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FRONT PAGE CONTRIBUTOR

A Well That Never Runs Dry

Obama's chutzpah, that is.

Here we go again: In a press release from the Bureau of Ocean Energy Management, the Obama Administration unabashedly takes credit for the nation’s surging oil and gas production, without a scintilla of evidence that any of their policies or proposals is actually responsible for said surge.

As part of President Obama’s all-of-the-above energy strategy to continue to expand domestic energy production, … Interior will offer more than 21 million acres offshore Texas for oil and gas exploration and development in a lease sale that will include all available unleased areas in the Western Gulf of Mexico Planning Area. …

Domestic oil and gas production has grown each year President Obama has been in office, with domestic oil production currently higher than any time in two decades; natural gas production at its highest level ever; and renewable electricity generation from wind, solar, and geothermal sources having doubled. Combined with recent declines in oil consumption, foreign oil imports now account for less than 40 percent of the oil consumed in America – the lowest level since 1988.

Post hoc ergo propter hoc. All of the statements are factually true, but I defy anyone to establish any causation. And the “21 million acres … [including] all available unleased areas” have all been offered for sale before — many of them at least 30 times!

Remember when President Obama said this?

…(T)he natural gas boom has led to cleaner power and greater energy independence. That’s why my Administration will keep cutting red tape and speeding up new oil and gas permits.

That was in the 2013 State of the Union address.

On April 9, the House Natural Resources Committee held a hearing to look into the growing disparity between production on Federal lands vs. state jurisdiction.

Witnesses Hail State Energy Policies, Discuss how Federal Red Tape Blocks Much-Needed Energy Production

4-19-2013 9-01-35 AM

Note that the permitting time on Federal Lands has doubled since 2005, which makes the President’s promise to “keep cutting red tape” ring hollow.

Here’s what the witnesses had to say:

Utah’s Lieutenant Governor Gregory S. Bell noted that “State and federal APD permits require similar regulatory and engineering reviews, so it is hard to understand why a federal permit should take four times as long to be issued. Utah has shown it is willing to proactively address looming issues, and that its agencies and leaders are competent to craft and execute state-specific policies and regulations to ensure continued environmental health. The status quo of federal overreach is simply unacceptable.”

Jerry E. Patterson, Texas Land Commissioner in the Texas General Land Office, confirmed to the Committee that federal regulations are hindering new energy production. “The States lead the way in leasing, permitting, drilling and most important, the production of oil and gas. This administration should look to the states and follow their lead if we are to become energy independent. Sadly, federal policies hamper the development of vitally needed energy.”

Richard Simmers, Chief of the Division of Oil and Gas Resources Management for the Ohio Department of Natural Resources, testified that the best way to regulate oil and natural gas is at the state level. “… I unequivocally believe the regulation of an industry like oil and gas exploration should be administered at the most effective, efficient and economical level, which based on our regulations and highly trained staff, would be at the state level.”

Note that these are the words of regulators and public servants, not industry whores like me.

The cost of these permitting delays is incalculable. In a business where time is literally money, an unwieldy permitting process demands attention, and takes planners’ time away from safety, technology or other concerns. Federal permitting requirements have spawned legions of consultant firms whose sole function is compliance with a myriad of requirements from DOI, EPA and other government agencies. Further, permitting delays rob operating companies of flexibility, one of the few advantages that small firms have over larger ones.

Cross posted at stevemaley.com.

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