Land that’s off-limits in the West could open to energy companies
WASHINGTON — A decades-long fight by oil and gas companies to open drilling in the deserts and mountain ranges of the Western United States gained a new champion Friday with the inauguration of President Donald Trump.
The federal government owns in excess of 600 million acres, almost entirely concentrated in western states like Alaska, Utah and Nevada, where Trump has promised to reverse President Barack Obama’s policies that restricted energy development on public lands. Trump’s goal: expand local economies and make the country “energy independent.”
Far from the major shale plays in Texas and North Dakota, those lands have largely been left out of the hydraulic fracturing boom that swept the country over the past decade. Areport by the Congressional Research Service said federal lands only represented 21 percent of U.S. oil and gas production in 2015 — down from 36 percent in 2010.
But wildcatters from Houston and beyond have long maintained that modern drilling techniques honed in fields like the Eagle Ford and Permian Basin could allow them to get at oil and gas deposits in little-
explored federal lands. In western Colorado, for example, the U.S. Geological Survey estimates that the Mancos Basin holds 66 trillion cubic feet of natural gas, a deposit close in size to the Marcellus Shale in Pennsylvania.
But attempts to develop the Colorado shale field were dealt a blow late last year after the Bureau of Land Management canceled 25 more than decade-old leases, citing low production figures and the prevalence of hikers and other sportsmen using the area. Similar rulings elsewhere, along with environmental reviews that can run close to a decade, have turned many companies away from drilling on federal lands, said Kathleen Sgamma, president of the Western Energy Alliance, a trade group representing oil and gas companies.
“Wehave shale plays on federal lands in the West we can not get access to,” Sgamma said. “When there’s no political will behind a development, the inertia in the bureaucracy really takes over.”
Under Obama, drilling on federal lands slowed drastically from the oil-friendly policies of George W. Bush. In 2014 — even before the crash in oil and gas prices caused companies to pull back — the number of wells drilled on federal lands had fallen 50 percent since 2008.
Trump has laid out a loose plan for federal lands that would expand leasing for energy produc- tion, lift a moratorium on newcoal mines and remove regulations that the energy industry says can delay projects. But how much impact such moves would have is unclear.
Interest in federal lease sales has declined along with prices, with oil and gas companies buying just 23 percent of the leases offered last year, according to the Department of Interior. Coming off one of the worst oil busts ever, the appetite for forging into frontier areas remains low, said Clay Lightfoot, a Houston-based research analyst with Wood Mackenzie.
Developing these fields would be particularly costly, since they don’t have the pipelines, roadways and ready supply of workers available in more established fields, such as the Permian Basin in West Texas.
“In a price environment like we have now, operators are going to allocate capital to projects where there’s existing infrastructure and a lot of historic production, things that will remove uncertainty,” Lightfoot said. “Are there resources on federal land? Yes, probably. But to figure out what there is and what’s feasible are decisions that are going to need lots of moneybehind them.”
In addition, any oil and gas projects close to national parks andmonuments, alongwith lands considered wild or culturally significant to the Native Americans, are likely to face protests and lawsuits. Groups are already mapping out a strategy similar to what they have used to disrupt pipeline projects like the Keystone XLandtheDakota Access, despite statements by Trump, whose son Donald Jr. is an avid hunter, that protecting wilderness areas will be a priority, said Lena Moffitt, director of the Sierra Club’s “Beyond Dirty Fuels” campaign.
“We’re hopeful (Trump) will continue to subscribe to the conservation ethics he referenced throughout the election,” she said. “But if he doesn’t, we’ll be there.”
As Obama wound down his presidency, he used executive power to permanently protect federal lands and waters he considered too pristine or culturally important to develop. Chase Huntley, energy and climate program director at the Wilderness Society, said the president “has protected more acres onshore and offshore than any president in history.”
Overthe past two years, Obama designated more than 4.6 million acres of federal lands as national monuments, including more than 1.3 million acres of buttes, canyons and Native American ancestral grounds in Utah as a national monument named Bears Ears.
The area’s underlying oil and gas deposits had already attracted the interest of companies including Houston’s EOG Resources. But the designation, announced last month, is likely to make development anywhere close to the monument’s boundaries difficult, industry officials said.
Rep. Rob Bishop, R-Utah, chairman of the House Natural Resources Committee, has reportedly pressured Trump to try to pull back that national monument designation — a move no president is believed to have attempted before. Whether Trump would consider such an action is unclear.
During a confirmation hearing last week, Interior Secretary nominee RyanZinke called himself “an unapologetic admirer of Teddy Roosevelt,” the president whocreated the National Park system and designated 18 sites, including the Grand Canyon, as national monuments to protect them.
“There are lands that deserve special recognition,” Zinke testified, “where manis more of an observer than an active participant.”