A considerable majority of the public lands and waters leased for oil and gas development remain idle, according to a report from the U.S. Department of the Interior.
The idle acreage includes onshore leases in the area around the Williston basin.
President Obama called on federal land managers in March 2011 to determine just how much of the public land currently under lease for oil and gas activities is actually in development. The move was an effort to encourage leaseholders to develop existing leases rather than push the administration to open additional lands for development.
The report found that nearly 26 million acres of offshore leases and nearly 21 million acres of onshore leases are currently idle, meaning: “not undergoing exploration, development, or production.” That idle area accounts for 72 percent of all offshore leases and 56 percent of all onshore leases. “These lands and waters belong to the American people, and they expect those energy supplies to be developed in a timely and responsible manner and with a fair return to taxpayers,” Secretary of the Interior Ken Salazar said in a prepared statement. “We will continue to encourage companies to diligently bring production online quickly and safely on public lands already under lease.”
Officials in Alaska and the Gulf Coast have argued that the low rate of exploitation on federal leases is largely the result of administrative roadblocks by federal authorities.
The report found that only 44 percent of the leased federal acreage in North Dakota and 25 percent of the leased federal acreage in Montana are currently under development.
Although the majority of the Williston basin is under private lands, the U.S. Bureau of Land Management manages nearly 2 million acres of mineral estate in North Dakota.
While that is only a fraction of the 700 million onshore acres the federal agency manages, it is an increasingly active fraction with leasing, drilling and inspections all on the rise.
The agency holds quarterly lease sales and splits half of the revenue with the state. A July 2011 sale brought in $66 million and a January 2012 sale brought in nearly $36 million.
Over the five past years, drilling applications have increased fivefold and half of that increase came on tribal lands, including a big jump on the Fort Berthold Reservation.
The agency collected more than $3 million in drilling permit fees in fiscal year 2011.
That permitting is leading to drilling, too, according to the agency.
The agency collected more than $318 million in royalties from federal lands and $180 million in royalties from tribal lands in North Dakota in fiscal year 2011. Since 2007, revenues on Fort Berthold increased from less than $1 million to $134 million per year.
The federal government recently revised its onshore leasing policies to establish “a more orderly, open, and environmentally sound process for efficient development of oil and gas resources on public lands,” but is also is developing an Advanced Notice of Proposed Rulemaking for “incentives to encourage timely development of unused onshore leases.”
