President asserts oil is gusing while he stands on the hose
By Sen. David Vitter
Monday, April 2, 2012
President Obama and his interior secretary, Kenneth L. Salazar, have been amazingly creative in trying to convince us that they’ve actually promoted a robust domestic energy agenda and increased oil production. But it only takes a little research to conclude that Mr. Salazar and the Obama administration have been flat-out wrong with some of their claims and incredibly misleading with others.
Obama claim: Domestic oil production is up under his administration.
Last month, the nonpartisan Congressional Research Service issued a report revealing that 96 percent of the increase in domestic oil production since 2007 has occurred on nonfederal lands, production the federal government has little or no role in.
But the federal government owns and completely controls almost 2.5 billion acres of land and offshore zones, including our Outer Continental Shelf, an area that is actually larger than the entire land mass of the United States. What’s been happening with oil production there? The government’s own director of the Bureau of Land Management, Bob Abbey, testified to Congress on this very point recently: Oil production is actually down 14 percent on federal property and down 17 percent offshore from a year ago. The recent Congressional Research Service report confirms this: In 2011, production on federal property declined by an average of 275,000 barrels per day.
So when Mr. Obama says oil production is up, he’s right - and utterly misleading. It’s up because of private-sector activity on nonfederal land that Mr. Obama and the federal government have very little say over (though they’re trying to change that in significant ways). Almost everywhere they play a major role, production is down.
Obama claim: Oil production on federal land and offshore is up since the president took office.
This is another very interesting Obama manipulation of the data and again, utterly misleading.
Oil production on federal property did increase in 2009 and 2010. This was a result of leasing and permitting decisions made by the President George W. Bush’s administration, not Mr. Obama’s. In contrast, the fall-off from the leasing and permitting actions of the Obama administration is very significant, as noted above in the 2011 figures. It’s projected to get even worse in 2012 and beyond.
That’s because Mr. Obama’s five-year lease plan for offshore is half of what the previous plan was - moving us in the wrong direction. And permitting in the Gulf of Mexico is still more than 40 percent below levels prior to the BP oil spill.
Obama claim: “America only has 2 percent of the world’s oil.” This is the real grandaddy of all Obama energy statistics.
In fact, nothing could be further from the truth. We are the single most energy-rich country in the world, bar none.
Mr. Obama bases this statement on our nation’s “proven reserves.” But the president’s own Energy Information Administration has stated that proven reserves is “not an appropriate measure for judging total resource availability in the long-term.” It’s a very narrowly defined universe because more than 90 percent of our U.S. energy resources have been placed off-limits by the Obama administration.
For example, according to the Institute for Energy Research, the “[U.S. Geological Survey] estimates that unconventional U.S. oil shale resources hold 2.6 trillion barrels of oil, with about 1 trillion barrels that are considered recoverable under current economic and technological conditions. These 1 trillion barrels are nearly 4 times the amount of oil resources as Saudi Arabia’s proven oil reserves.”
None of this is counted in the Obama statistics.
Now you know “the rest of the story,” as radio broadcaster Paul Harvey used to say. It explains the difference between what we know in our gut and what we hear out of Mr. Obama’s Washington. And as usual, it confirms that we should trust our gut.
As bad as the Obama energy reality is, the good news is that America can turn the tide rapidly and take control of our energy destiny. That’s because we are, as previously stated, the single most energy-rich country in the world, bar none. All we need to do is have a government that lets us produce it.
If the president and his administration spent less time crafting their labored image of promoting domestic energy production and spent more time actually opening up our vast federal resources, we’d be on our way to building energy independence, to helping lower the price at the pump, to creating millions of good-paying jobs - even on our way to increasing revenue and lowering deficit and debt, since new domestic production would produce enormous new federal revenue.
Sen. David Vitter is a Louisiana Republican.
More on President Obama’s Domestic Energy Policy Rhetoric vs. Reality
When it comes to energy policy, President Obama has made it increasingly difficult for energy producers to continue harvesting domestic oil and natural gas.
I can cite 10 examples of what the federal government is saying publicly about domestic energy production versus how current policies are negatively impacting energy producers and energy producing states like Louisiana.
- An Inspector General report revealed that the Department of the Interior inappropriately manipulated the 30-day report to justify the moratorium on offshore drilling – in violation of the Information Quality Act and contrary to sound science.
- The group of experts stated that Salazar had consulted them on a May 27 report on drilling safety, and then falsely implied that the scientists had agreed to a "blanket moratorium" that they actually opposed.
“Even if we tap every single resource available to us, we can't escape the fact we only control 2% of the world's oil but we consume over a quarter of the world's oil.” (President Obama, Press Conference, 3/11/11)
- According to a recent Congressional Research Service report, our combined recoverable oil, natural gas, and coal resources make up the largest in the world.
