knowledge of what the makeup of their investor 
structure is.
    Mr. Beyer. OK.
    Mr. Steed, one last question. In Ms. Culver's testimony, 
she writes that there is a 20-percent increase in oil and gas 
permitting activities but flat funding for inspections and 
enforcement activities. And this despite the fact that the GAO 
had a report that the BLM had failed to inspect some 40 percent 
of high-priority drilling operations in 2009 to 2012.
    Why the imbalance in increasing all the permitting but not 
balancing that with the enforcement inspections that are so 
clearly necessary?
    Mr. Steed. The short answer, we were experiencing a large 
backlog on APDs and definitely wanted to improve our turn times 
on those APDs. As to the safety issue, we take safety very 
seriously and continue to do our jobs on that.
    Mr. Beyer. OK. Great.
    Mr. Chairman, I yield back.
    Dr. Gosar. I thank the gentleman.
    The gentleman from Florida, Mr. Soto, is recognized for 5 
minutes.
    Mr. Soto. Thank you, Chairman. Thank you for your courtesy.
    On the last business day of the year, on December 29, BLM 
moved to rescind a 2015 protection related to hydraulic 
fracking--quite an inauspicious rollout of such an important 
rule, at a time when a lot of people are not really paying 
attention and are spending time with their families.
    The first part of the rule, the protection, tightened 
standards for well construction and wastewater management.
    Deputy Director Steed, why would we want to keep such a 
rule on the books? And then, what was the reasoning for moving 
to get rid of that protection?
    Mr. Steed. You are referring to the hydraulic fracturing 
rule, correct?
    Mr. Soto. That is correct. I will get to the disclosure of 
chemicals next, but just on the well construction and 
wastewater management, why were those rules put in place, and 
why is there a move to get rid of them?
    Mr. Steed. I can't speak to why those rules were put into 
place.
    I can say, as part of the review put into place by the 
Executive Order leading us to look at burdens on energy and gas 
production, we took a wholesale look at the hydraulic 
fracturing rule. We noticed that there was overlap with state 
groundwater authority. Many states have their own regulations.
    We also noticed that there is a jurisdictional authority 
question with EPA and the states, and, indeed, that has not 
gone unnoticed by the courts. The courts enjoined the hydraulic 
fracturing rule and it has never been put into effect because 
they deemed that the BLM did not have the authority to do what 
they were proposing to do. And, to my knowledge, I am not sure 
that Congress has ever given us that authority to do it.
    Mr. Soto. So, on Federal public lands, we don't have the 
right to protect against hydraulic fracking by having tightened 
standards for well construction and wastewater management?
    Mr. Steed. I don't believe that was my answer. I think that 
the proposed rule of the previous administration was deemed to 
be unlawful.
    Mr. Soto. Was there a less offensive rule by virtue of 
jurisdiction that could have existed without eliminating the 
rule?
    Mr. Steed. Again, I think that we can defer to the states 
on this issue. The states have primacy over water resources 
within their states, especially groundwater. And I think the 
states are well-suited to do that.
    Mr. Soto. I have read in certain articles that Colorado, 
Wyoming, and New Mexico are the ones who this would 
particularly be slowed down for. Do those states have the same 
protections under state law right now?
    Mr. Steed. I am sorry, I am not sure what you are referring 
to.
    Mr. Soto. Do those states have the tightened standards for 
well construction, wastewater management in their state laws?
    Mr. Steed. They have their own sets of rules, yes.
    Mr. Soto. Is it to the same stringency as the Federal rule?
    Mr. Steed. No, sir, not to my knowledge. I have not 
independently reviewed each of those rules, but again, the 
previous rule was deemed to be unlawful.
    Mr. Soto. And then, disclosure of the chemicals containing 
fracking fluid. It has been wildly reported that many of these 
chemicals have a carcinogenesis property to them. What was the 
reason that the disclosure rule was proposed to be removed?
    Mr. Steed. At the time the previous rule was put into 
place, I think there was some issue with regard to disclosure 
of those chemicals. Many states have been involved in gathering 
those chemicals, as well as FracFocus is by far more widely 
used by industry currently, and we think that it is sufficient 
to cover the concerns.
    Mr. Soto. Wouldn't we want all chemicals being used on 
public lands to be public knowledge, given that it could have a 
substantial effect on health in these individual states as well 
as to Americans from all over the states visiting these public 
lands?
    Mr. Steed. I don't know the answer to that question, sir.
    Mr. Soto. There was citing of $14 million to $34 million 
compliance cost savings. Were there any additional costs 
determined under Medicaid, Medicare, or other healthcare costs 
due to increased cases of cancer as a result of not disclosing 
these types of chemicals?
    Mr. Steed. I don't know.
    Mr. Soto. Was there any health study conducted of what 
those costs would be in the proposing of this rule?
    Mr. Steed. I am happy to get back to you on that, sir.
    Mr. Soto. OK. I would really appreciate it.
    I yield back.
    Dr. Gosar. We are going to go another round, Darren, so if 
you want to stick around.
