The Administration’s Flawed Five-Year Offshore Plan

Words matter. But actions matter more, and the Interior Department’s final five-year offshore oil and natural gas leasing plan shows that while the administration trumpets an all-of-the-above energy approach, it falls short of providing the bold leadership needed to fully deploy our country’s ample resources.

You can read Interior’s statement on the plan here. Basically, Secretary Ken Salazar says the strategy includes areas with the “highest-known resource potential.” Sounds good, but it took industry exploration for those areas to gain that designation. Only through exploration can we learn the resource potential of other areas. Loudly, misguidedly, the administration is saying “no” to that.

Its plan omits areas off both coasts and in the Eastern Gulf of Mexico that are believed to be rich in energy – but which will remain unexplored. There’s little incentive to spend millions of dollars to research and gather data in these areas because they are off-limits to exploratory drilling. API’s Erik Milito, director of upstream and industry operations:

“We must move past policies that undermine the mission of supplying Americans with the energy they need. While vitally important, the Western and Central Gulf of Mexico areas included in this proposed offshore program are not ‘new’ areas. … Today’s proposal will not allow us to realize the full benefits from safe and responsible development of America’s oil and natural gas resources, continuing a pattern of delay and unnecessary restraint.”

Milito said Interior’s plan, announced with the Bureau of Ocean Energy Management, actually pushes back a scheduled 2015 lease sale for the Beaufort Sea off Alaska – where leasing already has occurred. It makes more areas off limits than it makes available. Milito:

“A sensible long-term strategy would embrace and promote expanded oil and natural gas exploration and development to create new jobs and secure critical energy supplies for future generations. … Exploring and developing new areas that offer oil and natural gas gives the United States the golden opportunity to create an additional one million new jobs and billions in new revenue to our government in just seven years. We cannot reach these goals by constricting exploration and obstructing the safe and responsible development of American energy resources.”

While oil production has increased in private and state lands, this administration has consistently deterred activity on federal lands, where oil production has actually decreased. Instead of forward-looking energy leadership that would create jobs, generate tax revenue for governments and make America’s future more secure, the administration offers posturing and talk. Instead of acting to promote greater domestic oil and natural gas production it is restricting opportunity and building in delay – neither of which will prepare the United States for its energy future.

View the original article here

Administration’s Energy Proposals: Less Than Meets the Eye

With a nod to H.L. Mencken, who made art out of presidential punditry nearly a century ago, the current president’s election-year energy campaign is rife with “balder and dash.” Consider two recent administration pronouncements – to allow offshore seismic testing and to expedite permitting for drilling on federal lands – each of which amount to quite a bit less than meets the eye.

Let’s look at the second one first. In North Dakota to see an energy boom in progress, Interior Secretary Ken Salazar pledged a new effort to speed up federal onshore permitting:

“…Salazar touted new automated tracking systems for managing lease sales and monitoring applications to drill wells on public lands that could pare processing time down to 60 days from nearly 300 now.”

Certainly, reducing the time it takes to process a federal permit application from nearly a year to two months is a positive step. Just as certain, it helps the administration sidestep the question of why operators currently have to wait up to a year to get a permit. Or maybe it doesn’t.

A study of Bureau of Land Management records showed there has been a slowdown in new leases, permits and wells drilled on BLM lands as a result of federal land energy policy. Declines in those categories were nearly twice as great on federal lands, compared to non-federal lands in western states. So, while the administration might be credited with moving to fix a problem, it’s a problem the administration has fostered. And more needs to be done. API Upstream Director Erik Milito:

“Today’s announcement sounds promising, but we would suggest additional reforms are needed. We support any system that will ensure efficiency and a clear, consistent application process. Most important, the administration needs to streamline the multi-year timeframe for environmental reviews and open additional areas for responsible energy development.”

Then there’s this: The U.S. Chamber’s Sean Hackbarth notes a flip-flop in the administration’s new zeal for expediting onshore permits:

“Improving the permitting process is never a bad thing. … However, what the department is touting is not a new innovation. The program they dug out is the same one they’ve been trying to eliminate the last three years.”

