AXPC Statement on Senate ENR Hearing on Interior Department’s Onshore Oil and Gas Leasing Program

WASHINGTON –  In advance of the U.S. Senate Committee on Energy and Natural Resources (Senate ENR) hearing on the U.S. Department of the Interior’s onshore oil and gas leasing program, AXPC outlined how operators on federal lands are committed to responsible development for the benefit of the American people.

“AXPC members are highly conscientious about working with, and listening to, the communities and the people in the places where we operate,” said Anne Bradbury, AXPC CEO. “Oil and gas exploration and production activities on federal lands contribute billions of dollars to federal and state governments, support millions of good paying jobs and local economies, and are conducted under some of the most stringent safety and environmental regulations in the world.”

AXPC represents some of the largest operators on federal lands, and seeks to work with Congress and this Administration on bipartisan solutions to ensure responsible development of federal lands is able to continue for the benefit of the American taxpayer.  AXPC’s show how our members are committed to working with local, state, tribal, and federal governments to responsibly produce the Nation’s natural resources:

    • Leases: Industry has not spent years stockpiling onshore leases: Data from the U.S. Department of the Interior Bureau of Land Management Oil & Gas Statistics show that companies have not been stockpiling leases and are diligently working to bring any leases held to production using technological advances that yield more production with less impact.
    • Royalties: Americans receive substantial economic benefits from onshore oil and gas leases: According to the Office of Natural Resource Revenue (ONRR), in fiscal year 2019 alone, revenues from federal onshore oil and natural gas leases totaled around $4.2 billion, including: $2.931 billion in royalties and $1.181 billion in bonuses (when a lease sale occurs).
    • Permits: More time and effort is required to develop federal oil and gas leases: More time and capital investment is needed to drill on federal land, compared to fee land, given the multiple layers of National Environmental Policy Act (NEPA) analysis throughout the development process and the complexity of layered federal and state regulation and permitting. Any potential changes to the federal oil and gas program or royalty rates should recognize the increased regulatory burden for companies who develop on federal lands versus nonfederal lands, as well as the significant differences between these systems.
    • Methane: Federal lands development can continue to help the U.S. lead on climate solutions: According to 2018 study by the U.S. Geological Survey (USGS), the extraction of oil and natural gas from federal lands accounts for just 0.6 percent of total U.S. greenhouse gases (GHGs), while providing the American taxpayer, states, and local communities with billions in annual revenue. The same study showed that emissions of CO2 and methane from federal fossil fuel development have declined 6.1 percent and 10.5 percent respectively since 2005.
    • Orphan Wells: State regulations expertise should be consulted and considered: State rules and regulations are oftentimes structured to address the specific hydrology, geology, production volumes, and unique features of the state. For example, addressing the challenge of orphan wells, states, through organizations like the Interstate Oil and Gas Compact Commission (IOGCC), have gathered decades of expertise about addressing the challenge and the sensitivities that should be considered. In particular, these states have expressed concerns to federal regulators to caution against situations where regulations themselves are driving companies out of business and exacerbating the problem.

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