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BLM: Well permitting fees to reach $4,000 Bureau of Land Management directed to recover more of its costs for document processing for oil and gas and minerals Petroleum News
The federal Bureau of Land Management has been told to recover more of its document processing costs. According to a proposal published in the July 19 Federal Register by the time the fees are fully implemented it will cost $4,000 for an application for an oil and gas permit to drill, $3,500 for a geothermal application to drill and $2,500 for a geophysical exploration permit.
BLM said the new fees would be phased in over a period of up to five-years.
First year drilling permit fees (oil and gas and geothermal) would be $1,600 and would increase $500 a year until the full fee is in place. There is currently no fee for an application to drill. There is a $25 fee for a geophysical exploration permit application in Alaska, but no fee for this permit elsewhere; that fee will be $500 the first year.
BLM said it is proposing to charge on a case-by-case basis for applications to renew mineral materials competitive contracts. Liquid minerals added to 2000 proposal BLM published a cost-recovery proposal in December 2000 for solid minerals. The July 19 proposal supersedes the earlier one and adds fluid minerals to the types of documents that would be affected by the cost-recovery provisions. The agency said its re-proposal is a response to recommendations by the Interior Department’s Office of the Inspector General, which said BLM needed to do more to recover its document-processing costs. Once the fees are fully implemented, BLM expects to recover some $23.5 million more annually in mineral processing receipts than it receives under its present regulations.
BLM said it costs $8,000 to $10,000 to process an oil and gas geophysical exploration application, an estimate based on 2002 and 2003 data, but the agency said it “did not receive a significant number of geophysical exploration applications in the two-year period analyzed,” and so will continue to collect and analyze data on the cost of geophysical exploration applications. The proposed $2,500 target fee is well below actual cost, “based on the time it takes to complete an environmental assessment and the fieldwork required.” A new fee, based on further data gathering, will be proposed at the end of the phase-in period, the agency said in the Federal Register.
BLM studied four years worth of data on processing oil and gas applications for permits to drill, and found the average processing cost was $4,000, the proposed fee. Because there is currently no fee, the fee will be phased in beginning at $1,600 “to give companies adequate time to include these potentially significant new costs in their planning processes.” Alaska: 10-15 APDs a year BLM Alaska State Office spokesman Ed Bovy told Petroleum News that BLM approves 10 to 15 applications for permits to drill each year and a couple of seismic survey applications a year.
The fixed fees are not appealable, but BLM said case-by-case fees will be appealable to the Interior Board of Land Appeals.
Case-by-case basis costs will be measured for: competitive lease applications for coal; royalty rate reduction applications for coal; logical mining unit applications; applications for lease modifications for coal; prospecting permit applications for non-energy leasable minerals; preference right lease applications for non-energy leasable minerals; competitive lease applications for non-energy leasable minerals; royalty rate reduction applications for non-energy leasable minerals; noncompetitive sale applications for mineral materials; competitive sale applications for mineral materials; competitive contract renewal applications for mineral materials; lease or sales applications when an environmental impact statement is required; mining plans of operations when an EIS is required; and mineral validity examinations/reports.
The Federal Register publication opened a 30-day public comment period that closes Aug. 18.
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