Oil & gas public lands management 101: How to put our farms, water, and national parks at risk

Bureau of Land Management (BLM) Colorado State Director Helen Hankins has developed a pattern of offering controversial drilling plans, which when met with widespread public outcry are temporarily halted, only to be re-offered after the furor has died down.

Colorado BLM Drilling 101

In 2011 Dir. Hankins proposed oil and gas leasing in Park County at South Park, home to several large reservoirs for metro Denver, Colorado’s drinking water, serving over two million people.

When the City of Aurora raised serious concerns about the sale, including a lease parcel located within ¼ mile of the high water mark of a city reservoir, Hankins temporarily halted the lease plan. Unfortunately, in 2012, Hankins revived plans to lease South Park for oil and gas drilling. True to form, Hankins temporarily halted the oil and gas lease plans again after local elected officials, sportsmen and others raised significant concerns about the plans, including impacts to water quality, wildlife habitat and tourism.

In early 2012, Colorado BLM proposed drilling next to vineyards, orchards, organic farms and a dairy in the North Fork Valley. When local farmers, ranchers, businesses and residents overwhelmingly opposed the plan, Hankins, again, temporarily halted BLM’s plans to lease the area for oil and gas drilling.

Fast forward to the end of 2012, and Hankins – predictably – offered a similar plan that still threatened the Valley’s local economy and water supplies, and even included leasing land for oil and gas drilling near a public school. Residents, local business owners and others once again opposed the controversial plan, and widely criticized Hankins for basing her plan on outdated analysis and failing to pursue a balanced approach to energy development.  In early February 2013, Hankins again temporarily halted drilling plans in North Fork Valley.

Name this tune: In late 2012, Colorado BLM announced plans to lease land for oil and gas drilling next to Dinosaur National Monument’s visitor center and along its southern entrance, as well as near Mesa Verde National Park. BLM’s proposal would mean that visitors could see drill rigs along with 149 million year old fossils, and create more air quality problems for Mesa Verde National Park – which is already beset with pollution problems. This time, the former Superintendent of Dinosaur National Monument, National Parks Service, and La Plata County joined the chorus of locals who raised serious concerns the drilling proposals. And, once again, Hankins halted the lease plans.

Unfortunately, since then, statements from Dir. Hankins’ staff indicate that this stoppage is temporary. In March, the local Colorado BLM assistant field manager said that the drilling leases near Mesa Verde National Park could be back on the auction block as early as this summer.

Dir. Hankins needs to end this contentious cycle of offering controversial oil and gas drilling leases, deferring them when locals rise up, and then trying to drive them back through later when protests have died down.

Dir. Hankins needs to adopt a new curriculum. She needs a smart-from-the-start approach that addresses the concerns of local residents, business owners, and the many industries that drive Colorado’s economy. She needs to adopt a balanced approach that protects the state’s drinking water, farms and national parks.

Fact Check on #SOTU and Rep. Doc Hastings

In Tuesday night’s State of the Union address, President Barack Obama stated:

“Now, in the meantime, the natural gas boom has led to cleaner power and greater energy independence. We need to encourage that. That’s why my administration will keep cutting red tape and speeding up new oil and gas permits.”

House Natural Resources Committee Chairman Doc Hastings claimed in a response, yesterday, that Obama administration-created red tape has slowed down energy production.

The truth is that the oil and gas industry already has plenty of land and opportunities to drill. Oil and gas companies are sitting on millions of leased acres of public land that they’re using for production or exploration, and thousands of idle drilling permits. Meanwhile, the United States has seen oil production skyrocket on federal lands. Technology, geology and price determine where and how much industry drills, not red tape.

Instead of worrying about multi-billion dollar oil and gas companies, the Obama Administration needs to adopt a more aggressive policy when it comes to conserving public land. During President Obama’s first term, his administration permanently protected far fewer acres than his immediate four predecessors. The President and Congress need to adopt a more balanced approach to public land use, putting as much effort into protecting lands that are crucial to the nation’s tourism and outdoor recreation industries as they do expanding the oil and gas industries’ already-swollen public land holdings.

