BLM Now Collecting Higher Drilling Application Fee

MEAD GRUVER

CHEYENNE, Wyo. (AP) — A huge increase in the application fee for oil and gas companies to drill on federal land is unfair and won't speed up review of drilling permits, industry officials said Wednesday.

The $6,500-per-well fee was part of the Interior Department appropriations bill passed by Congress and signed into law by President Obama on Oct. 30. The new fee amounts to a 62 percent increase over the previous $4,000 fee.

The U.S. Bureau of Land Management, which oversees federal oil and gas rights and drilling on federal land, says the higher fee is needed to keep up with the cost of processing new drilling applications.

But oil and gas industry officials pointed out that the money goes into the U.S. Treasury and not specifically to the BLM, where it might offset the costs of reviewing drilling applications.

What's more, companies pay the fee with no assurance that the BLM will approve their permits. Even after winning approval, a company can't be certain that a well will produce enough to be viable, said Steve Degenfelder, vice president of Double Eagle Petroleum, a small gas drilling company based in Casper.