Gas prices later reached record highsin June 2022, the average price for a gallon of gas in the United States hit $5 for the first time ever. March 2, 2021, PolitiFact, No, the U.S. did not end its domestic oil production. the Mineral Leasing Act. Join us for a free, virtual event for International Women's Day on March 8! ", In 2020, the oil bust created worker and supply shortages and caused companies to cut their budgets. They have to be sure that the costly investment (and time) that it takes to turn a lease into a producing well is worth it.. Douglas Holtz-Eakin, an economist and president of the American Action Forum, a center-right think tank, said firms are trying to assess the durability of the global rebound. ", 60% of counties in this country are refusing to implement the nation's gun laws.. The numbers on oil and gas leasing in Nevada over the last several years show us how broken the federal leasing program is. Those companieswhich determine their drilling plans more than a year in advancehave also faced labor shortages under Biden, with the oil industry comprising roughly 12,400 fewer workers last year than it did prior to the coronavirus pandemic. Heres some money, go get a third rig. I cant get the pipe. American Petroleum Institue February 27, 2023. Experts also suggested that drilling domestically is more costly than drilling overseas, which could further deter oil companies in the U.S. from upping production. "Sometimes there might not really even be producible oil and gas on a lease," Daigle said. . That's enough to last the industry another 10 years, by one estimate . Experts also suggested that drilling domestically is more costly than drilling overseas, which could further deter oil companies in the U.S. from upping production. Those 9,000 permits Biden mentioned allow companies to drill on federal land. Mutual Fund and ETF data provided by Refinitiv Lipper. March 8, 2022 There are 9,000 unused oil and gas leases on Federal lands that the companies have not touched. Many of the drilling permits held by industry and 60 percent of the acreage leased to oil producers sits unused, she said. All rights reserved. It suggests American producers have been motivated by a desire to manipulate the market during the current crisis in Europe. At the same time, this is a really profitable business, especially with West Texas Intermediate trading at close to $100 a barrel. Ive Heard that Hydraulic Fracturing is Linked to Cancer. From a federal regulatory standpoint, once a permit is approved, industry can proceed. Like when the president points out that some of his competitors are sitting on 9,000 federal land leases they havent drilled. Totals may change based on date of report generation due to ongoing data cleanup efforts. With oil at $120 or more, drilling there is wildly profitable.". All Rights Reserved. "In the United States, 90% of onshore oil production takes place on land that isn't owned by the federal government. | Terms & Conditions | Privacy, Psaki has made the claim about unused federal leases, Pipeline Strategic Data Tracking System (PSDTS). Fossil Fuels The U.S. Energy Information Administration in January forecasted that U.S. oil production will average 12.4 million barrels per day during 2023, surpassing the record high for domestic crude oil production set in 2019. Bidens number is correct: There are 9,137 approved permits to drill on federal and Indian land, and the oil industry could use those permits and drill. How Many Jobs Has the Oil and Natural Gas Industry Created? Corporate strategy has fundamentally changed.". Oil and gas companies are currently sitting on 23 million acres of unused federal leases, an area roughly the size of Indiana. Please read our Terms & Conditions, Cookies Policy and Privacy Policy before using the site. President Joe Biden. And of the remaining 10% that occurs on federal land, the oil and gas industry has millions of acres leased," Biden said. "Oil and gas companies already have leases the size of Indiana," said Sen. Ed Markey (D-Mass.) Now, his own administration is acknowledging that's wrong. The U.S. has more than 24 million acres under lease to oil and gas companies onshore close to half are not producing. Our only agenda is to publish the truth so you can be an informed participant in democracy. Occidental has more than 500 unused federal permits. Tomorrow's lease sale is a step in the wrong direction, and the administration needs to do better." After decades of an industry-first management approach to offshore leasing at DOI, oil and gas companies have stockpiled more than 9.3 million acres of unused, non-producing leases sitting off U.S. coasts. If . Biden said that companies pumped more oil in the U.S. during his first year in office than during his predecessors first year and that we were on track for record oil production next year. Government policies can either discourage or encourage oil producers to take the risk of investing billions of dollars, plus considerable time and effort, to find out whether or not the lands they lease are viable sources of oil. Then Biden pivoted to point the finger at the industry: "In the United States, 90% of onshore oil production takes place on land that isnt owned by the federal government. What are the Claims of Anti-Fracking