American Oil and Gas Reporter - January 2015 - 34

Federal Legislation

BLM Pilot Office Program To Continue
WASHINGTON-Congress' December push to fund most of the government
through fiscal 2015 yielded some legislative items that drew praise from the oil and
gas industry. According to industry groups
and published reports, the $1.1 trillion
package of 11 appropriations bills signed
by President Obama on Dec. 22 contained
a few provisions of particular interest to
oil and gas producers. The legislation
passed the House of Representatives 219206 on Dec. 4 and cleared the Senate 5640 on Dec. 12.
Among its provisions:
* It reauthorizes and reforms the U.S.
Bureau of Land Management pilot office
program authorized by the Energy Policy
Act of 2005, which was set to expire in
2015.
* It seeks to address concerns about
Western land use restrictions associated
with the Endangered Species Act by prohibiting the Interior secretary from spending any funds to write or issue proposed
listing rules for the greater sage grouse and
its distinct population segment in the Columbia Basin, and final rules for the bistate distinct population segment of the
greater sage grouse and the Gunnison sage
grouse.
* Consistent with offshore producers'
concerns that the Obama administration's
National Ocean Policy efforts will initiate
offshore zoning restrictions, the appropriations bill contains no funding for a National Ocean Policy.
* The legislation allocates funds for
studying crude-by-rail transportation and
for maintaining the Strategic Petroleum
Reserve.
During its final days of activity in 2014,
the lame-duck Congress also passed legislation extending tax credits retroactively for 2014 that included credits for wind
energy and biofuels, but also for natural
gas vehicles.
BLM Pilot Program
The Western Energy Alliance, Independent Petroleum Association of America and American Petroleum Institute
laud the provision to reform and extend
BLM's pilot office program as a way to
help ease the backlog of applications for
permits to drill and to reduce processing
delays for new oil and gas production on
federal lands. Among the aspects of the
program's expanded flexibility to draw
praise from industry advocates is language
that allows the agency to create new project offices according to shifts in industry
34 THE AMERICAN OIL & GAS REPORTER

activity.
They note that the bill also raises APD
fees to-and fixes them at-$9,500 (indexed
to inflation) through 2026, with 15 percent
of the revenue staying with the field office
that collects the money and 85 percent going to a fund intended to accelerate APD
processing.
"Passage of the permit funding bill was
achieved because all sides were willing to
work together," relates Western Alliance
Vice President of Government and Public
Affairs Kathleen Sgamma. "Oil and natural gas producers agreed to higher fees
for federal permits in exchange for regulatory certainty. With a compromise bill
that garnered strong bipartisan support, we
were able to achieve the goal of restoring
funding for permitting that otherwise
would run out in 2015.
"Permitting is a critical issue for Western producers, as delays can cause development to be reallocated off public lands,
or even to other areas of the country not
predominated by public lands," Sgamma
adds. "When that happens, Westerners lose
jobs, consumers lose American energy, and
taxpayers receive less return."
IPAA Senior Vice President of Government Relations and Political Affairs Dan
Naatz says, "The BLM energy permitting
program plays an essential role as independent producers consider American
energy opportunities on federal lands. In
these uncertain times of price volatility, it
is encouraging for America's job creators
to have regulatory certainty through a
streamlined permitting process. Continuing this program will increase oil and natural gas production on federal lands by reducing permit delays, and will allow
greater flexibility for the federal government to respond to the changing needs of
the industry."
API also lauds the measure for improving the permitting efficiency of BLM
field offices. The group joins IPAA and the
Alliance in crediting the efforts of a number of policymakers, including Senators
Tom Udall, D-N.M., John Barrasso R-Wy.,
and Lisa Murkowski, R-Ak., and Representatives Rob Bishop, R-Ut., Doc Hastings, R-Wa., Doug Lamborn, R-Co., Cynthia Lummis, R-Wy., and Chris Stewart RUt.
Sage Grouse Suspension
Meanwhile, Congress' move to defund
ESA rules for both the greater and Gunnison sage grouse also drew praise from
industry representatives. Media accounts

note that a November report from the U.S.
Geological Survey that suggested the
possibility of three-mile buffer zones between sage grouse habitat and oil and gas
sites had raised more industry concern
about the species' status.
IPAA says that, unless they are extended, the provisions barring Interior from directing funds to write or issue proposed
sage grouse listing rules are scheduled to
expire at the end of September 2015. Even
so, the group says the extra time will be
helpful. "This delay on sage grouse reinforces that many of our elected officials
recognize that independent producers
have made important and meaningful
strides to aid in the conservation and recovery of the sage grouse," the group says.
However, Western Values Project Director Chris Saeger deems the legislation
"profoundly misguided" and says it runs
counter to the wishes of both DOI and the
American West. "The BLM and governors
of states in the American West must keep
moving forward toward implementing
plans for the greater sage grouse on the
same timeline they have been working
with in order to protect our wildlife and our
Western way of life," he asserts. "Leaders
from the sportsmen, cattle, ranching, outdoor recreation, energy development,
government and business communities all
repeatedly have called for fast action on
the sage grouse. And Westerners have
made it clear time and again that they expect their leaders to act now. The actions
of a dysfunctional Congress don't change
the need for immediate action on sage
grouse."
Tax Extenders
December also saw the Senate pass tax
legislation to extend the alternative fuel and
infrastructure tax credits retroactively for
2014, which published reports note include
the wind production tax credit and others
for biofuels. According to natural gas vehicles advocacy group NGVAmerica, HR
5771, the Tax Increase Prevention Act of
2014, extends more than 50 provisions that
expired at the end of 2013 or during 2014.
Among items that the legislation contains,
NGVAmerica says it has lobbied for extending the:
* Fuel tax credit for natural gas,
which offers a $0.50 credit or payment to
businesses for each gasoline-gallon equivalent of natural gas they use as a transportation fuel; and
* Tax credit for alternative fuel vehicle refueling, which provides a 30 percent

American Oil and Gas Reporter - January 2015

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