From the pages of
Pinedale Roundup
Volume 103, Number 13 - November 30, 2006
brought to you online by Pinedale Online

Feds' study shows more restrictions to drilling
New inventory with revised categories reveals more obstacles for industry
by Julia Stuble

“We have a real challenge balancing our multiple use mission in the growing West,” Bureau of Land Management Director Kathleen Clarke told reporters upon the unveiling of a new inventory of federal lands for oil and gas development.

The inventory, a study mandated by the Bush Administration’s Energy Policy Act of 2005, expands on a 2003 report mandated by the Energy Policy and Conservation Act of 2000. The new inventory examines the extent of U.S. onshore Federal oil and gas resources. Compared to the 2003 study, this one finds more lands have restrictions on their development than previously thought.

Eleven areas were inventoried in this study. Six of these were not included in the 2003 study. These new oil and gas basins, in Alaska, the Rocky Mountains and the East, are estimated to have 187 trillion cubic feet of natural gas and 21 billion barrels of oil. This represents 76 percent of onshore Federal oil and gas resources.

Nationally, the report revealed the difficulties developers of energy resources must face because of environmental protection restrictions. Industry lobbied for the revised study in order to prove the obstacles they have to deal with when leasing and drilling for oil and gas. The lobbyists asked Congress to change the way the inventory was categorized lands.

This new inventory primarily changed categorizations of existing land while surveying the new basins. In 2003, lands which had conditions on drilling permits were placed in the category “Accessible under Standard Lease Terms”. This study placed these under the category “Accessible with Restrictions” category. This enlarged the amount of acreage with restrictions, and reduced the accessible without restrictions lands.

The new study also excludes “Proved Reserves,” thereby decreasing the resources within the “Accessible under Standard Lease Terms” category.

According to the new report, about 50 percent of the oil and more than 25 percent of the natural gas accessed beneath the 99 million Federal acres that were studied are off-limits to drilling.

The BLM found that of the 99 million acres inventoried, just three percent of onshore Federal oil and thirteen percent of onshore Federal gas are accessible under standard lease terms. The agency estimates that 60 percent of onshore Federal gas may be developed subject to additional restrictions.

In Wyoming, the new study took another look at the Powder River and Upper Green River Basins as well as analyzing the Wyoming Thrust Belt and Denver Basin resources.

In the Upper Green, the BLM found that lease restrictions, such as wildlife stipulations, increased on Federal lands from the 37 percent covered in 2003 to 50 percent covered now.

Seventy-six percent of the gas reserves in the Upper Green have access restrictions, up from the 25 percent in 2003. Clarke would not comment if the report revealed BLM’s success in establishing restrictions to protect environmental concerns, or if it justified industry’s claims that the agency was being too restrictive to development.

“This shows the realities that are out there in terms of development,” she said. Clarke found the new report to be a “more complete and accurate” study than the 2003 report.

“We need to be vigilant in the care of our environment while meeting the needs of the nation for energy,” she added.

The study does not address the amount of acreage with restrictions where those stipulations have been lifted or received exceptions for various amounts of time. Responding to the more restrictive terms found for development in the Upper Green, the Petroleum Association of Wyoming urged the BLM to look at “innovative” approaches industry has developed to work around wildlife stipulations.

An environmental study, supplementing the Anticline’s Environmental Impact Statement will be released by the BLM soon. This statement will analyze the assertions Shell, Ultra and Questar have made regarding year-round drilling on the Mesa. These operators believe that their methodology will reduce their impact to wildlife species and air quality, as well as improve workforce stability.

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