Energy produced from U.S. Department of Interior (DOI) lands in FY2012 -- which included 626 million barrels of crude oil, 5 Tcf of natural gas and 460 million tons of coal -- contributed $230 billion to the national economy and supported 1.2 million jobs, according to the government agency's newly released Economic Report for Fiscal Year 2012.
In total, the activities of the DOI contributed $371 billion to the U.S. economy in 2012, supporting 2.3 million jobs in activities including outdoor recreation and tourism, energy development, grazing and timber harvest.
"The missions of the Department of the Interior contribute to our nation's economy in ways big and small," said Secretary of the Interior Sally Jewell. "From the billions in revenues generated from oil and gas development, to the jobs created from tourism to our national parks and public lands, Interior's activities are an important source of business development and employment for communities and families in all 50 states."
Despite the fact that gas sales from federal lands are increasing, those sales represent a smaller share of the overall market. The report points out that the explosion of shale gas resources over the last six years is marginalizing the contributions from federal lands. The DOI points to Energy Information Administration and ONRR data that indicates that federal gas sales account for only 19% of total domestic production for FY 2012 and that gas sales volumes from federal and Indian lands have decreased each year since FY2003, when federal sales accounted for a record 34% of U.S. production.
"The rapid increase in natural gas production from shale resources, found largely outside the federal lands, over the last five years has significantly reduced natural gas prices and the relative attractiveness of non-shale natural gas resources, including those on federal and Indian lands," the DOI said.
Nevertheless, federal onshore production volumes have continued to rise since 2003, while the federal offshore continues a downward trend. In FY2003 production of processed and unprocessed gas was about 1.9 Tcf onshore and 4.2 Tcf offshore. By FY2012 onshore production had grown to 2.4 Tcf while offshore production was only 1.3 Tcf.
The report noted that during 2012 the U.S. Bureau of Ocean Energy Management held two lease sales in the Gulf of Mexico. Lease Sale 218, which was actually completed on Dec. 14, 2011, resulted in over 1 million acres being leased in the Western Gulf of Mexico Planning Area and about $325 million in bonus bids. Lease Sale 216/222 was held on June 20, 2012 offering over 39 million acres in the Central Gulf of Mexico Planning Area. The DOI points out that this sale resulted in 2.4 million acres being leased and about $1.7 billion in bonus bids. In FY2012 the Bureau of Safety and Environmental Enforcement approved 476 permits for deepwater drilling and 443 permits for shallow water drilling on the Outer Continental Shelf.
Onshore, oil and gas companies nominated 5.9 million acres of public minerals for leasing in 2012, up from 4.5 million acres the year before. The Bureau of Land Management held 30 onshore oil and gas lease sales in 2012 offering 2,064 parcels of land covering nearly 4.7 million acres, according to the report. Over three-quarters of those parcels were sold: 1,554 parcels covering nearly 1.4 million acres, and generating about $261 million in bonus and rental revenue for American taxpayers.
"This was a 9% increase in lease sale revenue over 2011, following a strong year in which leasing reform helped to lower protests and increase revenue from onshore oil and gas lease sales on public lands," the DOI said. "In FY2012, the BLM processed 5,861 applications for permits to drill (APD) on Federal and Indian lands. In 2013 and 2014, BLM expects to process more than 5,000 APDs annually."
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