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Bureau of Land Management Comments

Bureau of Land Management
Administrative Record, Room 401LS
1849 C Street, NW
Washington, DC 20240
Email: WoComment@wo.blm.gov

Regulation Identifier No. AC94
RE: 43 CFR Part 3100 et al.

Onshore Oil and Gas Leasing and Operations, Proposed Rule

Dear Sir/Madam:

The Independent Petroleum Association of America (IPAA) appreciates the opportunity to submit comments with regard to the Bureau of Land Management’s (BLM) plain English rewrite of its oil and gas regulations, published in the Federal Register December 3, 1998. The IPAA is a national oil and gas trade association representing over 8,000 of America’s oil and gas producers.

The IPAA and its membership worked collaboratively with the Public Lands Cooperating Associations Forum (PLCAF) in the development of its comments. IPAA, and its 8,000 members, fully endorse and incorporate by reference the comments submitted by the PLCAF. We sincerely hope that the Bureau will acknowledge for the record that the comments submitted by the PLCAF represent comments from not just a number of trade associations, but more importantly, represent the comments of thousands of individual oil and gas producers.

The past year has been devastating for America’s producers. With record layoffs and shut-in wells, over $2 billion has been lost in tax and royalty revenues. Even though prices have recovered somewhat, recovery time will be lengthy. In an unstable economic environment, regulations need to be certain. We are not asking for more favorable oil and gas regulations. We are simply asking that BLM’s oil and gas regulations, especially during these challenging times, be fair and predictable and thereby eliminate uncertainty and reduce litigation. This should be a common goal for all parties.

If the current regulations are working, they should not be changed. As suggested by the PLCAF, if BLM has identified areas in need of improvement, then these areas should be discussed with stakeholders prior to the issuance of a proposed regulation. By adopting this approach, all parties can work together to ensure that changes to the regulations will not result in unintended consequences.

For example, throughout the rewrite, new fees and increased bond amounts are assessed in response to concern about "orphan wells." IPAA is not sure the issue of "orphan wells" is as significant an issue as outlined by BLM during various public workshops. However, IPAA stands ready to work with BLM to design an enforcement process that resolves concerns about orphan wells and protects the environment without penalizing all operators by increasing costs across the board. IPAA also supports investigating legislative alternatives for providing BLM the funds it needs to satisfy any obligations occurring due to orphan wells.

Unfortunately, the IPAA believes that many of the additional costs and uncertainty created by the proposed regulations were not adequately addressed by BLM's analysis performed in response to the requirements of the Small Business Regulatory Enforcement Fairness Act (SBREFA). In polling members, small producers do believe that their costs of operating a federal well will dramatically increase under the proposed rulemaking. If it is not a new fee being assessed, it is additional uncertainty, which equates to costly delays and litigation. The IPAA stands ready to work with the BLM to better quantify the costs this proposed rulemaking would impose on small producers. Better yet, the IPAA stands ready to work with BLM on regulatory changes, which will not result in news costs and burdens.

The IPAA strongly endorses the PLCAF recommendation that the BLM redraft the proposed rule and issue a redraft for public comment. The entire oil and gas industry is ready to work with the BLM to develop more fair and reasonable regulations that meet the Department’s plain English objectives.

Thank you for this opportunity to provide comments. If you have any questions or would like to discuss these comments further, please contact Ben Dillon, Vice President of Public Resources, at (202) 857-4722.

Sincerely,

Lee Fuller

Vice President of Government Affairs
Independent Petroleum Association of America

Cc: The Honorable Frank Murkowski, Chair of Senate Energy and Natural Resources Committee
The Honorable Barbara Cubin, Chair of House Resources Subcommittee on
Energy and Minerals
Ms. Sylvia Baca, Acting Asst. Secretary of Interior for Lands and Mineral Resources
Mr. Tom Fry, Acting Director of BLM
Mr. Elgie Holstein, Associate Director of Natural Resources, Energy and Science, OMB Ms. Jennifer Smith, Advocates Office, SBA Mr. Robert Gallagher, Special Advisor to the Secretary, DOE