Monday, March 28, 2011

Energy Debate Begins To Heat Up With Same Old Arguments

Mar 24: Calls by President Obama in his March 11 press conference for the Department of Interior to report on the number of unused oil and gas leases on public lands, as well as proposals to end oil company subsidies; and recent Republican proposals for the Administration to stop getting in the way of more drilling have resurrected the "Use It Or Lose It" debate of a couple of years ago.
    On March 10, House Natural Resources Committee Ranking Member Ed Markey (D-MA) issued a statement on rising gas prices saying, "American oil production reached an 8-year high in 2010, and yet prices continue to climb. We need to finally enact clean energy solutions that will tell Gaddafi and the Saudis that we don't need their oil any more than we need their sand. Despite the Republican rhetoric, the oil and gas industry has more leases to drill for oil in the U.S. then they can even make use of.  Last year the Bureau of Land Management issued 4,090 drilling permits, but industry drilled only 1,480 new wells, or just a little over a third of what they own. And of the 79 million acres of public lands the oil companies hold under lease, they are only actually producing oil on 18.5 million acres, only under a quarter of what they hold."
    House Natural Resources Committee Chairman Doc Hastings (R-WA) released the following statement on Congressional Democrats and the White House's "use it or lose it" claims regarding energy leases. Rep. Hastings said, "In an attempt to shift blame for rising gasoline prices, President Obama and Congressional Democrats are desperately attempting to resurrect an old, discredited myth. But their story doesn't match reality. Federal regulations and laws, especially those imposed by the Obama Administration, are the greatest factors affecting the pace of developing leases. The Administration has imposed regulation after regulation, roadblock after roadblock, and now wants to turn around and say production is not moving fast enough. The Obama Administration can't have it both ways. The truth is that 'use it or lose it' is already law. The moment a lease is issued the clock starts ticking and rent is paid every year to taxpayers. Instead of recycling old myths, the Obama Administration should examine their own polices that block American energy production and cost American jobs."
    House Speaker John Boehner also indicated in a blog posting entitled Deja Vu: Dems Push 'Use It or Lose It' Hoax to Distract From Policies Driving Up Gas Prices, Costing U.S. Jobs saying, President Obama and Senate Democrats recently claimed American job creators are essentially 'sitting' on energy leases and doing nothing with them. The Speaker said, "We won't reduce our dependence on foreign oil if politicians in Washington remain dependent on hollow talking points like 'use it or lose it.'   Americans are looking for real solutions and a sustained commitment to expanding American energy production that will lower gas prices and create more jobs, which is what our American Energy Initiative is all about."
    Meanwhile, 48 Senate Democrats issued a release last week and letter to Senate Minority Leader Mitch McConnell (R-KY) calling on Republicans to abandon a proposal they say would make excessive speculation in the oil markets even worse. They said, "Republicans' reckless spending bill, H.R. 1, would reduce funding for the Commodity Futures Trading Commission (CFTC) by one-third, forcing layoffs to the watchdog agency that polices market manipulation that drives up oil prices. Experts say that with demand fairly stable and supply at an all-time high, speculation is a factor driving up gas prices. One expert said speculation may add as much as $1.50 a gallon to the price consumers pay at the pump for gasoline."
    The Senators said, "We find it equally troubling that your preferred budget would cut billions of dollars in investments in critical programs focused on developing new alternative fuels and clean energy technologies, undermining our competitiveness and increasing our trade deficit with oil producing nations. We urge you to reverse these policies that will only set our nation backward, and put America's independence from foreign oil even further out of reach. . ."
    In a blog posting by the Wilderness Society on March 22, they said, "With summer driving season just a few months off, the oil companies and their allies in Congress have begun to beat the drum about 'more drilling.' They say that it will lower the price at the pump, although that simply isn't so. In fact, the United States on an annual basis drills more oil and gas wells than any other country on earth. We're even producing more oil today than we were in any of the Bush years – but that production has had zero impact on reducing prices.  Why? Because the world oil price determines the price of our gasoline at the pump, and that is affected by issues unrelated to our production, such as protests in the oil-rich middle east and rising demand from China.

    While the oil companies loudly push for more drilling, there is something else they are happy to keep quiet. The oil companies are sitting on more than 29 million acres of onshore federal oil and gas leases that they are not even using – an area bigger than the state of Ohio, locked up by oil companies. And they are not only sitting on tens of millions of acres of federal leases they aren't using, they also aren't using  thousands of drilling permits that were issued to them last year by the Interior Department's Bureau of Land Management. . ."

    Erik Milito, upstream director for American Petroleum Institute (API) , called the "use-it-or-lose-it" argument "a convenient way to detract attention from policies that undermine the mission of supplying Americans with the energy they need." He said, ". . . we'd like to set record straight – again – regarding charges by administration officials and members of Congress that American oil and natural gas companies are sitting on oil leases granted by the government, stubbornly refusing to turn them into producing leases. . . So to set the record straight, we are making available to you two fact sheets – one for offshore and one for onshore – that explain exploration and production timelines. We believe they offer a thorough explanation of just what is involved, and how long it takes to turn a lease into a producing field – as much as 10 years. . . It is ridiculous for anyone to imply that these companies would be willing to spend billions of dollars to acquire leases, and then simply sit on them while their competitors around the world are busy producing oil and natural gas. . ."

    Access the statement from Rep. Markey (click here). Access the statement from Rep. Hastings (click here). Access the blog posting from Speaker Boehner (click here). Access the Republican's American Energy Initiative Facebook page (click here). Access a release from Senate Democrats (click here). Access the blog post from the Wilderness Society (click here). Access a release from API and link to the fact sheets and the complete statement (click here).
  • EPA's Radiation Monitoring Continues To Confirm No U.S. Concern
  • NRC OIG Finds Defects In Nuclear Reactor Components
  • USDA & DOI Release Wildland Fire Management Documents
  • NAS Report On Challenges Facing The Corps of Engineers
  • EPA Advisors To Review Report To Congress On Black Carbon
  • Stewart and Jasper Orchards v. Salazar