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The subcommittee on energy and Mineral Resources will come to order. The subcommittee is meeting today to hear testimony on examining access to oil and gas lands. Ent on federal i ask unanimous consent that the gentleman from arkansas mr. Westerman be allowed to sit with the subcommittee and participate with the hearing. Without objection so ordered. Opening statement at the hearings are limited to the chairman and the ranking minority member and a vice chair. This will allow us to hear from our witnesses sooner and help members keep their schedules. Therefore i ask unanimous consent that all of the member Opening Statements be made part of the hearing record if they are submitted to the subcommittee clerk by 5 00 p. M. Today. Without objection, so ordered. Can we do that now . Right here . Chair gosar now, i ask that there not be any type of disruption regarding the testimony given here today. It is important that we respect the rules and the decorum of the house and allow the public to hear our proceedings. Today, the subcommittee will examine access to oil and Gas Development on onshore federal lands. Onshore federal oil and gas accounts are roughly 20 of americas production and is integral to our nations independence and security. Not only has the new due to the burdens of the federal middle development process. Not only has the administration inherited a backlog of 3,000 drill permit applications but an incredibly burdensome regulatory scheme that discourages investment and development. It is critical that we evaluate these obstacles to ensure a fair return to the American People. There are many factors that influence an operators decision to lease and develop hydro carbons. Including oil price, geology and transmission infrastructure. And while some may point to low Commodity Prices as a reason to withhold production market , conditions are no excuse for poor policies or for the federal government failing to uphold statutory obligations. In fact many operators avoid , federal lands due to unquantifiable risk and un the uncertainty. The current permitting processes are fraught with uncertainty, duplication and delay. Designating lands for development can take years and parcels nominated for lease were often explicitly retracted from the auction. Although the act requires quarterly lease sales of eligible land, this requirement has not been enforced for years. Furthermore, once an operator has successfully navigated the federal leasing scheme, the leasing must still proceed through the application for a permit to drill or a. P. D. Review process which could set , drilling back over a year. The uncertainty, delay and risk presented throughout the process make operational and Financial Planning nearly impossible and is a detriment to the locality, state and the American People. Despite the complications and inefficiencies of leaseing and permitting under the Previous Administration, we are confident the new administration will take the time to carefully examine and optimize the blms processes. Secretary ryan zinke he testified before us last week and a shared steps he is taken to recommit to holding up the mission. In addition to increasing program funding, the secretary has committed to improving field Office Performance and we are grateful for the initial steps in the right direction and we look forward to finding a practical solution for the developer the process. With that i organized the Ranking Member for his statements. Thank you. Rep. Lowenthal thank you, mr. Chairman. First i want to compliment you and all the members on both sides of the aisle of this committee as weve been doing so , well in our last few meetings. Theyve been bipartisan, cooperative and constructive. I think today is going to be a little more contentious. And i hope that that does not end, that spirit. Mr. Chairman i dont oppose oil , and Gas Development on public lands, but i do oppose letting oil and gas industry call all the shots on how to manage those lands that are owned by all americans. You know, in all of the above policy does not mean that we dont set priorities. And i am concerned about our priorities. Its only taken five months and nearly every move on energy that this administration has made could have come right out of the executive board rooms of the American Petroleum institute or the National Mining association. That may actually be the case given the number of oil, gas and , coal lobbyists who now occupy high ranking positions at the interior department, energy department, the Environmental Protection agency and in the white house. Rules to protect public health, gone. Rules to protect our land, air and water and cut down on pollution, gone. Rules to protect fish and wildlife, gone. Rules to make sure that companies are paying their fair share, gone. The standard seems to be did the Obama Administration put it in place and did one oil and gas or coal company complain about it . If so, its gone. In no place is it more important to balance multiple uses Environmental Protections as well as Economic Development than on americas public lands. This idea of balance, this idea that some areas should be protected while others can be developed is at least in danger now and soon that would be gone too. To quote the statement of the acting assistant secretary, Americas Free markets will help determine where and when Energy Development on public lands is feasible. That means that the idea that these lands which belong to all americans should be managed in a way that will ensure that they are here for our children and our grandchildren. That idea is now gone. Instead the administration is , operating under the idea that the department of the interior should become a service station for the oil and gas industry. Which lands would you like to lease . Where and how fast do you want to drill . What regulations do you want us to repeal . Are these National Monuments getting in your way . Just let us know. The department of interior is apparently here to keep you happy. Secretary zinke paid lip service to the idea of supporting all forms of energy to be in favor of the all of the above policy. But if we look at his budget, it increases oil and gas and coal programs by 34 million while renewables suffer a 15. 3 million cut. In fact, the fossil fuel program increase seems to be the only one in the entire interior budget that has an increase. Weve seen this movie before. Weve seen an administration where Energy Policy was literally written by big oil. During the eight years of the Bush Administration, the only measure of success for the bureau of Land Management was how many drilling permits it could issue. What did we get . Interior Department Officials thrown in jail, regulators doing drugs and literally getting into bed with the people they were supposed to be regulating, and a thirst for mineral revenues that put Safety Standards on the back burner and helped to contribute to the deep water horizon, according to the president ial oil spill commission. When it comes to giving the keys to our public lands to the oil and gas industry, President Trump has made the Bush Administration look bush league. Look, the fact is that oil and Gas Companies are doing just fine on our public lands and in our oceans. Despite the misleading statistics that theyre going to throw around today. Oil statistics really show that Oil Production on public lands is up 59 since 2008. Offshore production is at a record high. Companies have more than 7500 approved drilling permits that theyre not using and 26 million acres of public land under lease to be developed. Shows you from 2008 through right through 2015 the federal onshore Oil Production and how its increased every single year up to 2015. And 2016 was slightly below 2015 but above all the other years. , so in closing, i just want to say our new quest for Energy Dominance, whatever that means, means that never nothing is enough. We must do more. Hunting, fishing, camping, hiking, boating, offroading, grazing and all the use of our public lands are now second to second class oil and gas is dominant. So, mr. Chairman, we have an opportunity on this subcommittee to ensure that energys policies reflect the multiple uses of our public lands for the benefit of all of our constituents, not just the special interests of a few billionaires. Lets not squander it. Mr. Chairman, i just want to say in closing, i understand your out a few your send days ago, the title of this hearing would be focusing on onshore. And i will try to abide by that. However, the title of the hearing was really called examining access to oil and Gas Development on federal lands. And as you know, our outer Continental Shelf is really defined as submerged lands lying seaward of the coastline. This ms. Or macgregor there may be some questions that come up. Chair gosar i thank the gentleman for that clarification. Im going to get now to introducing our witnesses. Miss katherine macgregor. Now im going to yield time to the gentleman from new mexico to introduce the first witness. Rep. Pearce thank you. Id like to introduce ryan flynn whos executive director of the new mexico oil and gas association. As director of that, he has watched the permitting times on our wells increase from around 200 days to get that permit, to something over 400. He was formerly the secretary of new Mexico Environmental Department where he has a strong reputation of balancing Energy Development with responsible environmental stewardship. Ryan, appreciate you being here to testify today. I yield back. Chair gosar thank you. Our next witness is mr. Mark sclochie, dr. Laura nelson. Let me remind the witness that under our Committee Rules they must limit their oral statements to five minutes. But their entire statement will appear in the hearing record. Our microphones are not automatic so youll have to press that little button. And if it will kind of watch upfront the first four minutes , its green, then it will turn yellow. Then when you see red, please summarize. I will let the entire panel testify before we ask questions. This i will recognize ms. Macgregor for her testimony. Welcome back. Ms. Macgregor thank you. I have to say its very good to be back here today. I absolutely loved working here with both majority and may and minority staff. Im currently acting as secretary for land and Minerals Management at the department of the interior. Our responsibility is the management of four bureaus, the office of surface mining, the bureau of Ocean Energy Management, the bureau of safety and Environmental Enforcement and the bureau of lands management. I appreciate the opportunity to testify in the oil and gas program which plays a Critical Role in our Nations Energy economy. The blm manages 200 million surface acres and 700 million sub surface acres. Most of which are located in 12 western states, including alaska. Production was 7 of our nations on shore oil, 10 of our natural gas and 41 of our coal produced domestically. As well as approximately 18,000 megawatts of Renewable Energy. Last year the blm oil and gas , program generated over 1. 56 billion in royalties, rental payments and bonus bids, all of which were shared with states. States and counties in turn use these funds for roads, schools and other important municipal needs. Public lands are integral to the administrations America First Energy Agenda and the priority to maintain u. S. Energy dominance by growing inging by growing Domestic Energy production and sustaining jobs throughout our country. Access to responsible Energy Development on these lands begins with the planning and leasing process. 