Senator David Vitter

Washington Rhetoric vs. Reality

The Washington Times
Truth about Obama’s energy claims
President asserts oil is gushing while he stands on the hose

By Sen. David Vitter
Monday, April 2, 2012

President Obama and his interior secretary, Kenneth L. Salazar, have been amazingly creative in trying to convince us that they’ve actually promoted a robust domestic energy agenda and increased oil production. But it only takes a little research to conclude that Mr. Salazar and the Obama administration have been flat-out wrong with some of their claims and incredibly misleading with others.

Obama claim: Domestic oil production is up under his administration.

Last month, the nonpartisan Congressional Research Service issued a report revealing that 96 percent of the increase in domestic oil production since 2007 has occurred on nonfederal lands, production the federal government has little or no role in.

But the federal government owns and completely controls almost 2.5 billion acres of land and offshore zones, including our Outer Continental Shelf, an area that is actually larger than the entire land mass of the United States. What’s been happening with oil production there? The government’s own director of the Bureau of Land Management, Bob Abbey, testified to Congress on this very point recently: Oil production is actually down 14 percent on federal property and down 17 percent offshore from a year ago.

The recent Congressional Research Service report confirms this: In 2011, production on federal property declined by an average of 275,000 barrels per day.

So when Mr. Obama says oil production is up, he’s right - and utterly misleading. It’s up because of private-sector activity on nonfederal land that Mr. Obama and the federal government have very little say over (though they’re trying to change that in significant ways). Almost everywhere they play a major role, production is down.

Obama claim: Oil production on federal land and offshore is up since the president took office.

This is another very interesting Obama manipulation of the data and again, utterly misleading.

Oil production on federal property did increase in 2009 and 2010. This was a result of leasing and permitting decisions made by the President George W. Bush’s administration, not Mr. Obama’s. In contrast, the fall-off from the leasing and permitting actions of the Obama administration is very significant, as noted above in the 2011 figures. It’s projected to get even worse in 2012 and beyond.

That’s because Mr. Obama’s five-year lease plan for offshore is half of what the previous plan was - moving us in the wrong direction. And permitting in the Gulf of Mexico is still more than 40 percent below levels prior to the BP oil spill.

Obama claim: “America only has 2 percent of the world’s oil.” This is the real grandaddy of all Obama energy statistics.

In fact, nothing could be further from the truth. We are the single most energy-rich country in the world, bar none.

Mr. Obama bases this statement on our nation’s “proven reserves.” But the president’s own Energy Information Administration has stated that proven reserves is “not an appropriate measure for judging total resource availability in the long-term.” It’s a very narrowly defined universe because more than 90 percent of our U.S. energy resources have been placed off-limits by the Obama administration.

For example, according to the Institute for Energy Research, the “[U.S. Geological Survey] estimates that unconventional U.S. oil shale resources hold 2.6 trillion barrels of oil, with about 1 trillion barrels that are considered recoverable under current economic and technological conditions. These 1 trillion barrels are nearly 4 times the amount of oil resources as Saudi Arabia’s proven oil reserves.”

None of this is counted in the Obama statistics.

Now you know “the rest of the story,” as radio broadcaster Paul Harvey used to say. It explains the difference between what we know in our gut and what we hear out of Mr. Obama’s Washington. And as usual, it confirms that we should trust our gut.

As bad as the Obama energy reality is, the good news is that America can turn the tide rapidly and take control of our energy destiny. That’s because we are, as previously stated, the single most energy-rich country in the world, bar none. All we need to do is have a government that lets us produce it.

If the president and his administration spent less time crafting their labored image of promoting domestic energy production and spent more time actually opening up our vast federal resources, we’d be on our way to building energy independence, to helping lower the price at the pump, to creating millions of good-paying jobs - even on our way to increasing revenue and lowering deficit and debt, since new domestic production would produce enormous new federal revenue.

Sen. David Vitter is a Louisiana Republican.

More on President Obama’s Domestic Energy Policy

Rhetoric vs. Reality

When it comes to energy policy, President Obama has made it increasingly difficult for energy producers to continue harvesting domestic oil and natural gas.

I can cite 10 examples of what the federal government is saying publicly about domestic energy production versus how current policies are negatively impacting energy producers and energy producing states like Louisiana.

Washington’s Rhetoric on the Moratorium:

“Secretary Salazar called for aggressive new operating standards and requirements for offshore energy companies and ordered a six-month moratorium on deepwater drilling. Interior consulted with a wide range of experts from industry, government, and academia. Draft recommendations were reviewed by seven experts identified by the National Academy of Engineering.” http://www.doi.gov/news/pressreleases/Salazar-Calls-for-New-Safety-Measures-for-Offshore-Oil-and-Gas-Operations-Orders-Six-Month-Moratorium-on-Deepwater-Drilling.cfm

Reality:

- An Inspector General report revealed that the Department of the Interior inappropriately manipulated the 30-day report to justify the moratorium on offshore drilling – in violation of the Information Quality Act and contrary to sound science.

- The group of experts stated that Salazar had consulted them on a May 27 report on drilling safety, and then falsely implied that the scientists had agreed to a "blanket moratorium" that they actually opposed.

