Lost ecosystem service costs and impact fees: Modelling scenarios for oil and gas development on U.S. public land.

The U.S. Department of Interior's Bureau of Land Management regulates oil and gas development on 23 million acres of U.S. public land. The land disturbances associated with oil and gas development result in lost ecosystem service costs (LESC). LESC vary with the restorative characteristics of the land being developed, the duration of oil and gas production, the reclamation efforts that occur during production and the restoration occurring post-production. In order to understand the range and magnitude of LESC, we developed a model to quantify cumulative LESC totals for terrestrial ecosystems for 32 scenarios on a per acre basis. Total LESC calculated with a 0% discount rate range from $26,051 to $250,709 per acre depending on the years of energy production, interim reclamation rates and final restoration rates. LESC totals are lower when quantified at discount rates of 2, 4 and 10%. Internalizing LESC compensates public landowners and creates financial incentives for oil and gas companies (OGC) to reduce the initial disturbance footprint, invest in reclamation to reduce the footprint over time and to decrease the years of energy production in order to reduce the number of years between reclamation and final restoration. Charging impact fees for LESC would generate billions of dollars in revenue.