Facts You Won’t Find in Western Energy Alliance’s July 26th Press Release

Overall, this seems to be a reflection of WEA’s stubborn refusal to acknowledge improvements in the onshore leasing program and to continue to blame the Bureau of Land Management (BLM) for the state of the worldwide economy and business decisions its members are making.

WEA’s report:

  1. Fails to explain what “enough” oil production might be, and contradicts its own claims by acknowledging that oil production on public lands is, in fact, up and continues to rise.
  2. Fails to acknowledge or even consider that natural gas production is likely declining due to low natural gas prices as opposed to federal policies.
  3. Fails to account for steep declines in the amount of land industry has nominated for leasing in recent years, or the corresponding effects that has on leasing, production, and revenue statistics.
  4. Fails to acknowledge the thousands of surplus drilling permits or millions of idle acres under industry’s control that they choose not to develop.
  5. Claims grossly inaccurate information, especially in characterizing the number of leases protested in FY 11.

The facts about the WEA’s claims

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,[i] even though industry nominated 38% fewer acres in FY 11 than it did in FY 08.[ii] Additionally, BLM actually leased a higher percentage of acres nominated by industry in FY 11 (90%) than it did in FY 09 (70%).[iii] 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.[iv]

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%.[vi]

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.[vii]  And don’t forget that at the end of FY 11, industry was “sitting on” (not utilizing) over 7,200 approved APDs.[viii]

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.

6.     Colorado-specific claims:

a.     WEA Claim: BLM issued 97% fewer leases.

Fact: In FY 11, industry nominated 68% less acres in CO than it did in FY 08.[ix]

b.     WEA Claim: BLM offered 4 parcels for lease in FY 2011, a 98% decrease.

Fact: In FY 11, industry nominated 68% less acres in CO than it did in FY 08.[x]

c.     WEA Claim: 71% of leases offered have been protested.

Fact: In FY 11, 54% of parcels initially offered by the BLM in CO were protested.[xi]  That represents a 39% decline from FY 07 thru FY 09, when 93% of leases sold in CO were protested.[xii]

7.     Montana/Dakotas-specific claims:

a.     WEA Claim: BLM issued 96 leases in FY 2011, a 55% drop.

Fact: BLM issued 328 leases in MT, ND and SD in FY 11 (96 of those leases were issued in MT). That represents a 24% increase over the number of leases issued in MT, ND and SD in FY 08.

b.     WEA Claim: In FY 2011, 100% of leases offered in Montana were protested.

Fact: In FY 12, none of the 205 parcels initially offered by the BLM in MT were protested.[xiii] Neither were any of the 186 parcels initially offered by the BLM in ND and SD.[xiv]

c.     WEA Claim: Total leased acreage in effect has declined 57% since FY1988 and 29% since FY2008.

Fact: By their terms, leases expire unless the industry is actively drilling or producing oil and gas from them. Thus, the decline in leased acreage is likely due to expiring leases that the industry chose not to develop. 

8.     New Mexico-specific claims

a.     WEA Claim: Leasing revenue dropped 64%, from $66 million to $24 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.

b.     WEA Claim: BLM issued 22,974 acres, an 83% drop.

Fact: In FY 11, industry nominated 84% less acres in NM than it did in FY 08.[xv] 
c.     WEA Claim: 73% of the acreage offered in New Mexico has been protested.
Fact: In FY 11, none of the parcels initially offered by the BLM in NM were protested.[xvi]

9.     Utah-specific claims

a.     WEA Claim: BLM offered 17 leases for a total of 23,080 acres, an 86% drop.
Fact: In FY 11, industry nominated 44% less acres in UT than it did in FY 08.

b.     WEA Claim: Leasing revenue dropped 99%, from $8.5 million to $86,370.

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. Further, a detailed evaluation of oil and gas production in Utah from 2003-2011 found that both oil and gas development were at high levels following recovery from the 2008-09 recession.[xvii] 
c.     WEA Claim: Leased acreage has declined 98% since FY1988 and 73% since FY2008.