Hackbarth then links to the administration’s past four budget requests, each of which asked for repeal of the program it now touts:

“The Interior Department is taking credit for a program they have consistently tried to shut down, similar to taking credit for increased oil production that resulted not from its own policies, but, rather, from those implemented by previous administrations.”

Balder. Now the dash.

Last week the administration said it would allow seismic testing for oil and natural gas along parts of the East Coast, suggesting it supports more offshore development. Yet, the White House has banned lease sales in the Atlantic for at least the next five years – meaning seismic research there has no ultimate purpose. Milito:

“This is political rhetoric to make it appear the administration is doing something on gas prices, but in reality it is little more than an empty gesture. The administration’s announcement does not put us on track to produce more of our own energy, and it does not make up for three years of failed energy policy. It continues the pattern of delaying U.S. oil and gas development and supplies until well into the future.”

Bottom line: Beware of election-year flourishes and fan dances. This administration has a nearly four-year record of actions amounting to an off-oil policy – one that’s terribly inconvenient as Americans grapple with higher fuel costs. Hence, the need to look busy on energy – summoning another Mencken aphorism: “flap and doodle.”

View the original article here

Administration’s Energy Proposals: Less Than Meets the Eye

With a nod to H.L. Mencken, who made art out of presidential punditry nearly a century ago, the current president’s election-year energy campaign is rife with “balder and dash.” Consider two recent administration pronouncements – to allow offshore seismic testing and to expedite permitting for drilling on federal lands – each of which amount to quite a bit less than meets the eye.

Let’s look at the second one first. In North Dakota to see an energy boom in progress, Interior Secretary Ken Salazar pledged a new effort to speed up federal onshore permitting:

“…Salazar touted new automated tracking systems for managing lease sales and monitoring applications to drill wells on public lands that could pare processing time down to 60 days from nearly 300 now.”

Certainly, reducing the time it takes to process a federal permit application from nearly a year to two months is a positive step. Just as certain, it helps the administration sidestep the question of why operators currently have to wait up to a year to get a permit. Or maybe it doesn’t.

A study of Bureau of Land Management records showed there has been a slowdown in new leases, permits and wells drilled on BLM lands as a result of federal land energy policy. Declines in those categories were nearly twice as great on federal lands, compared to non-federal lands in western states. So, while the administration might be credited with moving to fix a problem, it’s a problem the administration has fostered. And more needs to be done. API Upstream Director Erik Milito:

“Today’s announcement sounds promising, but we would suggest additional reforms are needed. We support any system that will ensure efficiency and a clear, consistent application process. Most important, the administration needs to streamline the multi-year timeframe for environmental reviews and open additional areas for responsible energy development.”

Then there’s this: The U.S. Chamber’s Sean Hackbarth notes a flip-flop in the administration’s new zeal for expediting onshore permits:

“Improving the permitting process is never a bad thing. … However, what the department is touting is not a new innovation. The program they dug out is the same one they’ve been trying to eliminate the last three years.”

Hackbarth then links to the administration’s past four budget requests, each of which asked for repeal of the program it now touts:

“The Interior Department is taking credit for a program they have consistently tried to shut down, similar to taking credit for increased oil production that resulted not from its own policies, but, rather, from those implemented by previous administrations.”

Balder. Now the dash.

Last week the administration said it would allow seismic testing for oil and natural gas along parts of the East Coast, suggesting it supports more offshore development. Yet, the White House has banned lease sales in the Atlantic for at least the next five years – meaning seismic research there has no ultimate purpose. Milito:

“This is political rhetoric to make it appear the administration is doing something on gas prices, but in reality it is little more than an empty gesture. The administration’s announcement does not put us on track to produce more of our own energy, and it does not make up for three years of failed energy policy. It continues the pattern of delaying U.S. oil and gas development and supplies until well into the future.”

Bottom line: Beware of election-year flourishes and fan dances. This administration has a nearly four-year record of actions amounting to an off-oil policy – one that’s terribly inconvenient as Americans grapple with higher fuel costs. Hence, the need to look busy on energy – summoning another Mencken aphorism: “flap and doodle.”

View the original article here

Fact Checking the Administration’s Fact Checker

White House Communications Director Dan Pfeiffer put up a blog post last week, fact-checking his boss’ all-of-the-above energy strategy – perhaps because others have found the president’s energy assertions are more myth than fact, that he’s really offering an almost-none-of-the-above approach. Let’s review the White House’s defense.

