By Tom Kenworthy, a Senior Fellow at the Center for American Progress.
Announcing new drill-baby-drill legislation today, Chairman Doc Hastings of the House Natural Resources Committee and his GOP colleagues claimed that the failure to develop domestic oil reserves is contributing to the recent sharp increases in gas prices. However, even their hand-picked witnesses at recent show hearings, such as Richard Newell, administrator of the Department of Energy’s Energy Information Administration, testified to the contrary:
Long term, we do not project additional volumes of oil that could flow from greater access to oil resources on Federal lands to have a large impact on prices given the globally integrated nature of the world oil market.
A new report by the Department of the Interior shows that the oil and gas industry has failed to develop the vast majority of the 34 million acres it has leased from the federal government in the Gulf of Mexico. Those areas are estimated to contain 11.6 billion barrels of oil and 59.2 trillion cubic feet of natural gas.
In addition, the report documents that only about five percent of the nearly 53 million acres offered for lease in 2009 in the central and western Gulf was actually leased by industry. In 2010, the comparable figure was 6.4 percent.
The story is much the same when it comes to oil and gas development on federal onshore lands. The oil and gas industry has failed to explore or develop about 57 percent of the 38 million acres that it has leased from the federal government, according to the DOI report to the president. And the industry has taken a pass on leasing about 43 percent of the acreage offered to them over the last 26 months.
None of these facts seem to be reflected in Chairman Hastings’ three new pieces of legislation:
The trio of bills introduced today would give industry more access to places to drill and would expedite processing of the industry’s permits. The bills do nothing to move along the process on the areas already leased. And they’re not about lowering gas prices; they’re designed to increase oil companies’ profits. Fallow oil leases bulk up oil companies’ proven reserves, a key asset class for their market valuation.
This giveaway doesn’t come as much of a surprise when you look at who supports Chairman Hastings and his Republican colleagues on the Committee. Combined, they have received more than $2.5 million in oil and gas contributions. That money has led to multiple hearings about more drilling and none on expanding renewable energy. According to Politico, Hastings is holding an invitation-only briefing for lobbyists on his legislation.
Chairman Hastings says that his bills will “save American jobs by preventing deliberate government inaction and bureaucratic stalling.” Perhaps he should hold a hearing to ask his friends in the oil and gas industry about their inaction and stalling.
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