American Oil and Gas Reporter - October 2016 - 115

climbed, companies producing from federal acreage were criticized for not developing leases fast enough, the Energy Institute recalls.
The institute says over the past year, a
growing number of politicians and interest groups-and the Democratic Party-have
called for an end to oil, natural gas and coal
extraction on federal lands and offshore
waters. It cites the Keep it in the Ground
Act, a House bill with more than 20
sponsors. The bill would prohibit the Department of the Interior from entering any
new leases or renewing or extending leases for the purpose of developing onshore
fossil fuels.
In the past year alone, the institute says
the Obama administration has canceled
lease sales in the Arctic and Atlantic offshore planning areas, and rescinded previously-issued leases, including the posthoc withdrawal in July of 25 Colorado
leases. Federal agencies required to hold
quarterly onshore lease sales have ignored the law and canceled the sales, the
Energy Institute says. Since 2014, agencies have canceled 34 lease sales in eight
states.
The Energy Institute's report provides
two scenarios. The first examines the
economic output that would be lost or
placed at risk if energy development
stopped immediately on all federal acreage.
The second analyzes the cumulative impacts of immediately ceasing new leasing
while existing leases are left in place.
While the figures cited apply to the first
scenario, the institute warns the second scenario also has major impacts, with $6 billion in lost revenues over the next 15 years
and nearly 270,000 impacted jobs.
A Harmful Effect
"American voters deserve to understand
the real-world impacts of the proposals that
candidates and their allies make," says
Karen Harbert, president and chief executive officer of the U.S. Chamber's Institute for 21st Century Energy. "Their proposals will have a direct, harmful effect on
the American economy, and in particular
decimate several states that rely heavily on
revenues from federal land production.
Given the implications, these policy proposals should not be taken lightly."
According to the report, certain states
and regions would be affected disproportionally by halting energy production on
federal lands. Among its predictions:
* Wyoming would lose $900 million
in annual royalty collections, 20 percent
of its annual expenditures.
* New Mexico would lose $500 million, 8 percent of its total general revenue
funds.
* Colorado would lose 50,000 jobs,

while the Gulf states of Texas, Louisiana,
Mississippi and Alabama would lose
110,000 jobs.
"Since 2010, the share of energy production on federal lands has dipped because of increasing regulatory hurdles
from the Obama administration," Harbert
says. "Nevertheless, production on federal lands and waters still accounts for a quarter of all oil, natural gas and coal produced.
If that was to end, it would hit Western and
Gulf Coast states particularly hard, and
could result in production moving over-

seas, which would harm our national security and impact prices."
To estimate the economic impacts of a
ban on fossil fuel extraction on federal
lands and waters, the Energy Institute says
it examined data on jobs, royalties and production levels from federal lands, and used
a macroeconomic model to estimate the overall effects of blocking energy development.
The report is available at http://www.energyxxi.org/what-if%E2%80%A6energyproduction-was-banned-federal-lands-waters.
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Texas' Val Verde Basin Holds
5 Tcf, USGS Analysis Projects
WASHINGTON-The Canyon sandstones of the Val Verde Basin in Southwest
Texas hold 5 trillion cubic feet of natural
gas and 187 million barrels of oil, according to the U.S. Geological Survey.
The Val Verde Basin is the foredeep to
the late Paleozoic, north-verging Ouachita-Marathon fold and thrust belt, USGS describes. "Canyon sandstones" is the collective term for several sandstone intervals
deposited in deepwater environments in the
developing foredeep during the Late Pennsylvanian and Early Permian, the agency
says. The Canyon sandstones include the
Sonora Sandstone and Ozona Sandstone
intervals.
The survey says the sandstones represent multiple phases of deposition in prograding slope channel and basin-floor
submarine fan systems with varying directions of provenance. For example, USGS
points out, the Ozona sandstones are
sourced from the southwest, whereas the
Sonora sandstones are sourced from the
northeast.
The study defines four assessment
units (AUs) in the Ozona and Sonora sandstones of the Val Verde Basin. USGS says
the Permian Basin Paleozoic Composite
Total Petroleum System contains all four
AUs. Given than 15,000 wells have been
drilled and tested in the Canyon sandstones, the agency says production "fairways" have come into focus defined by
thicker sandstone intervals, and thus
denser drilling and production opportunities. USGS adds it uses the fairways as its
basis for defining AUs.
AU Definitions
The production fairway in the Ozona
Sandstone is defined as the Ozona Sandstone Tight Gas AU, and the area surrounding the fairway is the Ozona Sandstone Peripheral Tight Gas AU, USGS describes.
The production fairway and area sur-

rounding the Sonora Sandstone are similarly categorized.
In its assessment of technically recoverable tight-gas resources in the four continuous AUs in the Canyon sandstones,
USGS makes these projections:
* The assessed mean resource in the
Ozona Sandstone Fairway Tight Gas AU
is 1.615 Tcf of gas, with a 95 percent to
5 percent confidence (F95-F5) range from
730.0 billion cubic feet to 2.683 Tcf,
from a maximum production area of
270,000 acres.
* For the Ozona Sandstone Peripheral Tight Gas AU, the assessed mean resource estimate is 222.0 Bcf, with an F95F5 range from 68.0 Bcf to 425.0 Bcf, from
a maximum production area of 586,000
acres.
* For the Sonora Sandstone Fairway
Tight Gas AU, the assessed mean resource estimate is 2.799 Tcf, with an
F95-F5 range from 1.223 Tcf to 4.677 Tcf,
from a maximum production area of
431,000 acres.
* The assessed mean resource estimate
for the Sonora Sandstone Peripheral Tight
Gas AU is 388 Bcf, with an F95-F5 range
from 117 Bcf to 735 Bcf from a maximum
production area of 1.2 million acres.
For the four tight-gas AUs, the assessed
mean resource F95-F5 range for natural
gas liquids is 74 MMbbl to 338 MMbbl,
USGS says. More than half (56 percent,
or 2.779 Tcf) of the total assessed mean
tight-gas resource is in the Sonora Sandstone Tight Gas AU.
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Coming In November
Complete coverage of the North
Dakota Petroleum Council's 2016 annual meeting, held Sept. 19-21 at the
Holiday Inn Riverside in Minot, N.D.
OCTOBER 2016 115

American Oil and Gas Reporter - October 2016

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