- They said the moratorium went too far and warned that it "will have a lasting impact on the nation's economy which may be greater than that of the oil spill." The IG discovered that it was Carol Browner at the White House that approved this action.

http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/06/scientists_against_oil_drillin.html

http://vitter.senate.gov/public/index.cfm?FuseAction=PressRoom.PressReleases&ContentRecord_id=36B33089-FF43-E62E-B9B6-4F59FD0CB2FE

Washington’s Rhetoric on Available Resources:

“Even if we tap every single resource available to us, we can't escape the fact we only control 2% of the world's oil but we consume over a quarter of the world's oil.” (President Obama, Press Conference, 3/11/11)

Reality:

- According to a recent Congressional Research Service report, our combined recoverable oil, natural gas, and coal resources make up the largest in the world.

- The 2% figure cited by the president is a narrow estimate based on our PROVEN oil reserves. Proven reserves only include conventional oil in fields that have already been developed and determined to be economical to produce. This number does not even take into account the large oil shale reserves in the United States, well in excess of 2 trillion barrels of oil equivalent, of which the Department of Energy estimates there is 1.38 trillion barrels of recoverable shale oil. Production of these resources has been blocked by Secretary Salazar. http://www.fas.org/sgp/crs/misc/R40872.pdf

- According to CRS, the U.S. actually has approximately 134.5 billion barrels of recoverable oil.

Washington’s Rhetoric on Production:

“Oil production last year rose to its highest level since 2003.” (Heather Zichal, “Expanding Safe and Responsible Energy Production,” The White House Blog, 3/8/11) Further, a stated goal of the reorganization of BOEMRE is to “ensure a fair return to the taxpayer from royalty and revenue collection and disbursement activities.” http://www.boemre.gov/ooc/newweb/frequentlyaskedquestions/frequentlyaskedquestions.htm

Reality:

- In 2007, the U.S. Energy Information Administration projected the total 2010 U.S. oil production on federal lands to be 850 million barrels. Today’s actual production on federal lands is 714 million barrels, a 16 percent decline from what was projected

- The EIA published new projections this year that show a decline in total U.S. crude oil production of 110,000 barrels per day in 2011 and 130,000 barrels per day in 2012. Finally, the White House does not explain that the vast majority of increased production is occurring on private lands, not public.

- The Western Energy Alliance did an analysis on what the “return on investment” in Department of Interior’s energy programs have produced under the current administration. That analysis showed that the ratio of revenue returned per dollar spent by the federal government has fallen from $46.07 to $40.12 for onshore, and an unbelievable falloff from $118.54 to $30.08 for offshore energy production.

“U.S. oil and natural gas production has increased, while imports of foreign oil have decreased.” (White House Fact Sheet, “Fact Sheet: Expanding Safe And Responsible Oil And Gas Production,” www.scribd.com, Accessed 3/14/11)

Reality:

- According to data from the EIA, imports have decreased because demand has decreased due to a stagnant economy and high unemployment, not because of current Washington policies.

- Since 2008, U.S. foreign oil imports have decreased by 2 million barrels per day, and at the same time U.S. consumption has decreased by 2 million barrels per day.

- Also, according to Quest Offshore Resources, Inc., as of September 2011, 21 floating rigs are operating in the Gulf of Mexico, of which only 18 are currently drilling wells.

- Before President Obama’s moratorium, 33 floating rigs were operating the Gulf of Mexico with 29 drilling wells at that time. This indicates about a 37 percent drop in both the number of rigs operating and drilling.

“From 2008 to 2010, oil production from the Outer Continental Shelf increased more than a third – from 446 million barrels in 2008 to more than 600 million barrels of estimated production in 2010.” (Heather Zichal, “Expanding Safe and Responsible Energy Production,” The White House Blog, 3/8/11)

Reality:

- Once again, the Obama administration is attempting to take credit for actions of previous administrations. In actuality it takes years of exploration and permitting before a lease sees production. The increased production in the Gulf was primarily due to leases issued in 1996-2000 under the Deepwater Royalty Relief Act, during the Clinton and Bush administrations.

- The Obama administration’s actions, such as imposing a de facto moratorium, are causing energy production to decline in the Gulf of Mexico. EIA shows a 300,000 barrel per day decline in current Gulf production and a projected Gulf decline of over 150 million barrels of oil in 2012.

Washington’s Rhetoric on Transparency:

“Nowhere is transparency more important than in the management, development, and collection of revenues from energy and minerals in our public lands and oceans.” (Leading the World in Transparency in Natural Resource Revenues - Ken Salazar. October 25, 2011) http://www.whitehouse.gov/blog/2011/10/25/leading-world-transparency-natural-resource-revenues

Reality:

- The Interior Department has refused to provide the legal analysis supporting their expansion of legal authority to include contractors, despite multiple requests from the U.S. House and Senate. The Interior Department has even refused to respond my multiple letters and outstanding Freedom of Information Act (FOIA) request.

- The simple truth is that the vast majority of any increase in energy production since 2008 is occurring on public lands leased during the Bush administration and private lands – not on public lands leased under the current administration as many in Washington try to spin Louisianians to believe. According to the Energy Information Administration’s 2010 Annual Energy Review, from 2009 to 2010 coal production on federal lands has declined by 2.9 percent, oil production’s decline was at 29 percent, and natural gas production’s decline was even larger at 36 percent. This is in sharp contrast to production occurring on non-federal lands. For example, since 2005 oil production in North Dakota, occurring primarily on private lands has been growing at a rate of 26 percent a year.