NGI The Weekly Gas Market Report / NGI All News Access

Interior: 60% of Federal Lands with Oil, Gas Resources Are Off Limits

An estimated 60% of the 279 million federal onshore acres that have oil and natural gas potential are off limits to leasing, said Interior Department's Bureau of Land Management (BLM) and several other federal agencies in a report issued last Wednesday.

The report, which was congressionally mandated, estimated that 31 billion bbls of crude oil and 231 Tcf of natural gas resources were located on the 279 million federal onshore acres, mostly in the West. However, it noted that 62% of the 31 billion bbls of crude oil were inaccessible, meaning that congressional or administrative actions prohibited the development of the resources. The report further said that 41% of the 231 Tcf of undeveloped gas on federal lands was off limits to leasing.

The 62% of oil resources that are off limits represents 19 billion bbls of oil, which converts to 372 billion gallons of gasoline and 133 billion gallons of diesel fuel, said C. Stephen Allred, assistant secretary of Interior for land and minerals management.

The report further noted that an additional 30% of onshore federal oil and 40% of onshore federal gas may only be developed subject to restrictions over and above standard environmental leases terms, including seasonable timing limitations. It estimated that only 8% of onshore federal oil and 10% of onshore federal gas are accessible to producers under standard lease terms.

The report reveals that "if we want to lower the cost of energy, we must be willing to use our own energy resources," Allred said. "We must expand domestic oil and gas production" in conjunction with other policies, such as conservation, efficiency measures, clean-burning technology and sequestration, he said.

"While most of what the public is reacting to [now are] the prices having to do with gasoline and fuel, I have a great concern as to what's happening to the price of natural gas. Natural gas has doubled in [a] very short period of time...That has huge implications on the economy," Allred said.

The report is the third in a series of congressionally mandated scientific studies of U.S. onshore federal oil and natural gas resources and the restrictions on their development. It expands on earlier reports published in 2003 and 2006 that were required under the Energy Policy and Conservation Act of 2000.

The report did a basin-by-basin breakdown of the federal lands, including:

Overall, the report found that 96% of the federal land in Alaska is inaccessible, while 55% of the federal land in the western region of the Lower 48 states is not accessible and 41% of the federal land in the eastern region is off limits.

In addition to the BLM, other federal agencies contributing to the report were the U.S. Geological Survey, the Agriculture Department's Forest Service, the Department of Energy and its Energy Information Administration.

©Copyright 2008 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

Comments powered by Disqus