Energy Production and the Obama Administration

by Little Miss Attila on March 30, 2011

The President and his Secretary of the Interior would like you to believe that the reason energy production is stalled is that oil companies are slacking off (presumably because they are indiffferent to making money). Erik Milito of the API explains:

[Y]esterday, the president’s point person on oil and natural gas development, Secretary Salazar, released a politically motivated and deeply flawed report regarding so-called idle leases.

Among other things, it lists offshore leases that do not yet have approved exploration or development plans as “inactive,” regardless of whether there is exploration and pre-production activity going on: such as seismic or technical reviews of the geography.

This preparation work is necessary to determine whether natural resources exist on a lease, and how to produce any oil and natural gas safely.

The administration’s report assumes that oil and natural gas are spread uniformly across the lease acreage – suggesting that 70 percent of idle leases equates to 70 percent idled resources.

As if finding oil was no more difficult than sticking a pipe in the ground.

The report completely whitewashes the fact that in many cases, the reason these leases have no exploration plans is that BOEMRE is sitting on those plans.

This is like leasing an apartment from the government for $20 million dollars – the government refusing to give you the keys to the apartment – and the government proceeding to complain because you are not occupying the premises.

The disturbing reality is that 2011 could go down as the first year since 1957 that there has not been at least one offshore lease sale. Not one.

I’m certain that Americans find it difficult to reconcile that – and the fact that 85 percent of our offshore resources are off-limits to development – despite increased uncertainty in world oil markets and rising worldwide demand for crude oil.

And we could really use some leadership on this right now. Unfortunately, the guy in the White House is essentially anti-energy, unless that energy comes from other countries such as Brazil:

President Obama has a speech on energy scheduled for later today.

We hope he will tell Americans that the administration will abandon their policies to defer, delay and deny access to domestic resources of oil and natural gas . . .

I’m not holding my breath, however.

I’m going to have to remind people that some oil produced elsewhere in the world adheres to high environmental standards–but much of it does not. We really lead the world in terms of safety and environmental protection, so when the President refuses to develop resources available to us here in the U.S., he is in many cases not just “off-shoring jobs,” but also “off-shoring” pollution and accident risk. The end result is that we start running our cars on oil that was produced in a way that’s more hazardous to human life, and more deleterious to the planet.

For instance, Nigeria’s oil facilities have been compared to that country having a Deepwater Horizon-scale environmental catastrophe every single year–not to mention the lives lost in their industrial accidents.

I have asked my liberal/lefty friends–you know, both of them who admit that renewables such as solar, wind, and geothermal are not ready to do the heavy lifting in terms of our energy needs, and won’t be, for a couple of years–why they are okay with wreaking environmental havoc overseas, just so we don’t have to know that, unseen beyond the horizon and invisible on our beaches (but known to our yachters) there are oil rigs sticking up out of the water.

They have yet to give me a coherent answer. They say that I’m not being fair–that I am insinuating racism on their part, somehow, because Nigerians are mostly black.

Then they get into their cars and drive away.

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March 30, 2011 at 7:59 pm

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C_Before_E March 30, 2011 at 2:45 pm

Your liberal friends are lame, or maybe you are adding a descriptive flourish to make them look that way .

Energy is expensive and difficult to get. We have few good choices. Japan’s recent nuclear troubles underscore this fact.

A few years ago people might have been more open to what you suggest, but the Deepwater Horizon spill really spooked people in the US. The oil industry is usually very good at extracting oil from remote places, but BP’s helplessness and lack of accountability showed what can go wrong. Obama’s inaction did not help, and I say this as someone to the left of your average reader.

Buying from Brazil seems like a good idea. They are allies and lately a benign presence on the world stage, especially now that Lula is gone.

It is purely selfish of me, but I would prefer that accidents take place in nations like Nigeria, Algeria, Russia, Venezuela rather than here. If the US is serious about safety outside our borders, perhaps we can offer training . Hell, maybe we can even make some money.

Now if I insisted that the US open itself up to more environmental disasters, would you ask “Why do you hate America?”

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ponce March 30, 2011 at 2:47 pm

The number of oil rigs operating in the U.S. is up 17% from a year ago.

Step outside the fringe right cocoon once in a while, LMA.

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Little Miss Attila March 30, 2011 at 3:05 pm

C: The two countries that are richest in fossil-based fuels are the U.S. and Russia. They drill; we, largely, do not.

