Oil and gas extraction on federal land in Alabama
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Across Alabama, 80,540 acres of federal land were leased for crude oil and natural gas development in fiscal year 2014. Roughly 26 percent of the land owned by the federal government across the United States can be leased to private individuals and companies for energy development, including crude oil and natural gas drilling, solar energy operations, and geothermal energy operations. Oil and natural gas drilling on federal lands is primarily regulated by the U.S. Bureau of Land Management (BLM), although other federal land management agencies (the U.S. Forest Service, the U.S. Fish and Wildlife Service, or the National Park Service) may be involved. According to the Congressional Research Service, these federal agencies manage their acreage with three primary purposes: "preservation, recreation, and [the] development of natural resources."[1]
Background[edit]
Mineral rights[edit]
In the United States, property owners (including the federal government) can own the surface rights to a piece of property without owning the mineral rights. In some states, the mineral rights to a piece of property may have been sold in the past and may now belong to someone other than the surface owner. This is known as split-estate ownership. Mineral rights may belong to one individual, several individuals, or a company. The owner of mineral rights for a piece of property has the right to extract those minerals. In some states, this can happen without permission from the property owner (i.e., the holder of surface rights). The federal government holds the mineral rights for almost all federal lands, with the exception of 4 million acres of acquired lands.[2][3]
Bureau of Land Management[edit]
Across the United States, the U.S. Bureau of Land Management (BLM) manages 247.8 million surface acres of land and 700 million acres of subsurface mineral resources. Of these 700 million subsurface acres, around 166 million acres (23.71 percent) can be leased for energy development. The BLM manages its lands with a "multiple-use, sustained-yield" mandate, which requires the agency to balance several types of activities on its lands, including renewable and traditional energy development, grazing, recreation, and conservation. Most oil and gas leases on federal lands are managed by the BLM in coordination with the federal agency or non-federal entity that owns a land's surface rights.[1][4][3][5]
The BLM sometimes categorizes 31 states east of and bordering the Mississippi River as "Eastern states" and provides data for these states collectively. This is the case with the table below. The column titled "Split-estate federal mineral acreage" refers to land where the federal government owns the mineral rights and a private entity holds has the surface rights. According to the BLM, the exact number of split-estate ownership acres in the United States is not known and ranges between 55 million acres and 60 million acres. The BLM is responsible for overseeing the development of minerals on some American Indian-owned lands, the total acreage of which is noted in the table below. The column titled "BLM-managed acreage" includes acreage where the BLM owns both the surface and mineral rights.[3][5]
| Surface and subsurface land ownership for the BLM, in million of acres for fiscal year 2014 | ||||||
|---|---|---|---|---|---|---|
| State | Total state acreage | Federal mineral acreage | Federal surface acreage | BLM-managed acreage | Split-estate federal mineral acreage | American Indian trust mineral acreage |
| Alabama | -- | -- | -- | -- | -- | -- |
| Georgia | -- | -- | -- | -- | -- | -- |
| Mississippi | -- | -- | -- | -- | -- | -- |
| Tennessee | 0 | 0 | 0 | 0 | 0 | 0 |
| Eastern states* | -- | 40 | 40 | 0.10 | 0.30 | 2.30 |
| U.S. total | 1,529.72 | 699.7 | 643.2 | 247.9 | 57.2 | 56 |
| Note: *Eastern states include 31 states east of and bordering the Mississippi River. Source: U.S. Bureau of Land Management, "Mineral and Surface Acreage Managed by the BLM" U.S. Bureau of Land Management, "Public Land Statistics 2014" | ||||||
Regulation[edit]
According to the U.S. Bureau of Land Management, there are five stages in the process to develop oil and natural gas on federal lands:[6][7][8][9][10][11][12][13][14][15]
1. Land use planning
- Parcels of land where oil and gas drilling can occur (hereafter called parcels) are identified.
2. Lease sales
- Parcels of land are leased through a competitive auction.
