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The West as Carbon Colony: Tempest Over Wild Lands and Unexploited Oil and Gas Leases

By John McChesney, Director of the Rural West Initiative

Energy companies and some congressional Republicans have been up in arms about Interior Secretary Ken Salazar’s order 3310, from December 2010, for BLM to inventory public lands for “wilderness characteristics.” If the land is found to be worth protecting, it will receive the designation “Wild Lands.” Oil and gas drilling was put on hold in areas to be surveyed until decisions are made. Energy companies felt the order was a sneaky way to get new wilderness areas without congressional approval.

When asked about the charge that his administration was restraining domestic onshore drilling, here’s what President Obama said: “right now, the industry holds leases on tens of millions of acres — both offshore and on land — where they aren’t producing a thing. So I’ve directed the Interior Department to determine just how many of these leases are going undeveloped and report back to me within two weeks so that we can encourage companies to develop the leases they hold and produce American energy. People deserve to know that the energy they depend on is being developed in a timely manner."

That didn’t sit well with the oil and gas industry and its supporters in Congress. And increased pressure for more drilling seems to have worked. On Mar. 15th, Secretary Salazar said that the BLM would boost permits for oil and gas drilling by 44 percent in 2011. He said that the Bureau would approve 7200 permits as compared to 5000 in 2010.

I asked Reed Porter of the American Petroleum Institute if that was enough to satisfy the industry. "Every new permit is welcome," he said. But is that increase enough? "I can't put a number on it," he replied, adding that permitting should be allowed to increase in relation to increased demand.

Proponents of greater access to federal lands use sharply escalating gasoline prices to leverage their argument, but there's little evidence that more drilling on federal lands would have any impact on pump prices. On Mar. 17th, Richard Newell of the Energy Information Agency told the House Committee on Natural Resources:

"Long term, we do not project additional volumes of oil that could flow from greater access to oil resources on Federal lands to have a large impact on prices given the globally integrated nature of the world oil market and the more significant long-term compared to short-term responsiveness of oil demand and supply to price movements."

A trio of Senate Democrats picked up on the President’s remarks about unused leases, and introduced a bill to force oil companies to drill on land on which they already hold leases. Senators Robert Menendez (D-N.J.), Charles Schumer (D-N.Y.) and Bill Nelson (D-Fla.) said essentially, use it or lose it.  Menendez said, “We cannot afford a structure that allows companies to keep oil for a rainy day when they could be producing now.”

The Petroleum Institute's Reed Porter responded that it's not in oil companies' interest to sit on land that they paid millions to lease. He added that there's a long process of surveying and permitting between the lease grant and actual drilling, if any drilling is warranted. "Use it or lose it is already law," Porter said.  If oil companies do nothing on the land, it reverts after three to ten years.

For more on this story, Jackie Wheeler of High Country News has this to say about the confusion over wild lands and order 3310



Last modified Tue, 5 Jul, 2011 at 7:11