January 12, 2009

An expensive land grab

Oil & Gas Journal

In a move with dire implications for exploration and production on federal land, the US Senate returned to business as usual as the 111th Congress began work. The phrase “business as usual” here means sneaking energy mistakes into law as parts of a wide-mouth sandwich of provincially irresistible spending adventures.

Majority Leader Harry Reid (D-Nev.) reintroduced an omnibus lands bill that opponents fear will tighten limits on access by producers to federal oil and gas resources. He had withdrawn the legislation, actually a package of more than 150 bills, in November in response to resistance led by Sen. Tom Coburn (R-Okla.).

‘Worst habits’

In a statement on the Senate floor last week, Coburn said he had learned from the Democratic leadership that the lands package contained 12-13 new bills. “This is an omnibus lands bill that indulges the worst habits of a parochial Congress,” he said.

When the lands bill was under consideration last year, the Western Business Roundtable of Lakewood, Colo., said its biggest concern was congressional establishment of the National Landscape Conservation System (NCLS), a Department of Interior program now covering 27 million acres in 850 parcels of federal land. Administered by the Bureau of Land Management, the NCLS includes national monuments, national conservation areas, wilderness and wilderness study areas, wild and scenic rivers, and national scenic and historic trails. “The bill would give federal land managers the ability to alter the longstanding multiple-use management philosophy of the BLM by elevating the conservation purposes above other purposes for NCLS units,” the group said.

Claire Moseley, executive director of Public Lands Advocacy in Denver, called the NCLS move “a whole new land classification” that would block or delay exploration and development with new layers of regulation and legal hurdles. Another group, the American Land Rights Association, predicted that under the lands bill NCLS units would become national parks, with traditional uses restricted and roads cut off. It also warned of political pressure to add federal acreage to NCLS regulation. It called the legislation “one of the largest land grabs in history.”

In his Senate remarks, Coburn put the acreage figures into perspective by noting that the US area off-limits to development as wilderness already exceeds that of developed land—107 million vs. 106 million acres. Beyond giving statutory authority to the NCLS, an initiative of former Interior Sec. Bruce Babbitt late in the administration of President Bill Clinton, the bill in various ways would withdraw a further 3 million acres from leasing and energy exploration, Coburn said. Some of that lock-up would occur through wilderness and other such designations imposed with the stipulation that the land become subject to NCLS management.

In a period of intense public concern over energy supply, federal deficits, and economic health, the mere consideration of new measures to restrict commercial use of federal land is distressing. A new ICF International study for the American Petroleum Institute shows how much the US already denies itself by limiting oil and gas leasing in Rocky Mountain states. If land now off limits for other than statutory reasons became accessible, the study estimates, the Rockies by 2030 would have new production of 35,000 b/d of oil from 321 million bbl of reserves and 677 MMcfd of gas from 8.4 tcf of reserves. The extra production would boost all-time government receipts by $22 billion and employment in 2030 by 12,318 jobs.

Local seductions

When the federal government proposes to undertake further sacrifice of this type, taxpayers, energy consumers, and job seekers deserve to know what’s happening to them. But revelation is difficult when official refusal to pursue national potential hides in a swarm of local seductions. Coburn said 1,082-page lands bill last year contained 592 spending measures, including 15 new state and local water projects. The proposed spending totaled $10 billion—“money we don’t have,” he said.

The new version of the bill is 100 pages longer and no doubt more expensive. Legislation important to energy supply, to the economy, and to the federal budget deserves treatment more straightforward than this.