At the Interior Senate Appropriations Committee hearing tomorrow, BLM Director Neil Kornze is likely to face the same old misleading claims from some senators that oil companies are not profiting from drilling on federal lands. But before you hear that exhausted rhetoric, make sure you know the facts:
Leasing and drilling are down across the board (on state and private, as well as federal, lands) —and that’s because of low oil and gas prices.
Even when times are good, industry has routinely bid on less than one third of the acres offered by the BLM for lease.
As the AP reported just last week, the State of Wyoming is considering cancelling its upcoming lease sale for state lands. What’s more, a recent Wyoming BLM lease sale netted the least revenue in over five years. As stated by a Wyoming state official – and echoed by many others, including oil and gas companies – when oil and gas prices plummet, so does leasing.
And the public tends to agree with fewer leased lands. A nonpartisan survey of Western voters found that more than two-thirds—62%–support a balanced approach to energy development on public lands.
Oil and gas production on federal lands is so high, it’s setting growth records.
With the recent fall in oil prices, production has begun to decrease—but it’s decreasing everywhere, not just on federal lands. In fact, over the past year, the number of active drilling rigs in the U.S. has dropped by more than 50% nationally.
A final fact check—if industry claims that production on federal lands is down 30%, as it often does, take it with a grain of salt—that’s the combined number for onshore AND offshore production.
Westerners deserve a royalty rate update—and the oil and gas industry can definitely afford it
Industry was quick to vocalize their opposition for the recently proposed onshore royalty rate update, saying higher rates would drive production from federal lands—yet state and private lands generally have higher royalty rates than federal lands (16-18% as opposed to 12.5%), and production is booming there.
In any case, the Western Energy Alliance’s sustaining members showed collective profits topping $13 billion in 2014 alone—so they could more than afford to pitch in a little more.