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Interior report shows vast amount of idle gas/oil leases

Published: Tuesday, March 29 2011 4:46 p.m. MDT

WASHINGTON — A new report by the U.S. Department of Interior shows that approximately 57 percent of onshore acres under lease by the oil and gas industry sit idle, lacking any production or exploration activities.

The report issued Tuesday to President Barack Obama was in response to his mid-March request of the agency to determine how much public land already leased to oil and gas companies remains undeveloped — numbers anticipated to be used to bolster his premise that industry should use what it already has, and quit asking for more.

Of the 38,286,136 acres under lease as of March 14, 57 percent — or about 21.6 million acres — are not being subjected to any production or exploration activities, the report said.

"The information provided in this report indicates that the Department offered substantial acreage for potential oil and gas development in 2009 and 2010 that was not subsequently leased by bidding parties," according to the executive summary. "In addition for areas that are under lease, there are tens of millions of acres currently idle — that is, not undergoing exploration, development or production."

The report was blasted by Rep. Rob Bishop, R-Utah, who chairs the House Resources Subcommittee on National Parks, Forests and Public Lands, and the Western Energy Alliance, which represents 400 oil and gas producers in the West, including Utah.

"This administration would have you believe that energy companies do not want to produce energy. I'd say that assertion is ludicrous, but even that would be too generous," Bishop said. "The implications of this report are both disingenuous and intentionally misleading."

Kathleen Sgamma, director of government and public affairs, said the report ignores the bureaucratic hurdles that exist to energy development.

"The truth is that companies are doing all they can to develop federal energy resources, but a lease is not a green light to drill — it's the first step in a long, expensive process that is fraught with bureaucratic red tape and lawsuits by environmental groups determined to stop domestic energy development."

A map included in the report shows a substantial chunk of Western states in the country with the majority of their leases sitting idle. As an example, in Montana, the percentage of oil and gas leases that are actually producing is 24 percent; in Wyoming it is 32 percent; Texas is 31 percent; and Utah is at 22 percent.

January numbers show Utah has nearly 4.9 million acres leased, with 1.1 million acres in production.

Sgamma says that in general, about one-third of leased acreage is producing, while one third is undergoing preparatory work and one third will not be put into production by the current leaseholder.

"Production cannot occur on a lease until all preliminary environmental analysis and permitting work is complete," she said. "An oil and natural gas lease is no more than a definite maybe — maybe you'll get through all the environmental analysis and regulatory hurdles, maybe you'll get permission to drill, maybe your project won't be held up by legal challenges from obstructionist groups, maybe you'll find oil or natural gas."

But Matthew Garrington, deputy director of the Denver-based Checks and Balances Project, said the report highlights the need to scale back on issuing permits for domestic oil and gas production.

"The simple truth is approval rates for drilling permits are up, and industry lays idle hands on over 21 million acres of public lands," he said. "We should put an end to Big Oil's speculation on our public lands and continue to move forward with responsible energy development."

e-mail: amyjoi@desnews.com

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