The Trump Administrations approach. New mexico and utah officials review current land use application process and delays in permit approval. Without objection, so ordered. Under Committee Rule 4 f, any oral Opening Statement are limited to the chairman, ranking minority member and the vice chair. This will allow us to hear from our witnesses sooner and help members keep to their schedules. I ask unanimous consent that all other statements be made part of the hearing record if submitted by 5 00 p. M. Today. Without objection, so ordered. Today we will examine access to oil on federal land. Or subcommittee is holding a hearing to discuss offshore federal oil and Gas Development and we ask the members reserve all offshore questions for the next hearing. States are owned by all americans and the bureau of Land Management is obligated to responsively manage and develop these resources. On shore federal oil and gas accounts for 20 of americas production and is integral to our Nations Energy, independent and security. Nonfederal production out paces figures do in large part to the overwhelming Administrative Burden of the federal process. Not only has the new administration inherit add backlog of 3,000 drill permit applications but a burdensome regulatory scheme that discouraging 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 hey drydro carbons. While some may point to low Commodity Prices as a reason to withhold leasing and production, Market Conditions are no excuse for poor policies or for the federal government failing to uphold its statutory obligation. In fact, many operators avoid federal lands due to unquantity fiable risk and uncertainty. Although the mineral leasing act requires the blm to hold quarterly lease bills, this requirement has not been enforced for years. Further more, once an operator has successfully navigated the federal leasing scheme, the lease he must proceed through the application for a permit to drill or apd review process, which could set drilling back over a year. The uncertainty, relay and risk 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 under the Previous Administration, we are confidence that the new administration will take the time to carefully examine and optimize the bl ms process. Testified before us last week and shared some of the steps he is taking. In addition to increasing program funding, secretary zinke is increasing field office performance. We are grateful for the departments steps in the right direction and look forward to finding a practical solution to find a responsible developmental process. With that i now recognize the Ranking Member for his statement. 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. 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. Ill complete with that that 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 7,500 approved drilling permits that theyre not using and 26 million acres of public land under lease to be developed. Shows you from, what, i believe its the year 2008 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. Mr. Chairman, i just want to say in closing, i understand your desire you sent out a few days ago 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 shell is really defined as submerged lands lying seaward of the coastline. And mrs. Manager there may be some questions that come up. I thank the gentleman for that clarification. Im going to get now to introducing our witnesses. The first one, we see a familiar face, ms. Catherine mcgregor. Now im going to yield time to the gentleman from new mexico to introduce the first witness. Thank you, mr. Chairman. 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, professor of law, dr. Laura nelson. Let me remind the witnesses 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. If youll watch up front it is green. Then it will turn yellow. Then when you see red, please summarize. Well recognize ms. Mcgregor for her testimony. Welcome back. Thank you, chairman bishop, members of the subcommittee. I have to say its very good to be back here today. I absolutely loved working here and with both majority 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, office of surface mining, the reclamation and enforcement, 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 245 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. As well as approximately 18,000 mega watts 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 Domestic 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 8. 2 million acres. 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. Including by secretarial order. Order 3349 aims to remove duplicative burdens on Energy Production. Order 3352 will jump start alaskan Energy Production. And the National Petroleum reserve, helping increase throughput in the alas can pipeline. 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. Still promoting access does not come without its challenges. Im sure that all members of this committee are in close contact with their state and local leaders who do not hesitate to communicate their frustrations. It is the secretarys goal to restore trust. 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. 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 improoufl efficiencies without cutting corners to ensure these activities are done in a smart and environment tally responsible way. 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 billion to the states general fund or budget. That equalled roughly 25. 8 of the budget last year. The total budget was about 6. 2 billion. 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 attractive in our state. Given that the average wage 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 seen major acquisitions and purchases in new mexico totaling over 13 billion. The northern Delaware Basin has recently been the focal point for some of the most expensive acreage basis oil and gas 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. 