Pfeiffer:

“The fact is, oil is bought and sold in a world market. And just like last year, the biggest thing that’s causing the price of oil to rise right now is instability in the Middle East.”

This important acknowledgement – echoed by Federal Reserve Chairman Ben Bernanke – accurately depicts the reality that crude oil is a global commodity whose pricing is affected by global events. Keep that in mind as we continue.

Pfeiffer:

“The truth is that there is no silver bullet to address rising gas prices in the short term, but there are steps we can take to ensure the American people don’t fall victim to skyrocketing gas prices over the long term.”

History suggests that just as global crude markets are affected by unrest and uncertainty that could restrict supply, they also can be affected by developments that expand supply. That’s what happened in the summer of 2008:

So, yes, supply matters – even the prospect of increased supply can have impact. So then the question is: What can the United States do to have more effect over crude oil supply, which, as nearly everyone agrees, is key to what happens at the pump?

We could approve the Keystone XL pipeline, which would bring upwards of 800,000 barrels of oil per day from Canada. We could endorse a federal offshore drilling plan that actually includes new areas for development, to increase domestic supply. We could open access on federal lands that currently are off limits. Studies indicate a tiny piece of the vast Arctic National Wildlife Refuge (ANWR), for example, could deliver 1 million barrels or more per day.

Unfortunately, the administration has said no the Keystone XL, no to a more robust offshore drilling plan and no to fully developing our onshore resources in ANWR, the Rockies and other areas. While the administration says it’s for greater domestic oil and natural gas production, it’s actually doing little to foster that and in a number of cases is blocking it.

Pfeiffer:

“Since 2008, U.S. oil and natural gas production has increased each year, while imports of foreign oil have decreased. In 2011, U.S. crude oil production reached its highest level in 8 years, increasing by an estimated 110,000 barrels per day over 2010 levels to 5.59 million barrels per day. U.S. natural gas production grew in 2011 – the largest year-over-year volumetric increase in history – and easily eclipsed the previous all-time production record set in 1973. Even if you fail to give the Obama Administration the credit it deserves in helping to expand this production, any notion that production has been blocked or slowed, doesn’t square with the facts.”

Actually, the notion that the administration has blocked or slowed oil and natural gas domestic production is well-supported by fact:

There has been a “systematic decline” of energy production on federal lands in the West in the past two years, according to a study by EIS Solutions released in January. According to Bureau of Land Management data, the number of new federal oil and gas leases is down 44 percent, while the number of new drilling permits and the number of new wells drilled both are down 39 percent.According to the Energy Information Administration, federal production in the Gulf of Mexico is estimated to be down 21 percent from 2010 – falling from 1.55 million barrels per day to 1.32 mb/d last year to an estimated 1.23 mb/d this year.Ten federal agencies currently are looking at more regulation of hydraulic fracturing, threatening the catalyst to the current natural gas revolution.

So, another question: If overall domestic production has increased while production on western federal lands and in the Gulf has decreased, what does that mean? It means the increases are coming from areas not under federal control – that domestic output is increasing despite the administration’s policies, not because of them.

Pfeiffer:

“We believe an all-of-the-above approach doesn’t need to come at-any-cost. That is why just as we make available more than 75 percent of our potential offshore oil and gas resources, the Obama Administration continues to study the feasibility of exploration, development, and production in other areas.”

Here we have some statistical flim-flammery. While the administration has made available for development 75 percent of federal offshore resources that meet the government’s definition of undiscovered but technically recoverable resources, these areas only account for 13 percent of the United States’ total offshore acreage. That’s how a 75 turns into an “F” on development.

Pfeiffer:

“As you can see, the claims and the facts just don’t add up.”

The White House’s problem is the facts do add up. We’re looking at a 21 percent decline in Gulf production and a trajectory on federal lands that’s heading down. It’s an administration that says one thing on energy and does something else – sending mixed messages to Americans and global energy markets.