Activists? A shale well, for example, could cost about $7 million to drill. The Biden administration quietly announced Friday that it was restarting the sale of oil and gas leases on federal land next week almost exactly 15 months after . The moratorium represents a step further than Secretarial Order No. 13 rejected oil and gas leases. "So, I would suggest you ask the oil companies why they're not using those, if there's a desire to drill more. But a Biden administration official downplayed the alteration Monday, saying the number of unused oil and gas permits remains high. And of the remaining 10% that occurs on federal land, the oil and gas industry has millions of acres leased," Biden said. Conclusion. To be clear, Biden wasnt wrong about that number, but citing it as evidence that energy companies are sitting on their hands to keep prices high needs a bit more context. Before coming to API, Kevin served in the White House as Special Assistant to the President in two different roles, and as Deputy Solicitor for Energy & Minerals at the U.S. Department of the Interior. Bidens number is correct: There are 9,137 approved permits to drill on federal and Indian land, and the oil industry could use those permits and drill. Here's why: President Joe Biden said that his policies have not made the U.S. less equipped to withstand the impact of the ban on Russian energy imports. Oil production on federal lands fell to 12.28 million barrels per day in November, the latest month with data. When a company acquires a lease, it makes a significant financial investment at the beginning of the lease in the form of a non-refundable bonus bid and pays additional rent until and unless it begins producing. For decades, the agency has prioritized oil and gas development over many other uses, allowing the industry to sink over 96,000 wells on public lands and accumulate millions of acres of unused leases. Mischaracterizing the way federal leases work does not help foster new investment and risk-taking. If you came to me and said, Mike, heres $100 million. It took us all of probably three to four years to consolidate enough acreage to start drilling to begin with, he said. What Does EPA Say About Water Contamination? For perspective, Doug Ackerman, President of the New Mexico Oil and Gas Association, said it takes upwards of 12 months to get the 30-50 permits required to drill a single well during a House Natural Resources subcommittee hearing earlier this month. White House, Remarks by President Biden Announcing U.S. Ban on Imports of Russian Oil, Liquefied Natural Gas, and Coal, March 8, 2022, U.S. Energy Information Administration, "EIA expects annual U.S. crude oil production to surpass pre-pandemic levels in 2023," Jan. 11, 2022, Bureau of Land Management, Applications for permits to drill, December 2021. Is Biden sharing all the facts here? There is actually an incentive for the companies not to develop these resources because for publicly traded companies, these reserves get reported and influence market valuation, Daigle said. So the surface pads, as you can see from here, its kind of hard to see. They exist. Those guys are tripping in and out to go in and try to latch on to that ESP and try to pull it out, Cohorn said. I took a trip out to ground zero for domestic oil and gas production Texas' Permian Basin . EIN: 41-0953924. "In Utah alone, the industry is sitting on more than 1.7 million acres of unused federal oil and gas leases on some of our nation's wildest and most culturally significant public lands . President Joe Biden said that his policies have not made the U.S. less equipped to withstand the impact of the ban on Russian energy imports. He contended that the onus is on U.S. oil and gas companies that have permits to begin drilling, but havent started. The Biden campaign's crusade against fossil fuelswhich helped the Democrat appeal to young liberal votershas made many U.S. oil companies wary of investing in new drilling operations given the long-term political risk, the Washington Post reported last year. Attorneys, and the ballot theft immediately ended. On Feb. 27, 2023, a reader alerted us that the federal agency had published an updated number of the approved and available permits to drill the new total was 27% smaller, 6,653 permits. Editors note, Feb. 28, 2023: This fact-check of President Joe Bidens statement in March 2022 was based on available data at the time from the Bureau of Land Management. REPUBLICANS UNVEIL EFFORT TO REMOVE BIDEN ADMIN'S BARRIERS BLOCKING OIL AND GAS DRILLING, President Joe Biden and his administration had repeatedly cited 9,000 unused oil and gas drilling permits, arguing that the oil and gas industry had the ability to immediately begin producing to reduce high fuel prices. Labor is in such short supply in the region that stories like this are common, Cohorn said. Biden said that companies pumped more oil in the U.S. during his first year in office than during his predecessors first year and that we were on track for record oil production next year. Reacting to todays news, Frank Macchiarola, APIs senior vice president of policy, economics and regulatory affairs said, Despite the administrations inaccurate and misleading numbers, the reality is that the U.S. natural gas and oil industry is confronting the global energy crisis by continuing to work to meet the energy needs of U.S. consumers and our allies abroad. 