The Interior Department recently announced a new plan to open up 14 offshore areas for oil and gas drilling in the Gulf of Mexico, Alaskan coast, and Atlantic Ocean. “The safe and responsible development of our nation’s domestic energy resources is a key part of the president’s efforts to support American jobs and reduce our dependence on foreign oil,” explained Interior Secretary Sally Jewell.
This proposal may look like a grand victory for the American energy sector. But it’s not. Significant hurdles remain before we’ll see any serious offshore development.
For the Atlantic territories, officials propose the absolute bare minimum -- just one lease sale, six years from now. The White House may even scrap that sale before a final program is announced. And even if that sale is retained, it’s possible for a future president to rescind it.
Other nations continue to pursue offshore energy development while the U.S. continues to restrain its own progress. In fact, Canada, Cuba, and the Bahamas are pursuing the development of their own offshore oil and natural gas resources in Atlantic areas very near U.S. waters.
Likewise, the Interior’s plan removes additional lease sites offshore Alaska. When coupled with the administration’s call to permanently ban energy development in 12 million acres of the Arctic National Wildlife Refuge and 10 million acres in the Beaufort and Chukchi Seas, you have huge swaths of energy rich territory taken off the table.
Alaska relies on oil and gas for more than 90 percent of state revenues. Its officials are furious. “This administration is once again promising Alaskans that it will allow exploration sometime in the future -- but not right now,” said Sen. Lisa Murkowski, one of the state’s two Republican senators. “I think we all know what promises from this administration are worth.”
Indeed, this White House has an exceptionally poor track record when it comes to oil and gas development. While publicly claiming it embraces all kinds of energy, it has routinely hindered this industry with increased fees, slow permit processing, and overly burdensome regulations.
Offshore lease sales have plummeted under the Obama administration. And energy production on federal lands has dropped 6 percent over the last five years. By contrast, energy production on private lands has jumped 61 percent over that same period.
What’s more, this administration has cancelled more than 100 oil and gas leases in Montana and Utah. And it has bogged down the Keystone XL pipeline in needless bureaucratic delays.
Despite this federal obstructionism, private sector innovation has driven the American energy industry to unprecedented heights. The United States is now the top energy producer in the world, supplanting Russia and OPEC. And that growth has helped power American economic recovery. In fact, employment within the oil and gas sector grew 40 percent in the years following the financial crisis.
Ironically, the president has tried to claim credit for this boom. In this year’s State of the Union address, he boasted about how “America is number one in oil and gas.” He then added that “thanks to lower gas prices and higher fuel standards, the typical family this year should save $750 at the pump.”
This credit-grab makes political sense. There’s growing support for oil and natural gas from across the political spectrum. And presidential approval ratings have historically risen as the price of oil drops.
But these energy gains have occurred without support from the White House. Rather than cultivating American energy, the president continues to shackle it. And this latest offshore drilling proposal appears to be aimed at creating the illusion of progress to distract from this administration’s real record.
Erik Milito is the director of Upstream and Industry Operations for the American Petroleum Institute.
Published: March 12, 2015 - Volume 13 - Issue 48