A recent federal government audit cannot verify whether additional funds that Congress gave to seven U.S. Bureau of Land Management offices, including Buffalo and Rawlins in Wyoming, helped speed the processing of applications to drill for oil, natural gas or coal-bed methane, which is what the money was intended to do.
The audit was conducted by the U.S. Government Accountability Office, a nonpartisan agency that investigates agencies and public money for Congress. For the BLM audit, Congress asked the GAO to review BLM drilling permits and environmental inspections, said Frank Rusco, who leads the team at the GAO that conducted the audit. The GAO studied the BLM for the fiscal years of 2007 to 2012 — from Oct. 1, 2006, to Sept. 30, 2012.
An employee of Denver-based oil and gas producer Yates Petroleum Corp. and an employee of the Sheridan-based landowner group Powder River Basin Resource Council both reviewed the audit and criticized the BLM, specifically the Buffalo office. The Yates employee said the BLM is not doing enough to permit drilling. The PRBRC representative said the BLM is not doing enough to protect public lands from environmental damage.
But Bev Gorny, a spokeswoman for the BLM Wyoming state office in Cheyenne, emphasized that the Buffalo office was inundated in those years. It received nearly 30 percent of all the federal oil and gas APDs, or applications for permits to drill, in the federal fiscal year that began Oct. 1, 2006, and ended Sept. 30, 2007. Nearly 98 percent were for coal-bed methane wells, the audit found.
Gorny said that the additional funds from Congress, in the form of a pilot program for seven busy offices that included Buffalo and Rawlins, helped with the backlog and now the Buffalo office does one-fifth of the environmental inspections of all the BLM offices.
“Without pilot office funding, these accomplishments would not have occurred,” she said in an email.
According to the GAO audit, the pilot program was part of the Energy Policy Act of 2005. The project provided extra funds, and 140 new staff members were sent to the seven offices.
Gorny, of the BLM, said that in Rawlins, the pilot program funds 20 positions and some equipment and training needs.
In Buffalo, the federal funds added about 25 positions. Not all of the 25 worked for the BLM. Seven of those positions were for people who worked at the Buffalo office but were employed by other federal and state agencies that assist in permitting oil and gas drilling, such as the Wyoming Department of Environmental Quality and the U.S. Fish and Wildlife Service.
There were two reasons why the GAO couldn’t figure out whether the extra money in pilot program was well-spent: an incomplete database and a decrease in natural gas prices, which plunged to a 10-year low in March 2012. That resulted in fewer APDs for natural gas and coal-bed methane wells.
Although the pilot project money was supposed to speed up APDs, GAO researchers couldn’t figure out the amount of time it took BLM to process APDs from the date they were received to the date they were approved. That’s because the agency’s central oil and gas database was missing certain data necessary to assess whether the deadline was met. The deadline contained other inaccurate permitting processing data, the report said.
Gorny of the BLM said that the database is currently being updated. The updates are based on suggestions of the GAO and will be up and running by the end of this fiscal year, which ends Sept. 30.
The GAO audit said that the BLM Buffalo field office had fewer APDs to handle after the natural gas bust that occurred during the study period, but Tim Barber, who works for Yates Petroleum's Gillette office in government regulation, wasn't buying it. In March 2012, Barber testified before the House Subcommittee on Investigations, Oversight and Regulations about his frustrations with the Buffalo office. Barber pointed to data from the Buffalo office in fiscal year 2009 that showed only 825 APDs were approved at a time when there were more than 2,100 APDs waiting approval.
“The privilege of increased funding should come with the responsibility to meet the goal of that increased funding,” Barber said.
Rusco, who leads the team at the GAO that conducted the audit, said Congress asked auditors to also look at environmental inspections and enforcements, which aren't part of the pilot program but is one of BLM’s responsibilities by law.
Inspections have increased by about 63 percent nationally, from 10,941 in fiscal year 2007 to 17,866 in fiscal year 2012. But the audit found the agency’s database lacks data on inspection history of many wells. The BLM may not have a way to identify oil and gas wells that pose the greatest environmental risk because the database lacks complete inspection history.
Gorny, of the Wyoming state BLM office, said that the number of inspections that the GAO considered doesn’t take into account all types of environmental inspections that the BLM conducts.
“The Rawlins Field Office -- we have increased our total annual environmental inspection numbers by conducting more inspections on plugged and abandoned well sites for determining reclamation success,” Gorny said. “Those inspections are not included in the environmental inspection number in the GAO report.”
Jill Morrison of the Powder River Basin Resource Council, said that the GAO report provided a good analysis of problems with environmental inspections, especially with the problems associated with a lack of documentation. She said her organization has reported garbage at well sites, erosion and other problems. She doesn’t think the BLM has always followed up or fined companies for violations.
“Enforcement with the BLM is lacking,” she said.