- The 2% figure cited by the president is a narrow estimate based on our PROVEN oil reserves. Proven reserves only include conventional oil in fields that have already been developed and determined to be economical to produce. This number does not even take into account the large oil shale reserves in the United States, well in excess of 2 trillion barrels of oil equivalent, of which the Department of Energy estimates there is 1.38 trillion barrels of recoverable shale oil. Production of these resources has been blocked by Secretary Salazar. http://www.fas.org/sgp/crs/misc/R40872.pdf
- According to CRS, the U.S. actually has approximately 134.5 billion barrels of recoverable oil.
- In 2007, the U.S. Energy Information Administration projected the total 2010 U.S. oil production on federal lands to be 850 million barrels. Today’s actual production on federal lands is 714 million barrels, a 16 percent decline from what was projected
- The EIA published new projections this year that show a decline in total U.S. crude oil production of 110,000 barrels per day in 2011 and 130,000 barrels per day in 2012. Finally, the White House does not explain that the vast majority of increased production is occurring on private lands, not public.
- The Western Energy Alliance did an analysis on what the “return on investment” in Department of Interior’s energy programs have produced under the current administration. That analysis showed that the ratio of revenue returned per dollar spent by the federal government has fallen from $46.07 to $40.12 for onshore, and an unbelievable falloff from $118.54 to $30.08 for offshore energy production.
“U.S. oil and natural gas production has increased, while imports of foreign oil have decreased.” (White House Fact Sheet, “Fact Sheet: Expanding Safe And Responsible Oil And Gas Production,”www.scribd.com, Accessed 3/14/11)
- According to data from the EIA, imports have decreased because demand has decreased due to a stagnant economy and high unemployment, not because of current Washington policies.
- Also, according to Quest Offshore Resources, Inc., as of September 2011, 21 floating rigs are operating in the Gulf of Mexico, of which only 18 are currently drilling wells.
- Before President Obama’s moratorium, 33 floating rigs were operating the Gulf of Mexico with 29 drilling wells at that time. This indicates about a 37 percent drop in both the number of rigs operating and drilling.
“From 2008 to 2010, oil production from the Outer Continental Shelf increased more than a third – from 446 million barrels in 2008 to more than 600 million barrels of estimated production in 2010.” (Heather Zichal, “Expanding Safe and Responsible Energy Production,”The White House Blog, 3/8/11)
- Once again, the Obama administration is attempting to take credit for actions of previous administrations. In actuality it takes years of exploration and permitting before a lease sees production. The increased production in the Gulf was primarily due to leases issued in 1996-2000 under the Deepwater Royalty Relief Act, during the Clinton and Bush administrations.
- The Obama administration’s actions, such as imposing a de facto moratorium, are causing energy production to decline in the Gulf of Mexico. EIA shows a 300,000 barrel per day decline in current Gulf production and a projected Gulf decline of over 150 million barrels of oil in 2012.
- The Interior Department has refused to provide the legal analysis supporting their expansion of legal authority to include contractors, despite multiple requests from the U.S. House and Senate. The Interior Department has even refused to respond my multiple letters and outstanding Freedom of Information Act (FOIA) request.
- The simple truth is that the vast majority of any increase in energy production since 2008 is occurring on public lands leased during the Bush administration and private lands – not on public lands leased under the current administration as many in Washington try to spin Louisianians to believe. According to the Energy Information Administration’s 2010 Annual Energy Review, from 2009 to 2010 coal production on federal lands has declined by 2.9 percent, oil production’s decline was at 29 percent, and natural gas production’s decline was even larger at 36 percent. This is in sharp contrast to production occurring on non-federal lands. For example, since 2005 oil production in North Dakota, occurring primarily on private lands has been growing at a rate of 26 percent a year.
(Washington, D.C.) - U.S. Sens. David Vitter (R-La.), Jeff Sessions (R-Ala.) and John Cornyn (R-Texas) today presented new information for the investigation into a potential cover-up of documents that led to the drilling moratorium in the Gulf of Mexico following the BP oil spill. The focus of the investigation is Mary Kendall, acting Inspector General at the Department of Interior, who appears to have blocked a full investigation into manipulation of a National Academy of Engineers report by the White House and senior Interior officials.
(Washington, D.C.) - U.S. Sen. David Vitter made the following statement following the U.S. Department of Interior’s announcement of a western Gulf of Mexico lease sale. The sale they announced will be only the third lease sale since the 2010 drilling moratorium. The five-year lease sale plan that has been withdrawn by the Obama administration would have provided at least 10 lease sales over the same period.
