Missed Opportunity_Feature 06-2013

A funny idea of what “back in business” means

We all know that production of oil and natural gas has soared in the United States over the last few years. But there’s one place where production actually has dropped: on federal lands.

That comes from the federal government’s own Energy Information Administration. In a new report, EIA reveals that oil and gas production from federal lands – including coastal waters – reached a ten-year low in 2012.

Last year, sales of crude oil from federal lands fell more than 5 percent compared to the year before. “In contrast,” EIA notes, “total U.S. crude oil production (from public and private lands) increased by 15 percent.”

Perhaps more ominously, sales of oil produced from federal properties have fallen 18 percent from the 2010 level.

The drop-off is even more significant offshore, where the majority of U.S. production from federal lands occurs. Sales of oil produced from federal waters plummeted 23 percent from a peak of 615 million barrels in 2010.

A major contributor, of course, are the actions taken by the current administration in the wake of BP’s 2010 oil spill to slow the pace of drilling in the Gulf of Mexico.

It’s hard to see those numbers improving any time soon. The federal government’s new 2012-2017 offshore leasing plan keeps the vast majority of U.S. offshore areas off-limits for energy development, including the Atlantic Ocean, Pacific Ocean, nearly all of the Eastern Gulf of Mexico and most Alaskan waters.

The administration’s plan replaces a previous proposal that would have opened up parts of the Atlantic Coast for responsible energy development, and offered the possibility that the Eastern Gulf of Mexico would be opened as well.

Under the administration’s updated plan, more than 85 percent of U.S. offshore areas remain off-limits. No other country prohibits its own economic development like this.

Last summer then- Secretary of the Interior Ken Salazar declared, “Two years removed from the spill, the Gulf of Mexico is back in business.”

The government’s own data show otherwise.

America’s federal lands are owned by the American people.  And the U.S. energy industry has proven that with our rapidly advancing technologies we can safely and responsibly produce energy almost anywhere.

After years of waiting, it is time to give us the opportunity to invest, create jobs, and generate revenue from our shared resources.


6 Comments

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  1. Soseki Natsume says:

    I think you answer your own question. As you posted above:

    “Sales of oil produced from federal waters plummeted 23 percent from a peak of 615 million barrels in 2010.”

    Which means demand is decreasing. Naturally, it is a bit of a fudge data as oil prices were at a high is 2010. Basically, there is no reason to open these areas to oil development.

    And as you pointed out, these federal lands belong to the American people. That includes me. I do not want ExxonMobil drilling there. Especially since oil is a dead-end industry. We really need to have vision and good old American resourcefulness and develop a sustainable energy solution.

  2. John McCory says:

    Funny you should mention Responsibility. Just this week, several news outlets pointed out that Exxon Mobil STILL have an unpaid debt to the US Federal Govt. of $100 Million. http://www.ringoffireradio.com/2013/07/18/exxon-still-owes-government-100-million-for-exxon-valdez-oil-spill/

    America’s federal lands ARE owned by the American people, and until you pay your just dues, I, for one, will not darken the doorstep of your gas stations. Plus I’ll continue to spread the $100 Million news.
    (I still haven’t gone to a BP/Arco since the gulf “accident”, BTW)

    Happily driving my Prius and shopping elsewhere, God Bless Solar,
    John Galt

  3. Chris Henson says:

    “Perhaps more ominously, sales of oil produced from federal properties have fallen 18 percent from the 2010 level.” There is nothing whatsoever ominous about this fact. Especially when Exxon/Mobil continues to be one of the most profitable corporations on earth. Now if you only paid your share of taxes. Keeping you out of our national properties is one of the things our government is doing right.

    • Jim Hart says:

      Define “fair” share of taxes, please. I haven’t heard of an IRS audit that found criminal fault with ExxonMobile, so I would presume the government is happy that they are compliant with existing law.