10 years ago, the blm had nearly 45 million acres under lease. Today we are at 27 million acres. This is nearly identical to the total area currently designated as areas of critical and environmental concern, also known as standing at over 24 million acres. This is nearly 10 of all blm managed lands in the unite. United states. In 2016, they designated a. 2 million acres, the most acreage since 1980. This is one example of designations that limit how public lands may be used. Responsible Energy Production and conservation need not be mutually exclusive. That is why it is vitally important to restore our mission and strike the appropriate balance in on shore leasing that allows for job creation in rural america. This is about restoring balance. Under secretary zinke, the department and the blm have been proactive in prioritizing responsible Energy Production on public lands. Including by secretarial order. Order 3349 aims to remove duplicative burdens on Energy Production. While promoting job growth for hard working american families. Order 3352 will jump start alaskan Energy Production in the National Petroleum reserve alaska, helping to unleash Energy Protection of potential. These efforts have already shown to be effective. Under the secretarys leadership the blm has had more lease sales offered more acreage and , generated more revenue in 2017 than this same time last year. Were only just getting started. The blm plans to hold 14 additional lease sales this is year. Promoting access to public lands does not come without challenges. Im sure that all members of this committee are in close contact with their state and local leaders who is erers who do not hesitate to communicate their frustrations. It is the secretarys goal to restore trust. And improve relationships with our state and local partners. Many of him rely upon the economic revenues that come from responsible Gas Production on public lands in the west. For example the u. S. Census , bureau has found that rural new mexico has one of the highest poverty rates in the country yet rural new mexico is , home to some of the most Promising Oil and natural gas deposits in the entire world. These resources are a tremendous source of jobs, Economic Growth and revenue for these communities. This is why the Administration Remains committed to promoting responsible oil and Gas Production that creates jobs, promote a robust economy and contribute to Americas Energy security. There are a multitude of factors that affect access to federal oil and Gas Resources and the department and the blm are reviewing all of these and taking action where possible to encourage development. And improve efficiencies, without cutting corners on our duties to ensure that these activities are done and environmentally responsible way. Thank you for the opportunity to testify today and i will be happy to answer questions. Chair gosar thank you. I now recognize mr. Flynn for his five minutes. Thank you. Mr. Flynn thank you. Thank you members of the subcommittee and staff. My name is ryan flynn. Im the executive director for the new mexico oil and gas association. Prior to taking over, i was the secretary of environment and Natural Resource trustee in the state of new mexico and worked in State Government for approximately six years, almost six years prior to taking this role. I want to thank representative pearce for recognizing me and i want to recognize him as well. He has been a tremendous leader. His district is home to one of the most resilient and productive oil and gas plays in the world. The great Permian Basin. I want to talk to you a little bit about new mexicos oil and gas industry and talk to you about some challenges to oil and Gas Development on federal lands in new mexico and suggest some opportunities for improving blms operations in new mexico. I want to be very clear that my goal here today is not in any way, shape or form to criticize blm individually. We have had a tremendous working relationship with blm staff and leadership and we look forward to continuing that working relationship moving forward. But like any large agency there are several opportunities for improvement. And i believe the secretary has inherited a difficult situation but he is more than capable and , up to the task for turning things around in a positive direction. New mexicos oil and gas industry is the most important economic industry to the state of new mexico. Last year in 2016, new mexicos oil and gas industry contributed 1. 6 billion to the states federal fund or budget. That equalled roughly 25. 8 of the budget last year. The total budget was around 6. 2 billion. In the last 10 years oil and gas , typically contributes about a third directly to the states general fund. This money goes directly to roads, hospitals, schools, that infrastructure in the state would simply not be possible without the oil and gas industrys contributions. Our industry also employs over 100,000 people in the state of new mexico, a state with about 1. 8 million people. New mexico also has one of the highest poverty rates in the country with almost a quarter of our population living below the federal poverty line. Oil and gas jobs are extremely attractive in our state. The average wage on a rigged is about 75,000 a year. Nationally new mexico is one of the top Energy Producing states in the country, ranking fifth in crude Oil Production and eighth in natural Gas Production. Even during a prolonged period of low prices, new mexicos oil and gas industry has remained resilient. In the last eight months were we have seen major acquisitions and purchases in new mexico totaling over 18 13 billion. The new mexico portion of the northern Delaware Basin has recently been the focal point for some of the most expensive acquisitions in the world. In calendar year 2016 new mexico was the largest producer of gas and oil from federal lands, accounting for over 78 Million Barrels of oil and over 770,000 cubic feet of natural gas. New mexico, the biggest challenge to oil and Gas Development on federal lands in new mexico remains regulatory uncertainty at blm. I think the best illustration of this issue is to look at the Permian Basin and to look at the development in west texas compared to the development in new mexico. As of june 16, 2017, there were 59 riggs running in new mexico, versus 309 in texas. The main difference is the bureau of Land Management. Blms farmington fuel office takes approximately one year to process a drilling permit. Blms Carlsbad Field Office also takes approximately 250 days to process a drilling permit. Rightofways take approximately a year or more. Depending on the field office. Overall, blm suffers from a lack of staffing, a poorly designed and cumbersome new system and systematic irregularities in the processing protocol. These delays translate directly into lost revenue for stakeholders. Our estimates are that approximately 1. 4 million of royalty and 831,000 of state severance tax is deferred each day based on the backlog in new mexico. This Financial Impact is huge in a state like new mexico where we face prolonged budgets issues in light of the low Market Pricing for oil and gas. I will conclude by just noting that there are many opportunities to improve blms operations in new mexico such as simple edits to the program, agreements with state regulatory authorities to transfer some of the work from processing work permits from blm to state offices like our oil , conservation division. And blm making use of existing laws such as categorical exclusion to allow approval of permits. Thank you very much. Chair gosar thank you. Mr. Squillace thank you. Thank for this opportunity to testify today. Im a professor of law at the university of colorado law school. I began my written testimony by asking that we each kmitdcommit each commit to each other that we will engage in a meaningful way on the important issues that are the subject of this hearing and i offer this testimony in the hopes we can have a constructive dialogue. I want to make three points regarding oil and gas on federal lands. Oil and Gas Production remains strong, despite a weak market and a lackluster interest in new leases and velma. Second, the efforts to accelerate leasing and velma under Current Conditions are misguided, because what they could do is walk up federal oil and Gas Resources, even as they deny the public a fair return on valuable assets. In this regard, the committee should focus on improving and reforming the royalty and revenue policies at the federal level, which are much in need of reform. Finally, if we are going to have oil and Gas Development on public lands, it have to be preceded by appropriate environmental analysis and planning. In my judgment, it is inappropriate to use federal lands for industrial scale oil and Gas Development. Let me go back to the first question about oil and Gas Production. As i knowledge in my written testimony, the number of federal leases, the amount of acreage under lease and the number of new issues have all declined. Productionhore oil more than doubled between fiscal year 2008 and 2015. The number of federal producing leases has never been higher. If you look at the year 2016, the amount of federal land producing oil and gas was higher in only one year out of the last 10. What is remarkable about the statistics is it is all happening at a time of weakening demand. Some figures here to support that claim. Federal land under production amounts to less than 47 of the federal land under lease. And in 2016, the industry did not even bid on two thirds of the leases offered by the blm. I should note that by 2015 they did on 15 of the leases offered. Right now, we have 7500 apds approved and it are not being drilled upon and that is the most weve ever had at the blm. If you look at 2016, the blm permits butdrilling industry drills on fewer than 39 of these permits. By the way, that contrasts with other years when the number of drills, the drilling permits were in the 70 and 80 range. What is going on . It takes me to my second point with regard to Market Conditions. I want to make two observations. When i last looked at the market price for oil on monday, the price was at a very low level. West texas intermediate was at 42 and . 43. The obviously has an impact on the interest of the oil and gas industry. There is another important point, which the committee must recognize. The major place for oil and gas, which has really driven development, happened not to be found on federal land. There are exceptions, the Permian Basin which mr. Flynn talked about, but for the most part these plays are on private lands and in other areas. What happens, if the government tries to sell the leases under current Market Conditions, we will be getting lowball prices, essentially giving away valuable federal resources and it does not make sense. What we should be doing is looking at leases and improving the apd, rather than improving more apds. We need to reform policies. We now charge two dollars an acre for those leases that do not receive a bid, 1. 