Oil from US government leases tops 1B barrels in 2019

Breaking the billion-barrel threshold marks a major milestone

BILLINGS, Mont. (AP) — Oil production from federally-managed lands and waters topped a record 1 billion barrels last year, U.S. officials told The Associated Press, as shorter permitting times and technological advances helped drive new development.

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Critics charge that the gains being made by energy companies come at the expense of the environment, with fewer safeguards to protect the land and wildlife from harm.

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The production figure was up more than 13 percent from 2018. It includes oil from onshore and offshore parcels and American Indian-owned lands managed by the U.S. Interior Department during fiscal year 2019, which ended Sept. 30.

Acting Assistant Secretary of the Interior Casey Hammond told AP that breaking the billion-barrel threshold marks a major milestone in the Trump administration's drive to increase domestic energy production.

This Jan. 16, 2015, file photo shows pumpjacks operating at the Kern River Oil Field in Bakersfield, Calif., which is overseen by the U.S. Bureau of Land Management. (AP Photo/Jae C. Hong, File)

"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."

Royalties collected by the government on oil production increased to $7.5 billion in 2019, according to Interior officials. That's up 21 percent compared to 2018.

Roughly half of that money is returned to states where the oil is produced. The rest goes into the U.S. treasury.

Royalties on oil produced from Indian reservations or Indian-owned land is returned to the tribes or individual owners.

The steep rise in production in recent years follows the advent of a drilling technique known as hydraulic fracturing, or "fracking," which lets companies extract oil from underground reserves that were once considered out of reach.

Fracking spurred an industry boom during the Obama administration that has picked up speed under Trump.

There's been longstanding strong demand among private companies to acquire oil and gas leases on lands controlled by the U.S. Bureau of Land Management, said Mike Penfold, a retired state director at the agency.

What's different under Trump, he said, is the rollback of environmental rules intended to strike a balance between development and conservation.

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"This is another example of the Trump administration undoing four or five decades of thoughtful laws to protect the public lands," Penfold said. "The benefits of this go to the oligarchs who put more money in their pockets — not other public land users or the taxpayers."

Under Trump, the time it takes the Bureau of Land Management to approve drilling applications has been cut from 257 days on average in 2016, to 108 days last year, according to federal officials.

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About one-quarter of U.S. oil is produced from federal lands, a share that has slightly dropped since Trump took office.