Fact: Leased acreage has declined by only 33% since FY 88 and 11% since in FY 08.[xviii] Additionally, the decline in leased acreage is likely due to expiring leases that the industry chose not to develop. Finally, leased acreage in UT has fluctuated between 3.2 and 4.8 million acres over the past decade;[xix] thus, the current level of leased acreage is consistent with recent levels.

10.  Wyoming-specific claims

a.     Claim: BLM offered 213 parcels for lease in FY 2011, an 82% drop.

Fact: In FY 11, industry nominated 79% less acres in WY than it did in FY 08.[xx]

b.     Claim: 69% of acreage offered was protested.

Fact: Between FY 07 and FY 09, 74% of leases sold in WY were protested.[xxi] By FY 12, only 28% of leases initially offered in WY were protested.

11.  Claim: Total leased acreage in effect has declined 30% since FY1988 and 15% since FY2008.

a.     Fact: Industry has 11.6 million acres of leases in WY[xxii] and only 3.8 million acres production;[xxiii] thus, industry is only utilizing 33% of its leased acreage in WY. Additionally, the amount of acreage in WY nominated for lease by industry declined by 79% between FY 08 and FY 11,[xxiv] which correlates with the amount of leased acreage.

EIA on natural gas prices

 

[xxv]

Royalty Revenue vs. Wellhead Price

Not surprisingly, the Office of Natural Resource Revenues and Energy Information Administration data show a strong correlation between natural gas royalties from federal onshore lease and the prices of natural gas.[xxvi]


[i] CO BLM Nov. 2010 Lease Sale: 5 parcels initially offered; 0 parcels protested, http://www.blm.gov/pgdata/etc/medialib/blm/co/programs/oil_and_gas/Lease_Sale/2010.Par.48288.File.dat/Nov%202010%20Sale%20Notice.pdf; CO BLM Mar. 2011 Lease Sale: 2 parcels initially offered; 2 parcels protested, http://www.blm.gov/pgdata/etc/medialib/blm/co/programs/oil_and_gas/Lease_Sale/2011.Par.73084.File.dat/March%202011%20Final%20SN.pdf; http://www.blm.gov/pgdata/etc/medialib/blm/co/programs/oil_and_gas/Lease_Sale/2011.Par.36753.File.dat/Nov2011Protests.zip; CO BLM May 2011 Lease Sale: 12 parcels initially offered; 8 parcels protested, http://www.blm.gov/pgdata/etc/medialib/blm/co/programs/oil_and_gas/Lease_Sale/2011.Par.92543.File.dat/May%202011%20Final%20SN.pdf; http://www.blm.gov/pgdata/etc/medialib/blm/co/programs/oil_and_gas/Lease_Sale/2011/may_2011.Par.23810.File.dat/May%202011%20Protest%20Information.zip; CO BLM Aug. 2011 Lease Sale: 5 parcels initially offered; 3 parcels protested, http://www.blm.gov/pgdata/etc/medialib/blm/co/programs/oil_and_gas/Lease_Sale/2011/august_2011.Par.73593.File.dat/August%202011%20Final%20Sale%20Notice.pdf; http://www.blm.gov/pgdata/etc/medialib/blm/co/programs/oil_and_gas/Lease_Sale/2011/august_2011.Par.22790.File.dat/August%202011%20Protests.zip. http://www.blm.gov/pgdata/etc/medialib/blm/wo/MINERALS__REALTY__AND_RESOURCE_PROTECTION_/energy/oil___gas_statistics/data_sets.Par.67327.File.dat/table-03.pdf.