50 in rental. It does not generate much revenue, but it encourages speculation. It needs to be reformed. We have not reformed royalty rates since the 1920s when the mineral leasing act was passed. We need to increase rates to reflect Market Conditions. The state of texas charges 25 and royalties on oil, twice what the federal government charges. In colorado, 20 . And offshore lands, 18. 75 . Finally, if we are going to use our public lands for oil and Gas Development we really need to be smart about it. I do not oppose oil and gas the but wen public lands, all rely on Oil Production to some extent, Gas Production, for power generation, but we need to recognize that we can accommodate these interests without doing damage to public lands. If we can show the slides that i think are on the screen. Mr. Flynn talked about the Permian Basin. This is a picture of the Permian Basin in texas. For those who have not been i urge you to go. This kind of Development Goes on for miles in every direction and it is not the kind of thing that i think we want for a public lands. It is private lan, but on public lands we should be doing appropriate planning, doing appropriate environment all analysis. It takes more time. And we owe it to the American People to make sure that if we are going to have development we do it right. I do not oppose development of public land for some the velma, but it is different from private lands. We need to make sure that we do better than we have been on public lands. We cannot do this if we are denying adequate resources and funding and personnel. Good management requires proper funding. Thank you very much. I look forward to your questions. Chair gosar thank you. The chair recognizes dr. Nelson. Welcome. Ms. Nelson good morning. Thank you chairman gosar. Thank you for the opportunity to be here. I serve as the Energy Advisor to the governor of utah. Governor herbert. I want to say this morning i am going to be focusing primarily on our energy resources. But utah is a Natural Resource state. This includes mining and agriculture as critical Natural Resources. But it really also includes our national and state parks as well. So we truly believe in balancing both use and conservation. And we think that this is the best approach to leveraging all of our resources to generate revenues and create jobs. So focusing on energy in particular, though, this is an important aspect of our economy. It contributes 9 to our gross state product. Its 2. 2 of the state wages, although its only 1. 1 of our employment numbers. So it indicates that these are very high paying jobs, as has already been discussed. And it contributes 673 million in revenues, most recently in 2015. These revenues are really important to utah. They help to provide education to our students and they also provide many other Critical Community services, which have also already been mentioned. Utah, like i think much of the country that is dependent on Natural Resource development, experiences booms and bust in the Natural Resource development. Since 2014, utah has in fact been experiencing a decline in production activity, specifically related to oil and gas. As has been mentioned, this has been an large part driven by lower Commodity Prices which are really a function of Market Conditions. Just to give you an example of the impact, Oil Production in 2014 was around 41 Million Barrels a year in utah. In 2016, it was 31 Million Barrels. So matching our 2012 levels. Natural Gas Production has also been on the decline since 2012. But we believe nonetheless that if we can access our resources, we can create new opportunities for development of these commodities. As Commodity Prices rationalize, this is going to be critical. What we need to do is really create a regulatory path forward that allows for sustained growth in jobs, especially in those communities that have been impacted by the past years decline in oil and gas activities. For example, in utah our overall rate of unemployment as of may 2017 was 3. 2 . But in our oil and gas counties, theyre very dependent on jobs in these sectors and their unemployment rates are 5. 9 and 6. 6 . We truly believe that access to our resources coupled with what we call an all of the above Energy Strategy can create sustained growth in the Development Activity and in the associated jobs and revenues. Utah is a public lands state. Weve got 70 of our land is federally owned. And so really getting it right when it comes to leasing and permitting is key if were going to deliver on the promise of our energy and minerals opportunities. Now in utah, as i mentioned 70 federally managed and this leads often times to lengthy permitting schedules and especially when theyre compared to the permitting schedules for applications for permits to drill. And were just not convinced that the federal process in fact delivers results that are more robust than those that are provided through our effective and efficient state agency. The Energy Policy act of 2005 specifies that the bureau of Land Management must approve applications for permit to drill, apds within 30 days. But we understand that the average permit time is closer to 220 days. And depending on the field office, its not uncommon for it to take years. Our recommendation is very simple, to resolve the link the time it takes to approve applications to drill to allow , for the primacy to be allocated to our division of oil, gas and mining or generally to states where theyre willing and have shown that they are capable of taking over this process. This in no way is meant to be disparaging to blm or to the department of interior in particular, but really just to provide an opportunity for those agencies to focus on their broader mandate of multiple land use. We do recognize currently that d. O. I. And blm do not have authority to delegate primacy for regulation in particular for permitting, inspection and enforcement of oil and Gas Production to the states for production thats occurring on federal land. However, we recognize that the primacy may be accomplished by one of two actions. First of all, congressionally directed legislation, or application of the federal permit streamlining Pilot Project that was in fact established as part of the Energy Policy act of 2005. In september, in fact, of 2014, the u. S. Senate approved s 2440, the blm processing improvement act of 2014 that among other things makes permanent the federal streamlining project program. So we believe that assigning primacy, delegation of oil and Gas Development where appropriate to states would allow for better efficiency and better environmental outcomes and would also free up the resources. Chair gosar you are over your time. Think thank the panel for their testimony. Reminding the member that is the Committee Rule 3d poses a five minute limit on the questions, the chairman will recognize members for any questions. Ill start with myself. Mr. Flynn, leasing policy changes put in place in 2010, internal memo 2010117 has resulted in a situation in which the blm is not fulfilling the mineral leasing acts requirement to hold a lease sale in every oil and gas state at least quarterly. Only one lease sale was held in the state of new mexico in 2016 as sales in lower interest areas of the state were cancelled. And not replaced by sales in the san juan basin. What impact does the rotational lease sale schedule have on oil and Gas Development in new mexico considering the texas , permian is right across the border . And how does this affect the budget of the state of new mexico . Mr. Flynn mr. Chairman, thank you for the question. The impact is profound from both an economic and a jobs perspective. As i mentioned before, approximately onethird give or take a couple of Percentage Points in a given year of our budget is derived directly from severance taxes paid by the oil and gas industry. So when the state of new mexico is not attracting activity, we are suffering from an Economic Perspective. Of the federal royalty, nearly 50 of the federal royalties paid comes back to the state of new mexico as well. We derive benefits both from our severance tax as well as our share of the federal royalties that are paid. Each drilling rig constitutes approximately 50 to 100 high paying jobs. So each rig on the texas side of the border means 50 to 100 high paying jobs are going to texas. And that trickles down and has an impact throughout our economy. Those workers are spending money in restaurants. Theyre buying goods and theyre paying more taxes to the state when theyre buying different goods and paying for services. New mexicos budget is dependent on the oil and gas industry. We certainly as an industry support efforts to diversify our budget. However, the fact remains that we are the foundation of the budget and when we suffer the state suffers. From a budget perspective we , just had a special session to deal with the shortfall because of low market prices where we had to account for about 100 million deficit. And next year we have current projections which are inherently inaccurate at this point, so that were facing another budget deficit of perhaps 200 million to 250 million. This impact is profound in a state like new mexico where our jobs and economy is dependent on the oil and gas industry. Chair gosar you said 50 . It is 48 . Mr. Flynn nearly. Chair gosar in your written testimony you state that since taking office, the secretary has scheduled quarterly lease sales in nearly every office. You also highlight the successful february 2017 lease sale that generated nearly 129 million. What in your opinion precluded quarterly lease sales during the Previous Administration . Ms. Macgregor thank you for the question. I cant speak to the Previous Administrations decision on whether to hold lease sales or not hold lease sales. Chair gosar isnt it statutorily required . Ms. Macgregor it is in the mineral leasing act to conduct Quarterly Sales in each state office. I can speak to the fact that we have had more lease sales this year than last year. 11 lease sales were cancelled or postponed last year alone. Were hoping to continue forward with our schedule of lease sales. And of course we believe that , leasing can be done economically even in these price conditions. Just to touch back, i think its important to note that there is no low balling that goes on. The department, when we conduct leases, actually ensures that every lease sold is reaching a fair market value threshold. And yesterday i believe the , bureau of Ocean Energy Management announced that we and 10 million for bids that were made that just did not reach fair market value thresholds. We will conduct our lease sales in accordance with federal law and make sure that taxpayers get fair market value. Chair gosar thank you. My time is short so i will acknowledge the Ranking Member for his time. Rep. Lowenthal thank you. Ms. Macgregor, as i mentioned earlier when i quoted your testimony when you said Americas Free markets will help determine where and when Energy Development on public lands is feasible. To me, thats a troubling statement. Statement. Because it sounds an awful lot like an admission that the oil, gas and Coal Industries will control the location and the timing of Energy Development on our public lands. And then the Energy Counselor to day, through the secretary is quoted as saying that we are moving towards, quote, an energy dominant public policy. My first question is, do you agree with the policy statement in the federal land policy and Management Act that states, it is the policy of the United States