By Jessica Goad

The United States is in the midst of an energy boom, seen for example in the rise of U.S. oil production to its highest level in 20 years. But this hasn’t stopped the oil and gas industry from clamoring for more access to public lands for drilling, and from criticizing the Obama administration for “[putting] in place more obstacles” and setting public lands “off-limits” to development.

For example, Senator David Vitter (R-LA), Ranking Member on the Senate Environment and Public Works Committee, even went so far as to state, “There’s no disputing the fact that our nation’s domestic energy production on federal lands has been stymied by this administration.”

But a new report released today by the Denver-based Center for Western Priorities called “Follow the Oil” shows that putting the blame on the president and his administration is nothing more than conservative messaging.  Much of today’s boom in oil and natural gas is from unconventional shale “plays,” areas that have only recently been opened through new technology.  And, as the report notes:

Nationwide, 90 percent of all current shale gas plays exist on nonfederal lands, with only 10 percent located on federal lands. Even starker, almost all shale oil resources exist on non-federal lands. Only 7 percent of current shale oil and mixed plays are found on federally-owned lands with the remaining 93 percent on nonfederal lands.

This map shows what those findings look like across the country, and where the industry is “following the oil”:

Additionally, economics are playing a role in driving drilling from public lands to nonfederal lands.  As the report states, “rapid development increased the supply of natural gas, driving down prices, and sending companies searching for other drilling locations and revenue sources.”

In other words, the oil and gas industry has met the enemy, and it is itself.

The release of this report comes at a very opportune time, considering that Sally Jewell, nominee to be the next Secretary of the Interior, will have her confirmation hearing in front of the Senate Energy and Natural Resources Committee this week

And as expected, key members of the committee are preparing to ask her questions about how the administration is stifling drilling on public lands. For example, Energy and Environment Daily reports that Senator John Barrasso (R-WY) will ask Jewell “where she stands on domestic energy development, job creation and federal regulations.”

Senator Lisa Murkowski (R-AK), the Ranking Member on the committee, said she told Jewell in a meeting last week about “resource potential in Alaska, off-shore and in the National Petroleum Reserve-Alaska and Arctic National Wildlife Refuge, and the limitations to access.”

And Senator Mike Lee (R-UT) released a statement after Jewell’s nomination announcement that “The [Interior Department’s] approach has hurt our economy, killed jobs, and prevented states like Utah from generating critical revenue,” so questions about energy on public lands are also likely to come from him.

The report released today shows that, despite all of the questions Jewell may get on drilling on public lands, the industry in the end is “following the oil” to nonfederal lands.

Jessica is the Manager of Research and Outreach for the Public Lands Project at the Center for American Progress Action Fund.

On Monday, USA Today reported that the price of gasoline hit $3.60 a gallon for the first time since October — an early start in comparison to the usual price rise seen in the spring. The increase occurred despite world oil production climbing to 88.8 million barrels per day in 2012, about 2 million barrels higher than two years ago according to the Washington Post’s Brad Plumer. And about half of that increased production is due to an oil boom in the United States that’s driven imported oil to its lowest level since 1987.

That increased oil production will bring down gas prices is one of the most reliable Republican canards when it comes to energy, so what gives?

As Plumer points out, “The big thing to remember is that oil prices are a function of both supply and demand. If world demand for oil rises faster than producers can pump the stuff out, prices will go up.” Plumer cites a piece by James Hamilton of UC San Diego, which shows China’s consumption of oil is booming, and that the world economy as a whole is growing apace — and thus demanding more oil — even as fuel efficiency increases.

Technically, the world isn’t even producing enough oil to keep pace with the rise in global incomes. Oil supply has risen by 2.3 percent since 2010. But the world economy has grown by 7.1 percent since then. The only reason that oil prices haven’t soared to record highs, Hamilton points out, is that countries have been undertaking new conservation measures. Americans, for instance, are buying more fuel-efficient cars in droves.

