Guest “Blank Looks Matter” by David Middleton
U.S. producers “have 9,000 permits to drill now — they can be drilling right now, yesterday last week, last year,” President Joe Biden said Tuesday. “They have 9,000 to drill onshore that are already approved. So let me be clear, let me be clear: they are not using them for production now.” The comments came a day after the American Petroleum Institute, the biggest U.S. oil lobby group, accused the administration of “misusing facts” when it comes to federal leasing data.Bloomberg
This is a follow up to Jen, Joe… Is it 9,000 leases or 9,000 permits that oil companies are allegedly sitting on?
As I discussed in the above-mentioned post, the “9,000 permits to drill now” are the result of operators, with large onshore Federal lease positions, stockpiling four years’ worth of drilling permits in anticipation of Brandon delivering on his promise to halt new drilling permits on Federal lands and waters.
Oil companies lock in drilling, challenging Biden on climate
By MATTHEW BROWN and CATHY BUSSEWITZ
January 10, 2021
BILLINGS, Mont. (AP) — In the closing months of the Trump administration, energy companies stockpiled enough drilling permits for western public lands to keep pumping oil for years and undercut President-elect Joe Biden’s plans to curb new drilling because of climate change, according to public records and industry analysts.
An Associated Press analysis of government data shows the permit stockpiling has centered on oil-rich federal lands in New Mexico and Wyoming. It accelerated during the fall as Biden was cementing his lead over President Donald Trump and peaked in December, aided by speedier permitting approvals since Trump took office.
The goal for companies is to lock in drilling rights on oil and gas leases on vast public lands where they make royalty payments on any resources extracted. Biden wants to end new drilling on those same lands as part of his overhaul of how Americans get energy, with the goal of making the nation carbon neutral by 2050.
INVITATION TO DRILL
Making it easier to drill was a centerpiece of Trump’s effort to boost American energy production in part by enticing companies onto lands and offshore areas run by the U.S. departments of Interior and Agriculture.
Under Trump, crude production from federal and tribal lands and waters increased sharply, topping a billion barrels in 2019. That was up by almost a third from the last year of the Obama administration.
YEARS WORTH OF PERMITS
To undo the late-term awarding of so many permits, a former senior Interior Department official said the Biden administration could be forced to pay millions of dollars to companies to get them to relinquish drilling rights. Such a scenario played out in pristine areas of Montana where officials spent decades trying to buy out companies with drilling leases near Glacier National Park.
Houston-based EOG Resources amassed the most permits this year — 1,024 — including 549 since September, according to AP’s analysis.
In total, EOG has about 2,500 federal permits approved or in progress. “If he (Biden) tries to impose some regulations on how new federal permits are issued, we certainly already have an inventory, a large inventory, of existing federal permits that will sustain activity for several years,” company CEO Lloyd Helms told a November investors conference.
Oklahoma-based Devon Energy collected the second-highest number this year. As the presidential campaign wore on this summer, Devon executives assured investors that the company was amassing permits. By October, Vice President David Harris said the company had enough “federal drilling permits in hand that essentially cover all of our desired activity over the next presidential term.”
Let’s go to the data
The data for the following graphs were drawn from two Bureau of Land Management (BLM) websites:
Many variations of this Disraeli-ism have recently popped in the media.
For Immediate Release, January 21, 2022
New Data: Biden’s First Year Drilling Permitting Stomps Trump’s By 34%
Thousands of Permits OK’d Despite President’s Authority to End Drilling by 2035
WASHINGTON— New federal data shows the Biden administration approved 3,557 permits for oil and gas drilling on public lands in its first year, far outpacing the Trump administration’s first-year total of 2,658.
Nearly 2,000 of the drilling permits were approved on public lands administered by the Bureau of Land Management’s New Mexico office, followed by 843 in Wyoming, 285 in Montana and North Dakota, and 191 in Utah. In California, the Biden administration approved 187 permits — more than twice the 71 drilling permits Trump approved in that state in his first year.
