DENVER - The pause on oil and gas leasing President Biden ordered upon taking office has a minimal effect on national and western regional economies, according to a new report by the Conservation Economics Institute (CEI). In fact, the analysis finds that the oil and gas industry currently holds leases worth decades of drilling opportunities.
The study, “Economic Effects of Pausing Oil and Gas Leasing on Federal Lands,” looks at the United States and five Intermountain West states that dominate federal onshore production of oil and gas: Colorado, Montana, New Mexico, Utah and Wyoming.
NRDC (the Natural Resources Defense Council) commissioned the report, in partnership with the Center for Western Priorities (CWP) and eight other groups. The analysis was conducted prior to a recent federal court’s decision to reinstate leasing.
Nationally, the report finds:
- Federal onshore production is a small sliver of overall production, representing about 6% of total domestic oil production, and 8% for gas;
- Demand for federal oil and gas leasing is on the decline;
- There is no meaningful link between acres of federal leasing and employment in the oil and gas sector;
- Pausing leasing does not limit existing drilling or production on federal lands;
- Most of the existing federal lands leased (14 of 26 million acres) are non-producing;
- Industry already holds 75 years of future drilling potential in existing federal onshore leases;
- Remaining unleased public lands are less desirable for oil and gas development.
In the Intermountain West, it finds:
- At least 86% of federal onshore oil and gas production takes place in Colorado, Montana, New Mexico, Utah and Wyoming. These states in 2019 accounted for 86% of federal onshore oil and 95% of federal onshore natural gas production, respectively.
- In western states where federal oil and gas drilling accounts for most of the state’s production industry has stockpiled so many unused leases that each state has more than a decade, and up to 6 decades, of remaining drilling opportunities.
The report cites significant benefits to a pause in leasing:
- Affording time for the Bureau of Land Management to identify fiscal inefficiencies in its leasing program, collect critical information, complete studies, and update decision documents to make more informed policy decisions;
- Expanding conservation goals and multiple uses, such as protecting wildlife habitat, increasing recreation, and identifying potential wilderness;
- Temporarily protecting well over 1 million acres of unleased land while the BLM re-balances its approach to multiple use management;
- Signaling to the marketplace that the Administration is serious about addressing climate and transitioning to cleaner and renewable sources of energy.
And it shows how these positive outcomes vastly outweigh any potential costs in lost lease revenue.
Finally, the report demonstrates that the Intermountain West today is significantly less dependent on the oil and gas industry. It considers how protecting public lands can spur regional economic development, by attracting people and businesses, creating high wage information and service jobs, and envisioning development strategies for diversifying into conservation-based development. These alternative growth options include increased tourism, fishing, hunting, off-road riding, mountain biking, and nature viewing. The report also notes that cleaning and reclaiming legacy wells in the U.S. will create jobs and reduce greenhouse gas emissions, yielding as many as 85,000 direct annual jobs for ten years of duration and eventually eliminating nearly 252,000 metric tons of methane. Finally, the study notes that conservation measures draw people and businesses, while oil and gas drilling can repel them.
“In many of these rural communities in the West that were once dependent on oil and gas resources, there is already an economic transition underway,” said Evan Hjerpe, director of the Conservation Economics Institute (CEI). “And incremental phasing down of the federal oil and gas program, starting with a pause on leasing, affords critical time for reforming oil and gas policies.”
“Polluters cried economic duress when the Administration set about reforming a broken system, and this shows just how misleading those claims are,” said Josh Axelrod, senior advocate for the Nature program at NRDC (the Natural Resources Defense Council). “The pause on leasing federal lands is not an economic threat—industry is already sitting on a stockpile of leases that could yield drilling for well over half a century.”
“Communities around the West have long been tied to boom and bust cycles, and our lands, water and wildlife have borne the brunt of industry’s extractive activity,” said Jesse Prentice-Dunn, policy director of the Center for Western Priorities (CWP). “But this shows that today, drilling on public lands does not drive employment. The pause on leasing is a chance to begin reforming the wildly outdated system of leasing on public lands. It is time to invest in sustainable uses that will ensure a brighter future for our communities, public lands, and climate.”
CEI, NRDC and CWP are releasing this analysis in close collaboration with eight partner groups, including Conservation Colorado, Conservation Voters New Mexico, the National Parks Conservation Association (NPCA), Powder River Basin Resource Council, Southern Utah Wilderness Alliance (SUWA), Wild Montana, The Wilderness Society (TWS), and the Western Organization of Resource Councils (WORC).
Josh Axelrod has more details in his blog, here.
A recording of the telepresser with CEI, NRDC and CWP outlining these findings is available upon request.
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NRDC (Natural Resources Defense Council) is an international nonprofit environmental organization with more than 3 million members and online activists. Since 1970, our lawyers, scientists, and other environmental specialists have worked to protect the world's natural resources, public health, and the environment. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Bozeman, MT, and Beijing.
Conservation Economics Institute (CEI) is an independent nonprofit organization that provides research on economic means to simultaneously provide for biodiversity, ecological health, and community welfare.
The Center for Western Priorities is a nonpartisan conservation and advocacy organization that serves as a source of accurate information, promotes responsible policies and practices, and ensures accountability at all levels to protect land, water, and communities in the American West. Based in Denver, Colorado, the Center advances responsible conservation and energy practices in the West. We encourage open, public debate and work to advance those discussions online, in the media, and throughout Western communities by promoting responsible solutions and original research. Visit us at https://westernpriorities.org/ and follow us on Twitter at @WesternPriorities