    Dr. Steed, I understand from the Energy Burdens report that 
the Bureau is seeking to return to a quarterly lease sale 
format. Can you update us on the Bureau's progress on achieving 
that goal?
    Mr. Steed. On achieving lease sales, correct?
    Dr. Gosar. Yes.
    Mr. Steed. Sure. Last year, we had 28 lease sales 
conducted. That is a sizable increase over the previous fiscal 
year. We will continue to do that and are trying to meet the 
Secretarial Order that mandates, indeed, that we have the 
quarterly lease sale as well as our obligations under the 
Mineral Leasing Act.
    Dr. Gosar. Gotcha.
    Now, Mr. Kubat and Mr. Schulz, BLM's primary statute, the 
Federal Land Policy and Management Act, or FLPMA, specifies the 
land use planning process. Resource management plans, RMPs, 
which are intended to guide planning for 15 to 20 years or 
more, specify the appropriate uses of public lands and are in 
effect until such time as a new RMP is completed. Updates take 
several years, usually 5 or more. However, under the previous 
administration, the BLM delayed leasing and other management 
decisions while it completes these multiple-year RMP updates. 
And they have added another layer of delay through the master 
leasing plan, or MLP, process.
    Mr. Kubat and Mr. Schulz, have you experienced delays in 
leasing as a result of the RMP amendment process and/or the MLP 
process?
    Mr. Schulz first.
    Mr. Schulz. Yes, we have.
    Dr. Gosar. Mr. Kubat?
    Mr. Kubat. Yes, we have also, Mr. Chairman.
    And I would add that the consideration in this scenario, we 
have had this recently with the sage-grouse amendment to a 
resource management plan within our focus area where we have 
seen deferred parcels within an area where we have significant 
plans for development be deferred for an extended period of 
time. This prevented them from being offered.
    But, in that review, you have the resource management plan, 
you mentioned the master leasing plan--which I would note is an 
unnecessary fourth layer of examination that is contemplated, 
and its consideration should be removed from the process.
    Dr. Gosar. Gotcha.
    Dr. Steed, I understand that the Energy Burdens report in 
your testimony--that the Bureau has received the MLP process 
and has decided to rescind this practice. How did the Bureau 
arrive at this decision?
    Mr. Steed. As was discussed in previous testimony, the idea 
of MLPs came to be because we could resolve, or in theory at 
least, resolve a number of concerns on the front end of the 
leasing process. The practical application of that has not come 
to fruition.
    And I will just share one anecdote with you, Mr. Chairman. 
We went through the whole master leasing process in Moab, Utah, 
with the expectation we were able to resolve a number of 
conflicts on the front end. When it came to the time of the 
lease sale, all 43 of the leases were protested, and it appears 
that we did not achieve our goal of reducing that conflict. So, 
I will just conclude by saying, I think it was an unnecessary 
layer of bureaucracy that we can solve through other means.
    Dr. Gosar. Let's drill down a little further, literally. 
Even without the MLP process, the Bureau will still conduct 
several separate reviews under the NEPA process before an 
operator can drill or lease. Is that correct?
    Mr. Steed. That is correct. One at the RMP stage, the 
resource management plan stage, that will be reviewed at the 
leasing stage. And, again, a site-specific NEPA process will 
happen at the time of issuance of APD.
    Dr. Gosar. Ms. Culver made a couple of comments that seem 
to contradict those types of statements, that the public is not 
part of the review. Can you address that?
    Mr. Steed. I don't believe that to be the case. It is a 
very public process, and the public is afforded ample 
opportunity to comment on each of these lease sales as well as 
applications.
    Dr. Gosar. Senator, where do you see the improvement in 
your years as a State Senator in the area that you represent? 
How have you seen this process work out, as Dr. Steed has 
talked about, as the operators have talked about, working with 
states for multiple jurisdictions?
    Mr. Van Tassell. I would preface this by saying that, in 
the last 10 years, the school and institutional trust funds in 
the state of Utah have went from just over $600 million into 
the school trust fund that we only spend the interest on to 
$2.4 billion in the school trust fund that is now being 
disbursed to the students in the state of Utah.
    Most of that has been at a time when state leasing has been 
in public land primarily, the only available property because 
of all of the other requirements. The issues that have been 
concerning and wanted to be watched, we have not seen that. Our 
oil and gas board is very active. They do all of the 
qualifications. We are doing the research and the inspections 
that are necessary.
    Again, oil and gas is not located everywhere, but where it 
is located, we need to have access to it. And there is room 
enough to let the hunters and the sportsmen and all of the 
other people in there. As we do proper management, we really 
get a better moldable gas. But in the past, up until now, 
primarily with the Federal/state lands, I have viewed it as an 
opposition. We get ready to kick the field goal, and we move 
the goalpost.
    And that has been a big issue for the producers and for my 
local economy. I have had businesses shut down. I work in 
banking when I am not at the Senate. We have had foreclosures, 
we have had businesses--there is always the ability as 
commodities go up and down that we will see fluctuation and 
adjustments made.