that public lands be managed in a manner that will protect the quality of scientific, scenic, historical, ecological, environmental, air and atmospheric Water Resources and archaeological values. Do you support that . Ms. Macgregor absolutely. Ecolor and i also supports the area that speaks to managing and balancing multiple use of those lands. Rep. Lowenthal thank you. But do you also believe though, in that balance that you point out, that balance between that and also exploration and production of oil leases, that there are times that its necessary to override the wishes of the free market . Ms. Macgregor just to speak to that, i believe that the statement that anyone aside from the secretary in the bureau of Land Management will control where and when leases are held is not true. It will be a measured development that of course preserves the multiple use of the lands and the varied uses. Rep. Lowenthal so you do believe there will be times when you will overstay or protect those values to override the wishes of the market. Ms. Macgregor i absolutely do and i know there are areas that are going to be more treasured and special than others. I think we can strike that appropriate balance. Rep. Lowenthal i think that is what we are trying to find on this, because we have real concerns that the policy has moved us away from that balance and not towards that balance. Ms. Macgregor i understand your concerns. I think that the entire planning process done through rmps at the bureau of Land Management will ensure that we find that balance. Rep. Lowenthal lets talk about that balance. Lets talk about according to , the blm budget, there were 2,552 drilling permits currently pending at the end of the last fiscal year. And it seems like taking care of this backlog and issuing permits as quickly as possible is a high priority for the department. And i believe thats true. It is good to be efficient. Permit processing shouldnt take longer than it needs to and i think some of those issues have been raised. But we dont need to tell people out there theres a huge backlog of permits that need to be addressed and potentially at the risk of not doing thorough environmental reviews, not evaluating protests. Not dealing with other activities. Because is it not true that the number of unprocessed permits is currently the lowest its been since 2005 . So really we have the smallest backlog that weve had in over a decade. Is that not true . Ms. Macgregor im sure thats true, but a backlog is still a backlog. And taking care of rep. Lowenthal thank you for stating that it is true. At the end of 2015, there were over 7,500 of those this is the most in a decade 7,500 , drilling permits that companies have still not used, which is the most. So we have the most drilling permits and at the smallest backlog. That have not been used. Is that not true . Ms. Macgregor its correct that we have 7,950 approved but not drilled in this year. Rep. Lowenthal thats also the most we have had in this decade. Ms. Macgregor i am not sure if its the most or not. I can get back to you on that. We can get back to that data. I will finish up. Ranking member wrote to the secretary in april looking for the number of permits that have been approved but not used at the end of fiscal year 2016. Thats what hes done, hes written to that. Last week the secretary said , there was no need to answer letters because they will simply call us with the information. Im asking you will you please ask the secretary to either call me me or Ranking Member grahah data, or you016 can call me with that data, and or you can text me. Ms. Macgregor you are going to give me your number . Rep. Lowenthal yes i am. Ms. Macgregor i would be more than happy to work with your office fulfilling that. Rep. Lowenthal thank you. I yield back. Chair gosar i recognize chairman mr. Bishop from utah. Rep. Bishop would you call me if i gave you the number too . Ms. Macgregor sure. Rep. Bishop in the past i got calls but just no information was forthcoming so if you could add the information it would be nice. Let me ask mr. Flynn and dr. Nelson for a because i am second, there is some questions. If 39 of the leases that are out there, the bids are let, are not being taken, why would a company not bid on something that administration, either this one or previous one, would put out for bid . Why . Why would they not go for that very quickly . Mr. Flynn chairman, its too difficult to provide a single answer. It really depends on the geology and rep. Bishop 16 seconds to give me a couple of answers. Mr. Flynn i think it depends on what youre bidding on first and foremost. There are they would be considering the productive potential. Rep. Bishop are you telling me there is a possibility the bids for lease would not have enough resources there to make it practical . Mr. Flynn yes. Rep. Bishop or that those lands would actually be so litigation prone that it would not be worth going for them . Mr. Flynn yes. Absolutely. Rep. Bishop and that may be one of the reasons why bids were let . Would it be possible for any administration past or present to be so devious they would put out bids for lease they knew would not be acceptable . You cannot answer that. You have a vision of their heart. Ill let that go down there. Okay. Dr. Nelson, let me go to you then. We have been talking about how cheap the royalties are in federal lands. Why in the hell would a company not go to pay those cheaper royalty rates . Why go to state or private land to pay more money . That then i think question can be answered pretty simply. First of all, what weve seen in terms of leases that are offered is that there are very few parcels that are offered at a single time. As i know you are well aware, chairman bishop, that the Companies Really look to maximize resource play, and if they cannot plok up a resource play then they are simply not going to bid. Irrespective of what the royalty requirements are. So i thank you for the question. Rep. Bishop so the only reason somebody would bid on federal land they make money and the longer it takes to perm to go through litigation to get those areas it simply means its not profitable. They are willing to pay more money if they could actually be in production. Which should be an idea for the federal government that if we guarantee youll be in production and at the permitting process goes faster, people would be willing to pay more to do that. Dr. Nelson are there other , examples how land be be stopped from production, for example, would there be projects that could be established, shown that they are worthy but all of a said and they need lets say , some electricity or power to go into that plant and the , federal government could block rights of way to make the entire project worthless . Would that actually ever happen . Ms. Nelson yes. Rep. Bishop and in my district. Ms. Nelson yes. Infrastructure is critical and federallys must cross federal lands, so it does sometimes inhibit the ability to develop a project even after a lengthy leasing process followed by a lengthy apd process, then the need to secure leasing for the infrastructure. Rep. Bishop there are some native american tribe who is rely on energiment development. They do not have gaming opportunities. In colorado there is one. Are there examples in prior administrations they were prohibited from going to actually implementing the programs they want, the tracking devices the programs they had, which inhibited their ability to do that. Ms. Macgregor i think there are several examples where Energy Producing tribes did reach out and issue Public Comment on some of their concerns for responsible production on their land. Rep. Bishop its not just doi dealing with that as far as permitting, sometimes the epa got involved which shut down any production they would have Going Forward. Is doi considering reforms that would delegate permitting process and Regulatory Authority to states . Ms. Macgregor it is something that id be more than happy to talk to your staff in your office about, that sounds like an interesting idea that wed be process and Regulatory Authority willing to discuss. Rep. Bishop so dr. Nelson, maybe i can come back to you because i know there was a bill that talked about this. If indeed a company was held to federal standards, but the state actually did the permitting process, could such a system actually work and facilitate faster permitting . Ms. Nelson we believe that it would. And we would like to move forward with assigning that for approval of applications for permits to drill to our Utah Division of oil gas and mining and to other states. Rep. Bishop i was unfair. I asked you that with 30 seconds remaining so im over. Thats my rule i violated. Thank you for your answers. Thank you for being here and spending the time in talking about this. This is a significant issue. I yield. Chair gosar the floor recognizes the gentleman from massachusetts. Mr. Flynn were having a hard , time hearing. Can you take your microphone and move it closer and speak in. Is that better . Chair gosar yes, thank you. That is a little better. I now recognize the gentle woman. Rep. Tsongas welcome. The oil and gas industry struggles with Market Conditions, our nation also happens to be in the midst of a clean energy revolution. In massachusetts alone jobs in , the Clean Energy Sector have grown by 75 since 2010. It is now an 11 billion industry across the entire commonwealth. Nationally we reached a milestone this past march when over 10 of all electricity came from wind and solar. Many individual states the percentage of electricity general rated by wind and solar is even higher. Our nations public lands stand to play a significant role in this transition to clean energy. The Obama Administrations bureau of Land Management approved permits on public lands for utility scale solar facilities, wind farms and geothermal plants. And set a goal of approving projects that would generate 20,000 megawatts of clean energy by 2020. I believe this committee and the new administration should also be working to ensure that our public lands are supporting renewable Energy Development, where it is appropriate, and in an all of the above framework, to help decarbonize our electric grid, support job creation and increase royalty payments to taxpayers and local communities. Miss macgregor and welcome back to the committee on this issue , of supporting renewables the bureau of Land Managements fiscal year 18 budget request includes a 13 million cut to Renewable Energy programs. This is money that was budgeted for activities such as Public Outreach and stake holder engagement, lease sales and making sure that permits are reviewed in a timely manner. Your written testimony outlines the many steps that this administration is taking to rush approvals of oil and Gas Development, but no similar steps for renewable development. How will you ensure that Renewable Energy projects have the proper funding and staff levels to ensure timely , similarly timely reviews and are you considering setting similar targets as the Obama Administration did for renewable Energy Development . Ms. Macgregor thank you for the question. We are definitely supportive, this administration, of all energy jobs. Were not engaged in picking winners or losers in any way. When it comes to clean energy which of course is very important to you, we are remaining supportive of those projects that have already