FACT CHECK: All-of-the-Above Approach to American Energy

Lately, there have been a lot of misleading claims about gas prices. As middle class families are struggling with high prices at the pump, a result of increased global oil prices, politicians have renewed their promises for $2 gas and their misleading claims about who is to blame. One thing is clear, cheap political points and false debates won’t bring down the price of gasoline. 

The fact is, oil is bought and sold in a world market.  And just like last year, the biggest thing that’s causing the price of oil to rise right now is instability in the Middle East. 

The truth is that there is no silver bullet to address rising gas prices in the short term, but there are steps we can take to ensure the American people don’t fall victim to skyrocketing gas prices over the long term.  That’s why since taking office the President has been focused on a sustained, “all-of-the-above” approach to developing new domestic energy sources, expanding oil and gas production, and reducing our reliance on foreign oil, most notably through the historic fuel economy standards the President has established, which will nearly double the efficiency of the vehicles we drive and save families $1.7 trillion at the pump.  It’s true that in the near term, the U.S. will continue to rely on responsibly produced oil and gas, but over the long term, the Obama administration is committed to a policy that allows us to transition from oil towards cleaner alternatives and energy efficiency. This strategy is a win-win scenario. A win for the economy. A win for energy security. And a win for the environment. Despite the facts, Republicans have continued to ratchet up the rhetoric, distorting facts and in some cases pushing complete falsehoods for short term political gains.

Here are some of the claims that have been made recently, and the reality that the politicians making those claims fail to acknowledge.

“Over the last three years, your administration has blocked, slowed, and discouraged the production of critical American energy sources.”

False.  The numbers speak for themselves. Since 2008, U.S. oil and natural gas production has increased each year, while imports of foreign oil have decreased.

• In 2011, U.S. crude oil production reached its highest level in 8 years, increasing by an estimated 110,000 barrels per day over 2010 levels to 5.59 million barrels per day.
• U.S. natural gas production grew in 2011 – the largest year-over-year volumetric increase in history – and easily eclipsed the previous all-time production record set in 1973.

Even if you fail to give the Obama Administration the credit it deserves in helping to expand this production, any notion that production has been blocked or slowed, doesn’t square with the facts.

“This President continues to limit offshore areas to energy production and is granting fewer leases on public land for oil drilling.”

False. In the wake of the largest oil spill in U.S. history the Obama Administration put in place important new standards that ensured that drilling continued, but that the lessons of the Deepwater Horizon oil spill were recognized, and guided future production. Today drilling and production continues, but in line with these important new standards. In fact, since new standards were put into place last year, the administration has approved hundreds of permits for drilling in the Gulf of Mexico, including:

• 308 permits for deep water drilling activities for 94 unique wells in the Gulf of Mexico and;
• 113 permits for shallow water wells in the Gulf of Mexico.

In fact, we are now permitting at levels seen before the Deepwater Horizon oil spill, all while meeting these important new standards.

Additionally, we believe an all-of-the-above approach doesn’t need to come at-any-cost. That is why just as we make available more than 75 percent of our potential offshore oil and gas resources, the Obama Administration continues to study the feasibility of exploration, development, and production in other areas. We will move forward, but in a manner that is safe and sensible. We need to protect sensitive ecosystems, and we don’t have to indulge the false choice between our energy security and the environment.

“President Barack Obama likes to take credit for this energy boom, but in reality, recent U.S. energy growth is largely a result of private-sector investment and policies put in place by his predecessors. The energy policies this president has adopted are jeopardizing the progress we have made, and if he continues them, the U.S. energy boom could soon be over.”

Since 2008, U.S. oil and natural gas production has increased each year, while imports of foreign oil have decreased. Much of that production is on private lands, and the President believes that we want to be expanding responsible production across the country not just on public lands.

We have taken steps to extend existing leases in the Gulf of Mexico and Alaska. In addition, in December the administration held a lease sale that covered over 20 million acres in the Gulf of Mexico, and last month the President announced an additional sale that will cover 38 million acres and produce up to 1 billion barrels of oil and 4 trillion cubic feet of natural gas.

Lastly and most importantly, we have put in place new rules to ensure that oil and gas companies are using the leases they have, and not just sitting on them. A report released last year by the Department of the Interior found that about 57 percent of leased onshore acres and over 70 percent of leased offshore acres were not being developed by the oil and gas companies that own them. And in 2010, of the nearly 37 million offshore acres offered for lease by the Federal government, only 2.4 million acres were leased by companies.