    But our issue is being able to have stability. If we can 
level out the mountains and fill in the valleys, get somewhere, 
instead of doing this and going kind of on a wave, our local 
economy, our children, our education, and all in the state of 
Utah will be benefited.
    Dr. Gosar. Thank you.
    The gentleman from Virginia is recognized for his 5 
minutes.
    Mr. Beyer. Thank you, Mr. Chairman.
    Ms. Culver, we heard from Mr. Steed about why the BLM is 
doing away with the master lease plans, the MLPs. I would love 
for you to offer a defense of them, especially since they came 
up during the Bush administration by the leadership at the BLM 
and the Deputy Secretary. The original idea was that it was to 
provide greater regulatory certainty by thinking, as you said, 
smart from the start, thinking this through from the beginning.
    How do we overcome Mr. Steed's objection, and the 
operators', that it is just another unnecessary bureaucratic 
layer?
    Ms. Culver. I think part of the challenge is at the land 
use planning level we have multi-million acre field offices. We 
are not getting into detail about how to develop different 
resources. We see the vast majority under the average BLM land 
use plan--over 90 percent of those lands are open for leasing 
and development. And as the Senator said, the oil and gas is 
where it is, yet these lands are open, even when they have no 
potential or very low potential for leasing.
    And the master leasing plan process allowed us to, if you 
will forgive me, drill down into the details of where the 
different resources were, how they could be safely developed, 
and involve communities. These plans, as you mentioned, started 
to be developed, the idea, in the previous administration, and 
it was to address places where we had a history of conflict--
areas in Moab and Wyoming--that were also slowing down leasing 
and permitting because of wide protests and legal actions.
    So, I think we have just seen these plans start to work. 
They were just completed in the last few years. And I can say, 
from the perspective of our organization and others who were 
involved in that process, having an opportunity to submit 
information at a granular level of where we were concerned, how 
those concerns could be addressed, to hear the same concerns 
from the industry to prioritize the right places to lease, 
drill, and address the proximity of national parks was 
extremely valuable for us.
    Mr. Beyer. Thank you very much.
    Mr. Kubat, in his suggestions, complained about getting a 
land use designation and then later having the rules changed on 
him. And, specifically, he talked about the need to honor valid 
existing rights contained within the original lease terms.
    Ms. Culver, is that unreasonable? Or how would you respond 
to that? A businessperson who makes an investment and later 
finds that----
    Ms. Culver. Right. As somebody who is making an investment, 
the lease specifies that there will be conditions imposed to 
address environmental concerns. It explicitly provides that if, 
for instance, endangered species are identified or cultural 
resources, those will need to be addressed.
    The BLM's lease form is not particularly long. This is in 
Section 6 of the standard form. Companies are on notice. And 
that may be a little less certain, but they are on notice of 
that.
    And it is important because, again, if an area is made 
available for leasing based on a land use plan that is 
operating at the level of 4 million acres, we have not yet 
looked at what is in a given area. Lease stipulations allow us 
to address at a broader scale where big-game habitat could be, 
which Mr. Kubat mentioned, but that will not necessarily be 
identified at the land use planning stage.
    And, when we get down to conditions of approval on permits 
to drill, it is similar. The industry typically will take the 
position that environmental analysis cannot be done at the 
leasing stage or should not be done in too much depth until 
they get to the permitting stage because that is when they will 
decide, this is where the haul roads will go, this is where the 
well pads will go. If they are not going to make those 
decisions until we get closer to the development, that is when 
the agency will need to apply those conditions.
    So, that is all a part of the process of working together.
    Mr. Beyer. Yes. Thank you. That was very clear.
    Mr. Steed, you talked about how, 2012, only 17 percent of 
the leases were protested, and it was 88 percent in Fiscal Year 
2017--in many of your offices, 100 percent. Why this explosive 
growth in lease protests? Are we leasing stuff that we wouldn't 
have leased before?
    Mr. Steed. No. Again, I have not done a deep dive in this 
to determine why. It would be my guess, however, that people 
that are in opposition to oil and gas development are using the 
protest process in ways that it wasn't used prior, especially 
as far back as 2012.
    Mr. Beyer. So, they are driven by a larger concern about, 
say, climate change and using the protest process lease by 
lease?
    Mr. Steed. I honestly don't know.
    Mr. Beyer. OK.
    Thank you, Mr. Chair. I yield back.
    Dr. Gosar. I thank the gentleman.
    The gentleman from Florida, Mr. Soto, is recognized for 5 
minutes.
    Mr. Soto. Thank you, Chairman.
    I want to go back to this Wyoming decision that has been 
utilized to justify removing the protections on hydraulic 
fracking.
    I think it is pretty commonplace that oil drilling is under 
the regulation of BLM and EPA, with its various 
responsibilities. But I think the American public would be 
really surprised to know, based upon the laws as interpreted in 
Wyoming, that the Federal Government has no regulatory role 
over fracking in the United States--something that is dangerous 
and has healthcare effects and environmental effects.
