API Underscores Importance of Federal Oil and Gas Program, Urges DOI to End Federal Leasing Pause
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WASHINGTON, April 15, 2021 – The American Petroleum Institute (API) today submitted comments to the U.S. Department of Interior (DOI) on the importance of continued natural gas and oil leasing and development on federal lands and waters for U.S. economic growth and climate progress. API Vice President of Upstream Policy Kevin O’Scannlain urged Interior Secretary Deb Haaland to account for the economic and environmental benefits that federal natural gas and oil production provides to local communities and the entire country during the department’s review of the program and expeditiously lift the federal leasing pause.
“The U.S. is now the global leader in both emissions reductions and energy production, thanks to the innovation and vitality of the U.S. oil and natural gas industry,” API Vice President of Upstream Policy Kevin O’Scannlain said. “We believe it is critically important to bring proper attention to the enormous benefits derived from continued oil and natural gas exploration and development on federal lands and waters – both for our economy and our environment. It is just as critical we highlight that a ban or significant curtailment of new oil and natural gas leasing would effectively reduce our domestic energy supply and will not reduce demand. Enacting these policies means only that we will likely import more oil and natural gas from countries with lower environmental standards and could revert back to coal for power generation, resulting in higher emissions domestically, precisely the opposite of the administration’s intended effect.”
API’s recently unveiled Climate Action Framework outlines industry initiatives and government actions to support a lower carbon future while ensuring access to affordable, reliable energy produced in the U.S.
“Policies aimed at slowing or stopping oil and natural gas production on federal lands and waters will ultimately prove harmful to our national security, environmental progress and economic strength,” added O’Scannlain. “National energy demand will continue to rise, and banning or greatly hindering leasing and development on federal lands and waters would threaten decades of American energy and climate progress and return us to greater reliance on foreign energy with lower environmental standards and coal for power generation. Perhaps most pointedly, any forced decrease in domestic production of natural gas will lead to higher GHG emissions.”
The ability of U.S. producers to provide natural gas and oil supplies to the world market has also brought global environmental benefits and emissions reductions. As O’Scannlain points out, “U.S. LNG exports will be critical to achieving the ambitions of the Paris Agreement – models show that this important agreement cannot be achieved without access to natural gas that provides a path to transition countries toward a lower-carbon future while ensuring millions of people in developing nations gain and keep access to electricity.”
O’Scannlain outlined the environmental and economic benefits that federal natural and gas production provides to federal, state and local communities each year through revenue streams from royalties, rents, bonus bids and taxes.
- In 2019, DOI disbursed nearly $12 billion generated from energy production on federal lands and waters to the U.S. Treasury and state governments. Over the past decade, DOI has disbursed on average $10 billion dollars annually.
- In 2020, the Land and Water Conservation Fund, which is funded almost entirely by offshore oil and gas natural revenues, distributed over $227 million across the country for outdoor recreation and conservation efforts.
- DOI announced that offshore oil and gas production provided $249 million in FY2020 revenues for conservation, restoration and hurricane protection programs to Gulf states.
- DOI recently announced $1.6 billion in funding through the Great American Outdoors Act, which is provided by energy development on federal lands and water, to address critical deferred maintenance projects and improve transportation and recreation infrastructure in national parks, national wildlife refuges and recreation areas, and Bureau of Indian Education schools.
To ensure the benefits and revenues provided by federal natural gas and oil production remain steady and strong, O’Scannlain stated, “DOI policy decisions must balance many factors, including setting royalty rates and other revenue producing charges at levels that will continue to attract the investments needed to produce domestic oil and natural gas on federal lands and waters.”
API represents all segments of America’s natural gas and oil industry, which supports more than ten million U.S. jobs and is backed by a growing grassroots movement of millions of Americans. Our 600 members produce, process and distribute the majority of the nation’s energy, and participate in API Energy Excellence, which is accelerating environmental and safety progress by fostering new technologies and transparent reporting. API was formed in 1919 as a standards-setting organization and has developed more than 700 standards to enhance operational and environmental safety, efficiency and sustainability.
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