June 26, 2008

Bush Republicans Have Struck Out on Energy

After blocking three Democratic efforts to address our energy crisis by investing in renewable energy just this month, Bush-McCain Republicans are now offering what they are calling a “new” energy bill that offers more of their same failed policies. The bill calls for opening up additional drilling off America’s shores, despite the 68 million acres already leased to oil companies that are not producing. It also calls for expanding oil shale production, which is still hampered by the lack of commercially-ready technologies and high costs. While these proposals would help Big Oil amass ever greater profits, they would do nothing to lower the cost of gasoline at the pump, worsen global warming and fail to reduce our dependence on oil. Fortunately, the Republican bill does borrow one idea to bring prices down from Democratic bills, which is to strengthening the Commodity Futures Trading Commission so it cracks down on excessive speculation in energy markets, but there is still more to do. The most important step that Bush-Republicans could take to help solve our nation’s energy crisis is to stop standing in the way, and join Democrats in investing in energy efficiency and clean alternatives to help consumers get some relief.

Bush Republicans have already whiffed on energy three times this month:

Republicans Blocked Climate Change Bill Which Would Have Set Up a Cap and Trade System and Provided Billions of Dollars for Alternative Energy Development. Republicans blocked a motion to invoke cloture (thus limiting debate) on the Boxer, D-Calif., substitute amendment no. 4825 that would cap greenhouse gas emissions nationwide and set up a trading system for companies to buy and sell emissions allowances. Note: Three-fifths of the total Senate (60) is required to invoke cloture. A "nay" was a vote in support of the president's position. The motion was rejected 48-36: R 7-32; D 39-4; I 2-0. [Senate Vote #145, S 3036, 6/6/08]

Republicans Blocked a Bill that Would Have Cracked Down on Speculation and Price Gouging, Invested in Renewable Energy and Rolled Back Tax Breaks for Oil Companies. Republicans blocked a motion to invoke cloture (thus limiting debate) on the motion to proceed to the bill that would repeal tax benefits for oil companies worth $17 billion over 10 years that were enacted in 2004 and 2005, as well as direct the money to renewable energy. It also would impose a profits tax on the largest oil companies. Note: Three-fifths of the total Senate (60) is required to invoke cloture. The motion was rejected 51-43: R 6-41; D 43-2; I 2-0. [Senate Vote #146, S 3044, 6/10/08]

Republicans Twice Blocked Creating New Energy Tax Credits. Republicans twice blocked motions to invoke cloture (thus limiting debate) on the motion to proceed to the bill that would extend dozens of expired or expiring tax provisions for one year and create new energy-related tax incentives.  Note: Three-fifths of the total Senate (60) is required to invoke cloture. Motion rejected 50-44: R 3-44; D 45-0; I 2-0. [Senate Vote #147, HR 6049, 6/10/08; Senate Vote #150, HR 6049, 6/17/08]

Bush Republican proposals would not lower gas prices:

Bush Administration’s Own Energy Information Administration Found Outer Continental Shelf Drilling Would Have No Significant Impact on Gas Prices  “The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030… Because oil prices are determined on the international market, however, any impact on average wellhead prices is expected to be insignificant.” [Energy Information Administration, 2007]

On President Bush’s Watch, Offshore Drilling Has Increased, But the Price of Gas Has Skyrocketed. The number of domestic drilling permits issued and wells have increased dramatically from 3,000 permits and wells in 2000 to nearly 8,000 permits and 6,000 wells by 2006. Over the same time period gas prices have skyrocketed from $1.25 per gallon in January 2000 to over $4 per gallon today. [Bureau of Land Management, answers to questions submitted 3/1/07; EIA Historical Data]

Assistant Secretary of the Interior Said Oil Shale Development Would Have No Impact on U.S. Oil Supplies Until At Least 2015. Under questioning from Senator Salazar, Assistant Secretary of the Interior Allred admitted oil shale development would not increase U.S. oil supplies until at least 2015.

Sen. Salazar: (To DOI Assistant Secretary Allred) When I look at your chart on oil shale development on public lands, you have at some point on that chart this little brown dot that says ‘project completion: phase 3 – commercial.’  When do you think that will happen?  What year?

Asst. Secretary Allred: Senator, it’s hard to predict that because…

Salazar: 2011?

Allred: Oh no, I think, I think…

Salazar: 2016?

Allred: Probably in the latter half of, say, 2015 and beyond.

Salazar: So between 2008 and 2015 whatever happens here will not have any impact in terms of adding additional supplies to the oil markets of America.  Is that correct?

Allred: Not physical supplies…that’s correct. [Senate Energy Committee Hearing, 5/15/08]

Oil companies are not drilling in areas currently under lease:

There Are 68 Million Acres of Leased Federal Lands That Are NOT Producing Oil.

