Washington – The energy bill signed by President Bush on Monday won’t immediately speed up gas drilling in the Rocky Mountain West.
It just can’t go any faster right now.
Despite complaints that the Bureau of Land Management takes too long to rule on drilling permits on public lands, the agency has been approving permits faster than industry can drill wells.
The BLM approved more than 6,000 wells last year on public lands. But producers drilled fewer than 4,000.
“I don’t think it’s going to increase production,” Pete Morton, an economist with the Wilderness Society, said of the energy bill. “They have more permits than they have drilling rigs or labor.”
As he signed the bill Monday at a ceremony in Albuquerque, President Bush touted the “practical reforms” the bill makes to the federal permitting process for drilling wells on public lands. He said it will “encourage new exploration in environmentally sensitive ways.”
Bush administration officials acknowledge the drilling and labor shortage but say there’s still good reason to eliminate delays in the permitting process.
“Those are issues we cannot correct,” Deputy Energy Secretary Clay Sell said. “But just because government can’t solve a problem doesn’t mean we shouldn’t work on the ones we can. Improving the way permits are awarded is important.”
The 1,700-page bill also includes a host of other regulatory changes and incentives in nearly all fields of energy, from renewable energy to nuclear power.
The bill extends daylight-saving time, beginning in 2007, by starting it three weeks earlier and ending it a week later. It accelerates oil-shale development, encourages conservation and requires increased use of ethanol, among other provisions.
It also grants nearly $15 billion in tax breaks, much of it to encourage production.
“The bill I sign today is a critical first step,” Bush said in the ceremony at Sandia National Laboratory. “It’s a first step toward a more affordable and reliable energy future for the American citizens.”
But supporters and critics agree that it will not lower gasoline prices. And it won’t increase the amount of natural gas produced in the Rocky Mountain West.
That’s being stifled by a shortage of drilling rigs and workers to run them.
There are about 80 drilling rigs operating in Colorado right now, said Brian Macke, director of the Colorado Oil and Gas Conservation Commission. The commission expects to approve a record 3,900 wells in Colorado this year, Macke said, but companies often have to wait several months for a free rig to get them drilled.
But he expects that rig manufacturers will soon catch up with drillers’ demand.
Two rigs imported from China are to be put into operation in September and October. More are to follow from China over the next several years.
Also, the first of 20 rigs manufactured by Oklahoma and Texas companies will be delivered in November.
Morton questions whether BLM will be able to keep up with the surge in permits. He said the number of permits has doubled since 1992, and shot up 42 percent between 2003 and 2004.
“That’s a pretty dramatic increase in production without any streamlining,” Morton said.
Congressional investigators reported last month that BLM offices around the West have been so busy processing permits for companies that they haven’t been able to keep up with environmental enforcement.
At the center of efforts to speed decisions on oil and gas permits on public land is a “pilot project” intended to streamline the process. Regulators from the different environmental agencies will be dispatched to eight Western BLM offices, including Buffalo, Wyo., and Glenwood Springs.
The bill sets up a new series of deadlines that the BLM will have to meet, starting with telling companies within 10 days whether their drilling applications are complete.
Provisions in the bill encouraging construction of nuclear plants could further energize uranium mining in Colorado. A looming shortage of uranium has sparked a flurry of permits in the Uravan Mineral Belt, a swath of western Colorado desert that holds a unique combination of the steel-hardener vanadium mingled with uranium.
Staff writer Mike Soraghan can be reached at 202-662-8730 or msoraghan@denverpost.com.
