Transcripts For CSPAN3 Hearing Focuses On Oil And Gas Development On Federal Lands 20170629

Now, i ask that there not be any type of instruction 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 oniio onshore fe 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 administration inherits 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 success and ensure a fair return to the American People. There are many factors that influence an operators decision to lease and develop hydro carbons. While some may point to low Commodity Prices, 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 uncertainty. The current permitting processes are fraught with uncertainty, duplication and delay. Designating lands for development can take years and parcels were often explicitly retracted from the auction. 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 leasing and permitting under the Previous Administration, we are confident the new administration will take the time to carefully examine and optimize the blms processes. In addition to increasing program funding, secretary zinky with that, i now recognize the Ranking Member for his statements. Thank you. 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. 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 concerns 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 zinky paid lip service to the idea of supporting all forms of energy to be in favor 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. Mr. Chairman, i just want to say in closing, i understand your desire that the title of this hearing would be focusing on onshore. 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. As you know, our outer Continental Shelf is really defined as submerged lands lying seaward of the coastline. There may be some questions that come up. I thank the gentleman for that clarification. Im going to get now to introducing our witnesses. Miss catherine mcgregor. Now im going to yield time to the gentleman from new mexico to introduce the first witness. 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 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. Appreciate you being here to testify today. I yield back. 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. The first four minutes its green, then it will turn yellow. Then when you see red, please summarize. Well recognize ms. Mcgregor for her testimony. Welcome back. Thank you. I have to say its very good to be back here today. I absolutely loved working here and with both majority and m 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, 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. Accounting for 7 of our nations on shore oil, 10 of our natural gas and 41 of our coal produced domestically. 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 growi ining domest Energy Production and sustaining jobs throughout our country. Access to responsible Energy Development on these lands beginnings with the planning and leasing process. Ten years ago the blm had nearly 45 million acres under lease. Today we are at 27 million acres. This is nearly 10 of all blm managed lands in the unite. In 2016 the blm designated this is one example of designations that limit how public lands may be used. Responsible Energy Production and conservation need not be mutually exclusive. Thats why its vitally important to secretary to strike the appropriate balance in on shore leasing that allows for job creation in rural america. This is about restoring balance. The department and the blm have been proactive in prioritizing responsible Energy Production on public lands. Order 3349 aims to remove duplicative burdens on Energy Production. Order 3352 will jump start alaskan Energy Production. These efforts have already shown to be effective. Under the secretarys leadership the blm has had more lease stales, 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 sale this is year. Im sure that all members of this committee are in close contact with their state and local leader who eers who do n hesitate to communicate their frustrations. It is the secretarys goal to restore trust. 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. 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. Thank you for the opportunity to testify today and i will be happy to answer questions. I now recognize mr. Flynn for his five minutes. Thank you. Thank you. 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 pierce for recognizing me. I want to recognize representative pierce as well who just had to step out of the room, but 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. 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. 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 fwol 1. 6 billion to the sta federal fund or budget. That equalled roughly 25. 8 of the budget last year. In the last ten 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 at trtractive in our state. 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 seen major acquisitions and purchases in new mexico totaling over 18 billion. 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 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 basin and the development in west texas compared to the development in new mexico. As of june 16th, 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. Overall, blm suffers from a lack of staffing, a poorly designed and cumbersome new system and systematic irregularities in the processing protocol. Our estimates are that approximately 1. 4 million of federal royalty and 831,000 state severance tax is deferred each day based on the backlog in new mexico. The 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. Thank you very much. Thank you, mr. Flynn. The chair now recognizes mr. Im a professor of law at the university of colorado law school. I began my written testimony by asking that we each kmicommit t engage in a meaning fu iningful. I want to make three points regarding oil and gas programs on federal lands. First, oil and Gas Production on federal lands remains strong despite a weak market and lackluster interest in new leases and development. Second, efforts to accelerate leasing and development under Current Marketing conditions are misguided. That they could do is lock up federal oil and Gas Resources even as they deny the public a fair return on these valuable assets. In this regard the committees focus really should be on improving and reforming our oil and revenue policies at the federal level which are much in need of reform. Finally, if were going to have oil and Gas Development on our public lands, it has to be preceded by appropriate environmental analysis and planning. In my judgment, it is entirely inappropriate to use our federal lands for industrial scale oil and Gas Development. So let me turn to the first question about oil and Gas Production. As i acknowledged in my written testimony, the number of federal leases, the amount of acreage under lease and the number of new leases issued have all declined in recent years. Heres the thing. Federal onshore Oil Production more than doubled between fiscal year 2008 and 2015. The number of federal producing leases has never been higher. If you look just at the year 2016, the amount of federal lands producing oil and gas was higher in only one year out of the last ten. Whats remarkable about these statistics is that its all happening at a time of weakening demand. Just a few figures here to support that claim. First of all, federal land under production amounts to less than 47 of the federal land that is under lease. In 2016, the industry did not even bid on twothirds of the leases offered by the blm. I should know in 2015 they bid on only 15 of the leases offered. Right now we have 7500 apds that have been approved and are not being drilled on. Thats the most we have ever had at the blm. In 2016 the blm issued 2,184 drilling permits, but industry drills on fewer than 39 of these permits. That contrasts with most other years when the number of drills drilled upon was in the 70 or 80 range. Whats going on here . That takes me to my second point which is Market Conditions. I just 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. On monday, west texas intermediate was at 42. 