Western Energy Alliance brazenly flubs facts in new poll

Western Energy Alliance is hard at work spinning their new survey, which underscores the lengths to which they’ll go to increase the profit margins of the billion dollar oil and gas industry – even when that means putting water, public health, and local communities at risk.

WEA announced their new poll a month ago, but just released the results today. Was it because they needed all that time to figure out how to spin the poll?

Unfortunately for WEA, since they included so many factually incorrect statements in the poll, they won’t be able to use their results for much other than spin sessions. And, this isn’t the first time that WEA and their vice president for government affairs, Kathleen Sgamma, haven’t been able to keep their facts straight or master basic grade school multiplication skills.

While WEA’s poll also spins that the public supports hydraulic fracturing, there are already 351 towns and cities across the U.S. that have taken action to limit or ban fracking within their borders.

Here’s a look at some of the most glaring factual errors from the WEA poll materials:

WEA claim #1: “The government has prevented oil and natural gas development on federal lands, even though less than one-tenth of 1% of public lands is being used for oil and natural gas today.”

Facts: Both the federal government and industry has aggressively pushed to increase drilling activity on public lands. According to the U.S. Energy Information Administration, production of crude oil is at its highest level since 2002, and data from the Department of Interior show that oil production on federal lands was up 7 percent in 2012. This is despite the fact that nearly 21 million of the almost 39 million acres of public lands leased to the oil and gas industry sit idle.

WEA claim #2: The oil and gas industry do such a great job cleaning up lands where they’ve drilled that they’re considered wilderness, or pristine areas, post-clean up.

Drilling infrastructure in Wyoming. Source: EcoFlight

Facts: Reports on reclamation efforts in Utah, Wyoming and New York have shown that:

restoration attempts often fail and create long-lasting problems that threaten western wildlife;companies fail to provide adequately funded bonding, leaving behind billions in clean-up costs for states such as Wyoming; andthe oil and gas industry often fails to plug depleted wells – industry neglected to plug 89 percent of wells in New York.

In fact, a recent Government Accountability Office (GAO) analysis pointed to a highly inadequate system for funding clean-up of oil and gas wells on public lands.

WEA claim #3: “Increased energy production of American energy from public lands will lead to lower energy costs for consumers.”

Fact: Unfortunately for WEA’s spin team, experts agree – from BusinessWeek to the Energy Security Leadership Council – that the global market actually drives consumer oil prices, not U.S. production levels, so increased U.S. drilling doesn’t lead to lower energy prices.

Polls are only worth the paper they’re printed on if they fail to relay facts in a straightforward and honest way. Clearly, Western Energy Alliance and the companies they represent such as Anadarko and Noble care more about spin than they do about facts.

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Hansen’s Oil Sands Facts are Lost in Space

To hear it from environmental activist James Hansen, development of the oil sands in Canada will usher in the apocalypse, “game over for the climate,” as he wrote in a recent New York Times op-ed.

It’s a frightening thought, but unfortunately for Mr. Hansen, it’s not grounded in realistic assumptions.

Of course, this isn’t the first time Hansen has proclaimed “game over” if the oil sands are developed. In June 2011, Hansen penned a letter calling the oil sands a “monster,” the development of which would mean “game over” in the global effort to control carbon emissions. Hansen wrote that the oil sands contain “at least” 400 gigatons of carbon, which would equate to adding about 200 parts per million (ppm) to the atmosphere.

But in his recent op-ed, Hansen now states that the oil sands contain 240 gigatons of carbon. What changed?

The reasons are likely numerous, but a significant one came from Andrew Leach, who pointed out last summer (right after Hansen published his letter) that to get the carbon content Hansen claimed, you’d have to burn 2.4 trillion barrels of oil – or about 40 percent more oil than the total in-place resources found in the Canadian oil sands. It’s worth noting that the new figure Hansen uses – 240 gigatons – is 40 percent lower than his original claim. Leach also noted that it would take until the year 3316 to get the amount of oil out of the ground that Hansen is referencing.

Moreover, total oil in place does not indicate how much oil will be produced. Although technologies are constantly evolving to allow for greater recovery rates, the oil sands in Canada are estimated to hold about 170 billion barrels of oil in proven reserves, with as-yet undiscovered, technically recoverable resources being pegged at about 320 billion barrels, or about 86 percent less oil than what Hansen suggested in his original “game over” model.

