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Whose Land Is It, Anyway?

December 1, 2006

Say that you're a property owner with apartments to lease. No one would begrudge you the right to impose conditions on lessees -- a cleaning deposit must be posted, vehicles must park in designated spaces, no messy pets, no painting the walls with garish colors, no loud parties at 2 in the morning. You impose such conditions in order to keep up the value of your property. You'd be foolish to do otherwise.

If potential lessees complain that such conditions are unfair, you would quickly invite them to take their business elsewhere. If your property manager took their side and tried to weaken or waive the conditions, you would quickly find another property manager.

Every American -- from Bill Gates to the poorest of the poor -- is a property owner, with an equal stake in America's public lands -- parks, forests, deserts, mountains, plains, and tundra. When it comes to leasing our public lands to oil and gas producers, we must insist on rigorous conditions so that the lands are in healthy condition when the leases are up. We want the water, wildlife, soils, and air quality protected. We expect our property manager -- the Bureau of Land Management -- to look after our interests as agent of the landlord.

BLM, however, considers such conditions to be onerous. The BLM published a report this week that, in so many words, tries to make a case that too much of the oil and gas beneath America's public lands are not available to energy companies under lease conditions that suit their interests.

Here are the particulars. The report estimates the quantity of oil and gas that may lie beneath 99 million acres of federal land in Alaska, the Rockies, and the southern and northern Appalachians, and the Florida peninsula.

Beware of the fine print. Proven reserves of oil and gas, which are hydrocarbons known to be available and producible with known technology, are excluded from the estimate of available resources because they are already in production -- a clever sleight-of-hand that gives disproportionate weight to the estimated amount of hydrocarbons that are "constrained" -- available through conditional leases or not available because the landlord has a better use for the land.

Undeveloped oil beneath the 99 million acres totals 21.2 billion barrels -- of which 20.6 billion barrels, or 97 percent -- are "undiscovered, technically recoverable reserves." Which means that government geologists think the oil may be there, but no one knows for sure. In any event, the amount that would actually be produced depends on production costs and market prices. The term "technically recoverable" is not the same as "economically recoverable."

Likewise, the report estimates that the 99 million acres hold 186.9 trillion cubic feet (tcf) of gas, of which all but 5 tcf are "undiscovered, technically recoverable."

But let's be generous. Let's say that every barrel and cubic foot of gas that the BLM thinks may be there actually exists and every molecule is economical to produce. How much is beneath lands unavailable for leasing? To use the apartment analogy, how many units in the building are not available to potential tenants?

One-third of the estimated oil is off limits by executive order or act of Congress. Those lands include national parks, wilderness areas, and the Arctic National Wildlife Refuge, which, in the collective judgment of citizens and their elected representatives, are best suited for permanent protection on behalf of future generations.

Another 6 percent is not available for leasing as a result of administrative discretion, a status more easily changed than executive orders or statutes.

Eight percent is classified as unavailable merely because the acreage is involved in a land use planning process. Only in the most tortured sense is that acreage off limits. It's the same as classifying one of the apartment units as off limits to renters because the city building inspector has not yet finalized the occupancy permit.

Fully half the oil is available under a variety of leasing conditions -- which are imposed to ensure protection of the water, wildlife, and other features that give public land lasting value. The report calls such conditions "constraints" -- as if the property manager believes that the landlord should give more deference to the tenant's interests than to his own.

What about natural gas? Only 8 percent is off limits by executive order or by statute. Another 13.6 percent is off limits pending completion of land management planning. Nearly three-fourths is available for production, under various conditions that govern surface use and production timing.

The payoff quote that illustrates the true purpose of the report -- to argue for making oil and gas production the dominant use of public lands -- is contained in a Q&A accompanying the document. "...It will help ensure that any constraints in place or proposed are the most appropriate and effective for managing all the resources of the area and not posing barriers to oil and gas production unless it is absolutely necessary for the preservation of other resources present on the land."

Lands have many potential uses -- watershed protection, fish and game habitat, recreation, scientific research, grazing, and yes, energy and mineral production. But oil and gas production is not, always and everywhere, the highest and best use of public lands that contain hydrocarbons. We want our land managed for long-term value, because we will own it long into the future -- long after the oil and gas tenants have moved out.