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    Oil and gas extraction on federal land in Montana

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    Across Montana, 2,590,037 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]

    In fiscal year 2014, 2,576,000 barrels of crude oil were produced on federal lands in Montana.

    See also Fracking in Montana and Oil and natural gas extraction on federal land

    Background[edit]

    See also: Economic impacts of fracking and Environmental impacts of fracking

    Mineral rights[edit]

    Surface subsurface right chart.png

    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]

    A map of all federally owned land in the United States
    Click to enlarge.
    Federal lands and Indian reservations in Montana
    Click to enlarge.

    Bureau of Land Management[edit]

    See also: Oil and natural gas extraction on federal land

    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
    Montana 93.27 37.80 26.10 8 11.70 5.50
    North Dakota 44.45 5.60 1.10 0.10 4.50 0.90
    South Dakota 48.88 3.70 2.10 0.20 1.60 5.00
    Wyoming 62.34 41.60 30.00 18.30 11.60 1.90
    U.S. total 1,529.72 699.70 643.20 247.90 57.20 56
    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]

    See also: Regulation of oil and gas drilling on federal lands and BLM oil and gas leases by state

    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]

    Average wait times for an Application for Permit to Drill
    Click to enlarge.

    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]

    See also: Leases for oil and gas drilling on federal lands

    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]

    Onshore oil and gas leases


    Scroll over points on the below chart to see the number of oil and gas leases per year.


    The table below displays lease statistics for Montana and surrounding states in 2014.[16][17][18]

    Leases statistics for Montana 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
    Montana 3,364 2,590,037 29 15,051 1,446 26,000,000 38,000,000
    North Dakota 2,119 1,031,121 71 11,765 1,193 1,000,000 6,000,000
    South Dakota 428 192,992 132 38,725 79 2,000,000 4,000,000
    Wyoming 15,535 10,608,506 335 296,021 7,551 30,000,000 42,000,000
    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 Montana 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§
    Montana, North Dakota and South Dakota 7/15/2014 $1,115,909 52 15,504 50 15,469 50 100.00% 15,469 100.00%
    Montana, North Dakota and South Dakota 5/21/2014 $4,582,755 43 14,620 43 14,620 43 100.00% 14,620 100.00%
    Wyoming 5/6/2014 $10,864,041 53 52,350 53 52,350 53 100.00% 52,350 100.00%
    Wyoming 2/11/2014 $14,079,138 167 153,934 165 152,035 165 100.00% 152,035 100.00%
    Montana, North Dakota and South Dakota 1/28/2014 $17,513,861 45 2,939 40 2,261 40 100.00% 2,261 100.00%
    Wyoming 11/5/2013 $2,834,233 35 42,677 35 42,677 34 97.14% 42,587 99.79%
    Montana, North Dakota and South Dakota 10/22/2013 $870,638 87 21,645 87 21,645 84 96.55% 20,845 96.30%
    U.S. total -- $202,534,383 1,752 5,798,551 1,679 5,683,736 956 -- 919,378 --
    Note: § 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 Montana 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
    Montana 134 -- 119 150 141 57 66 26 51 26 26
    North Dakota 66 -- 109 72 88 65 147 135 197 255 254
    South Dakota 0 0 1 4 4 0 1 3 3 2 2
    Wyoming 3,399 3,120 3,692 3,557 3,155 1,975 1,538 1,660 1,229 1,001 997
    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]

    See also: Inspections of oil and gas drilling on federal lands

    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]

    BLM oil and gas inspections, 2007 to 2014
    Click to enlarge.
    Oil and gas inspections by state
    Click to enlarge.
    Key

    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 Montana, its adjacent states (provided for comparison), and the United States as a whole.[22]

    Crude oil production on federal lands in Montana and adjacent states in thousands of barrels
    Click to enlarge.
    Natural gas production on federal lands in Montana and adjacent states in million cubic feet (MMCF)
    Click to enlarge.


    According to the U.S. Bureau of Land Management, Montana was home to 766,544 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 Montana and adjacent neighboring states, fiscal year 2014
    State Producing acres Permits approved Wells spudded Producing wells Well completions
    Montana 766,544 26 22 2,819 2,826
    North Dakota 570,645 254 174 1,874 1,912
    South Dakota 44,589 2 2 87 88
    Wyoming 4,033,994 997 665 31,647 32,603
    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 Montana and adjacent states. Figures are rendered in thousands of dollars.[22]

    Oil and gas revenue from federal lands in Montana 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
    Montana $30,681 $41,671 $50,520 $47,533 $69,686 $34,617 $40,786 $44,160 $38,017 $37,195 $34,414
    North Dakota $28,740 $77,106 $65,553 $66,104 $109,078 $135,252 $123,614 $223,445 $208,287 $245,721 $211,340
    South Dakota $923 $1,365 $1,675 $2,011 $2,752 $1,563 $1,637 $2,328 $3,916 $2,861 $3,928
    Wyoming $741,884 $1,047,148 $1,269,723 $997,553 $1,740,752 $784,986 $1,163,704 $1,201,053 $863,021 $940,908 $1,081,037
    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 Montana and surrounding states.[22]

