Interior Secretary Ken Salazar announced that there would be more auctions for drilling leases this year. (Photo courtesy of NOAA)
The federal government leases public
land to oil and natural gas companies
for drilling. For at least the last
decade, energy companies have called
the shots. The Obama Administration
has indicated things are different now.
Conrad Wilson reports, there are some
inconsistencies in the Obama Administration’s
plan to reign in the industry:
Transcript
The federal government leases public
land to oil and natural gas companies
for drilling. For at least the last
decade, energy companies have called
the shots. The Obama Administration
has indicated things are different now.
Conrad Wilson reports, there are some
inconsistencies in the Obama Administration’s
plan to reign in the industry:
Because of the recession, we’re not using as much energy. For the last
several months, there’s been a glut of oil and natural gas. Big oil and
natural gas companies saw record profits a couple of years ago – but those
profits are down now.
If you ask the energy companies, it would seem the biggest culprit is not
the economy, but the federal government.
For instance, Interior Secretary Ken Salazar is blamed for energy
companies’ falling profits. That’s because he’s criticized oil and gas
companies for acting like they have a right to drill on as much public land
as they want.
“Trade groups for the oil and gas industry repeatedly launch attacks that
have all the poison and deception of election year politics. Trade groups
for the oil and gas industry need to understand that they do not own the
nation’s public lands, tax payers do.”
That sounds like tough talk, right? And in many ways it is. There have
been some major reforms that change the way business is done between the
government and and oil and gas drillers.
But behind all this stick waving, the industry’s also getting a carrot. In
a conciliatory gesture, Salazar announced that there would be more auctions
for drilling leases this year.
The industry says it needs access to even more land. Kathleen Sgamma
directs government affairs for the Denver-based trade group Independent
Petroleum Association of Mountain States. In November, her office issued a
report criticizing the Department of Interior. Among the many concerns, was
the amount of land offered for lease.
“Our full paper looked at all of the things that the Interior Department is
doing to make it more difficult to develop American natural gas and oil on
federal lands. And one of those things is a slow down in permitting.”
But the government says a slow down in permits and leases is not causing
lower profits for oil and gas. As it is, companies are not drilling or
pumping where they already have leases – because there’s a glut of
supplies.
In Western Colorado, the Thompson Divide Coalition wants to cancel leases
and prevent drilling. Lisa Moreno heads up the alliance of ranchers,
hunters, and conservationists.
“The fact of the matter is, is the industry has a huge amount of acreage
under lease that they haven’t developed.”
Moreno says energy companies have leased about 47 million acres, but the
oil and gas companies are only using about one-third of that land right
now.
So why do oil and gas companies want more land? Even if energy companies
don’t use the lands for drilling, they’re still an important asset.
Jeremy Nichols is Climate and Energy Program Director for WildEarth
Guardians. Nichols says leases represent assets and are used to attract
investors.
“And so drilling is just part of what they do. They’re also basically land
holding companies. You know, they’re buying and selling each other left and
right. And so it’s more than just to drill or not to drill. It’s a lot
more, it’s a lot more complicated than that.”
If that’s the case, why is the government opening more leases?
Well, Jeremy Nichols thinks Interior Secretary Ken Salazar is trying to
kiss and make up.
“You know, I’ll be honest I think Salazar appearing conciliatory. But the
oil and gas industry is going to be critical no matter what Salazar does.
The oil and gas industry just doesn’t like to be regulated; they don’t like
to be told what to do. And so they’re going to complain no matter what.”
And so, more of the public’s land will be held by oil and gas drillers who
won’t be producing much until the economy recovers, prices go up and they
can make more money.
For The Environment Report, I’m Conrad Wilson.
