Report: Oil and Gas Boom Not Happening on Federal Lands

Mar 5, 2013

A Congressional Research Service report finds that the administration deserves zero credit for America’s oil and gas boom. The increase in oil production has been from state and private lands:

On non-federal lands, there were modest fluctuations in oil production from fiscal years (FY) 2008-2010, then a significant increase from FY2010 to FY2012 increasing total U.S. oil production by about 1.1 million barrels per day over FY2007 production levels. All of the increase from FY2007 to FY2012 took place on non-federal lands, and the federal share of total U.S. crude oil production fell by about seven percentage points.

In the case of natural gas, while production has increased by 20% since 2007, “production on federal lands (onshore and offshore) fell by about 33%.”

Part of the problem is the slow process which raised the time it takes to get a permit by over 40% from 2006 to 2011.  The report states that the Bureau of Land Management explains that this increase is due to the “complexity of the process.” The report concludes: “A more efficient permitting process may be an added incentive for the industry to invest in developing federal resources, which may allow for some oil and gas to come onstream sooner.”

In a press release, House of Representatives Energy and Power Subcommittee Chairman Ed Whitfield (R-KY) said, "Where the states have been in charge, we have seen energy development boom in a safe and responsible way, but under federal control we have seen a sharp decline in production."

I've been harping on this for some time so it's always good to get additional evidence. We should also remember that by failing to develop federal lands, we're missing out on federal revenue and economic output:

The Institute for Energy Research released a study by Dr. Joseph Mason, a professor at Louisiana State University, in response to a Congressional Budget Office report from August that analyzed the benefits of opening up federal lands and waters that are restricted by law or administration policy from leasing.

“Even conservatively estimated, the economic effects of allowing access to U.S. energy resources are significant,” Mason told reporters over the phone.

The CBO found that opening up federal lands would generate a total of $7 billion in revenues during the first decade — $5 billion from ANWR and $2 billion from areas of the outer continental shelf. The CBO projected revenues from opening more lands to be between $2 billion and $4 billion from 2023 to 2035.

...

Mason found that opening up more federal lands would generate as much as $24 billion annually in taxes over seven years for the federal government in addition to lease revenues estimated by the CBO. In the long-run, $86 billion annually would be generated in federal taxes from more activity on federal lands and in federal waters.

States and local governments would see huge gains in tax revenues as well — $10.3 billion annually over the next seven years and $35.5 billion annually after that.

Also, watch this video by U.S. Chamber’s Senior Vice President for the Environment, Technology & Regulatory Affairs Bill Kovacs on why these permitting delays to energy projects hurt job creation.

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