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Prelude to a Cutback of Oil and Gas Development on Public Lands?

The administration kvetches that companies aren't using their leases, despite Interior regulations leaving lands "idle."

by
Bridget Johnson

Bio

May 17, 2012 - 3:29 pm
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The Obama administration issued a report this week highlighting a surplus of unused oil and gas leases on public lands, in an ominous sign that it might be laying out a case to eventually cut back on acreage open for development.

The White House forwarded the Department of Interior report to its press list, stating that more than two-thirds of federal offshore acreage leased by industry and more than half of federal onshore leased acreage in the lower 48 states remains idle without active production or exploration activity.

“As part of the Obama administration’s all of the above energy strategy, we continue to make millions of acres of public lands available for safe and responsible domestic energy production on public lands and in federal waters,” said Interior Secretary Ken Salazar. “We continue to offer new areas onshore and offshore for leasing, as we have over the last three years, and we also want companies to develop the tens of millions of acres they’ve already leased but have left sitting idle in order to further reduce our reliance on foreign oil as quickly as possible.”

The Interior Department said its finding were consistent with President Obama’s “Blueprint for a Secure Energy Future.”

It said that out of nearly 36 million acres leased offshore, only about 10 million acres are active. In the lower 48 states, an additional 20.8 million acres, or 56 percent of onshore leased acres, remain idle. Approximately 7,000 approved permits for drilling on federal and Indian lands have not yet been drilled by companies, Interior said.

While the administration publicly balks about unused leases, many point to industry being scared away from developing on public lands by increasing bureaucracy and stifling regulations.

“These Interior claims are repackaged liberal talking points that just shows they don’t understand how the economy works when it comes to energy production,” Sen. David Vitter (R-La.) told PJM. “Often because of Interior regulations, these lands sit ‘idle’ and paying into the Treasury until they can move forward.”

The report also comes on the heels of the administration taking heat over the Keystone XL pipeline controversy and an EPA administrator’s now infamous remark that oil and gas companies should be regulated a la Roman crucifixions.

The latest Interior Department regulations, putting new oversight, reporting and permitting requirements in place for hydraulic fracturing, or “fracking,” on public lands were announced just two weeks ago.

The administration followed the Interior report with an announcement today that it is moving forward with the Gulf of Mexico oil and gas lease sale announced by Obama in January, in which more than 38 million acres will be offered.

“As part of the Obama administration’s all of the above energy strategy, we continue to make millions of acres of federal waters and public lands available for safe and responsible domestic energy exploration and development,” Salazar redundantly said today. “Holding this lease sale is one of the many administrative steps  we are taking, at the president’s direction, to increase U.S. production, reduce dependence on foreign oil, and incentivize early production on leases that industry holds.”

Oil exploration on lands controlled by the government plummeted by 14 percent from 2010 to 2011. The gains in oil production over the past eight years that Obama regularly touts were on private and state lands.

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