    Oil and gas revenue from federal lands in Montana 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 $25,776 $37,113 $45,960 $42,511 $64,225 $29,751 $34,426 $35,711 $31,042 $31,635 $31,203
    Rents $3,765 $3,321 $3,226 $3,372 $3,504 $3,156 $2,753 $2,562 $2,335 $2,102 $1,604
    Bonus $777 $755 $752 $1,507 $1,447 $1,776 $3,315 $5,275 $4,305 $3,113 $1,461
    Other revenue $362 $482 $583 $143 $511 -$66 $293 $612 $335 $345 $145
    Total $30,681 $41,671 $50,520 $47,533 $69,686 $34,617 $40,786 $44,160 $38,017 $37,195 $34,414
    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]

    The link below is to the most recent stories in a Google news search for the terms Oil gas federal land Montana. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.

    Oil and gas extraction on federal land in Montana - Google News

    Energy in the 50 states[edit]

    Click on a state below to read more about energy in that state.

    http://ballotpedia.org/Energy_in_STATE

    See also[edit]

    Footnotes[edit]

    1. ↑ 1.0 1.1 Congressional Research Service, "Federal Land Ownership: Overview and Data," February 8, 2012
    2. ↑ Geology.com, “Mineral Rights,” accessed January 29, 2014
    3. ↑ 3.0 3.1 3.2 U.S. Bureau of Land Management, "Mineral and Surface Acreage Managed by the BLM," October 13, 2011
    4. ↑ U.S. Bureau of Land Management, "Surface Operating Standards and Guidelines for Oil and Gas Exploration and Development The Gold Book," 2007
    5. ↑ 5.0 5.1 5.2 U.S. Bureau of Land Management, "Public Land Statistics 2014," May 2015
    6. ↑ 6.0 6.1 U.S. Bureau of Land Management, "Leasing of Onshore Federal Oil and Gas Resources," September 29, 2015
    7. ↑ 7.0 7.1 7.2 U.S. Bureau of Land Management, "Qs&As About Oil and Gas Leasing," July 10, 2012
    8. ↑ U.S. Bureau of Land Management, "Decision Support, Planning, & NEPA," December 3, 2013
    9. ↑ U.S. Bureau of Land Management, "Competitive LEASING," October 20, 2009
    10. ↑ U.S. Bureau of Land Management, "Oil and Gas Lease Sales," accessed October 20, 2014
    11. ↑ 11.0 11.1 U.S. Bureau of Land Management, "Fracking on BLM Colorado Well Sites," accessed May 9, 2014
    12. ↑ U.S. Bureau of Land Management, "Average Application for Permit to Drill (APD) Approval Timeframes: FY2005 - FY2014," January 6, 2015
    13. ↑ U.S. Bureau of Land Management, "Environmental REVIEW and PERMITTING," October 20, 2009
    14. ↑ U.S. Bureau of Land Management, "OPERATIONS and PRODUCTION Monitoring, Inspection and Enforcement," October 20, 2009
    15. ↑ U.S. Bureau of Land Management, "RECLAMATION and Abandonment," October 20, 2009
    16. ↑ 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
    17. ↑ U.S. Bureau of Land Management, "Mineral and Surface Acreage Managed by the BLM," accessed October 6, 2015
    18. ↑ U.S. Bureau of Land Management, "Public Land Statistics 2014," accessed October 6, 2015
    19. ↑ U.S. Bureau of Land Management, "Oil and Gas Lease Sales, Fiscal Year 2014," accessed October 6, 2015
    20. ↑ U.S. Bureau of Land Management, "Average Application for Permit to Drill (APD) Approval Timeframes: FY2005 - FY2014," January 6, 2015
    21. ↑ U.S. Bureau of Land Management, "Oil & Gas Inspections and Enforcement," December 31, 2014
    22. ↑ 22.0 22.1 22.2 22.3 Office of Natural Resource Revenue, "Statistical Information," accessed October 11, 2015
    23. ↑ Office of Natural Resource Revenue, "ONRR’s Frequently Asked Questions – FAQs," accessed October 8, 2015
    24. ↑ Office of Natural Resource Revenue, "ONRR’s Frequently Asked Questions – FAQs," accessed October 8, 2015
    25. ↑ U.S. Bureau of Land Management, "Mineral and Surface Acreage Managed by the BLM," accessed October 8, 2015
    26. ↑ Office of Natural Resources Revenue, "Oil and Gas Reporter Training Report of Sales and Royalty Remittance (Form 2014)," accessed October 16, 2015
    27. ↑ Department of the Interior, "Natural Resource Revenues from U.S. Federal Lands," accessed October 16, 2015
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