By Chris Nelder

 

Crude oil and lease condensate production on Federal and Indian lands is 13 percent lower than in fiscal year 2010.

True, but what of it? Oil production on these lands was in decline throughout the Bush years, and actually increased under the first two years of Obama’s administration. Most of the decrease was in federal offshore, and of the 104 million barrel decline there from 2010 to 2011, the vast majority owed to reduced production in the Gulf of Mexico in the aftermath of the Macondo well disaster in April 2010.

The big picture is clear that government policies undertaken by the Obama Administration have produced a significant decline in offshore oil production on federal lands in fiscal year 2011. That is certainly not a way to increase domestic production of oil and keep oil and thus gasoline prices in check.

True, but twists the facts. On the whole, as the above charts show, oil and gas production has actually been higher under the Obama administration than it was under the Bush administration, and the policies around the exploitation of federal lands have not been radically different under the Obama administration. The IER may have preferred that the Obama administration carry on like nothing had happened after the biggest oil spill in U.S. history, but that would have been neither realistic nor advisable under any environmental or political calculus. In fact, the Obama administration opened up new drilling in the Gulf of Mexico less than a year after the blowout, and recently approved 500 leases for drilling in the Arctic that were held up since 2008.

Our reality

The fossil fuel industry’s harping about limits on federal properties is couched in overblown and deliberately confusing rhetoric, but what it’s really about is access to more of the Outer Continental Shelf.

According to the EIA report, which actually counts sales and not production, offshore federal production of oil (crude plus lease condensate) in fiscal year 2011 was 514 million barrels, onshore production was 112 million barrels, and production on Indian lands was a negligible 19 million barrels. The only serious remaining prospects are in federal waters. In the usual EIA production data, federal offshore oil production was 528 million barrels in the 2011 calendar year.

To put that in perspective, 528 million barrels is equivalent to 1.45 mbpd. The U.S. consumed 18.8 mbpd of oil in 2011. Therefore, all the fuss about Obama’s policies is really about wanting to increase that portion of our supply that meets just 7.7 percent of our demand. Oil production from all federal and Indian properties, both onshore and offshore, meets just 9.4 percent of our demand. The oil and gas industry would like you to believe that if the government just got off their backs, they could hugely increase that share, even while battling the relentless toll of natural depletion. This is, quite simply, false. If we turned the remaining federal waters into a pincushion we could manage a modest increase, but it would certainly not give us energy independence.

As Steve LeVine quipped recently, what we are seeing now is “The Second Law of Petropolitics” in action: The party out of power always blames the party in power for high gasoline prices. The blame was somewhat less shrill during the Bush years, since the oil and gas industry tends to be right-wing, but as I detailed in July 2008, the Democrats were clamoring for a release of oil from the Strategic Petroleum Reserve, vowing to crack down on speculators, and even suggesting that we sue OPEC, while President Bush moaned that he couldn’t wave a magic wand and make more oil appear.

In short, there is absolutely nothing new here. The reality is dusty, dull, dour, and totally unsalable politically. After 150 years of intensively applying the world’s best extraction technology, we have nearly sucked our land dry, and the only remaining good prospects are offshore. If all limits on drilling were removed, including in the Outer Continental Shelf and the Alaskan National Wildlife Refuge, some estimates show that we might increase US oil production by 2 or 3 mbpd at most. That new production would probably take 10 years to come online, and 15 years or more to reach maximum output. It would be hardly noticeable as it compensated for the loss of oil production due to depletion. Barring export restrictions, much of it would be sold to the highest bidder, which is Asia. If it lowered prices at all, it would be by a few pennies per gallon.

Presidents have very limited latitude on domestic oil production, and they can do next to nothing about gasoline prices. No matter which party is in power, we are always and inextricably tied to a global market for oil and gasoline. There are no real supply-side solutions, no matter how desperately we want there to be, and no matter who’s promising them. As we enter the twilight years of oil, our only serious option is to reduce our consumption.

Which brings me to the photo. Artist Gregory Lent took that photo in India this week and posted it on Twitter with the comment, “[A] lot of monkeys can turn on a tap but I never met one who thought to turn one off.”

Indeed.