DOI Releases Update on Unused Oil and Gas Leases

As the Obama administration continues to make millions of acres available to for oil and gas development, a report released by the Department of the Interior shows that more than two thirds of federal offshore acreage leased by industry and more than half of federal onshore leased acreage in the lower 48 states remains idle – neither producing nor under active exploration or development by companies who hold those leases. According to the report, more than 70 percent of the tens of millions of offshore acres currently under lease are inactive, neither producing nor currently subject to approved or pending exploration or development plans. Out of nearly 36 million acres leased offshore, only about 10 million acres are active – leaving nearly 72 percent of the offshore leased area idle. In the lower 48 states, an additional 20.8 million acres, or 56 percent of onshore leased acres, remain idle. Furthermore, there are approximately 7,000 approved permits for drilling on federal and Indian lands that have not yet been drilled by companies. Press Release

And the Tulsa World reports:

...Industry groups reacted strongly to the new report, saying it was misleading and failed to explain the process required to drill once a lease is secured. They said federal agencies and outside groups opposed to drilling were responsible for much of the delay. Kathleen Sgamma, a vice president at the Western Energy Alliance, said half of the non-producing acreage is attributable to the Interior Department's “redundant regulations and bureaucratic delays.” Sgamma said some acreage would never be developed because exploration on it wouldn't be economically viable with today's technology. But, she said, “The truth is that companies are doing all they can to develop federal energy resources, but a lease is not a green light to produce — it's a definite maybe and the first step in a long, expensive process fraught with bureaucratic red tape.” In the report, the Interior Department acknowledged that activity on some leases is delayed by protests and said the Bureau of Land Management is hoping to narrow lease sales to parcels “in appropriate locations and avoid the contention and litigation that have characterized many development proposals over the past several years.” Jack Gerard, president and CEO of the American Petroleum Institute, said the administration last week approved drilling on leases in Utah after a four-year delay in granting permits.