Administration Prefers Talking than Taking Action on Energy

Mar 16, 2012

We are missing an energy opportunity. While American oil and gas production in total is rising, an Energy Information Agency (EIA) report released earlier this week finds that it's going in the opposite direction on federal and Indian lands:

Total sales of all fossil fuels produced on Federal and Indian lands, which are measured in terms of British thermal units (Btu) to allow for aggregation across all fossil fuels, rose by about 1 percent between fiscal year FY 2009 and FY 2010 and dropped by about 6 percent between FY 2010 and FY 2011.

The report supports the Institute for Energy Research’s findings.

Yet on Monday, Interior Secretary Ken Salazar told reporters that oil and gas production couldn’t be better [emphasis mine]:

On federal lands and water, we have moved forward in the last three years with a 13-percent increase in oil and gas production. Just from the federal lands themselves, gas production in 2011 was one of the best years that we've had in the last decade.

EIA’s report says otherwise. They found 5.0 billion Btus of natural gas were produced for sale on federal and Indian lands in 2011. That’s down from 5.5 billion Btus in 2010 and 5.8 billion Btus in 2009. Both are way down from the 7.3 billion Btus produced in 2003. Offshore natural gas production took a big hit, decreasing 21% from 2010 to 2011.

Oddly, EIA got its data from the Department of Interior, so I don’t know how Secretary Salazar can say natural gas production is great.

The EIA report also found that 2011 oil production on federal and Indian lands fell nearly 14% from 2010 and is almost unchanged since the current administration took office in 2009. Blame a 16.8% decrease in offshore oil production for this.

These decreases in production on federal lands doesn’t bode well for improving America’s energy security. We know the potential for more energy is there. EIA reports that, as of 2009, there was 12,116 billion cubic feet of natural gas reserves and over 4 billion barrels of oil reserves offshore in the Gulf of Mexico.

The federal government has direct control over these lands. Rules on leases and permits determine if oil and gas rigs are worth being erected. Bad policy means America has one arm tied behind its back.

It’s not a stretch that pundits like Charles Krauthammer write that “the American people know something about this president and his disdain for oil.”

Later in the column, Krauthammer cuts through the administration’s energy illogic:

“The American people aren’t stupid,” said Obama on February 23, mocking “Drill, baby, drill.” The “only solution,” he averred in yet another major energy speech last week, is that “we start using less, that lowers the demand, prices come down.” Yet five paragraphs later he claimed that regardless of “how much oil we produce at home . . . that’s not going to set the price of gas worldwide.”

So: Decreasing U.S. demand will lower oil prices, but increasing U.S. supply will not? This is ridiculous. Either both do or neither does. Does Obama read his own speeches?

Yesterday, the President gave another energy speech where he made similar point as in his February 23 speech, and he again called for an “all-of-the-above” energy strategy.

The administration can keep on saying “all-of-the-above” until it's blue in the face. However, the decreases in oil and gas production on federal lands along with the rejection of the Keystone XL pipeline show that they prefer talk over action.

P.S. Ignore the straw men and the pooh-poohing of new energy jobs in Paul Krugman’s latest column. It’s easy for him to discount energy's benefits from the safe confines of the New York Times.

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