Oil and Gas Exploration and Development on Public Lands

Publication Date: March 2004

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Environment

Type:

Abstract:

The U.S. Congress and the Administration are involved in a major policy debate over oil and gas development from federal lands and from federal mineral estate underlying certain privately owned lands. Within the framework of U.S. public lands policy, restrictions and withdrawals have affected the amount of land that can be developed. The Energy Policy and Conservation Act Amendments of 2000 (EPCA) mandated a study which was released in January 2003 to assess the oil and gas resource potential underlying restricted federal lands. It concluded that although the amount of land prospected for natural gas that was completely "off-limits" for development was 35.6%, other restrictions and lease stipulations are in place. The conference report to the Energy Policy Act of 2003 (H.R. 6) as well as the scaledback Senate version of the bill (S. 2095) contains provisions that would address restrictions and impediments to oil and gas development on public lands. The Bush Administration has its own initiatives to expedite the permitting process -- considered by some to be a major impediment -- on federal lands.

As part of the oil and gas leasing system, lessees must file an application for a permit to drill (APD) for each well. The Bureau of Land Management (BLM) is required to process the APD in 30 days but delays may occur, extending the average approval time to over 120 days. Some approvals have taken over three years. A new process to expedite the APDs has been established at the BLM that includes, among other features, the processing and conducting of environmental analyses on multiple permit applications with similar characteristics.

Energy and mineral industry representatives maintain that federal withdrawals and/or restrictions inhibit mineral exploration and limit the reserve base even when conditions are favorable for development. They further contend that sufficient environmental standards are in place to protect public lands. Critics who oppose opening up more federal lands or the mineral estate under private lands argue that the general environmental requirements are not adequate and that some forms of development threaten water quality and quantity; therefore, certain restrictions and withdrawals are appropriate.

Concern exists regarding natural gas supply and declining production rates. As a result, there is increased interest in potential gas supplies in the Rocky Mountain region. Several resource estimates suggest significant amounts of natural gas on public and private lands in the region, and Rocky Mountain natural gas may become much more important to the overall supply picture.

Elsewhere, the outlook is mixed for increased oil and natural gas production on U.S. public lands. While domestic natural gas production and natural gas imports are expected to rise, it is unclear whether much of the domestic supply will come from public lands that are currently restricted or off-limits. This report will not be updated.