Granted, oil prices would almost certainly be even higher than they are now without the drilling boom over the past two years in places like North Dakota. But at this point, the extra drilling is struggling to keep up with the pace of global economic growth.

Here are the global production and consumption numbers for the last few years from the U.S. Energy Information Agency (note the numbers to the left start at 84,000 thousand barrels per day):

And despite forecasts from BP and the International Energy Agency that domestic and global oil production will continue rising, Plumer notes that high gas prices aren’t going away anytime soon:

The [IEA] recently projected that U.S. oil production would continue rising through 2020 and beyond, as companies extract more “unconventional” oil from shale rock and other sources. But global demand was also expected to rise 35 percent between now and 2035, with China on pace to become the largest oil consumer in the world in the next two decades.

And that’s the optimistic scenario. Raymond T. Pierrehumbert, a geophysical sciences professor at the University of Chicago and a lead author on the third IPCC Assessment Report, recently pointed out in Slate that while going after unconventional oil remains profitable, and thus likely to continue, it requires ever greater effort to retrieve the same amounts of oil:

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NRDC President Frances Beinecke. (Photo credit: Matt Greenslade/photo-nyc.com)

By Tom Kenworthy

The head of the Natural Resources Defense Council appeared before a Senate committee looking into the implications of the nation’s shale gas revolution yesterday. Frances Beinecke issued a compelling appeal for tougher federal oversight of the oil and gas industry and its drilling practices that have raised widespread concerns about public health and safety.

“I have never seen a single issue that has frightened, antagonized and activated people across this country like the practice of fracking,” NRDC president Beinecke told the Senate Energy and Natural Resources Committee. Referring to the industry practice of stimulating oil and gas production by injecting a mix of chemicals, water and sand into underground rock formations, Beinecke said:

“Families are angered and frustrated by their inability to control fracking in their towns, and sometimes on their own property. They want to know that their water is safe, their air is clean and their lands and farms are protected. They want to know their children are healthy.”

Beinecke’s comments captured a troubling truth for the oil and gas industry, which to a large extent has been caught off guard by the mounting public hostility to fracking, or hydraulic fracturing. Fracking is now used in the vast majority of drilling operations and has opened up vast new domestic reserves of oil and gas previously locked in shale formations. As Beinecke noted, a December Bloomberg poll found that 66 percent of U.S. respondents believe there should be more aggressive government oversight of fracking, a majority that surged by ten points in just the previous three months.

While the industry favors the current patchwork of state regulation, Beinecke said states have neither the technical ability nor the political will to adequately protect the public from ill effects of drilling that can include air and groundwater pollution, hazardous wastes, and carbon pollution from methane leaks.

In addition, as other groups like the Center for American Progress have pointed out, Beinecke said that numerous oil and gas exemptions from bedrock national environmental laws make federal oversight also insufficient. “There is simply no justification for exempting fracking from the basic environmental laws that have applied to other industrial activities for four decades,” she said in written testimony, noting exemptions enjoyed by oil and gas from statutes such as the Clean Air Act, Clean Water Act, and Safe Drinking Water Act among others.

She also called on the federal Bureau of Land Management, which oversees drilling on some 700 million acres of federal land and other properties where the federal government controls the mineral rights, to toughen pending fracking rules that now appear to be in the process of getting watered down. The BLM, she said, “may be going in exactly the wrong direction.”

That concern was also raised last week by Sen. Ron Wyden (D-Ore.), who chairs the Senate energy panel. In a letter to Interior Secretary Ken Salazar, Wyden urged that he ensure a “properly constructed rule with sound requirements for public disclosure, well integrity, and monitoring.”

Tom Kenworthy is a Senior Fellow with the Center for American Progress Action Fund.

by Bill Becker

For those of us concerned about the future of the United States in an era of global climate change and international competition over diminishing natural resources, the new report from the National Intelligence Council (NIC) contains goods news and bad news.

