Oil and gas projects limit land conservation — USDA

Source: Marc Heller, E&E reporter • Posted: Thursday, August 25, 2016

For years, ethanol critics have complained that the corn-to-energy craze is tearing up uncultivated land that could be used for conservation. A study by the Department of Agriculture suggests another factor — drilling for oil and gas in shale formations — also plays a role.

USDA’s Economic Research Service reported that more land is being taken out of the department’s Conservation Reserve Program in counties that sit atop shale, compared with counties that don’t.

For seven years in a row, from 2006 through 2012, the rate of early exits and non-enrollments in the CRP was greater in shale counties than in non-shale counties, according to the study. That trend reversed in 2013, but overall, declines in CRP acreage have been much faster in shale counties, the study’s author said in an email.

Acreage in the CRP program declined by 36 percent in shale counties from 2002 to 2015, compared with a 25 percent decline in non-shale counties, said the author, Claudia Hitaj.

The study examined a shorter period, from 2006 to 2013, finding similar results.

The study doesn’t specifically pin early exits from the program on oil and gas production. But early exits carry a financial penalty that includes returning program payments to the government and paying a fine, so producers typically wouldn’t leave the program without a lucrative alternative.

“Early exits and decisions not to re-enroll could be due to a number of factors, one of which is the placement of oil or natural gas wells, pipelines, and access roads through CRP land,” the study said.

A spokesman for the federal Farm Service Agency, which runs the Conservation Reserve Program, said most early exits are based on economic factors, especially high crop prices that give farmers an incentive to pull out.

Lately, however, low crop prices have dampened the appetite to leave, said the spokesman, Kent Politsch. This year, the program is in greater demand, and only a quarter of farmers trying to enroll will be able to do so, he said.

The tightness is based in part on budget cuts that have placed a cap of 24 million acres on total CRP acreage, the program’s advocates in conservation groups say.

Still, potential oil and gas production is a reality on many farms. In 2012, a total of 35 percent of active farmland was in counties overlaying shale, the ERS said. In 2014, about 6 percent of farmers and ranchers received lease and royalty payments for energy production, averaging $56,000, the agency said.

Whether oil and gas drilling reduces acreage in the conservation program isn’t entirely clear, said Ferd Hoefner, policy director for the National Sustainable Agriculture Coalition, which supports the CRP. To determine the roles of drilling and crops grown for energy would take a deeper analysis, he said.

In any event, Hoefner said, the acreage cap suggests that some land could come out of the CRP to make room for more sensitive land that should be protected as buffers between farms and waterways, for instance, or never be put back into production.