One of the standard talking points about high gas prices is the notion that restrictions on exploration and drilling in environmentally sensitive federal lands and offshore areas have tightened supplies of oil at a time of heightened demand. If we can just open those areas and drill more, the logic goes, gas prices would plummet.
Never mind that the oil in ANWR wouldn't be available for years. Moreover, as the Campaign for Our Future notes:
Drilling for oil in Alaska's Arctic National Wildlife Refuge would, at most, lower the cost of a barrel of crude oil by 50 cents in 2025.
That's 50 cents per barrel of crude, not per gallon of refined gasoline. But what about the notion itself that the government has frowned on drilling on federal lands?
A new majority staff special report [pdf file] issued last week by the House Committee on Natural Resources contains some fascinating information. The core findings:
In a Nutshell
_ On the Outer Continental Shelf, 82% of federal natural gas and 79% of federal oil is located in areas that are currently open for leasing._ Onshore, 72% of oil and 84% of natural gas resources are either fully accessible under standard lease stipulations designed to protect lands and wildlife, or will be accessible pending the completion of land-use planning or environmental reviews.
_ Between 1999 and 2007, drilling permits for oil and gas development on public lands increased more than 361%.
_ Since 2004, the Bureau of Land Management has issued 28,776 permits to drill on public land; in that same time, only 18,954 wells were actually drilled.
_ Oil and gas companies have stockpiled nearly 10,000 extra permits to drill that they are not
using to increase domestic production.
_ Onshore, of the 47.5 million acres of federal lands leased by oil and gas companies, only about 13 million acres are actually producing oil and gas.
_ Offshore, only 10.5 million of the 44 million leased acres are currently producing oil or gas.
_ Combined, oil and gas companies hold leases to nearly 68 million acres of federal land that are not producing oil and gas.
_ The 68 million acres of leased, inactive federal land could produce an additional 4.8 million barrels of oil and 44.7 billion cubic feet of natural gas each day.
_ That would nearly double total U.S. oil production, and increase natural gas production by 75%.
_ 4.8 million barrels of oil equals more than six times the estimated peak production from the Arctic National Wildlife Refuge.
_ Development of and production from the 68 million acres currently under lease but not in production would cut US imports of oil by one-third.
Now, the number of permits isn't the same as the potential deposits of oil and natural gas, but the report does make an interesting point about another measure of natural resources, leases on federal lands:
Further, despite the federal government's willingness to make public lands and waters available to energy developers, of the 47.5 million acres of on-shore federal lands that are currently being leased by oil and gas companies, only about 13 million acres are actually in production, or producing oil and gas (Figure 2). Similar trends are evident offshore as well (Figure 3), where only 10.5 million of the 44 million leased acres are currently producing oil or gas.
Combined, oil and gas companies hold leases to nearly 68 million acres of federal land and waters that they are not producing oil and gas (Figure 4). Oil and gas companies would not buy leases to this land without believing oil and gas can be produced there, yet these same companies are not producing oil or gas from these areas already under their control. [emphasis added]
Go read the whole report. It's a fascinating look at the under-exploitation of federal lands that are already open to oil and natural gas exploration.
Of course, oil industry groups tell a different story here in its own report, intended to convince readers that there's no such thing as Big Oil.
But even in that report, there's an interesting contrast to another one of the conservative talking points: no new refineries have been built in this country for a long time, and over-regulation is the reason. Really? The API report notes that it's more cost effective to expand existing facilities than to build news ones, and so the equivalent of four new refineries will be created by expansion by 2010, or within the next two years:
Since 1985, U.S. refining capacity has increased by 20 percent even though there are 57 fewer refineries. Because the infrastructure to bring crude in and get products out is in place, it is more cost effective to add on to a refinery than to build a new one. The elimination of subsidies under the government price and allocation controls in 1981 led to the closure of many smaller, less efficient refineries throughout the 1980s and 1990s.
According to the U.S. Energy Information Administration, current domestic refinery expansion plans will boost domestic refining capacity by another 800,000 barrels per day by 2010, the equivalent of four new refineries.
Moreover, a number of refinery modification or expansions have been announced to handle increased processing of heavier crude oils, including oil derived from Canadian oil sands. This additional crude from Canada – a reliable, nearby source –should enhance our domestic energy security.
And for those who don't like calls for conservation? The industry report says:
The greatest “new” energy source available to use is the reduced demand brought about by greater energy efficiency and Conservation.
The Campaign for Our Future site looks at those who fought increased efficiency and conservation:
Since 2001, the Administration and its allies in Congress blocked efforts to promote U.S. energy independence. The most important of these:
- They repeatedly blocked measures to encourage conservation and greater use of renewable energy sources. The Bush Administration slashed Department of Energy programs that had promoted conservation, efficiency, and renewable energy sources. Bush and Senate conservatives killed 2007 legislation that would have required 15 percent of our electricity to come from renewable sources. The Administration and Senate conservatives continue to block the Renewable Energy and Energy Conservation Tax Act of 2008.
- They obstructed efforts to increase fuel efficiency. Conservatives did nothing to improve fuel efficiency for cars and SUVs while they controlled Congress and the White House. Then in December 2007, the day after Bush signed Democratic legislation which modestly increases fuel efficiency standards, the administration blocked laws enacted in 18 states that would improve auto efficiency rules for a majority of Americans.
Eliminate fuel efficiency standards entirely? Yeah, that will help. Minnesota Central takes a look at that idea, among others, in In MN-01 Davis opposes mandates but what about subsidies ?
Graphics--top to bottom: Drilling permits & gas prices; offshore natural gas open to exploration; offshore oil open to exploration, all from House Natural Resources Committee special report [pdf file]. Final chart: refinery expansion v. number of refineries, API report.
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