US processes oil, gas permits during shutdown

President Donald Trump's administration is continuing to process drilling permits and open acreage to oil and gas development during a government shutdown now in its 18th day.

Those actions could blunt the effects of the shutdown on the oil and gas industry but will not spare the sector entirely. US federal agencies have been forced to furlough or suspend pay for hundreds of thousands of employees since the shutdown began on 22 December, suspending work on some pipeline permitting activities and regulatory revisions the industry has supported.

The US Bureau of Land Management (BLM) says it is continuing to process permit applications from oil and gas producers on federal land, an activity it says is exempt from the shutdown. The agency processed more than 3,300 drilling applications in fiscal 2017 that came primarily from Wyoming, New Mexico, Colorado and North Dakota.

The administration also is keeping up efforts to open the Arctic National Wildlife Refuge to drilling and expand oil and gas leasing in the National Petroleum Reserve in Alaska (NPR-A). BLM said it is tapping appropriations from the last fiscal year to continue work on an environmental study of leasing in the refuge and on an "integrated activity plan" that could expand leasing in NPR-A.

"This money will be used for labor and operations for staff and contractors involved. Work may continue on these projects as long as appropriated funds remain," the agency said yesterday.

BLM also says it will continue to hold public meetings this week to get input on oil and gas leasing in NPR-A and the Arctic National Wildlife Refuge. That has triggered concerns from Democratic lawmakers who say the comment periods on those leasing plans should be extended so long as most federal workers are furloughed and unable to answer questions from the public.

"Asking people to comment on two major development processes in the arctic with huge potential environmental and human consequences without anyone in the agency able to answer questions defeats the purpose of the public participation process," House Natural Resources Committee chairman Raul Grijalva (D-Arizona) said in a letter yesterday to the US Interior Department.

US offshore producers can similarly expect continued processing of drilling permits. The US Bureau of Safety and Environmental Enforcement says about half of its 803 employees are essential and will continue working without pay. The federal agency, in a contingency plan updated last month, says it will continue inspecting offshore rigs and processing drilling permit applications.

Oil and gas industry officials contacted over the past week say they are not too worried about the shutdown at this point. But they say short-term problems can arise when issues occur out in the field that require government sign-off.

"Federal permit processing is anything but just-in-time. There can be many snags along the way, so operators normally request permits months before they plan to use them," Western Energy Alliance president Kathleen Sgamma said.

The shutdown appears likely to slow work on issuing replacement permits for the $8bn, 830,000 b/d Keystone XL crude pipeline and the $7bn, 1.4bn m³/d Atlantic Coast natural gas pipeline. US courts last year threw out permits for those projects, and the agencies responsible for issuing new permits are partially shut down.

The shutdown could also push back the release of the next stage of an offshore oil and gas leasing plan that was expected in mid-January, delay permits for onshore seismic oil and gas surveys in Alaska and slow finalization of a rule that would revise offshore safety standards.