The good news: The NIC predicts that in a “likely tectonic shift” the United States could become energy independent in the next 10 years. That’s a goal we’ve been trying to achieve since the oil embargoes of the 1970s.

The bad news: The NIC predicts we’ll get there by increasing our addiction to fossil fuels. In other words, we’ll stop importing oil, but we’ll export more greenhouse gases and make ourselves more vulnerable to rising seas and weather disasters. Surprisingly, the nation’s top intelligence agency doesn’t directly acknowledge this rather important trade-off.

That’s surprising because the NIC was established in 1979 to build a bridge between the intelligence and policy worlds. The analysis of global trends it issued earlier this month was produced with what the NIC describes as in-depth research, detailed modeling and a variety of analytic tools. Experts from think tanks, banks, government agencies and business groups in nearly 20 countries reviewed its report.

And it still got the future wrong.  Missing from the “black swans” the NIC considered are the unexpected technology breakthroughs and underestimated environmental traumas that are likely to prod us into a different energy economy than the NIC describes.

The NIC acknowledges that it can’t predict the future. But its best guess is that shale oil production in the United States, along with a continuing explosion in shale gas production made possible by horizontal drilling and fracking, means that “energy independence is not unrealistic for the U.S. in as short a period as 10-20 years.”  The undesirable environmental impacts of oil and gas production can be mitigated, the NIC says. It predicts that the benefits of more oil and gas production will include lower energy prices, more companies choosing to expand in the U.S., an increase in gross domestic product, an improved energy trade balance, as many as 3 million new jobs by 2030 and fewer carbon emissions than if we continued using coal.

Another outcome would be bad news for cleaner renewable energy resources. Cheap natural gas might result in “the lack of a major push on alternative fuels such as hydropower, wind, and solar energy,” the NIC says. “Under most scenarios, alternative fuels continue to provide a relatively small increase in the share of overall energy requirements.”

What’s wrong with this picture?  Here are a few problems:

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by Greg Noth

A new study conducted by the energy consulting firm IHS CERA and sponsored by the U.S. Chamber of Commerce, the American Petroleum Institute, American Chemistry Council, and Natural Gas Supply Association finds the U.S. is on track to become the largest oil producer in the world.

Oil and other liquid carbon production is expected to reach 10.9 million barrels per day (bpd) this year, which is a 7 percent increase from last year. By next year, the Department of Energy projects the country will produce an average 11.4 million bpd — just below the 11.6 million bpd produced by the largest oil producer in the world, Saudi Arabia.

This study, which the Chamber happily endorsed, proves that attacks from the right against the Obama administration’s domestic energy policies — often led and funded by the Chamber of Commerce — are completely false. Indeed, production has increased every year of Obama’s presidency and this year is the largest single-year gain since 1951.

Compared to the last three years of President Bush, there have been 241 million more barrels of oil produced from public lands in the first three years of President Obama. Also, the number of oil drilling rigs have seen a 75 percent increase between 2009 and 2011.

Even though the Chamber acknowledges energy production is high, the organization and other oil-funded groups have spent millions this election cycle running attack ads, some repeating energy myths about the government limiting production. Its campaign narrative does not match reality.

Oil production is now higher than at any point since the mid 1990′s. Yet, despite these massive gains in production, gas prices have remained “stubbornly high.” This is because the global market determines prices, and factors outside U.S. borders control them — not presidents.

According to a recent analysis from the Congressional Budget office, the only way to truly protect consumers from price increases is to promote “policies that reduce the use of oil.” And that’s what we’ll need to do in order to address climate change as well.

The Chamber continues to attack Obama on energy. But the group is already getting the energy policy it wants, as this recent report it sponsored points out. Meanwhile, gas prices remain high and we continue on a path of uncontrolled carbon pollution.

Greg Noth is an intern with ThinkProgress.

By Jessica Goad

Today the House of Representatives is taking up H.R. 5325, the 2013 spending bill for agencies including the Department of Energy and the Army Corps of Engineers.

