Sunday, December 17, 2006

Good news: The more we look for oil and natural gas in the United States, the more we find. That might even be great news — if so much of the energy wasn’t out of reach. According to a new Interior Department report, there are substantial onshore energy deposits on federal lands. A companion study of offshore energy reserves released earlier this year reached the same conclusion.

But both reports found much of this energy is either explicitly off-limits or hampered by regulatory constraints that effectively make it so. At least part of the solution to high oil and natural gas prices lies right under our feet, but Congress has failed to change the laws and regulations that keep this domestic energy locked up.

Federal lands are critical because most of America’s onshore energy is in the West and Alaska, where more than half the land is under federal control.

How much energy are we talking about? The federal lands studied are “estimated to contain 187 trillion cubic feet of natural gas and 21 billion barrels of oil, which represents 76 percent of onshore federal oil and gas resources,” the Interior Department found. That 187 trillion cubic feet of natural gas could supply all of America’s households for 39 years, and 21 billion barrels of oil represents more than 30 years’ worth of current Saudi imports.

At the very least, bringing this energy online would have taken the edge off the price spikes consumers suffered in recent years and keep a lid on runaway prices for decades.

But, Interior says, we can access just 3 percent of onshore federal oil and 13 percent of onshore federal gas under standard lease terms. In other words, only this tiny percentage of energy can be accessed without serious legal or regulatory impediments. In addition, “46 percent of onshore federal oil and 60 percent of onshore federal gas may be developed subject to additional restrictions, including no surface occupancy.”

Most disturbing of all, “51 percent of the oil and 27 percent of the gas are [currently] closed to leasing.” This energy is completely off-limits.

Granted, few Americans want unrestricted oil and natural gas wells in our treasured National Parks or other areas of scenic, environmental or historical significance. But current restrictions surpass such reasonable limits. Besides, advances in drilling technology have dramatically reduced both the above-ground environmental footprint and the risk of spills.

A companion Interior report on offshore energy reads much the same. It found an estimated 19.1 billion barrels of oil and 83.0 trillion cubic feet of gas lie in federally-controlled territorial waters that are off-limits to leasing and development. The amount could be far greater, because the government’s initial energy estimates tend to be low.

So far, congressional efforts to cut the red tape hamstringing domestic energy production have fallen short. Lawmakers haven’t even managed to allow access to a small portion of Alaska’s Arctic National Wildlife Refuge, the site of 10 billion barrels of oil that is now off-limits. Congress did recently pass a very limited offshore energy bill, but only after it was so dramatically scaled back it keeps nearly all current restrictions in place. Also unsuccessful were efforts to streamline the cumbersome environmental rules under such statutes as the National Environmental Policy Act and Endangered Species Act. Given the change in congressional leadership, such measures are even less likely to succeed in 2007.

In addition to spreading overblown warnings about the environmental impact of drilling, many anti-energy activists and politicians insist America’s untapped oil and gas reserves are merely a “drop in the bucket” and therefore not worth the bother. But the Interior Department reports put the lie to this claim.

When Congress takes up this issue again, it shouldn’t ignore the significant amount of energy we have right here in the United States. It’s time to make this energy available to the American people.

Ben Lieberman is a senior policy analyst in the Roe Institute for Economic Policy Studies at the Heritage Foundation.

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