What’s even worse about Hansen’s doomsday scenario is the “solution” he offers to rectify it: a new tax on carbon that could raise energy costs for consumers, who might not be able to purchase as much, decreasing demand. Hansen specifically references “the reduction in oil use resulting from the carbon price” as something that would, somehow, “stimulate innovation, jobs and economic growth, avoid enlarging government or having it pick winners and losers.”

How a new tax to be collected and distributed by the federal government will “avoid enlarging government” is anyone’s guess.

Finally, Hansen assumes that efficiencies have completely flatlined and will not improve – a hypothesis that doesn’t even pass the laugh test, much less empirical evidence. As just one example, congressionally mandated increases in fuel economy through 2025 will substantially reduce U.S. gasoline consumption. This, combined with increased oil supplies from Canada through the Keystone XL pipeline, would allow the U.S. to reduce oil imports from unfriendly countries like Venezuela – with the added advantage of the environmental benefits pipelines offer over other forms of transportation.

In short, Hansen’s “game over” scenario suffers from significant flaws in its assumptions, and the fix he proposes for his wild projection could actually create additional and unnecessary economic pain to American consumers.

The truth is that development of the oil sands – and the approval of the Keystone XL – will create tens of thousands of new jobs, significantly grow the economy and further enhance America’s energy security. And as U.S. Secretary of Energy Steven Chu has said, companies developing the oil sands are “making great strides in improving the environmental impact of the extraction of this oil and will continue to do so.”

Not so frightening now, is it?

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Facts, Not Excuses, Should Guide Decision on Re-Routed Keystone XL

It’s good to hear that TransCanada has submitted its new application for a presidential permit to build the Keystone XL pipeline. The application comes just weeks after the Nebraska legislature approved a bill to move forward with a new route in that state that avoids the sensitive Sand Hills region.

Even better news would be that the White House, after a long list of excuses that prevented timely approval of the project, is now ready to give the go-ahead – dropping a position that a Washington Post editorial said has “little rational basis.” That analysis is reinforced not only by public opinion, but also by economic and environmental data. For example:

Americans support construction of the Keystone XL by nearly a 2-1 margin, according to a recent Gallup poll.A bipartisan, veto-proof majority in the U.S. House of Representatives recently voted to support construction of Keystone XL, the fifth time the House has backed the project. In March, 56 U.S. senators voted in favor of building the Keystone XL.More than 80 percent of Americans believe U.S. policies should support the use of oil from Canada’s oil sands.According to the U.S. Pipeline and Hazardous Materials Safety Administration, pipelines are the “safest and most-effective” way of transporting oil and natural gas. In addition, a comprehensive environmental assessment from the federal government concluded that the Keystone XL would have only “limited” impacts and be the safest pipeline ever constructed under current regulations.With unemployment still above 8 percent nationwide, the Keystone XL not only would create thousands of new jobs but also would help preserve jobs at U.S. refineries and production sites.While there are many factors that affect the price of gasoline families use to fill up their tanks, approving the Keystone XL would send a strong market signal that more supply is on the way, helping put downward pressure on the global price of crude oil, which accounts for 76 percent of the price paid at the pump. The pipeline could bring upwards of 830,000 barrels per day of Canadian oil from Alberta to U.S. refineries, with approximately 25 percent of the pipeline’s capacity used to deliver oil from North Dakota and Montana.

The application also comes as a new poll finds that Canadians support increased oil sands development by about a 2-1 margin. Among all provinces, the lowest level of support was in Quebec, where a clear majority – 55 percent – still supports development.

API Executive Vice President Marty Durbin said it’s time to approve the Keystone XL:

“The earth hasn’t moved, the geology hasn’t changed, the information remains the same, so there should be no reason for a re-review of KXL. The pipeline will be state of the art and has already been thoroughly examined for more than three years, including three environmental assessments. … The president should take this opportunity to approve the entire pipeline to demonstrate he is serious about an ‘all the above’ energy strategy. There is no legitimate reason for delaying this project any further. … We urge President Obama to support this project that will make us more energy secure.”

