Government shutdown: Land drilling permits to grind to a stop

If you’re waiting on the federal government to tell you whether you can make good on multibillion-dollar plans for exporting natural gas, you’re out of luck.

Ditto for oil companies eager for information on renewable fuel quotas they will have to meet next year, and engineers hoping to pull up old permit details from government databases.

Under the federal government shutdown that began Tuesday, all of these activities are at least temporarily suspended.

Although some energy-related government work will go on, many functions are indefinitely postponed. Among the casualties:

  • New submissions and filings to the Federal Energy Regulatory Commission, which reviews energy infrastructure and has a critical role vetting proposed natural gas export facilities. The five commissioners and a skeleton crew of essential personnel will stay on to tackle work involving the protection of life and property.
  • Testing of oil spill response equipment at a government facility in New Jersey.
  • Processing high bids for offshore oil and gas drilling rights sold during the western Gulf lease sale in August. According to the Bureau of Ocean Energy Management, “this will likely delay both the issuance of leases and the associated payments to the Department of Treasury that occur upon execution of the lease.”
  • Evaluation of new oil and gas exploration, production and development plans offshore.

The Bureau of Land Management also will stop issuing oil and gas permits for wells on public land during the government shutdown. But offshore, it’s a different story, as the Bureau of Safety and Environmental Enforcement will keep reviewing drilling applications and issuing permits for new and modified wells.

Interior Department officials said the different approach was directly tied to the two agency’s funding streams. While the Bureau of Land Management that deals with onshore wells mostly relies on money appropriated by Congress, most of the funding for Interior’s Bureau of Safety and Environmental Enforcement is tied to revenue from industry fees and rental payments.

But in all cases, oil and gas companies better keep sending out their checks to the government. Royalties from energy production on federal lands and waters are still due as usual.

The Bureau of Ocean Energy Management has halted most of the environmental work it does in connection with offshore energy development, such as statutorily required reviews of oil and gas lease sales. If a shutdown were to stretch on for months, that could jeopardize new oil and gas drilling proposals before the safety bureau.

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But in the meantime, said Assistant Secretary for Land and Minerals Tommy Beaudreau, there probably won’t be major effects on offshore oil and gas development.

“All of (the safety bureau’s) permitting personnel and the personnel involved in inspections are excepted, and so permitting will continue and inspections will continue. Environmental reviews on the other hand will be slowed,” Beaudreau told reporters, after testifying before a Senate committee. “In the near term, I don’t anticipate immediate effects in the pace of permitting. Longer term, though, there could be.”

Government officials stressed that work tied to human safety and protection of the environment would continue. As a result, even with a shutdown, inspectors will continue visiting oil and gas facilities offshore and onshore, both for routine reviews and emergency inspections. If there were a major oil spill, “employees will be available for activation to handle the event, ” the Bureau of Ocean Energy Management said.

Many Cabinet-level departments indefinitely have shuttered websites, putting a wealth of information temporarily out of reach, while some agencies are keeping sites available without updates. On Tuesday, websites for individual Interior Department agencies — including portals to information about drilling permits and enforcement activities — were sending would-be viewers to an Interior Department page instead.

“The non-emergency related websites will redirect to because staff who manage content or maintain the servers are being furloughed,” said an Interior spokesman.

All told, 369 safety bureau employees and 477 ocean energy bureau workers are being furloughed. About 10,200 Bureau of Land Management employees and 10,000 Energy Department employees are being sent home during a lapse in funding.

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