been permitted and will continue to be permitted on federal land in the appropriate areas where its been determined. In my Opening Statement when i said that we have 18,000 megawatts of approved Renewable Energy, much of that is still remaining to be installed. So we are aware is that there will be permitting on continued work with the bureau of Land Management to allow these projects to move forward in a responsible manner. I believe by focusing on our permitting process in general and making sure that were looking at efficiencies across the board, it will benefit all Energy Producers on federal lands, including Renewable Energy producers. You are abiding by the Obama Administration goals, correct . Ms. Macgregor we will ensure that Renewable Energy is permitted in an appropriate and smart time frame. Are you setting new goals for the Trump Administration in this area . The Trump Administration and the secretary have been very clear on their priorities moving forward and i think its restoring balance on federal lands, which includes all energy and you know, based on some of the acreage and numbers were looking at that were taking care of in the last administration when it comes to oil and natural gas, were still trying to dig out after little bit of a hole there to restore that balance, but yes, well prioritize all energy jobs on federal lands. Well, as a Trump Administration has touted its all of the above Energy Strategy, but renewables are frequently omitted. I think you are looking to see through the obama permits, youre not aggressively looking for additional ones, i do think a responsible Energy Production does call for more thought through plan as to how to maintain some balance, give at given the extraordinary Job Opportunities that we were seen in massachusetts and that im sure present a real opportunity across this country. Professor, in your experience, are fossil fuels given preferred treatment in terms of development on public lands . Mr. Squillace it varies from each administration but i think the Budget Proposal from the Trump Administration seems to clearly favor fossil fuels over Renewable Energy. So that is one indication. What i would say about that more broadly is that the United States has a responsibility to address the problem of Climate Change in a longterm Going Forward. And if its going to do that it needs to manage the decline of fossil fuels. Fossil fuels are going to decline because of Market Conditions irrespective of other issues that weve been talking about, but we need to manage that decline in a responsible way. Because if we dont, were going to see the kinds of economic dislocations weve seen already with the coal industry and that were likely to see Going Forward with oil and gas. The gentlemans time expired. Thank you, gentlemen. Now acknowledge the gentleman from colorado for his five minutes. Lamborn thank you, mr. Chairman. I have a couple of questions for you. Before i ask that, let me go on the record and say when you were on this side of the dais as a professional staff member i found you to be one of the hardest working most dedicated people ive ever met, and i think the country is fortunate to have you doing what youre doing now. So keep that up. So im going to say, the you said the blm is adding features to enhance the new electronic apd processing system, the fluid mineral support system and plans to decommission part of the prior processing systems, to improve the automation capacity and better match the blm resources to permit activities. That was what you said. So using internet based bidding and enhancing electronic processing is what this subcommittee has been pushing the blm to do for a long time as you know. Could you tell us more about these efforts . Ms. Macgregor sure, i would be more than happy to. And in speaking of the more enhanced internet based program were talking about when it comes to filing apds i recognize that new mexico in their field offices has a Different Program , so we are still working out the details of how these programs can work Better Together to make sure that overall we have a Better Program to process apds. But processing apds through an internetbased means is going to help us in many different ways. Especially eliminating a lot of the discrepancies that we see when industry files their permits. Right now, the blm actually has a permitting time frame of 257 days. In my testimony, i said that we were trying to get to 90 days and by statute we recognize that were supposed to be at 30 days. We think that utilizing this internet based means and harnessing that, well be able to find ways, you know, our staff compares to the turbo tax, but allowing folks to fill in the data and make sure that data doesnt get filed until it is fully complete. So thats one of the areas that i think that will be helpful. And also will increase transparency for folks on the committee and the general public who want to have a better understanding of what the absolute work load our folks on the front lines in the field are facing on a daily basis, especially in areas like casper casper, wyoming and carlsbad, new mexico. So when it comes to internetbased leasing, that is something that the Congress Allowed the bureau of Land Management to do in the 2015 ndaa, i believe, and we are moving to that model. And our folks internally are noticing that through online based bidding we are seeing an uptick in participation as more people can attend the lease sales online and perhaps increased revenues coming in. But were still analyzing all of the details of what were seeing in those lease sales and hoping to get something up to the hill eventually that provides more information on that. Rep. Lamborn thank you. Now, at the end of fiscal year 2016, the blm oversaw at least 40,000 leases across the country. That may sound like a lot but its actually the lowest number of federal leases since fiscal year 1985. 30 years ago. And despite the fact that the mineral leasing act requires lease sales to be held in each state at least quarterly, or more frequently, if the secretary deems that is necessary, the blm repeatedly canceled or failed to hold the required lease sales. What will the Current Administration do to correct this . Ms. Macgregor we are committing to making sure that we find you know, to be respectful of Ranking Member lowenthal, well find the appropriate areas to conduct lease sales and conduct those lease sales and were aiming to be doing quarterly lease sales. Its important to talk about leasing because, you know, in the example that 2014 was one of our highest producing years, in that year alone, in north dakota , an example of a project that came on line that initially produced 4200 to 6,000 barrels of oil a day in 2014. Great project, got through the process more wells might be drilled there, it was leased 15 years before in 2001. There are long lead times to get from lease to production. So thats why leasing and having certainty in the leasing process is so key. Because Companies Take time to develop these resources and have to allocate their own Economic Resources to do that. Rep. Lamborn thank you for being here today and thank you for your testimony. I yield back. Gentleman from florida is recognized for five minutes. Thank you, mr. Chairman. I appreciate the discussion. Obviously we need to make sure were not just focusing on 20th century jobs but 21st century jobs. In our state, we have avoided trying to have just an oil and gas economy. I realize there is a big push among a lot of states who are addicted to oil and gas jobs because they havent diversified economy like florida and a lot of states, so there is a big pressure to try to maximize this as much as possible. But we still have gas and oil that we need for homes and cars and for goods, so obviously for the near future we need to keep up the demand. But if we look to the future, we need to make sure were addressing Climate Change, that were pushing Renewable Energy, that were making sure that were conserving our parks and our Natural Resources and protecting our coastline. In florida, its much more about tourism and agriculture than it is about oil and gas and thats been something thats hurt our economy. Particularly with the disastrous bp oil spill in the gulf that wrecked the western part of the state for a year plus, and were still getting reimbursed for that. But i want to focus on the issues addressed by our speakers here. According to our information, the leasing times from about 2005 to 2015 have been about 190 to 220 days under both the bush and Obama Administrations, and now its at 250. What specifically, ms. Macgregor, are you recommending to get us from 257 back down to the average range of 190 to 220 . Ms. Macgregor thank you for your question. I know that there are few blm lands in florida, but i know this is important issue to you. What we are doing is prioritizing, again, areas where theres a good return on investment to the american taxpayer, and one of those areas is an America First Energy Agenda. What weve done so far simply is create priorities and start looking at vacancies out in the field. Two weeks ago, i was in carlsbad, new mexico and casper, wyoming visiting with some of the folks who actually these are 21st century jobs, some of the folks out there who are processing these permits and talking to them about what exactly they need to help move these permits in a more responsible timeframe. Clear, there is efficiencies that will be forthcoming to us but none today. Doctor, you know, i see that we have 192 out of 213 million acres that are eligible for leases. So were talking 10 left. Is this 10 of land thats feasible for leases or is this something that we really dont need to be pursuing . Mr. Squillace so let me answer that in a little different way, congressman. The concern is when youre deciding whether you want to lease oil and gas or any other resource on public lands, you go through a Land Use Planning process. The process is what has made so much of the land available for leasing. So theres that initial judgment that has to be made. Then the way that the leasing actually occurs is primarily from nominations from industry. Its industry that decides what lands they want to put up for leasing and then they come in and bid on them. That process of course is not worked very robustly in recent times simply because there hasnt been that much interest, frankly. I mean i know were there are certain areas rep. Soto lets get to that. If there is reduction in leasing, is it a supply, demand or regulatory issue . Mr. Squillace i would say its primarily a demand issue. So rep. Soto americans in the world are reducing their demand on oil, and that is leading to less desire for leases . Dr. Squillace yes, but i want to emphasize one important point about the regulatory issue. There has been a lot of discussion today about the regulations and the ways in which government regulation might limit development. I tried to point out in my original testimony, the problem here is that were dealing with public lands and its necessary, its not just that its legally required, its necessary that we focus on what the consequences are of full Field Development of oil and Gas Resources on our public lands. That kind of development can be devastating, and its happened a lot in our private lands, but i think its much more problematic when it happens on public lands , so there is a regulatory component, but