Oil Production on Federal Lands Reaches Record High

Published March 19, 2020

Production of crude oil on federally managed lands and waters reached a record high of one billion barrels in 2019, according to figures released by the U.S. Interior Department.

This is a 29 percent increase in oil production on federal lands since the end of the Obama administration.

Production is up by 122 million barrels, or more than 13 percent, from 2018, including oil extracted from onshore and offshore parcels, and from lands managed by the Interior Department on behalf of native peoples. Approximately one quarter of the oil produced in the United States comes from federal lands.

Innovation, Regulatory Rollback

The steep rise in oil production is attributable to the fracking revolution and the advances in horizontal drilling and seismic imaging that have enabled developers to extract oil and natural gas from shale formations cost-effectively, as well as the Trump administration’s deregulatory policies.

The Trump administration has cut the time it takes the Bureau of Land Management (BLM) to approve drilling applications by more than half, from 257 days in 2016, the last year of the Obama administration, to 108 days in 2019. Combined, these factors have resulted in the United States becoming the world’s largest producer of oil and natural gas.

The Trump administration’s changes to oil and gas regulations have created an attractive environment for developers, Casey Hammond, acting Assistant Secretary of Interior, told the Associated Press.

“You have to create an environment where folks want to bid on leases and then go develop them,” Hammond said. “One thing we can do as regulators is give people some assurances we’re going to work through the process in a fair and efficient way.”

Touting the results of the administration’s actions in a September 2019 speech, Trump said, “The United States in now the No. 1 energy producer anywhere in the world, by far. For the first time in more than 60 years, this just happened: We are now a net exporter of American natural gas. And we are ending decades of foreign energy reliance to unleash the blessings of American energy independence.”

Transforming Energy Calculations

Royalties collected by the federal government from oil production on federal lands rose by 21 percent from 2018 to 2019, to $7.5 billion. Approximately half that money goes back to the states in which the oil was produced.

The Trump administration’s energy policies have helped the U.S. economy and increased federal revenues, says Dan Kish, a senior follow at the Institute for Energy Research.

“President Trump’s energy policies have made us richer, stronger, and much less dependent on others for affordable energy America has in abundance,” Kish said. “In addition to turning America into the top oil and gas producer in the world, it has added new wealth to our Treasury.

“Last year, revenues from federal lands were 98 percent higher than revenues in the last year of President Obama,” Kish said.

The emergence of the United States as a global energy powerhouse has transformed the global political calculus regarding energy supplies, says Craig Rucker, president of the Committee for a Constructive Tomorrow (CFACT).

“OPEC is still very much with us, and it functions like the cartel it has always been, but thanks to the Trump administration’s energy policies, it cannot call the shots on as it did in days of yore,” Rucker said.

Bonner R. Cohen, Ph.D. ([email protected]) is a senior fellow at the National Center for Public Policy Research and a senior policy analyst with CFACT.