A few things Americans need to know about oil and gas production on public lands:

  • Industry is responsible for the majority of permitting delays. Last year, BLM announced it is moving to an online permitting system that will hopefully help companies cut down the time it takes them to properly file permit applications.

permit_timingBLM Table of Average Application for Permit to Drill (APD) Approval Timeframes:  FY2005 – FY2012

  • Industry is submitting far fewer permits to drill on public lands because of the shift from public lands’ natural gas resources to private lands’ shale oil deposits, and the federal government can’t approve a permit unless industry submits an application for it. More importantly, the federal government consistently approves drilling permits faster than industry can drill new oil and gas wells. The only thing holding back industry is industry.

wells_v_permitsBLM Summary of Onshore Oil and Gas Statistics

  • Industry does not use the drilling permits that have already been issued for oil and gas development. In fact, there are nearly 7,000 unused drilling permits that industry could develop on federal public lands.

unused_permitsBLM Approve Permits – Not Drilled table

  • According to the Department of Interior’s Oil and Gas Lease Utilization, Onshore and Offshore report, issued May 2012, “As of March 31, 2012, approximately 56 percent (20.8 million acres) of total onshore acres under lease on public lands in the Lower 48 States were conducting neither production nor exploration activities”

leased_productionDOI Oil and Gas Lease Utilization Report

  • The latest oil boom in the lower 48 states is due largely to an unconventional resource known as “shale oil,” (oil trapped within shale rock). The vast majority of both “shale oil” and “shale gas” (natural gas trapped within shale rock) is found under private and not public lands. The location of these resources, not safeguards for air and water, explain the shift in drilling from public to private lands.

shale_locationAdam Sieminski, U.S. House, Subcommittee on Energy and Power Committee on Energy and Commerce, 2 August 2012

ICYMI: Denver City Council supports BLM’s smart approach to protect water from oil shale speculation

On Monday, the Denver City Council issued a proclamation supporting the “research first” approach to protect western water, taken by the Bureau of Land Management’s (BLM) in its recently issued Programmatic Environmental Impact Statement (PEIS). By taking this action, Denver joined the list of communities throughout Colorado’s Front Range and West Slope that have publicly supported the BLM’s common sense, balanced approach to oil shale speculation. Local officials in these communities are particularly concerned about oil shale’s potential impact on the state’s already overstressed water supply.

denver_oil_shale_proclamationThe council rarely takes political positions but decided to weigh in on this important issue. The proclamation passed overwhelmingly, with a final vote of 8-2. The council explained that projections show Colorado’s water demands will increase 50 to 80 percent over the next 35 years. The Government Accountability Office reported that full-scale oil shale development could use as much as 140 percent of the water used by the Denver metro area alone.

“It is a responsibility for us as leaders on behalf of the constituents of Denver to express these concerns to ensure my grandchildren and their grandchildren have water to drink, take a bath in and cook with,” said Councilwoman Debbie Ortega.

“This is central to our business,” said Councilman Chris Nevitt. “We are not going too far out on a limb on a position that has been articulated by the Department of Natural Resources and Democratic and Republican governors alike.”

To date, oil companies have failed to find a commercially viable technology that converts oil shale rock into oil. Because of the uncertainty around what technology would be used for industrial-scale oil shale development, the impacts to water quantity and quality are unknown.

The BLM’s new PEIS sets aside 1,000 square miles of public land to conduct oil shale research and development. It also states that BLM will not grant commercial leases until “the lessee satisfies the conditions of its RD&D lease and meets all federal regulations for conversion to a commercial lease.” One of the most important conditions would be demonstrating the impact to both water quantity and quality.

Elected officials from cities and towns throughout Colorado have expressed their support of the BLM’s position.

Front Range officials sent a letter of support for the new PEIS to Sec. Ken Salazar:

“Oil shale development could pose significant risks to both water quantity and quality in the Colorado River watershed. As elected officials along the Front Range of Colorado – whose communities depend on water from the Colorado River Basin – we strongly believe it is essential that any final plan guiding the development of oil shale on our public lands, must first prioritize a thorough understanding of the potential impacts this industry would have on our water resources

Recently, the Front Range Water Users Council – which collectively meets the water demands of approximately 80% of Colorado’s population – requested that the BLM closely analyze the potential broad scale impacts of oil shale development before considering commercial leasing of public lands. We strongly agree, especially given that this year’s drought has severely strained our water supplies and there is no relief in sight. The drought underscores the fact that we cannot afford to take risks with our water and compromise Colorado’s farms and ranches, our world-class outdoor recreation economy, and our growing communities.”

West Slope officials also expressed their support for the PEIS in a letter:

“It is smart to require that research and development of oil shale and tar sands technologies be completed and the impacts analyzed before moving forward with a commercial leasing program.

Our public lands are enormous economic drivers in the Intermountain West. Tourism, recreation, hunting and fishing, ranching, and other industries provide billions of dollars of revenue and hundreds of thousands jobs throughout the three-state region.

The BLM has acknowledged in the Draft PEIS that the potential impacts of development on communities, water and air are largely unknown but potentially significant.

These lands are our heritage, and for many, our livelihoods. It is critical that we know more about the impacts of oil shale and tar sands development before putting communities, water and air at risk.”

