GOP, industry say Obama overstating his role in boosting U.S. oil, gas

Republicans and industry groups came out swinging at President Barack Obama today, accusing him of exaggerating his administration’s role in boosting domestic oil production and contending that current policies are impeding oil and gas development offshore and on federal lands.

Obama offered a defense of his administration’s record during Tuesday night’s State of the Union, saying U.S. production of oil had reached its highest level in eight years and the administration had opened millions of new acres of federal lands for development. He also pledged to support the ongoing natural gas boom and to ensure the hydraulic fracturing is done safely.

But in a letter to Obama today, 22 Republican senators argued production of federal resources has fallen. They urged Obama to roll back bureaucratic processes and regulations that they say make it tougher for companies to drill for oil and gas on U.S. lands and offshore.

“Hundreds of thousands of jobs and trillions of dollars in economic activity may be foregone if current policies remain in place,” the senators, including Texas senators John Cornyn and Kay Bailey Hutchison, wrote to Obama.

Meanwhile, GOP staffers on the House Natural Resources Committee contended the increase in U.S. oil production had nothing to do with Obama’s policies and production rose only because output went up on state and private lands.

“The president’s trying to take credit for work he had nothing to do with, while simultaneously trying to avoid blame for his own anti-energy policies,” House Natural Resources Committee Chairman Doc Hastings, R-Wash., said in a statement. “He can’t have it both ways.”

Data from the Energy Information Administration shows fossil fuel production on federal lands has remained relatively constant over the past decade, though it did have a sudden drop of almost 20 percent between 2009 and 2010. Since 2000, federal lands’ share of U.S. production fell from 37 to 29 percent, the data show.

Republicans also took aim at the president’s statement that his administration would open up 75 percent of “potential offshore resources” to oil and gas development. The figure actually refers to the administration’s five-year leasing plan for the outer continental shelf.

Interior Secretary Ken Salazar said in November the five-year plan would make available 75 percent of the nation’s potential oil and gas resources located in the outer continental shelf and viewed as recoverable. Drilling advocates such as the American Petroleum Institute have said the leasing plan didn’t go far enough and the administration should open up additional waters for drilling.

The plan would set up lease sales in the central and western Gulf of Mexico as well as in some Arctic and eastern Gulf areas, but it would not open up leases in the Atlantic Ocean.

Tommy Beaudreau, director of the Bureau of Ocean Energy Management, noted that more drilling rigs are operating in the deep waters in the Gulf Mexico now than before the Deepwater Horizon disaster in 2010.

“The Gulf of Mexico remains an enormously attractive place to work,” even with new safety measures put in place since the oil spill, he said in a speech in Louisiana.

It would be “premature to schedule lease sales” in the South and mid-Atlantic as BOEM is still studying and gathering information on the implications of opening up those areas, Beaudreau said.

Critics of the administration also sounded off on what they say are policies impeding development of oil and gas resources on federal land.

The Western Energy Alliance, an industry group, has expressed particular concern about pending Interior Department rules that could set restrictions on hydraulic fracturing on federal lands.

The department has said its new rules, which are still being written, will require disclosure of fracking fluids used on federal lands. Environmental groups argue rules are necessary to ensure oil and gas drilling is done as safely as possible.

“That’s a good start, but much more needs to be done to protect our communities and our environment,” Frances Beinecke, president of the Natural Resources Defense Council, said in a blog statement. “We need to hold the industry to safety standards, set sensitive places off limits, and keep contaminants out of our air and water. Only government safeguards can achieve those protections. Industry has already proven that it will not police itself.”

GOP committee staffers noted that new onshore leases in 2010 hit their lowest level since 1984, according to Bureau of Land Management data.

The Western Energy Alliance issued a statement after Obama’s speech saying the administration’s policies were making “energy development in the West increasingly difficult, time consuming and cost prohibitive.” The group has said companies are increasingly preferring state and private lands because U.S. regulations make it more costly to develop federal lands.

But onshore lease sales also rose by 20 percent in 2011 as the administration said reforms it had made reduced the number of protests of lease sales.

“We intend to continue to build on that success this year,” Deputy Interior Secretary David Hayes said at a Platts Energy Podium event earlier this month.

Kathleen Sgamma, vice president for governmental and public affairs, said in a phone interview earlier this month that the good news nationally “masks the fact that in the West the majority of leases are protested, even with changes made by this Interior Department.”

The protest rate on federal lands elsewhere is much lower and leases nonetheless remain off from where they were in the 1990s and early 2000s, she said.

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