Needed policy reforms not hindering natural gas production

Tuesday, February 23, 2010

This Science and Policy Brief examines necessary policy reforms for natural gas production through these key points:

  1. The natural gas industry has tried to blame Obama Administration policies for the recent downturn in drilling activity and investments in new production on public lands, but this trend began in 2008, well before the Obama Administration took office and instituted reforms to protect wildlife and other public values.
  2. The primary reason for the downturn in drilling activity is a significant drop in natural gas demand and new discoveries of natural gas deposits within the U.S. that have increased supply. These have together caused a decline in the price of natural gas, prompting industry to decrease investments in new projects. Market forces — not the Obama Administration's public land policies — are the primary determinant of industry behavior.
  3. Beginning in 2008, in anticipation of higher natural gas prices, natural gas production companies have curtailed drilling activities and even "shut-in" producing wells.
  4. The oil and gas industry has a huge inventory of unused federal leases under its control. More than 45 million acres of public lands are under lease to oil and gas companies, and nearly two-thirds of this acreage — over 32 million acres — is not in production. Allegations that Obama Administration public land management policies have left the industry with inadequate access to natural gas resources have no basis in the fact.

Read the complete brief by clicking the link below.

Authors: Michelle Haefele, Ph.D., Dave Alberswerth, Jyhjong Hwang