    I just wanted to hear from you, Deputy Director Steed. Is 
it odd that allegedly, under current law, BLM and EPA have no 
regulatory authority for fracking?
    Mr. Steed. Sir, as I said before, there is certainly 
overlap with state jurisdiction whenever we are dealing with 
groundwater, also overlap with EPA. Was your question that 
there was no Federal overlap, or was there a question on no BLM 
overlap?
    Mr. Soto. I am speaking exactly to the Wyoming case, where 
they say that Congress specifically exempted out fracking from 
EPA--that was the ruling in the case--and how BLM then could 
not come in and substitute. And you said, because of that case, 
that those rules were being pulled out.
    So, I am just asking more as an administrator, is that odd, 
that something that affects interstate commerce, health, 
natural resources is exempted out from BLM? Do you think it 
should be regulated by BLM?
    Mr. Steed. Sir, that is not a question for me to answer. 
That is a question for Congress to direct on. And, to my 
knowledge, Congress has never directed us to regulate.
    And I think that is exactly the court's finding in that 
case, especially when considering that it determined that 
Congress explicitly prohibited the EPA from acting, and, by 
extrapolation, to say that the BLM had less groundwork based on 
what Congress has said.
    Mr. Soto. Thank you, Deputy Director.
    And for Ms. Culver--sorry, my time is limited--do you think 
that Congress should be given the authority to regulate this? 
Should EPA and BLM be involved in something such as regulating 
hydraulic fracking in the United States?
    Ms. Culver. We believe that the BLM does have this 
authority under a number of its different legal statutes. And 
on behalf of the agency, if they don't want to defend their 
authority on their own, we have appealed the decision and are 
seeking to have our interpretation confirmed. Again, to us, it 
does not make sense.
    Mr. Soto. What specific jurisdiction grounds do you think 
there are, to be brief?
    Ms. Culver. Both the Federal Land Policy and Management Act 
and the Mineral Leasing Act, as well as another couple of Acts 
that I am going to end up in long acronyms if I go into about 
governing oil and gas on public lands and the regulatory 
authority of the Department of the Interior.
    Mr. Soto. So, you believe there is already jurisdiction?
    Ms. Culver. Absolutely.
    Mr. Soto. Let's accept for argument's sake that BLM's 
current line does not have jurisdiction. Should BLM and EPA be 
regulating hydraulic fracking in the United States?
    Ms. Culver. Absolutely. If this is occurring on Federal 
lands, then they need to have a say. What we have seen with the 
states is there is variation among the states in terms of the 
level of concern. FracFocus, which was mentioned, is voluntary. 
There are wide opportunities to hide information and declare it 
proprietary, which it may or may not be, but we don't have a 
way to see that.
    Right now, if the American people's minerals are being 
leased to companies, then we have a right to know what 
chemicals are being used and to ensure that the Department of 
the Interior is regulating that activity.
    Mr. Soto. Do you think there could be health effects from 
this lack of regulation right now?
    Ms. Culver. Absolutely. As you mentioned, there are a 
variety of chemicals used in hydraulic fracturing, and those 
chemicals are being injected deep into the ground and also 
being potentially spilled on the ground, so they do have an 
ability to affect our groundwater.
    Mr. Soto. Short of cancer, what other types of ailments 
could possibly befall the public unwittingly if we don't 
regulate this?
    Ms. Culver. There are a variety of aspects of the fracking 
process. For instance, even just air quality impacts from the 
various equipment that is used to conduct fracking, and then 
just general pollution of water sources that would then affect 
drinking water writ large.
    Mr. Soto. Thank you.
    I yield back.
    Dr. Gosar. Ms. Culver, you are an attorney, right?
    Ms. Culver. Guilty.
    Dr. Gosar. OK. What makes your opinion better than the 
judge in the case of this? You said that you feel that there is 
adequate jurisdiction to imply that. Tell me why your 
jurisdiction is better than the judge.
    Ms. Culver. In the initial briefs filed by, the initial 
position of the Bureau of Land Management for years has been 
that they have this authority. So, I think we feel we are----
    Dr. Gosar. But it is not actually supported by law.
    Ms. Culver. We think that the interpretation that the judge 
had in that case----
    Dr. Gosar. You think.
    Ms. Culver. That is why we have appealed to the court of 
appeals.
    Dr. Gosar. Well, we will find out, but, to me, it seems 
like it is very amiss in that recall.
    There are plenty of jurisdictions that we saw in the last 
administration that usurped adequate jurisdiction within the 
statute. The Clean Power Rule, that is an unusual one, where 
the Supreme Court actually ruled that you could not even go 
into the process of putting rules in place till they decided 
it. That is how over-reaching that administration was. Agreed?
    Ms. Culver. I am not going to argue with your summary of 
the rulings on the Clean Power Plan.
    In the context of the fracking rule, having read the 
court's decision and read the applicable statutes, our 
interpretation is different, and we expect that the court of 
appeals will agree with our interpretation.
