The People of America's Oil and Natural Gas Indusry

100 Days: Increase Access to Support Energy Renaissance

Mark Green

Mark Green
Posted March 6, 2017

America’s energy renaissance has made the U.S. the world’s leading oil and natural gas producer, with increased domestic output strengthening our economy and increasing American security in the world – while also playing a key role in reducing U.S. carbon emissions to their lowest level since 1992. With new leadership in Washington, we need new policies to secure and extend America’s significant energy gains. Increased access to public oil and natural gas reserves is among those topping the list.

While a number of policies and actions would support America’s recent energy progress, none is more important than opening new access to oil and natural gas reserves in federally controlled areas, offshore and onshore – the latter where production has declined in recent years.

According to a report by the Congressional Research Service, between 2010 and 2015 the percentage of the nation’s total crude oil out that’s produced on federal lands has decreased from 35.7 percent to 21 percent:

This is because access to reserves has been restricted, including limited lease sales, overly onerous regulation and government red tape. According to the Bureau of Land Management, the number of issued federal onshore drilling permits fell 47 percent from 2008 to 2015. Offshore, the Obama administration’s late move to withdraw tens of millions of acres from development in the Atlantic and Arctic oceans means that 94 percent of federally controlled offshore acreage is off limits to energy development. Erik Milito, API upstream group director, recently said that changing Washington’s approach to offshore reserves is key to America’s future energy security:

“[T]he nation continues to need a robust strategy for developing offshore and onshore energy. The U.S. offshore industry has a long history of safe operations that have advanced the energy security of our nation and contributed significantly to our nation’s economy.”

The energy picture on state and private lands, where development typically doesn’t require federal approval, is quite different. To a large extent, that’s where the energy renaissance is occurring. An API analysis of federal data and other resources shows that crude oil production increased 113 percent from 2010 to 2015, while natural gas output increased 55 percent over the same period. Charting the growth in non-federal crude production:

non_federal_crude_ouput

And non-federal natural gas:

non_federal_NG_output

This more than just bad energy policy, ineffective and inefficient. It’s also bad fiscal policy for the U.S. treasury. API calculates that if production in federal areas had grown at the same rate as overall U.S. production from 2010 through 2015, total royalties would have been 63 percent higher, with an additional $28.8 billion in royalties collected by the federal government.

Quest Offshore Resources analyzed the impacts of increased access in the Atlantic, Eastern Gulf of Mexico and Pacific and found that allowing more oil and natural gas production in these offshore areas could create more than 800,000 new U.S. jobs by 2035, grow the economy by up to $70 billion a year and raise more than $200 billion in cumulative revenue for the federal treasury – while leading to production of more than 3.5 million barrels of oil equivalent per day by 2035.

Increasing access to onshore and offshore energy reserves – as well as reasonable regulatory oversight and more streamlined permitting processes – is essential to broaden the benefits of America’s energy renaissance, helping consumers, manufacturers and the environment.

See other 100 Days posts -- America's strong energy foundation, tax reform, the flawed Renewable Fuel Standard, energy exports, hydraulic fracturing and consumers and the economy

ABOUT THE AUTHOR

Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.