3. Well permitting
- Oil and gas operators that obtain a lease must receive a permit from the BLM allowing them to drill.
4. Well operations and production
- Wells are drilled and operated.
5. Well reclamation
- Wells are plugged (closed) and the area is returned to its previous condition once oil or gas extraction is complete.
Leases[edit]
Leases can be held by any adult citizen of the United States. Corporations and associations organized under federal, state, or local law can also hold leases. Bidding for leases is done at an oral auction at a BLM state office. See the graph for the number of onshore oil and natural gas leases across the United States from fiscal year (FY) 1985 to 2014. The graph also displays the number of leases where oil or gas was produced (producing leases) during this time period.[7][16]
The table below displays lease statistics for Alabama and surrounding states in 2014.[16][17][18]
| Lease statistics for Alabama and adjacent neighboring states, fiscal year 2014 | |||||||
|---|---|---|---|---|---|---|---|
| State | Leases in effect | Total acres leased | Leases issued that year | Acres leased that year | Producing leases | Surface acres federally owned | Subsurface acres federally owned |
| Alabama | 147 | 80,540 | 4 | 471 | 24 | -- | -- |
| Georgia | 0 | 0 | 0 | 0 | 0 | -- | -- |
| Mississippi | 841 | 475,724 | 22 | 11,403 | 71 | -- | -- |
| Tennessee | 2 | 736 | 0 | 0 | 2 | -- | -- |
| U.S. total | 46,183 | 34,592,450 | 1,157 | 1,197,852 | 23,657 | 643,200,000 | 699,700,000 |
| Note: "--" indicates data were not available. Sources: U.S. Bureau of Land Management, "Oil and Gas Statistics" U.S. Bureau of Land Management, "Mineral and Surface Acreage Managed by the BLM" U.S. Bureau of Land Management, "Public Land Statistics 2014" | |||||||
Lease sales[edit]
In fiscal year (FY) 2014, the BLM collected $202,534,383 in revenue from oil and gas lease sales across almost 5.8 million acres of land. The table below provides lease sale statistics for Alabama and neighboring states for which the BLM provided data. The full table is available here.[19]
| Oil and gas lease sales, fiscal year 2014 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| BLM state office | Date of sale | Total revenue | Parcels posted | Acreage posted | Parcels offered day of sale | Acreage offered day of sale | Parcels receiving bids | Percent of parcels receiving bids§ | Acreage receiving bids | Percent of acreage receiving bids§ |
| Eastern states* | 9/18/2014 | $49,633 | 2 | 80 | 2 | 80 | 2 | 100.00% | 80 | 100.00% |
| Eastern states* | 6/19/2014 | $22,291 | 9 | 802 | 9 | 802 | 8 | 88.89% | 642 | 80.05% |
| Eastern states* | 3/20/2014 | $425,937 | 23 | 18,244 | 22 | 18,224 | 22 | 100.00% | 18,224 | 100.00% |
| Eastern states* | 12/12/2013 | $505,912 | 18 | 1,480 | 17 | 1,280 | 17 | 100.00% | 1,280 | 100.00% |
| Total | -- | $202,534,383 | 1,752 | 5,798,551 | 1,679 | 5,683,736 | 956 | -- | 919,378 | -- |
| Note: *Eastern states include the 31 states east of the Mississippi River § Percentages are for day of sales Source: U.S. Bureau of Land Management, "Oil and Gas Lease Sales, Fiscal Year 2014" | ||||||||||
Application for Permit to Drill[edit]
Before drilling can occur on federal lands, an Application for Permit to Drill (APD) must be submitted and approved by the U.S. Bureau of Land Management (BLM). In fiscal year (FY) 2014, the BLM approved 3,769 APDs. During that time, it took the BLM an average of 94 days to review an APD and it took oil and gas operators 133 days to resolve any issues the BLM found with the APD, according to the BLM. The table below shows drilling permits approved by fiscal year in Alabama and adjacent states.[11][20]
