The U.S. Bureau of Land Management announced it will collect $4,000 per permit application and return the money to the U.S. Treasury to offset the cost of paperwork and environmental analyses, said BLM spokesman Tom Gorey.

The energy industry, which has never before had to pay for applications for permits to drill, calls the fee a new tax. The BLM says it could help pay the government back the $25.5 million appropriated for drilling permit processing. But an environmental organization says it's about time energy companies pay what essentially would be a user fee, especially considering the huge profits developers yield from their activities on federal land.

In 2005, Congress rejected an attempt to charge for the permits. But the Fiscal Year 2008 omnibus appropriations bill that President Bush signed Dec. 26 allows the fee collection, albeit just for this year.

Marc Smith, executive director of the Independent Petroleum Association of Mountain States, said Friday the fee would be more acceptable if it went back to the BLM field office that issued the permit.

"This will do nothing to address the ongoing needs of the BLM field offices," Smith said.

"It seems like a poor policy to increase the cost of a service without a commensurate increase in the level of service," he said.

Steve Bloch, staff attorney for the Southern Utah Wilderness Alliance, welcomed the new fee.

"It's nice to see industry is being told it has to pay more of its way," he said. "But [$4,000] is a nominal amount and I really question any argument by industry that it will have a chilling effect."

Drilling permits are good for a year, but extensions are granted routinely.

Gorey said that on average, the BLM spends $5,000 on each drilling permit application.

The new policy would more than pay back the $25.5 million appropriation even if the number of new permit applications falls from past years.

The BLM received 10,492 permit requests in 2006 and 8,370 in 2007, he said.

The fees aren't likely to deter big energy developers, Gorey said, but could pinch smaller operators who submit multiple permit applications as part of an overall drilling plan.

"If they did 10 [applications] at one time, that's $40,000 versus what was zero dollars," Gorey said.

Smith said the fee would disproportionately hurt smaller companies, which already have difficulty securing drilling rigs and other equipment and need to have several permits ready to go.

phenetz@sltrib.com