Sally Jewell, the U.S. interior secretary, just cancelled leases to drill for natural gas on federal land in Colorado, in a last-ditch effort to stop an energy boom bigger than Bakken Shale discovery in North Dakota.
Jewell’s Bureau of Land Management claimed that the 25 “Mancos” energy drilling leases now being cancelled were just a non-performing portion of 65 leases on “lands managed by the White River National Forest” and “amount to less than ¬Ω of 1 percent of the active leases on public lands in the state of Colorado.”
But the 25 properties were “non-performing” only because they have been tangled in red-tape since President Barack Obama took office in 2009, even though they were leased in 2005 during George W. Bush’s administration.
The BLM manages nearly 700 million acres of federal lands in the United States. Because of tight restrictions, the “onshore” oil and gas wells on BLM lands accounts for just 11 percent of the natural gas supply and five percent of the oil supply in the United States.
BLM leases generated just $5.4 billion in lease payments during 2013, with the majority of funds going to the U.S. Treasury to reduce deficit spending. Despite the agency’s congressional mandate to maximize the value of public property, the agency website reveals the BLM has reduced issuing drilling permits every year since 2011.
To justify the sudden cancellation of the decade-old Mancos drilling permits, the BLM worked with the Thompson Divide Coalition of environmentalists to commission a resource report that appeared to exist for the sole purpose of undermining energy exploration in the Mancos Shale formation, according to the Western Energy Alliance, an industry group.
The timing of the cancellation of Mancos leases is especially egregious, because the United States Geological Survey just announced in June that the gas resources in the Mancos Shale formation that covers much of Northwestern and Western Colorado, has 40 times more natural gas than the USGS had projected.
The USGS originally estimated in 2003 that the Mancos Shale’s Piceance Basin held up to 1.6 trillion cubic feet of gas. Their latest estimate is the formation holds about 66.3 trillion cubic feet of gas.
The area has now been upgraded to “at least the second largest shale gas resource in the United States.” Its potential exceeds the size of the Bakken Shale Play” covering North Dakota and Montana that has almost doubled U.S. oil production since 2009.
“Mancos Shale Play” is second only to the giant Marcellus gas fields that cover much of Pennsylvania, West Virginia, Ohio and New York. To get a sense of Mancos Shale potential, Marcellus dry gas production has gone from almost zero in 2008 to producing about 20 billion cubic feet of gas a day, or about 40 percent of all U.S. gas production.
In fact, the U.S. is now producing so much gas that U.S. companies have built the expensive ports and specialized ships needed to export supercooled natural gas to foreign customers, including manufacturing and energy companies in the United Kingdom. The first shipment to the U.K. arrived in September.