gas

How President Obama has increased our energy costs

The Institute for Energy Research (IER) has just released a report documenting “actions President Obama has taken to increase energy prices and to increase the costs of cars, trucks, appliances, ice makers, and a multitude of other items that use electricity.” The list covers the period from February, 2009, to September, 2014. The full list (available here) extends for 13 pages and provides links to individual actions. Here is a sampling from the list:

February 4, 2009

Cancelled 77 oil and gas leases in Utah that could cost American taxpayers millions in lost lease bids, production royalties, new jobs and the energy needed to offset rising imports of oil and gas.

March 30, 2009

Signed the Omnibus Public Lands Management Act into law. This $10 billion, 1200-page bill prohibited energy production on over 3 million acres of federal land, costing American jobs.

January 8, 2010

Energy Department issues final rule for conservation standards for some consumer and commercial products including dishwashers, dehumidifiers, microwave ovens and clothes washers utilizing controversial Social Cost of Carbon calculations to justify cost.

February 17, 2010

Department of Energy notified Congress that it would reprogram $115 million Congress appropriated to continue the Yucca Mountain licensing process, and instead use it to terminate the only national repository for spent nuclear fuel under current law.

December 23, 2010

Interior Department announced a new “Wild Lands” Secretarial Order that could place hundreds of millions of acres of public lands off-limits to American energy production.

August 26, 2011

The Department of State concludes its 36–month environmental assessment of Keystone XL pipeline, which would transport as much as 830,000 barrels of oil from Canada per day to be refined and used in the US. The review found that no significant adverse impacts to the environment would result from the pipeline. Yet no action was taken to approve the pipeline.

January 9, 2012

Obama’s Department of the Interior Secretary Ken Salazar’s announces a 20-year ban on uranium mining on one million acres of federal land in Arizona.

February 3, 2012

Obama Administration announces plans to close off 75 percent of Western oil shale—of which 70 percent is on federal lands—to development.

January 18, 2013

Announced EPA regulations that would mandate costly upgrades to Arizona’s coal-fired Navajo Generating Station. Such changes would increase power and could impact water prices in Arizona as well. The local Navajo reservation could also see increased unemployment due to regulatory impacts.

November 15, 2013

Proposed Renewable Fuel Standards (RFS) levels outlining the levels of renewable fuels to be blended into gasoline and diesel fuel in 2014. The proposal calls for 17 million gallons of cellulosic biofuels in 2014. As of August 2014 producers have only been able to generate 72,000 gallons due to cost and complexity of the process.

April 18, 2014

Delayed final judgment again on Keystone XL pipeline that would deliver millions of barrels of oil from Canada and states like North Dakota to refineries on the Gulf Coast. The project has been blocked by the Obama Administration since 2008.

Remember, the whole list covers 13 pages. What I’ve listed above is about one page.

The Obama administration, especially the EPA, has been in collusion with radical environmental groups to stifle energy production. Anthony Watts has a report on his blog showing that “FOIA’d Emails show outside ‘green’ lobby groups staffed up, collude with Obama EPA, calling rules’ legality into question.” See his full post here. It begins:

The Energy & Environment Legal Institute (E&E Legal)

released a report today [Sep. 15] revealing and piecing together dozens of emails obtained under the Freedom of Information Act (FOIA), which lay out in detail EPA’s collusion with senior activists within environmentalist pressure groups, and proving the real thinking about the intent behind and impact of EPA’s “climate” regulations.

Far from the required recusing to avoid the appearance of a conflict, EPA filled its senior political ranks with green pressure group activists, continuing their life’s work and coordinating with former colleagues from their new positions in government. These emails show the groups sharing jokes about EPA assurances that it isn’t waging a war on coal, and gloating about the courts serially siding with EPA as it rewrites federal environmental law. More important, they show the special role and undue influence these relationships provided, the very sort of influence the Obama Administration once disavowed.

Obama claims that he is for “all of the above” on types of energy production, but in practice, it seems that “all of the above” does not include things that actually work.

See also:

Obama Clueless on Energy – Part 1

Obama Clueless on Energy – Part 2

Obama administration still clueless on energy

Obama, the Keystone Cop-out

Obama’s April Fools Joke

Obama’s Climate Action Plan is Clueless and Dangerous

Atlantic off-shore drilling could boost economy by $23 billion

Fuel Fix, a blog of the Houston Chronicle reports that an industry study says that drilling for oil and gas on the Outer Continental Shelf off the east coast of the U.S. between 2017 and 2035 could:

Create nearly 280,000 new jobs along the East Coast and across the country.

