BLM increases drilling permit fee
FARMINGTON — BLM has announced an annual adjustment to the fee it charges to process oil and gas drilling permits on public and Indian lands.
The fee increase, attributed to inflation, went into effect Oct.1, and will now be $110 more per permit, raising the permit fee to $9,610, according to a Sept. 26 BLM press release.
The non-refundable processing fee will be collected when an oil and gas operator submits an "Application for Permit to Drill," or APD, and is required whether or not a particular permit is subsequently approved, says the release. Congress directed the BLM to adjust the APD fee annually for inflation over 10 years, as part of the National Defense Authorization Act for Fiscal Year 2015.
According to information provided by Farmington BLM spokesman Zach Stone, prior to 2008, no APD fee was required, but following the signing by President Bush of the fiscal year 2008 Omnibus Appropriation Bill, the BLM was required to charge a $4,000 processing fee for each new APD. The fees were increased in 2010 to $6500, then again in 2015 to $9,500, said Stone. No fee is required for a Notice of Staking, or NOS, for prospective wells.
Stone said that to his knowledge, the Farmington BLM office has not received any feedback from local producers about this latest fee increase. “We have not heard of any complaints so far,” he said.
When asked, however, local producers have expressed frustration about the fee increase and about the amount of time it takes BLM to process the applications.
“The thing is, it’s frustrating that we have to pay a regulatory agency to regulate us. The fact we have to pay anything is frustrating – what other industry pays an agency to regulate them?” said T. Greg Merrion, President of Merrion Oil and Gas. “If you’re drilling a lot of small independent wells and have to include that fee, it represents a much larger hit. And what should normally take a few weeks (to process) takes BLM six to eight months. That’s also frustrating.”
Wally Drangmeister, Director of Communications for the New Mexico Oil and Gas Association, echoed this frustration.
“It (the fee increase) is not a big change, but one of the issues we have with BLM across the state is the lethargic pace at which they do processing,” he said. “If timeliness would be improved, an increase like that would be minimal, but it continues to be lethargic, so producers remain pretty frustrated.”
In response, Stone said that the BLM complies with a wide range of federal laws set forth by Congress, including the National Environmental Policy Act and the Endangered Species Act — among others — that help to protect resources and habitats.
“Comparable local or state agencies may not be required to fulfill the same stringent and time-intensive regulations with which the BLM complies,” said Stone. “We do this so that we can thoughtfully manage BLM activities such as outdoor recreation, livestock grazing, mineral development, energy production, and conserve natural, historical and cultural resources to sustain the health, diversity and productivity of America’s public lands.”
Leigh Black Irvin is the business editor for The Daily Times. She can be reached at 505-564-4621.