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Section A: General News


Editorial: President Obama blocking new economic lease on life




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July 30, 2014 | 2,648 views | Post a comment

By Robert L. Bradley Jr.

Innovative drilling techniques have transformed the United States into the world’s top producer of petroleum and natural gas. Recent analysis suggests America is in the midst of the second biggest oil boom in history. Yet, there are regions in the United States where energy production has unjustifiably dropped in recent years. Their common denominator is ownership by the federal government and operation by the Obama Administration’s Department of Interior.

According to a new report by the Congressional Research Service, while oil and gas development on private and state lands has surged, production on federal lands has fallen. The dichotomy can only be explained by blatant, pernicious Obama administration policies.

According to the Congressional Research Service, between fiscal years 2009 and 2013 oil production on private and state lands jumped 61 percent (an average increase of 2.1 million barrels per day), while federal land output fell 6 percent. With natural gas production in the same five-year span, production rose by one-third on private and state lands, but decreased 28 percent on federal lands.

The same technology and many of the same companies are at work on federal lands as on private and state lands. The difference resides in the back rooms of Washington, D.C. bureaucracy.

Since 2009, the average time it takes to secure a drilling permit for federal lands has risen by 18 percent compared to the previous five fiscal years. As recently as 2011, it took an astonishing 307 days to get the Bureau of Land Management’s (BLM) go-ahead for just a single oil or gas well. By comparison, some states grant permits in as few as 10 business days. Leasing federal lands has also become more difficult. The BLM has issued 50 percent fewer leases under the current administration than it did during President Clinton’s tenure.

Why isn’t the administration making it easier for the citizens to reap the benefits of our country’s most valuable resources? The positive effects of growing domestic energy production is indisputable. In 2012 alone, the newly vibrant oil and gas sectors supported 2.1 million jobs and added the equivalent of $1,200 to the average household income.

A new study by the U.S. Conference of Mayors, meanwhile, finds that, over the last three years, the energy boom has boosted manufacturing employment in metropolitan areas by an annual average of 1.7 percent. If Obama complains that the economy is leaving the middle class behind, he needs to have a talk with the mirror.

Replacing imports with backyard supply is supposed to be a goal of federal energy policy. Indeed, as Obama said in this year’s State of the Union address, “America is closer to energy independence than we’ve been in decades.” Yet his multi-front war on fossil fuels, part of his climate-change policy, puts him at odds with the fruits of the hydraulic fracturing/horizontal drilling oil and gas production boom. By discouraging energy exploration on federal lands, the administration is wasting an unprecedented opportunity to grow the nation’s economy and create jobs. According to an analysis from my own organization, the Institute for Energy Research, opening up more federal lands for drilling would lead to an annual increase in gross domestic product of $127 billion for the next seven years.

The potential for energy projects to grow jobs and wages is already on display in places where exploration has been allowed to move forward. In 2013, earnings growth in North Dakota, Oklahoma, and Texas outpaced the national average for the fourth year in a row thanks mostly to oil and gas development projects.

If the government created more boom-towns by opening up federal lands to drilling, it could add 552,000 jobs to the economy annually over the next seven years. Wages, meanwhile, would grow by $32 billion a year. In the long-term, expanding oil and gas exploration on federal lands would also help address the growing national debt, which currently exceeds $17 trillion. Such projects would increase federal tax revenues alone by $2.7 trillion during the next 37 years.

It’s the president’s obligation to use government land in ways that benefit taxpayers and strengthen our nation. By effectively keeping federal land inhospitable to oil and gas development, Obama is failing in this important duty.

Robert L. Bradley Jr. is CEO and founder of the Institute for Energy Research and the author of seven books on energy history and public policy.
 

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