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 permit 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 budget 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 exclusions to allow for expedited review and approval of permits. Thank you very much. Thank you, mr. Flynn. The chair now recognizes mr. Spillache for five minutes. Im a professor of law at the university of colorado law school. I want to just first note that i began my written testimony by asking that we each commit to engage in a meaningful way on the important issues that are the subject of this hearing. 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. Because what they could do is lockup 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 royalty 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 not by the way that in 2015 they bid on only 15 of the leases offered. Right now we have 7,500 apds that have been approved and are not being drilled on. Thats the most we have ever had at the blm. If you just look at 2016, the blm issues 2,184 drilling permits, but industry drills on fewer than 39 of these permits. By the way, 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. On the interest of the oil and gas industry. 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. So what happens is that 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 rather than improving more apds. We need to reform our policy. We now charge just 2 an acre for properties that dont receive a bid. 1. 50 dollar an acre in rental. It encouraging speculation and that needs to be reformed. We have not reformed our royalty rates since 1920 when the men mineral leasing act was passed. We need to increase those royalty rates to reflect those conditions. The state of texas charges 25 in royalties on oil, twice what the federal government charges. In my home state of colorado its 20 . As most of you know, 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. For those of you that have not been there, 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. And, by the way, we cant do this if were denying the blm adequate resources and personnel. Good management requires proper funding. 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. Thank you, chairman. And i also want to thank chairman bishop and the Ranking Member for the opportunity to be here today. I serve as the Energy Advisor to the governor of utah. Governor gary r. Herbert. 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 is 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. For example, 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, as i mentioned 70 federally managed, this leads oftentimes 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, to resolve the lent thi time 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 division of 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. Youre over your time, so, 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 lease 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. As i mentioned before, 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 thats drilled 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. 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 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. You said 50 . Its 48 since the budget. Severely reduced. 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 . Thank you for the question, sir. 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 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. 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 Counselor to through the secretary is quoted and then the Energy Counselor today to the secretaries 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 statement . Absolutely, and i also support the area that also speaks to managing and balancing multiple use of those lands. 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 . 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 that you so you do believe times that you will overstate or protect those values to override the wishes of the market . Mr. Lowenthal, i absolutely do. I know there are areas that are going to be more treasured and special than others. But i think we can strike that appropriate balance. I think thats what were trying to find on this. Absolutely. Because we have real concerns that the policy has moved us away from that balance and not toward that balance. I understand your concerns, and i think the entire planning process done through rnps at the bureau of Land Management will ensure that we manage well and that we find that balance. Well, 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 if seems like taking care of this backlog 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 do, and i think some of those issues have been raised. But we dont need to tell people out there that 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 . Im sure thats true, but a backlog is still a backlog, and taking care of thank you for stating that it is true. And 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 smallest backlog that have not been used. Is that not true . Its correct that we have 7,950 apds approved but not yet drilled in this year. And that is also the most weve had in this decade . I am not sure if its the most or not. I can get back to you on that. Ranking member grijalva 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 hell simply call us with the information. Im asking you will you please ask the secretary to either call me or Ranking Member grijalva with the 2016 data, or you can call me with that data, or you can text me. So youre going to give me your number . Yes, i am. I would be more than happy to work with your office on fulfilling that data request. Thank you, and i yield back. Thank the gentleman. I now recognize the chairman of the full committee, 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 actually add the information to it, it would be nice. So let me ask mr. Flynn and dr. Nelson just for a second because there are some questions. I mean if 39 of the leases that are out there, the bids are not being taken, why would a company not bid on something an administration, either this one or a previous one, would actually put out for bid . Why would they not go for that very quickly . Chairman gosar, chairman bishop, its too difficult to provide a single answer. It would really