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Oil Sands, Refined Products, and Exports: Just the Facts

U.S. Crude Oil Stays in the United States. According to the U.S. Energy Information Administration (EIA), in 2011, 99.7 percent of the crude oil produced in (or imported into) the United States was also consumed here, which means less than one-half of one percent (0.3 percent) was exported. Simply put, the United States does not export crude oil in any significant way.

The United States Exports Very Little Gasoline. Of the total on-road fuel produced in the United States in 2011, 92 percent of it was refined and consumed in the United States; only eight percent was exported. And of all the petroleum products that the United States does export, finished motor gasoline only represents about 21 percent. The majority of exported products (79 percent) are things like propane, ethanol, heating oil, and kerosene, which are produced in amounts in excess of U.S. demand.

   

What the United States Is Exporting Is Going to Mexico, which Benefits the United States. Of the gasoline that is exported, 60 percent goes to Mexico, from which the United States imports crude oil. This exchange benefits the United States: Gasoline is worth more than oil, so we’re purchasing a good and then selling back a more expensive good, not only creating a net value-add for the U.S. economy, but also creating manufacturing jobs and generating tax revenue.

The Oil Sands Would Replace Declining Supplies. According to the EIA, increased imports from the Canadian oil sands would likely replace heavy crude imports from Mexico, Venezuela, and Ecuador. Heavy oil imports from those three countries are about 900,000 barrels per day less than what they were in 2005, and they are projected to decline by an additional 540,000 barrels per day by 2020 and 845,000 barrels per day by 2035.

No Reason to Export Heavy Oil. The U.S. Department of Energy (DOE), in reviewing the Keystone XL project, concluded that “there would be no economic incentive to ship Canadian oil sands [crude] to Asia via Port Arthur” without a surplus of heavy oil. And since heavy oil imports are declining (DOE noted that heavy oil imports “are likely to decrease by a significant amount within the next five years”), oil sands crude from Canada would be filling a gap, not creating excess supply.

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Facts Support Fracking

In December 2010 Jane Van Ryan put up a post urging us to not rush to judgment on fracking. The case in question was in Texas where the EPA issued an emergency order:

"…that 'tried, convicted and sentenced' a natural gas company accused of polluting two water wells in Texas with methane gas. Weeks later, evidence shows that the company Range Resources was not responsible for the methane leaks. As the article authored by Alex Mills of the Texas Alliance of Energy Producers explains, the water wells were drilled in 2005 and Range Resources drilled two natural gas wells nearby in 2009. In August this year, the water wells' owners complained to the state agency that oversees oil and natural gas drilling that their wells had become contaminated. They blamed Range Resources.  Tests showed, however, that the methane did not come from Range's natural gas wells. In a meeting with EPA officials, Range Resources learned that an EPA engineer acknowledged that the hydraulic fracturing process, also known as fracking, in the deep natural gas wells was not the cause."

The evidence was clear that fracking did not cause the problem, so clear in fact, that 15 months later the EPA has finally withdrawn its “imminent and substantial endangerment order.” Energy In Depth notes:

"But while today’s filing finally puts an end to a case whose scientific foundation had cracked, then crumbled, then outright disintegrated many months before, it reignites the conversation about what’s become a troubling trend for EPA: Every time EPA intervenes in a high-profile case – generating scads of maligning headlines about shale and hydraulic fracturing in the process – the agency ends up getting it wrong."

More from the Wall Street Journal:

"In addition to dropping the case in Texas, the EPA has agreed to substantial retesting of water in Wyoming after its methods were questioned. And in Pennsylvania, it has angered state officials by conducting its own analysis of well water—only to confirm the state’s finding that water once tainted by gas was safe. Taken together, some experts say, these misfires could hurt the agency’s credibility…"

The industry is committed to producing energy from shale safely and responsibly, and in addition to strong industry standards, there are appropriate federal and state regulations in place for oil and natural gas operations, including those that employ hydraulic fracturing. And many state rules have recently been strengthened. For this to work, however, we need government to be committed to responsible regulation and enforcement. The EPA’s troubling pattern of seeking maximum publicity for hydraulic fracturing cases before the facts are in serves neither the public nor the environment. This is not a three strikes and you are out situation, but it should be a wake-up for the EPA that changes are needed in their approach.

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