Nowhere in the song “This Land Is Your Land” do the lyrics mention the federal government. Yet, a new report released on June 19 by the U.S. Energy Information Administration (EIA) confirms the large role the government has taken in regulating federally owned land in the oil, gas, and coal industries.
Crude oil production in the United States has been increasing at remarkable rates since 2008. In 2013, the EIA found the United States produced 7.454 million barrels of crude oil per day, up from 4.999 million barrels per day in 2008. Production increases like this provide enormous economic benefits to producers and consumers alike. However, the new EIA report reveals the negative effects of federal interference on the oil, gas, and coal industries.
According to the EIA report, the federal government owns roughly 650 million acres of land, about 30 percent of the United States’ total land mass. Despite oil and gas production nearly doubling in less than six years, production on federally owned lands has continued to fall for the third consecutive year. Last year, production of oil, gas, and coal on federal land and offshore fell by 7 percent.
Coal represents more than half of the conventional fuel energy extracted from federal lands, while natural gas and crude oil represent the remainder of the federal energy portfolio. The decline in oil, gas, and coal production on federal lands has caused the government’s share of total domestic conventional fuel production to fall to 25 percent.
Some argue that the shift in production from federal to state and private lands is because federal lands have the least oil and gas shale deposits, which is partly true. The other cause of this reduction is the existence of extensive federal regulations and inefficiency. It takes between five and 10 years for a business to obtain federal approval and begin exploration—10 times longer than it takes to obtain a state permit. Even after a permit is obtained, there are no guarantees that the drilling will be successful, making the process a risky long-term investment for energy producers.
The sheer amount of regulation has allowed the oil industry to access only 15 percent of available offshore areas. The federal government’s interference in the oil, gas, and coal industries has only served to impede production and the benefits consumers would receive from energy production on federal lands.
Despite the federal government’s interference and inefficiencies, the oil, gas, and coal industries have been achieving record production numbers. Imagine what these numbers would look like if the federal government streamlined the regulatory process, or even better, allowed states to make land-management decisions?
The United States is the land of the free, not the land of the federal. It is well past time for the government to release its tight grip and allow the people most directly impacted to manage the land.
Hanna Hebert is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please click here.