      Can I suggest you pay your “fair” share by paying more than you already do, regardless of how much that is? That would be the same logic you’re applying to an anergy production company who is adding wealth to the economy (think plastics as well as energy).

  4. Grace Adams says:

    US Navy funds Algae Systems R&D on algal bio-diesel as a commercial product to replace petroleum. They hope to get it cost-competitive with petroleum in 2016 at about $10/gallon. I believe they realize that they need to have the too big to fail oil firms buy and run the Algae System modules to mass produce bio-diesel and have Algae Systems make the modules. They also need the too big to fail oil firms to mass market the bio-diesel once it is sufficiently cost-competitive for too big to fail oil firms to invest in with 80% direct loan financing at whatever interest rate is on 10-year Treasury notes at the time of the loan.
    The resource I would like to see developed in off-shore areas is off-shore wind–lots of wind turbines floating off the US coast in the Atlantic from Cape Hatteras North Carolina on north up to the Maine/Canada border in the Pacific from the California/Oregon border on north up to the Washington state/Canada border and then off the coast of Alaska.

  5. john werneken says:

    In the social chattering of elitists vs. egalitarians and the centralized cathedral vs. the decentralized bazaar, I side emphatically with the cathedral elite. I just like cathedrals and more capable people. Exxon and its colleagues/competitors fuel the modern world, where peace, public safety, freedom, and prosperity have advanced further in the last 68 years than in the previous 68,000.

    Not much practical risk attends seabed drilling – US shore based fisheries are a minor national factor. Beach vacations are desirable although by no means truly important, but more to the point, drilling is well enough understood that spills are rare, leaving plenty of beaches at the worst of times. And the operators are, properly, responsible to pay valid claims of real economic damage to beachfront residents and businesses.

    As far as I can tell, the only reason so much federally controlled seabed is off limits to drilling is the fear of political embarrassment should video of dead wildlife be shown. Why not simply prohibit television in these areas and allow drilling?

  6. Soseki Natsume says:

    I think you answer your own question. As you posted above:

    “Sales of oil produced from federal waters plummeted 23 percent from a peak of 615 million barrels in 2010.”

    Which means demand is decreasing. Naturally, it is a bit of a fudge data as oil prices were at a high is 2010. Basically, there is no reason to open these areas to oil development.

    And as you pointed out, these federal lands belong to the American people. That includes me. I do not want ExxonMobil drilling there. Especially since oil is a dead-end industry. We really need to have vision and good old American resourcefulness and develop a sustainable energy solution.

  7. John McCory says:

    Funny you should mention Responsibility. Just this week, several news outlets pointed out that Exxon Mobil STILL have an unpaid debt to the US Federal Govt. of $100 Million. http://www.ringoffireradio.com/2013/07/18/exxon-still-owes-government-100-million-for-exxon-valdez-oil-spill/

    America’s federal lands ARE owned by the American people, and until you pay your just dues, I, for one, will not darken the doorstep of your gas stations. Plus I’ll continue to spread the $100 Million news.
    (I still haven’t gone to a BP/Arco since the gulf “accident”, BTW)

    Happily driving my Prius and shopping elsewhere, God Bless Solar,
    John Galt

  8. Chris Henson says:

    “Perhaps more ominously, sales of oil produced from federal properties have fallen 18 percent from the 2010 level.” There is nothing whatsoever ominous about this fact. Especially when Exxon/Mobil continues to be one of the most profitable corporations on earth. Now if you only paid your share of taxes. Keeping you out of our national properties is one of the things our government is doing right.

    • Jim Hart says:

      Define “fair” share of taxes, please. I haven’t heard of an IRS audit that found criminal fault with ExxonMobile, so I would presume the government is happy that they are compliant with existing law.

      Can I suggest you pay your “fair” share by paying more than you already do, regardless of how much that is? That would be the same logic you’re applying to an anergy production company who is adding wealth to the economy (think plastics as well as energy).