Interagency Team on Bakken Continues Progress to Advance Bakken Oil and Gas Permitting and Production

BILLINGS, MT – Responding to President Obama's call to increase the efficiency of federal permitting and review of infrastructure projects, the interagency Bakken Federal Executive Group met yesterday in Montana where they continued the dialogue on ways to facilitate the development of oil and gas resources in the booming Bakken Formation.

The group, which represents a dozen federal bureaus with review responsibilities in the Bakken, was identified by the President as one of five priority regional initiatives under Executive Order 13604, Improving Performance of Federal Permitting and Review of Infrastructure Projects. The group's work in collaboratively addressing common obstacles associated with the Bakken energy boom in western North Dakota is also closely aligned with the principles identified in the President's memorandum of May 17 on infrastructure review.

The group identified several action items that are intended to advance the production of oil and gas in the Bakken and explore collaborative ways to work with state agencies and industry to help reduce natural gas flaring in the area. Action items include forming teams of executive sponsors to resolve issues of staffing shortages, housing and facilities limitations, outreach, and permitting complexities. Improving federal, tribal and state coordination to reduce duplication and facilitate timely responses will be at the forefront of their permitting efforts. The group also agreed to explore the preparation of a memorandum of understanding to advance efficiencies and the Administration's efforts to facilitate production of oil and gas in the Bakken.

Interior's Deputy Secretary David J. Hayes participated in the meeting by telephone and applauded the work being done by the regional executive team to further coordinate federal action and to strengthen existing relationships with partners in the region.

“Interior continues to be a leader in implementing President Obama's vision for a federal permitting process that is smarter, more efficient, and more responsive to the American people,” Hayes said. “By coordinating across the many federal agencies involved in the Bakken region – as well as with state, tribal, and local governments and with stakeholders – we are able to offer a better process for industry while also arriving at better outcomes for communities and the environment.”

The Obama Administration has made the safe and environmentally responsible expansion of domestic oil and gas development a priority. Domestic production has grown each year the President has been in office, with oil production currently higher than any time in the past two decades; natural gas production at its highest level ever; and renewable electricity generation from wind, solar, and geothermal sources having doubled since 2009. Combined with recent declines in oil consumption, foreign oil imports have fallen to a 20-year low.

Oil and gas development in the Bakken has been growing rapidly during the past five years, creating a number of workforce and regulatory issues. The booming economy in the region has driven up wages and the cost of housing, making it difficult for federal agencies to staff up to the levels needed to address the increasing workload. Federal applications for permit to drill (APD) have increased by more than 500 percent over this period. Rapid development has generated environmental challenges and challenges to intergovernmental permitting and coordination.

To address these complexities, the Bakken Group, which was formed last year, has made progress on a number of fronts, including taking steps to address federal employee housing; improving sharing of environmental data and best practices, such as increased use of on-line submittals of APDs; streamlining some environmental analyses; and improving coordination with the oil and gas industry. The Bakken Group also has placed a priority on tribal coordination and consultation.

U.S. Sen. John Hoeven (R-N.D.) noted the important role of the Bakken Group in addressing the problem of gas flaring.

“We have been working to streamline the permitting process on federal lands and to reduce flaring in the Bakken,” Hoeven said. “The Administration approached us about working together to address both of these issues. This week's meeting is a step toward getting all of the shareholders together. At the same time, we continue to work in the Senate on legislation to help expedite the permitting process.”

Noting that the BLM has oil and gas management responsibilities for more than 1.4 million federal subsurface acres and 568,000 leased Indian subsurface acres in North Dakota, BLM's Principal Deputy Director Neil Kornze said, “Working closely with all of these agencies, we're responsible for leasing, permitting and compliance, production accountability and the development of Indian Trust minerals. The BLM wants to get this right.”

Last year, the BLM approved 664 drilling permits with 246 of those on federal mineral leases and 418 on Indian mineral leases. Since 2007, APDs on the Fort Berthold Indian Reservation have increased from 0 to more than 400. About 900 APDs are anticipated this year. The BLM is also responsible for site inspection and enforcement of production accountability for royalty collection -- workloads that have increased as development increased. Federal royalties collected in North Dakota totaled nearly $138 million in fiscal year 2012. In five years, royalties paid on Indian wells have gone from less than $1 million to more than $257 million in FY 2012.

The pace is not expected to let up. A recent U.S. Geological Survey report estimated that the Bakken and Three Forks Formations in the Williston Basin Province of Montana, North Dakota, and South Dakota contain an estimated mean of 7.4 billion barrels of undiscovered, technically recoverable oil and 6.7 trillion cubic feet of associated/dissolved natural gas.

Bureaus participating in the Bakken Group are the BLM, Bureau of Indian Affairs, Bureau of Reclamation, National Park Service, U.S. Fish and Wildlife Service, U.S. Geological Survey, Office of Special Trustee, Office of Natural Resources Revenue, U.S. Environmental Protection Agency, U.S. Forest Service, Natural Resources Conservation Service, and the U.S. Army Corps of Engineers.