Along with a number of cuts to renewable energy and increases for fossil fuels, the bill text includes $25 million for the Department of Energy’s “Unconventional Fossil Energy Technologies” including unproven oil shale — one of the dirtiest forms of energy in existence.

A political fight is brewing on this front. As Politico reported:

Rep. Jared Polis (D-Colo.) will introduce an amendment cutting $25 million from DOE’s Fossil Energy Research and Development program for research into oil shale, a type of rock that, when heated, gives off oil. The committee report notes that estimates say there’s the equivalent of 2 trillion barrels of oil in that rock, but the industry has not been able to make the process commercially viable for years.

The $25 million struck from oil shale development would instead be used for deficit reduction. Polis’s amendment will likely be voted on today or tomorrow.

Oil shale — not to be confused with shale oil like the Bakken formation in North Dakota — is an unproven technology still in the research and development phase.  It involves heating up rocks to high temperatures and melting the oil out of them. A number of companies have been attempting to produce oil shale for decades, with no commercial success.  Even if the technology were to be viable, oil shale would be a complete disaster for the climate.

While House Republicans’ throw support behind a dirty, unproven oil extraction technology, they continue to drag their heels on a key tax credit for the wind industry set to expire at the end of the year. Without this tax credit, wind developers face major policy uncertainty — potentially threatening up to 37,000 jobs.  As former Michigan Governor Jennifer Granholm put it:

[Speaker John] Boehner [R-OH] has repeatedly hounded the president about an all-of-the-above energy strategy. So it seems weird for Republicans to be picking energy “winners and losers.” How is it that they can vote to extend tax credits for oil but not for wind?

In addition to stalling on the production tax credit, some Republicans have been lobbing attacks on renewable energy in the energy and water spending bill itself.  Last week, Rep. Tom McClintock (R-CA) offered an amendment to completely defund the Energy Department’s Office of Energy Efficiency and Renewable Energy.  The amendment failed, with 107 Republicans voting against it.  Additionally, a number of amendments to boost funding for renewable energy failed, such as one Rep. Janice Hahn (D-CA) that would move $50 million from fossil fuels research to renewable energy research.

Jessica is the Manager of Research and Outreach for the Public Lands Project at the Center for American Progress Action Fund.

Coming to a state near you?

By Tom Kenworthy

Before long the tar sands issue won’t be just about imports from Canada via pipeline.

Utah, which has never met a dirty fuel it didn’t love, has been encouraging efforts to develop a home-grown tar sands industry. Construction on a project located on state lands in the eastern part of the state could begin by the end of the year, according to a story in Environment and Energy Publishing’s Energy Wire:

“It’s not just something that’s up in Canada,” Utah Tar Sands Resistance member Raphael Cordray told E&E. “People don’t know it’s here in Utah. Our goal is to get the citizens of Utah to recognize that there’s a proposed tar sands site in Utah that could become the first commercial site in America, and what is at stake.”

Utah has about a third of the roughly 36 billion barrels of tar sands oil thought to be located in the U.S. Not all of that is estimated to be technically or commercially recoverable, however.  Tar sands contain a form of petroleum called bitumen that can be refined into gasoline. But the process is costly, energy-intensive, and on a life-cycle basis releases far more global warming pollutants than conventional oil refining operations.

U.S. Oil Sands, the Canadian based company that is working to develop the Utah deposits, has leases on about 32,000 acres of land in the state. The company was granted permits to begin production by the state in 2009. But it faces a legal challenge from an environmental group, Living Rivers, which fears tar sands production will harm Utah’s desert and mountain landscapes.

Meanwhile, supporters of another dirty fossil fuel, oil shale, have been making a political ruckus in a number of counties in Utah, Colorado and Wyoming — organized by a former Bush administration Interior Department official who now directs a Utah state office focused on energy development on federal lands in the state.

