Myth v. Reality: Alternative Reality Redux – 4% Does Not Equal a “Stockpile”

Myth v. Reality: Leasing Talking Points
 
The Interior Department is holding a forum on how it will implement the Biden leasing ban. As I discussed last week, 7% of U.S. greenhouse gas emissions from the development and consumption of federal oil and natural gas does not equal “nearly a quarter.” Likewise, less than 4% of the federal mineral estate is not a “stockpile” of leases from rampant “fire sales.” Here are a few highlights.

Myth Number One: “Over the last few years the oil and gas industry has stockpiled millions of acres of leases on public lands and waters.”
 
Leased acreage is at a historic low while production has hit historic levels. From a high of over 120 million acres in 1985, leased acreage is down 78% to 26.6 million, up slightly from the all-time historic low during the Trump Administration of 25.5 million acres. By the end of the Trump Administration, leased acreage was down 41% from the Obama Administration’s high of 45.4 million. In fact, industry is more efficient, producing greater quantities of oil and natural gas from an ever-smaller portion of public lands. 

Source: BLM Oil and Gas Statistics webpage.​

Myth Number Three: “The President’s action will…restore balance on America’s public lands”
 
Why is it that when policymakers do something decidedly unbalanced they justify their actions as “balanced?” It’s hard to argue that there’s not already a balance on public lands when of the 700 million acres of federal lands and mineral estate, 26.6 million acres are leased with only 480,550 acres of surface disturbance. From that small impact, 279 million barrels of oil, 3.3 trillion cubic feet of natural gas, and nearly $3 billion in royalties were delivered to the American people last year, representing 6% and 9% of total U.S. production, respectively.

Source: BLM Oil and Gas Statistics webpage.​

Spin Cycle: “The oil and natural gas industry is sitting on approximately 7,700 unused permits.”
 
Well of course! Since then-presidential candidate Biden promised to ban fracking on federal lands during his campaign, we’d be grossly negligent to our investors and the American taxpayer if we didn’t build up an inventory of permits to mitigate the risk. Our foresight has been confirmed by actions since.
 
Rinse and Repeat: “…nearly 13.9 million acres (or 53%) of those [leased] acres are non-producing.”
 
As developed by Congress and implemented by administrations of both political stripes over many decades, the federal onshore program is not based on central planning. It’s designed using market mechanisms to ensure a fair return to the taxpayer while developing the energy that all Americans own and use every day. The current 47% utilization rate is well within the historic norm of 50% plus or minus a few points. With the 2019 historic high in production, we’re producing more on less acreage than ever before. That’s a balance we’re proud of.
 
The full position paper is available here, containing responses to all four myths. I'll be live tweeting during the forum from 11:00 – 2:30 MT on Thursday March 25th during the forum as the misinformation gets repeated. 

Author

Kathleen Sgamma, President