Fed up with federal lands management

There are several reasons Montana is lagging behind neighboring states when it comes to oil and gas development. While North Dakota maintains nearly 200 drilling rigs at any given time, Montana has struggled to keep rigs running. North Dakota issued more than 2,500 drilling permits last year. Montana issued only 297.

Considering these numbers, it should come as no surprise that North Dakota is producing around a million barrels a day, while Montana pumps out less than 80,000 barrels a day. So what gives?

Taxes, access, geology and regulatory climate all play a key role in company’s decision to deploy capital to a particular area.

The Keystone XL pipeline delay provides a perfect example of the political reality of unnecessary and cumbersome delays waiting for approval of a project that is environmentally sound, and job generating. After five years and multiple environmental assessments that conclude the pipeline will not exacerbate greenhouse gas emissions, the Obama administration still refuses to approve the pipeline. Keystone XL is the poster child of many Federal land projects that linger for approval.

Federal lands and waters hold roughly 43 percent of all domestic oil reserves and 72 percent of oil shale acreage, according to the American Action Forum. But energy production has been stifled through lengthy permitting and more land’s designated off-limits to oil and gas drilling.

According to the American Petroleum Institute, waiting for a federal permit can take more than 10 times longer than it does at the state level. In 2013, the average wait for the federal government to approve a request was 194 days, compared to two weeks in Montana (on state and fee land). Waiting for federal lands to be reviewed prior to being offered for lease can take infinite amounts of time with no end in sight.

Total daily federal onshore oil production is only about one-third of what is produced every day at North Dakota’s Bakken formation alone.

President Obama has often taken credit for the increased oil and gas production in the United States. Last year, however, the Obama administration sold the lowest amount of oil and gas leases since 1988 and approved the fewest drilling permits since 2002.

According to the Congressional Research Service, production on federal lands has fallen from 33.8 percent in 2009 to only 23 percent last year.

The share of U.S. oil production on federal lands has fallen to a five-year low, in spite of record development on state and private lands, which has increased 65 percent in the last seven years.

The Bureau of Land Management reported last month that federal land now accounts for only 5 percent of total oil production.

The United States government has direct ownership of nearly 650 million acres, managed by several different government agencies including the BLM, which oversees more land than any other agency.

The BLM, created by the Department of the Interior in 1946, owns 247.3 million surface acres and 700 million subsurface mineral acres (oil/natural gas).

“Federal land ownership is a huge impediment. There is no other way to put it. There is an artificial cap on energy production that is directly related or the result of federal land ownership,” said Cody Stewart, Energy Advisor to Gov. Herbert, R-Utah.

In Montana, 29.9 percent of lands are federally owned, while in North Dakota only 3.9 percent of land is owned by the federal government. Between Montana and the Dakotas, the BLM manages a landmass the size of Nebraska.

Congress mandated the BLM to make public lands available for mineral leasing with the passage of the Mineral Act of 1920. The agency is required to hold four mineral lease sales a year in each BLM district.

Last year, 26 drilling permits were issued by the BLM on federal Lands in Montana, down from 206 ten years earlier and 150 permits in 2007. In North Dakota, 255 permits to drill on federal land were issued in 2013, up from 50 in 2003 and 72 in 2007.

Resource development is heavily regulated at the state level and by federal laws such as the Clean Water Act, Clean Air Act, and the Endangered Species Act, all of which continue to grow in reach and scope, not only on the oil and gas operators but also the agricultural producers.

The Migratory Bird Treaty Act (1918) and the Endangered Species Act (1973) both aim to protect wildlife. Unfortunately, of the 2,105 species listed under the Endangered Species Act, only 1.3 percent has been delisted, according to the U.S Fish and Wildlife Service.

Species are listed as endangered at the expense of business and employed taxpayers. The spotted owl designation is a glaring example of defacto wilderness that destroyed large chunks of the timber industry.

When it comes to protecting wildlife, not all industries are treated the same. Wind farms kill about 440,000 birds a year. Last December, the Interior Department finalized a rule that would grant permits to let wind farms kill eagles for up to 30 years, six times longer than current permits allow.

Can you imagine if similar “permits to kill” were issued to producers of non-renewable energy sources? Instead, oil producers face five plus figure penalties and fines for harming any migratory or endangered bird.

According to the Montana Wilderness Association, the National Wilderness Preservation System currently comprises wilderness areas on 109,492,591 acres across the country, and 3,433,038 acres in Montana. Human activities in wilderness areas are restricted to scientific study and non-mechanized recreation; motorized vehicles and equipment are forbidden in these areas, limiting access for many Montanans.

When combined with the many other land use allocations and designations that remove federal lands from multiple use, such as National Parks, National Wildlife Refuges, Wild and Scenic Rivers, Wilderness Study Areas, National Monuments, and Forest Service Roadless Areas, the total swells to 7,924,426 acres in Montana. Less than half of that federal land is open to multiple-use activities that include natural resource development.

State and local economies must not be further encumbered in favor of sweeping defacto wilderness measures. Multiple use on public lands is key to economic development and sustainability in rural communities. The removal of any lands from multiple use status will disproportionately affect the counties and rural school districts surrounding the public land.

The 49 percent federal money that is turned back to the state and local communities is a huge miss when activity and access is denied to development. All too often, national park, wilderness and monument rules are extended into buffer zones that continue to grow beyond the original designated boundaries.

Access to our natural resources is the key to a healthy local economy. Montanans are dependent upon access to the 30 percent of land ownership controlled by Washington. That access is being systematically denied to multiple use by people outside of Montana. Enough is enough.

David A. Galt is the executive director of the Montana Petroleum Association.