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Jim: jdipeso@rep.org
(253) 740-2066 / 2010
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Energy and Public Lands - Money
Talks
April 1, 2010
For many in the oil and gas
industry and those who carry their water in Congress, oil and gas
drilling should be the dominant use of America’s public lands.
From their point of view, reserving public lands for other public
benefits – such as watershed protection, wildlife habitat, or outdoor
recreation – shortchanges the country, and you can count on them to
complain about it.
Access, however, is not the only driver for oil and gas production on
public lands. Industry complaints that the federal government isn’t
making enough public land available for drilling rarely mention the
economic factor – drillers won’t drill unless it would pay to drill,
whoever owns the land. And if it doesn’t pay, then why ask for more
public lands to be leased?
Typically, companies "nominate" federal lands for leasing. The Bureau
of Land Management reviews nominations, and then puts leases up for
competitive bidding.
In a spot of enterprising journalism, the online journal Greenwire
found that producers asked for about half as much public land in 2009
as they did in 2008. Industry officials cite political hostility to
fossil energy production from the Obama administration’s Interior
Department.
There might be something to that, but it’s a sound bite that ignores
complicated reality. Look at the economic factors. The recession slowed
energy demand while supplies hit the market from liquefied natural gas
facilities and from shale formations east of the 100th meridian.
Lower demand plus higher supplies equals falling prices. In 2008,
wellhead gas prices averaged close to $8 per million Btu. Last year,
average prices were down to $3.71 per million Btu, according to Energy
Information Administration figures.
Money talks – except in energy producer press releases complaining
about access to public lands.
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