Fact Check on #SOTU and Rep. Doc Hastings

In Tuesday night’s State of the Union address, President Barack Obama stated:

“Now, in the meantime, the natural gas boom has led to cleaner power and greater energy independence. We need to encourage that. That’s why my administration will keep cutting red tape and speeding up new oil and gas permits.”

House Natural Resources Committee Chairman Doc Hastings claimed in a response, yesterday, that Obama administration-created red tape has slowed down energy production.

The truth is that the oil and gas industry already has plenty of land and opportunities to drill. Oil and gas companies are sitting on millions of leased acres of public land that they’re using for production or exploration, and thousands of idle drilling permits. Meanwhile, the United States has seen oil production skyrocket on federal lands. Technology, geology and price determine where and how much industry drills, not red tape.

Instead of worrying about multi-billion dollar oil and gas companies, the Obama Administration needs to adopt a more aggressive policy when it comes to conserving public land. During President Obama’s first term, his administration permanently protected far fewer acres than his immediate four predecessors. The President and Congress need to adopt a more balanced approach to public land use, putting as much effort into protecting lands that are crucial to the nation’s tourism and outdoor recreation industries as they do expanding the oil and gas industries’ already-swollen public land holdings.

A few things Americans need to know about oil and gas production on public lands:

  • Industry is responsible for the majority of permitting delays. Last year, BLM announced it is moving to an online permitting system that will hopefully help companies cut down the time it takes them to properly file permit applications.

permit_timingBLM Table of Average Application for Permit to Drill (APD) Approval Timeframes:  FY2005 – FY2012

  • Industry is submitting far fewer permits to drill on public lands because of the shift from public lands’ natural gas resources to private lands’ shale oil deposits, and the federal government can’t approve a permit unless industry submits an application for it. More importantly, the federal government consistently approves drilling permits faster than industry can drill new oil and gas wells. The only thing holding back industry is industry.

wells_v_permitsBLM Summary of Onshore Oil and Gas Statistics

  • Industry does not use the drilling permits that have already been issued for oil and gas development. In fact, there are nearly 7,000 unused drilling permits that industry could develop on federal public lands.

unused_permitsBLM Approve Permits – Not Drilled table

  • According to the Department of Interior’s Oil and Gas Lease Utilization, Onshore and Offshore report, issued May 2012, “As of March 31, 2012, approximately 56 percent (20.8 million acres) of total onshore acres under lease on public lands in the Lower 48 States were conducting neither production nor exploration activities”

leased_productionDOI Oil and Gas Lease Utilization Report

  • The latest oil boom in the lower 48 states is due largely to an unconventional resource known as “shale oil,” (oil trapped within shale rock). The vast majority of both “shale oil” and “shale gas” (natural gas trapped within shale rock) is found under private and not public lands. The location of these resources, not safeguards for air and water, explain the shift in drilling from public to private lands.

shale_locationAdam Sieminski, U.S. House, Subcommittee on Energy and Power Committee on Energy and Commerce, 2 August 2012

House Energy and Power Subcommittee promotes failed oil shale speculation, despite century of failure and new reports that world’s leading firm could lose big on Utah oil shale project

“It’s disappointing to see Rep. Whitfield and House Republicans recycling the same old failed energy ideas. Despite being awarded billions in taxpayer funds, all these oil shale speculators have to show is failure. We need real energy solutions, not more speculation and failed investments,” said Ellynne Bannon, western lands program manager for the Checks and Balances Project.

