In this list
Natural Gas | Oil

Study claims minimal economic impact from US federal onshore leasing moratorium

Energy | Electric Power | Natural Gas

US natural gas, power prices face bullish outlooks into winter heating season

Energy | Oil | Crude Oil

Platts Crude Oil Marketwire

Commodities | Energy | Electric Power | Renewables | Natural Gas

Hydrogen: Beyond the Hype

Energy | Oil | Electric Power | Refined Products | Fuel Oil | Electricity

Sweden fires up oil-fired generating capacity to supply high-demand Poland

Energy | Oil

Fuel for Thought: OPEC+ to set tone for 2022 with response to US oil release, COVID-19 variant

Study claims minimal economic impact from US federal onshore leasing moratorium

Highlights

Group says existing leases provide for decades of drilling

Platts Analytics finds 3.6 Bcf/d of production at risk

3,200 stockpiled permitted wells on federal lands currently

The moratorium for new oil and gas leases on onshore federal land looks to have a minimal economic effect on the US Rocky Mountain region, according to a study by the Conservation Economics Institute.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

"We found minimal if any impacts from the pause in oil and gas leasing," Joshua Axelrod, senior advocate at the Natural Resources Defense Council, said Aug. 4. "We found multiple benefits. Oil and gas development actually repels people from these areas."

CEI is recently created nonprofit organization that provides research on economic and environmental issues. The Center for Western Priorities and NRDC supported the study on the moratorium.

"The federal oil and gas leasing program is woefully inefficient and outdated," CEI director Evan Hjerpe said. "These result in heavy subsidies to oil and gas companies and a poor return to the public. There was a need for the Biden oil and gas leasing pause."

He said he expects the moratorium, or pause, to extend no longer than one year, but it was likely there might be a need for extended leasing pauses in the future.

No new leases being offered

The Biden administration issued the moratorium on its first day in office. A federal judge has since overturned the leasing moratorium, but the Bureau of Land Management offices have yet to resume offering new leases.

The CEI study contends oil and gas companies hold enough leases issued prior to the moratorium to extend drilling programs for decades. The producing US Rocky Mountain states include Colorado, Wyoming, New Mexico, Utah and Montana.

"For regional economic effects in the Intermountain West, we have found impacts to be minimal in the short term, as the most resource-reliant states have ample stockpiles of leases and permits to easily continue the status quo in terms of new drilling on federal lands," the study said.

Acreage for 'decades of drilling'

Wyoming holds nearly 5 million acres of non-producing federal leases, while the next closest, Utah holds 2 million.

"Wyoming producers are the most reliant on federal leases, but it already holds ample acreage to provide for decades of drilling," Hjerpe said. "Medium-intensity drilling results in 10 years of drilling programs in New Mexico and up to 60 years in Wyoming on federal land with no new leases."

Still, data by S&P Global Platts Analytics shows substantial production could be at risk by 2025 under a lengthy moratorium. A permanent halt of new drilling permits on federal lands and waters puts 1.1 million b/d of oil output and 3.7 Bcf/d of gas output at risk by 2025 if existing permits and drilled-but-uncompleted wells are allowed to continue.

There are about currently 3,200 stockpiled permitted wells on federal lands as well that operators can lean on in the event of a policy change. More than 2,000 of those are in New Mexico over the Permian Basin.

A total federal drilling ban would cut oil output by 1.6 million b/d. Tighter emissions controls would also crowd out marginal producers. About 750,000 b/d and 9 Bcf/d of production in the US comes from low-producing stripper wells, potentially more vulnerable to costs of increased regulations, according to Platts Analytics.

Global Energy Awards | December 9, 2021

For more than 20 years, the Global Energy Awards has recognized achievements by companies who have faced complex challenges and capitalized on unique opportunities. Nominations open June 7, nominations close Aug. 27.

Learn more