Round up of local elected official’s expressions of support:

Denver City Council

Front Range local elected officials

Thornton letter (Denver suburb)

West Slope/mountains Colorado, Wyoming, Utah local elected officials

Town of Carbondale

Pitkin County

Routt County

City of Grand Junction

City of Rifle

Town of New Castle

Seven things you need to know about oil production and drilling on your public lands.

With less than three weeks to go before Election Day, the rhetoric around gas prices and drilling is heating up at campaign events around the country. The issue was also front and center in Tuesday night’s presidential debate.

Predictably, data about oil production on federal lands and its effects on gas prices is being spun and twisted to fit a range of agendas. While the data shows that industry interest for drilling permits has moved away from public lands to private lands – there is a simple explanation for the shift that industry lobbyists and PR pros aren’t telling you. Drilling companies go where the most profitable resources are, and today that means shale oil, the vast majority of which is under private lands.

We want to help the public by laying out the hard facts about oil production on federal lands and its impact on the price at the pump (or lack thereof) so that the next time there is a sound bite or lofty rhetoric, the public knows the truth.

Here are seven things to you need to know about oil production and drilling on your public lands.

1. Oil production is at its highest level in eight years.

Despite the conventional wisdom spun by industry and on campaign trails by Big Oil politicians, the U.S. is the world’s third largest oil producer. In fact, domestic oil production is at its highest level in eight years.

Oil Production Graph
Source: “U.S. Field Production of Crude Oil,” Energy Information Administration, accessed 18 October 2012.

2. The vast majority of shale oil and gas resources are found under private and not public lands.

The latest oil boom in the lower 48 states is due largely to an unconventional resource known as “shale oil,” (oil trapped within shale rock). The vast majority of both “shale oil” and “shale gas” (natural gas trapped within shale rock) is found under private and not public lands. The location of these resources, not safeguards for air and water, explain the shift in drilling from public to private lands.

Source: Adam Sieminski, Testimony of the Energy Information Administration, U.S. House, Subcommittee on Energy and Power Committee on Energy and Commerce, 2 August 2012.

3. Natural gas prices have plummeted, while oil prices have rebounded since 2008.

The major factor driving whether a rig drills for oil or natural gas is price. Most of the energy resources under federal public lands are natural gas. As we saw above, most shale oil resources are under private lands. Given that natural gas prices plummeted and oil prices have rebounded since 2008, there is a strong incentive for drill rigs to move from public to private lands.

Source: “Cushing, OK WTI Spot Price FOB,” Energy Information Administration, accessed 18 October 2012.
U.S. Natural Gas Wellhead Price,” Energy Information Administration, accessed 18 October 2012.

4. Despite the fact that most shale oil resources are under private lands, oil production was higher on public lands in 2011 than it was in 2007.

One would of course expect oil production to skyrocket on private lands, but oil production has also increased on public lands by about 19,000 barrels per day.


Source: Marc Humphries, “U.S. Crude Oil Production in Federal and Non-Federal Areas,” Congressional Research Service, 20 March 2012.

5. More oil production from public lands will not affect the price at the pump.

The Associated Press found that “[g]as price spikes have had little to do with the level of oil produced in the United States.” This is because the price of oil is set on a world market, and increasing demand from countries such as China and India is raising the cost of oil. So, drilling companies make more money drilling for oil when prices spike, but it won’t lower the price at the pump.

Click the snapshot below to view the Associated Press’s interactive chart on their website.


6. The U.S. Bureau of Land Management continually approves drilling permits faster than the number of new wells industry develops.

Critics often point to declining permit numbers as proof positive that the federal government is blocking development, but the facts tell a different story. Industry is submitting far fewer permits to drill on public lands because of the shift from public lands natural gas resources to private lands shale oil deposits, and the federal government can’t approve a permit unless industry submits an application for it. More importantly, the federal government consistently approves drilling permits faster than industry can drill new oil and gas wells. The only thing holding back industry is industry.

Source: “Number of Drilling Permits Approved by Fiscal Year on Federal Land,” U.S. Bureau of Land Management, last updated 9 November 2011.
Number of Well Bores Started (Spud) During the Fiscal Year on Federal Lands,” U.S. Bureau of Land Management, last updated 9 November 2011.

7. Industry is sitting on more than 7,000 federal drilling permits with a green light to drill.

Lastly, industry does not use the drilling permits that have already been issued for oil and gas development. In fact, there are more than 7,000 unused drilling permits that industry could develop on federal public lands.


Source: “Approved Applications for Permit to Drill – Not Drilled,” U.S. Bureau of Land Management, 30 September 2011.