depend on the geology and youve got 16 seconds to give me a couple of answers. I think it depends on what youre bidding on first and foremost. So they would be considering the productive potential. Are you telling me that there is a possibility that bids for lease would not have enough resources there to make it practical . Yes, mr. Or those lands would be so litigationprone that it wot be actually worth going for them . Yes, absolutely. That may be one of the reasons why would actually it be possible for any administration pa mr. Chair you cant answer that. You have a vision of their heart. Ill let that go down there. Dr. Nelson, let me go to you, then. Weve been talking about how cheap the royalties are on federal lands. Why in the hell would a company not then go to the federal lands just to pay those cheaper royalty rates . Why would they go to state or private land to pay more money . I think the 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 their resource play. If they cant block up a resource play, then theyre simply not going to bid irrespective of what the royalty requirements are. So thank you for the question. I hope that answers it. The only reason somebody would actually bid on federal lands is if they can make money. And the lodnger it takes to permit, 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 can actually guarantee youre going to be in production, and the permitting process goes further faster, the people would be willing to pay more simply to do that. Dr. Nelson, are there other examples of how land can be stopped from production . For example, would there be projects that could be established, shown that they are worthy, but then 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 that power to make the entire project worthless . Would that actually ever happen . Yes. And in my district . Yes. Infrastructure is critical and oftentimes must cross federally managed lands. And so it does sometimes iran hibi inhibit the ability to develop a project, the need to secure leasing for the infrastructure. Merchandise s. Mcgregor, sou in colorado, were there examples in prior administrations where they were prohibited from actually implementing the programs they want, the tracking devices, the programs that they had, which inhibited their ability to do that . I think there are several examples where energyproducing tribes did reach out and issue Public Comment on some of their concerns for responsible production on their lands. And its not just doi that was dealing with that as far as permitting. Sometimes the epa got involved. Is doi considering reforms that would delegate permitting process and Regulatory Authority of states . Its something i would 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 i can come back to you because i do know there was a bill out there 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 permit something. We believe that it would, and we would like to move forward with assigning that primacy for approval of applications for permits to drill to our Utah Division of oil, gas, and mining and also to other states that have proven the capability. I was unfair. I asked you that question with 30 seconds remaining. Thats my rule that i violated. Thank you for your answers. Thank you for being here and spending the time and talking about this. This is a significant issue. I yield what i dont have. Before i recognize the gentle woman from massachusetts, were flynn, were having a hard time hearing from you. Can you take your microphone and move it a little bit closer to you. Is that better . That is a little bit better. Thank you. I now recognize the gentle woman from massachusetts, ms. Tsongas. While the oil and gas industry wrestles with changing Market Conditions that you all have testified to, 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 significant milestone this past march when over 10 of all electricity came from wind and solar. In many individual states, the percentage of electricity generated 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 utilityscale 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 federal taxpayers and local communities. Ms. Mcgregor, 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. 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. So 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 already 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 that there will be permitting and 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. So youre abiding by the Obama Administration goals, is that correct . We will ensure that Renewable Energy is permitted in an appropriate and smart time frame. And 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 that 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 of a little bit of a hole there to restore that balance. As the Trump Administration has touted its all of the above Energy Strategy, but renewables are frequently omitted. I think even though youre looking to see through the obama permits, youre not aggressively looking for additional ones. I do think a responsible Energy Production does call for a more thought through plan as to how to maintain some balance given the extraordinary Job Opportunities that weve certainly seen in massachusetts and that im sure present a real opportunity across this country. Professor squallice, in your experience, are fossil fuels given preferential treatment in form in terms of development on public lands. Bush yopush your button, ple. Sorry about that. It varies from administration to administration. What i would say about that more broadly is that the United States has a responsibility 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 the 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 that weve seen already with the coal industry and that were likely to see Going Forward with oil and gas. As i said the gentlemans time is expired. Thank you. I thank the gentleman. I now acknowledge the gentleman from colorado for his five minutes. Thank you, mr. Chairman. Ms. Mcgregor, i have a couple of questions for you, but when youre on this side of dais, 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 you