The People of America's Oil and Natural Gas Indusry

Western Drilling Downer

Mark Green

Mark Green
Posted September 27, 2011

The Western Energy Alliance (WEA) has a new analysis showing that oil and natural gas leasing on federal lands in the Rockies is significantly down since 2008.

How down? Using Bureau of Land Management (BLM) leasing data from 2008 through the current federal fiscal year (ending Sept. 30), WEA says the number of parcels offered has declined 70 percent. Acreage is down 81 percent and revenue 44 percent. The numbers would be worse if not for production gains in the Bakken formation in North Dakota and Montana and the Niobrara in Wyoming.

The question is, why? Answer: Lack of access to federal lands for energy development. For example, WEA says, just four parcels in Colorado have been offered for lease in 2011 and just 17 in Utah. WEA's Kathleen Sgamma:

"High value lease sales in these areas indicate industry interest and the potential for significant new government revenue. Now that BLM has worked through its new leasing policies, we hope it will offer sufficient acreage in FY 2012 to more closely align with industry interest. ... These numbers clearly show there is interest in producing from public lands in the Rockies, but the government is constraining access. Without access to public lands, oil and natural gas companies will not be able to achieve the full job and economic growth potential of the West."

The situation in the Rockies points to larger access issues that keep the energy sector from helping the country capitalize on its natural resources. A better scenario: Opening up federal areas on and offshore to development - to produce more energy, more jobs and more revenue to government.

Access in the Rockies is a key part of a pro-energy approach that by 2020 could create 1.1 million additional jobs, an additional 4 million barrels' worth of oil and natural gas and $127 billion in additional revenue to government, according to the Wood Mackenzie research and consulting firm.

Even better: These benefits are within reach. We just need the right policies from Washington.

ABOUT THE AUTHOR

Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.