Democrats blast GOP oil shale, ANWR drilling proposal

Democrats and fiscal conservatives today blasted a Republican plan to expand oil and gas drilling nationwide as a way to pay for building new bridges and roads.

Rep. Ed Markey, D-Mass., said the proposal “is nothing more than the same drilling proposals (Republicans have) offered time and time again,” only this time dressed up as a revenue-raiser, even though the royalties from expanded onshore and offshore drilling is far less than what is needed to pay for federal transportation programs.

These “drilling bills would barely get us started down the road of paying for a transportation bill,” Markey said, adding that the Republican proposal “would only generate one-fifteenth of the revenue that we would need to fund transportation projects for the next six years.”

Markey’s comments came during a House Natural Resources subcommittee hearing on a suite of GOP bills that aim to allow drilling in the Arctic National Wildlife Refuge, open up the Atlantic and Pacific oceans for development and force the government to issue commercial leases for oil shale development on public lands.

Republicans are linking the pro-drilling measures with a plan to reauthorize funding for federal transportation programs that are otherwise set to expire early next year. By drawing on oil and gas royalties, the GOP aims to fill a big gap between the cost of nationwide transportation projects and the diminishing revenues collected from a gasoline tax that fills the federal highway trust fund.

Rep. Doc Hastings, R-Wash., the House Natural Resources Committee chairman, acknowledged there isn’t yet a formal estimate of the potential federal royalties from proposed drilling, but he insisted that the alternative of “doing nothing will not create any new jobs or generate any new revenue.”

“During these difficult economic times, with soaring debts and deficits and a highway fund that needs to be replenished, Congress should not pass up an opportunity to create jobs and generate billions in new revenue,” Hastings said. “The revenue from these projects will make a significant contribution to help fund America’s roads and bridges.”

Rep. Doug Lamborn, R-Colo., noted that oil and gas resources lurking underneath federal lands and waters “are the property of the American people,” but their value is locked up as long as those areas are off limits.

But Ryan Alexander, head of the Taxpayers for Common Sense, said it would be fiscally irresponsible for Congress to link spending on highways with speculative revenues from energy production that may never pay off as promised.

“Simply making more federal lands available or limiting regulations on resource extraction is not a solution to our nation’s debt crisis and could lead to greater taxpayer liabilities down the road,” she said. The GOP approach “relies on speculative future revenues derived from new offshore drilling leases. Paying for a couple years of transportation funding with expected revenues from an increase in oil and gas drilling that will likely take many years to get rolling is not a responsible budget approach.”

Alexander likened the approach to “buying the Ferrari tomorrow because you are sure a raise is coming sometime in the future.”

One of the measures, drafted by Lamborn, is aimed at spurring research and commercial development of kerogen from oil shale. Shell, Exxon and other companies have done research on ways to produce oil shale, but it hasn’t been proven commercially viable after decades of attempts.

The Bush administration leased federal lands in Colorado, Utah and Wyoming for oil shale projects, but under President Barack Obama, the Interior Department reversed course on those leases two years ago. Ultimately, the Interior Department announced it would allow smaller, experimental oil shale leases in the region, with the goal of testing extraction practices that could eventually be rolled out commercially.

Critics say that given decades of failed attempts, the oil sands are still years — at best — away from being commercially produced, and so it doesn’t make sense to count on getting any federal royalties from the work anytime soon.

“Retrieving oil from shale may be a way to produce more domestic energy, but the technology to retrieve it in a cost competitive fashion does not currently exist,” Alexander said. “Taxpayers should not bear the financial consequences of this risky prospect. Research and development on federal lands is already occurring, and fast-tracking to commercial leasing before a technology is developed is a high risk taxpayers cannot afford.”

Bill Eikenberry, a third-generation Wyoming rancher and former state lands manager said there just are “too many headwinds associated with oil shale.”

“Oil shale is just an opportunity to fuel Wall Street-style speculation on our public lands,” he told the subcommittee in prepared testimony. “Without the breakthrough in technology for commercial oil shale development,­ which industry says is at least a decade or more away, there are no jobs, there is no energy and there is no revenue in oil shale.”

But Lamborn countered that there is no harm in letting companies try their hand at producing oil sands, so long as “they’re investing their own money.” If it doesn’t pan out, it doesn’t hurt American taxpayers, he said. But at least then there’s a chance that oil sands technology can be scaled up and commercialized to tap an estimated 1.5 trillion barrels of oil equivalent in the region, Lamborn said.

