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Offshore Drilling: How Obama Can Have His Cake and Eat It Too

By: Steve Maley (Diary)  |  March 31st, 2010 at 02:05 PM  | 

RESIZE: AAA

By including areas of the East Coast, Eastern Gulf of Mexico and offshore Alaska in its new Five Year OCS Leasing Plan, the Obama Administration would appear to be throwing a bone to the “Drill. Baby, Drill” crowd.

Of course, everyone expects that there’s a quid pro quo in the deal: in exchange for this Open Access, you will support some form of Cap and Trade proposal. Isn’t that about it, Senator Graham?

But don’t mistake oil and gas leasing as a green light for an oil operator to “Drill. Baby, Drill”. An oil and gas lease is full of all kinds of “subject-tos”. Most significantly, an operator’s ability to drill and explore a lease is subject to his ability to secure the requisite approval from the various government agencies that issue permits for that activity.

So, theoretically, the Feds could issue a lease, but if one of the regulatory bodies refuses to issue a permit, there’s no drilling.

But that would never happen, would it?

Well, it did, less than two weeks ago.


Montana oil leases suspended

BILLINGS – A federal judge has approved a first-of-its-kind settlement requiring the government to suspend 38,000 acres of oil and gas leases in Montana so it can gauge how oil field activities contribute to climate change. …

[Note: These are leases that have already been sold by the BLM. Operators have put up their money but have done no drilling pending resolution of this case. - ed.]

Under the deal approved Thursday by U.S. District Judge Donald Molloy in Missoula, the Bureau of Land Management will suspend the 61 leases in Montana within 90 days. They will have to go through a new round of environmental reviews before the suspensions can be lifted.

“We view this as a very big deal, if a modest first step, in the BLM addressing climate change in oil and gas development,” said plaintiffs’ attorney Erik Schlenker-Goodrich. “It’s quite a dirty process, but there are ways to clean it up.” …

A parallel lawsuit challenging 70,000 acres of federal lands leased in New Mexico remains pending. …

A BLM spokesman, Greg Albright, said reviewing lease sales for climate change would be a first for the agency. How it will be done was still being worked out, and it was unclear if the BLM would adopt such reviews as a standard requirement.

[emphasis added]

Bear in mind that these two cases represent 108,000 widely dispersed acres in areas that have been under oil and gas development for decades. These permits are make-work for the bureaucrats and their consultants and allow the environmental “stakeholders” to drag out developemnt and make it easier for the interested operator to pull up stakes and go elsewhere.

If it’s this easy in Montana and New Mexico, offshore areas will be a piece of cake.

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  • martinrocket

    This is an opportunity for Republicans to develop a more nuanced approach than simply “drill baby drill.” The problem with simplistic catch phrases is that they create easy opportunities for the opposition to claim “yes, we’ll do it, drill!” Then Independents think Obama is bipartisan… Republican leadership can take this opportunity to build an approach to drilling offshore that shows leadership and develops the platform. Organize, develop a clear message, and show leadership. Drop the “drill baby drill” catch phrase.

    • cabanon

      As much as a debacle the entire health care mess was we got absolutely nothing out of it, zero, zip, not even tort reform!

      I’m starting to think if we’re going to get railroaded on every single issue why not try and get a few things, even if they are small things.

      • martinrocket

        The Conservatives in England are gaining momentum again on the back of Energy. They have positioned themselves as experts and lead accordingly, even though they are in the minority. They will win the majority back and get power again based on their leadership. Its similar to Fiscal matters, Republicans need to be the party of fiscal responsibility WHILE they have the power. As the minority they should introduce, or co-sponsor pay-as-you-go and get back some credibility that Bush lost because of an expensive war. If Romney is considered the expert on Energy and is a proven fiscally conservative, then he beats McCain and possibly Obama.

  • Scope

    http://www.americanthinker.com/blog/2010/03/obamas_offshore_oil_feint.html

    According to the author, in a few days the EPA is to announce a controversial ruling that will declare CO2 as a toxic and which will finalize the emissions standards of light trucks, etc.

    BTW, as of now, Oil Industry stocks are up on Obama’s announcement. Obama is the master manipulator.

