Obama, GOP battle over credit for surging oil and gas production

This player has full sharing enabled: social, email, embed, etc. It has the ability to go fullscreen. It will display a list of suggested videos when the video has played to the end.

 

Republicans and the White House are battling over whether President Obama deserves credit for oil and natural gas production that has surged in the last few years.

Many Republicans claim that Obama, who faces political headwinds over the botched ObamaCare rollout, is touting a U.S. success story he did nothing to enable.

ADVERTISEMENT
“They looked at the numbers and they are trying to make good news out of anything nowadays, so they are going to try and take credit for this development, when we all know that this is not because of development on any federal lands,” Sen. Lisa Murkowski (R-Alaska) told The Hill on Thursday.

U.S. oil production is at its highest point in the last two decades, import reliance is dropping, and natural gas production is at record levels.

Republicans frequently point to data showing the surge has occurred largely on the strength of production from shale formations outside the regions that the Interior Department regulates.

“This is because of development on state and private lands, and it has been fabulous, so let’s take advantage of that on the federal side as well,” said Murkowski, the top Republican on the Senate Energy and Natural Resources Committee.

House Republicans used debate over energy bills on their side of the Capitol this week to hammer the point that the production surge has been centered on state and private lands.

The bills, including a measure to mandate faster drilling permits on federal lands and make more areas available for drilling, are going nowhere in the Senate.

But they gave Republicans a platform to try and counter a White House that has increasingly highlighted the U.S. energy boom in recent days.



“The Obama administration is actively and purposely keeping these resources off-limits. Leasing and permitting delays, regulatory hurdles, and ever-changing rules are a few of the reasons energy production on federal lands is in decline,” House Natural Resources Committee Chairman Doc Hastings (R-Wash.) said during debate.

It’s not a new political tussle between the White House and Republicans.

Obama and his GOP challenger Mitt Romney, for instance, squared off over development on federal lands in one of the testiest exchanges in their 2012 presidential debates.

But the battle flared again this month when the federal Energy Information Administration (EIA) reported an eye-catching statistic on Nov. 13.

October’s 7.7 million barrels per day of U.S. oil production meant that the country produced more oil than it imported for the first time since 1995, according to the EIA, which is the Energy Department’s independent statistical arm.

That didn’t go unnoticed by Obama or his aides, who touted the report alongside information about falling imports, auto efficiency and the White House’s second-term climate change agenda.

Obama reminded the business community, which often bashes his energy policies, of the data when appearing at a Wall Street Journal-hosted forum on Tuesday.

“We decided to reverse our dependence on foreign oil, and today, we generate more renewable energy than ever before and more natural gas than anybody in the world. And for the first time in nearly 20 years, America now produces more of our own oil than we buy from other countries,” Obama said.

Dan Utech, Obama’s top White House energy adviser, highlighted the production news in a blog post last week that also addressed Obama’s auto efficiency policies and falling imports.

Data on U.S. production and where it’s happening provides ammunition for both sides.

According to the EIA, combined oil production from federal lands and waters rose sharply from fiscal 2008-2010, largely on the strength of surging Gulf of Mexico production, but then dropped in 2011 and 2012.

Natural gas production from federal lands and waters has generally been declining for a decade, according to the EIA, which uses Interior Department-reported sales figures for its estimate.

A big part of the trend can be attributed to the location of shale deposits where hydraulic fracturing, or fracking, and horizontal drilling have allowed producers to tap huge oil or natural gas resources.

Much of it is in Pennsylvania, where gas production has taken off. And it's common in Texas and North Dakota, states where the federal government owns far less land than it does in several Western energy-producing states.

“There are only so many dollars out there,” said Sarah Ladislaw, an energy expert with the Center for Strategic and International Studies, noting the heavy industry investment in shale exploration outside of federal lands.

“When you overlay those two maps, the places to be weren’t necessarily on federal land,” said Ladislaw, co-director of the think tank’s Energy and National Security Program.

However, she also noted that energy producers might be skeptical of the way federal lands are governed.

Obama’s critics focus heavily on the regulatory climate, not the shale geography, to explain why production from federal regions has dropped even as overall U.S. oil and gas production soars.

“The strange irony is that no president in modern history has benefitted more from energy production that his policies actively oppose, both politically and economically,” said Benjamin Cole, spokesman for the conservative, business-backed American Energy Alliance.

However, the same EIA figures show that oil production from onshore federal areas specifically has actually been rising slightly since 2008.

In the Gulf of Mexico, where almost all waters are federal, crude oil production has fallen in recent years.

That’s partly an echo of the temporary deepwater drilling freeze that followed the BP oil spill, a disaster that prompted the Interior Department to revamp its oversight.

But the EIA’s 2013 Annual Energy Outlook forecasts that offshore oil production will start rising again. It’s already higher this year than in 2012 and is forecast to pick up steadily from roughly 1.5 million barrels per day in 2013 to nearly 1.8 million in 2016, according to the EIA.