Petroleum and environmental at odds over federal oil, gas regulation

Petroleum and environmental at odds over federal oil, gas regulation

Associated Press The Billings Gazette | Posted: Thursday, July 21, 2011 5:12 pm

CHEYENNE, Wyo. - Petroleum and environmental groups are at odds over what's getting in the way of more drilling for oil and natural gas in the West: too much government regulation or the petroleum industry's own speculative practices.

The Western Energy Alliance said onshore oil and gas production in the U.S. is projected to exceed energy imports from Saudi Arabia, Iraq, Kuwait, Venezuela, Colombia, Algeria, Nigeria and Russia combined by 2020. Yet federal oil and gas reserves beneath public lands in the West have proven more expensive to develop than deposits in other regions because of excessive government regulation, the group said in a recent report.

The Wilderness Society countered in its own report Wednesday that environmental regulation isn't getting in the way of oil and gas drilling so much as the companies themselves when they choose not to drill on a large share of the 41 million acres of U.S. Bureau of Land Management land they have leased for development in the West.

"The industry and their allies in Congress keep complaining about alleged restrictions and the Obama administration's policies inhibiting their access to public lands and oil and gas development," David Alberswerth, a policy adviser for The Wilderness Society in Washington, D.C., said Thursday. "They're sitting on over 6,500 gas drilling permits in the West."

Some 3,500 of those idle permits are in Wyoming. Others are in are in New Mexico, 1,307; Utah, 775; Colorado, 571; and Montana, 203, according to U.S. Bureau of Land Management records, the group said.

Companies often choose not to develop because they speculatively acquire leases and permits to drill on public land, Alberswerth said.

Last week's report from the Denver-based Western Energy Alliance highlighted the promise of newly refined techniques to produce more domestic oil and gas, which the group credits for a net increase in oil production in the U.S. in recent years.

The report from the petroleum group called for reforming federal oil and gas regulations, saying "misguided government action is preventing achievement of the region's full energy potential."

It singled out a proposal to transfer regulation of hydraulic fracturing from states to the federal government.

A way of increasing production by splitting open underground fissures with a pressurized mix of water, sand and chemicals, hydraulic fracturing has become a common practice. But it also has raised concern about possible groundwater contamination.

The energy alliance said the report from the environmentalists showed a poor understanding of how oil and gas leasing in the West really works.

"Permits on public lands often come with various conditions of approval such as seasonal and wildlife restrictions," alliance spokesman Jon Haubert said. "In addition, regulatory delays, environmental appeals and rig availability can all delay an operator from immediately exercising a permit once received."

It often takes the full 10-year term of a lease for a company to get through all of the government's "bureaucratic hurdles" before a company can even begin drilling, he said.

Matt Garrington with the Checks and Balances Project, which helped with The Wilderness Society research, pointed out that despite those claims, the energy group's report called for aid to the oil and gas industry through "government handouts" such as subsidies.

"It's not about red tape, it's making sure that government is working for industry," he said of the regulations.

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