U.S. overhauls oil, natural gas drilling policy

WASHINGTON (Reuters) - Interior Secretary Ken Salazar said on Wednesday that big oil and natural gas companies will no longer be “the kings of the world” like they were under the Bush administration, announcing new drilling policies to protect the environment on western federal lands.

While the reforms would likely slow the permitting process to search for oil and gas on government lands and decrease the number of acres available for energy exploration, Salazar rejected industry claims that the Obama administration’s policy change would reduce domestic energy supplies.

“The difference is in the prior administration the oil and gas industry essentially were the kings of the world,” Salazar said in telephone briefing with reporters. “Whatever they wanted to happen essentially happened and the department essentially was the handmaiden of the oil and gas industry.”

Under the reforms, the department’s Bureau of Land Management, which oversees onshore drilling activities, would take a more active role in deciding which parcels of federal lands should be leased instead of relying on energy companies to nominate the areas they want to explore.

Salazar charged that in the past, the public lands were a “candy store” for the oil and gas industry, where they could “walk in and take whatever they wanted.”

The BLM would continue to accept industry requests regarding where to offer leases, but the agency will promote leasing in already-developed areas and will plan carefully for leasing and development in new areas.

BLM staff would also seek more public input and conduct more on-site visits to potential lease areas, rather than work from their offices, to ensure endangered wildlife and habitat would not be harmed from drilling activities.

Salazar said energy companies already had plenty of federal land to search for oil and gas, as only 12 million acres of the almost 44 million acres leased in the West were in production.

He also said the reforms would bring legal certainty to energy companies by avoiding lawsuits. Salazar pointed out that in 1998, a little over 1 percent of onshore leases were protested, but that number had soared to 40 percent by 2008.

Still, the oil and gas industry slammed the new policy.

“In what has become increasingly familiar double-talk from this administration, Interior Secretary Salazar today again spoke of the importance of domestic oil and natural gas, while making it more difficult to produce American oil and gas, put more Americans back to work and help restore our nation’s economy,” said Jack Gerard, president of the American Petroleum Institute.

The environmental community welcomed the reforms, which it said were long overdue.

“The Obama administration is working to restore balance to the process and protect clean water, clean air and America’s wildlife,” said Amy Mall, a senior policy analyst at the Natural Resources Defense Council.

“It’s no wonder that industry is whining. For eight long years, the oil and gas industry practically wrote the rules,” she added.

Additional reporting by Ayesha Rascoe; Editing by Christian Wiessner