The Facts on Domestic Oil and Gas Production

Some recent comments in the press have attempted to paint a picture that an agreement on energy issues signed during the President’s trip to Brazil shows a lack of commitment to domestic oil and gas production. Let’s be clear – this administration is committed to developing a broad range of energy sources, and we know that high prices at the pump are forcing Americans to make tough choices. That is why we continue to take steps that, over the long run, will save Americans money at the pump and lessen our reliance on foreign oil. We stand by our desire to be a strategic partner of Brazil on energy issues, but when it comes to domestic production our record speaks for itself, and regardless what some would like to claim, that record makes clear that we are fully committed to developing domestic resources safely, responsibly, and efficiently. 

It has been less than a year since the largest oil spill in U.S. history. In that time, this Administration has worked aggressively to implement unprecedented new safety and environmental standards that build on the lessons learned from the Deepwater Horizon oil spill. Contrary to misleading claims, production has continued. Following the development of important new standards, the Department of the Interior (DOI) has worked with industry to ensure they meet the standards, and as a result has to date issued 39 permits for new shallow water wells.  In February, oil companies were finally able to develop the first deepwater containment systems – designed to contain spills if the worst happens, as it did in the case of the Deepwater Horizon. Based on that ability – evaluated on a case-by-case, permit-by-permit basis –since February 28th, DOI has issued six deepwater drilling permits. Each permit needed to comply with all of the new standards, including demonstrating that they could contain an underwater oil spill like the one that released 4.9 million barrels of oil into the Gulf of Mexico just last year.

DOI is also taking a range of other steps to encourage domestic offshore production, immediately and over the longer term.  In fact, just last Monday, the agency approved the first deepwater exploration plan since new standards were put into place – a step that was applauded by industry and not only shows the industry’s ability to meet important standards, but will result in the opportunity for additional deepwater drilling permits.

These efforts also are bolstered by the responsible production that DOI is overseeing on onshore public lands as well. In 2010, the Bureau of Land Management (BLM) held 33 oil and gas lease sales covering 3.2 million acres, and processed more than 5,000 applications for permits to drill (APD) on Federal and Indian lands. In 2011, BLM is scheduled to hold an additional 33 lease sales, and the bureau expects to process more than 7,200 APDs.  

Of course production is not just about federal action, industry needs to do their part, not only taking the necessary steps to develop and produce responsibly, but ensure they use the leases they have. Currently, just 45 percent of all onshore leases are actively producing, and less than 30 percent of the millions of acres under offshore leases are producing. That is why the administration is also taking steps to provide additional incentives for industry to develop oil and gas supplies from the leases that already are in their hands.

This Administration will continue to take concrete and immediate steps to support responsible domestic production, as well as expand our energy portfolio to increase clean energy sources and invest in efficiency across the board.  As the President said on March 11, “any notion that my administration has shut down oil production might make for a good political sound bite, but it doesn’t match up with reality.”