Another measure by Rep. Steve Stivers, R-Ohio, would force the government to sell drilling leases in parts of the Pacific and Atlantic oceans, while also lifting a congressional ban on exploration in the eastern Gulf of Mexico.

That statutory ban bars drilling in the eastern Gulf through 2022, unless Congress changes the law. The Obama administration also is not planning on selling any new drilling rights in the Pacific or Atlantic oceans from 2012 through 2017, the next five-year leasing period for the outer continental shelf.

Erik Milito, the upstream director of the American Petroleum Institute, said the plan would “deliver more jobs for Americans, more revenue for our government and greater energy security — while providing a reliable source for the fuels consumers and businesses use in their homes, vehicles and factories and for the petrochemicals used in everything from our clothing to our iPhones to our computers and pharmaceuticals.”

18 Comments

  1. chiefdecoy

    Democrats should be really proud of what they will have accomplished when Canada starts exporting all their oil to China, and we are paying $7 a gallon for fuel. And they say that Republicans are an oil company/traders best friend? Me thinks it’s the other way around…..

    #1
  2. lil ol me

    poor chioice of pics to accompany the story. It implies the sinkhole was frac/exploration-related.

    #2
  3. worriedsick

    Democrats blast the proposal that brings in revenue instead of offering there own ideas (besides raising taxes). As least one side is making an effort. Both sides REALLY need to learn to agree and compromise on some things soon otherwise we will all be screwed. Quit pointing fingers and taking sides, do your job and fix this country. They all need to be replaced!

    #3
  4. Tex

    Any time you see the name of Rep. Ed Markey, D-Mass., you know it is bad news for this great country. You do not even have to read any further.

    Who needs enemies when you have Ed Markey in the Washington Day Care?

    And who is the moron journalist who put a Houston pothole picture with this article?

    #4
  5. This article makes a number of mistakes, or reports without challenge a number of misstatements regarding oil shale development. First, the potential value of leasing land for oil and gas development can and has been risk weighted by financial analysts for years. Therefore, it is not inherently wrong to link potential revenues – it is simply an investment choice.

    Second, kerogen is not the product of oil shale development, shale oil is. Kerogen is the solid hydrocarbon that exists in the rock at present.

    Third, oil shale commercial oil shale production has been done for years in Brazil, Estonia, and China. Currently, the Estonian company Enefit is planning to permit, design and build a production facility on land it holds in Utah, so it is inappropriate to say that “it hasn’t been proven commercially viable after decades of attempts.” What has not yet been proven is in situ production of shale oil from oil shale, and only one company has actually been testing this for more than a decade. Red Leaf Resources expects to bring shale oil production on line in 2013 or 2014, using a novel, but tested technology.

    Fourth, the article twice refers to oil sands, which are significantly different from oil shale.

    Fifth, it is curious to quote BIll Eikenberry, who has no current technical knowledge of oil shale production, on the viability of oil shale development without some balancing of his unsupported assertions. Eikenberry has not attended the Oil Shale Symposium series hosted at the Colorado School of Mines each year since 2006, so his understanding is apparently largely restricted to what he learned as a government employee in a previous era of oil shale investigation.

    Whether oil shale will be developed commercially and in an environmentally sound way remains to be seen. It should not be ruled out on the basis of misconceptions, misrepresentations, and obsolete data.

    Jeremy Boak, Director
    Center for Oil Shale Technology and Research
    Colorado School of Mines
    Viewpoints expressed are mine and do not constitute positions of the Colorado School of Mines

    #5
  6. Anonymous

    The conservatives have ZERO solutions to achieve American energy independence. The Tar Sands are nothing compared to the awesomeness that was Texan Oil. The Tar Sands will raise natural gas prices because they have to be boiled out of the ground. The Tar Sands will devastate prime timberland in an area the size of Florida; that we have depended on centuries to build homes across America. And the Tar Sands will tip the carbon scales and send this world into run away climate change and the next great mass extinction: the human species included.

    #6
  7. Anonymous

    Renewables (wind, solar, heat pumps) AND reducing population growth & SprawL are the real solutions to both energy independence & climate change. The Tar Sands will provide for a few years, not even decades; and do nothing to end our oil/coal addiction.