I understand being “spooked,” but the answer to a large industrial accident is to reform the industry in question, rather than eliminating it. We did not stop building ships after the Titanic sank; we instead made sure they had enough lifeboats, and took ice warnings seriously.

As far as nuclear power is concerned, don’t make me laugh: the Japanese facility was forty years old, and several generations removed in terms of the way it was engineered. France gets 40% of its electricity from nuclear power plants. We seem to prefer using coal. Then we turn around and complain about the pollution! Nuclear power is the cleanest way to generate electricity; we shouldn’t get wrapped around the wheel over what can happen to drastically outdated technology in extreme circumstances.

Ponce: The number of operating rigs is actually down. Production, by some measurements, is up–but much of that is the result of leases granted under previous administrations such as Bush and (especially) Clinton. Since this President seems determined not to grant more than a tiny handful of new leases, we can look forward to a dramatic drop in production in future years–which will lead to a huge spike in gas prices, inflation far beyond what we’re coping with now, and misery for the working poor and the middle class.

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C Before E March 30, 2011 at 4:16 pm

It is hard for government to reform industries in an anti-regulatory climate and hard to get business to self-regulate. Trust is low. I think Americans are going to be wary of drilling for awhile.

Tend to agree with you about the nukes…although again it is difficult to calm the pblic, who are very reactive these days. I was very surprised that the staid and methodical scientist Angela Merkel put a moratorium on Germany’s nuclear go-ahead.

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ponce March 30, 2011 at 4:18 pm

“Ponce: The number of operating rigs is actually down.”

LMA,

That is simply a falsehood:

http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm

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Little Miss Attila March 30, 2011 at 6:11 pm

That’s for North America, not the U.S.

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ponce March 30, 2011 at 6:19 pm

No, it’s not, it is for the U.S., LMA.

Take off your ideological bias blinders and look at it again.

The U.S. has 294 more rigs operating today than it had last year.

Up 17%.

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Little Miss Attila March 30, 2011 at 6:25 pm

Okay. What are the figures in the Gulf of Mexico?

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ponce March 30, 2011 at 6:43 pm

Um, kinda makes your fact free claim that “the guy in the White House is essentially anti-energy” seem rather silly now that you know the number of oil rigs operating in the U.S. has increased 17% over the past year, doesn’t it?

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Little Miss Attila March 30, 2011 at 7:14 pm

Not really, since production lags behind permits, which in turn lags behind the granting of leases. Not to mention the fact that the number of active rigs in the Gulf of Mexico still went down.

ponce March 30, 2011 at 8:36 pm

Haha, LMA.

You just can’t let that ideological bone go, can you?

The number of oil rigs operating in the U.S. doubled during Obama’s first year in office.

Does that data point help you come up with an honest answer?

Darrell March 31, 2011 at 4:44 am

ponce, you should dedicate your comments to Satan like Alinsky did. Lies. Damned lies. And ponce’s comments. Sure, rigs are operating because of high oil prices and an outlook for the same. But like everything else, you have to look more closely. It does depend on where you are drilling. Oil field operators order new drilling to halt the inevitable decline in production, and marginal fields get a second look. But that doesn’t do much for the big picture–bringing the most promising new resources on line.

Canceling leases and slow-walking offshore permits, as the Obama Administration has done, does not increase American energy production or bode well for our future. The Department of the Interior’s proposed “wild lands” policy to treat designated lands as de facto Wilderness Areas will lock-up land from energy development, decrease certainty and increase costly delays for energy developers. BLM has admitted to a 206 day average processing time for Applications for Permits to Drill (APD). However the actual time from when a company submits an APD to final approval is close to 2 years in some field offices. What do you expect from the people that have made The Unibomber’s Luddite Manifesto into National Energy Policy under the moronic assumption that the “Age of Oil” is over.

Besides not allowing drilling in untapped crude oil resource, the existing oil infrastructure in the United States has been completely shut down. The federal government has not approved a single new exploratory drilling plan in the Gulf of Mexico since the deep-water drilling moratorium was lifted in October, 2010. Obama has placed a seven-year ban on drilling in the Atlantic and Pacific continental shelf. In other parts of the world, deep water drilling continues at a frenetic pace in places like Brazil, the Mediterranean, the Turkish Black Sea, and the Gulf of Guinea. Hell, we even gave Brazil $2 Billion bucks to do it!

The US has a total of 38 million acres of OCS under active lease of which 6.5 million acres are producing. The reason there is not production activity on those 31.5 million acres (38 – 6.5) is because the Obama Administration has stopped and is failing to issue permits to drill. This is blocking expanded American energy production in both the Gulf of Mexico and Alaska. As of February 2011, shallow-water permit issuance continues to lag behind the historical average of 7.1 permits per month. The 37 permits issued since April 2010 represents an average of only 3.7 per month.