Key Facts

  • The Obama Administration has moved forward with new research and development leases for oil shale on public lands. In November 2012, the U.S. Bureau of Land Management finalized two new oil shale research, demonstration, and development leases to ExxonMobil and Natural Soda.
  • Oil shale is not oil. It is a rock that has to be heated to 700 degrees or more over months, or even years, in order to be processed into oil. Taxpayer dollars have already funded $3.2 billion dollars in loan guarantees and $3.7 billion in price guarantees to oil companies for oil shale with nothing to show for it except failed projects.
  • Some oil shale advocates like to point to the nation of Estonia as proof that oil shale can be a viable energy source. Unfortunately, Estonia isn’t saying the same thing about U.S. oil shale.  The CEO of Eesti Energia, Enefit’s parent company, a world leader in oil shale development has acknowledged that oil shale isn’t profitable and that “we have time” to wait and “we will not make any real investments” in the U.S. until the oil shale industry in Estonia is at a “new level.”
  • Just last month Enefit, a company trying to produce oil shale in Utah, came under fire from a key investor – the Estonian government – when it was revealed that the company could lose up to $100 million dollars on their project in Utah. It was also reported that Enefit’s Utah project has proven to be “unexpectedly difficult to do, and that tests indicate that Utah oil shale requires more energy to break down than expected, resulting in higher carbon dioxide emissions.

Tipton staffer goes to WEA, raises his ties to oil and gas companies

Colorado Congressman Scott Tipton’s close and questionable ties to oil companies have been a source of controversy since he was first elected. These include:

  • His campaign contributions from oil companies;
  • His financial investments in oil companies lobbying for the Keystone Pipeline – which he voted in favor of , and
  • His ties to SG Interests, an oil company recently ordered to pay $275,000 in fines to settle a federal anti-trust law suit. In 2012, SG Interests started a super PAC to help re-elect Tipton.

Last week, Coloradoans were given another look behind the curtain at Rep. Tipton’s cozy relationship to Big Oil as a former Tipton aide announced he is joining Western Energy Alliance – an oil and gas lobbying group known to be critical of drilling safety standards.

Last year, WEA representatives testified on behalf of a Tipton bill that would mandate energy development as the primary use of all public lands – which would leave agriculture, hunting, fishing, outdoor recreation, and watershed interests out in the cold.

We understand that Rep. Tipton is influenced by his addiction to Big Oil contributions and the size of his personal net worth. But, at some point he needs to put the Coloradoans who elected him before big oil company CEOs.

Natural Resources Committee can’t continue 112th’s land use approach in the 113th

“Those who cannot remember the past, are condemned to repeat it.”
George Santayana, Life of Reason, Reason in Common Sense

Over the course of the 112th Congress, we stood witness to an approach to public land use that has swung spectacularly out of balance. Nowhere is this more evident than in the actions of the House Natural Resources Committee (HNRC). So as the curtain rises on the 113th Congress, we wanted to take a moment to remember the past two years, lest the nation be condemned to repeat them.

Any lip service paid by the HNRC’s leadership to a balanced energy approach has been thoroughly disproven by their actions. Rather than take a smart approach that creates the most energy while protecting our water, communities and resources for future generations, Hastings and his team spent the 112th falling over themselves to continue billions in taxpayer-funded handouts to oil and gas companies.

Under the leadership of Chairman Doc Hastings (R-Wash.) and his lieutenants, Rep. Doug Lamborn (R-Colo.) and Rep. Robert Bishop (R-Utah), HNRC focused on promoting the long-failed oil shale experiment. Their oil shale swindle would have given two million acres of public land to oil companies for oil shale speculation, while providing bargain basement royalty rates.

The bill (H.R. 3408), sponsored by Rep. Lamborn, would have provided no energy and no revenue to Americans – just millions in taxpayers handouts to the oil and gas industry.

House Speaker John Boehner named Lamborn’s bill a funding source for his highway bill, but an analysis from the nonpartisan Congressional Budget Office found that the bill would generate zero revenue.

The extremism of the HNRC didn’t stop there.  The committee also failed to address or even investigate the causes of the Deep Horizon spill in the Gulf of Mexico, or to consider policies needed to prevent a further spill – despite the billions in damages BP caused. To the contrary, HNRC voted multiple times to lift the temporary safety moratorium that was installed following the Gulf of Mexico spill.

The majority on the HNRC also fought tirelessly to secure more of our public lands – forests, canyons, waterways – for oil and gas drilling. Hastings and his peers ignored facts like record-level production, decreased nominations by oil companies and that new deposits like the Bakken Field and Eagle Ford are located on privately owned land.

