Current federal regulations will see a 9% decrease in natural gas production according to a joint SAIC and GTI study.

Current U.S. federal environmental regulations and moratoria on exploration activities on federal lands will have significant impacts on the production of both natural gas and crude, as well as the U.S. economy, according to a recent study jointly completed by the Science Applications International Corp (SAIC) and Gas Technology Institute (GTI), under the administration of the National Association of Regulatory Utility Commissioners (NARUC).

The nearly two-year study, “Analysis of the Social, Economic and Environmental Effects of Maintaining Oil and Gas Exploration and Production Moratoria On and Beneath Federal Lands,” found that the continued moratoria on exploration of federal lands will result in the U.S. GDP (gross domestic product ) decreasing by a cumulative US$2.36 trillion, or roughly 0.52% annually, from the period of 2009 to 2030.

The study utilized a modified version of the federal government modeling program used by the U.S. Congress to update the energy outlook under current laws and under new energy policy proposals.

This program updated the natural gas resource base currently located on federal lands in moratoria by 132 trillion cubic feet (Tcf) onshore and 154 Tcf offshore, which increased the domestic natural gas reserve base from 1.748 Tcf to 2.034 Tcf.

Additionally, the study’s modeling program increased the domestic crude oil resource by 37 billion barrels (bbls) offshore and 6 billion bbls located in the Arctic National Wildlife Refuge (ANWR), which increased the U.S. oil reserves from 186 billion bbls to 229 billion bbls.

According to the study, natural gas production will decrease by 9% annually, or a cumulative 46 Tcf. This will result in natural gas imports, both from liquefied natural gas (LNG) and pipeline imports from Canada, increasing by 15.7 Tcf, or nearly 75% annually.

Based on these findings, the study reported that maintaining the current moratoria will result in natural gas prices increasing by 17% and the average electricity prices increasing by 5%. Further, the study claims that cumulative oil imports from OPEC countries will increase by 4.1 billion bbls.

However, maintaining the moratoria will not increase the negative environmental effects associated with the use of oil and natural gas, and it would increase the use of renewable energy by 1.4%.

While much of the study’s findings seem to point to ending the moratoria on these lands and opening development of their resources, the study group’s chairman stated that the findings should be used by national leaders to better understand the nation’s resource base and what the effects of energy legislation will have on the economy and its citizens.

“Whether additional federal lands should be leased for energy development – and under what conditions leasing should occur – is a matter for national energy policy decision makers. Our research allows policy makers to know the extent of the resource base and the effects that maintaining the restrictions would have on the country. Our public interest is dedicated to giving decision makers information upon which they can rely in developing America’s national energy policy,” O’Neal Hamilton, the study group chairman, said. – Frank Nieto