“Biden’s runaway drilling approvals are a spectacular failure of climate leadership,” said Taylor McKinnon at the Center for Biological Diversity. “Avoiding catastrophic climate change requires ending new fossil fuel extraction, but Biden is racing in the opposite direction.”
[…]Center for Biological Diversity
Firstly, the president has no authority to end drilling by 2035 or any other date… Not unless congress changes the laws governing drilling on Federal lands and waters.
Secondly, while the central claim is effectively a lie, Politifact rated Brandon’s 9,000 permits canard as mostly true. How can a lie be mostly true? It’s a Disraeli-ism.
Jen “Circle-back” Psaki: “Well, there are 9,000 approved oil leases that the oil companies are not tapping into currently.”
To explain the lies, I am going to start with leases, which are often conflated with permits. In order to obtain a drilling permit, you have to have a lease. In order to have a lease, the Federal government has to follow the law and hold lease sales and honor those leases.
The US government’s fiscal year runs from October 1 through September 30 of the following year. Brandon’s first year of lease and permit data would be fiscal Year 2021 (FY2021). One third of FY2021 occurred before Brandon took office. The BLM is the agency charged with managing onshore Federal oil & gas leasing and permitting.
Note that there have been no onshore Federal lease sales held since Brandon took office on January 20, 2021. Many, if not most, of the Alaska leases were rescinded by Brandon shortly after he took office.
February 16, 2022
WASHINGTON, D.C. — Today, U.S. Senator John Barrasso (R-WY), ranking member of the Senate Committee on Energy and Natural Resources (ENR), blasted the Bureau of Land Management (BLM) for ignoring the deadline to announce onshore oil and gas lease sales for the first quarter of this year.
“The Biden administration continues to defy the courts and the law,” said Barrasso. “The BLM has blown past a critical deadline required to hold the first federal onshore oil and gas lease sale this year. As a result, Wyoming and other Western states will now miss oil and gas lease sales for the fifth quarter in a row. Even in the face of a global energy crisis, historic inflation, and skyrocketing gasoline prices, the Biden administration continues to crush U.S. energy production.”
BLM is required by the Mineral Leasing Act to hold onshore oil and gas lease sales on a quarterly basis. This statute also requires BLM to publish a public notice of sale at least 45 days before the sale is held. This week, BLM missed the deadline to publish a notice of sale in time to hold a lease sale in the first quarter of this year.Senate Committee on Energy & Natural Resources
Without new lease sales, the blue curve will soon start dropping like a rock, taking the orange curve with it.
In FY2021 66% of all active onshore Federal leases were producing oil and/or gas, the highest percentage since at least 2001.
The number of new leases awarded in 2021, plummeted to the lowest level since at least 2016.
In 2021, only 248,132 acres were awarded, an 89% decline from 2019’s 2,245,906 acres.
Brandon: “They have 9,000 to drill onshore that are already approved. So let me be clear, let me be clear: they are not using them for production now.”
C’mon man! Before you started bloviating about halting all new permits to drill, well spuds pretty well tracked APD’s.
Once the industry realized that you weren’t going to halt permitting on existing leases, the flood of APD submissions subsided.
The stockpile of APD’s Approved and Available to Drill (AAPD) has steadily been declining as the inventory has been drilled up and/or excess permits have expired. However, the number of pending APD’s has been steadily climbing.
Oddly enough, it appears that the BLM only started to track AAPD’s in July 2021.
Our government has a funny way with words. When we submit exploration & development plans and APD’s to BLM or BOEM/BSEE, they don’t officially receive them until they decide they have received them. The law requires them to approve permits in a timely manner. But the clock doesn’t start until they officially receive the applications. While the number of approved, but undrilled APD’s is declining, the number of submitted, but not received (pending) APD’s is skyrocketing. From Day-One the Doddering Imbecile in Chief has done everything in his power and beyond to undermine the US oil and gas industry.