Instead, they continually complained that oil and gas companies, which reaped some $136 billion in profits in 2011, and collected billions in taxpayer-funded handouts, were being mistreated.

The HNRC also failed to protect any new public lands as wilderness. This makes the 112th the first Congress since 1966 to not do so.

In the new Congress, Rep. Hastings remains HNRC chairman. Rep. Lamborn remains chair of the Subcommittee on Energy and Mineral Resources, and Rep. Bishop will remain chairman of the re-named subcommittee on Public Lands and Environmental Regulation. This means there is no reason to believe the balance of land use will correct itself.

Let’s hope that the American people remember the past, and let these politicians know they don’t want it repeated.

Oil shale: Energy’s pink unicorn

Norquist's pink unicorn

Grover Norquist, founder of the right wing, anti-tax group Americans for Tax Reform, recently spoke out about the folly of spending tax dollars on pink unicorns, since they don’t exist. Following his logic, government shouldn’t create handouts for oil shale, since it doesn’t exist as an energy source.

We want to see if Mr. Norquist is willing to join us in calling for an end to all oil shale subsidies.

After a century of efforts to turn oil shale into a viable energy source, no commercial industry for it exists. And, that’s even after the federal government has risked billions in taxpayer-backed handouts to oil companies in the name of oil shale, including a brand new $50 million subsidy that was just introduced in Congress.

Mr. Norquist’s position on pink unicorns came in response to Sen. Lindsay Graham’s (R-SC) statement about voting for tax increases. Norquist claims that spending cuts to ‘match’ tax increases won’t ever happen (In other words, the cuts will never come to exist, like pink unicorns).

“If you had a pink unicorn, how many dollars in taxes would you raise to trade for the pink unicorn? Since pink unicorns do not exist in the real world, it’s never occurred to me to worry about the senator from South Carolina.”
— November 28, 2012, NPR

Oil shale is the pink unicorn of energy.

Commonly confused with the shale oil being drilled for in the Bakken and Eagle Ford fields, oil shale is actually a rock that contains a fossilized organic substance called Kerogen. Kerogen was never subjected to the titanic heat and pressure that forms liquid oil. To take the place of Mother Nature’s process, oil shale speculators have to superheat the rocks to 700 degrees or more over months or even years, to create oil.

After a century of investment and research, oil companies haven’t found a way to duplicate those geologic forces in a commercially viable way.

In late November, the nonpartisan budget watchdog group Taxpayers for Common Sense released a report examining the billions of tax dollars that have been risked on oil shale speculation. Nearly $7 billion taxpayer-funded handouts in the form of loan and price guarantees for oil shale were made to oil companies in just the 1980s alone.

Coincidentally, just as Taxpayers released their report, Rep. Ralph Hall (R-TX) introduced a bill (H.R. 6603) with $50 million in new government handouts for the pink unicorn of energy, oil shale.

And, Rep. Hall is trying to give away this money even though companies involved in oil shale speculation say they don’t want or need taxpayer subsidies.

“We’re not asking for any special treatment[.] We’re asking to be able to proceed as any other industrial development would.
— Rikki Hrenko, CEO of Enefit American Oil, Bloomberg, February 27, 2012

Hall’s bill comes even after a Congressional Budget Office (CBO) analysis found that opening up public lands to commercial oil shale development would provide zero revenue.

That CBO analysis was sparked by Speaker Boehner and Rep. Lamborn’s proposal to use oil shale royalties to fund transportation projects. That plan had a number of flaws, including the fact that there is no commercial oil shale industry to generate royalties, and that another section of the bill slashed any potential royalties to bargain basement levels.

Oh, and Rep. Lamborn said oil shale wouldn’t help transportation funding.

After the Lamborn bill went nowhere in the Senate, the House again tried to prop-up oil shale by including new spending on oil shale research other legislation.  Cooler heads prevailed, and the amendment offered by Reps. Jared Polis (D-CO) and Gerry Connolly (D-VA) that struck funding for oil shale research from the appropriation, passed.

