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March 31, 2014 - Greg Zimmerman

New Data Confirms: Decade High Oil Production on Federal Lands

Oil and gas companies are producing more crude oil from federal lands than at any point in the last decade. Add this new round of government data to the mountain of evidence: Oil and gas drillers have their eye—and their investment dollars—set on areas with valuable crude oil, as natural gas prices remain stagnant.

 

According to a Greenwire analysis of 2013 production numbers released by the Interior Department:

 Industry coaxed 133 million barrels of crude from onshore federal lands during the last fiscal year, a 7 percent jump over the previous year and the highest level in more than a decade. Production soared 48 percent on American Indian lands, rising to 46 million barrels in 2013, much of it from the Fort Berthold Reservation in North Dakota’s Bakken region…

 

When it comes to oil and gas, not all areas are created equal. Some parts of the country don’t have any oil or gas, some are underlain primarily by crude oil and others by natural gas. Companies make investment decisions based off of market forces—the price oil and gas fetches—and where the oil and gas lies. If it’s not profitable to drill for natural gas, a company will set its sights on more profitable oil reserves.

 

That’s precisely what we’ve seen in western Colorado, which has significant natural gas, but limited crude oil. There, companies like Encana, Bill Barrett Corp, Antero Resources, and PDC Energy are halting drilling and shifting capacity to areas with more crude oil, like eastern Colorado.

 

By a coincidence of geography, the large majority of federal lands—like in western Colorado—are underlain by natural gas, not oil. But, as the new data proves, where oil does exist on federally managed lands— for example, in North Dakota—oil production is booming.

 

So next time you hear a politician, or an industry lobbyist, say that drilling is down on public lands because of federal bureaucracy, remember, it’s an expedient talking point, but not one that’s grounded in reality.

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