Nevada ranks third nationally for oil potential on federal lands, but industry remains skeptical
New federal study reveals 1.4 billion barrels could lie beneath Nevada’s public lands, though economic viability remains questionable
A new federal analysis has placed Nevada among the top three states for oil potential on public lands, but industry experts and environmental advocates alike question whether this designation will translate into actual drilling activity in the Silver State.
Massive reserves identified
The U.S. Geological Survey released findings this week showing that Nevada holds an estimated 1.4 billion barrels of “undiscovered” oil beneath its public lands, trailing only Alaska and New Mexico in potential reserves. The state also contains an estimated 1.2 billion cubic feet of natural gas, according to the comprehensive study.
“We think there’s resource potential there, and it just so happens there’s a lot of federal land,” said Chris Schenk, the lead author of the federal report.
These estimates represent “technically recoverable oil and gas resources” that could potentially be extracted using current technologies, though many of these reserves may not be economically viable to develop. The analysis marks the first time since 1998 that the federal government has conducted a comprehensive assessment of oil and gas potential across national parks, wilderness areas, and other public lands nationwide.
Technology advances drive new estimates
The dramatic increase in estimated resources reflects significant technological improvements in extraction methods over the past quarter-century. The 1998 federal analysis estimated about 7.8 billion barrels of oil and 201 trillion cubic feet of gas nationwide, while the current study suggests 29.4 billion barrels of oil and 391.6 trillion cubic feet of gas lie beneath all federal lands.
According to the report, this represents enough oil to meet the nation’s needs for four years and sufficient natural gas for a dozen years. The substantial revision upward demonstrates how advances in drilling technology, particularly hydraulic fracturing and horizontal drilling, have expanded the range of potentially recoverable resources.
Political context and timing
The analysis was prepared in response to directives from the Trump administration to “unleash” domestic energy supplies. In February, Interior Secretary Doug Burgum directed federal agencies to identify energy and critical minerals resources on public lands across the country.
“American Energy Dominance is more important than ever, and this report underscores the critical role science plays in informing our energy future,” Burgum said in a press release announcing the study.
The timing of the report coincides with Republican efforts in Congress to advance proposals that would allow the federal government to sell several million acres of public land in Nevada, Utah, and other Western states. These legislative efforts have generated significant controversy among conservation groups and outdoor recreation advocates.
Industry shows little interest despite potential
Despite the promising geological assessments, Nevada’s oil and gas lease sales have historically generated minimal industry interest. The disconnect between estimated potential and actual drilling activity highlights the complex economic realities facing energy development in the state.
This week’s Bureau of Land Management auction exemplifies the challenge. Five oil and gas parcels in Nevada totaling 6,800 acres were offered for lease, but none received a single bid. These same parcels also failed to attract any industry interest during similar auctions in 2023 and 2024.
“We recognize that interest in Nevada is lower than other states in the West where development is more economical, such as New Mexico and Wyoming. The scale of this auction, for instance, was small relative to others,” said Aaron Johnson, vice president of public and legislative affairs for the Western Energy Alliance trade group.
Economic challenges persist
When Nevada public lands do attract oil and gas leasing interest, they consistently underperform compared to other states. From 2015 to 2024, the average successful bid per acre in Nevada was just $4.10, a stark contrast to the $4,900 per acre average in New Mexico during the same period.
This dramatic pricing difference reflects industry skepticism about the economic viability of Nevada’s oil and gas resources, despite the federal government’s optimistic technical assessments.
Uncertainty acknowledged
Schenk, the study’s lead author, acknowledged significant uncertainty in the estimates, particularly since the resources remain undiscovered and untested.
“Whenever you’re exploring for resources, whether it’s minerals or oil and gas, there’s uncertainty before you drill,” Schenk explained. “There’s a lot of uncertainty, because it’s undiscovered.”
This uncertainty helps explain the gap between theoretical potential and actual industry investment in Nevada’s energy sector.
Environmental and recreation concerns
Critics of expanded oil and gas leasing argue that Nevada’s public lands would be better utilized for recreation, wildlife conservation, and renewable energy development. Russell Kuhlman, executive director of the Nevada Wildlife Federation, expressed skepticism about both the resource potential and the wisdom of continued leasing efforts.
“We’ve been leasing these low potential lands since the 1950s,” Kuhlman said. “We have yet to find anything that would get the oil and gas industry excited.”
Kuhlman highlighted concerns about how oil and gas leasing affects land management decisions. Over 90 percent of public lands managed by the Interior Department in Nevada are currently available for oil and gas leasing. Once leased, these lands are essentially locked into energy development considerations for the duration of the lease, which can extend 10, 20, or even 30 years.
“That’s really where the issue is, once land is identified as an oil and gas lease, it’s essentially put in that folder and forgotten about by the Bureau of Land Management,” Kuhlman explained.
Controversial proposals continue
Despite the lack of industry interest, the Trump administration has pushed to lease additional Nevada public lands, including 264,000 acres in Elko County’s Ruby Mountains. This area is particularly popular among hunters and outdoor recreation enthusiasts, making it a focal point for debates about competing land uses.
Environmental advocates argue that speculative leasing removes valuable recreational and conservation lands from other potential uses, including renewable energy development that might prove more economically viable in Nevada’s abundant sunshine.
Looking ahead
The disconnect between Nevada’s theoretical oil and gas potential and the industry’s actual interest presents a complex challenge for policymakers. While the federal study suggests significant resources may exist beneath Nevada’s public lands, decades of unsuccessful leasing attempts raise questions about whether development will ever prove economically feasible.
The ongoing debate reflects broader questions about how best to utilize Nevada’s vast public lands in an era of changing energy markets, growing environmental consciousness, and increasing recognition of the economic value of outdoor recreation and tourism.
For Nevada residents and visitors who value the state’s natural landscapes, the new federal estimates may represent more of a long-term concern than an immediate threat. The combination of industry skepticism, economic challenges, and environmental opposition suggests that major oil and gas development in Nevada remains unlikely in the near term, despite the federal government’s optimistic resource assessments.
Image Source: https://www.planetware.com/tourist-attractions/nevada-usnv.htm
Category: State News, Environment
Subcategory: Natural Resources
Date: 06/27/2025