    Dr. Gosar. Well, not if it is not going to the Ninth 
Circuit, I doubt.
    But, anyway, Senator Van Tassell, can you explain to us how 
the State of Utah School and Institutional Trust Lands 
Administration, known as SITLA, manages land held in trust to 
provide public services and how mineral revenues are utilized 
in the state of Utah?
    Mr. Van Tassell. They are a fully independent board 
operated with the trustee of the schoolchildren of the state of 
Utah. They lease the property out on state leases.
    There have been a number of school sections that were 
isolated in the state of Utah that have been conjoined and 
traded with the Bureau of Reclamation. We have increased those 
into large blocks instead of stand-alone sections because it 
has become obvious that that is not the way you develop 
property anymore, that there is a bigger value by 
consolidating. And that has been done and is in process on one 
or two other outliers, along with some of the Indian nations.
    The other things that are doing pretty well are operated 
under oil, gas, and mining--most of the time it is under their 
guidelines. Some of this would have some BLM because of the 
mixed nature in the field. So, sometimes BLM, but the majority 
of the SITLA school trust lands are handled through oil, gas, 
and mining.
    Dr. Gosar. Mr. Schulz and Mr. Kubat, if a state lease that 
you are looking to develop is adjacent to federally owned land 
or minerals, does uncertainty regarding the Federal leasing and 
permitting process influence your decision or ability to 
develop the state-owned lease?
    Mr. Kubat first.
    Mr. Kubat. Absolutely. I would refer back to the testimony 
I gave a moment ago related to our recent development example 
of where we, strategically and out of necessity, had to adjust 
a development plan due to those very circumstances.
    Dr. Gosar. Mr. Schulz?
    Mr. Schulz. It definitely impacts it. At times, it can 
benefit the state lease, because that is where we know we can 
go drill a well and are able to work with whatever timing 
stipulations there might be. State lands and those private 
lands often provide flexibility.
    But, in the same sense, if there are acreage blocks that 
are not leased around that state lease and there is interest in 
those Federal leases, it can discount the state lease as well, 
until you can get that whole block together.
    Dr. Gosar. Dr. Steed, what are the next steps that the BLM 
plans to take to further improve the onshore oil and gas 
leasing process on Federal lands?
    Mr. Steed. As mentioned, we are currently reviewing our 
instruction memoranda processes to make sure that they are in 
line with Secretarial direction, as well as the presidential 
Executive Order.
    We are currently in the process of staffing appropriately 
in order to reduce both leasing times as well as APD turn times 
and to make sure that we have our resources in the areas where 
they are best suited.
    Dr. Gosar. And you are interested in increasing time to 
oversee dangerous wells, right?
    Mr. Steed. Absolutely.
    Dr. Gosar. Seriously? Increasing time. I don't think that 
is what you want to do, right?
    Mr. Steed. Did I say that, sir?
    Dr. Gosar. Yes.
    Mr. Steed. OK, no. I am sorry, I don't know what I just 
said.
    Dr. Gosar. That you are not interested in increasing the 
time for oversight.
    Mr. Steed. No, we are interested in decreasing the time for 
oversight. Thank you.
    Dr. Gosar. Thank you. The gentleman from Virginia is 
recognized.
    Mr. Beyer. Thank you, Mr. Chairman.
    Ms. Culver, this Administration's energy dominance agenda 
feels as if we are going back to the rhetoric in the agenda of 
decades-old energy policies, particularly when BLM talks about 
undoing some of the Obama administration's leasing reforms.
    From your perspective, what were some of the leasing 
problems that we saw under President Bush that President 
Obama's BLM was attempting to deal with? I mean, why did we 
have these things that Mr. Steed has to deal with now?
    Ms. Culver. Well, I think we saw a similar policy of making 
oil and gas the dominant use of public lands. And part of that 
was there no site visits, there was no public input, and there 
was no environmental analysis prior to leasing.
    And we got to the point where we saw areas mistakenly put 
up for sale that conflicted with the governing use the BLM had 
or state uses or local uses, and that led to a very strong 
pushback from local communities and the public. And, by 2008, 
many lease sales were being invalidated by the BLM itself and 
in the courts, and it was resolving these problems that were 
causing so many delays.
    And the ultimate ruling on this came from a court that 
formally prohibited the Bureau of Land Management from issuing 
77 leases sold in Utah. And that is a very extreme action for a 
court, but it was based on the abject failure of the agency to 
look at impacts to neighboring national parks, the air quality, 
and other resources. It basically sent a message to the BLM 
that the system was fundamentally broken.
    The message was received, and an interdisciplinary team of 
career BLM, Forest Service, and Park Service employees reviewed 
the process, and they concluded that environmental reviews were 
needed, public input was needed, consultation with sister 
Federal and state agencies would all identify conflicts up-
front and reduce the likelihood that we would have invalid 
sales.
    And they actually found that the BLM employees required 
more guidance to understand that the agency's multiple-use 
mandate did not permit oil and gas development to be the main 
use of our public lands.
