The Interior Department’s Bureau of Land Management (BLM) has issued 79% fewer leases for western public lands over the past five years, resulting in less oil and natural gas development and a significant corresponding decline in revenue to federal and state governments, according to an analysis by the Western Energy Alliance (WEA).
BLM offices in Colorado, Montana, New Mexico, North Dakota, Utah and Wyoming issued 531 onshore leases in fiscal year (FY) 2010, down 79% from the 2,499 leases issued in FY 2005, said the WEA, a nonprofit group that represents 400 independent oil and natural gas producers. Since FY 2005, BLM has offered 60% fewer parcels and 70% fewer acres.
Leasing revenue from onshore production dropped to $101.6 million in FY 2010 from 189.6 million in FY 2005, according to WEA. In the first two years of the Obama administration BLM issued leases for 76% fewer acres than the first two years of the Clinton administration and 71% fewer acres than the first two years of the Bush administration, the group said.
Revenue from onshore federal royalties, rents and bonuses declined 33% to $2.8 billion in 2010 from $4.2 billion in 2008, WEA reported. In 2009 oil and gas development in the West provided $6.6 billion in direct government revenue, which is used for impacted communities, schools, conservation funds and other public benefits, the group said.
The largest percentage decline in the number of leases issued over the past five years was in Utah. BLM issued only 21 leases in Utah in FY 2010, down 97% from the 617 leases issued in FY 2005. This translated into 596 fewer leases that were issued for drilling in the state during the period.
Wyoming also was hit hard over the five-year period. The BLM issued only 314 leases there in FY 2010, down 64% from the 797 leases awarded in FY 2005, the alliance said. This amounted to 483 fewer leases being made available to producers to drill in the state over the 2005-2010 period.
The Montana/Dakotas BLM issued 70 leases in FY 2010, which was 77% fewer than the 306 leases that were awarded in FY 2005, the WEA said. Similarly, the Colorado BLM awarded only 34 leases in FY 2010 for an 88% drop from the 272 leases issued in FY 2005.
“This trend, if continued, will result in a decline in energy development with a resulting loss of jobs and less revenue for federal and state treasuries at a time when Americans are very concerned about out-of-control deficits and spending,” said Spencer Kimball, WEA manager of government affairs.
The West produces 27% of the U.S. natural gas and 14% of total U.S. oil, WEA said. In 2009 42% of western oil and natural gas was produced on federal lands, it said.
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