• 33.5 Million Outer Continental Shelf Acres Under Lease Are NOT Being Drilled. There are 33.5 million acres of the federal OCS lands that are under lease but are not producing. In contrast, just 10.3 million acres of offshore leases are producing. [MMS, 2007]
• 34.2 Million Onshore Acres Under Lease Are NOT Being Drilled. There are 34.2 million acres of the federal onshore lands that are under lease but are not producing. In contrast, just 13.3 million acres of onshore leased lands are producing. [MMS, 2007]
• 68 Million Acres Is Slightly Larger Than Colorado – Bigger Than Every State Except The 7 Largest. 68 million acres is equivalent to 106,000 square miles, just larger than Colorado at 104,000 square miles. The only states larger are Alaska, Texas, California, Montana, New Mexico, Arizona and Nevada. [Enchanted Learning]

Just 21 Percent of Outer Continental Shelf Leases Are in Production. There are 7,740 active leases in the outer continental shelf and only 1,655 are in production. [Department of Interior]

Just 19 Percent of Outer Continental Shelf Acres Under Lease Are Producing. There are over 41,000,000 acres in the outer continental shelf have been leased for oil drilling, yet only 8,123,000 acres are in production. [Department of Interior]

Most recoverable offshore oil and gas is open to drilling:

79 Percent of Recoverable Offshore Oil Is Open to Drilling. Currently 79 percent of America’s technically recoverable offshore oil reserves are open for leasing, while just 21 percent are closed to drilling. [Minerals Management Service, 2006]

82 Percent of Recoverable Offshore Natural Gas Is Open to Drilling. Currently 82 percent of America’s technically recoverable offshore natural gas reserves are open for leasing, while just 18 percent are closed to drilling. [Minerals Management Service, 2006]

Technological and economic viability are main problems preventing oil shale development:

RAND Corporation Study Found Questionable Commercial Readiness and High Production Costs Are Prevent Oil Shale Development. “Questionable commercial readiness and high production costs pose serious problems that currently prevent oil shale development.” [RAND Corporation, “Oil Shale Development in the United States,” 2005]

Royal Dutch Shell Is Still Determining If Oil Shale Production Technology Is Viable on a Commercial Scale. In 2006, Jill Davis, a spokesperson for Royal Dutch Shell Corporation said, “We know the technology works. The thing is we have to determine whether it works on a commercial scale.” [Rocky Mountain News, 10/24/06]

Chevron USA Believes Full Scale Oil Shale Leasing Should Not Proceed Without Clear Demonstration of Commercial Technologies. “Chevron believes that a full scale commercial leasing program should not proceed at this time without clear demonstration of commercial technologies.” [Chevron USA comments on BLM’s DPEIS on oil shale, 3/20/08]

Experts believe broad-based leasing could hurt oil shale development:

RAND Expert Warned Establishing a Broad-Based Commercial Leasing Program May Be Detrimental to Oil Shale Development. “In my judgment, establishing a broad-based commercial leasing program within the next five years is not necessary and, in fact, may be detrimental to oil shale development.” [Testimony of Jim Bartis, RAND Corporation senior policy researcher, before the House Committee on Natural Resources, 4/17/07]

• RAND Expert Said Government Does Not Have Enough Information to Effectively Set Royalty Payments. “The government lacks important information about the costs and risks of development. It thus runs the risk of either being too lenient about lease bonus and royalty payments, allowing firms to have access without adequate compensation to the public, or too zealous, causing a loss of private-sector interest in oil shale development, especially for initial commercial plants.” [Testimony of Jim Bartis, RAND Corporation senior policy researcher, before the House Committee on Natural Resources, 4/17/07]

More Bush Republican giveaways to big oil will only further America's energy imbalance:

U.S. Transportation Sector Is 97.5 Percent Dependent on Petroleum or Natural Gas – Just 2.5 Percent Comes from Renewable Energy or Electricity. The United States transportation sector consumes 97.5 percent of its energy from either petroleum or natural gas.  Renewable energy or electricity makes up approximately 2.5 percent of the energy consumed by the transportation sector. [Energy Information Administration, “Transportation Sector Energy Consumption,” Annual Energy Review 2007]

49 Percent of America’s Electricity Comes from Coal. Coal was responsible for 49 percent of electricity production in 2007. [Energy Information Administration, “Electricity Net Generation: Total (All Sectors),” Annual Energy Review 2007]

21 Percent of America’s Electricity Comes from Natural Gas. Natural gas was responsible for 21 percent of electricity production in 2007. [Energy Information Administration, “Electricity Net Generation: Total (All Sectors),” Annual Energy Review 2007]  

19 Percent of America’s Electricity Comes from Nuclear. Nuclear energy was responsible for 19 percent of electricity production in 2007. [Energy Information Administration, “Electricity Net Generation: Total (All Sectors),” Annual Energy Review 2007]  

Just 2.5 Percent of America’s Electricity Comes from Renewable Sources. Renewable energy (wind, solar, geothermal, biomass) was responsible for 2.5 percent of electricity production in 2007. [Energy Information Administration, “Electricity Net Generation: Total (All Sectors),” Annual Energy Review 2007]

 

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