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story.lead_photo.caption FILE - This June 12, 2017 file photo shows pumpjacks operating in the western edge of California's Central Valley northwest of Bakersfield. Oil production from federally-managed lands and waters topped a record 1 billion barrels in 2019, according to the Department of Interior on Tuesday, Feb. 11, 2020. (AP Photo/Brian Melley, File)

BILLINGS, Mont. -- Oil production from U.S.-managed lands and waters topped 1 billion barrels last year, federal officials said Tuesday, setting a record as technological advances help drive development in new areas and as the Trump administration eases rules on the industry.

The production figure was up 122 million barrels, or more than 13%, from 2018. Federal officials said it includes oil from onshore and offshore parcels and American Indian-owned lands managed by the U.S. Interior Department during fiscal 2019, which ended Sept. 30.

Critics say 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.

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

"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."

He said permits were being issued to companies more quickly and without compromising the landscape and public waters.

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, and it has picked up speed under Trump.

About one-fourth of U.S. oil is produced from federal lands, a figure that's held fairly steady for much of the past decade as drilling has increased on both public and private lands.

There's been long-standing, 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.

"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."

The amount of oil now being extracted from federal lands has broader geopolitical significance, giving the U.S. a large enough stake in the world oil market to prevent the OPEC oil cartel from setting crude prices, said Sarp Ozkan, director of energy analysis at the industry data firm Enverus.

But Ozkan warned that the pace of growth is likely to slow as companies shift from investing money into drilling to making sure their shareholders get adequate returns.

"That will undoubtedly affect production from [Interior Department] lands as well," Ozkan said.

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

Royalties collected by the government on oil production increased to $7.5 billion in 2019, according to Interior Department officials. That's up 21% from 2018 but beneath the record revenue in 2013 when oil prices topped $90 a barrel.

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

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

Business on 02/12/2020

Print Headline: U.S.-managed lands yield 1 billion barrels of oil in '19


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