Tag: leasing

Mixed Messages on Oil and Gas Drilling

  • 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.

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Part 1: Selling the Family Farm to Developers

  • A former farm field in Central Ohio ready for development. It's an increasingly common sight in this area. This land is right next door to a dairy. Worried about his new neighbors, the farmer is planning to sell. (Photo by Tamara Keith)

In the Great Lakes region, farmland is rapidly being developed into homes, office parks and shopping centers. Nationally, farmland is lost at a rate of more than 9-thousand acres a day. But in order for this development to happen, someone has to sell their land. In the first of a two-part series on farmers and the decisions they make about their land, the Great Lakes Radio Consortium’s Tamara Keith introduces us to some farmers who have made the difficult choice to sell:

Transcript

In the Great Lakes region, farmland is rapidly being developed into homes, office parks
and shopping centers. Nationally, farmland is lost at a rate of more than nine-thousand
acres a day. But in order for this development to happen, someone has to sell their
land. Tamara Keith introduces us to some farmers who have made that difficult choice:


At a busy intersection in a newly suburban area, a red barn and white house sit back
off the road. Lush green pasture land hugs the old farm buildings. But the days are
numbered for this bucolic scene.


(sound of construction)


Across the street dozens of condos are under construction… and farmer Roy Jackson has
put this 216-acre farm in Central Ohio under option for development. As soon as the
developer gets approval to build, Jackson’s farm will be no more.


“I’m a third generation farmer and you put your roots down and to see your land be
developed is something I have seen coming, but to actually see it happen across the
road; it’s a sad thing, but it’s progress.”


Sitting on his front porch, Jackson looks our on a neighborhood where once there were farms.


Jackson: “At one point we farmed over 1500 acres and now we’re down to about 300.”


Keith: “What happened?”


Jackson: “We’ve lost a lot of it to development. In the estate of my mom and dad
we had to sell that to settle the estate and that was part of it as well.”


Like many in agriculture, Jackson didn’t own all the land he farmed. He was leasing
it and when the owner decided to sell for development, Jackson was out of luck. Now
he says there’s not enough land left to farm profitably.


“I have a son that wants to farm with me and to do it here, there just isn’t enough
land to sustain two families and make a living for both.”


So, he’s found a big piece of land down in Kentucky, in an area where land is still
plentiful and development pressures are distant. He’s leasing it with an option to buy.
Soon Jackson and his son will have the cattle ranch they’ve been planning for years.
It just won’t be in the state where his family has farmed for three generations.


(sound of heavy machinery)


Workers operate backhoes to grade the ground in an open field that will eventually
be home to some seven-thousand people in a new development. Retired farmer and
agriculture educator Dick Hummel recently sold a portion of this land, allowing
the project to move forward.


“I had some people critical of me because I was going to sell farmland, but on
the other hand, I really didn’t. I traded. You just have to accept that in this
community because that’s what’s going to happen. That’s what has happened. Plus
the fact, it’s been pretty tough farming and this has given a lot of farmers a
chance to sell some land for some excellent prices.”


Hummel sold about 100 acres of farmland and bought some new land – 77 acres –
farther out in the country. His father had bought what Hummel calls the “home farm”
in 1935, and that family history weighed heavily on Hummel when he was deciding what
to do.


“It was harder to decide to sell that land because it had been in my family for many
generations than it was the agricultural part.”


His father bought the land for 100 dollars an acre and Hummel was able to sell it
for a whole lot more. Asked why he sold, Hummel’s answer is simple.


“The offer. I hadn’t thought about selling at all. I didn’t even know that they
would want any of this particular land ’till all at once there were others that
were selling for a price. I heard about that, and first thing I knew, a heck of
a lot of land in this area was selling. So you compare notes as to prices, et
cetera and so forth, and that’s how it happens.”


Hummel says he wasn’t pressured to sell. He’s well past retirement age, and
he says it was the right decision personally. And such is the case for most
farmers who sell their land for development, says Sara Nikolich, Ohio director
with American Farmland Trust.


“You’ve got acres of farmland that can be sold for 20, 30,000 dollars an acre at times.
For a lot of farmers that’s their retirement they’re sitting on, and when you have
development surrounding you and you don’t have any public policy to promote agriculture
and perhaps you don’t have any heirs, you don’t have any options available to you other
than development.”


And so, the personal decisions of individual farmers are transforming some of the
nation’s rural landscape into suburban landscapes.


For the Great Lakes Radio Consortium, I’m Tamara Keith.

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