A number of county boards in the region have approved, or considered approving, a resolution taking the Obama administration to task for scaling back plans by the Bush administration to develop oil shale resources. Combined with efforts on Capitol Hill, this represents the beginning of an all-out election year push by Republicans to agitate for massive developments of dirty and impractical fossil fuels.

Oil shale – not to be confused with shale oil deposits like those in the Bakken field in North Dakota – is an energy developers’ pipe dream. Though oil shale deposits in Colorado, Wyoming and Utah may contain an estimated 1.5 trillion barrels of recoverable oil, it has never been proven to be commercially viable in the U.S.

Oil shale is a rock that contains kerogen and must be heated to very high temperatures to release a synthetic oil. It has “one-third the energy density of Cap’n Crunch!“ Shale oil is conventional oil trapped in reservoirs found in shale rock formations.

Development of oil shale could have a significant impact on already stressed western water supplies, according to a 2010 study by the General Accounting Office. And a recent report by Western Resource Advocates shows that oil shale development would take huge amounts of energy, would have emit large amounts of global warming pollutants, and would increase air pollution problems in the interior West.

Tom Kenworthy is a Senior Fellow with the Center for American Progress Action Fund

The House push for oil shale is a terrible idea for the arid West.

by RL Miller, reposted from Daily Kos

On Feb. 1, the House Natural Resources Committee approved a three-headed monster of an energy bill: drilling in the Arctic National Wildlife Refuge, drilling off the California coast, and expansion of oil shale drilling. But hey, the bill has the magic word “jobs” in the label, so it’s all good! The committee’s press release trumpets the quantity of oil shale lurking deep under the Green River formation (Colorado, Utah, and Wyoming) and the need for job creators’ certainty.

The committee doesn’t bother with the thirsty facts of oil shale mining. If drilling for easy oil can be analogized to sticking a straw into a lemon and watching juice seep up, obtaining oil from oil shale involves digging up fossilized lemons, reconstituting them with a lot of water – some estimates are 5 gallons of water for every gallon of oil – using vast quantities of energy to boil the watery dried out lemons, catching the vapor, distilling lemon juice vapor from water vapor, and dumping all that contaminated waste water somewhere. All these activities will be taking place in western Colorado and eastern Utah, not exactly known for their abundance of water.

The committee also doesn’t bother with the economics of oil shale mining. The technology isn’t in place for commercial oil shale mining and may never be. Oil shale, like nuclear fusion, has been “10 years away from commercial development” for much longer than 10 years; the Checks and Balances Project has compiled oil shale industry boosters’ promises (PDF) going back to 1916. Unlike Canadian oil sands (aka tar sands), oil shale has never been produced commercially in the United States.

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Although China boasts of its green progress, the booming nation is also making major bets on North and South American tar sands, one of the most carbon-intensive fuels on the planet. This play for civilization-threatening energy comes even as the world’s nations jockey over the fragile international climate accords in Durban, South Africa:

On Monday, China National Offshore Oil Corp (CNOOC) closed its acquisition of bankrupt Canadian tar sands producer OPTI Canada Inc. CNOOC gets OPTI’s 35 percent working interest in Long Lake and three other project areas located in the Athabasca region of northeastern Alberta, split with Canadian operator Nexen Inc. The deal cost $34 million for OPTI stock and $2 billion in debt. [Reuters]

On Wednesday, CNOOC and Nexen formed a joint venture, giving CNOOC a 20 percent working interest in the Kakuna, Angel Fire, and Cypress deepwater exploration wells in the Gulf of Mexico. [BusinessWeek]

These dirty investments in North American fossil fuel projects are just the latest in a rapid string of deals to give China access to high-polluting carbon energy from the Americas. Over the last three years, China-owned companies have invested over $18 billion in tar sands, shale gas, and coal projects in Canada and Venezuela:

November, 2011: China signs a $6 billion deal with Venezuela to develop tar sands — $4 billion to the Chinese-Venezuelan tar sands company Sinovensa to increase production from 118,000 barrels a day to 1.1 million barrels a day in 2014, and $2 billion to Venezuela’s state-owned oil company Petroleos de Venezuela for refining projects, drills, and equipment. [Channel News Asia]