Only one deepwater permit has been issued – over four months after the moratorium was officially lifted. The Administration is being held in contempt for slow-walking permits and is currently trying to appeal a Federal Judge’s ruling that ordered them to act on stalled deepwater permits.

“In 2010, the Bureau of Land Management (BLM) held 29 oil and gas lease sales for public lands in the West, offering 1643 parcels covering 3.2 million acres,” according to the Administration. Those 29 lease sales may seem high, until it’s compared to 2008 when there were 38 lease sales. Lease sales have DECREASED under the Obama Administration. The total onshore acreage leased under the Obama Administration in 2009 and 2010 are the lowest in over two decades, stretching back to at least 1984.

The process of developing a lease – from the purchase of the lease and the right to drill to actual production takes time. Approximately one-third of leases are waiting to complete environmental review and obtain permits to drill. The Obama Administration has slowed this process by adding new layers of regulations and hurdles. And they are cooperating with “private” groups that want to block it for one reason or another.
Total acres leased (41 million acres of public lands are under lease for oil and gas development, of which 12 million acres are producing) are not an accurate representation of potential energy development as all leases DO NOT contain economically recoverable amounts of oil and gas. That’s what the drilling determines.

Luckily, Obama domestic policies that have spent $Trillions, while doing nothing to stimulate the economy, have keep oil imports lows. The dead economy saves us 2 million bbl/day of oil imports due to lower consumption. Yay!

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ponce March 31, 2011 at 8:54 am

“does not increase American energy production or bode well for our future.”

Purrel,

So it’s your swinish judgment that today’s Americans are under no obligation to leave any oil in the ground for future generations of Americans?

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Little Miss Attila March 31, 2011 at 9:20 am

We have enough oil to last another two generations, at least. That would give us half a century to figure out how to make renewables work.

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ponce March 31, 2011 at 9:39 am

Currently, the U.S. has about 10 years worth of proven oil reserves left at current production rates.

Anything beyond that is somewhere between scientific theory and wishful thinking.

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Little Miss Attila March 31, 2011 at 9:50 am

I guess you didn’t hear about the CRS report; here’s a summary–

http://www.energytribune.com/articles.cfm/6933/US-Has-Earths-Largest-Energy-Resources

ponce March 31, 2011 at 10:06 am

Your link to the oil industry propaganda site seems to be broken, LMA.

Let me guess…because America has large coal reserves, the fringe right thinks that gives us the right to leave our kids zero oil?

Darrell March 31, 2011 at 10:48 am

Same twenty years ago. And twenty years before that. Look it up.
But with your fucking policies, you may make it come true unless people come to their senses.
Forget English as the official National language–let’s go for a Constitutional Amendment making Capitalism our National Economic system and keeping Marxists away from the controls of government.

Darrell March 31, 2011 at 10:43 am

Why? Your spawn and the spawn of other brain-dead Leftists won’t
be able to design and build the machines to use oil and natural gas.
What are you saving it for nostalgic reasons? Petroleum jelly?
Don’t worry, asshole, KY is non-petroleum based.

We built the machine and we deserve to use every drop of our creation.
I’d explain static life indexes and the difference between reserves and resources (probable, possible, and speculative)
someday and why twenty years ago we had the same ten years of proved reserves remaining, but I’m afraid it will all fall on deaf–or ignorant–ears. After all, you can lead a ponce to knowledge but you can make it think. Thank God you stayed away from the hard sciences!
Unfortunately, the rest of us have to deal with the ignorant bunch that’s at the helm right now. People that spent their whole life
studying philosophy and ideology now think they can make the important decisions that control our technical destiny.
God help us all.

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Jeswil December 13, 2012 at 7:30 am

CNN is reporting that not only is BP spdineng $50 million on a PR campaign on TV, but they have also spent good money to buy up several top spots on search engines. If you Google something like spill, gulf oil, offshore oil, oil spill, Louisiana coast spill and oil cleanup, but NOT oil disaster , you will get BP as the FIRST link at the top of the page. A PR insider says, I’d estimate that BP is spdineng at least $7,500 a day to own the top position on searches related to the oil spill on Google, and another $3,000 a day to cover both Yahoo and MSN’s Bing. Yet, in the meantime fishermen in the Gulf haven’t had a paycheck in weeks!

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