Interior:

Assistant Secretary Watson lays out energy priorities for BLM, MMS on public lands

With a natural gas boom under way in the western United States, energy companies say the Interior Department is moving too slowly on drilling permits. Meantime, environmental critics contend that the department is placing too much emphasis on energy issues at the expense of environmental protection. Rebecca Watson, Interior Department assistant secretary for land and minerals management, explains her efforts to find middle ground and also describes what the energy bill means for future exploration efforts on public lands. Plus, Watson weighs in on the need for more offshore drilling and proposed changes to the Endangered Species Act. (Editor's note: This interview was taped previous to the events of Hurricane Katrina.)

Transcript

Brian Stempeck: Hello and welcome to OnPoint. I'm Brian Stempeck. Joining us today is Rebecca Watson, the assistant secretary of the Interior Department, who oversees the Bureau of Land Management, the Mineral Management Service and the office of surface funding. Assistant secretary thanks a lot for being here today.

Rebecca Watson: Glad to be here.

Brian Stempeck: We're here today to talk about the energy bill which passed into law last month. Broadly speaking, what does this mean for the Interior Department and the agencies you oversee? What's the next steps you're going to be taking?

Rebecca Watson: Well we have a lot of next steps. This is a very comprehensive energy bill. It was the first major energy legislation in 13 years, and when I say comprehensive I mean comprehensive. It has everything from conservation that involves the Department of the Interior, to new supply; from renewable energy to fossil fuels to new future forms of energy, including methane hydrates. And then also distribution systems, which will cross public lands and then research. So in all those areas we are involved. So we have a team of people that are already setting to work and we have to coordinate a lot of this activity with the Department of Energy and the Department of Agriculture.

Brian Stempeck: Now one of the big issues, of course, is speeding up the processing of permits for energy exploration projects, primarily on BLM lands. That's been a big issue in the past, a lot of complaints from the industry that it's taking far too long. How are you going to speed that up and what will the bill do and what are you already doing to, I guess, resolve that question?

Rebecca Watson: Well, we've been doing a lot of things. We met over the past few years with industry and talked about how we could improve processes and we already put in place some ways that we can put together the permits that we need to do for cultural resource surveys, for example, on our lands. How can we group together well permits? So we're not just doing one well at a time, but put together between five, 10, 15, as many as 30 wells in a pod and that's not just good for industry. We think it's also good for the environment and the GAO has agreed when they looked at that. If we can take a broader scale look at the landscape and analyze the environmental impacts from a 30 well pod that is just better for the environment and it lets us get that permitting done in a much larger group and that speeds things up. So that's what we've done in the past. What the bill directs us to do now is take a look at all these different environmental laws that we need to comply with, figure out ways that we can improve that, work together with the forest service and improve that process. And it sets some specific timelines already, right now, in the bill that are applicable today.

Brian Stempeck: Now I was going to ask about the GAO report. They came out in July with a report saying, basically it says the number of permit applications for energy exploration on BLM lands has about nearly tripled in the last few years. BLM is really kind of short handed when it comes to environmental enforcement. There's other things that might be falling by the wayside as you put more emphasis on energy. How do you respond to that report and have any changes been made at the agency since then?

Rebecca Watson: Well we took that report very seriously, and we take our responsibilities for environmental enforcement and inspection very seriously. And it's not just looking at what the impacts are in the environment. There are also technical requirements that that INE work requires. Looking at and making sure that we're getting the royalties for the American people, for the production of this American energy. And what we're trying to do in light of the run up of APDs, because of the demand for energy, is prioritize how we do INE inspections. Looking at where we put our people and focus their efforts on those areas that put the most risk on the landscape. So that's what we're trying to do. That's what we're doing out in Buffalo and our managers are trying to prioritize their work and we're looking for more people. The industry, as well as the government, faces the same problem, finding good people to work in this field. And the energy bill addresses that. They've asked the National Academy of Sciences to take a look at the quality of our workforce that's out there. I read the Wall Street Journal just this week and I noticed a quarter page ad by BP Amoco, they're looking to fill 400 positions in the next six months of highly technical people in the oil and gas field. So there is a crying need for people with expertise that we just don't have right now.

Brian Stempeck: One of the things that you said in the past, in the previous speech I believe, was that part of the reason with some of the delays that you're encountering with the energy exploration is because the actual industry permits themselves are kind of lackluster. There's information missing and say, at the same time that we're making these changes as to how we go about approving these permits, the industry has to improve how they're submitting them. Can you explain a little bit more about that?

Rebecca Watson: Well, one of the things we did is, again, trying to analyze why is this process not going as fast as we need it to go? Because the bottom line is that we are demanding energy, all of us, you, me, everybody in this country wants energy. That's why we have a supply/demand crunch right now. So we're looking at how we can improve that process. And in looking at it we saw that of the time delay in issuing APDs came from the need for BLM to send back applications to industry and say you didn't provide the information requested on the form. So what I said to the industry people that I was talking to is we need to sit down in a dialogue and see how we can work with you to make sure you give us the right information. Maybe there's a failure to communicate. Maybe we're not doing a good job telling you what we need. Maybe we need to train our BLM people better. Maybe we need to train together, industry and BLM, I found that to work really well with other things that BLM does with county commissioners in addressing the wild land fire issue for example. If we train together, so everybody's reading from the same hymn book, same time and understand the interpretation, then that can work. So I think that's something we want to do.

