Full Title: Follow the Oil
Author(s): Center for Western Priorities
Publisher(s): Center for Western Priorities
Publication Date: March 1, 2013
Full Text: Download Resource
Description (excerpt):
Oil and gas drilling in the western United States has boomed since 2000. As the energy boom has progressed in recent years, drill rigs have moved from federally-owned lands to nonfederal lands, the majority of which are privately owned, but also include some state- and locally-owned lands. This report focuses on the motivations for that shift by assessing the push-pull economics and geological realities that drove the transition.
New extraction methods, such as hydraulic fracturing, have allowed industry to access significant new natural gas resources, creating an increase in production and profits between 2003 and 2008. However, rapid development increased the supply of natural gas, driving down prices, and sending companies searching for other drilling locations and revenue sources.
A combination of low natural gas prices and new shale extraction techniques inspired industry to look toward a more profitable commodity: shale oil. As a result, oil and gas companies moved their operations to areas where shale oil was abundant and offered the greatest potential profit.
The large majority of shale oil plays exist under nonfederal lands. Mapping of shale resources reveals that 93 per- cent of all onshore shale oil and mixed oil and gas plays are found under nonfederal lands. Even in the Rocky Mountain West, where more federal land is located, 89 percent of the shale oil and mixed oil and gas plays are under nonfederal lands.
This report demonstrates that the lack of shale oil depos- its under public lands and the market-driven movement away from natural gas and towards oil explains recent drilling trends on public lands.