    And I would note that that is different from the SITLA 
lands that the Senator was discussing. State lands do not have 
a multiple-use mandate. They do not have an obligation to 
consider all of the things that the Department of the Interior 
has to consider as the steward of our public lands. So, that 
mandate has to be followed.
    The current approach that we use now has required 
consideration of other multiple uses and has strengthened 
protections for wilderness, wildlife, and recreation, but it 
has also reduced conflicts, even while we have seen production 
of oil and gas increasing on our public lands.
    So, at that point, at the end of the Bush administration, 
Federal lease sales were twice as likely to be challenged in 
Federal court than they are now. And site-specific sale 
protests, those that are tied to certain values in certain 
places, have continued to decrease since then.
    Mr. Beyer. Thank you.
    Mr. Steed, one of the things that the Democrats typical 
push back to our Republican friends is we say, ``Look at all 
those leases you approved that nobody is using. Why do we need 
to have new leases?'' In fact, to give you some numbers, at the 
end of Fiscal Year 2016, there were 7,950 BLM permits that had 
not been used, and yet last year we approved 1,000 more 
permits.
    Help us with the math. Why do we need to be aggressively 
doing so many new permits when so many existing permits are 
outstanding? Are those outstanding permits on essentially dry 
land? There is no oil, there is no gas. And if so, didn't we 
know that ahead of time, when the permits were issued?
    Mr. Steed. Sir, I think as pointed out by Mr. Kubat and Mr. 
Schulz at the beginning of questioning, there are a variety of 
factors that lead to that.
    Some of them are that lease stipulations, for instance, may 
prohibit drilling during certain time frames, or other reasons 
that may be better for business overall. And, honestly, I think 
that they may be in a better position to address the concerns 
on their business community than----
    Mr. Beyer. Mr. Schulz, you have been so quiet.
    Mr. Schulz. Thank you for the question.
    From a vantage point of QEP, not every lease is going to be 
a viable economic oil and gas lease. It is just the nature of 
the way the business still works. You go out and we lease, and 
we file for APDs, but at times the market conditions can 
change, especially if you have an APD process that takes 8 
months to a year to get an APD. The markets can change a lot in 
that time frame.
    But when you go out and you are trying to put together an 
acreage block, at times you may realize that part of those 
acres are not viable. The Pinedale example is a great one, 
where we had a big acreage position that was leased. It was 
about 15,000, 18,000 acres of core acreage.
    There were acres on the flanks, as they called it, of this 
ridge. And those flanks, in order to get the approval for the 
project-wide EIS, which I will remind you is another method 
where the public gets a chance to comment, we decided to 
suspend those leases. So, therefore, the BLM approved 
suspending those leases so that they would not be drilled 
because they were marginal acres, but it was still held by the 
operators in order to build out and drill those wells.
    And that is just one example where there are times where 
marginal acreage in a marginal price environment for natural 
gas did not make sense. There is still oil and gas under there; 
it is just whether or not it is produceable with an economic 
return during the current environment.
    Dr. Gosar. Senator, you talked about looking at the 
economics as well as caretaking of the environment. I don't 
think they are mutually exclusive. In fact, just last summer, 
we went up to the North Slope and actually saw and witnessed 
the increased caribou herds along the pipeline. Do you see the 
same type of effect in Utah?
    Mr. Van Tassell. Are you referring to wildlife?
    Dr. Gosar. Yes.
    Mr. Van Tassell. The biggest factor that we have in 
wildlife, we have been very progressive and aggressive in 
reclaiming and bringing pinon cedar forests that produce almost 
no feeder habitat for wildlife into production, into rehabbing 
it, bringing it in for the sage-grouse as well as deer, 
antelope, moose, and the other things that we have. We are 
seeing a great increase right now.
    Dr. Gosar. So, you are very successful at your state 
management plans, right?
    Mr. Van Tassell. Our state management plans have been very 
successful. And I think we are just now getting to a land mass 
large enough where we will see huge events in the next few 
years.
    Dr. Gosar. In fact, in previous hearings, we have heard the 
destitution in regards to the derogatory comments to state 
management plans, when we have seen Fish and Wildlife Service's 
plans, particularly, like the Mexican gray wolf, be anemic, in 
fact malpracticed, if you were looking for a term, in those 
aspects.
    Why not start working with the states and empowering states 
in a collaborative aspect? I mean, you really like dirty air 
and dirty water, right?
    Mr. Van Tassell. Not where I live.
    Dr. Gosar. Well, that is what I thought.
    Mr. Van Tassell. The comment I would make on that is that 
in 2017, we had no exceedance in the Uinta Basin of bad air 
quality. We have some unique things that we are trying to 
figure out what the science is and how to prevent that. But 
when you can go 1 year and have 30 days of pretty bad air 
because of snow on the ground and then when you don't, you get 
some others. But that is another different story. We won't go 
there today.
    But I think that we have some great opportunities to 
increase--I am sorry, I forgot what you asked.
