The Numbers Don’t Lie – BLM lease sales undercut industry claims

To hear the oil and gas industry tell it, we just aren’t drilling enough.

The Arctic National Wildlife Refuge should be opened for drilling. Drill rigs should be set up off the coast in the Arctic Ocean, the North Atlantic and in the Gulf of Mexico, without improving the lax industry regulations that led to the Deepwater Horizon catastrophe. Pipelines, like the Keystone XL, should crisscross the nation, less than a year after a pipeline leaked into the Yellowstone River.

They even started a $100 million ad campaign, trying influence the 2012 political candidates (an ad campaign that is brilliantly spoofed here).

But what happens when reality crashes in on their parade?  The latest figures from the Bureau of Land Management, the federal agency that oversees most drilling on federal lands, tell a different story.

Record Natural Gas production: 2011 was a banner year for natural gas production on federal lands.  In fact, it was the banner year – with the highest royalty revenue from gas production ever recorded (which accounts for 2011 gas production and some production from previous years). The BLM also calculated returns on more than 5.3 million MCF (or million cubic feet, the unit of measurement for natural gas) produced from federal lands in 2011.

Increasing Lease Sales: Lease sales also increased in 2011– the oil and gas industry leased an additional 2 million acres of land (up from 1.4 million last year) and bought 2,188 new leases (up from about 1,300). 

(Side note – the oil and gas industry spent $256 million on those leases, or about 2.5 times what they will pay for their advertising campaign…think about that the next time gasoline prices are over $4/gallon)

Unused permits still unused: In the drilling world, a drilling permit is the last step before making a hole in the ground.  With a drilling permit in hand, no lawsuit, complaint, or federal agency rule or regulation can stop a company from drilling for gas and oil, which makes this next statistic a little surprising.  In 2011, the BLM issued over 4,200 drilling permits – but only 3,260 wells were actually drilled.  This continues a trend of oil and gas companies sitting on thousands of permits and not using them.  For an industry that continues to make claims that we aren’t drilling enough, it sure seems like they would use every permit.  Certainly there are some extenuating circumstances – but thousands of permits are sitting on the shelf!

The numbers show that the oil and gas industry is doing well without opening up sensitive wild lands to drilling.  They are posting record profits without fragmenting some of the little remaining unspoiled habitat. They still receive billions of dollars in tax breaks.

The numbers don’t lie – but when the oil industry and their Congressional allies claim that there needs to be more drilling in America, something doesn’t add up.