By Senator Robert Menendez (D-NJ)

As Chairman of the Foreign Relations Committee, I see a lot of fanfare applauding increased oil production in the U.S. and the increase is truly remarkable. We are producing nearly 2 million more barrels of oil a day than government (EIA) experts had predicted ten years ago. But here’s what is truly astounding: We are consuming over 5 million barrels less in oil a day than had been predicted in 2003. So, there is no question we are making dramatic strides in the oil sector, but we are doing twice as well on the conservation side of the ledger than we are in production.

Oil conservation lacks the sizzle that energy production enjoys. After all, you don’t see people striking it rich by taking a train to work, by driving an electric car, or converting their business’ fleet to run on natural gas. What’s worse, not only does it lack sizzle, some public figures say oil conservation isn’t even a serious approach to energy policy. Vice President Cheney famously said conservation is a “sign of personal virtue, but … not a sufficient basis for a sound, comprehensive energy policy.”

But as a nation, in order to continue to improve our energy security, insulate our economy from high oil prices, and address climate change, we will continue to accomplish a lot more by using less oil than by producing more oil. It’s less exciting than an oil geyser, but the opportunity is simply much bigger. Increasing oil production in the U.S. helps our energy security and our economy, but increasing domestic production is often described as the healer of all wounds. Unfortunately it is not.

If it were, oil prices would not be so stubbornly high. Oil is traded in a worldwide market, so our increased production has been drowned out by increased demand elsewhere. But thanks to increased fuel economy standards, investment in public transportation, and a burgeoning market in alternative fuel vehicles, Americans do not need nearly as much oil to achieve mobility as once predicted. And we have a lot more improvement to do. After all, we use twice as much oil per capita as the United Kingdom and Germany and a third more than Australia.

Despite our exceptional prowess in drilling for oil, we simply cannot drill our way out of our problems. To address climate change, drive down prices, and truly end the world’s dependence on energy from unstable parts of the world, we need to use a lot less oil. The good news is that we have gotten off to a great start.

Republican members of the House Natural Resources Committee will do their level best at a hearing today to perpetuate a host of myths about the pace and efficiency of oil and gas development on federal lands compared to state and private lands. And as in the past, their level best won’t be on the level.

Today’s hearing, “State Lands vs. Federal Lands Oil and Gas Production: What State Regulators Are Doing Right,” is the latest attempt to show that the Obama administration, through regulations, bureaucratic obstacles, and an ideological hostility to the oil and gas industry, has thwarted traditional energy development on 700 million acres of federal and tribal lands and those private lands where it controls the mineral rights.

Those criticisms fly in the face of the facts:

• Oil production from federal lands and waters in every one of the last four years was higher than it was in 2008, according to an analysis of Energy Information Administration data by the Congressional Research Service.
• The oil and gas industry itself has cut back on its requests to drill on public lands, from an average of 6.6 million acres in 2006 to 2008 to 4.8 million acres annually from 2009 to 2012, a decline of 27 percent.
• The production of shale gas and shale oil in recent years is taking place “largely outside of the Federal lands” because that’s where those resources are, according to 2012 testimony by Adam Sieminski, administrator of the Energy Information Administration to the House Energy and Commerce Committee.
• The vast majority of shale oil and shale gas plays exist underneath non-federal lands, a study by the Center for Western Priorities found. That study, “Follow the Oil,” showed that only ten percent of shale gas plays occur on federal lands, and only 7 percent of shale oil and mixed plays are on federal lands.
• High oil prices Market forces and depressed natural gas prices have been driving oil and gas developers to shift from drilling for natural gas to drilling for shale oil in places like North Dakota, where the resources largely lie beneath private lands. Oil and gas companies have made “market choices…to shift their production to oil and other liquid plays and away from gas,” according to Mark Squillace, professor of law at the University of Colorado. “And this means less activity on public lands.”
• State and federal permitting procedures for oil and gas are fundamentally different, with negotiations to resolve problems taking place before permitting begins on private land but after the process begins on federal land, making it almost automatically faster to get permits on lands where the state controls the permitting. As the Congressional Research Service reported, “A private versus federal permitting regime does not lend itself to an ‘apples to apples’ comparison.”
• The Congressional Research Service also found that between 2006 and 2011 the federal Bureau of Land Management has significantly cut its time for processing drilling permits from an average of 127 days to 71 days, while the time it has taken for industry to complete its processing chores has increased from an average of 91 days to 236 days.

Many critics of the federal oil and gas leasing program ignore that these resources are on publicly owned lands and waters — they belong to every American. And as the Federal Land Policy and Management Act makes clear, these lands are for multiple uses — including hunting, fishing, recreation, and grazing — and not just for oil and gas production. Despite this multiple use management requirement, the president has leased 2 acres for oil and gas production for every one acre of land conserved for future generations.

Members of the House Natural Resources Committee should be more concerned about that imbalance, rather than their fictitious statements about oil and gas production from federal lands and waters by President Obama.

Tom Kenworthy is a Senior Fellow with the Center for American Progress Action Fund. Daniel J. Weiss is a Senior Fellow and the Director of Climate Strategy at the Center for American Progress.

A jury in New Hampshire found ExxonMobil guilty of negligence for contaminating drinking water with MTBE, a gasoline additive.