    #7
  8. Jethro Bodine

    With Shell drilling in the Arctic off Alaska, the fact is more areas are open under Obama than were open under Bush. I understand the Chronicle thinks its job is to parrot right-wing talking points, but it’s also the Chron’s job to at least pretend to be a newspaper.

    #8
  9. Dollar

    @Anonymous, the tar sand reserves are larger than the Saudi Arabia’s reserves. That is what scares the greenies.

    Canadian govt is already building nuke generators to replace nat gas for water heating. And we have so much nat gas in the USA and Canada, what they use in the tar sands is a blip on the radar screen. They’re flaring nat gas in the Bakken , due to lack of a gathering system to get it to market.

    I really doubt your claim that about the timberland.

    And finally, you get down to the real reason for objecting to the tar sands, and that is CO2 emissions.

    And that leads into your second post on these magical renewables.

    If there were actually bonafide workable renewables that could be produced on a scale necessary to replace oil, and that could be accomplished within the next 20 years, then you would be correct and we do not need the tar sands.

    But that is not the case, and trying to stop tar sand production long long before any renewable is available, is stupidity of the highest order.

    Some day, you might get enough electricity from wind and solar to heat/cool our homes and business, just replace our current electric needs.

    But you will never scratch the surface on our transportation fuel needs. There are not enough sunny deserts in North America to cover up with solar panels to replace 15 million bbls of oil per day.

    You are dreaming.

    #9
  10. Another intelligent plan shot down by Democrats who only want to raise taxes and increase spending. I hope America wises up to these fools next election.

    #10
  11. scott38

    Produce energy in the US = BAD.
    Pay countries that hate us to produce energy = GOOD.
    Today’s lesson brought to you by the Democratic party, killing good jobs since Obama was elected.

    #11
  12. Chris

    Renewables (wind, solar, heat pumps) AND reducing population growth & SprawL are the real solutions to both energy independence & climate change. The Tar Sands will provide for a few years, not even decades; and do nothing to end our oil/coal addiction.
    *********
    Crap, crap and more crap spewed here. No wonder you go by “anonymous”. Solar energy? I’m laughing as I type this…

    #12
  13. B Jones

    Did anyone notice that the ruling Socialist (Green Energy Party) in Spain just went down in flames. Spain went from boom to bust in seven years thanks to Obama like leaders.
    .
    The Socialists ran on taxing the rich and green energy policy, and they lost badly.
    Don’t give up yet America. We will be back after the Socialists are out of power, and the liberal media have even lost more credibility.
    I trust Pajamas Media more than I do the mainstream media, HC included.

    #13
  14. RAYMOND HONC

    If the Democrates do not want to be self sufficient with oil and improve unemployment and raise the tax base……..them maybe we should cut their retirement, their wages and their perks. That should be enough to stimulate the econocmy!!

    #14
  15. Contrary Dave

    Photo reminds me of one in the Baltimore Sun decades ago. Worked in a plant that had a problem and the Sun reporter spoke to a rent-a-guard at the gate who knew nothing. Result was front page headline and a statement that children in a nearby school were cowering in their schoolrooms. Tucked in the front page article was photo of a classroom full of children under their desks – in Dallas, doing a nuclear war drill.

    Incompetence or conspiracy. I normally am a fan of incompetence, but in that case and this one I have to vote conspiracy to defraud the reader.

    #15
  16. Kb

    Rep. Ed Markey, D-Mass. is the biggest threat to the economy and the oil industry, and every industry that is dependant on contracting out products and manufacturing from them, as well as plastics and chemicals manufacturers having to pay much more for raw product. But, he doesn’t care about that…I wonder if he even understands it.

    #16
  17. JonC

    Is Markey the biggest idiot in the country?

    “Markey said, adding that the Republican proposal “would only generate one-fifteenth of the revenue that we would need to fund transportation projects for the next six years.”

    So in that case are the Democrats going to give up pushing higher taxes on “millionaires and billionaires” as that will raise less than one-fifteenth of the revenue necessary to balance the budget? I didn’t think so.

    #17
  18. Harry Bennett

    I can admit I voted for Obama in 2008. I beleived the hop and change. I cannot vote for him in 2012. We need jobs more than ever and he turned down the pipeline. that is just a failure to lead.

    #18