Senate Energy Committee Approves Hoeven's BLM Mineral Spacing Legislation to Prevent Permitting Delays, Reduce Duplicate Regulations for Oil and Gas Wells

WASHINGTON – Senator John Hoeven today announced that the U.S. Senate Energy Committee has approved, with bipartisan support, his Bureau of Land Management (BLM) Spacing Act, which helps prevent the BLM from delaying permits for oil and gas wells where the agency has only a minority share in the subsurface mineral rights and no surface rights. This measure reduces duplicate regulatory processes and puts the state and local governments first in permitting the projects, treating BLM the same as all other minority holders of mineral rights and protecting other mineral owners from unfair and unnecessary delays. The Hoeven measure was approved as part of the Energy Policy Modernization Act of 2015.

“In North Dakota alone, we have 3 million stranded acres where oil development is held up due to delays at BLM,” Hoeven said. “These delays are due to unnecessary, duplicate regulations, which not only hurt private mineral rights holders, but also prevent the federal government from collecting royalties on the minerals it owns. My bill makes the state and local jurisdictions the primary authority in permitting oil and gas projects and reduces BLM’s undue influence over projects on non-federal land where it is a minority holder of mineral rights.”

Currently, BLM permits take over 6 months for approval, compared to less than a month for the state to issue a permit. Hoeven’s bill addresses this delay by allowing the Secretary of the Interior, acting through the BLM Regional Directors, to waive the permitting requirement where BLM has no environmental connection. The waiver is allowable in instances where (1) less than a quarter of the subsurface minerals within a drilling spacing unit are owned or held in trust by the federal government and (2) when the federal government does not own, lease or hold in trust any surface rights within a drilling spacing unit.

Under this change, the federal government still receives royalties from energy production within the drilling or spacing unit, and energy operators are still subject to all laws, regulations and guidance governing energy activity in each relevant jurisdiction. Further, this measure reduces BLM’s workload in approving drilling permits, which will help speed up the approval process for drilling permits on federal land.

In addition to his Federal Mineral Spacing bill, Senator Hoeven successfully included the following provisions in the committee’s energy legislation:

  • All-of-the-Above Federal Building Conservation – This legislation improves the energy efficiency of federal buildings by allowing the continued use of efficient fuels like natural gas, which would otherwise be phased out. It removes limits on the kind of energy used and provides much-needed flexibility for new and significantly renovated federal buildings. The bill repeals a section of a 2007 energy bill that mandated federal buildings reduce reliance on fossil fuels, with 100 percent elimination of all fossil fuels by 2030, and it also extends current energy efficiency targets from a 30 percent reduction by 2015 to a 45 percent reduction by 2020.
  • Furnace Fix – Hoeven’s bill addresses a proposed Department of Energy rule that establishes minimum efficiency standards for residential gas furnaces and requires the furnace to vent horizontally. The rule would increase the cost of purchasing a new furnace by $350 and the cost of installation by $1,500 to $2,200. This legislation requires the Energy Secretary to consult with affected groups before finalizing the rule and develop a rule that works for everyone, including consumers.
  • Non-Profit Energy Efficiency – This bill, which Hoeven introduced with Senator Amy Klobuchar (D-Minn.) earlier this year, creates a pilot grant program to assist nonprofit organizations, including schools, hospitals, faith-based organizations, and youth centers, in improving the energy efficiency of their buildings and generating renewable energy.

Because many of the existing energy efficiency programs are structured as tax credits, tax-exempt organizations have been unable to make use of these programs. This measure is fully paid for, requires a 50 percent cost share from grantees and authorizes $10 million per year for the next five years for grants of up to $200,000.