its a necessary component that is designed to make sure that were protecting all of the resources that weve talked about that is required. Rep. Soto right now its taken 257 days so it looks like well have plenty of time to review them. Thank you so much. The gentleman from virgin you is recognized. Rep. Wittman thank you. Like to thank our witnesses for joining us today. I wanted to get your perspective. You both come from states that have significant acres of federal lands and obviously that does have an impact on your state. The question is is what type of impact and you spoke earlier about the Economic Impacts of what happens on those lands and lack of activity there that generates Economic Activity does have a significant impact. You spoke about that. But i wanted to get more detail about not only how does that affect the state, but how does it affect local economies and what do you see from a standpoint having to deal with , as you talked about, mr. Flynn, budget deficits keeping economies going, how do you deal with, you know, these massive amounts of public lands looking at ways to make sure she to make sure they generate some revenue, and then looking at the regulatory hurdles that are there for Energy Development on those lands . I wanted to get both you and dr. Nelsons perspective from their state viewpoint. Mr. Flynn chairman, representative witman, two quick answers. One that would not really go into the economic but from an Economic Perspective really it boils down to Infrastructure Projects, from the local Development Perspective roads and sewers are the bread and butter. They are on the front lines of governing. I know you all interact with them constantly in your districts. And i interact with them in my prior role and in my current role. Less revenue means less Infrastructure Projects for roads, sewers, Drinking Water systems, period. The second issue, really from weve talked about the economic issues, but we talk about the delays that blm and processing rightofways, if Climate Change is an issue that you believe is important, like i do, then one of the key infrastructure challenges we see is related to infrastructure to reduce flaring offense. Events. Ng so rightofway approvals not being processed contributes to the problem that we see when it comes to Green House Gas emissions. So beyond the economic issue , there are profound environmental impacts that are associated with the difficulties, processing not only permits to drill but also rightofway approvals. Dr. Nelson thank you. Thank you for the question. I guess i understand and agree with the things said and ill add that in utah, we have 29 counties and about 23 to 24 of those are Rural Counties and this is where the preponderance of federally managed lands are. To the extent that access is limited where its appropriate really has significant impact. This is where we see the high levels of unemployment and limited opportunities for even diversification because Natural Resources are the backbone for allowing for the Economic Development, which in turn does drive the diversity and the infrastructure that is required to meet the needs for that Natural Resource Development Also lends itself to other industrial and commercial development. So, basically youre creating a conundrum when you limit access to those resources for those communities that are dependent on that initial development. Rep. Wittman thank you viewed thank you. Ms. Macgregor, you heard concerns from both of these states from the state and local level about making sure that there is the highest and best use of those lands that are now under federal control. Give me your perspective on what department of interior can do to help address these concerns and make sure that these states have these federal lands producing to help them deal with the issues they have to deal with. Ms. Macgregor thank you for the question, sir. Every state has their different infrastructure needs and different economies and goals. These states being represented here today clearly would like to see responsible oil and Gas Development on their lands. The good news for them that is a priority of this administration very clearly from the top down starting with the white house. So we are allocating resources and making sure that we are addressing not only Planning Issues and making sure in the planning side of things that we are finding and striking the appropriate balance to find the right acreage to lease. But also when it comes to permitting, addressing backlogs not just for apds but for rights of way and making sure we can get through those in a responsible timeframe, that folks who invest on federal lands, whether its any building project, it doesnt have to be oil and gas, can get through and have a reliable permitting process. And lastly, regulatory certainty which i believe other folks have touched upon. Rep. Wittman thank you. Thank you. The gentleman from california is recognized. Thank you. An i spent the last several years sitting as a City Council Member where i had an oil company that wanted to come into my town, hermosa beach, to drill 34 wells on land and then out into the santa monica bay. I have seen time and time again where big oil tries to come in and take over urban areas and take over areas that are just causing more environmental pollution, and we read about spills happening all the time whether they are on land or offshore. I was very disturbed to hear that the president wanted to open up the coast lines again to drilling. And i think today weve heard, i would say, an assault on our federal lands. Sometimes i take a look at this stuff and i think that this administrations talking points are coming right out of big oil. One of the things im hearing about is something called Energy Dominance. Dr. Squillace, did i say that right . They talked about this. Can you explain what that means and do you think its something we should strive for on our public lands . Dr. Squillace so its an interesting question. I dont know that i can answer what exactly an Energy Dominance means, but i think its the wrong word. I dont think any of us should be looking at dominance. We ought to be looking at being energy smart. Energy smart, to some extent, is about what weve been talking about today, an all of the above strategy, but one that recognizes the perils of Climate Change and the risks that we face if we continue to develop fossil fuels at a pace that is simply not sustainable given the challenges of Climate Change that we talked about. I think if we think about it in that way, then its appropriate to allow fossil fuel development to decline in an appropriate way, manage that decline in a responsible way and move shift our economy so that were relying more and more on renewable and other forms of energy that do not cause the problems that weve seen. Rep. Barragan what do you think the impact is going to be if we start doing more oil drilling on public lands . Both to the environment and to the global Climate Change problem we have . Dr. Squillace as i mentioned in my original testimony, im not opposed to oil and Gas Development on government lands , but its different from oil and Gas Development on private lands, because these are our public lands, if were going to have the we need to have appropriate planning to make sure that were doing it responsibly. You know, with all of the great technologies that we have right now, we can do horizontal drilling in ways that allows multiple wells on a single pad and minimize the footprint. If we dont do sufficient advanced planning and if we dont do the kinds of analysis that are required for appropriate development of those resources, then we lose that opportunity to sort of make these advantages available to us. So i think there is an appropriate way to do it. I do think we need to recognize it cant go on forever. That we do have responsibilities globally to deal with the fossil fuel issue in a timely way, but i think if were going to have it, we can do it responsibly. Rep. Barragan thank you. Im proud to be from california where we have been leading the charge and moving toward Renewable Energies and knowing that there is great Economic Development in that as opposed to the fossil fuel industry. Thank you. I yield back. From new mexico is recognized. Thank you, mr. Chairman. Then appreciate the conversation that were having today. Thanks to each one of our panelists. You have comments on the second page of your testimony about the leasing 2 an acre. That section is in there because you feel like its inappropriate, you feel its a give away. Why is that section there . So youre asking about the bonus bids the 2 an acre if they dont sell a lease, then its available for 2 an acre. Is that sort of a give away to oil and gas . So if you look at the revenues that come in from federal rep. Pearce thats not what im asking. On the 2 is that a give away to oil and gas . I think it is, yes. So its value available for almost nothing i guess i wonder 2, thats pretty well achievable to people like you and me. You ever go and bid 2 on these, its a give away. You think its unfair. Have you bid on these personally . No. I know Terry Williams did bid on one. It might not be as big a give away if its going to require tremendous investment downstream to actually do something with that lease, that what you feel like is a give away, might not be as much a give away and if it were, i suspect people maybe not you, but people who could afford 2 an acre which is almost all of us, might be out doing that instead of putting money in the lottery. A lot better chance of payoff in this than a lottery ticket. And it you made a comment just a second ago that the decrease in promoting in permitting is a demand issue, and i would point out that the American Energy Institute Just put out the 2016 was the highest use of gasoline in our record, so it doesnt sound like a demand issue, it sounds like that we have drilled another, drilled enough, that were producing enough oil that the price of gasoline is coming down even though the use is going up, usually increased use would driving the price up but we increased the amount of supply. So i think that maybe your insertion in the record it was a demand issue should be rethought at some point. New mexico has about 40 , between 30 and 40 of its revenues to the government established by oil and gas, so mr. Flynn, i would like your opinion on the bom, apd delays were seeing there in the state , and i worked very much with bom on those. But from the business perspective. Representative pearce, i think you know better than anyone, but just very bluntly it has a huge impact on our ability from a state to provide basic rep. Pearce how much are the delays . Mr. Flynn well, the delays i mentioned in my testimony, we believe are about 1. 