46 a barrel. That obviously has an impact. But theres another important point here which the committee needs to recognize. The major plays for oil and gas which have really driven development in recent years happen not to be found on federal land. There are exceptions. The Permian Basin is one of them. For the most part these plays are on private lands and other areas. If the government tries to sell these leases under current Market Conditions, were going to get low ball kinds of prices. Essentially were going to be giving away these valuable federal resources and that just doesnt make sense. What we ought to be doing is looking at leases arather than improving more apds. We need to reform our policy. We now charge just 2 an acre for properties that dont receive a bid. It encouraging speculation and that needs to be reformed. We have not reformed our royalty rates since 1920 when the men r mineral leasing act was passed. The state of texas charges 25 in royalties on oil, twice what the federal government charges. In my home state of colorado its 20 . On offshore lands its 18. 75 . If were going to use our public lands for oil and Gas Development, we really need to be smart about it. I dont oppose oil and Gas Development on our public lands. But for now at least, all of us rely to some extent on Oil Production, on Gas Production for power generation. But we need to recognize that we could accommodate these interests without doing damage to our public lands. If we could show the slides that i think are on the scheme mr. Flynn talked about the Permian Basin. This is a picture of the Permian Basin in texas. Id urge you to go. This kind of Development Goes on for miles and miles in every direction. Its not the kind of thing that i think we want for our public lands. This is private land. But on our public lands we ought to be doing appropriate planning, doing appropriate environmental analysis. If it takes more time, we owe that to the American People to make sure if were going to have development, we do it right. I dont oppose development of our public lands for some oil and Gas Development, but its different from our private lands. These are our multiple use lands and we need to make sure that we do better than weve often done on our public lands. We cant do this if were decompden denying the blm adequate resources and personnel. Thank you very much. I look forward to your questions in the discussion of these issues. The chair now recognizes dr. Nelson for five minutes. Welcome. Good morning. I serve as the Energy Advisor to the governor of utah. I want to say this morning i am going to be focusing primarily on our energy resources. 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. 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. 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 in 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. In utah our overall rate of unemployment as of may 2017 was 3. 2 . 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. 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. In utah, this leads often times to lengthy permitting schedules and especially when theyre compared to the permitting schedules for applications for permits to drill. 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 torks resol simple, 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. Remember, your testimony will be in full. I thank the panel for their testimony. Reminding the member that is the Committee Rule 3 d 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 least sale was held in the state of new mexico in 2016 as sales in lower interest areas of the state were cancelled. 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 . How does this affect the budget of the state of new mexico . Mr. Chairman, thank you for the question. The impact is profound from both an economic and a jobs perspective. Approximately onethird give or take a couple of Percentage Points of our budget is derived directly from severance taxes paid by the oil and gas industry. 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. Each rig on the texas side of the border means 50 to 100 high paying jobs are going to texas. 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. 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 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. 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 . I cant speak to the Previous Administrations decision on whether to hold lease sales or not hold lease sales. Isnt it statutorily required . 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. 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. Yesterday i believe the bureau of Ocean Energy Management announced that we rejected ten bids and 10 billion 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. Thank you. My time is short so i will acknowledge the Ranking Member for his time. Thank you. Ms. Mcgregor, 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. 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 counselored to 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, environmental, air and atmospheric Water Resources and archaeological values. Do you support that . Absolutely. I also support the area that speaks to managing and balancing multiple use of those lands. Thank you. 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 . Just to speak to that, i believe that the statement that anyone aside from a 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. So you do believe there will be times when you will overstay or protect those values to override the wishes of the 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. Thats what were 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. 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. 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. 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. 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 . Im sure thats true, but a backlog is still a backlog. 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 the decade, 7,500 drilling permits that companies have still not used, which is the most. So we have the most drilling permits and the backlog. That have not been used. Is that not true . Its correct that we have 7,950 approved but not drilled in this year. Thats also the most week had in this decade. I am not sure if its the most or not. I can get back to you on that. Back to the date, ill 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 or Ranking Member grahah will the 2016 or you can call me with that data, and or you can text me. So youre going to give me your number . Yes, i am. Id be more than happy to work with your office fulfilling that. I yield back. I recognize chairman mr. Bishop from utah. Would you call me if i gave you the number too . Sure. 