The Trump administration wants to expand surface and sub-surface leasing of federal and tribal lands as part of a push to improve energy exploration in the United States. To that end, in July of 2017, the Interior Department issued a directive to streamline the process for oil and natural gas drilling on federal lands.
Although the law requires applications for permit to drill (APD) to be approved within 30 days, the actual time averaged 257 days in FY2016. The 2017 directive, signed by Secretary of the Interior Ryan Zinke, seeks to improve the Federal Onshore Oil and Gas Leasing Program and the Federal Solid Mineral Leasing Program to speed up the process.
Significant transformation will be required to meet the new target. Today, the leasing process can be laborious. Obtaining a lease itself is difficult, and the subsequent APD process has its own complex set of rules and regulations. The required processes span multiple agencies with varying authorities, governed by both federal and state laws and regulations.
Federal agencies—led by the Department of the Interior (DOI) and several of its sub-agencies, including the Bureau of Land Management (BLM), the Office of Natural Resources Revenue, the Office of Environmental Policy and Compliance and the Bureau of Indian Affairs—recognize the need for improvement. As a result, bureaus and offices within DOI are examining how to enhance the process to benefit not only the oil and gas companies but also the federal holdings and stakeholders, including Native Americans. The effort reflects the administration’s request in section 280 of OMB Circular A-11 that all agencies establish a culture which is mindful of the customer experience across federal government services.
Recently, CGI leaders within our U.S. federal and commercial oil and gas sectors sat down with government and industry stakeholders to discuss their challenges. One major theme emerged: the need for government agencies to establish a customer service mindset to accomplish administration objectives.
While much has been written about citizen-centric services, government agencies must also consider bringing a service-based approach to support companies seeking to expand economic opportunities. Just like individual citizens, companies are also seeking increased transparency, accessibility and responsiveness when working with the government. While the concept sounds simple enough, it’s sometimes difficult to determine where to start.
Based upon these conversations and CGI’s 30-plus years of experience serving both the oil and gas industry and federal agencies, I offer four quick-win recommendations for greater efficiency in supporting federal energy exploration stakeholders:
- Provide greater transparency. Oil and gas companies need to understand where their APDs are in the process and what the timelines are for completion. Lack of insight leads to a downstream domino effect of delays with measurable costs to industry. Maneuvering through the lease and permitting process is not the end of the story, or the start of the revenue flow. Companies often encounter delays, such as waiting for rigs to become available, or having APD restrictions on drilling start dates based on weather or environmental factors. Transparency into the various processes―from a company-centric view rather than an agency-centric view―is critical to improved partnerships with oil and gas firms.
- Enable online access. Needed transparency could be accomplished through a simple web presence. While BLM specifically has made great strides in refining its processes, oil and gas firms rely upon weekly or bi-weekly conference calls with the bureau to review the status of their applications. Industry and government personnel needed on these calls include geologists, landmen and regulatory staff—a costly and time-consuming approach. Implementing tools to allow online APD approvals would be a welcome first step toward increasing process efficiency.
- Demonstrate the end-to-end process: Agencies within DOI should consider collaboratively designing and presenting a simple web-based view of the end-to-end leasing and permitting process to help companies navigate the process. The website could provide points of contact within the various agencies and which office to contact for a specific question or issue. It could also provide links to state regulations that may impact a lease or permit issuance. Establishing an online process view is a critical first step toward future improvements leveraging robotic process automation (RPA), chatbots, virtual agents and advanced analytics. OMB Memorandum 18-23 calls for agencies to shift work from low value to high value to reduce the burden on citizens and businesses; revising DOI’s processes could be just the beginning.
- Enhance education with an ecosystem view: Today, many companies are not working with the government to lease federal and tribal lands because they do not understand the process. Much can be done to educate firms regarding the various lease types and bond requirements, such as through the web presence discussed above. Additionally, internal education within and across government organizations would help address the complexity inherent within the permitting process. Agencies should consider collaboratively establishing an ecosystem view of the process and educating each employee who supports oil and gas constituents in that effort.
Foundation for the future
These quick wins would set a foundation for adopting a service mentality toward leasing and permit management. In the future, we see numerous opportunities for even leaner processes supported by technologies such as RPA and analytics, to position for industry self-service and a digital APD process ―all to decrease the time required to begin oil and gas production. With expanded education and more user-centric services, additional firms may look to leasing federal lands as well, benefitting economic growth.
Achieving the administration’s vision for American energy independence places increased demands on agencies like DOI. We look forward to continued collaboration with our government and industry clients, sharing knowledge and best practices for improving core processes.
What other quick wins can help industry and government expand effective use of public lands? Share your ideas in the comments.