FARMINGTON — U.S. Sen. Martin Heinrich visited the Farmington Field Office of the Bureau of Land Management on Friday as part of the junior congressman's tour of San Juan County to discuss education, job training and economic development in the area.
Heinrich, who is on recess in his home state before Congress goes back into session on Sept. 8, toured the WESST Enterprise Center and the new San Juan College School of Energy on Friday morning before visiting the field office to meet with officials and talk about energy development on public lands. Afterward, Heinrich traveled to Aztec to walk the city's new pedestrian bridge and nearly completed trails near the Aztec Ruins National Monument with officials.
A member of the Senate's Energy and Natural Resources Committee, Heinrich cosponsored the BLM Permit Processing Improvement Act, a bill introduced by fellow Democratic Sen. Tom Udall in June. The bill would expedite oil and gas drilling permits by increasing permitting fees to fund BLM offices with complaints over permit application backlogs. Currently, the fee is $6,500 per application. Udall's legislation would boost that to $9,500 per application, a cost hike the oil and gas industry has supported.
The bill would also reauthorize a pilot program at BLM offices in Farmington and Carlsbad that helps staff process the permit backlog.
Of the state's 650 BLM employees, 10 percent are funded through the program. The Farmington BLM Field Office was allocated $1.7 million last year to pay for 20 new full-time staff positions to process permits.
"The oil and gas industry has been very positive on the legislation. They've been at the table, and they've been testifying on behalf of the legislation at the hearings," Heinrich said.
BLM Field Office Manager Gary Torres said his office has processed about 200 permits already this year. He expects that number to double or triple in the next year as Mancos Shale plays rev up.
"We've issued around 200 permits this year, but we're anticipating, based on industry estimates, of maybe upwards of 400 to 600 in the next 12 to 18 months as the Mancos Shale comes online more," Torres said. "It's very important that we have extra funding to be able to process all the applications that we have come in."
Wally Drangmeister, New Mexico Oil and Gas Association spokesman, agrees.
"We're very supportive of that legislation, and we are very hopeful it will pass," Drangmeister said in a phone interview on Friday. "Already the pilot appropriation has dramatically impacted the Farmington and Carlsbad offices. Mancos Shale development is ramping up, so those resources are going to be essential if that development is going to continue."
Drangmeister said while the industry sees the price hike as "a necessary evil" and "the cost of doing business," it is well worth it, given the expense of drilling rigs sitting idle on well pads waiting for permits to be issued, which can take months.
The legislation also seeks to address the complexity of the regulatory process, Heinrich said.
"One of the complications slowing the permitting process is just how the surface challenges are managed today versus historically," Heinrich said. "You used to have a parcel, and there was a lease and you'd have everything done from the well pad on that parcel. Oftentimes, now with horizontal drilling, you might have four rigs on that well pad that are off that lease, and so there are real estate and right-of-way issues associated with dealing with both your leased land and the right-of-way on unleased land, and those complicating factors extend the processing time. So that's a challenge, but, on balance, being able to produce that way produces higher results and longer plays and is worthwhile in the long run."
