Op-Ed: Big Energy Makes Misleading Economic Claims

OIL AND GAS DEVELOPMENT ON PUBLIC LANDS IS alive and well despite what some special-interest groups are claiming.

Lobbyists for big energy hope to convince Congress to undo commonsense Interior Department drilling reforms, and they’re hoping to roll back important environmental and public safety protections by making unfounded claims about how these reforms affect the economy. Congress should not heed these complaints.

The fact is, with these reforms in place, the energy industry is poised to develop a massive number of oil and gas projects in the West.

?In Wyoming, for example, the Bureau of Land Management is working to approve the Continental Divide-Creston project, a field of about 9,000 new wells.

It will be one of the biggest drilling operations in the nation-roughly the size of the well-known and extremely productive Jonah and Pinedale Anticline projects combined.

The BLM is also in the midst of approving five other new projects in Wyoming that would authorize drilling nearly 11,000 more wells. This level of drilling constitutes another boom.

Since last July, the BLM has decided protests challenging 10 oil and gas lease sales in Wyoming, issuing about 80 percent of the parcels that had been protested.

There is no large backlog of undecided lease protests as some industry groups claim.

Still, the Western Energy Alliance, an oil and gas industry promoter, recently issued a report claiming the number of lease parcels on public lands has declined under the current administration. But this is just a selected piece of the story.

While the number and acreage of oil and gas leases have declined recently, oil and natural gas prices-and demand for these commodities-have also tumbled during this period, caught up in the Great Recession. Companies have been less interested in drilling or nominating parcels of land to be leased.

A downward trend in leasing activities has been a nationwide phenomenon, and not just on federal lands. It has been a result of market forces, not government practices and policies.

As the WEA’s own research shows, the oil and gas industry nominated fewer parcels for leasing in 2009 and 2010 than in previous years.

The industry didn’t want new leases; they weren’t being “withheld” as WEA implies. Moreover, the industry continues to hold vast acreages of previously issued leases that it has not bothered to develop. And it can’t keep up with the number of drilling permits being issued or it doesn’t want to.

In 2010 only 36 percent of the drilling permits issued were drilled by industry.

The WEA’s data also show that total revenue from taxes and royalties from oil and gas development in the Rockies is way up since 2003. Total revenues have been flat since 2006, but are still more than three times what they were in 2003.

Oil and gas development in six Rocky Mountain states is currently generating about $6.6 billion in revenues annually. According to the BLM, revenue generated from lease sales was up 57 percent in 2010 over the previous year. This source of income remains significant for states.

The Obama administration favors development of natural gas. Therefore, the House Natural Resources Committee should seek common ground on this and other energy issues. Rather than attacking, for example, a reasonable plan to require public disclosure of the constituents of fracking fluids (which contain toxic compounds), the House should focus on making sure that fracking, which has contributed to increased natural gas supplies, is done safely. And opportunities such as increased energy efficiency put money in consumers’ pockets; so we could all agree to work toward that.

The Department of Interior’s public lands energy policies have been needed and appreciated by the public. If the only policy pursued in the House is to destroy these initiatives that would be a mistake. For example, the Interior Department’s leasing reforms have shed more light on the practice of oil and gas leasing, which had been almost solely the province of industry. This has now changed, and that’s a good thing.

The administration’s policy of recognizing wilderness-quality lands as “wild lands” is also widely appreciated by backcountry hunters, among others.

We don’t have to choose between economic health and environmental conservation. With care and foresight we can have good jobs and healthy public lands.

Voters will not tolerate loss of control and loss of access to public lands in the name of misleading economic claims made by energy industry lobbyists. These lands belong to “we the people,” and that must be the bedrock of all public lands energy policies.

Contact: Bruce Pendery, program director, Wyoming Outdoor Council, bruce@wyomingoutdoorcouncil.org; 435-752-2111