    Dr. Gosar. Increase habitat and----
    Mr. Van Tassell. Increase habitat. I think there is a 
partnership between not only the industry but also for the 
locals in making sure anyone that lives in my area is a hunter, 
as a result, and a fisherman. That is one of the reasons we 
live there, because you can be 10 minutes out of town and hit a 
reservoir or 25 minutes to a good hunting area, and that is 
what we want to preserve and protect.
    Dr. Gosar. It is not mutually exclusive, right, is what I 
am getting to.
    Mr. Van Tassell. That is not.
    Dr. Gosar. Yes, I agree.
    The multiple-use doctrine is very important. And Ms. Culver 
brought up the multiple-use doctrine. So, revenues, aren't they 
substantial in oil and gas, Ms. Culver?
    Ms. Culver. Yes, they are one of the substantial revenue 
sources.
    Dr. Gosar. Yes, so mineral extraction is very substantial, 
right?
    Ms. Culver. Substantial in terms of?
    Dr. Gosar. Revenues from mineral extraction are very, very 
high, right?
    Ms. Culver. Yes.
    Dr. Gosar. So, part of the multiple doctrine agreement with 
the states is shared revenues for maximizing those revenues, 
right?
    Ms. Culver. The states do get approximately half of the 
revenue.
    Dr. Gosar. Not anymore. It is 52-48 since the Murray-Ryan 
budget. The royalties are split 52 to the Federal Government, 
48 to the states, and those have been declining. And the reason 
they have been declining is because we have predicated not full 
use of the multiple-use doctrine.
    That is part of the contract with the Federal Government 
with states and local municipalities. They pay for our 
education. They pay for our infrastructure. They pay for all 
those and above. So, what we see is the floundering of rural 
Arizona, rural Utah, and rural Colorado because we see the 
diminishing returns on that contract, so it is all of the 
above.
    You brought up the Wilderness Society. And when you brought 
up the multiple-use doctrine, you also brought up timber sales. 
I would sure like to really see you guys on the forefront of 
adjudicating that instead of having these catastrophic 
wildfires, instead of going into court.
    When we start utilizing the multiple-use doctrine, it was 
an agreement with western states that have these big swathes of 
Federal lands for the perpetuity of preserving those but also 
reinvesting in those local communities and states. I think we 
really need to make sure that we understand that properly, make 
sure that it is done right. I am all for doing things right, 
but I am also following the letter of the law.
    Ms. Culver. Interestingly, the letter of the FLPMA 
specifically says that ``multiple use'' means looking at the 
best balance of resources for the American public, not just 
those with the greatest economic return. So, I agree we need to 
consider both of those things.
    Dr. Gosar. Absolutely. Thank you.
    The gentleman from Virginia is recognized.
    Mr. Beyer. Thank you, Mr. Chairman.
    I would like to add that addressing climate change might 
help with those catastrophic wildfires also, as would restoring 
the Forest Service budget, which has been progressively gobbled 
up with wildfire fighting, as you know.
    And to put proper context with the decline in revenues in 
rural Arizona and rural Utah, places like that, Mr. Steed, in 
your written testimony, you pointed out that BLM sold just 
under 800,000 acres of oil and gas leases in 2017. That is with 
this progressive rollback of the Obama-era protections. It is 
an increase from 2016, but it is 40 percent lower than it was 
during the 8 years of the Obama administration. They did 1.35 
million acres per year. In 2011, it was over 2 million acres, 
so two and a half times what you did last year.
    So, even with Interior de-regulating across the board and 
trying to make things as easy as possible for industry, leasing 
is still down. What do you think is the predominant factor in 
that drop? Or how do you possibly assign that drop to things 
like master leasing plan?
    Mr. Steed. I am not sure I am qualified to answer that 
question, sir. I can speculate that there are certainly market 
conditions that drive ups and downs. In addition to that, I 
would have to point out that the oil and gas industry is 
something that has long lag times between when you stand up 
something and when it actually comes to fruition. And my 
colleagues here can certainly address that as well.
    However, I would say that I don't know if that is the best 
metric to whether we are doing our job or not. We are trying 
very hard to do the work of the American people, and we are 
trying very hard to facilitate oil and gas development, as well 
as renewable development, as well as promoting our multiple-use 
objectives for access, for hunting and fishing, and for all of 
the other things that we do at the BLM. So, I think that, in 
totality, we are trying as hard as we can to meet our 
obligations.
    Mr. Kubat. If I may, I would like to help Dr. Steed with 
this one.
    Mr. Beyer. Sure.
    Mr. Kubat. In the sense of, from an industry perspective, 
is it not true that in the Obama era, in its administration, 
that the fewest number of parcels were offered for auction 
during that administration? That is accurate. And is it not 
also true that that probably correlates with the highest 
commodity pricing that we have seen in decades? That is also 
true. So, therefore, the price a company can pay for a leased 
parcel was at its apex during that period.
    Mr. Beyer. That all sounds completely plausible. But I 
think the overall point is that, looking at the 800,000 acres 
in Fiscal Year 2017, it still compares unfavorably to the 
1,350,000 each year through the Obama administration.