Brian Stempeck: One of the other issues you're facing, beyond just the permit approval process, is when you see protests from environmental groups and members of the public. I mean you've seen a huge number in protest on energy projects, from about 700, during the Clinton administration, to 4,500 protests during the Bush administration. That's a big jump. There's a number of appeals of permits given as well. What do you think is driving that change?

Rebecca Watson: Well, I think when you look back and analyze it, I looked at it and there's about six to 10 environmental groups that are filing all these appeals. It's not like we're getting appeals from a lot of separate different people. It's a group of environmental groups that are filing these appeals. I think a lot of it grew out, frankly, of the 2004 election. I think that energy was an area in which these groups felt there was a vulnerability that they could attack. If you go back and analyze the 2004 election cycle you see there was about at least 14 different groups that were set up to target the energy initiative of President Bush as a wedge issue to decide that 2004 election. I don't think that that issue changed. I think that it's obvious from the jump up in the statistics between the end of the Clinton administration and this administration, that there is politics and philosophy behind it, because the level of leasing has not changed. We're not leasing any more than the Clinton administration did. So there's not been a huge difference in the amount of leasing, yet the lease appeals have increased by over 400 percent.

Brian Stempeck: So you're saying it's totally politically minded? I mean the environmental groups, when they're asked about this they would say that the Bush administration is being far more aggressive in how it approaches energy development on public lands. Even though you might be talking about the same number of acres it's basically a different kind of a role for the department going forward. Do you think they're really just politically minded? Is that the only rationale for the environmental groups mounting these protests?

Rebecca Watson: No, I didn't -- I think that the environmental groups have a lot of different issues. I would say that is one aspect of it, is the politics and the philosophy, as to why there's been such a massive increase, by 400 percent in that time period. I think that when you look at the record of the Bush administration and separate it from the rhetoric that the group shows, I think that we have taken a measured response and it's an environmentally responsible production of energy. I think why you see a rapid growth of energy in the Bush administration, again, gets back to the marketplace. We are in a time of high demand for energy. That didn't come from the Bush administration. It came from the world global demand for energy and the American demand for energy. Our system of laws is set up to respond to the marketplace. In other words, when the market prices are high for energy, because the demand is high, then the laws provide that the land should be leased for energy and energy be developed. And I think that we're taking a measured approach because were governed by all this many web of environmental laws that are out there. And we're following those. We're not leasing all the lands. We're not developing all the lands. We're putting in restrictions on those lands and the same industry that complains about our APD issuance also complains about some of the decisions we're making to protect wildlife, wild areas and other things. We're keeping in mind the other values that the Americans hold dear. So we're trying to take a balanced approach here and environmental groups play a very important role in advocating that other side. And I'm not harping on that at all, but I think that the huge escalation in protests is a very telling factor.

Brian Stempeck: We hear a lot from Secretary Norton about cooperative conservation, this idea of involving environmental groups, the public, the industry, getting them all at the table and kind of resolving these issues. But since the number of protest has gone up so highly and the number of appeals has gone up so highly, it seems to be more contentious than ever. Do you think the cooperative conservation effort has failed so far?

Rebecca Watson: No, not at all. I think cooperative conservation is really an effort that is working and it's working every day. And I think it's a very exciting effort that we're seeing happening in the West all the time. It's not one that gets in the headlines all the time because it happens on the ground in the day to day after. I think one of the things I'm most proud of at that Bureau of Land Management is our cooperating agency rule. And that gets right back to these plans that we developed that allow for energy development. Before you can do any energy development we have a plan that says what areas you can develop it in and what areas you can't. And what we have said is we're going to involve state and local government and that is a requirement now. We made it an absolute requirement that you have to ask state and local government to help plan those areas. And that is huge. As a Westerner that is a big step and that is something we did and that is a fulfillment of cooperative conservation. In August we're celebrating cooperative conservation with a lot of groups coming and telling their stories about cooperative conservation in the Bush administration. And there are a lot of good stories and Web sites that will illustrate the many examples of cooperative conservation. So it's alive and well and we're always going to have litigation because when you are trying to balance quality of life on the environmental side and quality of life that we can get from energy, there's always going to be a question of where do you put that balance point? And people will have a different perspective. So you'll have litigation. That's part of our American way. But I think cooperative conservation is here.

Brian Stempeck: Looking forward to this fall, beyond the energy bill, another issue that's coming up in Congress is, members of the House Resources Committee, members of the Senate, are looking at potential changes to the National Environmental Policy Act and to the Endangered Species Act. These are the environmental laws that the environmental groups cite when they protest some of these energy development projects. What do you think is the administration's role in shaping how reforms of these laws go forward? And, I guess, what do you see as the big questions that need to be addressed?

