Manchin Leads Robust Discussion On Energy Production On Federal Lands

April 27, 2021

To watch a video of Senator Manchin’s opening remarks, please click here.

To watch a video of Senator Manchin’s questioning, please click here.

Washington, DC – Today, the U.S. Senate Energy and Natural Resources Committee held a hearing to examine energy development on federal lands, with a focus on the current status of the Department of the Interior’s onshore oil and gas leasing program. Senator Joe Manchin (D-WV), Chairman of the Committee, emphasized the need to reduce damaging methane venting and flaring on federal lands and raised concerns about the Department of the Interior’s non-competitive leasing process.

“Under the current system, when a lease sale is held, if nobody purchases the lease anybody can come in and buy it for the next two years without paying a bonus bid. With so many parcels going unsold over the last few years there are now approximately 1,500 parcels containing more than 4 million acres that are currently available under the non-competitive lease provisions. Particularly with annual rent of only $1.50 an acre, forgoing bonus bids can be a pretty large loss to the taxpayer, and hurt the states that would receive a share of the bonus bid revenue. We don’t have it in the federal coal leasing program, so why keep it for oil and gas?” Chairman Manchin asked. “Why is that still allowed?”

“The Mineral Leasing Act directs the BLM to do this,” said Ms. Nada Culver, Deputy Director of Policy and Programs, Bureau of Land Management. “As the General Accountability Office has noted, we receive three times the income from leases purchased competitively. Leasing purchased competitively and with higher bonus bids are much more likely to be developed.”

During the hearing, Chairman Manchin also questioned the witnesses about the perceived stockpile of leases held by oil and gas companies.

“There are over 13,000 leases representing nearly 14 million acres that are not producing oil and gas. Ms. Hollub, can you help us better understand what’s going on with these leases that aren’t producing? For a typical well, how long does it take from the time a lease is secured to the time the well goes into production?” Chairman Manchin asked.

“From the time we get a lease to the time we can get in producing and maximizing values, anywhere from three to four years. The reason for that is the subsurface work that’s required. Doing development on federal acreage the way I’m talking about will not only recover more of the subsurface hydrocarbons but will do so in a more efficient way that maximizes value and also diminishes our footprint and gives the opportunity to design a development with a lower number of vessels because we need to minimize the leakpoints to minimize emissions,” said Ms. Vicki Hollub, President and Chief Executive Officer, Occidental Petroleum.

The hearing featured witnesses from the Bureau of Land Management, Pueblo of Acoma, State of Wyoming, Occidental Petroleum, and Western Energy Alliance. To read their testimony click here.

To watch the hearing in full, please click here.