An oil well is seen on Sept. 8, 2012, off County Road 6480 during sunset. The director of the Bureau of Land Management has called for new fees to help
An oil well is seen on Sept. 8, 2012, off County Road 6480 during sunset. The director of the Bureau of Land Management has called for new fees to help cover the cost of inspections at oil and gas wells. (Daily Times file photo)

FARMINGTON — The Bureau of Land Management director has called for a new fee to help pay for inspections for oil and gas wells.

During a speech Thursday at the 60th annual meeting of the Rocky Mountain Mineral Law Foundation in Vail, Colo., BLM Director Neil Kornze said "while permitting efforts have improved, critical inspections are lagging, and we must do better," according to a BLM press release.

Kornze's statements were met with criticism from the Western Energy Alliance, a trade association for the oil and gas industry.

"The oil and gas industry returns $54.12 for every taxpayer dollar that BLM spends for the federal onshore oil and gas program," said Kathleen Sgamma, a spokeswoman for the alliance.

She added: "We already pay for inspections permitting, leasing, you name it, 54 times over."

The U.S. General Accountability Office reported BLM failed to inspect about 40 percent of high-priority drilling operations from 2009 to 2012, according to a report released in May. The bureau is responsible for the inspection of 100,000 wells nationwide.

In his speech, Kornze said the bureau has to do a better job.

"The BLM takes its responsibilities seriously, and we must increase our inspection efforts to help protect communities and the environment and to ensure that taxpayers are getting a fair return on public resources," he said.

Sgamma said BLM officials should look at how they budget their money before asking companies to pay for an inspection fee.

"It's not a matter that companies aren't already paying enough. It's a matter that those resources that are being paid to the federal government are not being used for the oil and gas program," she said.

She said the bureau has reallocated internal money to renewable energy programs and has spent fewer dollars on oil and gas.

The BLM press release states the money the bureau receives has declined about 20 percent since 2007, when accounting for inflation.

Sgamma said the alliance isn't opposed to inspections at oil wells and supports a bipartisan bill introduced in Congress last month and co-sponsored by 13 legislators, including N.M. Sens. Tom Udall and Martin Heinrich, both Democrats. The measure would increase permit fees from $6,500 to $9,500, but the bill outlines at least 75 percent of the permit fees would go to state BLM offices.

"We're willing to pay more when we know it's going to be used correctly at the field office, but a vague new inspection fee is not something we support," Sgamma said.

Kornze also said in his speech that the bureau has many unused permits.

"Over the last few years, the BLM has significantly reduced the time it takes to process drilling permits. Right now, nearly 7,000 permits have been approved, but are sitting unused. That's two years' worth of drilling permits that are ready to go today," Kornze said.

Donna Hummel, a spokeswoman in BLM's New Mexico office, said that figure is for permits nationwide.

Area industry leaders have said permitting for drilling in Mancos Shale oil in southern San Juan County has been slow.

Gov. Susana Martinez has announced an agreement between the state, BLM and San Juan College that would help the federal agency process permits faster. Maureen Joe, assistant field manage for the BLM office in Farmington, said that agreement hasn't been finalized yet.

Since October 2013, Joe said the office has approved about 100 permits. Joe did not have information on how many permits applications are waiting to be approved.

Erny Zah is The Daily Times business editor. He can be reached at 505-564-4638. and ezah@daily-times.com. Follow him @ernyzah on Twitter.