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New Interior Department Study Shows More Restrictions to Oil and Gas Development Then Previously Reported

Independent Oil, Gas Producers Applaud Report - Bans, Restrictions and Bureaucratic Delays Are Preventing Responsible Energy Development.

WASHINGTON, DC - November 28, 2006 - The U.S. Department of the Interior released a report today showing that only 3 percent of onshore federal oil and 13 percent onshore federal gas are accessible to America's oil and gas producers under standard lease terms. The 99 million acres inventoried by the Bureau of Land Management is estimated to contain 187 trillion cubic feet of natural gas and 21 billion barrels of oil, however, due to bans, federal restrictions and bureaucratic delays the majority of this public resource is closed to development. This study expands on an earlier report published in 2003, inventorying an additional six new oil and gas basins in Alaska and Rocky Mountains. The nation's independent oil and natural gas producers, who drill 90 percent of the nation's oil and gas wells, are urging federal lawmakers to use the results of this study to develop policies that streamline regulatory burdens placed on American oil and gas development.

"This report clearly demonstrates the distinction between what is available and what is accessible. There is enough onshore oil and natural gas available in the United States to significantly alleviate the burden on American consumers while strengthening our energy security. However, these public resources are not accessible because regulatory barriers and antiquated policies prevent the responsible development of these resources," said Mike Linn, chairman of the Independent Petroleum Association of America (IPAA) and president, Linn Energy, Pittsburgh, PA. "Now that both the public and our elected lawmakers know these resources are available, we need to work to make sure they are accessible."

The study reported that 46 percent of onshore Federal oil and 60 percent of onshore Federal gas have the potential to be developed but are subject to significant restrictions and impediments. Among the impediments to oil and gas exploration: federal agencies delaying permits while revising environmental impact statements; litigation on Resource Management Plans designed to delay access; and unreasonable permit requirements that prevent production. In many cases, oil and gas producers are paying the costs of Environmental Impact Statements - a cost that is supposed to be incurred by the government and can cost producers hundreds of thousands of dollars.

"American oil and gas producers must overcome significant impediments to exploration and production," said Linn. "Access to these resources is limited by numerous barriers that significantly reduce the ability of independent producers to access these valuable resources."

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IPAA is the national trade association representing oil and natural gas producers that drill 90 percent of the nation's oil and natural gas wells. These companies account for 68 percent of America's oil production and 82 percent of its natural gas production.