| Approved Applications for Permit to Drill, fiscal years 2004 to 2014 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| State | FY 2004 | FY 2005 | FY 2006 | FY 2007 | FY 2008 | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 |
| Alabama | 6 | 0 | 0 | 1 | 0 | 1 | 0 | 0 | 2 | 0 | 0 |
| Georgia | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Mississippi | 9 | 15 | 4 | 7 | 3 | 2 | 1 | 1 | 3 | 6 | 10 |
| Tennessee | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| U.S. total | 6,052 | 4,579 | 6,738 | 7,124 | 6,617 | 4,487 | 4,090 | 4,244 | 4,256 | 3,770 | 3,769 |
| Source: U.S. Bureau of Land Management, "Oil and Gas Statistics" | |||||||||||
Inspections[edit]
The BLM inspects oil and gas drilling sites on federal lands several times during the drilling process. Inspections are overseen by employees of the Inspection and Enforcement Program at the BLM. The following graphs display the number and type of inspections performed by the BLM from 2007 to 2014. BLM employees performed almost 30,000 inspections on oil and gas sites across the United States in 2014.[21]
Oil and gas production[edit]
The Office of Natural Resources Revenue (ONRR) provides data on mineral production on federal lands. The charts and tables below show federal onshore oil and natural gas production (in terms of the amounts sold) for fiscal years 2004 to 2014 for Alabama, its adjacent states (provided for comparison), and the United States as a whole.[22]
| Crude oil production on federal lands in Alabama and adjacent states in thousands of barrels, fiscal years 2004 to 2014 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| State | FY 2004 | FY 2005 | FY 2006 | FY 2007 | FY 2008 | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 |
| Alabama | 322 | 237 | 103 | 70 | 64 | 44 | 40 | 38 | 34 | 31 | 25 |
| Georgia | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Mississippi | 484 | 427 | 330 | 297 | 255 | 247 | 257 | 302 | 285 | 410 | 409 |
| Tennessee | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| U.S. total | 97,180 | 97,238 | 102,164 | 104,872 | 103,134 | 104,499 | 107,880 | 113,375 | 125,270 | 137,029 | 148,778 |
| Note: Oil includes black wax crude, condensate, drip or scrubber condensate, fuel oil inlet scrubber, oil, oil lost, other liquid hydrocarbons, sweet crude and yellow wax crude. These data are collected in terms of sale years, which are "transactions for sales that took place in a given fiscal year and do not include adjusted or corrected transactions for sales that took place in previous fiscal years."[23] Source: Office of Natural Resource Revenue, "Statistical Information" | |||||||||||
| Natural gas production on federal lands in Alabama and adjacent states, in MMCF, fiscal years 2004 to 2014 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| State | FY 2004 | FY 2005 | FY 2006 | FY 2007 | FY 2008 | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 |
| Alabama | 53,478 | 47,568 | 44,490 | 36,463 | 33,778 | 30,362 | 28,210 | 23,002 | 19,946 | 18,990 | 18,431 |
| Georgia | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Mississippi | 904 | 1,067 | 1,036 | 757 | 688 | 709 | 834 | 1,045 | 707 | 526 | 252 |
| Tennessee | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| U.S. total | 2,403,287 | 2,580,017 | 2,660,419 | 2,891,765 | 3,081,528 | 3,196,500 | 3,033,285 | 2,918,572 | 2,906,698 | 2,655,876 | 2,499,870 |
| Note: Natural gas includes coalbed methane, flash gas, fuel gas, gas lost (flared or vented), nitrogen, processed (residue) gas, unprocessed (wet) gas and gas plant products. These data are collected in terms of sale years, which are "transactions for sales that took place in a given fiscal year and do not include adjusted or corrected transactions for sales that took place in previous fiscal years."[24] Source: Office of Natural Resource Revenue, "Statistical Information" | |||||||||||
