Lynn Helms, director of the North Dakota Industrial Commission's Department of Mineral Resources, spoke Tuesday in support of proposed legislation that would allow states to manage development of oil and gas production on federal land within their borders.
"This legislation is a rare opportunity to implement better government instead of bigger government," Helms said of the Secure American Energy Act. "North Dakota urges you to approve and pass this legislation."
Helms was one of four witnesses called before the House Committee on Energy and Mineral Resources in Washington.
The bill addresses two areas: the regulation of offshore oil resources and the empowerment of states. Offshore oil resource regulation, covered under Title 1 of the bill, would distribute revenues from oil and gas leasing on the Outer Continental Shelf to certain coastal states, require the sale of approved and scheduled offshore oil and gas leases, and establish offshore wind-lease sale requirements. Title 2 focuses almost entirely on giving states authority to manage development of oil wells on federal land and would eliminate duplicative reporting requirements.
"North Dakota has a unique history of land ownership that has resulted in a significant portion of North Dakota consisting of split-estate lands that are adversely affected by BLM (Bureau of Land Management) permitting and sundry notice processes," Helm's said in his testimony. "Virtually all federal management of North Dakota's oil and gas producing region consists of some form of split estate."
Helms said North Dakota has more than 2,800 oil and gas spacing units that contain federal minerals. Each spacing unit is typically comprised of 1,280 acres. Of these units, 32 percent contain federal minerals and will have at least one well affected by BLM permitting.
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This represents an estimated 18 percent of statewide production from federal and Indian lands, and 14 percent of production from state or private land that contains some federal mineral estates with no federal surface estate.
"Imposition of BLM's additional regulatory requirements also threatens royalties to North Dakota," Helms said. "Based on my understanding, it takes nine months to get a drilling permit in the state of North Dakota from the Bureau of Land Management-it takes less than 20 days from the state of North Dakota."
Helms said 20 companies with operations on federal and Indian lands are shifting operations elsewhere, costing the state 1,000 jobs. He argued the state already has many of the same permitting requirements that the BLM does.
"We live there, we care about the land, we want it well taken care of," Helms said in response to questions about environmental impact. "But states have to balance their budget. We feel the impact of these revenue delays. The federal government, unfortunately, doesn't operate on a balanced budget."
He said some state regulations, such as for carbon capture and gas venting, are stronger than BLM regulations.
Those who support the bill lauded its aim to empower states and reduce the need for duplicative permitting processes, but there were also critics of the proposed legislation. Ranking committee member Rep. Alan Lowenthal of California expressed doubts about the legislation's necessity or efficacy.
"The state doesn't require a biological study, doesn't require a wildlife study, a waste management plan, reclamation plan or public comment," Lowenthal said. "These are exactly the types of things that should be considered when looking at a permit for drilling on public land."
Lowenthal also said current regulations under the National Environmental Policy Act look more comprehensively at the impacts of more than just the drilling of the well itself.
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"These are the impacts on the surface itself ... that surface use plan includes where the roads will be, the size and location of the drilling pad itself, the waste pits and every other physical impact. It is analyzing those impacts ... that is what is being waived in this bill. That is what the Bureau of Land Management spends its time analyzing and the states simply do not."
He said states would take just as long as the federal government if it also had to take into account all of the surface impacts the BLM does.
"I for one do not believe we should waive these laws," Lowenthal said. "Nor am I convinced that permitting speed is a problem we should be worried about. I simply do not believe it has risen to the level of obsession the Department of Interior has shown."
Other lawmakers, such as Rep. Darren Soto of Florida, expressed concern over whether environmental impacts in neighboring states could spill over and harm industries like tourism.
