CHEYENNE, Wyo. – Environmental red tape has contributed to a 79 percent reduction of oil and gas leasing on public land in the Rocky Mountain States, taking a toll on the region's economy, says a petroleum industry group.
Members of the Denver-based Western Energy Alliance is prepared to spend $ 3.9 billion to drill in the West, 16 000 jobs, says Kathleen Sgamma, Group Director of Government Affairs.
Bureaucratic uncertainty which causes them to look elsewhere to invest, "she said.
"They simply cannot be authorized, they cannot recover their approved projects" Sgamma said Thursday.
An Alliance report released this week documents falling numbers, although questioned an environmental campaigner's characterization of the Federal authorisation procedure that is stuck in bureaucratic control.
"Oil and gas is like a child with 10 sticks. It can only put one in his mouth. But if you try and take one of the 10 away, it will cry and scream, "says Erik Molvar, biodiversity conservation Alliance.
U.s. Bureau of land Management in seven States — Colorado, Dakotas, Montana, New Mexico, Utah and Wyoming — issued 60 percent fewer parcels for leasing and 70% less areas for rental in 2010 than in 2005, according to the report.
The result, the group said, has been a 46 percent decrease in revenues from leasing, from US $ 190 million to $ 102 million. It is money that goes to the Federal Government and the Governments of the struggling with budget deficits, "said Sgamma.
Not only is less sea lease sale on BLM auctions, "she said, but fewer leases are issued to companies under very stringent environmental review since the Obama administration took office nearly two years ago.
"There are already three layers of analysis in the process of leasing. This Administration has another couple of other layers of analysis, "said Sgamma. We think it's probably time to scale back some of that redundant analysis and enable development review, to go further, to create jobs in the West and economic activity.
Less drilling in the West has been the industry itself, said Molvar.
Companies have to be drilled to the point where they have created a natural gas glut that has pushed down prices, Molvar said Friday. Economy, more than anything, has caused leasing downturn, "he says.
"It is disingenuous to suggest that the reduction of the lease is driven by some form of Government policy or supervision of environmentalists, because it is the oil industry itself which is requested by a much smaller area to leased lines," Molvar said.
Companies nominate parcels BLM oil and gas leasing. Western Energy Alliance Report shows the number of nominated parcels reduces from about 3,000 in 2007 to $ 300 in 2010, said Molvar.
"No wonder you may decrease," he says.
Sgamma said lease nominations "not just disappear" and there is a "huge backlog" of nominated lease before the BLM.
"What companies in the right mind would continue to nominate and again when there is no progress?" she said.
Molvar said companies exercising their right to drill on only a small number of leases that they acquire – just 30 percent in Wyoming. He also said that several large drilling projects, and thousands more wells, approved in recent years.
Sgamma said companies often do not drill in leases since the examination shows that the loan is not viable. Focus on high-profile projects with thousands of new wells, "she said, overlooking the bigger picture of many small developer does not have permission to drill through only a handful of wells.
The overall result, Sgamma said, is well on the West cost more, causing companies to ensure gas plays, mainly in private land in the East and South.
"We want to put Western European States at a disadvantage to the rest of the country? We do not think that should be present, "she says.
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