The United States leads the world in energy resources…
The United States has more energy resources than any other country in the world. Yet, until recently, the vast majority of this energy was undiscovered or considered technologically infeasible to access. Today, thanks to dramatic new breakthroughs, the United States has the potential to become the number one energy producer in the world by the end of the decade – meaning millions of new jobs, much greater energy independence and lower prices for gasoline and electricity.
…but federal restrictions block our opportunity for jobs, greater national security and affordable energy.
Realizing this new American energy opportunity, however, will not be possible under the federal government’s current energy policies. At the very moment when we have the potential to dramatically increase our oil and gas production, the federal government is throwing up more restrictions to development. The result? Fewer jobs, less security and higher gasoline prices at the pump.
Cutting federal leasing by 90%.
Today, despite record gasoline prices, new leases for development on federal land have dropped to under 2 million per year from 12 million per year in 1988. So while America’s official estimates of recoverable oil resources are increasing, the access the federal government is allowing for development is decreasing.
The opportunity: According to a study conducted by Noble Royalties, returning leasing levels back to 1980s levels would generate over 750 billion dollars in lease and royalty fees for the federal government and add an additional 5 trillion dollars to the US economy.
Blocking development in Alaska.
Official government estimates say the 10-02 Area Coastal Plain of the Arctic National Wildlife Reserve (ANWR) has 10.4 billion barrels of oil and the highest potential for a super large oil field of any location in North America. Yet its development is blocked. Opponents of development have cited environmental concerns. But the estimated environmental footprint from development based on current technology is less than .01% of ANWR’s total acreage.
This ban on development has led to a dangerous decrease in oil flow through the Trans-Alaska Pipeline, which increases the possibility of ice crystals forming that would cause integrity problems. The Trans-Alaska Pipeline employs over 2,000 people and still delivers 10% of all the oil produced in the United States. Unless more oil is produced in Alaska, it will need to be shut down.
The opportunity: A May 2008 study by the Energy Information Agency estimated that development of the 10-02 Area Coastal Plain could supply 1.45 million barrels per day at peak production –a 20% increase in America’s daily oil output. That means it can easily return the pipeline to operating at high capacity. Furthermore, studies by the Bureau of Labor Statistics and Congressional Research Service estimate that allowing development of the 10-02 Area Coastal Plain in ANWR would create between 60,000 to 130,000 new jobs.
Blocking development offshore.
Today, thanks to the offshore development ban and other restrictions, only 2.2% of America’s offshore land is leased for development. That leaves an area 10 times the size of Texas off our coasts where the United States is blocked from looking for oil and gas.
The opportunity: A recent study from Wood-McKenzie estimated that hundreds of thousands of new jobs would be created by letting the offshore oil and gas development ban expire.
The United States has not built a new refinery since 1976. Without new refineries, the United States will not be able to take advantage of its energy production potential. It won’t matter how much oil the US produces if there is a bottleneck getting the oil refined into gasoline and other petroleum products. The recent gasoline prices spike in California up near $6 per gallon is due primarily to the fact that there is so little refining capacity that any disruption in one location causes across-the-board problems.
The opportunity: Building more refineries in the United States would keep more of our domestic production here at home, lowering gasoline prices and creating jobs.
Red tape, lawsuits, and bureaucracy.
Beyond outright bans on development and the failure to issue new leases, numerous new laws have been passed in the past 30 years increasing administrative requirements on energy producers. A 2004 report from the U.S. Department of Energy determined that there are more than 140 different laws which impact natural gas production in the United States. Most of these laws apply equally to oil development as well. The result of this new mound of bureaucracy and red tape has been increased permitting delays, lawsuits and compliance costs that are additionally stymieing development.
Of course, it is reasonable to expect the US government take steps to make sure energy companies are developing oil and gas responsibly. But environmental regulations long ago passed from the necessary to the ridiculous. For instance, the Bureau of Land Management recently put a moratorium on drilling in 380,000 acres of land during the mating season of prairie chickens. But when pressed, BLM admitted that the ban was not based on any scientific analysis.