  • jackbenimble

    I am a mineral owner in the Powder River Basin of Northern Wyoming and Southern Montana. I’ve been very involved in the Coal Bed Methane (CBM) play in this area. It has proceeded fairly well in Wyoming and due to Federal footdragging and environmental obstructionism, has been almost completely shut-down in Montana. I’ll vouch for everything Vladimir says about Federal Oil and Gas Leases being the start rather than the end of the process. Essentially all a Federal Lease is is permission to start spending lots of money trying to get permission to drill with no promise that you will ever obtain that permission or get any of your money back.

    The way the CBM industry works, a large number of wells need to be drilled into the coal formations on 40 or 80 acre spacing and water needs to be pumped out of them across a broad area. When they are sufficiently de-watered, methane starts to flow. Because our private mineral holdings are interspersed with Federal minerals, it is hard to put together a developable land position where a project does not include some of each, private and federal. Federal foot-dragging has greatly hampered development on our private minerals. About the only way to get the Feds to issue a drilling permit is to drill a well on adjoining private land and pump like hell and hope that you can create a drainage (Federal gas being produced from a private well which deprives them of royalties) situation that will get their attention. Then they generally will require the operator to drill an off-setting well on Federal Land. But they still will not necessarily permit enough wells to create a viable de-watering pattern.

    Montana is administered out of a different BLM regional office then Wyoming. Montana would not allow any development until they completed an Environmental Impact Study and they were FOUR years late on their own two-year schedule in finally completing this study. It effectively killed the industry there. All the drilling rigs that had been active on the Wyoming side of the border picked up and moved on.

    Wyoming was considerably better but it still pulls all sorts of inane crap. Lately they have been giving the industry all sorts of grief about the population crash of the Prairie Chicken. That population did indeed crash across the entire west but it happened more than a decade ago well before the CBM industry was active and in plenty of places where there was no oil and gas activity. Everybody knows and admits that. But somehow oil and gas gets the blame anyway and a whole bunch of restrictions on its activity to go with the blame.

    My family was fortunate enough to have holdings in both Wyoming and Montana but I know a lot of Montana ranchers who watched enviously as their neighbors just across the border in Wyoming got rich while they suffered in the cattle industry which as usual has sucked recently. Generally ranchers make a killing on this development because even if the Feds own the minerals under their land and they don’t get the royalties, they do get paid obscenely for access and surface damages and usually get first refusal on related construction (fences, cattle guards, gravel roads, reservoirs) and ongoing operating activities like well monitoring. There has been more economic activitiy on those lands in the last decade then in the entire previous century and a good amount of it sticks to the rancher.

    I’ll be flat amazed if there is any drilling on the East Coast on Obama’s leases in the next decade. And if the otherside of this deal is some sort of climate bill with heavy taxes on carbon emmissions then it is not worth it.

  • http://pocketchangeproductions.net/ anotherindyfilmguy

    slow, not fast… like making a ten minute piece of crap into a long drawn out feature length snoozer… I feel like I’m watching a national train wreck in super slow motion with the “O” running everything into the ground. Impeach him? Naaaaah, can’t do that….

    On the one hand there is this feeling of parallel with Nazi Germany as the Nazis gained more and more power in the face of all sanity and on the other hand a feeling it is not just about power but about destroying a nation as the culmination of decades of a deliberate seditious insurrection effort.

    Treasonous is a harsh word regarding the “O”stration of America, but there it is – daily we see something new that hurts everyone and no one seems to be able to do something about it. Helplessness in the face of oblivion is a dangerous mix.

    • martinrocket

      This is nothing like Nazi Germany. You’re hurting, not helping the conversation.

      • Achance

        Of the NSDAP, if if political correctness won’t allow us to say that, this battle is lost already.

      • Tbone

        At least the Nazis put the interests of Germany first. Obama and his henchmen hate America and seek to destroy our good institutions and replace them with a government of moral equivalency.

        • martinrocket

          The Obama administration is not at all like the rise of power of the Nazis… The Nazis rose to power as a new party, with new (and horrible) ideas. The Obama administration is the result of the Democratic Party’s platform that has been in development since they lost everything after Clinton and an overreaction to the Bush administration. If you want to convince people of your views you cannot make the Nazi comparison. You loose independent thinkers immediately. I’m not trying to be a jerk here, but I am proposing that you are overreaching when you say this is anything like post WW1 Germany. The Republicans will take the house this November, then possibly the Senate in 2012, and the Dems will have been a surge after a costly war and a reaction to a bad economy. Thats it.

          • Tbone

            Well, why don’t you just go catch them for me.