said in your testimony the blm is adding features to enhance the new electronic apd processing system, the Automated Fluid Minerals Support System and plans to demission parts of the prior apd Processing Systems to matter match the blm resources to permit activities. That was what you said. So using internetbased bidding and enhancing the electronic processing of apds is exactly what this subcommittee has been pushing the blm to do for a long time as you know. Could you tell us just a little bit more about these efforts . Sure, id be more than happy to talk about that. And speaking of the more enhanced internetbased program that were talking about when it comes to filing apds, i do 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 in eliminating hopefully a lot of discrepancies that we see when industry files their permits. Right now, the blm actually has a permitting time frame of 257 days, and in my testimony i said that we were trying to get to 90 days. And by statute, we recognize were supposed to be at 30 days. But we think that utilizing that internetbased means and harnessing that, well be able to find ways, you know, our staff compares it to turbo tax, but allowing folks to fill in the data and make sure that data doesnt get filed until it is, you know, 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 workload our folks on the front lines, in the field, are facing on a daily basis, especially in areas like casper, wyoming, and carlsbad, new mexico. When it comes to internetbased leasing, thats something the congress allowed, and we are moving to that model. Our folks internally are noticing that through onlinebased 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. Okay. Thank you. Now, at the end of fiscal year 2016, the blm oversaw a little more than 40,000 leases across the country. Now, this 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 thats necessary, the blm has 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 lowenthal, were going to find the appropriate areas to conduct lease sales, and we will conduct those lease sales. And were aiming to be doing quarterly lease sales. I think 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 online that initially produced 4,200 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. 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 bank. I thank the gentleman. The gentleman from florida is recognized for his five minutes. Thank you, chairman. I appreciate the discussion today. Obviously we need to make sure were not focusing on 20th century jobs but 21st century jobs. You know, in our state, we have avoided trying to have just an oil and gas economy. I realize theres a big push among a lot of states who are addicted to oil and gas jobs because they havent diversified their economy like florida and a lot of other states. So theres a big pressure to try to maximize this as much as possible. But we know we still have gas and oil that well need for homes and cars and for goods, so obviously for the near future, well need to keep up the demand. But if we look to the future, we need to make sure that were addressing Climate Change, that were pushing Renewable Energy, that were making sure that were conserving our parks and conserving our Natural Resources and protecting our coastline. In florida, its much more about tourism and agriculture than it is about oil and gas. Thats been something thats hurt our economy, particularly with the disastrous b. P. Oil spill in the gulf that wrecked the western part of the state for a yearplus, and were still getting reimbursed for that. But i wanted folks on the issues that have been 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. Mcgregor, are you recommending to get us from 257 or 250something that you mentioned back down to that average range of 190 to 220 . Thank you for your question, and i know that there are very few blm lands in florida, but i know this is an important issue to you. But what were doing is prioritizing, again, areas where there is 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 frame. Just to be clear, theres efficiencies that will be forthcoming to us, but there are n none today. Dr. Squallice. Is this 10 of land thats really even feasible for leases, or is this something we dont really need to be pursuing . Let me answer that in a little bit different way, congressman. The concern is that when youre deciding whether you want to lease oil and gas or any other resource on our public lands, you go through a Land Use Planning process. And the Land Use Planning processes is what has made so much of the land available for leasing. So theres that initial judgment that has to be made. But then the way that the leasing actually occurs is primarily from nominations from industry. Its industry that decides what lands they want put up for leasing, and then they come in and bid on them. That process, of course, has not worked very row lubustly in rec times because there hasnt been that much interest frankly. Lets get to that. So if theres a reduction in leasing, is it a superior lply, or regulatory issue . I would say its primarily a demand issue. So americans in the world are reducing their demand on oil, and that is leading to less desire for leases . Yes. I want to emphasize one important point about the regulatory issue. Theres been a lot of discussion today. Regulations and the ways in which government regulation might limit development. As 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 fullfield development of oil and Gas Resources on our public lands. That kind of development can be devastating, and its happened a lot on our private lands. But i think it is 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 the resources that weve talked about. Right now its taking 257 days, so it looks like well have plenty of time to review them. Thank you the gentleman. The gentleman from virginia is recognized for his five minutes. Thank you, mr. Chairman. Id like to thank our witnesses for joining us today. Mr. Flynn and dr. Nelson, 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. I want to get more detail on not only how does that affect the state but local economies. 