According to the U.S. Bureau of Land Management, Alabama was home to 7,707 producing acres on federally held land in fiscal year 2014. See the table below for further details, including data from surrounding states.[16][25][5]
| Production related statistics for Alabama and adjacent neighboring states, fiscal year 2014 | |||||
|---|---|---|---|---|---|
| State | Producing acres | Permits approved | Wells spudded | Producing wells | Well completions |
| Alabama | 7,707 | 0 | 0 | 30 | 30 |
| Georgia | 0 | 0 | 0 | 0 | 0 |
| Mississippi | 34,192 | 10 | 9 | 125 | 128 |
| Tennessee | 736 | 0 | 0 | 10 | 10 |
| Note: "--" indicates data were not available. Sources: U.S. Bureau of Land Management, "Oil and Gas Statistics" U.S. Bureau of Land Management, "Mineral and Surface Acreage Managed by the BLM" U.S. Bureau of Land Management, "Public Land Statistics 2014" | |||||
Revenue[edit]
The federal government collects several different types of revenues as a result of oil and gas production occurring on federal land. These revenues include royalties, rents, bonuses, and other revenue. Royalty fees are charged after oil or natural gas is produced in paying quantities. The fees apply to the revenue collected from selling that oil or natural gas. For onshore federal lands, the royalty fee is 12.5 percent, although there are exceptions to this rate. Rents are annual fees of $1.50 per acre for each year for the first five years of a lease; after this period ends, the fee increases to $2.00 per acre. Bonuses are the amounts collected from the highest bidder when land is leased. Other revenues includes interest, settlement agreements, and estimated and minimum royalties. Of the revenue that is collected, 50 percent goes to the state where the production occurred, 40 percent goes to the Land and Water Conservation Fund, and the remaining 10 percent goes to the U.S. Treasury.[6][7][22][26][27]
The table below details total revenues from onshore oil and gas production on federal lands in Alabama and adjacent states. Figures are rendered in thousands of dollars.[22]
| Oil and gas revenue from federal lands in Alabama and adjacent states, in thousands of dollars, fiscal years 2004 to 2014 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| State | FY 2004 | FY 2005 | FY 2006 | FY 2007 | FY 2008 | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 |
| Alabama | $1,761 | $1,770 | $1,934 | $3,384 | $2,526 | $1,058 | $1,099 | $1,882 | $2,587 | $800 | $1,572 |
| Georgia | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Mississippi | $2,735 | $2,987 | $4,202 | $6,278 | $4,263 | $2,224 | $2,930 | $5,556 | $9,150 | $6,126 | $5,557 |
| Tennessee | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| U.S. total | $1,887,983 | $2,798,163 | $3,304,064 | $2,779,740 | $4,341,089 | $2,207,027 | $2,864,797 | $3,178,239 | $2,762,220 | $2,994,569 | $3,326,031 |
| Note: Revenue includes reported royalties, rents, bonuses and other revenue. All data are for onshore production by sales year. "--" indicates data were not available. Sources: Office of Natural Resources Revenue, "Statistical Information" | |||||||||||
The table below breaks down revenues by type for Alabama and surrounding states.[22]
| Oil and gas revenue from federal lands in Alabama by type, in thousands of dollars, fiscal years 2004 to 2014 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| State | FY 2004 | FY 2005 | FY 2006 | FY 2007 | FY 2008 | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 |
| Reported royalties | $1,561 | $1,707 | $1,711 | $2,290 | $2,077 | $865 | $891 | $1,283 | $1,572 | $665 | $1,004 |