And EIA has projected that this trend of increased production will continue for the foreseeable future.

“On federal land, energy production fell 11 percent last year, and your draft five-year plan for off shore exploration projects a decline in federal leasing and permitting.”

On federal lands, we are taking steps to encourage increased production. Of course, public lands do not tell the whole story. Overall, since 2008, U.S. oil and gas production is up, and last year more oil was produced in this country than at any time since 2003. And despite a shift of industry interest away from producing on public lands, we continue to offer and permit more public land for development and production. Today, the U.S. has more oil and rigs at work in the field than the entire rest of the world. And, for federal waters, the Administration has announced the 2012-2017 Offshore Oil and Gas Development Program, which will make available more than 75 percent of our potential offshore oil and gas resources.

As you can see, the claims and the facts just don’t add up.

But our production record doesn’t end there.

• Earlier this month the Obama Administration announced the next steps towards further energy exploration in the Arctic.  And last week, we joined Mexico in an agreement that will make more than 1.5 million acres in the Gulf available for exploration and production, which contains an estimated 172 million barrels of oil and 304 billion cubic feet of natural gas.
• The Administration has proposed an Oil and Gas Leasing Program for 2012-2017, which makes available more than 75 percent of estimated undiscovered oil and gas resources on the U.S. Outer Continental Shelf. The proposed program schedules 15 potential lease sales, 12 in the Gulf of Mexico and three off the coast of Alaska, advancing safe and responsible domestic energy exploration and production by offering substantial acreage for lease in regions with known potential for oil and gas development.
• We are encouraging development of mineral resources in the Rocky Mountain West. For example, in February, we made more than half a million acres available for research and development of oil shale and other unconventional oil resources.
• Last year, the President established an interagency Alaska working group, which has been working to improve the efforts of Federal agencies responsible for overseeing the safe and responsible development of onshore and offshore energy in Alaska.  The group has been coordinating review of Shell’s proposed exploration activities in the Arctic, where we have not only extended leases, but are on track to approve exploratory development this summer.
• Onshore in Alaska, this Administration committed to holding annual lease sales.  In December 2011 we held a lease sale that covered over 140,000 acres and generated $3.6 million in total bids. 
• We have made enormous progress on renewable permitting for federal lands.  In all the years leading up to 2009, the federal government permitted a total 1,530 megawatts of clean energy – including zero megawatts of solar. But in the last three years, we have approved 29 onshore renewable energy projects to reach approximately 6,600 additional megawatts – including 16 solar projects, 5 wind farms, and 8 geothermal facilities. In this State of the Union address, the President set a goal to reach 10,000 megawatts by the end of this year – enough to power 3 million homes. That’s a strong record.

Lastly, as part of the promises for quick fixes, politicians have turned the Keystone pipeline into some sort of panacea to high prices at the pump. The irony is that it was Congressional Republicans who stopped this project from going forward by inserting it into the December payroll tax cut legislation and trying to score political points, despite knowing that it could not be approved before their arbitrary deadline. Regardless, even if the pipeline had been approved, the oil from this pipeline does not start flowing immediately; first, the pipeline needs to be built.  In fact it would take the Keystone pipeline more than 45 years to carry the amount of oil we will save through the historic fuel economy standards established by President Obama.

That said, the January denial of the permit was not a judgment on the merits of the project. Dozens of pipelines have been built under this administration, and just this week TransCanada stated the company will move forward with a separate pipeline from Cushing, Oklahoma to the Gulf Coast. As the President stated in January, we support TransCanada’s interest in proceeding with the Cushing project, which will help address the bottleneck of oil in Cushing that has resulted in large part from increased domestic oil production. Moving oil from the Midwest to the state-of-the-art refineries on the Gulf Coast will not only modernize our infrastructure, but it will create jobs and encourage American energy production. We look forward to working with TransCanada to ensure that it is built in a safe, responsible and timely manner.  We’ll also take every step possible to expedite the necessary Federal permits.

Separately, TransCanada gave the State Department advance notice of its intention to submit a new application for the cross-border segment of the Keystone XL pipeline, from Canada to Steele City, Nebraska, once a route through Nebraska has been identified. By not allowing sufficient time for important review or the identification of a complete pipeline route, Republicans in the House forced a rejection of the company’s earlier application in January. And as we made clear, the President’s decision in January in no way prejudged future applications. We will ensure any project receives the important assessment it deserves, and will base a decision to provide a permit on the completion of that review.