Oil, Gas Firms Find It Harder To Drill On U.S. Land
Since the Deepwater Horizon accident, the oil industry has complained loudly that the government is dragging its feet in approving new offshore drilling projects. Now the industry says that it's experiencing similar problems in the Rocky Mountains.
There, companies bid for the right to drill for natural gas on federal land. In recent years, environmental groups have found they can slow down the boom-town pace of drilling by challenging those leases, as a way of protecting special places.
It's a tactic that has upset companies that drill for natural gas.
"We're tired of spending our money, having the government cash our check and taking our money, and not issuing leases," says Nerd Gas Co. senior vice president Cary Brus.
"We believe it's a breach of contract. ... They took our money, we want our leases," says Brus, whose company has joined a lawsuit that claims the Bureau of Land Management is breaking the law.
The Mineral Leasing Act says the BLM has 60 days to award a lease. But a government report released last summer found the agency was able to meet that deadline less than 10 percent of the time in the Rocky Mountain region.
Part of the reason is that these leases are also subject to other regulations designed to protect the environment. Environmental groups have challenged leases after they are sold, based on concerns for animals like pronghorn antelope, mule deer and sage grouse that could be pushed out of their native habitat by drilling operations.
"One of the great things about this state is, we have world-class wildlife," says Joy Bannon, field director for Wyoming Wildlife Federation. "We also have world-class energy resources, and we need to find a balance of that."
Environmental groups have worried that special places were being handed over to the oil and gas industry without much scrutiny.
"Under the last half of the Bush administration, there was an avalanche of oil and gas leasing activity," says Erik Molvar, executive director of the Biodiversity Conservation Alliance.
Molvar says that groups like his started challenging leases as a way of slowing that avalanche. In his view, public land in Wyoming should be available for all kinds of uses, including recreation.
"For so many years, the oil and gas industry has had the entire pie of all the public lands all to themselves," Molvar says.
But that changed when Barack Obama became president nearly two years ago. While George W. Bush's administration was focused on oil and gas development on public land, Obama favors renewable energy. Those changing priorities made it difficult for BLM workers to keep up with awarding leases.
"Prior to February 2009, we were about two months behind," says Julie Weaver, chief of fluid minerals adjudication at the BLM office in Cheyenne, Wyo.
"After the change in the administration, we had to step back and do some re-evaluation, and because of that we have a backlog," she says.
The agency hopes to be caught up by Feb. 1, Weaver says. The BLM is also changing its leasing process, so that concerns from environmental groups are addressed before a lease goes to auction. That will likely lead to fewer leases sold, and less money for the federal treasury.
Meanwhile, the industry has started losing interest in drilling on public land.
"I think you have seen some pullback in activity," says Kathleen Sgamma, director of government and public policy at Western Energy Alliance. "We've gotten very clear signals from this administration that it's going to be difficult to get leases, it's going to be difficult to get permits and project approvals."
Sgamma says that's a shame, because her industry could be providing thousands of jobs at a time the country needs them. Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/.