The Government Accountability Office (“GAO”) conducted a review of certain aspects of the Bureau of Land Management’s (“BLM”) management of federal oil and gas resources.  Following this review, the GAO produced a report of its findings.  The report covers fiscal years 2007 to 2012 and examines, among other issues, the changes in BLM’s permitting workload and the actions BLM took to manage that workload.  Based on this review, GAO recommends that BLM should improve the completeness and accuracy of the data it collects on its processing of drilling permits.  The report notes that BLM acknowledged its permitting deficiencies and undertook to implement corrective measures that may help reduce the time needed to process permits.

The report criticizes BLM’s inability to process applications for permit to drill (“APD”) within the 30-day deadline required by the Energy Policy Act of 2005, as well as its inability to determine what causes this delay.  BLM tried to improve its APD review process in 2007 by issuing a new rule for oil and gas permitting and by implementing a pilot project to streamline permit processing (the “Federal Permit Streamlining Pilot Project”).  Nonetheless, BLM remains incapable of consistently processing APDs within the 30-day deadline, despite receiving only half as many applications in 2012 as it did in 2007.  According to the GAO, the extent of this problem is unquantifiable because BLM failed to accurately collect and record data regarding APD processing.  Based on a subset of useable data, the GAO concluded that BLM required an average of 229 days to approve APDs in fiscal year 2012.

This lack of data also means that the effectiveness of BLM’s pilot project remains uncertain.  To date, BLM has not analyzed whether the pilot project has been beneficial, or if it should be implemented nation-wide.  Preliminary numbers indicated that in the seven offices adopting the pilot project, BLM processed 10% more APDs in the first two years of the project, but that APD approval times increased by more than 40%.  Without more detailed data and an evaluation of the project by BLM, the GAO concluded that it could not assess whether the changes to the permitting program were working.

In the report, BLM acknowledged that it continues to face issues with APD processing, but indicated that beneficial changes were on the horizon.  For example, BLM intends to implement a new automated APD processing and tracking system by the end of 2013.  This system should help BLM process APDs faster and more efficiently while improving the quality of data tracked by the agency.  It will allow for online APD submission and prevent the submission of incomplete permits.  It will also allow applicants to track the progress of their permits and flag any delays, so that applicants can proactively resolve issues with the agency.  BLM noted that this system is used in the Carlsbad Field Office and has helped reduce processing times.

The GAO report may serve as a wake-up call to BLM, as it highlights the agency’s failure to comply with Congressional directives in the Energy Policy Act of 2005.  It may also motivate BLM to implement corrective measures to allow for uniformity in APD processing and eliminate the inconsistency in approval times among the various field offices.  If BLM can meaningfully improve this process, it will likely see an increased interest in federal oil and gas development.