by Chet Hardin
On June 26, the Western Energy Alliance issued a press release proclaiming "Washington Suppresses Western Oil & Gas Production; Shrinks Vital Revenue Source."
Today Western Energy Alliance unveiled new data sets for its Western Oil and Natural Gas Dashboard, which confirms that changes in federal land management policies are suppressing oil and natural gas production on America’s energy-rich federal lands. According to the Dashboard, a compilation of oil and natural gas statistics derived from government data sources, between FY2008 and FY2011 natural gas production on federal lands in the West declined 4%, while production on state and private lands increased 29%.
Key indicators in the Dashboard show the result of policies that reduce access to public lands in the West from FY2008 to FY2011. The Bureau of Land Management (BLM) offered 81% less acreage, which has resulted in a 44% drop in leasing revenue, down from $356 million to $201 million. Nationwide, royalty and leasing revenue have declined 12%, from $4.2 billion to $3.7 billion.
For Colorado, WEA claimed that:
• BLM issued 97 percent fewer leases.
• BLM offered 4 parcels for lease in FY 2011, a 98 percent decrease.
• 71 percent of leases offered have been protested.
These claims didn't sit well with the Wilderness Society and the Checks and Balances Project, which "have combed through the report line by line to present an accurate picture of oil and gas drilling on public lands."
What they found was released today. The nonprofits presented their retorts Mythbusters-style:
1. WEA Claim: From FY2008 to FY2011 in the West, BLM offered 81% less acreage.
Fact: In the Rockies (CO, MT, ND, NM, SD, UT, WY), BLM only leased 21% fewer acres in FY 11 than it did in FY 08, even though industry nominated 38% fewer acres in FY 11 than it did in FY 08. Additionally, BLM actually leased a higher percentage of acres nominated by industry in FY 11 (90%) than it did in FY 09 (70%). Finally, as of July 2012, over 88% of the public lands managed by BLM in the Rockies (not including ND and SD)—nearly 51 million acres—were available for oil and gas leasing.
2. WEA Claim: From FY2008 to FY2011 in the West, over 70% of leases offered were protested.
Fact: Protests are dramatically declining in the Rockies. Between FY 07 and FY 09, 74% of leases sold in CO, NM, UT and WY were protested.[v] In FY 11, the percentage declined to 61% throughout the Rockies, and has declined even further in FY 12—to 22%.
3. WEA Claim: From FY2008 to FY2011 in the West, federal Application for Permit to Drill (APD) approvals declined 39%.
Fact: In FY 11, BLM received 54% fewer APDs from industry than it did in FY 08—hence, the decline in approved APDs. And don’t forget that at the end of FY 11, industry was “sitting on” (not utilizing) over 7,200 approved APDs.
4. WEA Claim: From FY2008 to FY2011 in the West, federal leasing revenue dropped 44%, from $356 million to $201 million.
Fact: This is not inconsistent with the declines in nominations and drilling (such as the thousands of unused permits to drill already approved) that are controlled by the industry and affected by natural gas prices.
5. WEA Claim: From FY2008 to FY2011 in the West, nationwide, federal onshore revenue declined 11%, from $4.2 billion to $ 3.7 billion.
Response: This is not inconsistent with the declines in nominations and drilling (such as the thousands of unused permits to drill already approved) that are controlled by the industry and affected by natural gas prices. Also see chart below.
As for the claims about Colorado, they wrote that in Colorado "industry nominated 68% less acres in CO than it did in FY 08" and that "in FY 11, 54% of parcels initially offered by the BLM in CO were protested. That represents a 39% decline from FY 07 thru FY 09, when 93% of leases sold in CO were protested."