US oil sector bristles at Biden permit oversight

Oil industry officials and some Republicans are faulting President Joe Biden's administration for continuing to subject "routine" oil and gas permit decisions to review by political appointees.

That high-level review process started on Biden's first day in office, through an order signed by the acting head of the US Interior Department that expired on 21 March. But critics say the administration extended much of that review process indefinitely through a memo signed just days before the prior order expired.

"Why is it necessary for this administration to act in this way, for political appointees to make routine permitting decisions usually made by career staff," the top Republican on the Senate Energy and Commerce Committee, John Barraso (Wyoming), asked today during an oversight hearing.

The administration's new memo, signed 19 March, sets up a high-level oversight process for scheduling new lease sales, extending drilling permits, offering royalty relief and issuing federal land management plans. Those types of actions must be sent to the US Interior Department for review, the memo says, before lower-level officials announce a decision.

But industry officials say that review process appears to be slowing down federal approvals that had once been routine. Occidental Petroleum chief executive Vicki Hollub said her company was awaiting decisions from the US Bureau of Land Management (BLM) on 26 requests to extend its existing leases, out of about 300 submitted across the industry.

"These are lease extension requests that would have been pretty typical and routine in the past, that have not yet been approved," Hollub said at the hearing.

Biden administration officials say they continue to process permits for existing leases, and they argue there is nothing unusual about having a review process.

"This is the way the BLM has operated before under previous administrations and under this administration," BLM deputy director for policy and programs Nada Wolff Culver told lawmakers today. "If the assistant secretary or headquarters has any further inquiries, they can make them. There is not a formal sign-off."

Culver said she did not have any updates on when the Interior Department will finish a broad review of the federal oil and gas program, the completion of which will dictate whether oil and gas lease sales can resume. But she said the industry already has enough existing leases and drilling permits to sustain their operations.

BLM approved 513 onshore drilling permits between 1 February and 31 March, according to data the agency released last week. The pace of drilling permit approvals accelerated in March, but is still roughly a third of the number of drilling permits approved during the same period in 2020. BLM officials have cited a backlog of nearly 8,000 approved drilling permits to argue there is unlikely to be interruptions to industry.

By Chris Knight