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 that 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 and dr. Nelsons perspective on it from your state viewpoint. Let me give you two quick answers. One that would not really go into the economic, but from an Economic Perspective really it just boils down to Infrastructure Projects. From a local development perspective, roads and sewers are the bread and butter of city and council, local government officials. Theyre really 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, for Drinking Water systems, period. The second issue i would point out really from weve already talked about the economic issues, but if we talk about the delays at blm in 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 to reducing emissions from venting and flaring is related to infrastructure, to reduce flaring events. So rightofway approvals not being processed actually contributes to the problem that we see when it comes to Greenhouse 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 so much for the question. I guess i understand and agree with the things that mr. Flynn has said, and ill just add that in utah, we have 29 counties and about 23 to 24 of those counties are rural counties. This is where the preponderance of federally managed lands are. To the extent that access to development of those lands 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 that 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 developments. So basically youre creating a conundrum when you limit access to those resources for those communities that are dependent on that initial development. Very good. Thank you. Ms. Mcgregor, ill go to you. Youve 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 that 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 federal oil and natural Gas Development on their lands. The good news for them is thats a priority of this administration very clearly from the top down, starting with the white house. So we are allocating our 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 also for rightsofway, 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 focuses have already touched upon. Very good. Thank you, mr. Chairman. I yield back. Thank the gentleman. The gentle woman from california is recognized. Thank you, mr. Chairman. Ive 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 theyre on land or offshore. I was very disturbed to hear that the president wanted to open up the coastlines again to drilling. And i think today weve heard, i would say, an assault on our federal lands. Sometimes i take a look at that 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. Squallice did i say that right . Theyve talked a lot 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 any of us should be looking at dominance. We ought to be looking at being energy smart, and energy smasrt is what weve been talking about today in all of the above strategy but one that recognizes the perils of Climate Change and the risks we face if we continue to develop fossil fuels at a pace that is simply not sustainable given the challenges of Climate Change that weve talked about. So i think that 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 that we have . So as i mentioned in my original testimony, im not opposed to oil and Gas Development on public lands, but its fundamentally different from oil and Gas Development on private lands because these are our public lands. And if were going to have it, we need to have appropriate planning to make sure that were doing it responsibly. You know, with all the great technologies that we have right now, we can do horizontal drilling in ways that allows multiple wells to be put on a single pad and minimize the footprint on the public land. But if we dont do sufficient advance planning and if we dont do the kinds of environment analyses 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 theres 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. Thank you. Im proud to be from california, where we have been leading the charge in moving toward Renewable Energies and investing and knowing that there is great Economic Development in that as opposed to the fossil fuel industry. Thank you. I yield back. The gentleman from new mexico, mr. Pierce, is recognized for his five minutes. Thank you, mr. Chairman. Appreciate the conversation that were having today. Thanks to each one of our panelists. So, mr. Squillace, 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 that its inappropriate. You feel like its sort of a giveaway . Why is that section there . So youre asking about the bonus bids and the no, the 2 an acre, if they dont sell a lease. Right. Then its available for 2 an acre. Right. Is that sort of a giveaway to oil and gas in your opinion . So if you look at the revenues that come in from thats not what im asking. Im asking on the 2, is that a giveaway to oil and gas . I think it is, yes. So its value thats 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 giveaway. You think so it might not be as big a giveaway because its going to require tremendous investment downstream to actually do something with that lease, that what you feel like is a giveaway might not be as much a giveaway. And if it were, i suspect people, may 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. You have a lot better chance of payoff on this rather than a lottery ticket. You had made a comment just 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 that 2016 was the highest use of gasoline in our record. So it doesnt sound like a demand issue. It sounds like we have drilled enough, that were producing enough oil, that the price of gasoline is coming down even though the use is going up. So i think that maybe your insertion into the record that it was a demand issue should be rethought at some point. Now, new mexico has about 40 , somewhere 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 blm apd delays that were seeing in the state. Ive worked very much with blm on those, but from the business perspective. Representative pearce, i think you know better than anyone, but just, you know, 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 my testimony, we believe are about 1. 