U.S. Federal Leases - Onshore Oil Production

Introduction

Part I and Part II of this inaugural series described the U.S. oil supply chain. Domestic production, imports and the refinery process led us all the way through to state & federal taxes and retail pump prices in an effort to detail the factors in discussing U.S. oil independence or interdependence.

Another topical energy debate recently is oil production from Federal leases.

Datasets from the Department of the Interior (DOI), the Bureau of Land Management (BLM), the Bureau of Ocean Energy Management (BOEM), the Energy Information Administration (EIA) and even the U.S. Government Accountability Office GAO were utilized to visualize the facts.

Federal lease datasets are enormous like all energy datasets, so we will likely put out four pieces over the next few days detailing:

1. Onshore Production
2. Offshore Production
3. BLM and BOEM leasing and permitting
4. Company-level activity

Onshore Oil Production - Counties

First the good news.  

226 U.S. counties reported oil production from Federal onshore leases in FY21 totaling 1.06 million barrels of oil per day.

Now the bad news.

90% of FY21 onshore oil production came from the top-10 counties, a trend that has been increasing in recent years as Lea and Eddy counties in New Mexico have grown rapidly.  Lea and Eddy now represent 66% of all onshore production from U.S. Federal onshore leases.

To say onshore oil production from Federal leases is currently concentrated would be an understatement.  The top-10 counties, representing 90% of all Federal onshore oil production, are shown below

The current production and trend for FY21 top-10 counties is varied.  Only these ten counties produced more than 10,000 Bbls/d.

Outside Lea and Eddy, NM onshore oil growth is hard to see.

In another sign geology means more than county or state borders and politics, since 2003 there has never been more than 160,000 Bbls/d in counties other than top-10 counties from 2021.

Lea and Eddy, NM and a few other counties have made all other onshore oil production from Federal leases a small percent of total onshore oil production.

Onshore Oil Production - States

The BLM also managed leases on Native lands, although they don'y break out production by county or state to protect the tribes.  Fort Berthold in North Dakota is likely a majority of the Native production.

Interestingly, Native lands are seeing production roll over a bit as Federal lands approach all-time highs.

Given the large growth in New Mexico counties, it should be no surprise the state comprised 67% of all onshore Federal lease oil production in FY21.  The top-6 states represent 98% of all onshore production.

DOI and EIA state-level data can be used to look at production growth from Federal leases and compare versus private lands.  The heatmap below shows cumulative growth since 2003.

Note that Native lands are not broken down by state thus included as 'Private' lands; the discrepancy in North Dakota in particular would likely compress if Fort Berthold production was moved from one side of the ledge to the other.

The trend appears to be that there is no trend.  Federal lands outperform private lands in some states and underperforms in others.

Onshore Oil Production - Basin

Oil production growth in New Mexico on Federal leases is largely in the Permian Basin.  The data was wrangled to strip out Federal lease production from private land production to pick up on trends.

Finally, we can use the data to compare onshore oil production growth from Federal leases versus private leases.

The outcome may not be what is expected, but as discussed it is largely the result of parabolic growth from two counties in New Mexico.  It is unlikely that growth continues at the recent pace.

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