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Why We Need More Development on Government Lands and Offshore

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Oil and natural gas from federal lands and waters is critical to meeting the nation's energy needs, providing approximately 30 percent of all oil and 38 percent of all natural gas produced in the United States. In terms of future production potential:

  • Federal lands hold an estimated 650.9 trillion cubic feet of recoverable natural gas, enough to meet the natural gas heating needs of 60 million households for 160 years (approximately 60 million households in the United States are heated by natural gas).
  • Federal lands also hold an estimated 116.4 billion barrels of recoverable oil, enough to produce gasoline for 65 million cars and fuel oil for 3.2 million households for 60 years.
  • Greater access to these areas is needed because that's where the remaining oil and natural gas accumulations are likely to be located – particularly the larger ones. Although much of our nation's natural gas production is from private lands, this is not enough to meet our growing energy demand – particularly natural gas for electric power generation.

Our nation's long-term energy security will depend upon diversity of sources of supply. It is important to remember that U.S. domestic production is mostly made up of modest amounts from hundreds of thousands of wells in thousands of oil and gas fields, both onshore and offshore. With the exception of a few very large fields discovered many decades ago, all of our current production comes from fields that can be characterized as only a few weeks or months of supply. Thus, each discovery makes a proportional contribution to supplies over 10, 20, or in some cases, 50 or more years. The U.S. needs a constant supply of new discoveries to replace declining production from existing and end-of-life wells to meet our nation's growing demand for energy. Otherwise production will eventually fall, creating a supply/demand imbalance that will either be met by growing imports, rising prices, or both.

The Importance of Multiple Use Federal Public Lands

Let's consider the example of oil and natural gas resources beneath multiple use public lands across the country administered by the Bureau of Land Management (BLM). A 2006 study by the BLM found that approximately 24 percent of Federal Lands onshore (23.8 million acres) are accessible under standard industry lease terms. Based on current resource estimates, these lands are expected to contain 3 percent of the remaining oil (743 MMBO) and 13 percent of the gas (25.2 Tcf) resources.

It is important to note that we are talking about multiple use public lands, where development of energy resources is allowed, along with grazing, recreation, hunting, fishing, and other uses. These are government lands designated for use for economic, recreational and scientific purposes. Around one-third of the land in the United States is controlled by the government, most of which is in the West. In Wyoming, for example, the government controls 50 percent of the land in the state. About one-third of government lands are set aside as national parks, wildlife refuges or wilderness areas. Industry is not advocating for exploration on federal lands that have been set aside for national parks or wilderness areas where drilling is banned.

Exploration and production of energy resources in the Mountain West is not easy and has required technological breakthroughs and strategies to address land use, environmental, and cultural resource concerns in responsible and effective ways. U.S. energy companies, working with government agencies and other regional and local stakeholders, are committed to employing technologies and practices to protect the land and environment. The publication Rocky Mountain States Natural Gas: Resource Potential and Prerequisites to Expanded Production - September 2003 (1.19MB PDF), prepared by the Department of Energy (DOE), describes the significance of the energy resources of the Mountain West to meeting the nation’s energy challenge. This publication also appropriately discusses the land use and environmental concerns in the region, and the importance of collaboration by all stakeholders to assure environmentally sound and economically feasible development of these important American resources.

The Importance of Federal Mineral Rights Offshore on the Outer Continental Shelf

Offshore areas currently account for about 20 percent of our domestic oil and gas production. Based on assessments by the U.S. Geological Survey and the Minerals Management Service, 50 percent of undiscovered oil resources and 36 percent of undiscovered natural gas resources lie offshore. If we are to meet our growing demand for oil and natural gas, our nation will need to develop these offshore resources.

Advanced technology allows the industry to develop offshore resources without environmental harm. Clean beaches and thriving commercial and recreational fisheries can and do coexist with offshore production. One of the primary concerns mentioned by drilling opponents is the potential for oil spills. Industry vigilance and stringent regulatory oversight combine to produce excellent environmental performance in the area of oil spill preparedness and prevention. Offshore operators are subject to at least 17 major permits and must follow 90 sets of federal regulations. Government oversight also applies to any associated pipelines or onshore facilities. As a result of these improvements in the technologies of offshore drilling, the track record for the U.S. oil and gas industry has been exceptional. Since 1980, the U.S. Minerals Management Service (MMS) reports that offshore operators have produced 4.7 billion barrels of oil with a spill rate of only .001percent. Natural seeps introduce as much as 150-175 times more oil into U.S. marine waters than offshore oil development.

Even though several major hurricanes have affected offshore operations, there have only been 34 spills of 50 barrels or more since 1985. The industry’s performance during the unprecedented 2005 hurricane season, when Hurricanes Katrina and Rita roared through the heart of the Gulf of Mexico, demonstrated the level of environmental protection built into offshore operations. Nearly 3,050 platforms and more than 22,000 miles of pipelines were in the direct path of these hurricanes. Some platforms experienced 5 to 6 hours of sustained winds of 170 miles per hour with gusts over 200 miles per hour. Production was shut down, platforms were evacuated, and safety valves and subsurface well control systems worked as designed to prevent loss of oil to the environment. According to a federal report issued in 2006 by the Minerals Management Service, "there were no accounts of spills from facilities on the Federal OCS (Outer Continental Shelf) that: reached the shoreline; oiled birds or mammals; or involved any discoveries of oil to be collected or cleaned up".

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