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 second, because i am 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 . Chairman, its too difficult to provide a single answer. It really depends on the geology and 16 seconds to give me a couple of answers. I think it depends on what youre bidding on first and foremost. There are they would be considering the productive potential. Are you telling me there is a possibility the bids for lease would not have enough resources there to make it practical . Yes. Or that those lands would actually be so litigation prone that it would not be worth going for them . Yes. Absolutely. 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 have a vision of their heart. Ill let that go down there. Okay. Dr. Nelson, to you then. Weve been talking p 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 foos pay more money . I think the question can be answered pretty simply. First of all, what weve seen in terms of leaveses 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 cant 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. I hope thattens as 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 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 sudden 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 . Yes. And in my district. Yes. Infrastructure is critical and oftentimes must cross federallying iffed 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. Miss mcgregor, there are some native american tribe who is rely on energiment development. They dont have gaming opportunities. Southern uteses in colorado are one. There are examples in prior administrations they were prohibited from going to actually implementing the programs they want t tracking devices, the programs they had, which inhibited their ability to do that. 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. Its not just doi dealing with that as far as permitsing tepa 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 . 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 willing to discuss. So dr. Nelson, maybe back to you because i do 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 . 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. 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. I thank the floor recognizes. Mr. Flynn, were having a hard time hearing. Can you take your microphone and move it closer and speak in. Get closer to. Is that better. That is a little better. Thank you. I now recognize the gentle woman. Welcome to our wests. 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 or 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 mcgregor 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 . 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 permit, 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 . 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 renewablings 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 any 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 . 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 responsible to address the problem of Climate Change in the long term 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, what 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. 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. Surement id be more than happy to talk about that. And in speaking of afms 2 which is 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 were 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. 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 casp 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. Thank you. Now, at the end of fiscal year 2016, blm, 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 so. What will the Current Administration do to correct this . We are committing to making sure that we find you know, to be respectful of Ranking Member loewen thaul, 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. Thank you for being here today and thank you for your testimony. Mr. Chairman, 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 and you know 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. 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, miss mcgregor, are you recommending to get us from 257 back down to the average range of 190 to 220 . Thank you for your question. I know that there are few blm lands in florida but i know this is important issue to you. But 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 time. To be 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 . Well, 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 lets get to that. If there is reduction in leasing, is it a supply, demand or regulatory issue . I would say its primarily a demand issue. So americans in the world are reducing their demand on oil leading to less desire for leases . 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. Right now its taken 257 days so it looks like well have plenty of time to review them. Thank you so much. Thank the judge from virginia. 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 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. 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 sewerssh 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 is related to infrastructure to reduce flaring veepts 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. 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 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. Thank you. Miss mcgregor, 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. 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 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 apd but for rights of way and making sure we can get through those in a responsible time frame 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. Thank you. I field back. Thank you. The gentle woman from california. Thank you, mr. Chairman. 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. Mr. Skwalchy, they talked about this. Can you explain what that means and do you think its something we should strive for on our public lands . 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 we 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, and 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. 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 . 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 quay to do it. I do think we need to recognize 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. 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. Mr. Pierce. 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 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 you made a comment a second ago that the decrease in permitting, the decrease in lease sales 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 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 pierce, i think you know better than any one but just very bluntly it has a huge impact on our ability from a state to provide basic infrastructure needs. How much of the delays. Well, the delays i mentioned in mif 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. 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. Many people are saying in the agency that they need more staff. Can you address that question for new mexico. Sure. Representative pierce, i think briefly, first of all, previous study showed that a Pilot Program that had been enact add 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. 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 . 