Result in an additional $195 billion in new private investment.

Contribute up to $23.5 billion per year to the U.S. economy.

Add 1.3 million barrels of oil equivalent per day to domestic energy production.

Generate $51 billion in new revenue for the government.

“The Interior Department’s Bureau of Ocean Energy Management soon will begin the long process of developing a schedule for selling outer continental shelf drilling leases from Aug. 27, 2017 through mid-2022 – and the oil industry wants to make sure the Atlantic acreage isn’t left out.”

Although this area is technically open for exploration and development, the feds have not scheduled any leases, which is a necessary first step.  Leasing activity in the area has been inactive since the early 1980s.  The Obama administration withdrew a scheduled lease sale for the Mid-Atlantic area in 2011.

OCS-planning-area

The United States has recently experienced a boom in oil and gas production, but that has occurred almost exclusively on private and state lands. Federal land has been largely closed due to the policies of several administrations.

See also:

Open federal land to energy exploration and development to boost economy

The hypocrisy of Obama’s energy boasts

“The measure of a man is what he does with power”-Plato

President Obama has several times claimed, “that under my Administration oil production is higher than it has been in a decade or more.” That is a true, but misleading, statement because during the period FY2007 through FY2012, all of the increased oil and gas production came from private and state land, over which Obama had no control, meanwhile production from federal lands, over which he does have control, decreased.  Obama was hypocritically taking credit for positive events that happened in spite of his policies.

That assertion comes from a Congressional Research Service (CRS) report, “U.S. Crude Oil and Natural Gas Production in Federal and Non-Federal Areas.” Here are the data graphically:

Oil-production-1

Gas-production-1

This result reflects the use of fracking on State and private land and the de facto moratorium on leasing Federal land.

According to the CRS report, “On non-federal lands, there were modest fluctuations in oil production from fiscal years (FY) 2008-2010, then a significant increase from FY2010 to FY2012 increasing total U.S. oil production by about 1.1 million barrels per day over FY2007 production levels. All of the increase from FY2007 to FY2012 took place on non-federal lands, and the federal share of total U.S. crude oil production fell by about seven percentage points.”

“The shale gas boom has resulted in rising supplies of natural gas. Overall, U.S. natural gas production rose by four trillion cubic feet or 20% since 2007, while production on federal lands (onshore and offshore) fell by about 33% and production on non-federal lands grew by 40%.”

CRS also says that the bureaucratic burden of drilling on Federal land is much more burdensome than on state or private land, and concludes that production from Federal land will remain lower because “the regulatory framework for developing resources on federal lands will likely remain more involved and time-consuming than that on private land.” CRS notes that time to process drilling permits rose from 218 days in 2006 to 307 days in 2011.

There is great potential for discovery and production of oil and gas on Federal land, including off-shore drilling. However, as noted by Investor’s Business Daily, President Obama chose instead “to withdraw tracts of federal land that had already been cleared for oil and gas development” and he ignored a judge’s order to lift a ban on off-shore drilling in the Gulf of Mexico. In effect, Obama administration policies close about 85% of potential off-shore areas to drilling.

The Wall Street Journal reports: “Mr. Obama has blocked exploration and production on significant areas of the Outer Continental Shelf, and the few leases he has put up for auction contain land that is of little value to drillers….The U.S. oil and gas boom has been a rare bright spot in the otherwise gloomy Obama economy. Imagine how much more energy the U.S. could produce, and how many more high-paid jobs it could create, if the Obama Administration stopped being an obstacle.”

See also:

Open federal land to energy exploration and development to boost economy

President Obama’s “all of the above” energy policy isn’t

Obama’s April Fools Joke Shows off-shore areas still blocked by Obama policy

Open federal land to energy exploration and development to boost economy

The United States has recently experienced a boom in oil and gas production, but that has occurred almost exclusively on private and state lands. Federal land has been largely closed due to the policies of several administrations.

The American Energy Alliance has a new report “Beyond the Congressional Budget Office” which shows the potential of a more enlightened federal policy in energy development. Here is the executive summary:

While headlines have reported a boom in US oil and gas production, that boom has been related almost exclusively to exploration and development on private and state lands and waters. Even that limited expansion has had profound effects. Opening up Federal resources — in addition to private and state resources — to exploration and development can accelerate all of those trends. But recent administrations have yet to follow through on promises to allow access to Federal resources, instead proposing to levy increased taxes on oil and gas production.

