The oil and gas industry, federal regulators and environmental groups are engaged in a battle of messaging regarding how much federal land is available for development.
They agree on the numbers.
This past week, each side supported their case with the same numbers because the real battleground isn’t in the number of federal permits issued to the industry, it’s where the industry wants to drill and how.
Oil and gas operators are holding approximately 7,200 approved applications for permit to drill (APDs) on federal leases that they have not used. According to a U.S. Department of Interior report issued on Tuesday, approximately 57 percent of the onshore public lands currently under lease for oil and gas development are “idle,” presumably debunking industry’s claim that the Obama administration is blocking energy development on public lands.
Environmental groups are correct to note that industry has a lot of active APDs to develop. But industry is telling the truth when it says a complex set of timing and surface stipulations make it difficult to develop all of those leases in a timely fashion. Sage grouse and raptor nesting protections, for example, block a sizable portion of federal leases from being developed from March to June in Wyoming.
There is a backlog of leases (corrected) under analysis at the Bureau of Land Management.
But industry officials cross the line of reason when they assert that President Obama is purposefully and masterfully ratcheting up approved APD numbers while nullifying them with onerous and over-reaching stipulations behind the scenes.
It is the federal government’s legal obligation to enforce the Clean Air Act, Endangered Species Act, Clean Water Act and other federal environmental laws. The U.S. Environmental Protection Agency‘s current effort to regulate greenhouse gases comes from a Bush-era Supreme Court mandate. These laws are complex — and some elements are flawed, vague and outdated. But they represent a contract among American citizens that clean air, clean water, wildlife and a healthy environment are resources worth protecting.
For example, operators in the Upper Green River Basin went through an arduous, multi-year environmental analysis and permitting process to develop the Pinedale Anticline and Jonah natural gas fields. Yet, even with federal and state stipulations in those plans, the mule deer population has been hit hard, and the development seriously degrades air quality — to the point that the state (out of concern for human health) has had to warn area residents to avoid going outside on 10 occasions this year.
Yet the industry continues to drill dozens of wells, 365 days of the year, seven days a week, 24 hours a day.
While drilling and production continue in the Pinedale Anticline and Jonah fields, operators must seek out replacement wells. In fact, there’s a production decline-rate at work in Rocky Mountain natural gas, which essentially means that the industry must drill more wells this year than it did last year just to maintain the current level of production. To increase production would require the industry exponentially increase the number of wells it drills this year, next year, and so on.
Understanding this, oil and gas operators were staking out future projects in Wyoming even during the commodity price bust of 2008-09. There are at least six proposed projects currently under analysis by the Bureau of Land Management in Wyoming for a total of 17,555 new gas wells.
A seventh project — EnCana Oil & Gas USA’s “Normally Pressured Lance Formation” project — would add another 3,500 gas wells surrounding the Jonah gas field.
That the industry had the foresight to initiate those projects in 2008 is an acknowledgment that analyzing and permitting large oil and gas projects takes time.
Drill, baby, drill? Okay. But first let’s understand and be up-front about whether we’re protecting or sacrificing our air, water, wildlife and other resources in the process. And if the aim is to drill our way to lower gasoline prices and more energy independence … Well, that’s another column.
Contact Dustin Bleizeffer at 307-577-6069 or dustin@wyofile.com.
I really enjoy reading Mr. Bleizeffer’s reports in Wyofile.
One correction to the story above, though. The report states that, “There is a backlog of APDs under analysis at the Bureau of Land Management.” In fact, the story referred to is about the backlog of unissued leases, not APDs.
An important fact in this debate over “access” to public lands for oil and gas drilling is that, in addition to the tens of millions of acres of BLM lands throughout the Rocky Mountain West that are under lease but not in production, the BLM has issued thousands of drilling permits to the industry that they aren’t using, a point also made in the article.
These approved APDs mean that the operators who received them are “good to go” — all approvals have been obtained to commence operations, and there are no legal challenges, “red tape,” or anything else holding things up other than company decisions about whether or not investments or resources should be committed to particular approved projects.
I suspect that one reason that so many approved BLM APDs are going unused is because most projects on public lands are for natural gas wells, and because gas prices are currently low, the companies sitting on the idle BLM drilling permits may be holding off investing in new projects until prices rise.
Anyway, the pertinent facts here — tens of millions of acres of unused leases, and thousands of approved but idle federal drilling permits — clearly demonstrate that Obama Administration policies have nothing to do with any downturn in drilling on public lands. Oil and gas companies have made those decisions on their own.