Permit surplus should preclude new drilling, Wilderness Society says
By OGJ editors
WASHINGTON, DC, Apr. 21 -- The Wilderness Society (TWS) this week said public and private data bolster their view that the oil industry has no commercial need to drill on environmentally sensitive lands because it is not using the permits it already has available to them.
TWS's report, released Monday, said that more than 6,000 drilling permits have not been used over the past decade. And in the resource-rich Powder River area of Wyoming, TWS said federal government data show that more than 1,000 permits have gone unused during the past year.
"No one is saying we shouldn't be drilling out west, but this surplus raises the question of why there's a rush to open some very sensitive areas to drilling, including areas that have been proposed for wilderness protection," said Michelle Haefele, a TWS economist.
Industry officials meanwhile said that it's perfectly normal for producers not to use all their permits at one time.
"It's not a just-in-time business," said Lee Fuller of the Independent Petroleum Association of America. "In broad terms, if you are in the business of developing oil you always are trying to develop one property while trying to figure out what the next one will be. It's not surprising for people to be getting permits ahead of when they want to drill—some of the permits are heavily stipulated, and you want a set of permits in hand."
Producers also may hold off on drilling on a particular lease because of other external constraints, such as limited pipeline capacity, a situation that was common in the Rocky Mountains just a few years ago, Fuller noted.
Utah, Colorado contentious
TWS is particularly upset with recent decisions by the US Bureau of Land Management to sell leases in proposed wilderness areas in Colorado in May and in Utah in June. "This is not an economic analysis that's taking place in a vacuum," said Haefele. "We're witnessing the very real possibility of losing some of the West's last remaining unspoiled areas."
Extrapolating existing BLM data, the group found that as much as 60% of the leases currently held by the oil and gas industry are not in production. That amounts to 23 million acres throughout the Rocky Mountain West, and 31 million acres nationally, that are leased but not being used, TWS said.
For the study, TWS interviewed BLM staff and based findings on what they called "the best available data from the BLM," including the Annual Public Lands Statistics Reports, "Public Rewards From Public Lands," data from the Automated Fluid Minerals Support System and "Oil and Gas Leasing Statistics" from Mar. 4.