BLM tags $4K fee on drilling permits
Glenwood Springs correspondent
Aspen, CO Colorado
GLENWOOD SPRINGS ” The Bureau of Land Management has begun charging a $4,000 processing fee for each new oil and gas drilling permit application, the agency announced on Wednesday.
The directive to charge for the permits, which are known as an application for permit to drill (APD), was inserted into a $555 billion spending bill that President Bush signed on Dec. 26. Before the change, the BLM did not charge for processing APDs, according to the agency.
The money generated by the fees “is not new revenue, but rather a reimbursement to the U.S. Treasury for the estimated cost of processing new APDs” for the agency’s 2008 fiscal year, according to the BLM. The fees became effective the day Bush signed the spending bill.
“To carry out this congressional directive, the BLM has developed interim guidelines for its field office regarding the collection and handling of the new fees,” a statement released by the BLM said. “Final guidance will be developed over the next several weeks.”
Marc Smith, executive director of the Independent Petroleum Association of Mountain States, criticized the new fee, calling it the “epitome of bad government” when increased costs come without improved levels of service.
“It is a new tack on domestic energy production, and it won’t do anything to ensure that Americans have the affordable energy they need,” Smith said. “I think more importantly, it does not do anything to address the ongoing needs of the BLM field offices that are processing these application permits to drill.
“This will have a big impact on smaller and locally owned and managed energy companies. It makes it more costly to plan and go through the planning process.”
Smith said he could understand the fees if the money were returned to the field office where it was generated, creating a self-sustaining funding mechanism that would ensure that land managers have the resources they need as drilling activity increases and decreases.
“As it currently stands, the money goes into the black hole of the federal Treasury and no additional resources come back to the field office where they are generated,” Smith said.
The new fee is a positive development in the eyes of Duke Cox, interim executive director of the Western Colorado Congress, an advocacy organization that supports environmental stewardship. Cox, a builder by trade, compared the situation to applying for a building permit.
“Every building permit that I apply for, I reimburse either the county, the city or whatever the jurisdiction is,” Cox said. “I reimburse them for the cost of processing my permit before I begin to build. To ask (energy companies) to pay their own way is something that is finally being done. It should have been done years ago, but they have been getting a pass for a long time.”
Cox said he sees nothing wrong with the new fees and thought it was “a great idea.”
“I think the BLM can use the extra money because they have a huge job trying to monitor energy development in western Colorado,” Cox said.
BLM statistics show that 706 APDs were issued in Colorado from October 2006 to September 2007. Of those, 677 were issued for northwest Colorado. The BLM anticipates that northwestern field offices will process 800 APDs for the agency’s 2008 fiscal year. The new fees would generate about $3.2 million.
“We are in the process of working out all the details (about the new fees),” said David Boyd, northwest Colorado public affairs specialist for the BLM.
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With 4/20 long designated as the holiday for getting high, another date on the calendar, which stands for “oil” backwards, has gained momentum in the post-legalization era.