US Congress moves fast to limit oil and gas development

15 January 2009 22:34  [Source: ICIS news]

WASHINGTON (ICIS news)--One of the first acts of the new 111th US Congress would impose limits on drilling for oil and gas reserves on vast reaches of federal lands in the West, energy industry officials said on Thursday.

With a 73-21 vote, the Senate passed S-22, the “Omnibus Public Lands Management Act”, what Senator Jeff Bingaman (Democrat-New Mexico) called “one of the most sweeping conservation laws the Senate has considered in many, many years”.

The bill is a catch-all measure that includes as many as 150 separate items that deal with national wilderness preservation, national rivers, national conservation areas, watershed management, national trails, paleontological resources, national parks, national heritage areas and heritage corridors - among dozens of other matters.

However, US oil and gas drilling companies complained on Thursday that the 1,300-page bill contains various provisions “that will further limit America’s oil and natural gas producers’ access to these resources [and] will only diminish the state of the economy and result in lost jobs, lost revenues and in increased dependence on foreign oil imports”.

The Independent Petroleum Association of America (IPAA) warned that the omnibus lands bill will put further restrictions on development of energy resources on federal lands at a time when the nation needs access to as much of its domestic reserves as possible.

IPAA says its independent energy production firms account for 90% of US domestic oil and gas drilling.

Dan Naatz, the association’s vice president for federal resources, said the omnibus lands bill represents “a significant change in federal lands management”.

He said the bill’s establishment of a new National Landscape Conservation System provides poorly defined restrictions on use of some 26m acres of federal lands in the West.

“Our concern is that this adds yet another layer of federal bureaucracy and will make it more difficult for producers to access multiple-use lands that technically should be open to oil and gas exploration and development,” Naatz said.  He said it provides yet another regulatory venue in which to challenge and block energy development.

Multiple-use federal lands are those open to a variety of permitted activities, such as camping, hiking and boating, livestock grazing, timber harvesting and oil and gas development, among others.

The omnibus bill also establishes a new land classification called national heritage areas.  Naatz said this provision would allow national parks - already closed to energy development - to influence activity far beyond park boundaries, effectively extending park-related drilling bans to undetermined areas well beyond national park boundaries.

Another element of the omnibus lands bill would bar future oil and gas development in the 1.2m acres of an area known as the Wyoming Range, part of the Rocky Mountains in western Wyoming state.

“The Wyoming Range is not a national monument area, not a national park but a multiple-use area that already has active oil and gas production under way,” Naatz said.

“This bill would prevent future access to what may be 8,800bn cubic feet [bcf] of natural gas in that range,” he said.

US petrochemical producers and downstream chemical and resin manufacturers are heavily dependent on natural gas as a feedstock and energy resource.

“It should not be federal policy to put still more restrictions on oil and gas development when we need more oil and gas production across the country,” Naatz said.

The omnibus lands bill is to go to the US House for further consideration.  But the House passed a very similar bill in the 110th Congress last year, so House approval of the measure is seen as almost certain.

Separately, Senator Joe Lieberman (Independent-Connecticut) and 23 other senators - all Democrats except for one Independent - have introduced legislation to permanently prohibit oil and gas development in the Arctic National Wildlife Refuge (ANWR), an area believed to hold major energy resources.

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By: Joe Kamalick
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