Oil and Gas for Managers (3000-74)Oil and Gas for Managers (3000-74)

Pete Culp

Assistant Director

Minerals, Realty & Resource Protection

May 1999

Overview for this Session:Overview for this Session:

Course Expectations.

Resource and Industry.

BLM Program Mission.

Course ObjectivesCourse Objectives

To enable managers: To make effective Oil & Gas

resource use decisions. To promote environmentally

responsible development of public’s oil and gas resources.

Oil and Gas For Managers

Scope of Oil and Gas IndustryScope of Oil and Gas Industry

Distribution of oil & gas fields.

Resource potential.

Use and dependence.

Role of petroleum.

U.S. Oil & Gas Fields

U.S. Exploration History

Oil and Gas Fields of the U.S.POWDER RIVER BASINWYOMING AND MONTANA

SAN JUAN BASINNEW MEXICO , COLORADO

AND UTAH

SOUTHWEST WYOMINGWYOMING, UTAH, AND COLORADO

HOT SPOTS FOR FUTURE GAS DEVELOPMENT

World Energy Consumption by Fuel Type, 1970-2020

0

50

100

150

200

250

300

1970 1980 1990 2000 2010 2020

Year

Qu

adri

llio

n B

tu COAL

OIL

NATURAL GAS

RENEWABLES

NUCLEAR

History Projections

U.S. Dept. of Energy 1998 Forecast

Domestic and Global Oil Production is Expected to Decline

Projected U.S.and Canada

Projected U.S.and Canada

Continued Decline for U.S. Oil Production

Continued Decline for U.S. Oil Production

Source: DOE, 1998

Declining U.S. ProductionDeclining U.S. Production

Increasing ConsumptionIncreasing Consumption

Forecast for the Future

Forecast for the Future

Volatile PricingVolatile Pricing

The Flow of OilThe Flow of Oil

Production

Exploration

Refining and Processing

ManufacturingStorage

Transportation

Fuels & Other Uses

Product: Gallons per barrel

gasoline 19.5

home heating oil/diesel fuel

9.2

jet fuel 4.1

residual fuel oil 2.3

What a Barrel of Crude Oil MakesWhat a Barrel of Crude Oil Makes

SummarySummary

Importance of resource…

Employment

Feed Stocks

Revenue

Economic and Military

Security

BLM Oil and Gas ProgramBLM Oil and Gas Program

BLM Oil and Gas ProgramBLM Oil and Gas Program Oil and Gas Mission

Scope of the Program

Budget

Processes

Oil and Gas Program Mission

Oil and Gas Program Mission

“It is the mission of the Bureau of Land Management to sustain the health, diversity, and productivity of the public lands for the use and enjoyment of present and future generations…….”

---The BLM Mission

• To encourage the environmentally responsible development of public oil and gas resources to ensure a fair return to the public, build communities, and preserve the health of the land.

• To meet our trust responsibilities to Native Americans in managing their oil and gas interests.

• To encourage the environmentally responsible development of public oil and gas resources to ensure a fair return to the public, build communities, and preserve the health of the land.

• To meet our trust responsibilities to Native Americans in managing their oil and gas interests.

BLM Oil & Gas ProgramBLM Oil & Gas Program

A Balanced Approach

Ensuring a Fair Return on Public

Resources

Ensuring Environmentally Sound and Safe

Operations

Building a Better

Government

Fostering Economic

Growth

Scope of ProgramScope of Program

Bureau Oil and Gas StatisticsBureau Oil and Gas Statistics

OIL

U.S. Onshore Production

GAS

Oil & Gas Estate

Bureau Oil and Gas StatisticsBureau Oil and Gas Statistics

0

100

200

300

400

500

600

BLM Oil & Gas Estate Under Lease

Mil

lio

ns o

f A

cre

s

Non Producing:

28,162 leases

12.9 million acres

Non Producing:

28,162 leases

12.9 million acres

Producing:

20,106 leases

10.5 million acres

Producing:

20,106 leases

10.5 million acres

48,268+Oil & Gas leases23.4 million acres

48,268+Oil & Gas leases23.4 million acres

Subsurface

Only

Surface & Subsurface

304.56

259.44

BLM Oil & Gas Benefit-CostBLM Oil & Gas Benefit-Cost

0

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

700,000,000

800,000,000

Receipts Costs

Do

llars

BLMBLM

States States

Reclamation FundReclamation Fund

U.S. TreasuryU.S. Treasury

FY-98

States (Net Recpt. Share)

States (Net Recpt. Share)

BLM FY-98 Accomplishments

BLM FY-98 Accomplishments

3,167

2,305

2,026

~57,000 producing/producible wells

Budget

Strategic Plan

Annual Work Plan

Oil & Gas Program Strategic Goals Tie-insOil & Gas Program Strategic Goals Tie-ins

Inspection & EnforcementOrphan Wells

Leasing & Development

Native American Trust Responsibilities

All Aspects of the Program

All Aspects of the Program

Pre- & Post Lease

.

ALMRSAFMSS

Outreach

Pre- and Post LeaseNEPA

Rehab sites & roads when no longer needed

Industry Requested Approvals

Performance MeasuresPerformance Measures

Decrease APD approval times.

FY-98 is base year.

Goal: Reduce delay by 10% in FY-99.

National Oil & Gas Budget Emphasis for

FY-1999

National Oil & Gas Budget Emphasis for

FY-1999

Production Verification

Planning

Leasing

Development

Rule Making

AFMSSCustomer Service

Workload MeasuresWorkload Measures

Leasing Operations Reservoir Management Agreements Inspection & Enforcement Indian Technical Assistance

BLM Program Costs FY-99

BLM Program Receipts FY-97

FY-99FY-99

Oil & Gas

59%

Coal

25%

Other Leasable and Salable Minerals

5%

Locatable Minerals

3%

Recent Funding TrendsRecent Funding Trends

0

100

200

300

400

500

600

700

FY1993 FY1994 FY1995 FY1996 FY1997 FY1998 FY1999

Fiscal Year

Mill

ion

s o

f D

olla

rs

MLRMLR

Oil & GasProgram

Oil & GasProgram

ProcessesProcesses

APPEALS

BLM Oil & Gas Time FramesBLM Oil & Gas Time FramesPlan RevisionsPlan Revisions

SummarySummary

What’s Next?What’s Next?

Learning the Industry... BLM at Work... Balancing Resource Use... Collaborative Management... Summary Exercise…