Peña calls for leasing

On his way to the private sector, U.S. Energy Sec. Federico Peña paused to deliver an important message: If the federal government wants the U.S. to increase production of oil and natural gas, it must make land under its control available for lease. In a speech in Washington, D.C., last week, Peña further noted that oil and gas leasing and drilling can occur without threatening environmental values, "something that I think many people in this country are not aware of today."

May 18, 1998

4 min read

In the oil and gas industry, these are not breakthrough insights. What is significant is that an energy secretary chose not only to give voice to the observations but also to address them to fellow cabinet officers with contrasting points of view.

One voice

In response to a question, Peña said DOE has begun discussions with the Departments of Interior and Agriculture over federal leasing. "It seems to me the government ought to speak with one voice when we are making judgments about how we obtain long-term energy security for our country," he said.

Indeed. Earlier this year, DOE proposed an energy strategy that included the worthy goal of stabilizing U.S. oil production. Without a strengthened leasing effort, however, such a goal is just wishful thinking.

Peña deserves the oil and gas industry's praise for placing his strategy's production ambitions in an essential policy context. But he's swimming against the tide.

Resistance to oil and gas leasing in the U.S. is strong. A new study by Delta Environmental Consultants of Denver for several petroleum industry associations notes that the leased share of total federal mineral acreage in eight western states has fallen to 17% at present from 72% in 1983. The study didn't cover offshore acreage, where leasing occurs nowhere but in the central and western Gulf of Mexico.

Refusing on environmental grounds to lease federal land for petroleum exploration has become an American political tradition, like investigating oil companies when gasoline prices rise. Along the East and West Coasts, opposition to offshore leasing has always been strong. Antileasing sentiment gained national dimensions during the first term of former President Ronald Reagan, when then-Interior Sec. James Watt tried to offer the whole Outer Continental Shelf at once. In 1989, the Exxon Valdez crude oil spill produced a similar reaction, defusing a strong drive in Congress to approve leasing of the Arctic National Wildlife Refuge Coastal Plain in Alaska.

The Clinton administration has built on the prejudice it inherited. Interior Sec. Bruce Babbitt remains fiercely opposed to leasing of ANWR. And access to onshore lands administered by the Bureau of Land Management and Forest Service remains difficult, even for operators holding leases. Recently, the supervisor of the Lewis & Clark National Forest in Montana decided not to allow leasing of acreage believed to be capable of holding 15 tcf of gas for no reason other than an imagined impact on something called "the spiritual value of place."

So appeals for domestic oil and gas production mean little from anyone in government unwilling to take on the federal landlords at Interior and Agriculture. The adversary duty logically falls to energy secretaries, whose willingness to ruffle cabinet feathers over leasing in the past has been inconsistent and mostly unsuccessful.

Gauge of commitment

Peña said the discussions between DOE, Interior, and Agriculture may be the first of their kind. "I can't tell you where they will end up," he said. "But we're hopeful we will conclude these discussions with at least a unified position in government about what our view is about domestic production."

That Peña is headed for the exit places these comments in a fading light, of course. That he has provided a clear gauge by which to test the administration's commitment to U.S. oil production is something to cheer, however, and reason to regret his departure.