            Trust me Sparky, the Democrat Party of current configuration has nothing to do with the Democrats of 20 years ago. It is a new party with horrible ideas.

            Fortunately, it is being led by a coffee boy with all the gravitas credentials of Paris Hilton as opposed to a real leader like Hitler.

          • robobbob

            Yes, there are some names that are inflammatory by nature, but that does not change the underlying comparision. It is a shame that history is often taught on stereotypes. Critical information is left out. When mentioned, people instantly envision tanks, marching boots, and ovens. Few are aware of the all encompassing, comprehensive reordering of society that had occurred. As a consequence, they do not recognize totalitarianism when its staring them in the face.

            The Nazi movement was not a simple overnight change of power at the top. And contrary to contemporary ideas, they did not start out with camps on day one. They had developed a populist and socialist agenda that made them very appealling to many people. Free healthcare, free education, redistribution of money and land, getting tough on big business etc. They won a great many elections on that. Of course the reality turned out much different. They spent years infiltrating their party members throughout the government and society to be ready to assist when the time was right. They had also spent years developing a parallel “shadow” government. When the time came, they were able to quickly sweep away large sections of bureaucrats loyal to the republic, and replace them with loyal party members eager to carry out the party’s agenda. The Nazi movement was not an overnight phenomenon, taking advantage of a singular unique crises, but was the result of a decades long deliberate program designed to turn the system against itself. And it was not just a power shift, but a complete reordering of society. Work permits, mandatory youth leagues, price controls, rationing, media control, enviromental protection. EVERYTHING required government approval.

            While the NSDAP was an indepentently formed party, the progressives have taken the path of hallowing out the democrat party and taking it over from the inside. They have been infiltrating all levels of government for decades, and now control most levers of power regardless of who is actually elected into office. Simple ’10 and ’12 wins will be a start, but we are dealing with a set of metastasized tumors that infect all branches of government from the EPA, to State Dept, Labor boards, education, judges, and down to local AG and dog catchers.

            The Dems “surge ” is just the latest in a long term ongoing operation against the US Republic whose groundwork has been laid long in advance. You need to wake up to that. The name Nazi might make people cringe, but from a political standpoint, it is an apt analogy.

          • Tbone
  • jorgejimenez

    Isn’t this what we wanted? Let’s all be honest with ourselves: if a Republican had done this we’d all be celebrating.

    • Charles Cianfrocca

      …we’d believe he meant it.

      Obama is just trying to get something real now in exchange for something imaginary in the future.

    • Charles Cianfrocca

      …we’d believe he meant it.

      Obama is just trying to get something real now in exchange for something imaginary in the future.

  • gwalt

    and the media dutifully responds.

    Someone needs to put up a website with several clocks on them.

    One for every promise he makes (which at least 33 of them have expired).

    Let’s start a calendar/clock when this “drilling for our own oil” started. It can be used in 2012 debate.

    As Jim Geraghty on NRO has said many many times:
    Every Obama promise or policy statement comes with an expiration date. Every one.

    • gwalt

      The Obamapromiseclock.com can then be used by R-Candidate to say –” On March 29th at 2:30 Mr. Obama promised we would start drilling for oil. Still no oil.

      If I were President, we would have oil by now being refined out of the new areas.”

      Have a clock running for each promise that goes unfulfilled AND that has expired (which is at least 33 by now).

      Promise–Date made–clock running or stopped—not fulfilled or nothing ever done.

      A whole list —dozens of clocks.

  • swamphermit

    You can bet it will! If any Republican goes for that ‘Bait’, he/she needs to be shipped to Iran. I say let Obama and the Dems keep digging that hole until a crane can’t reach them, then toss the MSM in on top of them. They pass the disastrous health care bill, and now they want to blame Republicans for it…before they have to start the VAT. Now, Obama wants to pretend to be a ?Drill. Baby, Drill? kind of guy, and MSM follows along like the morons that they are…

  • http://www.libertytreehugger.com reverelth

    when Obama puts out with some new oil refinery permits, renounces $7/gallon gasoline, and makes sweet love to clean coal.

  • Achance

    He can say he’s all for it confident that the “scientists” in DOI and EPA and his Greenie friends will stop it for EVER happening in a Democrat Administration or even a Republican administration that isn’t filibuster and veto proof.