[xi] CO BLM Nov. 2010 Lease Sale: 5 parcels initially offered; 0 parcels protested, http://www.blm.gov/pgdata/etc/medialib/blm/co/programs/oil_and_gas/Lease_Sale/2010.Par.48288.File.dat/Nov%202010%20Sale%20Notice.pdf; CO BLM Mar. 2011 Lease Sale: 2 parcels initially offered; 2 parcels protested, http://www.blm.gov/pgdata/etc/medialib/blm/co/programs/oil_and_gas/Lease_Sale/2011.Par.73084.File.dat/March%202011%20Final%20SN.pdf; http://www.blm.gov/pgdata/etc/medialib/blm/co/programs/oil_and_gas/Lease_Sale/2011.Par.36753.File.dat/Nov2011Protests.zip; CO BLM May 2011 Lease Sale: 12 parcels initially offered; 8 parcels protested, http://www.blm.gov/pgdata/etc/medialib/blm/co/programs/oil_and_gas/Lease_Sale/2011.Par.92543.File.dat/May%202011%20Final%20SN.pdf; http://www.blm.gov/pgdata/etc/medialib/blm/co/programs/oil_and_gas/Lease_Sale/2011/may_2011.Par.23810.File.dat/May%202011%20Protest%20Information.zip; CO BLM Aug. 2011 Lease Sale: 5 parcels initially offered; 3 parcels protested, http://www.blm.gov/pgdata/etc/medialib/blm/co/programs/oil_and_gas/Lease_Sale/2011/august_2011.Par.73593.File.dat/August%202011%20Final%20Sale%20Notice.pdf; http://www.blm.gov/pgdata/etc/medialib/blm/co/programs/oil_and_gas/Lease_Sale/2011/august_2011.Par.22790.File.dat/August%202011%20Protests.zip.

America’s Fracking Concerns

Studies across the nation reveal legitimate worries exist across party lines

Hydraulic fracturing or “fracking,” as it is more commonly known, is a growing concern in the minds of many Americans according to a recent national survey. Fracking is the practice of sticking toxic chemicals into the ground to get to natural gas. And as the practice increases so too have worries surrounding water contamination.

As 2010 wound down a study by the Civil Society Institute revealed that more and more Americans became aware of fracking as a method for natural gas extraction from coast to coast. But the survey didn’t just reveal that Americans had heard of fracking, but it also showed that large numbers of citizens have health concerns about the practice.

The study, “Fracking and Clean Water: a Survey of Americans” showed that 60 percent of respondents had at least some awareness of the fracking issue. Of those who said they were aware of the practice, 40 percent claimed they were “very concerned” about the practice’s affect on drinking water, while another 30 percent said they were “somewhat concerned” about the practice’s affect of drinking water.

The awareness of the fracking issue as well as the concerns about its relation drinking water supplies is noteworthy because the issue was virtually unknown just a few years ago.

“If you asked someone for his or her take on fracking two or three years ago, your question would have likely been greeted with a confused gaze,” wrote Pennsylvania journalist Leah Zerbe. But now, with fracking happening in nearly 40 states, Zerbe says the awareness and concerns surrounding fracking have clearly grown.

Perhaps most interesting about the growing concerns about fracking is that they are bi-partisan in nature: 57 percent of Republicans, 74 percent of self-identified Independents and 86 percent of Democrats were among those claiming they were concerned about the practice. Those are pretty strong numbers at a time in America’s history when it is difficult to get the electorate to agree upon anything.

Moreover, less than a year after 80 percent of Americans said they don’t trust our government, the Civil Society Institute’s study shows that 78 percent of respondents “strongly” support “tighter public disclosure requirements as well as studies of the health and environmental consequences of the chemicals used in natural gas drilling.” However, the same study shows that 56 percent of Americans who are aware of fracking feel that state and federal officials are not doing “as much as they should,” and 49 percent say they aren’t doing “anything at all” to require proper disclosure of the chemicals used in natural gas drilling.

The scope of these feelings is also worth noting. It is not just limited to the heavily fracked parts of Pennsylvania or the politically charged drumlins ??? of central New York. In Wyoming, where fracking was practically invented and is practiced in small towns like Pavillion, a study reveals that residents feel gas drilling has polluted their water wells and that four out of five residents of the Pavillion area have reported headaches, nausea, itchy skin, dizziness and other ailments since production began in their town. In Colorado, where the number of gas wells has grown from 200 to 1,300 over the last ten years, methane levels in nearby water wells are reported to have increased as well.

All of these numbers combine to reveal a clear consensus. Americans are aware of fracking. While it is hard to determine if this concern began with Josh Fox’s “Gasland” movie last year or if the concern is simply the result of growing reports of water contamination near fracked lands, it’s easy to tell that eyebrows have been raised and people are demanding accountability when it comes to what is in their drinking water and under their property.

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