New study: federal control of land hurts job growth in oil and gas industry

The Daily Signal reports on a new study from the Heritage Foundation.

They write:

Current government regulations imposed by the Bureau of Land Management are harming energy production and holding back the U.S. economy, a new study reveals.

“While federally owned lands are also full of energy potential, a bureaucratic regulatory regime has mismanaged land use for decades,” write The Heritage Foundation’s Katie Tubb and Nicolas Loris.

The report focuses on the Federal Lands Freedom Act, introduced by Rep. Diane Black, R-Tenn., and Sen. James Inhofe, R-Okla. It is designed to empower states to regain control of their lands from the federal government in order to pursue their own energy goals. That is a challenge in an oil-rich state like Colorado.

“We need to streamline the process as there are very real consequences to poor [or nonexistent] management,” Tubb, a Heritage research associate, told The Daily Signal.

“Empowering the states is the best solution. The people who benefit have a say and can share in the benefits. If there are consequences, they can address them locally with state and local governments that are much more responsive to elections and budgets than the federal government.”

Emphasizing the need to streamline the process, Tubb pointed to the findings in the new report.

“The Bureau of Land Management estimates that it took an average of 227 days simply to complete a drill application,” Tubb said.

That’s more than the average of 154 days in 2005 and more than seven times the state average of 30 days, according to the report.

The report blames this increase in the application process on the drop in drilling on federal lands.

“Since 2009,” Tubb and Loris write, “oil production on federal lands has fallen by nine percent, even as production on state and private lands has increased by 61 percent over the same period.”

Despite almost “43 percent of crude oil coming from federal lands,” government-owned lands have seen a 13-point drop in oil production, from 36 percent to 23 percent.

So, if we were interested in more job creation (and lower gas prices) then what we would be doing is letting oil and gas companies hire more people and extract more oil. Streamlining the process for new new drilling permits would help a lot. Right now, we still have a very low level of labor force participation. If we want companies to hire more people, we need to make it easier for them to do it. That means a less anti-business climate.

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