    • Richard Mullins

      I’ll try to look for the link on the Houston Chronicle on this later but seems like going to piss off more people than it going to please. More than likely, no real change. This whole thing was for show and it will never happen.

  • Bill

    lifted the 29 year ban on drilling in the offshore regions, ALL OVER THE PAPERS was the FACT that CONGRESS HAD TO LIFT THE BAN that it had imposed also. Not until September 2008 when Congress allowed the ban to expire did that become a way to get oil drilling done. Well, did it? Didn’t Congress reinstate the ban after the 2008 election? I am asking because I haven’t found on the net whether Congress will have to concur on this action Obama announced today. I smell a really big RAT here. You know that this administration can not be trusted nor can the democrats’ leadership. The EPA, all the Environmentalists’ lawsuits that will flood the courts (and oh by the way the Fed Government will probablly be paying the legal fees for the Environmental groups who get all these federal grants) smooth, hey? It would cost the oil and gas companies more money than they would be able to earn in 10 years to get the first drill in the ocean. Meanwhile China and Russia are helping Cuba drill out there in the good ole Gulf of Mexico, and they don’t have to worry about all these expensive problems. Russia is also trying to claim all the oil in the Artic Ocean offf Alaska, etc. as theirs, and Obama and his socialist ilk don’t have the courage to challenge their claim. This is a head fake. Look at the left hand while the right hand is up to something else. BEWARE.

  • aesthete

    where oil companies can drill for oil and pay a fee of some sort to provide for environmental damage in such a way that we get environmental protection + some oil, rather than just environmental protection (the current setup). Unfortunately, given previous performances, I don’t trust the Dems to come even close to enacting such a solution.

    Also, conservative estimates of serious proposals to “fix” climate change indicate that the effects of such policies would be somewhat greater than those of the Great Depression. Add to that the general noncompliance to international treaties on the environment, and we have a problem that, if real, has no real political solution. In that case, wouldn’t it be better to have strong, developed economies to deal with the problem, rather than underdeveloped economies which will do nothing to avert global warming? The fact is, the proposed cap-and-trade bill would do jack squat according to climate change scientists’ projections! I’ll start taking climate change seriously when its acolytes do the same, and propose the tough changes that would be required to effect a change.

    Developed Chile had losses topping out at < 1000 dead as a result of its strong building codes and less than stellar (but still decent) response to the earthquake. Undeveloped Haiti has lost over a quarter of a million! Tell me, which country would you like to live in, flaccid Kyoto Treaty or no, if global warming turned out to be real? Now I ask: which country would you rather have to deal with the problems caused by global warming: a social democracy encumbered by regulation and inept and underfunded response teams with Great Depression-levels of economic calamity, or a strong, developed country with adequately funded response teams?

  • Adjoran

    He’s actually doing exactly the opposite, making any offshore drilling less likely than before his “opening” . . . Bob Bennett pointed this out almost immediately. Check http://corner.nationalreview.com/ @ 6:11 p.m. on 3/31.

  • mriggio

    anything this Admin says that sounds faintly like something the Right would like is really 180 degrees out of whack. Fer instance, the recent ‘health insurance exchanges originally proposed by the Heritage Foundation’….NOT! Since we can’t all be expert across all fields, this is a useful guideline, just sayin’. Also, 5′s to your earlier comment Achance…..

  • madjayhawk

    Since crude oil prices are driven by speculators Obama’s rush to the teleprompter might be an attempt to cool them off a little, knowing full well that oil drilling off the coast will not happen in our lifetime as long as Democrats are in control. Bush did the same thing and crude oil prices plummeted from $130 a barrel all the way to below $30 a barrel. It looks like, judging from the market reaction, the speculators maybe calling BHO’s bluff. Look next for signs of heavy duty threats of oil company nationalization and/or passage of the Volker Rule. For the good of the country he’ll say. Crude is at $84 a barrel and slowly rising. Crude prices have risen at least 30% on his watch without a peep out of the Obmamagic drugged media. If oil hits $120 BHO will be eventually blamed as Bush was. $3.50-$4.00/gallon prices at the pump will be hard for the media to continue to ignore even if it makes BHO look bad. A November disaster and continued recession will be guaranteed.

  • ihateliberals

    doesn’t do anything unless first it becomes a law to override the different agencies that would not issue a permit. Secondly there is not capacity to refine additional oil. we would have to increase capacity to refine additional oil in order to reduce the cost. This is nothing more than a Smoke Screen.