Rebecca Watson: Well, I think that we have an important role because the Council on Environmental Quality is considered the expert on the NEPA law. They're the expert interpreter of it. And the Fish and Wildlife Service and the NOAA agency at the Commerce Department are both the expert interpreters of those two laws. And I think from my perspective, with the agencies that I administer, we live every day with those laws and we can talk about how those laws are administered, how they're used and what kind of improvements could be made to those laws. And I think that any law has so many values to it, but it's also a law that you can take a look at and see how can we improve it? We've come a long way in 30 years and I think some of the things that Chairman Connaughton has talked about, as far as NEPA and how we can use technology to improve NEPA process, are certainly worth looking at. So I think that there's a lot that the administration can add to the discussions as they occur up on the Hill.

Brian Stempeck: Specifically what changes do you think are needed to these laws, to NEPA or the Endangered Species Act?

Rebecca Watson: I think that those are discussions that the Hill's going to have and I think we'll add to that debate when they come up.

Brian Stempeck: All right, let's talk a little bit about some of the other aspects of the energy bill. The Interior Department also is going to be one of the agencies you're overseeing. The Minerals Management Service is going to be doing oil and gas inventory of offshore leasing, that sort of the thing. That was a very controversial part of the bill. How is Interior going to move forward with that? What's the timetable for that survey?

Rebecca Watson: Well, the timetable in the statute is quite a quick one, it's six months. And in that time period we really don't have the ability to go out and initiate our own seismic work ourselves. So what we're going to probably be doing is utilizing inventory data that we have already available in the area and then also data that we have from adjacent areas in Canada and Mexico. Work has been done in those areas adjacent to American waters and from that seismic work that was done in those waters, you can infer what the resources might be in that. So I think for our first report we'll be using existing data. That's what the statute permits and then we would have to be looking to Congress to provide budget to do seismic work or industry could undertake that work itself, but ...

Brian Stempeck: Do you think the energy bill went far enough with it comes to offshore drilling? Do you think they should have gone further and authorized new projects? I mean there was kind of an 11th hour push by the White House to try to maybe open some more drilling in the Gulf of Mexico. Do you think that should have happened or is there going to be a new push for that this time?

Rebecca Watson: Well, my secretary thought it should happen and I support what my secretary thought. I think it was a good idea. I think that, you know, we're in a time of high demand for natural gas and for oil. And there's some wonderful natural gas supplies right off our American waters and we have an excellent record of safety. We can produce this energy safely and the reality is we can produce and drill for oil and gas more safely than we can shipping it in in tankers. You have less risk of spill from oil and gas production that way than you do from tankers. We believe that that is a good choice to produce American energy when we have it available there and we can do it safely. So we think that that is important and that's why the secretary pushed that proposal.

Brian Stempeck: Do you think we're going to see a new legislative push for that this fall or possibly this year?

Rebecca Watson: Well, I was just reading a publication this morning where the folks in the utility side of the gas industry are pushing for that. The utility folks and the people in the chemical industry, the fertilizer industry, they understand the need for gas, more supplies of gas because the chemical industry in America has lost 100,000 jobs this year. The utility industries, they're hearing from their customers when the gas prices go up. They understand the connection between supply and price and I think it's very important and you lower price by increasing supply. We have the gas offshore, 60 percent of the undiscovered oil and gas in the United States is offshore. And we need to take a look about the responsible development of those resources. And I think this is something that the secretary has articulated, and it's something that we have to work with Congress and with the governors of those states. And that's what she's willing to do.

Brian Stempeck: One last question for you because we're running out of time, BLM to try and basically double the amount of wind power on federal lands in the next 20 years. How do you see that happening? There hasn't been, when that plan was first announced there wasn't a lot of interest from the wind industry. We haven't seen too many projects go forward quite yet. Where do you see that headed in the next year?

Rebecca Watson: Well, I think we're in really good shape and that's because we just issued our final wind energy EIS document just about a month or two ago. Rolled that out up on Capitol Hill and what the Bureau of Land Management did is do a programmatic EIS and looked at all the environmental impacts from developing wind energy on public lands. So we are ready and open for business. In other words, if you want to come in and permit a wind energy project, now you can tier to this larger environmental impact statement. That means your environmental permitting will go much quicker. So we have put in place best management practices to address wildlife issues in this EIS document. So we have expedited that process and that's been greeted very affirmatively by the wind energy industry. Also the energy bill passed wind energy tax incentives for two years and that's something the wind energy industry wanted. So I think that's very good. And then the final thing that's exciting is the movement by the Western Governors' Association coupled with the energy bill for transmission in the West to help move wind energy generated power to the marketplace. Because that's the second thing that a lot of people don't think about. You can develop renewable energy but if you can't get it to market that's the big missing piece. It doesn't do any good. So we've got a lot of activity in the West to transmit power and the energy bill is going to help on that score tremendously.

Brian Stempeck: OK. We're out of time. We're going to stop there. I'd like to thank our guest today, that was interior department assistant secretary, Rebecca Watson. I'm Brian Stempeck. This is OnPoint. Thanks for watching.

[End of Audio]

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