5 million in lost federal royalty each day. And approximately 800,000 deferred in so just the interest ruprupt lease sale that stopped 70 million from coming into the state because of a protest, it was eventually thrown out. But that 70 million was 10 of the shortfall. 10 of the shortfall for the state of new mexico. Now, many people are saying in the agency that they just need more staff. Can you address that question for new mexico . Sure. Representative pearce, you know, i think briefly, first of all, a previous study showed that a Pilot Program that had been enacted a few years ago to provide federal permit streamlining Pilot Project, create additional funding, and that allowed 140 additional Staff Members to be added for seven pilot offices, including two offices in new mexico, farmington and carlsbad. The number of days it took to process the apds increased, so they got less efficient by 40 . The same people working in the same agency took much longer, and my study showed it took about double. So, ms. Mcgregor, i know you recently and what mr. Lambert from colorado said about your performance, it seemed to go well, so im going to identify with that also. But thanks for visiting our state. I look forward to working with you because these 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 they cant get the apds permitted. So people just the companies, they got the option to drill there or here, and i can see the effect of the permitting delays. So its not quite a level playing field. People just use the best economic opportunity, that is, well go drill on private land instead of trying to wrestle around with the government, and that hurts states like new mexico, and it hurts the federal government, and it hurts our job base in new mexico. So, mr. Chairman, ive extended pass my time. Yield back. Thank the gentleman. The gentleman from virginia recognized for his five minutes. Thank you, mr. Chairman, very much. Ms. Mcgregor, ive seen reports that the interior department is considering recombining the bureau of Ocean Energy Management with the bureau of safety and Environmental Enforcement. You know, the reason they exist is because of the deepwater horizon tragedy, 2010. The agency that existed at that time was the Minerals Management service, and when that agency wasnt mired in scandal, it was dealing with a sharply conflicting mission, both promoting and regulating offshore drilling. So the creation of a dedicated offshore safety regulator separate from a Leasing Agency was one of the key recommendations of the president ial oil spill commission. Senator bob graham, who is one of the cochairs of the commission, was quoted as saying when he heard this news of the potential agency combination, quote, ive heard no indication of why were doing this. Its seven years after this enormous disaster, and this was one of the key steps in mitigating the chances of repetition. I believe it nt can be to address problems with permitting. You just look at the first five months of this year, bsee has approved 324 permits with only 20 permits pending. So sounds like firing on all cylinders. Whats the evidence that you have that shows combining the agencies would be in the publics interest . Sir, 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 office of Natural Resources revenue, known as onrr, and then bomr, which was itself split into two separate agencies. As we look at reorganization broadly within the department, the discussion on splitting the agencies and whether or not they should be recombined is still ongoing and internal, but i here your comments and am more than happy to take those back with me today. I know secretary zinke when he was here last week talked about remember the reason they were split in the first place. You dont have the fox guarding the hen house. Utah governor gary herbert sent a letter to ed robertson, asking the bureau not to sell leases net to zion park. Visitors come from alound the world to see the lush landscape at Zion National park and the preservation of this experience is important to the surrounding communities. So, dr. Nelson, do you believe that other local communities and economies and communities in utah that similarly depend on recreation and tourism should have a say on 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 in 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 that 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 overall management and multiuse of our federal lands, but just to provide for that more efficient local assessment for these permitting processes. Well, i hardly agree with you on the need for local input and local engagement. How do you balance the rights of americans who live across the country, the other 49 states, who own that land and vfr 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 lands is different across the country. Utah is 70 . You go up to alaska where its even higher. 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. And part of that taking into consideration is those lands were federally owned at the time utah was admitted as a state and alaska too. Thank you, mr. Chairman. I yield back. I just want to answer the gentlemans question that its also multiple use, and that was one of the dictations on behalf of having public lands that are very different than east of the mississippi. Gentleman from colorado is recognized for his five minutes. Thank you, mr. Chairman. Thank the panel for taking time to be able to be here. Ms. Mcgregor, id like maybe you to be able to speak a little bit to dr. Nelsons discussion of maybe having some of the permitting going over to the states. Right now when the department of interior, blm, when you issue a permit, do all environmental requirements have to be complied with if theres a choice to be able to move forward with drilling . Absolutely. So, ms. 