Interior Secretary Announces New Onshore U.S. Oil and Gas Drilling Policy

Ken Salazar, the U.S. Secretary of the Interior, yesterday announced the issuance of new guidance for oil and gas leasing on the country's 260 million acres of onshore federal land. The new guidance will empower the Bureau of Land Management (BLM) to implement a number of reforms to ensure that land leases for oil and gas drilling first undergo thorough and systematic evaluation—sometimes on a case-by-case basis—to determine environmental risk factors. The hope is that this more considered onshore leasing policy will not only help improve protection of land and water resources, and wildlife, but will also help reduce the incidence of costly and protracted delays that have resulted from community and environmental group protests as well as lease litigation. Salazar attributed the blame for many of these problems squarely to what he characterised as the previous administration’s "anywhere, anyhow" drilling policy. He noted that what the country now needed was "a fresh look – from inside the federal government and from outside – at how we can better manage Americans’ energy resources". He promised that "the new guidance BLM is issuing for field managers will help bring clarity, consistency, and public engagement to the onshore oil and gas leasing process, while balancing the many resource values that the Bureau of Land Management is entrusted with protecting, on behalf of the American people".

While announcing the new policy, Salazar also noted the creation of an Energy Reform Team, via Secretarial Order, that will function within the Office of the Assistant Secretary for Land and Minerals Management to identify energy reforms and oversee implementation. Assistant Secretary Wilma Lewis, the head of this office, will provide direction for the new team while it works towards "the orderly, efficient, responsible and timely development of public resources critical for our national energy security". To promote clarity and openness, and reduce potential dissent, the new team will seek engagement from all stakeholders, including the industry and the general public alike, to promote this agenda. She noted that "through its work, the team will promote efficiency and effectiveness in the development of renewable and conventional energy resources, so that we can be properly accountable to the American public".

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Under the new policy, special emphasis will be provided on properly examining individual oil and gas areas nominated for leasing, in order to consider factors, environmental and otherwise, that may be specific to those sites in particular. The BLM expects the new review process to be multidisciplinary in its approach and comprehensive, taking into account both internal and external viewpoints. While the Bureau will be open to suggestions on new areas to open up to leasing, it is making clear that it will favour leasing in areas that have already seen development. In new areas, the BLM will be seeking greater public engagement, especially with regard to the development of Master Leasing and Development Plans, before approving leases. The body has yet to complete internal reviews, but once done, it will begin the process of implementing the new oil and gas leasing guidance.

Outlook and Implications

The Department of the Interior’s new onshore oil and gas leasing policy represents a fundamental shift in thinking compared to the system established under the previous administration of president George W. Bush. That system was widely perceived as failing the public, the environment, and even the industry, while doing little to increase domestic oil and production. The new approach will—on paper at least—be far more circumspect, paying due regard to the viewpoints of local communities, while undertaking detailed environmental studies before approving leases. If the new system works as intended, the oil and gas industry will itself benefit from a reduction in legal action and protests against its plans, which have until now hampered its ability to develop new areas. Assuming community concerns are addressed and resolved prior to lease sales, the industry should be able to proceed more easily.