5 million in lost federal royalty per day is deferred each day as a result of the back log and approximately 800,000 deferred and state severance. Rep. Pearce i made the comment yesterday that this is the interruption in a lease sale that stopped 70 million coming to the state because of a protest filed by one of the environmental groups, it was eventually thrown out. But that 70 million was 10 of the shortfall for a state of new mexico, so yeah, we get a little energetic when we are talking about the issues. Now, many people are saying in the agency that they need more staff. Can you address that question for new mexico . Mr. Flynn sure. Representative pearce, i think briefly, first of all, previous study showed that a Pilot Program that had been enacted a few years ago to provide federal permit streamlining Pilot Project created additional funding and allowed 140 additional Staff Members to be hired for seven pilot offices , including two in new mexico. The Farmington Office and carlsbad office. And while they were able to increase the amount of applications, the apds, by 10 , the number of days to process the apds increased. So they got less efficient by 40 . Rep. Pearce the industry jumped in and helped out and the same people working in the same agency took much longer and my study showed it took about double. So, miss macgregor, you recently in whatever mr. Lambert from colorado said about your performance seemed to go well so im going to identify with that also. But thanks for visiting our state, just to look forward to working with you because they delays really do affect us. I live three miles from the texas border and so i can see all those rigs running over there in texas. That should be running in new mexico but cant get the apds permitted. But they got the option to drill there or here, and i can see the effect of the permitting delays , so its not a level playing field. People just choose the best opportunity, that is, we will go drill on private land instead of trying to wres well the government and that hurts states like new mexico and hurts the federal government and hurts our job base in new mexico. I yield back. The gentleman from virginia is recognized for his five minutes. Rep. Beyer thank you, mr. Chairman. Miss macgregor, i have seen reports that the interior department is considering recombining the bureau of ocean energy manage wmt the bureau of safety and environment enforcement. The reason it exists is the crisis in 2010. The agency that existed at the time was Minerals Management service and when that agency was mired in scandal dealing with a conflicted mission with promoting and regulating offshore drilling. So the creation of a dedicated off shore safety regulator separate from a Leasing Agency was one of the key recommendations the president ial oil spill commissioned. Senator bob graham, one of the cochairs, was quoted saying when he heard of this news of the potential combination, i heard no indication of why we are doing this its just 7 years disaster. Normous i believe it cannot be to address permitting. You look at the first five months january through may, approved 324 permits with only 20 permits pending. So sounds like firing on all cylinders. What is the evidence that shows combining bom and bsee would be in the Public Interest . Ms. Macgregor thank you for that question. When it comes to the offshore, we obviously want to make sure that were ensuring that the bureaus that both lease and conduct inspections are doing their jobs and doing them well. When it comes to the split of the former mms into actually three agencies, the original split broke out, the office of Natural Resources revenue known as honor, which is split, then left bomer, which was itself split into two agencies. As we look at reorganization broadly within the department, the discussion on splitting bomb and whether or not they should be recombined is on going and internal but i hear your comments and im more than happy to take those back with me today. Rep. Beyer secretary zinke talked about thinking massive reorganization and everything on the table. Please remember the reason they were split in the first place. You dont have the fox guarding the hen house. Governor herbert sent a letter, asking the bureau not to sell certain oil and gas leases next to Zion National park. In his letter he said, is it is visitors come from around the world to see the lush landscape surrounded by towering iconic sand stone cliffs, and the preservation of this unique experience is important to the surrounding communities, their economies depend on recreation and tourism. Dr. Nelson, do you believe that other local communities and economies and communities in utah similarly should have a say in how the oil and gas leases in their local communities are made . Dr. Nelson thank you for that question. Yes. I mean, utah, and i provided in both my written testimony and my opening remarks today, that were a Natural Resource state and that includes our national and state parks and we absolutely believe in balancing use and conservation, and we also are a very collaborative state and working with local communities. I think our key position here is that this occurs best when permitting happens at the state level. That you have that local interest, you have the local control. So assigning primacy for the permitting process associated with apds is best managed through the state and not to diminish the importance of blm or doi in the management of multiuse of our federal lands , but to provide for the more efficient local assessment for this permitting process. Rep. Beyer i heartily agree with the need for local input and engagement. How do you balance the rights of americans who live across the country, the other 49 states, who own that land, and have essentially their rights represented by the federal agencies . Dr. Nelson thats a big question to answer. I guess that one thing i would point out is that federally managed lands, the preponderance of those is different across the country. Utah is 70 . You got to alaska and its even higher. And so we are limited in our ability to create revenues across those federally managed lands that its a condition that doesnt exist for all states across the country. So i think that we have to take that into consideration, as well. Rep. Beyer part of that consideration is those lands were federally owned at the time utah was admitted as a state and alaska too. I yield back. The answer to the gentlemans question its also multiple use, that was one of the dictations on behalf of having public lands in the west that are different from east of the mississippi. The gentleman from colorado is recognized for five minutes. Lamborn thank you. Thank the panel for taking time to be here. , i would like you to speak a little bit to dr. Nelsons suggestion of maybe having some permitting going over to the states. Right now when the department of interior blm you issue a permit, do all environmental requirements have to be complied with if there is a choice to be able to move forward with drilling . Ms. Macgregor absolutely. Rep. Beyer so, miss nelson, if you had the right to be able to do what youre suggesting, that would still be applicable to you as well, wouldnt it . Dr. Nelson absolutely. Rep. Beyer so wed still have the responsible Energy Development making sure that were doing it 18 in an environmentally responsible way. I was reading your testimony miss macgregor, talking about some of the multiple use, i have the bill planning for Americas Energy future act which enumerates all of the above in the bill. The chairman has a bill for streamlining some of the permitting. Some of the permitting that were seeing. So we are seeing now multiple use not just traditional fuel sources, but also i believe you noted some of the nontraditional sources being developed on the public lands, as well. I do find it interesting, listening to some of the comments from our colleagues, the Ranking Member as an example talking about multiple use on the lands. If you lease 1,000, 5,000 acres, do they put up a big fence so nobody can hike, hunt, fish, on those lands . Ms. Macgregor not to my knowledge. Rep. Tipton so they are still multiple use even while we have the responsible Energy Development, be it traditional or nontraditional resources . Ms. Macgregor yes there is, sir. I think some of my colleagues sitting here today or other witnesses can speak to the technologies that are available from multiwell pads to minimize impact to surface acreage. Dr. Nelson, maybe you would like to speak to that as well in terms of lessening the impact. My friend from colorado, fellow coloradian, talking about lessening the impact. Have we developed technologies to be able to not only responsibly access resources but to be able to minimize the impact on public lands . Dr. Nelson yes. I would say the same technologies that really have led to the oil and natural gas revolution we have today significantly limit service impacts. L in fact, utahs currently looking at how it applies rules for horizontal drilling to assure that we have all of those same Environmental Standards in place but what were seeing is absolutely fewer drilling rigs required, and fewer pads being developed for drilling as a result of the advent of these technologies. Rep. Tipton i appreciate that. I had an opportunity to be in colorado and we were looking up onto blm land. They said we have a lease there. I said, when are you planning on drilling . They said, we are already producing. It was from one well pad. No Surface Development was going on but still being able to responsibly develop that resource. Miss macgregor, on a different topic, going to the mlps, Master Leasing Programs, essentially thats viewed as a narrow rmp to address the land use conflicts prior to leasing and drilling. Would you describe a little bit for us in what ways are the mlps s duplicate of the rmps . Ms. Macgregor what i can say is in the wake of United States Congress Making a determination and passing legislation to throw back the planning 2. 0 regulation, we are taking an in depth look at our planning process, because we recognize no matter what project members have on either side of the aisle the planning process at the Department Takes on average 5 to 7 years, often more. So as we look at planning in the department and consider how we can do things more efficiently, were evaluating whether the Master Leasing Program is an added step on top of an existing planning process. Does it actually increase efficiencies or is it another step . Were looking at that as well as many other issues. Rep. Tipton great. I was a little encouraged. That is the one thing we heard of a number of our constituents in terms of some of the different timeframes we have regulations, i believe your bill will be able to stream line those. Look at the overlap and to be able to do that in a responsible way. So appreciate all uf taking the time to be able to be here. My time expired. Thank you. The gentleman from louisiana is recognized for five minutes. Rep. Graves thank you. Ms. Macgregor, i would like to clarify some comments from up here, the contribution of federal lands to our overall Energy Production, in the oil and gas portfolio, its my understanding that we have seen a reduction in the i want to be clear, in the percentage of oil and gas that our federal lands are providing to the overall Domestic Energy production. Is that your understanding for example over the last several years . Ms. Macgregor specifically in , we did see a downtick in natural gas and Oil Production on federal lands. Rep. Graves looking at the memo for the committee between fy 2010 and 15 federal crude production from 36 to 21 of total production. Number two, again, i want to make sure im getting this right, making reference to the memo at the end of fy 2016, sew saw over 143 leases across the country. This is the lowest number of federal leases since 1985. Is that your understanding . Ms. Macgregor correct. Rep. Graves thank you. , changing gears a little bit. Could you comment or