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 sensitive way. You know, i think i was interested when i was reading your testimony, ms. Mcgregor, talking about some of the multiple use. I have a bill planning for Americas Energy future act, which enumerates all of the above literally in the bill. Chairman gosar 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, as i believe you noted, some of the nontraditional sources being developed on the public lands as well. But i do find it interesting, listening to some of the comments from our colleagues, the Ranking Member is 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 that nobody can hike, hunt, fish on those lands . Not to my knowledge. So theyre still multiple use even while we have responsible Energy Development via traditional or nontraditional resources . Yes, there is, sir. And i think some of my colleagues sitting here today or other witnesses can speak more to the technologies that are available from multiwell pads to do extended reach drilling and minimize impacts to surface acreage. And maybe dr. Nelson, maybe youd like to be able to speak to that as well in terms of lessening the impact. My friend from colorado, fellow coloradan, was 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 that we have today significantly limit surface impacts. In fact, utah is currently looking at how it applies rules for horizontal drilling of course to assure we have all of those same virenvironmental standards in place. Were seeing fewer drilling rigs required and fewer pads being developed for drilling as a result of the advent of these technologies. And i appreciate that. Hi an opportunity i had an oe in colorado, and they said we have a lease up there. I said when are you planning on drilling . They said, were already producing, but it was from one well pad. No Surface Development was going on, but still being able to responsibly develop that resource. Ms. Mcgregor, maybe on a little different topic here, its going to the mlps, Master Leasing Programs. Essentially thats viewed as a narrow rnp intended to be able to address some of the specific land use conflicts prior to leasing and drilling. Would you maybe describe a little bit for us in what ways are the mlps duplicative of the rmps. What i can sa when i can say sir is in the wake of the 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 five to seven 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 i was a little encouraged because that is one thing that we have heard out of a number of our constituents in terms of some of the different time frames. We have duplicative regulations, mr. Chairman, that i believe your bill that im cosponsoring, to be able to streamline those regulations, look at the duplicative overlap, and to be able to do it in a responsible way. I appreciate all of you taking the time to be able to be here. I yield back. The gentleman from louisiana is recognized for five minutes. Thank you, mr. Chairman. Ms. Mcgregor, id like to clarify comments made earlier from the dais up here. The contribution of federal lands to our overall Energy Production, particularly in the oil and gas portfolio, its my understanding that we have seen a reduction and i want to be clear in what im saying in the percentage of oil and gas that our federal lands are providing to the overrule 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 both natural gas and Oil Production on federal lands. I think looking at the memo here for the committee between fy 2010 and fy 2015, federal crude production fell from 36 of total production to 21 of total production. Number two, again, just want to make sure im getting this right. Im making reference to the memo. At the end of the fy 2016, the blm oversaw a total of 40,143 leases across the country. This is the lowest number of federal leases since fy 1985. Is that your understanding . That is correct. Thank you. Mr. Flynn, 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 benefit from the mineral leasing act, revenuesharing 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 moving forward. And i think from an industry perspective, we wholeheartedly respect and work collaboratively with the communities that 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 . Is that accurate . Yes. Okay. Number two, the United States benefits to the tune of approximately 10 under the mineral leasing act because the 40 that goes to the reclamation fund. Do you think thats an appropriate return on investment for the federal government . Mr. Chair, its really not my place to determine that. Ill leave it up to you to figure that out. We want to do our fair sure to make sure youre getting a return on your visit, but i dont want to dr. Nelson, do you care to comment on that same question . I think i share 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 often the Economic Opportunities are limited because of those lands that consideration needs to be given to how royalties are assigned to states that have more limited Economic Opportunities. But you also have benefited from tourism and other things as a result of National Parks and other federal facilities . Right. Yes. And by the way, the entrance fees for those National Parks, as i understand, goes right back into those National Parks and reinvested in maintaining those Natural Resources. So, ms. Mcgregor, 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 revenuesharing. Can you help me understand or distinguish between offshore production and onshore . The distinction between well, just applying mr. Flynns comment about proximity and hosting and the loudest voice, should offshore states i mean should they be treated in a disparate manner . Congressman graves, i think i know where youre going with this. Im pretty sure you recognized it about five minutes ago, but go ahead. Federal revenues are absolutely federal revenues from oil and natural Gas Development are absolutely 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, the acquisition of federal lands as well. So which is derived from offshore Energy Production, which means other states are benefiting more than actually the state of louisiana. I think the entire United States benefits from offshore Energy Production. And other states disproportionately benefit from it. I cant speak to that. But i mean tough choices were made in this budget. This is what a balanced budget looks like. But i am aware that revenuesharing is really important to coastal restoration, a variety of activities in the state of louisiana, and we are committed to under our states constitution, any revenue sharing dollars are committed to the coast. I have so much i want to talk about. I want to thank you all for your comments. I yield back. Thank the gentleman. I like the tack that he eventually got back to where we thought he was going to go with that question. The jgentle woman from wyoming s our final witness. Thank you, mr. Chairman. Id like to thank all the witnesses for being here today. In particular, ms. Mcgregor, i wanted to thank you. 