The Congressional Budget Office (CBO), at the request of the House Budget Committee, recentlyreleased an analysis of lease revenues that could be expected to arise from a proposal to open Federal lands and waters to oil and gas leasing (the “CBO Assessment”). Specifically, the proposal aims to open areas that are statutorily or as a matter of administration policy prohibited from leasing. The issue has repeatedly been a hot-button political and economic issue in the last several years, most recently at the beginning of the Obama administration and then again as Republican challengers in the 2012 election placed opening the lands and waters at the center of their energy policy.

But while the Administration cannot shy away from exploring the fiscal benefits of opening Federal lands, the CBO study was restricted to analyzing just one component of those benefits: lease revenues. This paper highlights the larger economic effects, including economic growth, wages, jobs, and both federal and state and local tax revenues, of opening Federal lands and waters to oil and gas leasing, relying solely upon the CBO natural resource and oil and gas price

estimates to show these broader economic effects in order to maintain direct comparability with their analysis. This paper also seeks to “complete” the CBO Assessment by taking measurements of output, jobs, wages and tax revenues into consideration.

The findings of this paper demonstrate that opening federal land that is currently closed-off because of statutory or administrative action would lead to broad-based economic stimulus, including increasing GDP, employment, and wages. Specifically:

GDP increase:

• $127 billion annually for the next seven years.

• $450 billion annually in the next thirty years.

• $14.4 trillion cumulative increase in economic activity over the next thirty-seven years.

These estimates include “spill-over” effects, or gains that extend from one location to another location. For example, increased oil production in the Gulf of Mexico might lead to more automobile purchases that would increase economic activity in Michigan. Spillover effects would add an estimated $69 billion annually in the next seven years and $250 billion over thirty years.

Jobs increase:

• 552,000 jobs annually over the next seven years.

• Almost 2 million jobs annually over the next thirty years.

Jobs gains would be felt in high-wage, high-skill employment like health care, education, professional fields, and the arts.

Wage increase:

• $32 billion increase in annual wages over the next seven years.

• $115 billion annually between seven and thirty years.

• $3.7 trillion cumulative increase over thirty-seven years.

Increase in tax revenue:

• $2.7 trillion increase in federal tax revenues over thirty-seven years.

• $1.1 trillion in state and local tax revenues over thirty-seven years.

• $24 billion annual federal tax revenue over the next seven years, $86 billion annually thereafter.

• $10.3 billion annual state and local tax revenue over the next seven years, $35.5 billion annually thereafter.

Read the full report here.

MasterResource also has a three-part series on this subject:

Part I: Expanding “Depletable” Resources

Part II: Coal Issues

Part III: Federal Land Potential

Arizona Fires, Floods, Earthquakes, and a Grand Canyon Time line

The Arizona Geological Survey has just released its winter edition of Arizona Geology magazine which is available for free download here. Each story is well-documented with photos and videos.

The lead story is a case study of the June, 2010, Shultz wildfire near Flagstaff which denuded the forest and with heavy rains, lead to flooding. “In June 2010, the Schultz Wildfire burned 15,000 acres of woodland on the east slope of the San Francisco Peaks in the Coconino National Forest. Near record monsoon rains in July and August produced debris flows and floods, the latter of which damaged dozens of homes, caused the temporary evacuation of over 1000 people, and led to one drowning death.”

The story on Arizona earthquakes shows maps of locations and magnitudes of 50 earthquakes recorded in Arizona during 2010. These observations are made possible by the new Arizona Integrated Seismic Network (AISN) which is in its third year in operation. The story tells us why Arizona earthquakes occur where they do. The article also provides a link to discussion and photos of the strong April 4, 2010, earthquake in northern Baja California, just southwest of Yuma.

Until recently, topics concerning geology were mostly absent in the displays and interpretive signs found within Grand Canyon National Park. That omission has now been remedied.

Billed by its creators as “the world’s largest geoscience exhibition at one of earth’s grandest geologic landscapes,” the Trail of Time interprets the geology of Grand Canyon’s spectacular views and its largely inaccessible rocks. The trail leads visitors towards key geologic concepts that can be read in the rocks of the canyon and serves to help people contemplate and more fully appreciate the enormity of geology and the larger meaning of geologic thought. One of the recurrent themes presented on the trail is that of “deep time…”

In the article titled “Summary of Oil and Gas Activity” we learn that oil & gas exploration and production, although small, does occur in Arizona. Additional wells were drilled for geothermal energy exploration and to test for carbon dioxide sequestration.

