- Approximately 98.5% of natural gas consumed in the United States is produced in North America, 23% from western states. Approximately 73% of the oil consumed in the United States is produced domestically, 22.1% from the West.
- The United States produced enough energy to satisfy 84% of its needs in 2013.
- Increased American oil production has reduced imports to just 27% and shrunk the U.S. trade deficit by $63 billion.
Making America More Secure with Abundant, Affordable and Clean Energy
The oil and natural gas boom of the last several years has dramatically increased America’s energy security. The United States became the world’s largest natural gas producer in 2013, and in 2014 overtook Saudi Arabia and Russia as the world’s largest oil producer, cementing our position as an energy superpower. We could be even more energy secure if the government would pursue policies that encourage instead of hinder development of America’s rich abundance of oil and natural gas. Policies such as allowing reasonable access to federal lands and waters, modernizing federal bureaucratic processes, approving the Keystone XL pipeline, and encouraging Liquefied Natural Gas (LNG) exports would solidify America’s position as an energy superpower. Congress’ action to lift the ban on oil exports was pivotal.
Western production has been a cornerstone of America’s transformation into an energy superpower, with proven reserves of over 10.6 billion barrels of oil and 81.6 Tcf of natural gas. The Bakken in North Dakota and Montana, the Niobrara in Colorado and Wyoming, and the Permian in New Mexico are significant contributors to the revitalization of American oil production. However, with vast amounts of federal lands, many areas of the West are at a disadvantage compared to other production areas like the Marcellus in Pennsylvania and Eagle Ford in Texas, which are predominated by private lands.
Removing barriers to development on federal land could further strengthen American energy security. Recent growth in oil and natural gas production has come in spite of federal policies, not because of them. Industry consultant Wood Mackenzie finds that government policies to improve access to domestic energy could further increase production by 8 million barrels of oil equivalent per day by 2030 and support 2.3 million jobs.
The Energy Dominance Agenda
Access to public lands in the West is critical to maintaining about a quarter of the nation’s oil and natural gas production. In contrast to the rest of the country where the federal government owns only 4% of the lands, 47% of the West is controlled by the federal government, and federal policies can severely impede access to vast oil and natural gas resources. Oil and natural gas companies need reasonable access to public lands and a predictable regulatory structure in order to make long-term decisions on where and when to deploy capital.
American oil and natural gas production has increased dramatically over the last decade, creating hundreds of thousands of jobs not only within the industry, but also in energy-dependent sectors such as chemical, steel, and other manufacturing. In 2019 domestic production has reach never-before seen heights, with the U.S. Energy Information Administration projecting a world-leading 12.4 million barrels per day average across the year. That figure would be more than double average production from as recently as 2012.
This huge success story has been the result of private-sector investment, innovation, and research and development. However, where the federal government has the most control–on federal lands–production gains were almost nonexistent during the boom. The charts below demonstrates the divergent paths of production on federal versus state and private lands over the period from 2008 to 2017.
Thankfully, that trend is beginning to change course due to the current administration’s goal of achieving domestic “energy dominance.” Beginning with an Executive Order (EO) in 2017, the president and various leadership officials have advanced policies promoting expanded access and streamlined permitting for oil and natural gas development on federal lands. A partial list of these secretarial orders (SO) and instruction memoranda (IM) and bulletins (IB) is below:
- EO 13807 - Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure
- SO 3354 – Supporting and Improving the Federal Onshore Oil and Gas Leasing Program and Federal Solid Mineral Leasing Program
- SO 3355 - Streamlining National Environmental Policy Act Reviews and Implementation of Executive Order 13807, “Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure Projects”
- SO 3358 - Executive Committee for Expedited Permitting
- WO PIM 2018-010 - NEPA Compliance for Oil and Gas Reinstatement Petitions
- IM 2018-034 - Updating Oil and Gas Leasing Reform – Land Use Planning and Lease Parcel Reviews
- IB 2018-061 - NEPA Efficiencies for Oil and Gas Development
- Deputy Secretary Memo - Standardized Intra-Department Procedures Replacing Individual Memoranda of Understanding for Bureaus Working as Cooperating Agencies
- Deputy Secretary Memo - Additional Direction for Implementing Secretary's Order 3355 Regarding Environmental Assessments
As a result of this change in attitude towards domestic energy production on federal lands, oil and natural gas companies are beginning to expand interest in those lands. The most pronounced example of pent up interest was a record-setting 2018 Bureau of Land Management lease sale in New Mexico which generated $972 million in bids on 142 parcels. The sale contributed to BLM shattering the record for its highest lease sale revenue in one year. Now that’s what you call energy dominance!
There is work yet to be done. Federal permitting times still lag behind the states, although they’ve fallen significantly under the current administration. The federal leasing process also continues to be under attack by radical environmental groups who want to halt all development and keep it in the ground. Nevertheless, the idea of American “energy dominance,” which appeared to be an unachievable goal at times over the past decade, is now a reality–and federal lands are beginning to contribute their fair share.