Having your cake and eating it too…

Ted Zukoski at unEarthed compares the oil and gas industry to a hungry, angry baby in his blog post today examining Secretary Salazar’s and the BLM’s latest decision to protect Colorado’s Vermillion Basin while allowing drilling on the vast majority of lands in the area.

“Meet the oil and gas industry in Colorado, the crybaby of the West’s public lands debate,” is his line following a metaphorical intro involving cake that made us briefly think he was recreating the old Bill Cosby parenting bit. Ted delivers a clear view of the facts surrounding the oil and gas industry’s insatiable appetite for land.

In spite of a 24-year high in drilling activity and the availability of 7,000 unused drilling permits with a green light to drill, the oil and gas industry still says that allowing drilling on 90 percent of a 2.4 million acre parcel is a “conservation-only approach.”

We recommend giving Ted’s post a read.

Oil drilling is doing so well they’re burning natural gas …

by Matt Garrington

Apparently, oil drilling is doing so well, oil and gas companies are burning off nearly one-third of the natural gas they produce in North Dakota. Now, House Democrats are calling for a congressional investigation into these oil and gas drilling companies’ practice of wasting a viable energy resource.

The request follows an article in The New York Times exposing the process. According to the Times, loose regulations in North Dakota has led to the widespread practice of deliberate burning off natural gas, commonly known as gas flaring.

Reps. Henry Waxman (D-CA) and Bobby Rush (D-IL) criticized the practice in a recent letter to House Republicans and Energy and Commerce Chairman Fred Upton (R-MI): “These wasteful practices appear to be a result of high oil prices and low prices for natural gas.  Investments in infrastructure to capture the natural gas associated with oil drilling are not keeping up with the rapid pace of oil exploration and development.”

The New York Times also reports the gas flaring is wasting enough “energy every day to heat half a million homes for a day” and dumps “two million tons of carbon dioxide into the atmosphere every year.”

The reason oil and gas companies are burning off the excess production is due to lack or storage capabilities and lack of access to a gas pipeline, which has a widely covered, troubled past. Yet, these corporations continue to extract and waste America’s energy supply with little regard to the trouble created.

“Our goal should be to utilize domestic energy resources responsibly to reduce our dependence on imported energy, not to squander vast quantities of natural gas,” writes Reps. Waxman and Rush.

In North Dakota, the Bureau of Land Management (BLM) manages approximately 1,700 oil and gas leases, which generated $12.3 million in revenue in 2006. The BLM returned $6.2 million to the state. There is no doubt that North Dakota residents will not be happy to learn oil companies are squandering hundreds of thousands of dollars in potential revenue for the state.

These are also the same oil and gas companies who have been complaining about drilling regulations on public lands. In Washington, executives continue to ignore the facts when testifying before Congress – misrepresenting the truth about energy production. In fact, oil and gas activity is actually nearing a 20-year high. So it is wild that these corporations continue to get away with wasting energy, demanding more taxpayer handouts, and double-down on American families hard-earned wages.

Advisory: Udall and Grijalva Ask for a Price Check on Behalf of American Families

Update: Read Rep. Grijalva and Sen. Udall’s letter to the Comptroller General.

Rep. Raùl Grijalva and Sen. Tom Udall are announcing proactive steps they’ve taken to determine if American families are receiving what they deserve from the oil and gas companies that lease public lands. Grijalva and Udall have officially requested the Government Accountability Office (GAO) to conduct an, “investigation of corporate profits and public financial benefits from mineral and oil extraction on federal lands.”

At a time when the five largest oil and gas companies are reporting $67 billion in profits over six months, while collecting $15 billion per year in government handouts, it’s fair to ask whether or not the industry owes their landlords – the American people – a little more rent.

“A GAO report is a great step in finding out how much the American public is losing in fair returns on the lands they’ve lent to oil and gas and mining companies,” said Checks and Balances Project Deputy Director Matt Garrington. “Americans are already paying oil companies near-record high prices at the pump, and then paying again through billions in taxpayer-funded corporate welfare. I commend Sen. Tom Udall and Rep. Raùl Grijalva for working to protect the American taxpayer by making sure some of the wealthiest corporations are paying their fair share.”

Thursday morning, Grijalva and Udall will hold a press conference to publicly release their request and explain why they’re concerned that Americans aren’t being fairly compensated for the billions in resources that oil and gas companies pull out of publicly owned land.

The Checks and Balances Project will continue to cover this story. For now, here’s the press conference information:

Grijalva Press Conference Details

Where: 1629 Longworth House Office Building

When: Thursday, Sept. 22, 9:00 a.m.

What: Public release of Grijalva/Udall GAO study request letter and media Q & A

Click to read Rep. Grijalva’s media advisory.

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