2023 World Oil, 2023 Gulf Publishing Company LLC. And is it Joe Bidens fault? Mutual Fund and ETF data provided by Refinitiv Lipper. The department, which manages oil and gas drilling on federal land, blamed the change on a "reporting discrepancy.". (AP Photo / Susan Walsh / File). The moratorium will extend the duration of the . Generic 1st 'XB' Future. Source: Bureau of Land Management data. Those permits include those issued under Biden and those still active from Trumps administration and potentially before, said Josh Axelrod, of the National Resources Defense Council. Biden has a point that the U.S. produced more during his first year than Trumps first year. U.S. Energy Information Administration, U.S field production of Crude Oil, Center for Biological Diversity, New Data: Bidens First Year Drilling Permitting Stomps Trumps By 34%, Jan. 21, 2022, Western Energy Alliance, Responding to the White House Blame Game on Leases, March 4, 2022, Washington Post, Biden outpaces Trump in issuing drilling permits on public lands, Jan. 27, 2022, CNN, More oil supply could stop massive price spikes. Producers also have to put a drilling plan together, secure rights of way and work with state and private landowners, Pett said. TheU.S. Energy Information Administrationin January forecasted that U.S. oil production will average 12.4 million barrels per day during 2023, surpassing the record high for domestic crude oil production set in 2019. Tim Stewart, president of the U.S. Oil and Gas . Developing a lease takes years and substantial effort to determine whether the underlying geology holds commercial quantities of oil and/or gas. And of the remaining 10% that occurs on federal land, the oil and gas industry has millions of acres leased,Biden said. They could be drilling right now, yesterday, last week, last year.". They arent necessarily the same people who own the mineral rights. Companies dont have to immediately begin drilling as their leases last 10 years and can be extended beyond that. The BLM, a subagency of the Department of the Interior (DOI), blamed the revision on a Trump-era technical change that it hadn't properly accounted for. We bring in a vendor, its their drilling rig, their frack crew, they outfit with their own workforce to make the work happen. Sometimes there might not really even be producible oil and gas on a lease, Daigle said. Then, Biden administration support for robust U.S. production might have helped deter Moscow from thinking that European nations dependent on Russian energy might do less to oppose Russia the aggressor. AP Photo/Matthew Brown, File. The number of "approved oil leases" (presumably Federal mineral leases) is not an answer to that question. It suggests American producers have been motivated by a desire to manipulate the market during the current crisis in Europe. Department of the Interior 2023 Minnesota Public Radio. Biden said the oil industry has "9,000 permits to drill now. We should be honest about the facts.". "Psaki has made the claim about 'unused' federal leases before," O'Scannlain notes. Those permits include those issued under . Cohorn said subcontractors are so busy, they can only make it to wells like this every so often. The argument about "unused" leases is a red herring, a smokescreen for energy policies that have had a hamstringing effect on the world's leading producer of natural gas and oil. I stopped his Election from being stolen. "So it simply wasnt profitable to drill with oil below $70. , U.S. Energy Information Administration, U.S field production of Crude Oil, Center for Biological Diversity, New Data: Bidens First Year Drilling Permitting Stomps Trumps By 34%, Jan. 21, 2022, Western Energy Alliance, Responding to the White House Blame Game on Leases, March 4, 2022, Washington Post, Biden outpaces Trump in issuing drilling permits on public lands, Jan. 27, 2022, CNN, More oil supply could stop massive price spikes. There are more than 9,000 permits to drill oil on federal lands, as President Biden . However, the unused drilling leases represent a fraction of the active permits, many of which are being used by the private sector to produce oil and gas daily, industry groups said. More from the Sommers piece in Fortune: While its unclear what lies ahead as Russia invades Ukraine, we know one thing for sure: American energy is a positive force in difficult times, helping to provide stability and security for allies abroad. In total, the oil industry now holds leases to more than 25 million acres of public lands . Theres a lot happening in the world. (iStock). Alaska leaders demand Biden administration 'not kill' oil drilling project, West Virginia House approves pay raises for governor, other officials, West Virginia House passes bill to ban child marriage, Cruz, Roy demand answers from Garland on FBI allegedly secretly recording progressive anti-abortion group, Biden quotes Dr. Seuss after previously erasing beloved author from National Reading Day. Honest about the facts. `` desire to manipulate the market during the current crisis in.. Lands that the companies have not touched so you can see from here, its kind of to. 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