The Winter edition of Arizona Geology contains very interesting articles. Give it a look at:

http://www.azgs.az.gov/arizona_geology/winter10/arizonageology.html

Obama’s April Fools Joke

“Obama greatly expands drilling for oil, gas off American shores” read the front page headline in the April 1 edition of the Arizona Daily Star. This Associated Press story claimed that “President Obama threw open a huge swath of East Coast waters and other protected areas in Alaska and the Gulf of Mexico to drilling Wednesday, widening the politically explosive hunt for more homegrown oil and gas.” “The president’s move allows drilling from Delaware to central Florida, plus the northern waters of Alaska, and exploration could begin 50 miles off the Virginia coast by 2012.”

That would seem to be a major change in policy, but it is not what is seems to be. Obama is actually delaying outer continental shelf (OCS) exploration and banning exploration closer to shore.

Those areas were actually opened for exploration in late 2008 when Congress, responding to high gasoline prices, lifted a moratorium on exploration. Obama’s Interior Department has been dithering and delaying implementation, and from the story we see that the delays will extend another two years.

According to the Mineral Management Service’s estimate of “Technically Recoverable Undiscovered Resources”, here’s what the new “Obama moratorium” is locking up: 572 million acres that may contain 17.5 billion barrels of oil and 76.5 trillion cubic feet of natural gas. But Obama wants us to be energy independent. And remember, the Department of the Interior has plans to lock up 13 million acres of land in the west by using the Antiquities Act.

Compare the two maps below. The first shows areas available for exploration after Congress lifted the moratorium in 2008. The second map shows areas available for exploration under Obama’s new plan.   Note on first map: job opportunity, spell checker needed.

OCS-2008

 

 

OCS2010

 

 

Obama Clueless on Energy – Part 2

In Part 1, we looked at energy policy regarding electricity. This time we look at transportation fuel.

According to the White House website, the Obama administration wants to: Within 10 years save more oil than we currently import from the Middle East and Venezuela combined. Presumably, the real goal is to be independent of these foreign sources so we are not at their mercy. I agree with this goal, but not the way the administration plans to go about it.

Between coal, oil, oil shale and natural gas, we have sufficient domestic resources to be energy self-sufficient. Government and environmentalists are the only impediments. In Obama’s home state of Illinois, for instance, coal deposits have the energy equivalent of all the oil in Saudi Arabia and Kuwait combined. We could use that to make both gasoline and electricity.

The Minerals Management Service has estimated potential resources of technically recoverable oil and gas in our outer continental shelf as follows:

West coast 10.5 Billion barrels oil, 18.3 Trillion cubic feet (cf) of natural gas;

East coast 3.8 billion barrels oil, 37 Trillion cf gas;

Eastern Gulf of Mexico 3.4 billion barrels oil, 19.4 Trillion cf gas.

Yet all of these resources are off limits due to Congressional moratoria, and these moratoria are not only depriving us of transportation fuel, but they are also depriving the government of considerable revenue.

According to a report at MasterResource.org, the Energy Information Administration has estimated oil and gas production in the United States with and without restrictions. By the end of the next decade (2019), restrictive permitting and tax policies will reduce the potential annual government tax take from oil and gas production by more than the total expected yield of the Obama tax program in the oil and gas sector. In the ten years to 2019, the time-frame used in the government’s tax increase proposal, restrictions and new taxes will have reduced the tax take from oil and gas production by more than $118 billion.

Instead of exploiting our own abundant natural resources, the Obama administration thinks we can “save” our way to energy self-sufficiency.

Obama proposed increasing the Corporate Average Fuel Economy (CAFE) standards. Currently, automakers must meet a CAFE standard of 27.5 mpg for cars and 22.2 mpg for pickups and SUVs. The Obama proposal would require automakers to raise fuel economy for cars, pickup trucks and SUVs to 35 miles per gallon by 2020. Rather than let the free market decide gas mileage, the government is using coercive command and control.

The Competitive Enterprise Institute has produced a paper (http://cei.org/pdf/5967.pdf(http://www.cei.org/pdf/5967.pdf)) on why raising CAFE standards is a bad idea. Their main point is that CAFE kills. CAFE restricts the production of larger, heavier vehicles. These vehicles are lower in fuel economy, but they are also safer than similarly equipped smaller cars. A 2002 National Academy of Sciences study concluded that CAFE’s downsizing effect contributed to between 1,300 and 2,600 deaths in a single representative year, and to 10 times that many serious injuries. A 1989 Brookings-Harvard study estimated that CAFE caused a 14- to 27 percent increase in occupant fatalities-an annual toll of 2,200 to 3,900 deaths. A 1999 USA Today analysis concluded that, over its lifetime, CAFE had resulted in 46,000 additional fatalities.

Bottom Line: Obama and Congress are impediments to sound energy policy.