June 9, 2008
Rapidly rising energy costs are leading the U.S. government to conclude that more public lands must be opened to drilling. But environmentalists are warning that such an assertion is misleading and ecologically harmful.
The U.S. Department of the Interior says that at least 40 percent of the oil and gas that lay beneath federally-controlled lands is off limits to production -- a policy that is no longer feasible, given $4 a gallon gasoline and escalating home heating prices. By extension, the solution is to provide more access to deep waters offshore and in the Western United States where ample supplies now exists.
"America has abundant energy resources," says Assistant Secretary of the Interior for Land and Minerals Management Stephen Allred. "However, for a variety of reasons, many of these resources are not available for development. At a time when energy prices have reached record levels and Americans are feeling the impact, we must find ways to develop those key energy resources that are available to us right here at home, on our public lands."
The report is the third in a series of congressionally mandated scientific studies of U.S. onshore federal oil and natural gas resources and limitations on their development. These public lands are estimated to contain 31 billion barrels of oil and 231 trillion cubic feet of natural gas. The Bureau of Land Management administers leasing of onshore federal oil and gas resources totaling 258 million acres in 12 Western states, including Alaska.
The agency found that 60 percent of onshore federal lands have potential as domestic sources for natural gas and oil. But they are presently closed to leasing, making 62 percent of the oil and 41 percent of the natural gas inaccessible for development. An additional 30 percent of onshore federal oil and 49 percent of onshore federal gas may only be developed subject to restrictions over and above standard environmental lease terms, including seasonal timing limitations.
But the Wilderness Society criticized the analysis. It says the purpose of the government's report is to allow more production in areas thought to be energy-rich and to do so before the Bush administration leaves office next January.
More than 44 million acres of public lands are leased for oil and gas development, according to the Wilderness Society. It says that there is an "explosion" of drilling on federal lands, with 7,124 drilling permits issued in 2007, a new record for the Bush Administration. Nationwide, the leasing is outstripping the oil and gas industry's capacity to drill, as industry is exploring on only a quarter of the leases it holds.
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The Bureau of Land Management labels certain areas as "inaccessible," the group adds, even though they are. That includes those lands undergoing resource management plans as well as those covered by "no surface occupancy" stipulations, which can be accessed via directional drilling techniques. The government report also lists all of the National Petroleum Reserve-Alaska's Northeast Planning Area in the "no leasing" category, even though the area has already seen two lease sales, with a third scheduled for October.
"We are seeing gas drilling on public lands at a magnitude greater than anything we've experienced, and it threatens to forever damage many of our most treasured Western places if not done carefully," says Dave Alberswerth of the Wilderness Society. "Oil and gas development is a legitimate and important use of our public lands, but it is equally important to have oil and gas program that is balanced with other uses of those lands."
At present, the United States provides about 19 trillion cubic feet of the 23 trillion cubic feet of natural gas that it currently consumes on an annual basis. Canada supplies most of the rest. The Bureau of Land Management points out that drilling last year took place on only 11 million acres of the 44 million acres in which such rights now exists.
Why is that? The Independent Petroleum Association of America says that it is because federal law has been misappropriated. Government is obliged to consider the environmental impacts of its decisions. Today, however, executive orders, regulations and court decisions have altered the landscape while the regulatory and permitting processes are laden with environmental reviews that can delay or derail viable projects.
Offshore drilling, meanwhile, is just as onerous. Moratoria in the Eastern Gulf of Mexico, the Atlantic Ocean and the Pacific Ocean prohibit access to about 80 trillion cubic feet of potential natural gas, those producers add. These restrictions -- set by both the legislative and executive branches -- are unreasonable. They rely on antiquated and inaccurate risk assessments. New techniques such as horizontal drilling, however, allow for safe development in areas with shell formations.
Green groups respond that clean air and water is a public right and allowing additional drilling on federally-controlled property would assuredly leave an indelible footprint. In terms of off-shore drilling, they point out that 191,000 barrels of oil have found their way into the Gulf of Mexico by way of damaged pipelines and hurricane-torn oil facilities. Because there is only 50 to 75 years of natural gas on domestic property, such groups maintain that policymakers ought to pursue a sustainable energy strategy.
Through the legislative process, Congress did grant producers more drilling access in the Gulf of Mexico, although not along the Atlantic or Pacific Coastlines -- moves that the industry refers to as "baby steps." Meanwhile, unconventional domestic sources such as coal bed methane and shale along with imported liquefied natural gas will help fill the void. Roughly 10 LNG receiving facilities are expected to become operational while about 2 billion cubic feet of shale is now produced each day, all in the United States.
Despite surging demand and record energy prices, the oil and gas sectors are unlikely to get unprecedented drilling access. They must therefore work to diversify their strategies by developing more unconventional gas supplies. That tactic is also controversial. But it is necessary given the current environmental and economic scenarios.
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