Rep. Hall’s bill is the third attempt by supposedly conservative members of Congress to prop up an industry that says it doesn’t need or want subsidies.

Maybe Mr. Norquist’s influence is waning in Congress, because Republicans continue to offer up pink unicorns as solutions to real energy challenges. We hope that he will lend his voice to the chorus of Americans asking our government to stop giving billion-dollar oil companies more of our tax dollars for a rock that supplies as much energy as a pink unicorn.

— Artwork by Ben Topf

Oil and gas welfare queen parking only

Remember back when Energy and Commerce Committee Chairman Fred Upton (R-Mich.) said he would have EPA Administrator Lisa Jackson in front of Congress so often she’d need her own parking space? Maybe he should have made the same offer to oil and gas welfare queen Kathleen Sgamma.

Today’s Energy and Power Subcommittee hearing marks the Western Energy Alliance’s Vice President of Government & Public Affairs’ FIFTH appearance before the 112th Congress. She’s scheduled to testify about drilling on private lands vs. public lands.

We’re willing to bet Ms. Sgamma won’t admit that industry is drilling more on private lands because that’s where the oil is. The vast majority of the much-hyped and very lucrative shale oil resources such as the Bakken in North Dakota or Eagle Ford in Texas are under private lands. (Don’t believe us? See the map on page 6 of this EIA presentation.)

What’s more likely is that Sgamma will continue to ask for more government welfare. Big Oil CEOs are already sitting on 20 million idle acres of public lands leased for development and upwards of 7,000 permits with a green light to drill.

In fact, Ms. Sgamma has testified in support of legislation that would create more welfare for oil and gas companies such as oil company quotas on taxpayer-owned public lands.

Obviously no stranger to the Hill, over the last two years, Ms. Sgamma has testified:

  • Three times before the House Natural Resources Committee, Energy and Mineral Resources Oversight Subcommittee,
  • Once before the House Science, Space, and Technology Committee, Energy and Environment Subcommittee
  • Once before the House Oversight and Government Reform Committee.

It’s always the same tired story that goes out of its way to twist the truth about energy development in the West.

The fact is that oil and gas companies are drilling at record levels. They’re drilling most in states such as North Dakota because that’s where the shale oil is and what can turn the greatest profit. Who would believe it? Companies drill for oil because that’s where they make money.

The non-partisan Headwaters Economics found in their research: “Since the end of 2009, oil production has more than doubled in North Dakota where the oil resource is best.”

ImageBut here’s the kicker, oil and gas drilling is up on both private and public lands in North Dakota. In fact, the U.S. Bureau of Land Management averaged nearly double the amount of drilling permits under President Obama than under President Bush in North Dakota.

In fact, oil and gas leasing, permitting, and drilling on North Dakota’s BLM lands were all higher under President Obama than President Bush.

Why? Because the main factors for oil and gas drilling isn’t public lands policy, it’s geology, technology and price. Oil companies are drilling on private and public lands in North Dakota that have shale oil under them. Fracking technology has made once impossible-to-get resources profitable. Throw in the huge bump in oil prices thanks to increasing world demand and voilà … drilling companies are drilling for oil under land that has oil.

They’re not drilling for natural gas in the Rockies because the price of natural gas plummeted in 2009, and now the Rockies have to compete with more lucrative plays closer to major populations such as the Marcellus Shale.

If Ms. Sgamma plans to continue her frequent trips to Capitol Hill with the 113th Congress, we suggest she reimburse the tens of thousands of dollars taxpayers have wasted on her “oversight” hearings and Big Oil welfare legislation mark-ups in the House.

But, she still should try for the parking space.

It’s DÉJÀ vu all over again – Oil-backed politicians hold conference call to push new handouts to oil companies

The House Majority leadership has declared it will bring a package of  “oil-above-all” bills to a vote next week. They’re calling the bills the Domestic Energy and Jobs Act (DEJA). We’re calling it the DÉJÀ VU bills, because it’s simply more of the same: Oil-sponsored politicians are trying to create new government handouts to their oil industry campaign contributors.