October, 2011: Sinopec spends $2.2 billion to acquire shale gas producer Daylight Energy, which controls 300,000 acres of oil and gas property, at a 70 percent premium. [Bloomberg]

May, 2010: China Investment Corporation spends $1.25 billion on Alberta tar sands — $817 million for a 45 percent stake in the Peace River tar sands project owned by Penn West Energy Trust, and $435 million for a 5 percent interest in the company. [Penn West Energy]

April, 2010: Sinopec spends $4.65 billion to buy ConocoPhillips’ 9 percent stake in tar sands producer Syncrude Canada. [New York Times]

February, 2010: PetroChina spends $1.73 billion to purchase 60 percent of AOSC’s MacKay River and Dover tar sands projects. [CRI]

July, 2009: China Investment Corporation spends $1.5 billion to purchase 17 percent of Teck Resources, Canada’s largest metallurgical coal and copper mining company. CIC was recently granted a seat on Teck’s board of directors. [China Daily]

In 2005, PetroChina and Enbridge signed a $2 billion deal to help the Canadian tar sands company develop the Northern Gateway Pipeline, a project intended to deliver 400,000 barrels of tar crude a day from Edmonton, Alberta to the British Columbia port town of Kitimat, giving China access to direct tar sands shipping.

The pipeline has been unbuilt for years, facing stiff opposition and economic challenges. This Friday, Gitxsan First Nation announced it would become “the first aboriginal partner” for the pipeline. On Thursday, 130 native groups in Western Canada pledged to block the project. Enbridge has offered up to a 10 percent stake in the pipeline to first nations who sign on.

By Jessica Goad, Manager of Research and Outreach, Center for American Progress Action Fund.

Today, the House Subcommittee on Energy and Minerals will debate a proposal to jump start oil shale production, which could be one of the dirtiest forms of energy in existence if it were to become viable. Subcommittee Chairman Doug Lamborn’s (R-CO) bill would codify midnight regulations on oil shale that the Bush administration passed just as it was leaving office in early 2009.

You’re not alone if you haven’t heard of oil shale, which should not be confused with the viable energy producer “shale oil.” In order to develop the oil shale, a type of rock, power plants must be built to heat the rock up to nearly 1,000 degrees Fahrenheit and produce crude oil that still needs to be refined. This takes a large amount of energy and money, as well as 3-5 barrels of water per barrel of oil produced, a dangerous issue in the parched West.

Politicians and oil companies have extolled the virtue of this “new” form of energy since the early 1900s, yet not a single barrel of oil from oil shale has been commercially sold. That does not stop today’s politicians and oil CEOs from using the same language as their decades old predecessors. In a field hearing this summer, the Checks and Balances Project developed a bingo card with old-timey oil shale phrases — all of which but one were used. You can follow along today to see if the same arguments are used yet again (click on the card for a larger version).

Oil companies and proponents of oil shale claim it can “solve our energy crisis,” and Lamborn recently claimed that it is “one of America’s greatest natural resources.” Yet, despite decades of experimentation and hundreds of millions of dollars in investment, oil shale has never been produced commercially in the United States. Even the director of the Center for Oil Shale Technology and Research admitted that:

All of the major companies are doing oil shale because they think it’s an interesting and high-potential area, but they’re not in a hurry to make it productive…

Oil companies already have research and development leases on public lands, but they now seeking even more public lands on which to experiment. Lamborn’s bill continues to reward dirty fossil fuel companies for chasing what some have called “the petroleum equivalent of fool’s gold.” Throughout his career, Lamborn has received $126,962 from the oil and gas industry.

On Wednesday, House Natural Resource Committee Republicans held their 20th oversight hearing on how to drill more. In addition to oil shale, todays legislative hearing will feature bills to drill in the Arctic National Wildlife Refuge and to mandate offshore oil and gas lease sales.