(Washington, D.C.) - U.S. Sens. David Vitter (R-La.), Jeff Sessions (R-Ala.) and John Cornyn (R-Texas) announced that the federal Integrity Committee is meeting today to discuss an investigation into a potential cover up of documents that led to the drilling moratorium in the Gulf of Mexico following the BP oil spill. The senators requested this investigation on May 24, 2012.
(Washington, D.C.) - U.S. Sens. David Vitter (R-La.), Jeff Sessions (R-Ala.) and John Cornyn (R-Texas) are demanding answers to a potential cover up of documents that led to the drilling moratorium in the Gulf of Mexico following the BP oil spill. In a letter addressed to Kevin Perkins, the Chairman of the Integrity Committee of the Council of the Inspectors General on Integrity & Efficiency, the Senators ask for an investigation into the matter.
Excerpts: “Late last year, Iran issued a series of not-so veiled threats to the West, suggesting it could use its "oil weapon" to show displeasure over toughening sanctions by halting exports or disrupting the Strait of Hormuz.
“This weekend, the Group of Eight nations may offer a timely retort: We've got an oil weapon of our own, and we're not afraid to use it.
“Obama's focus on the SPR carries risks: Republicans will blast the White House for using a national security tool to buy votes; Saudi Arabia and other OPEC allies may cry foul for having their market-balancing role usurped; and some consumer nations, like Germany, have resisted suggestions of using stockpiles.
“Last year, the president released 30 million barrels of the reserve to manipulate oil prices and has yet to refill it. Releasing even more this year only lessens our buffer and protection when a true crisis hits," said Senator David Vitter, a Republican from Louisiana.”
(Washington, D.C.) - U.S. Sen. David Vitter today warned the administration of the security concerns of opening the Strategic Petroleum Reserve. News reports have indicated that Obama will ask other G8 leaders for a coordinated reserve release at their upcoming summit.
“The U.S. is the single most energy-rich country in the world. The problem is that we are also the only country in the world that puts more than 90% of its energy resources completely off-limits,” Vitter said. “Last year, the president released 30 million barrels of the reserve to manipulate oil prices and has yet to refill it. Releasing even more this year only lessens our buffer and protection when a true crisis hits.”
Excerpts: “The J.P. Morgan mistakes that resulted in a loss of $2 billion or more have awakened some senators to the fact that the Dodd-Frank financial-regulation legislation of 2010 did not prevent errors of judgment and investment losses. But the politicians have drawn the wrong conclusion. They claim that more regulation will protect the public. That's wrong for three reasons…
…Mr. Vitter proposed legislation that required all banks to hold more capital, and large banks to hold proportionally more capital per dollar of assets than smaller banks. Congress quickly dismissed his proposal….
…Mr. Vitter had it right; Dodd-Frank has it wrong. Congress should repeal Dodd-Frank and mandate higher capital requirements. Making bankers bear the risks they undertake is the best way to limit those risks.”
Excerpts: “TransCanada’s decision to reapply for a federal permit to build the Keystone XL pipeline across the U.S.-Canadian border offers President Obama something that rarely comes around - a second chance to do the right thing.
When the president rejected TransCanada’s original Keystone XL application - finding a project capable of delivering roughly 1 million barrels of oil a day to American refineries not in the national interest - he threw away a golden opportunity to create jobs and improve America’s energy security…
…The Keystone XL pipeline represents a chance to improve our nation’s economy, strengthen a relationship with a key ally and bolster our energy security. As Canada’s Mr. Harper has said, the decision whether America should import more of his country’s oil should be a “no-brainer.” We hope the president will finally make the right decision on this project - but if he again misses his chance, those of us in Congress will have to step in.”
(Washington, D.C.) - U.S. Sen. David Vitter introduced an amendment to the Export-Import Bank Reauthorization bill that reforms the way the federal government loans money to energy projects. His amendment would prohibit the bank from financing oil and gas development projects in foreign countries that are similar to projects in the U.S. when there exists federal funding for those domestic projects. The amendment would also end the practice of taxpayers becoming the priority lender in bankruptcy, such as Solyndra, and ends the mandate for loans to renewable projects like Fisker.
Excerpts: “The LSU study estimates that Legacy Lawsuits have led to the loss of nearly 1,200 new wells in Louisiana, translating to an astonishing $6.8 billion in lost drilling investments. When drilling decreases, jobs are lost at a rapid rate. So while the court-sanctioned extortion, also known as Legacy Lawsuits, is taking place, more than 30,000 jobs have been lost, according the LSU study.
“Sen. David Vitter has made a plea for each side to work together on the issue of Legacy Lawsuits. He stated recently in a news release on the matter, ‘The current stalemate over the legacy lawsuit issue actually favors one side, the continued "bonanza" benefitting trial attorneys who often seek millions more in damages than required cost to clean up the contaminated land.’”