    Mr. Kubat. I think the point that is being missed here from 
a purpose of APDs is that we are a for-profit pursuit, and so 
we have to meet a cash-flow mechanism. We have to have a return 
on investment for our capital. We are not a special interest 
group that is a dark hole of capital that goes into it without 
an expectation of returns.
    When we purchase a lease and then apply for an ADP, we are 
doing that with an anticipation of a return on that investment. 
So, when you have higher commodity prices, you are at an 
ability to pay more for a lease, which would correlate for the 
increased revenue from those lease sales during that period.
    Mr. Beyer. Thank you.
    Mr. Kubat. That is the absolute correlation.
    Mr. Beyer. I think you made my point beautifully, which is 
that the decline has to do with the price of oil and gas rather 
than with the environmental burdens or non-burdens that the 
Administration is proposing.
    Mr. Kubat. The amount you can pay is directly correlated 
with the price you receive for your products, so yes.
    Mr. Beyer. That is exactly right. So, the higher the 
prices, the more money we can have for Arizona schools.
    Ms. Culver, one of Chairman Bishop's top priorities is the 
SECURE Act, which would turn over all oil and gas permitting on 
U.S. Federal lands to the states. What will happen to BLM if we 
do that? And is this a good idea?
    Ms. Culver. I think the biggest concern is something that 
we touched on here on this panel, that the states do not have 
to provide an opportunity for public input, they don't have to 
look at environmental values, they don't have the National 
Environmental Policy Act, they don't have a multiple-use 
mandate. And that would really put our clean air and water in 
our public lands at risk if that were to happen. That is one of 
our biggest concerns.
    Mr. Beyer. I imagine it would shrink the mandate of the BLM 
pretty significantly too.
    Ms. Culver. Well, maybe they could look more into 
inspection and enforcement of the existing wells with the 
additional personnel time they would have. That would be fine. 
As well as looking at the maintenance backlogs and how to 
better support recreation, wilderness, and wildlife on other 
lands too.
    Mr. Beyer. Thank you very much, Mr. Chairman.
    Dr. Gosar. I am sorry, I have to intercede here.
    So, Dr. Steed, if it was turned over to the states, they 
would still be required on numerous occasions for oversight, 
right? Please explain.
    Mr. Steed. I think that you are accurate.
    Ms. Culver. It is exempted in the SECURE Act from the----
    Dr. Gosar. No, you would still be required under NEPA 
provisions and everything else. So, that is not an appropriate 
question.
    Would you agree, Mr. Schulz?
    Mr. Schulz. Yes. From what I understand about the SECURE 
Act, the way it has been drafted, I think there is still very 
much a role for BLM to play in the leasing process.
    Dr. Gosar. So, Mr. Kubat, would you agree?
    Mr. Kubat. Yes, I would agree.
    Dr. Gosar. How about you, State Senator?
    Mr. Van Tassell. I would say so.
    Dr. Gosar. I agree.
    I think there is a lot of supposition in your statements, 
and I find that very misleading. I think, from that standpoint, 
we have to be very careful where we go.
    Go ahead. I yield.
    Mr. Beyer. Can I ask Mr. Kubat or Mr. Schulz or the Senator 
if they have read the SECURE Act?
    Mr. Schulz. I have had a chance to read through most of it. 
Obviously, it has been several months since I last looked at 
it, but I did read through it.
    Mr. Van Tassell. I have not read clear through it. I have 
seen parts of it, dealt with a part of it, but, primarily, I 
think I understand it.
    I would also say that I have so much faith in--I think our 
local/state government entities, that would control the work 
with fracking and the oil industry, are as up to speed and on 
the ground as anyone could be.
    Dr. Gosar. Well, sorry that you had to hear from the two of 
us quite a bit, but you traveled all that way, so we wanted to 
make sure that you got your full share.
    I thank the witnesses for their valuable testimony and the 
Members for their questions.
    The members of the Committee may have some additional 
questions for the witnesses, and we will ask you to respond to 
those in writing. Under Committee Rule 3(o), members of the 
Committee must submit witness questions within 3 business days 
following the hearing by 5:00 p.m., and the hearing record will 
be held open for 10 business days for those responses.
    If there is no further business, without objection, the 
Subcommittee stands adjourned.

    [Whereupon, at 4:46 p.m., the Subcommittee was adjourned.]

[LIST OF DOCUMENTS SUBMITTED FOR THE RECORD RETAINED IN THE COMMITTEE'S 
                            OFFICIAL FILES]

Rep. Lowenthal Submissions

    --Letter addressed to Chairman Bishop and Ranking Member 
            Lowenthal from the Wilderness Society, National 
            Parks Conservation Association, Earthjustice, et 
            al. dated January 17, 2018.

    --Letter addressed to Chairman Gosar and Ranking Member 
            Lowenthal from the Outdoor Alliance dated January 
            18, 2018.

                                 [all]