U.S. Policies Put Most U.S. Oil Off-Limits to Drilling

Daily News Article — Posted on June 6, 2008

(by Pete Winn, CNSNews.com) – Huge basins of untapped oil can be found on federal lands throughout the United States, according to a new report from the federal government. But much of it cannot — and may never be — recovered, because it lies under national parks and national monuments, or it is subject to environmental laws and restrictions that make drilling prohibitive.

The report, which was produced at the request of Congress by the U.S. Department of Interior’s Bureau of Land Management (BLM), said there are 279 million acres under federal management where oil and gas could potentially could be extracted.

More than half of it is totally off-limits to drillers.

“The total onshore resource is 31 billion barrels,” said BLM’s lead scientist Richard Watson, who authored the report. “Of that, 19 billion barrels are currently inaccessible or 62 percent. A little over 2 billion barrels, or 8 percent, is accessible under what we call standard lease terms.”

If you add in the 85.9 billion barrels of oil that lie offshore, as determined by the Interior Department’s Minerals Management Service, there are 117 billion barrels of oil on lands owned or managed by the U.S. government.

But all expansion of offshore oil recovery is currently off-limits.

Adding in what’s available on privately held land, the figure rises to 139 billion barrels of oil, according to the government – more than the known oil reserves of Iran, Iraq, Russia, Nigeria or Venezuela, respectively.

The biggest untapped land-based oil deposit in the United States lies within ANWR, the Artic National Wildlife Refuge, which is currently off-limits.

“We estimate there is something on the order of 7.7 billion barrels in that one area alone,” Watson told Cybercast News Service.

But setting aside Alaska, there is untapped oil on federal lands all across the United States, the government reported, with oil pockets found in Oregon, Washington state, Montana, Wyoming, Florida — even in the Appalachian Mountains.

“In the lower 48 states, there are about 12 billion barrels onshore,” Watson noted.

In California, for instance, where oil producers have been drilling for over 100 years, there are still large amounts available — much of it situated near scenic Santa Barbara.

“In the Ventura basin, there are 281 million barrels under federal ownership,” Watson said. “Forty-eight percent of that is inaccessible. The rest of it is accessible with varying restrictions on access.”

Exploration restricted

What makes much of the California oil off-limits is the fact that the bulk of it lies under a national forest.

“You’ve got a wilderness area, a condor sanctuary, there are a couple of islands offshore that are part of a national park,” Watson said.

Watson said Congress not only wanted to know how much oil there is on federal lands, it wanted to know what laws and regulations restrict exploration. Much of the oil is off-limits because of the National Environmental Policy Act (NEPA), the Clean Water Act, the Endangered Species Act and the National Historic Preservation Act.

Oil producers, meanwhile, say that even when these laws don’t forbid drilling, they are sometimes onerous, making it very difficult — or unprofitable — to get to the oil.

“NEPA, for instance, was originally supposed to be focused only on major federal actions,” said Dan Naatz, vice president of federal resources for the Independent Petroleum Association of America.

“But now, through court cases and regulatory rulings, it is to the point where basically anytime an oil or gas well is proposed on federal land, producers either have to do an environmental impact statement, or a environmental assessment to comply with NEPA,” Naatz added.

If producers don’t engage in the costly and complicated studies, they will end up in court, being sued by environmental groups, he said.

The report also noted that a large amount of oil — a little over 9 billion barrels, or 30 percent of the total — is available for tapping, with restrictions.

“These restrictions are usually in place to mitigate possible environmental damage or to prevent destruction of wildlife migration or nesting,” Watson said.

One restriction is the “no-surface occupancy stipulation,”which means drillers are not actually allowed onto the protected land.

Naatz said producers could recover more of the oil, if they were allowed to use directional drilling more often, which is frequently limited by regulations.

With directional drilling, producers obtain the rights to drill on land adjacent to the forbidden turf, drill down a short way, then drill horizontally – if they are allowed to.

“Directional drilling has revolutionized the industry,” he said. “You don’t ever want to tap into other areas that are not your property, but directional drilling has allowed the industry to reduce its footprint. From one well-pad, you can get a number of wells drilled.”

Another obstacle the report noted is the process of obtaining drilling permits, Naatz said.

“The permitting process is very slow, very cumbersome,” he said. “What happens is that the window of opportunity to operate on some lands is very limited. Usually you are talking about areas where they have winter-use restrictions, where there can be no activity, to allow for migratory birds or animals.”

In many cases, Naatz said, the window for drilling narrows to as little as one month a year.

“In the oil and gas business, that makes it virtually impossible to access those areas,” he added.

Environmental groups like the Sierra Club, meanwhile, are largely dismissive of the BLM report.

“It appears to be more of same kind of thing we’ve had all along from the Bush administration, which wants to exploit the land, rather than protect it,” noted Kristina Johnson, a Sierra Club spokeswoman.

In 2000 and again in 2005, Congress passed laws requiring the Department of Interior to inventory the oil resources that could be found both onshore and offshore in U.S. territory – and any restrictions which bar their recovery.