Six recommendations, if implemented, should significantly increase BLM's capability to process Applications for Permits to Drill, thereby reducing processing times and lessening the burden on industry and BLM. Long review times create problems for both industry and BLM. This may adversely affect developing the Nation's oil and gas resources.
The OIG assessed the effectiveness and efficiency of BLM's drilling permit process. We found long review times, insufficient process management, and inadequate database management. In addition, we found that BLM does not have a results-oriented performance goal to address processing times. Finally, until recently, processing times have not been a priority for DOI.
Oil and gas production on Federal and Indian lands produce annual royalties of about $3 billion. There are about 92,000 oil and gas wells on federally controlled lands, and industry drills about 3,000 new wells annually. BLM receives approximately 5,000 Applications for Permits to Drill each year, which it processes at 33 field offices, mostly in the Western States.
Delays in the permitting process can result in lost royalties to the Federal Government and Indian mineral owners. Industry reported that delays prevent drilling some wells, resulting in additional lost production and royalties.
We recommended that BLM improve local management support, establish and enforce processing timelines, develop outcome-based performance measures, upgrade its tracking database, reauthorize pilot offices to help with workflow issues, and implement several promising practices we identified.