FRONT PAGE CONTRIBUTOR
Paging Mr. Oil, Mr. Gas, Mr. Coal: Obama on Energy
Much of Tuesday night’s Presidential Townhall from Hofstra University focused on energy, and oil and gas policy in particular. Taking credit for recent increases in oil and gas production seems to be a particular obsession of President Obama’s.
As I commented in my diary on the Denver debate, Mitt Romney displays an impressive, executive level grasp of the the salient facts with respect to energy. Tuesday evening, he summed up his opponent nicely: “[President Obama] has not been Mr. Oil, or Mr. Gas, or Mr. Coal.” With a little less ideology and a little more pragmatism, Barack Obama might have forged a legacy as the Energy President. Much as Bill Clinton rode the groundswell of the 1990s internet boom, Mr. Obama might have been able to translate his good fortune into political capital.
But he didn’t.
Without further ado, let’s take a closer look at Mr. Obama’s Townhall pronouncements on energy.
OBAMA: The most important thing we can do is to make sure we control our own energy. So here’s what I’ve done since I’ve been president. We have increased oil production to the highest levels in 16 years.
TRUTH: Nine years, not sixteen. (Source.)
“We”, the nation, have increased oil production exclusively due to private investment and with scant help and encouragement of the federal government. The Department of the Interior has cancelled lease sales, cancelled leases and slowed permitting, particularly in the wake of 2010’s Deepwater Horizon disaster.
But “here’s what I’ve done since I’ve been president”? Sorry, Mr. President, but you didn’t build that. Mr. Romney is correct when he says that substantially all of the increase in production has been on private lands under state, not federal jurisdiction. And to the extent that there was an increase in oil production from federal leases in the first two years of your term (2009, 2010), that’s attributable to a few new deepwater offshore fields. The work to make that happen occurred on your predecessors’ watch. (Source: the line labeled “Federal Offshore (PADD 3)” at the above-cited link.)
Natural gas production is the highest it’s been in decades.
TRUTH: In fact, natural gas production is at an all-time high. (Source – see the line “Marketed Production”.) Why? The shale boom, and that’s due to private investment on lands under state jurisdiction. Natural gas from federal lands has been falling steadily for years.
And all these things have contributed to us lowering our oil imports to the lowest levels in 16 years. …
[Later] And the proof is our oil imports are down to the lowest levels in 20 years.
Here’s one that really gets my goat:
OBAMA: Here’s what happened. You had a whole bunch of oil companies who had leases on public lands that they weren’t using. So what we said was you can’t just sit on this for 10, 20, 30 years, decide when you want to drill, when you want to produce, when it’s most profitable for you. These are public lands. So if you want to drill on public lands, you use it or you lose it. And so what we did was take away those leases. And we are now reletting them so that we can actually make a profit.
ROMNEY: And production on private — on government land —
OBAMA: Production is up.
ROMNEY: — is down.
OBAMA: No, it isn’t.
TRUTH: Yes, it is.
But as for the “whole bunch of oil companies” who sat on leases for “10, 20, 30 years”… man, where did that come from? The concept of “squatting”, while it may be commonplace in Chicago tenements, is unknown in the oil patch.
The fact is, oil and gas operating rights are strictly defined in the legal document, the oil and gas lease, wherein the owner (in this case, the federal government) grants another party the exclusive rights to explore and develop the oil and gas underlying a tract of land.
An oil and gas lease has a term, a fixed period of time for which the rights are granted by the owner (typically, five to ten years for a federal lease). If the operator’s drilling fails to establish production, or if he fails to comply with the other terms of his lease, the lease dies a natural death. Leases have built-in “use it or lose it” provisions that are agreed to up front. Even if it a company could occupy public lands indefinitely, there would be no benefit for doing so.
Lastly, there was the matter of the Keystone XL Pipeline:
OBAMA: And with respect to this pipeline that Governor Romney keeps on talking about, we’ve — we’ve built enough pipeline to wrap around the entire earth once.
So, I’m all for pipelines. I’m all for oil production.
Right. And I’m all for Barack Obama. (Click here (pdf file) for a copy of a letter which reflects the attitude of the Obama administration to increased oil production ca. 2009.)
In researching this pipeline factoid, I came across this at The Blaze:
Politifacts pulled together numbers from the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration, after this comment to see how it worked out. It found that from 2008 through 2010, there was an increase of 29,604 miles of oil and gas pipeline. Given that circumference of the Earth at the equator is 24,873.6 miles, Obama’s “and then some” rings true. …
Tadeusz Patzek, chair of the Department of Petroleum and Geosystems Engineering at the University of Texas at Austin, pointed out that many miles of those pipelines are “field/project gathering lines of small diameter and small throughput” — not large transmission lines many of us think of.
He’s right. According to the DOT numbers, 21,177 miles of the new pipeline are listed as natural gas distribution lines.
Transcript source. Emphasis added throughout.
Cross-posted at stevemaley.com.