| Rents | $34 | $27 | $48 | $162 | $204 | $175 | $135 | $97 | $119 | $134 | $125 |
| Bonus | $150 | $13 | $176 | $932 | $248 | $26 | $80 | $527 | $893 | $0 | $451 |
| Other revenue | $15 | $23 | -$1 | $0 | -$3 | -$8 | -$7 | -$24 | $3 | $1 | -$8 |
| Total | $1,761 | $1,770 | $1,934 | $3,384 | $2,526 | $1,058 | $1,099 | $1,882 | $2,587 | $800 | $1,572 |
| Note: All data are for onshore production by sales year; "--" indicates data were not available. Sources: Office of Natural Resources Revenue, "Statistical Information" | |||||||||||
Recent news[edit]
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Energy in the 50 states[edit]
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See also[edit]
Footnotes[edit]
- ↑ 1.0 1.1 Congressional Research Service, "Federal Land Ownership: Overview and Data," February 8, 2012
- ↑ Geology.com, “Mineral Rights,” accessed January 29, 2014
- ↑ 3.0 3.1 3.2 U.S. Bureau of Land Management, "Mineral and Surface Acreage Managed by the BLM," October 13, 2011
- ↑ U.S. Bureau of Land Management, "Surface Operating Standards and Guidelines for Oil and Gas Exploration and Development The Gold Book," 2007
- ↑ 5.0 5.1 5.2 U.S. Bureau of Land Management, "Public Land Statistics 2014," May 2015
- ↑ 6.0 6.1 U.S. Bureau of Land Management, "Leasing of Onshore Federal Oil and Gas Resources," September 29, 2015
- ↑ 7.0 7.1 7.2 U.S. Bureau of Land Management, "Qs&As About Oil and Gas Leasing," July 10, 2012
- ↑ U.S. Bureau of Land Management, "Decision Support, Planning, & NEPA," December 3, 2013
- ↑ U.S. Bureau of Land Management, "Competitive LEASING," October 20, 2009
- ↑ U.S. Bureau of Land Management, "Oil and Gas Lease Sales," accessed October 20, 2014
- ↑ 11.0 11.1 U.S. Bureau of Land Management, "Fracking on BLM Colorado Well Sites," accessed May 9, 2014
- ↑ U.S. Bureau of Land Management, "Average Application for Permit to Drill (APD) Approval Timeframes: FY2005 - FY2014," January 6, 2015
- ↑ U.S. Bureau of Land Management, "Environmental REVIEW and PERMITTING," October 20, 2009
- ↑ U.S. Bureau of Land Management, "OPERATIONS and PRODUCTION Monitoring, Inspection and Enforcement," October 20, 2009
- ↑ U.S. Bureau of Land Management, "RECLAMATION and Abandonment," October 20, 2009
- ↑ 16.0 16.1 16.2 U.S. Bureau of Land Management, "Oil and Gas Statistics," accessed October 8, 2015 Cite error: Invalid
<ref>tag; name "oil and gas stats" defined multiple times with different content - ↑ U.S. Bureau of Land Management, "Mineral and Surface Acreage Managed by the BLM," accessed October 6, 2015
- ↑ U.S. Bureau of Land Management, "Public Land Statistics 2014," accessed October 6, 2015
- ↑ U.S. Bureau of Land Management, "Oil and Gas Lease Sales, Fiscal Year 2014," accessed October 6, 2015
- ↑ U.S. Bureau of Land Management, "Average Application for Permit to Drill (APD) Approval Timeframes: FY2005 - FY2014," January 6, 2015
- ↑ U.S. Bureau of Land Management, "Oil & Gas Inspections and Enforcement," December 31, 2014
- ↑ 22.0 22.1 22.2 22.3 Office of Natural Resource Revenue, "Statistical Information," accessed October 11, 2015
- ↑ Office of Natural Resource Revenue, "ONRR’s Frequently Asked Questions – FAQs," accessed October 8, 2015
- ↑ Office of Natural Resource Revenue, "ONRR’s Frequently Asked Questions – FAQs," accessed October 8, 2015
- ↑ U.S. Bureau of Land Management, "Mineral and Surface Acreage Managed by the BLM," accessed October 8, 2015
- ↑ Office of Natural Resources Revenue, "Oil and Gas Reporter Training Report of Sales and Royalty Remittance (Form 2014)," accessed October 16, 2015
- ↑ Department of the Interior, "Natural Resource Revenues from U.S. Federal Lands," accessed October 16, 2015
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