Today, House Majority Whip Kevin McCarthy (R-Calif.), House Natural Resources Chair Doc Hastings (R-Wash.) and Rep. Cory Gardner (R-Colo.) are getting on a blogger conference call at 11:30 AM EST to talk about the DÉJÀ VU bills. If you’re going to be on that call, we hope you’ll ask them a few questions, since we weren’t invited.

“It’s déjà vu all over again,” said Checks and Balances Co-Director Matt Garrington. “Chairman Hastings, Rep. Gardner and other oil-soaked politicians are trying to disguise new land giveaways to oil companies as job bills. If energy development on more land will create more jobs, why aren’t they trying to force oil company CEOs to use the 20-million acres that are leased to them and laying idle? It’s because oil company CEOs fill their reelection campaign accounts, and these congressmen are singing for their supper.”

  • Rep. Kevin McCarthy has taken $359,300 in oil and gas industry contributions.
  • Rep. Doc Hastings has taken $241,804 in oil and gas industry contributions.
  • Rep. Cory Gardner has taken $304,724 in oil and gas contributions.

*All amounts according to the Center for Responsive Politics (www.opensecrets.org)

Here are some facts about the DÉJÀ VU bills that McCarthy, Hastings and Gardner are probably hoping you overlooked:

Rep. Cory Gardner’s bill (H.R. 4480)

  • Attempts to increase the amount of land available to oil companies in a blatantly political fashion. The Gardner bill mandates that every time President Obama draws oil from the Strategic Petroleum Reserve (SPR), that the BLM would have to lease an equal percentage of public lands to oil and gas companies. This throws any market-based approach to supply and demand on our public lands out the window. Rep. Gardner fails to call the oil companies to account for the tens of millions of acres currently leased and thousands of permits issued but not yet developed.

Rep. Doug Lamborn’s bill (H.R. 4383)

  • Assesses “a $5,000 documentation fee” on anyone from “the public” who wishes to formally object to a leasing or drilling decision. These decisions affect public lands that are owned by all Americans. In effect, the bill is the equivalent of someone telling you that it will cost you $5,000 just to object to drilling in your front yard.
  • Places limits on how judges are allowed to conduct judicial review. They would be forced to “presume” that initial decisions on leasing and drilling were “correct” and in most cases could only enjoin decisions for no more than sixty days.

Rep. Mike Coffman’s bill (H.R. 4382)

  • Puts the authority for deciding how much public land is available for drilling in the hands of the oil companies instead of the Bureau of Land Management (BLM).  Coffman’s bill does this by mandating that the BLM offer at least 25 percent of the area nominated for leasing by industry. In order to gain more land, oil companies simply would need to nominate more lands knowing that they’d be guaranteed at least a quarter of the total lands nominated. These are the same oil companies currently sitting on over 20 million acres of idle leases on public lands.
  • Rolls back the Salazar leasing reforms which provide a common sense approach to public lands management. This would prevent local government and other stakeholders from having a say up front in the leasing process and create more conflict on public lands. It would also remove common sense protections for air quality, water quality, and wildlife habitat by allowing oil companies to skirt scientific review prior to drilling. These reforms have been key in reducing conflict and creating more certainty for industry on how to proceed with a lease once it’s issued.

Rep. Scott Tipton’s bill (H.R. 4381)

  • Ignores the balanced land use approach that we’ve developed in Colorado, and instead mandates that energy development be the primary use of all public land. This leaves ranchers, outdoor recreation businesses, watershed protection, and hunting and fishing in the dust.
  • Disposes of the current “multiple-use” mandate under which most of the public lands are managed. Instead, the Secretary of the Interior would be mandated to “take all necessary actions” to reach an objective for energy development on public lands. That objective would be decided by Washington insiders and likely with undue oil industry input, instead of feedback from Coloradans.

We urge any bloggers on today’s conference call to question the congressmen on these points and see what they have to say. But if you get a little dizzy, don’t worry. You’re just feeling DÉJÀ VU.