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U.S. Oil Production Increases In Spite of Team Obama’s Best Efforts

Free market to the Alinskyites: "I drink your milkshake!"

by
Duane Lester

Bio

March 24, 2012 - 11:03 pm

In the past three years the number of oil rigs in America quadrupled to 1,272. White House Press Secretary Jay Carney didn’t hesitate to boast, “Oil and gas production in the United States has risen every year since the president’s been in office. Oil production is now higher than it’s been in eight years.”

President Barack Obama pushes the same message: ”Now, we absolutely need safe, responsible oil production here in America. That’s why under my administration, America is producing more oil today than at any time in the last eight years.”

This is true. But it has little to do with anything done by Obama and his rabid anti-oil administration. In fact, we can give more credit to the Founding Fathers and President George W. Bush than the current president.

On a federal level, Obama went out of his way to limit oil production in America. The president revealed his agenda from the start, as shown by appointment of Ken Salazar as secretary of the interior. (In the summer of 2008, when Senator Mitch McConnell pushed a bill allowing drilling in the Outer Continental Shelf based on the price of gasoline, then-Senator Salazar said he would not approve of any new plan even if the price of gasoline were $10 a gallon.)

Not only did he object on the Senate floor, but after taking office, Salazar took action:

Interior Secretary Ken Salazar “canceled land leases for energy development on 77 parcels of land in Utah. Then he canceled a pending oil-shale lease sale based on his expert judgment that it ‘didn’t meet the smell test.’” Kerpen adds, “Overall there has been a steep drop-off in leasing on federal lands. … 2010 saw a 79 percent drop in leasing in Colorado, Montana, New Mexico, North Dakota, Utah, and Wyoming from 2005. Total onshore royalties dropped 33 percent in just two years.”

Salazar also imposed a six-month drilling moratorium on the Gulf of Mexico following BP’s Deepwater Horizon oil spill. The administration kept the ban in place, despite a judge overturning it. The Obama administration was later held in contempt of court.

Even though the ban was “lifted,” so few permits have been handed out that the term “permatorium” emerged to describe the administration’s attitude towards oil exploration in the Gulf.

As chairman of the House Committee on Natural Resourses, Doc Hastings noted this permatorium, as did Al Reese, CFO of ATP Oil & Gas:

Hastings cited data showing in the six months before the Macondo/Deepwater Horizon disaster, the Interior Department issued an average of 72 permits per month, compared to 52 per month over the past six months.

Al Reese, chief financial officer of ATP Oil & Gas, an independent that operates in the Gulf of Mexico, testified at the hearing that permit applications have become drastically more complicated since the spill, expanding from 30 or 40 pages to 3,600 pages for ATP’s most recent permit application. That increased complexity seems directly tied to the longer approval times, Reese said.

Christopher Prandoni notes, “Revenue from offshore lease sales dropped from $9.5 billion in 2008 to $36 million in 2011.”

Not to be left out, the EPA under Lisa Jackson withheld “critical air permits” from Shell Oil Company, forcing them to abandon their oil drilling plans in Alaska:

The closest village to where Shell proposed to drill is Kaktovik, Alaska. It is one of the most remote places in the United States. According to the latest census, the population is 245 and nearly all of the residents are Alaska natives. The village, which is 1 square mile, sits right along the shores of the Beaufort Sea, 70 miles away from the proposed off-shore drill site.

The EPA’s appeals board ruled that Shell had not taken into consideration emissions from an ice-breaking vessel when calculating overall greenhouse gas emissions from the project. Environmental groups were thrilled by the ruling.

The decision cost Shell five years and almost $4 billion. It’s estimated there are 27 billion barrels of oil in America’s piece of the Arctic Ocean.

And let’s not forget how Secretary of Energy Steven Chu looked forward to the time when gas prices in America compared with Europe. That would mean a gallon of gas would run somewhere between $7 to $9 a gallon. His choice for science adviser, John Holdren, has also discussed the need for higher gas prices to show “rising monetary costs for energy when its environmental and sociopolitical hazards are adequately internalized and insured against.”

In a recent conference call, Jack Gerard, president of the American Petroleum Institute, illustrated how far the Obama administration has gone to limit oil production on federal land:

Today, 85 percent of the outer-continental shelf has been placed off limits once again. When he took office, there were proposals on the table to open up opportunities in those areas. Today, in the Rocky Mountains, the leasing has gone down 70 percent since taking office. We now have 10 federal agencies, departments, looking at the technology of hydraulic fracturing, which has really opened up this vast game-changer both in natural gas and oil in the United States.

Overall, oil and gas production on federally controlled land is down by 40% since Obama took office.

So how is it possible that oil production can increase when the Obama administration is so overtly anti-oil?

Easy. As Gerard explains, there’s nothing they can really do to stop it:

While oil production is up, the increase relates almost entirely to investment and leasing decisions made before, sometimes long before, this administration came into office. The increase is also due to oil and gas development on private and state lands over which the administration has little or no control at all.

North Dakota is a great example of this. In 2002 (pdf), the state produced 30,462,404 barrels of oil on 3,514 wells. In 2011 (pdf), there were 6,664 wells. They produced 152,285,097 barrels of oil.

New technologies are also a reason for the increase in oil supply, as is the high price of oil, making it lucrative to drill for oil in places once cost-prohibitive.

So while it’s true oil production in America is up, this is clearly in spite of Team Obama’s best efforts. Because the Founding Fathers limited the authority the federal government has on private and state lands, hundreds of small oil companies — not “Big Oil,” as environmentalists want you to believe — are able to drill for oil on private and state land, unencumbered by the heavy hand of Obama’s anti-oil agenda.

It’s disingenuous, at best, for the president to take credit for the increase, considering the work he and his administration applied to limiting it. And it’s downright dishonest for him to take credit for work that began under his predecessor, considering how much blame he has put at President Bush’s feet for his own failed policies.

Duane Lester is a freelance writer and homeschool dad for his six children. He also blogs at All American Blogger.
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