respond perhaps to comments ive heard in the past about folks saying that federal lands is something that all americans should enjoy , therefore states that host Energy Production on federal lands should not not benefit from the revenue sharing formula . Mr. Flynn i think states that are burdened with the production should absolutely be deriving benefits from it. And it should, in all honesty, while everyone should be part of the debate i think the people who are living closest to the activity should have the loudest voice in moving forward. And i think from an industry perspective, we wholeheartedly respect and work collaboratively with the communities we operate in. Rep. Graves so the communities that host it and those that are closest should have the biggest voice and should share in the revenues. Do you is that accurate . Ok. Two, the United States benefits i think to the tune of 10 because the 40 goes to the reclamation fund. Do you think thats an appropriate return for the federal government . Mr. Flynn its really not my place to determine that. Ill leave it up to you. Rep. Graves thats fine. Mr. Flynn we want to make sure we are doing our fair share to make sure youre getting a fair return. I dont want rep. Graves dr. Nelson, you care to comment on that same question . Dr. Nelson i think i share in the same sentiment. I guess the one thing that i would add is that in states that are heavily burdened with lands, plans, federal and i say burdened because just off to the Economic Opportunities are limited because of those lands that consideration needs to be given to how royalties are assigned to states that have other have more limited Economic Opportunities. Rep. Graves but you also have benefit from tourism and other things as a result of National Parks. Dr. Nelson correct. Rep. Graves and by the way, entrance fees from those National Parks as i understand goes back into the National Parks and reinvested in maintaining resources. , i think that mr. Flynn and dr. Nelson just made very convincing comments about the relationship between production and revenue sharing. Can you help me understand or distinguish between off shore production and onshore . Ms. Macgregor distinction . So, just applying mr. Flynns comment about proximity and hosting and the loudest voice. Should offshore states, should they be treated in a disparate manner . Ms. Macgregor i think i know where youre going with this. [laughter] rep. Graves pretty sure you recognized it about five minutes ago. Ms. Macgregor federal revenues are absolutely federal revenues are critical to our budget. And in so many different ways lend themselves to various initiatives throughout the government. I believe also with the land and Water Conservation fund, acquisition of federal lands as well so. Rep. Graves as derived offshore means other states are benefiting more from offshore production off the coast of louisiana than actually the state of louisiana. Ms. Macgregor i think the entire United States benefits from offshore Energy Production. Rep. Graves and other states disproportionately benefit from it. Ms. Macgregor i cant speak to that. Rep. Graves as a result of land and water ms. Macgregor tough choices were made in this budget. This is what a balanced budget looks like. But i am aware that revenue sharing is important to Coastal Restoration in a variety of activities in the state of louisiana and we committed to rep. Graves under our state consideration revenue sharing dollars are committed to the restoration of the coast and youre smiling because that red light is on. [laughter] ms. Macgregor in the commonwealth of virginia rep. Graves i have so much more to talk about but i want to thank you for your comments. I yield back. I thank the gentleman. He got back to where we thought he was going to go with that question. Woman from wyoming is our final witness. Cheney thank you. Id like to thank all of the witnesses for being here today. And in particular miss mcgregor, macgregor, i cant tell you sort of how refreshing it is to have somebody who is in the executive branch who has clearly got such a Firm Understanding of these issues and to hear, know that you have been out in casper and in carlsbad looking at the challenges were facing, thats very appreciated. We as you well know, have spent a large part of the last eight years and beyond dealing with the real disconnect between washington and the policies that were made here, and whats happening on the ground. So i wanted to ask if you could continue a little bit in terms of the question that mr. Soto asked then you were cut off. That is i appreciate hearing both from secretary zinke and you today about the steps being taken to deal with the backlog of apds, but could you talk about in terms of in the field offices as you look at the electronic permitting process, some of these internetbased solutions, how is that translating on the ground . What steps will also include perhaps moving people in wyoming in particular, i know we shifted folks. But we really appreciate the change in policy but have yet to see a real breaking of the backlog. Could you talk more specifically how thisthe ground, will affect the movement of the apds. Ms. Macgregor absolutely. Getting out there was so helpful to see what our folks and what the state is doing to keep wyoming, you know wyoming is an energy power house and we want to see it stay that way. But we recognize we need to work better with our state and local partners to make sure we are reducing time frames when it comes to the permitting back log and dealing with a variety of the different processes that we deal with that manage the lands that border your state and local communities. When it comes to staffing, i think, you know, that is the part of the recipe to dealing with some of this. Blm wide, 325 people working on permitting across all of the blm offices, but there are 90 vacancies. So what were doing in accordance with the secretarys priorities when it comes to energy Exploration Production on federal lands, were looking right now at our top five busiest offices and one of those is casper. Casper i think is perhaps close to number one. And were recruiting right now to fill vacancies that are needed to make sure we are getting staffing out to the front lines. Again, which is another one of secretary zinkes priorities. Were trying to hire out where we need the individuals to get through this workload. And you know, i find the workload to be inspiring because that means thats just good news for the people of wyoming and for our entire country. But we also recognize that permits, when folks talk about permits not being used they do expire after two years, and we do receive 9500 fee for every single permit that is filed. So were looking to make sure those resources stay where they are needed, and that we have mobility within field offices so that if were doing things online, maybe buffalo folks who might not be as busy can help folks in casper or you know, maybe grow that to more nationwide movement so folks dont have to fly in just to help fix backlogs and we can be more nimble to the variety of development that occurs in accordance with the economics and geology of a different area. Rep. Cheney thank you. And in terms of on a related issue, the planning process, and you know, i was very pleased that we were able to pass a repeal of planning 2. 0 and have the president sign it. Could you talk a little more about how that planning process is going to be focused on ensuring we get more local voices into the whole land use management process as well . Ms. Macgregor absolutely. And another priority of the secretary is restoring trust. Especially in the west, for state and local communities that we have to work with day in day out because they feel the brunt of the choices made in washington on lands in the west. You know, the planning 2. 0 process aimed to do a lot of things, but did reduce some of the time frames for those communities to have Public Comment. So i think from the getgo, were going to work with our state and local communities, get their feedback how we they clearly will have thoughts how we can improve our federal planning process. But were also asking our team to think broadly and think different, and come up with bold new ideas we can take and get help with other federal partners to make things happen more quickly. Im hoping that we can be successful here because frankly, having a planning process that takes five to seven years and in some cases there are examples of much more, that is the not workable for any one. We need to be better so we can get these uses up and have the land managed better. Rep. Cheney great. Thank you very much. I think the gentlewoman from wyoming and thank you for bringing up that there are plenty of vacancies to be filled. So a nudge and notice to our Senate Colleagues to get those actually confirmed and filled. I think the witnesses for their valuable testimony and the members for their questions. The members of the committee may have additional questions for the witnesses and well ask you to respond to those in writing. Under Committee Rule 30, members of the committee must submit witness questions within three Business Days following the hearing. The record will be held open for 10 days for these responses. If there is no further business. Without objection, the subcommittee stands adjourned. Thank you. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] [captions Copyright National cable satellite corp. 2017] washington journal live every day with news and policy issues that impact you. Coming up this morning, the Economic Policy institutes david cooper and barren derougen from George Masons Center discuss the pros and costs of raising the minimum wage. And the lack of security personnel at federal maximum security prisons. Live at 7 00 eastern this morning. Downthe discussion. Join the discussion. This week during the july 4th recess in prime time on cspan, tonight at 8 00. First of all, communism, socialism, and the social stice movement are all modeled on christianity. They look on the world as a that ace so although they would never use those words that way. Its a place of injustice. Tuesday at 8 00 p. M. Eastern. And whether Tech Companies should be required to disclose customer data. Some suggest that we ought to build a backdoor in order to allow Law Enforcement access to data. The problem with that is you cannot build a backdoor that works only for the u. S. Government good guys or other people with good motives. If you build it for them, the encryptions will be weakened for everyone. Arizona Supreme Court justice. The most important and enduring decision a president will ever make is who to appoint to the United States Supreme Court and to the federal judiciary. Hillary clinton talking about women in politics. Women are often the first to spot conflict on the horizon coming their way. And when their insight and information is ignored, it often leads to consequences hat might have been averted. Every citizens do not fully understand the complex forces that have increased, for example, their economic woes. Economic insecurities create conditions that are breeding grounds breeding grounds, for racial and eets nick tensions. This week. Story unfolds e hi daily. In 1979 cspan was created as a public service. Is brought to you today by your cable or satellite provider

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