Bureau of Land Management Director Bob Abbey faced tough questions from House Republicans yesterday over his agency's proposed new oil and gas fee and forthcoming hydraulic fracturing regulations.

In its fiscal 2013 budget request, BLM called for companies that lease public lands for oil and gas production to pay $4 per acre on lands annually that have yet to be developed. BLM estimates the fee would generate about $48 million, offsetting appropriations reductions elsewhere in the budget and providing $10 million for increasing inspections on federal and American Indian oil and gas leases.

The fee drew fire from Rep. Cynthia Lummis (R-Wyo.), who pointed out that the agency also was planning a reduction of $26.4 million for oil and gas management and has proposed new hydraulic fracturing, or "fracking," regulations on public lands.

"It looks like the goal may be to reduce energy development on federal lands," Lummis said.

But Abbey said the fee would encourage lands to be developed. BLM's land leases last 10 years, he noted, and some companies may lease an area but never use it for oil and gas production. If domestic production isn't happening on the lands, he added, BLM wants to ensure that taxpayers benefit from the lease in some way.

The comments came during an Interior, Environment and Related Agencies Appropriations Subcommittee hearing on BLM's $1.1 billion request for 2013, which would be a 4 percent bump from the enacted 2012 level of $1.098 billion.

Lummis, along with Rep. Steven LaTourette (R-Ohio), also questioned Abbey on BLM's fracking regulations, which are under review by the White House Office of Management and Budget.

Abbey said the new rules would require the disclosure of chemicals used while fracking and address well integrity and wastewater management.

The rules are based on the findings of the Department of Energy's task force on hydraulic fracturing and consultations with state governments, companies in the industry and environmental groups to "come up with something that makes sense," Abbey said.

Lawmakers also asked Abbey about his agency's request for $15 million for sage grouse conservation.

The Interior Department is under a federal court-mandated 2015 deadline to determine if sage grouse should be listed under the Endangered Species Act. Greater sage grouse inhabit up to 47 million acres of BLM-managed lands, but the ground-dwelling bird has declined in numbers in recent years as its sagebrush habitat has disappeared.

Abbey said the funding would be used to better manage sage grouse habitat, which is most threatened by wildfires. The increase would also support monitoring and restoration efforts. BLM is partnering with the Fish and Wildlife Service, the Natural Resources Conservation Service, the Agricultural Research Service, and state and wildlife agencies to develop better management strategies, he said.

"How confident are you this is going to work?" subcommittee Chairman Mike Simpson (R-Idaho) asked.

Abbey replied, "It's got to work."

While Simpson, whose own state is dealing with the sage grouse dilemma, generally commended BLM for its conservation efforts, he objected to a proposed $1 per animal per month fee on ranchers who graze animals on public lands. Although the fee is low and should be addressed, Simpson said, the proposed increase is too high.

The fee would be in addition to the current grazing fee, which is $1.35 per animal per month.

BLM estimates that the fee would generate $6.5 million in 2013, providing funds to help the agency process pending applications for grazing permit renewals. The proposal would increase fees to graze livestock on Interior Department lands by roughly 75 percent (E&ENews PM, Feb. 15).

"Livestock producers, just like other small businesses, need certainty," Simpson said. "They need to know their grazing permits will be renewed in a timely fashion and that fees won't dramatically increase from year to year."

Abbey also highlighted the agency's goal of advancing renewable energy resources on public lands. BLM requested $26.8 million for renewable energy, up from the 2012 level of $19.7 million.

"President Obama, Secretary [Ken] Salazar and this Congress have stressed the critical importance of renewable energy to the nation's energy security and long-term economic development," Abbey said.