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 know that youve been out in casper and carlsbad looking at the challenges were facing, thats very appreciated. You know, we, as you well know, have spent a large part of the last eight years and even beyond dealing with a 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, but then you were cut off. And that is i appreciate hearing both from secretary zinke and from you today about the steps that are being taken to deal with the backlog of apds. But could you talk about in terms of in the field offices, as youre looking 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 weve shifted folks from our Buffalo Office to the casper office. But we really appreciate the change in policy, but have yet to see a real, you know, breaking of the backlog. So could you talk a little bit more specifically about on the ground how this will affect the movement of the apds. Absolutely. And 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 powerhouse, and we want to see it stay that way. But 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 backlog and dealing with a variety of the different processes 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 a part of the recipe to dealing with some of this. Blmwide, we have 325 people working on permitting across all blm offices, but there are currently 90 vacancies. What were doing in accordance with the secretarys priorities when it comes to Energy Exploration and 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 that 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, you know, 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 a 9,500 fee for every single permit that is is filed. For were looking to make sure those resources stay where theyre needed. And that we have some mobility within field offices so that you know if were doing things online, maybe buffalo folks who might not be as busy, can help folks in casper or we could maybe grow that to a 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 related issue, the planning process. And you know, i was, i was very pleased that we were able to pass the repeal and planning 2. 0 and have the president sign it could you talk a little bit more about how that planning process is going to be focused on insuring we get more local voices into the whole landuse management process as well . Absolutely. 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 actually feel the brunt of the choices made in washington on lands out in the west. You know, the planning 2. 0 process, aimed to do a lot of things. But did reduce some of the timeframes 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 on how we can, they clearly will have thoughts on how we can improve our federal planning process. Were asking our team to think broadly and think different and come up with bold new ideas that we can take and get help with other federal partners to make things happen a little bit more quickly. Im hoping we can be successful. Because frankly having a planning process that takes five to seven years and in some cases there are examples of, thats not a workable solution for anyone. We need to be better at working with these communities so we can get these uses up and have the land managed better. Great, thank you very much. I thank the gentlewoman from wyoming and thank you for bringing up, ms. Mcgregor, that theres plenty of vacancies that need to be filled. A nudge and notice to our Senate Colleagues to get those positions confirmed and filled. I thank the witnesses for their valuable testimony and the members for their questions. The members of the kmity may have additional questions for the witnesses and we will ask you to respond to those in right writing. Under Committee Rule 3. 0, members of the committee must submit witness questions within three Business Days following the hearing and the hearing rorld will be held open for ten days for these responses. If theres no further business, without objection the subcommittee stands adjourned, thank you. Tonight at 8 00 p. M. , Harvard University socialology professor and author William Julius wilson discusses Race Relations in america. Heres a preview. In order to keep things in proper perspective when talking about the relative gains of more privileged blacks, it is important not to overlook a continuing interracial disparities. For example, a report for center for economic and policy Research Reveals that before the great recession, there was only a 1. 4 percentagepoint difference, unemployment gap between recent black and White College graduates, aged 22 to 27. However in 2013, shortly after the economic downturn, the gap had surged to a 7. 5 percentagepoint difference. Now, race is obviously a factor at play here. Because historically the periods during and immediately after downturns have adversely impacted blacks, more than whites. Well have more from William Julius wilson on this and the effects of Donald Trumps candidacy and presidency on Race Relations from Stanford University tonight at 8 00 p. M. Eastern on cspan. Cspan where history unfolds daily. In 1979, cspan was created as a Public Service by americas Cable Television companies. And is brought to you today by your cable or satellite provider. Now former acting attorney general sally yates, who was fired by President Trump in the first days of his administration on the justice departments russia investigation and her brief tenure in the Trump Administration. This is from last weeks aspen ideas festival. Earlier today she tweeted potussne