Oil and gas drillers haven't been pushed off federal lands by the Obama administration, an environmental group contends, so much as they have jumped at other opportunities.
A new report by the Wilderness Society challenges a charge frequently leveled by the oil and gas industry -- that the reduction in leasing by the Interior Department shows a hostility to fossil energy development.
Instead, the group says, discoveries of vast natural gas deposits under non-federal lands have increased supply and driven down the price of gas, prompting industry to pull back on leasing.
"Market forces -- not the Obama administration's public lands policies -- are the primary determinant of industry behavior," the Wilderness Society report states.
The report challenges a November 2009 report by the Independent Petroleum Association of Mountain States (IPAMS) asserting that the Interior Department under Secretary Ken Salazar intends to curtail oil and gas development on public lands.
IPAMS says the environmental group has missed the point of the 2009 report -- that policies enacted now will hurt the West in years to come as it tries to recover.
"Drilling is down because of the economy. I don't think anyone denies that," Kathleen Sgamma, IPAMS's director of government affairs said today. "As the economy recovers, these policies will affect companies two or three years out and slow the recovery of the West."
The report highlighted a number of "irregularities" in the federal onshore natural gas and oil program, including permitting backlogs, failure to issue permits using categorical exclusions, indefinite holds on environmental analyses, reduced lease sales, and deferred and withdrawn leases (Land Letter, Nov. 19, 2009).
The criticism is not confined to IPAMS. American Petroleum Institute President Jack Gerard has also lashed out at the administration's federal lands policy.
"Reducing acreage leased for oil and natural gas development by 75 percent as occurred in 2009 will not put America on a path of preparing for its real energy future," he said in a January speech at the National Press Club. "Canceling leases, delaying lease sales, delaying environmental studies, holding back the next OCS [outer continental shelf] five-year plan, and adding layers of bureaucracy and new procedures will not ensure Americans have ample supplies of the oil and the natural gas that every projection shows they will be demanding in the near future."
IPAMS's report says that under Salazar, Interior "severely" reduced lease sales in 2009, the first year of the Obama administration. It said the administration has issued 1,934 fewer leases and 1.1 million less acres in the Intermountain West than the Clinton administration did in its first year.
BLM figures show that the George W. Bush administration issued fewer leases -- 3,289 -- than the 4,040 that the Clinton administration did in its first year.
In fiscal 2009, the Obama administration issued 2,072 leases, which was down from 2,416 leases in the last year of the Bush administration. That was down from 3,499 in the previous year, and down from a Bush administration high of 3,985 in fiscal 2006.
"This trend began in 2008 well before the Obama administration took office and instituted reforms to protect wildlife," says the report, written by Michelle Haefele, Dave Alberswerth and Jyhjong Hwang.
The highest number of leases since 1988 were issued in 1988 itself, with 9,324 leases. They have generally trended downward since.
The Wilderness Society report says many companies are focusing their attention on vast "shale gas" discoveries under mostly non-federal land in Texas, Louisiana and the Northeast. It also cites industry executives who say they are scaling back because of the price and the economy.
For example, it notes that Questar Corp. told investors in 2008 that it planned to scale back in 2009.
"We'll drill fewer wells -- Questar E&P will still grow production, but not at the pace of recent years," said company Chairman Keith Rattie in a third-quarter conference call with investors, according to the Wilderness Society report.