The People of America's Oil and Natural Gas Indusry

Hindering the Energy Revolution

Mark Green

Mark Green
Posted April 8, 2014

On Monday, the U.S. Energy Information Administration (EIA) released a remarkable new projection showing that given certain conditions and with the right policies in place the United States could reach energy self-sufficiency within two decades. It’s the first time EIA has projected that net imports’ share of liquid fuels consumption could reach zero – basically, that domestic production would exceed imports. Key to EIA’s scenario: access to domestic reserves.

On Tuesday, new Bureau of Land Management data showed that if EIA’s projection is to be realized, a new approach to energy development on federal lands will be needed. BLM statistics show that leasing and permitting on federal lands in fiscal year 2013 both were down, hitting their lowest numbers in years. Also down: new wells drilled. Let’s look at the data, starting with new leases:

blm_leases

In fiscal year 2013, a total of 1,468 new leases were issued, the second-lowest total since FY2001. During that period we can see that the number of new federal leases peaked in FY2006 (3,746 issued) before declining over the next four years. There was some increase in 2011, but the past two years have shown more decline. Now let’s look at permitting.

blm_permits

This chart shows a similar pattern – rising numbers of new permits into the middle of the decade, peaking in FY2007 with 7,124 permits issued, followed by a sharp decline and then a leveling off. The 3,770 permits issued in FY2013 was the lowest total since FY2002 (3,372). Now drilling.

blm_wells_reduced

Looks a lot like the first two, doesn’t it? The total number of new wells started surges in the mid-decade, peaking in FY2007 with 5,343 wells begun, before dropping off the past few years. The 2,413 new wells started in FY2013 was the lowest total since FY2005 (1,742).

One contributing factor is the 2008 recession, but with the economy recovering the leasing/permitting/ drilling numbers have not increased – indicating the need for a new federal approach to allow more leasing and streamlined permitting procedures that allow companies to get permission to drill new wells in a reasonable time frame.

Access to oil and natural gas on federal lands, onshore and offshore, is key to a strategy that could let the U.S. reach energy self-sufficiency, as EIA projected. Access means more lease opportunities and a permitting process that is timely and predictable – necessary to foster investments in energy development.

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.