View the original article here

Fact Checking the Administration’s Fact Checker

White House Communications Director Dan Pfeiffer put up a blog post last week, fact-checking his boss’ all-of-the-above energy strategy – perhaps because others have found the president’s energy assertions are more myth than fact, that he’s really offering an almost-none-of-the-above approach. Let’s review the White House’s defense.

Pfeiffer:

“The fact is, oil is bought and sold in a world market. And just like last year, the biggest thing that’s causing the price of oil to rise right now is instability in the Middle East.”

This important acknowledgement – echoed by Federal Reserve Chairman Ben Bernanke – accurately depicts the reality that crude oil is a global commodity whose pricing is affected by global events. Keep that in mind as we continue.

Pfeiffer:

“The truth is that there is no silver bullet to address rising gas prices in the short term, but there are steps we can take to ensure the American people don’t fall victim to skyrocketing gas prices over the long term.”

History suggests that just as global crude markets are affected by unrest and uncertainty that could restrict supply, they also can be affected by developments that expand supply. That’s what happened in the summer of 2008:

So, yes, supply matters – even the prospect of increased supply can have impact. So then the question is: What can the United States do to have more effect over crude oil supply, which, as nearly everyone agrees, is key to what happens at the pump?

We could approve the Keystone XL pipeline, which would bring upwards of 800,000 barrels of oil per day from Canada. We could endorse a federal offshore drilling plan that actually includes new areas for development, to increase domestic supply. We could open access on federal lands that currently are off limits. Studies indicate a tiny piece of the vast Arctic National Wildlife Refuge (ANWR), for example, could deliver 1 million barrels or more per day.

Unfortunately, the administration has said no the Keystone XL, no to a more robust offshore drilling plan and no to fully developing our onshore resources in ANWR, the Rockies and other areas. While the administration says it’s for greater domestic oil and natural gas production, it’s actually doing little to foster that and in a number of cases is blocking it.

Pfeiffer:

“Since 2008, U.S. oil and natural gas production has increased each year, while imports of foreign oil have decreased. In 2011, U.S. crude oil production reached its highest level in 8 years, increasing by an estimated 110,000 barrels per day over 2010 levels to 5.59 million barrels per day. U.S. natural gas production grew in 2011 – the largest year-over-year volumetric increase in history – and easily eclipsed the previous all-time production record set in 1973. Even if you fail to give the Obama Administration the credit it deserves in helping to expand this production, any notion that production has been blocked or slowed, doesn’t square with the facts.”

Actually, the notion that the administration has blocked or slowed oil and natural gas domestic production is well-supported by fact:

There has been a “systematic decline” of energy production on federal lands in the West in the past two years, according to a study by EIS Solutions released in January. According to Bureau of Land Management data, the number of new federal oil and gas leases is down 44 percent, while the number of new drilling permits and the number of new wells drilled both are down 39 percent.According to the Energy Information Administration, federal production in the Gulf of Mexico is estimated to be down 21 percent from 2010 – falling from 1.55 million barrels per day to 1.32 mb/d last year to an estimated 1.23 mb/d this year.Ten federal agencies currently are looking at more regulation of hydraulic fracturing, threatening the catalyst to the current natural gas revolution.

So, another question: If overall domestic production has increased while production on western federal lands and in the Gulf has decreased, what does that mean? It means the increases are coming from areas not under federal control – that domestic output is increasing despite the administration’s policies, not because of them.

Pfeiffer:

“We believe an all-of-the-above approach doesn’t need to come at-any-cost. That is why just as we make available more than 75 percent of our potential offshore oil and gas resources, the Obama Administration continues to study the feasibility of exploration, development, and production in other areas.”

Here we have some statistical flim-flammery. While the administration has made available for development 75 percent of federal offshore resources that meet the government’s definition of undiscovered but technically recoverable resources, these areas only account for 13 percent of the United States’ total offshore acreage. That’s how a 75 turns into an “F” on development.

Pfeiffer:

“As you can see, the claims and the facts just don’t add up.”

The White House’s problem is the facts do add up. We’re looking at a 21 percent decline in Gulf production and a trajectory on federal lands that’s heading down. It’s an administration that says one thing on energy and does something else – sending mixed messages to Americans and global energy markets.

