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Wednesday, December 23, 2009

Federal Oil & Gas Leases Undeveloped; Recession Cools Demand

Another campaign slogan popped by economic realities. All that faintly misogynist "Drill, baby, drill!" talk from the conservatives has gone poof in the face of decreased demand. Federal oil and gas leases for Bakken shale oil in the Dakotas and Montana brought in record revenues in the just-finished fiscal year (South Dakota brought in $163K, compared to North Dakota's $74.2M), but we're still far from a development rush.

As Interior Secretary Salazar looks at a comprehensive review of lease policy that may shift focus from Big Oil to sportsmen and conservationists, the recession may promote energy policy somewhat different from the crude-thirsty rantings of last year's Republicans:

[VP of The Wilderness Society's Public Lands Campaign Ann] Morgan says sportsmen and recreation groups want to see a slower pace of energy development, and more accountability for leaseholders to protect water, wildlife and public access.

Resource economist Thomas Power at the University of Montana says the recession turns out to be a good time for this review, when oil and gas production has been scaled back because of reduced demand.

"As a result, there's been less enthusiasm among companies for leasing more federal lands for oil and gas development, and vast amounts of existing federal oil and gas leases have gone undeveloped" [Deb Courson, "Experts: Time Is Right to Review BLM Oil and Gas Leasing," Public News Service, 2009.12.22].

Drill, baby, drill? Pfft. We've got leases available where the industry folks won't even bid, because the market isn't there.

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