WHAT WE FOUND

Only about 10% of domestic oil and gas drilling occurs on federal land. The rest happens on private and state property, Ed Hirs, energy fellow at the University of Houston, said. At the end of 2021, there were 9,173 approved applications for drilling permits on federal and tribal lands, according to the Bureau of Land Management (BLM).

Jennifer Pett with the Independent Petroleum Association of America (IPAA), which represents independent oil and natural gas producers, told VERIFY that more than 9,000 approved permits aren’t producing oil and gas right now. Joshua Axelrod with the National Resources Defense Council also confirmed that more than 9,000 approved permits are unused.

However, that doesn’t mean oil companies could just start drilling right now and produce oil and gas.

According to the IPAA, some of these leases are going through a “complex regulatory process or are held up in litigation.” Western Energy Alliance, which represents hundreds of companies involved in the exploration and production of oil and natural gas, says on its website that it is defending more than 2,200 leases in court, most of which cannot be developed while the cases are ongoing.

Hirs explained that a variety of factors can halt the oil drilling process for unused permits.

“Federal leases…are subject to environmental studies. They’re also subject to lawsuits filed by neighbors, by municipalities, by counties and state governments. And so it’s become a more arduous process,” he said.

Companies often need to have separate permits secured for multiple well sites before they can bring in an oil rig, the IPAA says. But just because the government approves the permits doesn’t guarantee the well will produce oil and gas, as some never do. This means approved permits may go unused.

“If you’ve gone, like most companies do, and filed a dozen or two dozen [permits] at a time, and your first well turns out to be a dry hole, you’re not going to go ahead and drill the rest of those,” Hirs said.

It’s true that companies will sometimes sit on unused permits until it makes more financial sense. The U.S. Government Accountability Office (GAO) found that since there isn’t a penalty for not using a drilling permit, some companies wait to begin drilling until oil prices are high enough to make it worth their while. One operator told the GAO that they would add a drilling rig if the price of oil increases and may suspend one if it decreases. Another said a permit may go unused if oil and gas prices are too low for them to turn a profit.

The COVID-19 pandemic continues to pose challenges for oil companies, too. Some are facing a six-month waiting period for piping materials needed to drill and are still short-staffed after layoffs spurred by the pandemic-induced drop in demand for oil, Pett said.