Interior Prioritizes Renewable Energy Permits, Delays Oil and Gas

In a study released last week, Dr. Joseph Mason of LSU demonstrated the vast economic benefits of opening up federal lands to oil and gas development: 500,000 new jobs a year and more than $30 billion a year in federal, state, and local tax revenue over the next seven years alone. That's just for starters. The study also shows that opening new federal lands to oil and gas production will create a cumulative $14.4 trillion in economic activity. But instead of seizing the opportunity to unlock the benefits of expanding oil and natural gas exploration, the Interior Department on Feb. 6 identified 23 renewable energy projects for priority permitting.

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If all 14 wind, 6 solar, and 3 geothermal projects are approved and built, the Bureau of Land Management (BLM) estimates the completed projects would total 5,300 megawatts of electricity generating capacity. That's enough energy to power 1.6 million homes when the wind is blowing hard enough, the sun is shining, and the geothermal plant is operating at full capacity. While 5,300 megawatts of electricity is a lot, how does that compare to the energy produced from oil and gas production? In the table below, we calculate the total British thermal units (Btu) these projects would produce if their capacity factors equal EIA's estimates in its Annual Energy Outlook.[ia] As the table below indicates, BLM's priority projects would be capable of producing about 44 trillion Btu of energy annually. To put that in perspective, oil wells in North Dakota produced more than 127 trillion Btu in Nov. 2012 alone.[ii] That's almost three times more energy in one month than BLM expects all of its priority wind, solar, and geothermal projects to produce in an entire year. Not only that, but in the last 14 months for which there is data, North Dakota's energy production, increased by 46 trillion Btus a month.[iii] In other words, the increase in North Dakota's monthly production over the last fourteen months was greater than what the Department of Interior's pet projects will produce over the course on an entire year. Plus, unlike solar or wind, oil can be used when and where it is needed.

BLM's Priority Renewable Energy Projects on Federal Land

Project Name	Capacity (MW)	Capacity Factor	Capacity Factor2	mWh per year	Btu
Hyder Valley Solar	350	0.25	8760	766,500	2,615,298,000,000
Quartzsite Solar Energy	100	0.25	8760	219,000	747,228,000,000
Stateline Solar	300	0.25	8760	657,000	2,241,684,000,000
McCoy Solar	750	0.25	8760	1,642,500	5,604,210,000,000
Desert Harvest Solar	150	0.25	8760	328,500	1,120,842,000,000
Ocotillo Sol	14	0.25	8760	30,660	104,611,920,000
Ft Mojave Solar	310	0.25	8760	678,900	2,316,406,800,000
Silverleaf Solar	160	0.25	8760	350,400	1,195,564,800,000
Blythe Mesa Solar	485	0.25	8760	1,062,150	3,624,055,800,000
Hidden Hills Solar	500	0.25	8760	1,095,000	3,736,140,000,000
Silver State South Solar	350	0.25	8760	766,500	2,615,298,000,000
Boulder City Solar	300	0.25	8760	657,000	2,241,684,000,000
Mountain View Solar	20	0.25	8760	43,800	149,445,600,000
Moapa Solar	200	0.25	8760	438,000	1,494,456,000,000
Mohave County Wind Farm	500	0.33	8760	1,445,400	4,931,704,800,000
Granite Mountain Wind	84	0.33	8760	242,827	828,526,406,400
Walker Ridge Wind	70	0.33	8760	202,356	690,438,672,000
Alta East Wind	300	0.33	8760	867,240	2,959,022,880,000
Tule Wind	51	0.33	8760	147,431	503,033,889,600
Searchlight Wind	200	0.33	8760	578,160	1,972,681,920,000
Casa Diablo	33	0.91	8760	263,063	897,570,273,600
Silver Peak	5	0.91	8760	39,858	135,995,496,000
New York Canyon	62	0.91	8760	494,239	1,686,344,150,400
Total	5294			13,016,484	44,412,243,408,000
Total average	230			565,934	1,930,967,104,696
Solar average	285			623,994	2,129,066,065,714
Wind average	201			580,569	1,980,901,428,000
Geothermal average	33			265,720	906,636,640,000
ND oil production (11/12)					127,558,901,200,000

As another example, IER calculated the energy production potential of the Manteo Prospect, a potential natural gas project off the shore of North Carolina. IER estimated the natural gas project could generate 320 trillion Btu of energy per year--more than 7 times as much energy per year as the Department of Interior's expedited renewable projects. But prospects like Manteo continue to be stopped by the federal government. For example, the federal government controls vast swaths of land and water which could be used for more exploration, but the Interior Department has leased just 2 percent of federal offshore areas and less than 6 percent of federal onshore lands for oil and gas development. Since the 2010 drilling moratorium, the Obama administration has pursued a policy of slow-walking offshore drilling permits. Onshore leasing is treated in a similar fashion, with leases falling to approximately 50% of those issued by the Bush administration, which leased fewer lands than the Clinton Administration before it. While production of energy from such lands lags far behind those on private and state lands, delays, red tape and uncertainty has grown exponentially. For example, it takes 307 days for the federal government to process a permit to drill on its lands, but only 10 days for North Dakota and 27 days Colorado to process a similar permit. The government process makes no attempt to be user friendly for those willing to pay money to explore for energy, hire employees and make investments here in the U.S. As Dr. Mason pointed out, opening federal lands to oil and gas development would result in enormous economic benefits, yet Interior obviously thinks renewable energy projects are more deserving of streamlined permitting. In the face of basic math, Interior continues to lease a pittance of federal land for oil and gas production, while prioritizing renewable energy projects with more limited potential. IER Policy Intern Alex Fitzsimmons contributed to this article. [ia] Energy Information Administration, Levelized Cost of New Generation Resources in the Annual Energy Outlook 2012, June 25, 2012 [ii] According to the Energy Information Administration, 1 barrel of crude oil converts to 5.8 million Btu based on U.S. production in 2011. [iii] For historical oil production statistics in North Dakota