Tuesday, October 23, 2012

Digganalysis on Oil Exploration and Energy Dependence

 During the 2nd presidential debate last week, Governor Romney got overly aggressive with President Obama regarding domestic drilling.  As usual the exchange included a series of half-truths and misinformation and at the end of the exchanges, critical information went unspoken, misperceptions unchallenged, and the true current state of affairs unspecified.  The bottom line isn’t cannot be distilled down into 30 second debate sound bites.

Firstly, let’s look at some oil production numbers going back to 2001.  The table below shows total domestic U.S oil production, per the Department of Interior, broken down by Bush and Obama administrations using annual average of thousands of barrels produced.

What’s worth noting is the year on year decline in the average annual production over the course of the Bush years.  Yes the big oil man’s administration was importing more oil while we drilled less domestically.  Do you remember the outrage from conservatives about the tree hugging Bush and the rising gas prices?  Of course, just like President Obama has been saying, domestic oil production is up and continues to increase even after the Deepwater Horizon disaster.  Below you can see that under President Obama we are importing less than during the Bush years.  In fact, 2011’s numbers compared to the peak in 2005 is off by 16%.  Use less means import less and that’s the road to energy independence.

But that doesn’t tell the whole story.  President Obama has also accelerated the use of renewables as seen in the table below, including a remarkable 13% increase from 2010 to 2011.  So while the conservatives love to mock the president about his clean energy plans, war on coal, and Solyndra failure the fact is he is developing  a balanced approach to energy; a balanced approach that leads to reduced foreign dependence, protects the climate, enables a resurging manufacturing sector, and insulates us from supply side shocks. 

Next came the charge that the Obama administration has reduced the number of leases granted to gas and oil companies to explore and drill on federal public lands.  Well that is a true statement; the department of the interior has cutback the number of leases granted.  There are several reasons for the cutback, and the number one reason is the lack of activity on leases already sold.  According to the May, 2012 report by the DOI: “There are approximately 26 million leased acres offshore and over 20 million leased acres onshore that are currently idle – that is, not undergoing exploration, development, or production.”  The report goes onto say: “Offshore: As of May 2012, nearly 72 percent of the area on the Outer Continental Shelf (OCS) that companies have leased for oil and gas development – totaling 26 million acres – are not producing or not subject to pending or approved exploration or development plans.”  And Onshore: As of December 31, 2011, approximately 56 percent of total acres of public land under lease in the Lower 48 States – totaling approximately 20.7 million acres - are not undergoing either production nor exploration activities.  As of September 30, 2011, there are over 7,000 approved permits to drill on public and Indian lands that have not yet been acted on by companies.”  Simply, the oil companies are not exercising their existing leases because an increase in supply will lower prices and they prefer to drill on state and private land due to lower environmental regulations with respect to environmental protection.    Oh, and there was this thing called the Deepwater Horizon explosion that led to the necessary moratorium on offshore drilling until root cause and preventative actions were respectively understood and implemented.

So where does that leave us?  Domestic oil production is up, energy from renewable sources is increasing, and the gas and oil companies are manipulating the supply.  Ooh that seems like a bold charge, how do you back that up Digg?  As reported by ThinkProgress, according to U.S. Congressman Edward Markey’s report titled “Use It or Lose It” 131 oil and gas companies have 3,684 idle leases in the Gulf of Mexico alone. The Big Five oil companies — BP, Chevron, Shell, ExxonMobil, ConocoPhillips — are responsible for 40 percent of the 20.7 million acres “not undergoing exploration, development, or production” in the region.

Half-truths, flat out lies, ignoring data, and making it up as you go:  The GOP.

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