View the original article here

Fact Checking the Administration’s Fact Checker

White House Communications Director Dan Pfeiffer put up a blog post last week, fact-checking his boss’ all-of-the-above energy strategy – perhaps because others have found the president’s energy assertions are more myth than fact, that he’s really offering an almost-none-of-the-above approach. Let’s review the White House’s defense.

Pfeiffer:

“The fact is, oil is bought and sold in a world market. And just like last year, the biggest thing that’s causing the price of oil to rise right now is instability in the Middle East.”

This important acknowledgement – echoed by Federal Reserve Chairman Ben Bernanke – accurately depicts the reality that crude oil is a global commodity whose pricing is affected by global events. Keep that in mind as we continue.

Pfeiffer:

“The truth is that there is no silver bullet to address rising gas prices in the short term, but there are steps we can take to ensure the American people don’t fall victim to skyrocketing gas prices over the long term.”

History suggests that just as global crude markets are affected by unrest and uncertainty that could restrict supply, they also can be affected by developments that expand supply. That’s what happened in the summer of 2008:

So, yes, supply matters – even the prospect of increased supply can have impact. So then the question is: What can the United States do to have more effect over crude oil supply, which, as nearly everyone agrees, is key to what happens at the pump?

We could approve the Keystone XL pipeline, which would bring upwards of 800,000 barrels of oil per day from Canada. We could endorse a federal offshore drilling plan that actually includes new areas for development, to increase domestic supply. We could open access on federal lands that currently are off limits. Studies indicate a tiny piece of the vast Arctic National Wildlife Refuge (ANWR), for example, could deliver 1 million barrels or more per day.

Unfortunately, the administration has said no the Keystone XL, no to a more robust offshore drilling plan and no to fully developing our onshore resources in ANWR, the Rockies and other areas. While the administration says it’s for greater domestic oil and natural gas production, it’s actually doing little to foster that and in a number of cases is blocking it.

Pfeiffer:

“Since 2008, U.S. oil and natural gas production has increased each year, while imports of foreign oil have decreased. In 2011, U.S. crude oil production reached its highest level in 8 years, increasing by an estimated 110,000 barrels per day over 2010 levels to 5.59 million barrels per day. U.S. natural gas production grew in 2011 – the largest year-over-year volumetric increase in history – and easily eclipsed the previous all-time production record set in 1973. Even if you fail to give the Obama Administration the credit it deserves in helping to expand this production, any notion that production has been blocked or slowed, doesn’t square with the facts.”

Actually, the notion that the administration has blocked or slowed oil and natural gas domestic production is well-supported by fact:

There has been a “systematic decline” of energy production on federal lands in the West in the past two years, according to a study by EIS Solutions released in January. According to Bureau of Land Management data, the number of new federal oil and gas leases is down 44 percent, while the number of new drilling permits and the number of new wells drilled both are down 39 percent.According to the Energy Information Administration, federal production in the Gulf of Mexico is estimated to be down 21 percent from 2010 – falling from 1.55 million barrels per day to 1.32 mb/d last year to an estimated 1.23 mb/d this year.Ten federal agencies currently are looking at more regulation of hydraulic fracturing, threatening the catalyst to the current natural gas revolution.

So, another question: If overall domestic production has increased while production on western federal lands and in the Gulf has decreased, what does that mean? It means the increases are coming from areas not under federal control – that domestic output is increasing despite the administration’s policies, not because of them.

Pfeiffer:

“We believe an all-of-the-above approach doesn’t need to come at-any-cost. That is why just as we make available more than 75 percent of our potential offshore oil and gas resources, the Obama Administration continues to study the feasibility of exploration, development, and production in other areas.”

Here we have some statistical flim-flammery. While the administration has made available for development 75 percent of federal offshore resources that meet the government’s definition of undiscovered but technically recoverable resources, these areas only account for 13 percent of the United States’ total offshore acreage. That’s how a 75 turns into an “F” on development.

Pfeiffer:

“As you can see, the claims and the facts just don’t add up.”

The White House’s problem is the facts do add up. We’re looking at a 21 percent decline in Gulf production and a trajectory on federal lands that’s heading down. It’s an administration that says one thing on energy and does something else – sending mixed messages to Americans and global energy markets.

View the original article here