The number of oil and natural gas leases on US and tribal lands
continued to fall in fiscal 2015, while the number of approved yet
unused drilling permits reaching a record high, Bureau of Land
Management data showed Monday.
The data, updated to include statistics through fiscal 2015, seems
to back up frequent arguments from US producers that the Obama
administration is doing little to promote drilling on federal lands
amid the ongoing shale renaissance. But it also bolsters claims
often made by administration that these same producers are often
letting leases on federal lands remain idle or simply not interested
in drilling on lands the government has opened for oil and gas
development.
Production from federal and tribal onshore leases accounted for 7%
of total US oil production and 11% of total US natural gas
production in fiscal 2015, BLM said.
In fiscal 2015 industry bid on just 15% of the over 4 million acres
of federal land BLM offered for lease and continued to produce on
only 40% of the federal acres currently under lease, the agency said
in a statement.
"At the end of the last fiscal year, there were 32.1 million acres
of public land under lease -- an area the size of Alabama -- yet
only 12.8 million acres were producing, an increase of 70,000 acres
from the prior year," the BLM said.
More precisely, the total number of producing leases on federal
lands has fallen from 14.54 million in fiscal 2008 to 12.76 million
in fiscal 2015 while the total number of wells spud each year on
federal lands has fallen from 5,044 in fiscal 2008 to 1,621 in
fiscal 2015.
And, since fiscal 2008, the total number of leases in effect has
fallen steadily each year, down nearly 20% from 54,359 leases to
44,213 leases in fiscal 2015, the BLM data shows.
Over that eight-year period, the total number of federal and tribal
acres leased has also fallen by nearly 32%, from 47.24 million acres
in fiscal 2008 to 32.19 million acres in fiscal 2015.
INDUSTRY GROUP FAULTS OBAMA ADMINISTRATION
Nearly all of BLM's new data shows significant declines since the US
oil and gas renaissance began, as credit for the domestic supply
boom has often been given to production on state and private lands.
The total number of applications for permits to drill on federal
lands has dropped to 3,508 in fiscal 2015 from 6,617 in fiscal 2008,
the number of new leases issued fell to 852 from 2,416 and the total
number of acres leased has fallen to 810,068 from over 2.6 million.
BLM pinned some of this decline in oil and gas prices from fiscal
2014 to 2015.
But Kathleen Sgamma, vice president of government and public affairs
with the Western Energy Alliance, an industry group, said part of
the blame falls to the Obama administration which continues to offer
leases about which producers are not interested.
"BLM offered millions of acres in very remote, unproven areas of
Alaska that there continues to be little interest in, while offering
very little in the Rocky Mountain states where there remains a huge
backlog of nominations," Sgamma said in a statement.
In addition, the BLM continues to approve permits more slowly than
states, hindering producers' plans, Sgamma said.
"When it takes BLM a long time to process permits, sometimes years,
companies? plans change, especially when the economic environment
changes significantly as it has," she said. "If BLM could process a
permit in a timely manner like the states do, then companies
wouldn't have to request permits so far in advance, and permits
would more closely match actual drilling activity."
The BLM said in fiscal 2015 it generated more than $2.1 billion in
royalties, $30 million in rental payments and $112 million in bonus
bids.
--Brian Scheid,
brian.scheid@platts.com
--Edited by Richard Rubin,
richard.rubin@platts.com
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