Driven Off The Deep End

Deep offshore oil drilling is far more dangerous than on-shore drilling, as has now become obvious. It's easier to contain a spill on land than to cap a blowout that takes place a mile below the ocean surface. But that's where oil companies are forced to go, given the barriers to domestic drilling that exist almost everywhere else.

Even Wyoming, which is more receptive to energy development than most states, has seen a significant recent slowdown in activity -- a slowdown not just due to the swooning economy, but due to the obstructionist tactics of federal bureaucrats and zero-drilling zealots.

Why are energy companies drilling so far offshore?

Because this is what they typically face when drilling on shore:


Backlog of protested Wyo leases persists at BLM

CHEYENNE -- Environmental protests, uncertainty over endangered species and a change in presidential administrations have bogged down oil and gas leasing in Wyoming.

The U.S. Bureau of Land Management has issued just 51 of nearly 1,200 oil and gas leases sold at its 11 lease auctions since June 2008.

The backlog prompted Gov. Dave Freudenthal to "implore" Interior Secretary Ken Salazar, a fellow Democrat, to act in a January letter. Yet the backlog is likely to grow when the BLM holds its next lease auction today.

Of the 85 leases the BLM plans to offer at the regular sale in Cheyenne, environmental groups are protesting 62. If previous auctions are any indication, that means at least 62 more leases in limbo -- none of the 51 leases recently issued was protested.

Environmental groups have protested 1,297 of 1,351, or 96 percent, of leases offered from the June 2008 sale through the upcoming sale, BLM documents show.

"No wonder companies are taking their money and investing in other states that have private land, where they don't have to deal with this bureaucracy and politics," said Bruce Hinchey, president of the Petroleum Association of Wyoming.

Oil and gas leasing in Wyoming provides a significant share of the nation's energy. The state in 2008 ranked second among states for natural gas production, providing more than 10 percent of the U.S. total, and ranked seventh for oil production, according to the U.S. Energy Information Administration.

Environmentalists defend the protests as necessary to protect Wyoming's wildlife and cherished vistas. They expressed doubt that the protests are slowing down drilling.
"The oil industry has enough leases in its pocket now to drill for decades. So the idea that somehow a scarcity of oil and gas leases is holding up energy production is laughable," said Erik Molvar, executive director of the Biodiversity Conservation Alliance.

Not only are companies unable to drill on leases they've bought, the state and federal governments haven't had access to the $50 million companies have paid.
Half of the money would go to the state and half to the federal government. Both are having budget trouble, yet the money has been piling up in an escrow account pending a BLM decision on whether to issue the leases.

"I implore your immediate attention to these unissued leases," Freudenthal wrote Salazar on Jan. 8. "Some would say that the oil and gas industry is getting what it deserves. But this is much too serious an issue for such pettiness."

A reply letter from Assistant Interior Secretary Wilma Lewis said the leasing process is "broken" and the department is working on a way to "restore needed balance."

Salazar spokeswoman Kendra Barkoff did not respond to a request for comment.

Julie Weaver, the BLM's head of oil and gas leasing in Wyoming, said she expects the backlog to end soon, especially now that the U.S. Fish and Wildlife Service announced in March that it would not list sage grouse as a threatened or endangered species. Most of Wyoming, including its best oil and gas fields, is sage grouse habitat.

Even so, Fish and Wildlife determined that protection for sage grouse is warranted, just precluded by higher priorities. That didn't exactly open the gate for leases.
"We had to go back and re-evaluate everything to make sure that we are complying with the Fish and Wildlife decision to warrant that animal," Weaver said.
The BLM auctions offer oil and gas leases every other month in Cheyenne. Environmental groups began stepping up protests against the leases a couple years ago.

Groups have protested not just leases in sage grouse habitat but leases they said could affect a wide range of wildlife -- prairie dogs, raptors, big game migration corridors and fish. Some protests have focused on climate change.

"We must address a protest before we can issue a lease," Weaver said. "And we have protests on every sale, different parcels in every sale, that we're trying to resolve."

She also said the change in presidential administrations has required the BLM state office in Cheyenne to adjust to new policies.

On Thursday, environmental groups stepped up pressure on the BLM by suing over the BLM's plan for oil and gas development in southern Wyoming. The area includes Adobe Town, a "wilderness quality" badlands where the groups say the BLM has approved five drilling permits.

The groups, represented by the Natural Resources Defense Council, include the Biodiversity Conservation Alliance, which by itself or with others has protested more than 90 percent of leases offered over the past two years. Other plaintiffs include the Wyoming Outdoor Council, which has protested leases offered at every sale over the past two years.
Wyoming Outdoor Council attorney Bruce Pendery said his group used to be one of the few that would protest oil and gas leases in Wyoming. Now, he said, a range of groups have been protesting leases.

"To me, what that speaks to is that there was this massive effort to increase oil and gas leasing during the Bush administration," Pendery said. "Because of that massive effort to increase leasing, there was an equally massive response."

Other groups that have been protesting leases include the National Audubon Society, Theodore Roosevelt Conservation Partnership, Trout Unlimited, Center for Native Ecosystems and Wyoming Wildlife Federation. Sometimes the groups object to just a handful of leases.
Other times, it's every lease offered at a sale, as the Biodiversity Conservation Alliance has done eight times in the past two years.

"Our goal here is to get results on the ground for wildlife and for special landscapes," Molvar said. "Not to prevent the oil and gas industry from gaining access to oil and gas leases."