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 mcgregor you recently and whatever mr. Lambbert 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 mex 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 Economic Opportunity that is 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. Mr. Chairman, i extended. I yield back. The gentleman from virginia is progressed for his five minutes. Thank you, mr. Chairman. Miss mcgregor, 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 quoted saying when he heard of this news of the potential ombse combination quote i heard no indication of why were doing this, its just 7 years after this enormous oo disasters. 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. Thank you for that question. When it comes to the off shore 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 bomber which was itself split in 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. 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 herber sent a letter, asking the bureau not to sell certain oil and gas leases next to Zion National park. He said 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. So 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 . 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 prim massey 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. 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 . 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 70 , you go up to alaska 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. Part of that consideration is those lands were federally owned at the time utah was admitted as a state and alaska too. 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. Gentleman from colorado is recognized for five minutes. Thank you, mr. Chairman. Thank the pam for taking time to be here. Miss mcgregor 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 . Absolutely. 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 . Absolutely. So wed still have the responsible Energy Development making sure that were doing it in an environmentally responsible way. I was reading your testimony miss mcgregor, 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. Chairman has a bill for streamlining 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 . Not to my knowledge. So they are still multiple use even while we have the responsible Energy Development, be it traditional or nontraditional resources . 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. Maybe dr. Nelson, maybe you would like to speak to that as well in terms of lessening the impact. My friend from colorado, fellow quoxtian 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 . Yes. I would say the same technologies that really have led to the oil and natural gas revolution we have today significantly limit surface impacts, 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. I appreciate that. 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 mcgregor, 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 dupe pliktive of the rmps . 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 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 and were looking at that as well as many other issues. Great. And 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 dupe plik kative 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 recognize forward five minutes. Thank you. Miss mcgreg e 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 . Specifically in fiscal year 16 we did see a downtick in natural gas and Oil Production on federal lands. Looking at the memo for the committee between fy 2010 and 15 federal crude prodrux 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 ver 4, 143 leases across the country this is the lowest number of federal leases since 1985 s. That your understanding. Correct. Thank you. Mr. Flynn, changing gears a it wille 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 14u9d n s should not bene the revenue sharing formula. Mr. Chair, representative, i think states that are burdened with the production should absolutely be deriving benefits from it. And 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. 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 . Restating. Okay. Two, the United States benefits i think to the tune of 10 because the 40 goes to the reclamation fund. You think thats an appropriate return for the federal government . Mr. Chair, its really not my place to determine that. Ill leave it up to you. Thats fine. Oyr fair share to make sure youre getting a fair return but i dont want dr. Nelson, you care to comment on that same question . I think i share in the same sentiment as mr. Flynn. I guess the one thing that i would add is that in states that are heavily burdened with federal lands 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. But you also have benefit from tourism and other things as a result of National Parks. Correct. And by the way, entrance fee from those National Parks ai understand goes back into the National Parks and reinvested in maintaining resources. So miss mcgreg e can i ask you a question. 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 . 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 . I think i know where youre going with this. Pretty sure you recognized it about five minutes ago. Federal revenues are absolutely federal revenues are critical to our budget. And in so many different ways with lend themselves to various initiatives throughout the government. I believe also with the landnd a Water Conservation fund, acquisition of federal lands as well so. We as derived offshore means other states are benefiting more from offshore production off the coast of louisiana than actually the state of louisiana. I think the entire United States benefits from offshore Energy Production. And other states disproportionately benefit from it. Cant speak to that. As a result of land and water tough choices were made in this budget. This is what a balanced budget looks like but we were 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 under our state consideration revenue sharing dollars are committed to the restoration of the coast and youre smiling because that red light is on. In the commonwealth of virginia so much more to talk b. I want to thank you all for your comments. Yield back. Thank the gentleman. I like the tact that he got back to where we thought he was going to go with that question. The again tell woman for wyoming is our final witness. Thank you. Id like to thank all of the witnesses for being here today. And in particular miss mcgregor, 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 on the ground how this will affect the movement of the apds. 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. We recognize that we need to work better with our state and local partners to make sure that 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 cap 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. 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. Absolutely. And another priority of secretarys 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 gitgo 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 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. Great. Thank you very much. I thank the gentle woman from wyoming and thank you for bringing up miss mcgreg theyre theres plenty of vacantcies to be filled. So a nudge and notice to our Senate Colleagues to get those actually confirmed and filled. I thank the witness for their valuable testimony and the members for their questions. Members of the k34i9y may have dagsnal 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. Coming up this afternoon here on cspan 3, treasury secretary Sarah Sanders and Steve Mnuchin will be delivering a live press conference. And then President Trump and Vice President mike pence will mark energy week by speaking at the department of energy, well be there live starting at