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US federal gas output lags that of private property: report


Although overall US natural gas production has dramatically increased each year since 2009, production on federal lands has declined each year over the same period, with much of the decline attributed to a 50% drop in offshore gas production, according to a Congressional Research Service report released Wednesday.

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"Federal natural gas production has fluctuated from around 30% of total US production for much of the 1980s through the early 2000s (34% of U.S. total in 2003), after which there began a steady decline through 2013," the report states.

Although the US Energy Information predicts that the years-long decline in offshore gas output will reverse itself in 2015, "any increase in production of natural gas on federal lands is likely to be easily outpaced by increases on non-federal lands, particularly because shale plays are primarily situated on non-federal lands," the study finds.

Industry advocates, however, point to more stringent regulations for leasing and drilling on federal lands as the chief reason why hydrocarbon production on those lands is trailing behind that of private and state-owned lands.

The CRS report found that as a result of the shale gas boom, annual US natural gas production rose by about 10.96 Bcf/d, or 19%, between fiscal year 2009 and FY2013, while gas production on federal lands (onshore and offshore) fell by about 28%, from 14.72 Bcf/d to 10.62 Bcf/d.

This compares with a 33% increase in gas production on non-federal lands over the same time period. "The big shale gas plays are primarily on non-federal lands and are attracting a significant portion of investment for natural gas development," the report states.

EIA estimates US dry gas proved reserves are about 334 Tcf, about a quarter of which lies beneath federal lands, and of that 69 Tcf is onshore and 16 Tcf offshore.

"Nearly all of the offshore proved reserves are located in the Central and Western Gulf of Mexico," according to the report. "Offshore natural gas production is projected to reverse a years-long decline in 2015, with annual production rising as high as 2.9 Tcf in 2040."

Even with these projected increases, offshore gas output would only account for about a 7.7% share of total US production in 2040, the report states.

Currently, there are 113 million acres of onshore federal lands that are open and accessible for oil and gas development while about 166 million federal acres are considered off-limits or inaccessible.

The study also finds that in contrast with the gas output picture, oil production on federal lands has fluctuated over the past five fiscal years.

However, as with gas production, oil output has increased dramatically on non-federal lands.

Non-federal crude oil production increased by 2.1 million barrels per day between FY2009 and FY2013, causing the federal share of total US crude oil production to fall by nearly 11%, the CRS says.

The report shows that "federal land policies are artificially suppressing production, putting Western communities that rely on oil and natural gas development at a disadvantage compared to other areas of the country," Western Energy Alliance said in a statement.

WEA President Tim Wigley placed the blame for the lackluster energy production from federal lands on the land-use policies of the Obama administration.

"The huge success of the oil and natural gas industry increasing energy security and bringing the country out of recession is despite, not because of, the policies of this administration," he said.

"The CRS report clearly shows that where the federal government has the most control, on federal lands, it is suppressing development of the energy that all Americans own while preventing job creation and economic prosperity," Wigley said.

Julia Bell, a spokeswoman for the Independent Petroleum Association of America, said the CRS report "should be a wake-up call for those concerned with energy development on federal lands."

She added that independent oil and gas producers "are struggling to overcome immense bureaucratic confusion with a myriad of overlapping jurisdictions and regulations," and called on Congress "to increase access and streamline permitting on federal lands."

--Jim Magill,
--Edited by Keiron Greenhalgh,