Public Desire for More Energy Requires Policy Shift, Not Political Maneuvering

With the president’s address on energy security today as he continues to take flak for his energy policies and fuel prices creep toward $4 a gallon, his supporters have stepped up efforts to defend the president in anticipation of the 2012 election cycle. Their tactic is straight forward: deflect blame for his own misguided energy rationing schemes towards the “Big Oil” companies.

Senators Robert Menendez, D-N.J., and Bill Nelson, D-Fla., both outspoken critics of everything fossil fuel, lobbed a volley at U.S. energy companies by introducing a so-called “use it or lose it” bill to charge them per acre on federal leases which are not currently producing oil and gas. And yesterday, the Department of Interior delivered its report on the topic to the White House with great fanfare.

While these political maneuvers may play to the President’s campaign apparatus, they should sound alarm bells for the American public.

This bill ridiculously assumes that there is oil and gas under every square inch of the mere 3 percent of federal lands that the administration makes available for energy exploration and production. Even if that were true, the last thing the federal government should be doing is rushing companies to drill wells without performing the necessary environmental analysis, seismic surveying, and exploratory drilling to search for the oil and gas. Furthermore, production on a leased allotment requires the very federal permits the administration continues to withhold from most prospective deepwater drillers, highlighting the fact that this measure is little more than a cheap political gimmick.

If passed, “use it or lose it” legislation would exert political and economic pressure on energy companies to speed up drilling projects, thus relegating safety to a second tier priority. The testing and analysis which precedes drilling and, if they are lucky, discovering oil and natural gas aboard a responsible offshore operation is measured in years, not weeks. New stringent regulatory protocols under consideration by the Interior Department only add to this already lengthy timeframe.

The White House called for the nation to “hit the pause button” on offshore energy production in the wake of last April’s spill in the Gulf. The moratorium and permitting delays have persisted for nearly a year, and cost the U.S. close to 300,000 barrels of domestic production per day -- 1.49 million barrels in total as of last month. This significant reduction in U.S. energy development leaves us even more reliant on foreign fuel sources from unstable foreign regimes. Pump price spikes caused, in part, by the Libyan crisis only highlight this reality. Now, administration allies are telling oil and gas companies to either “floor it” and make up for the destructive federal policy which halted production, reduced domestic supplies, and sent about a dozen drilling platforms overseas, or pay the federal government millions of dollars in fines.

That’s politics, as the saying goes.

The motive of this campaign, which has targeted oil and gas companies instead of high oil and gas prices, is to shift anger at the pump away from the administration and towards, well, anyone else. Oil and gas companies seem an easy target because of the billions in revenue they report for earnings. And while these earning reports are highlighted in every newspaper across the country, the fact that these same companies reinvest these earnings into exploration, production, infrastructure, and jobs to deliver this valuable resource seems to go unreported. If the administration really wanted to reduce domestic energy prices, the path is simple: increase domestic production.

Fuel prices are set on the world oil market. Adding to this supply is the best way to steady the market against disruptions abroad. Currently, the country leases only 2.4 percent of the outer continental shelf (OCS) for exploration. Even that is on hold now as nervous companies wait and see if they will receive drilling permits, or will be better served allocating resources to opportunities in other countries. While they may hold permits that are not producing currently, the regulatory uncertainty offered from the Interior Department would hardly convince anyone to invest millions of dollars in preparing to drill a well which may or may not be approved.

New polls confirm that 2 out of 3 Americans support expanded domestic energy production. This broad majority should preempt a policy shift to actually produce more oil and gas domestically, not blame others for continued delays.

Thomas J. Pyle is president of the American Energy Alliance, a not-for-profit organization that engages in grassroots public policy advocacy and debate concerning energy and environmental policies.