A New Hampshire jury found Exxon Mobil Corp. negligent in adding MTBE to gasoline and contaminating the state’s drinking water. The jury will continue to deliberate to determine what the company will pay in damages.

Exxon Mobil, the last defendant in the state’s lawsuit, had been on trial since Jan. 14 in Concord. The jury announced its partial verdict today about two hours after it began to deliberate.

The state is seeking monetary damages from Exxon Mobil based on its share of gasoline sales in New Hampshire during the period covered by the suit. Jurors said today that the market share was 29 percent. With a projected cost of $816 million to test, monitor and clean up wells, New Hampshire asked the jury to award it $236 million.

All other oil companies named in the suit (Shell, Sunoco, ConocoPhillips, Irving Oil, Vitol SA, Hess, and Citgo) have already settled with the state. Exxon was the lone holdout. Other suits in other states stemming from action started in 2000 have been consolidated in federal court and have not gone to trial yet.

What did the jury find compelling in the state’s argument? We may never know exactly, but there is probably more to it than the fact that the company made billions in profits while paying a minuscule tax rate as gasoline prices soared last year.

MTBE increases the oxygen content of fuel, making it burn more completely. Witnesses told the jury that the ethanol could have been used in place of MTBE, which causes tumors and other illnesses in rats and mice. Ethanol, for all its drawbacks (which may eventually decrease), does not do that. They estimated that 5,590 New Hampshire wells had MBTE levels that were unfit for drinking water.

So Exxon lost a court case (which it will appeal) for negligently poisoning drinking water. Exxon is also fighting EPA rules that make cars run more efficiently and use less gasoline. It dodges paying taxes on pumping tar sands oil through (and occasionally spilling it on) America.

No matter which gasoline additive is used, the fuel still gets burned, which puts more carbon pollution into the atmosphere and helps cause climate change. Efficient engines and reducing the amount of fuel is the best way to stop all types of pollution.

A top exec at Russia’s second largest oil company — and the largest non-governmental driller — has no interest in taking a gamble on high-risk Arctic Ocean drilling.

In an interview with the Financial Times this week, Lukoil vice-president Leonid Fedun said it would be much cheaper and less risky for oil companies to pursue Russia’s onshore shale reserves than offshore drilling in its Arctic oceans, citing Shell’s high-profile setbacks in the region as a warning sign.

“If someone asked me to invest money in Arctic exploration and development, I wouldn’t give a kopeck,” he said. “We have many more investment opportunities that carry less risk.”

Lukoil is not the first major oil company to publicly back away from Arctic offshore drilling. Last year, Total S.A., the fifth-largest oil and gas company in the world, announced last year that it wouldn’t seek to drill in the Arctic because an accident there would be a “disaster.”

And after watching Shell’s string of mishaps from the sidelines, Norway-based oil and gas company Statoil said last month that it would consider walking away from its Arctic offshore leases if exploration proves too risky and expensive. Tim Dodson, Statoil’s executive vice president of global exploration, acknowledged the numerous challenges associated with Arctic offshore drilling and reiterated his company’s cautious approach to exploration in the region, saying, “We’ve [said] we wouldn’t drill before 2015. Whether that means we drill in 2015, or maybe not until 2016 or whether we’d drill at all, I think maybe the jury’s still a little bit out on that.”

Other corporate voices have weighed in as well. Insurance giant Lloyd’s of London issued a report warning companies that responding to an oil spill in a region “highly sensitive to damage” would present “multiple obstacles, which together constitute a unique and hard-to-manage risk.” German bank WestLB also announced last year that it would refuse financing to any offshore oil and gas drilling in the region because “the risks and cost are simply too high.”

The risks of Arctic Ocean drilling are multifaceted and stem from an overwhelming lack of knowledge, preparedness, infrastructure, and technological capabilities. The unpredictability of this remote and isolated region is only compounded by the onslaught of climate change, which is affecting the region more than any other place on Earth and further complicating the ability to make informed decisions — and smart investments.

Shell has invested seven years and more than a few kopeks (about $5 billion, to be exact) into its Arctic drilling endeavor and came up with nothing but damaged equipment and a bruised ego. Shell’s multiple failures and the concern expressed by fellow corporations clearly demonstrate that the current level of risk in Arctic offshore drilling outweighs the potential reward. Thus, the question remains: How many more influential private sector voices will need to voice their concerns before the government responds and halts Arctic offshore drilling?

Kiley Kroh is the Associate Director for Ocean Communications at the Center for American Progress

By Bill Becker (Part 1 can be found here)

With debate over the Keystone XL pipeline heating up, the White House has issued an update of President Obama’s “Blueprint for a Clean and Secure Energy Future“. It is the latest of White House policy pronouncements that leave us wondering whether President Obama will ever uncage his inner revolutionary to fight for genuine energy security.

At this point, it’s anyone’s guess. The blueprint’s content does not live up to the promise of its title. It contains stark contradictions. It sticks to Obama’s all-of-the-above energy strategy – a strategy transparently designed to keep all-of-the-above special interests happy. Because it supports all types of energy — including the fossil fuels responsible for global climate change — it advocates nothing.

Consider:

Oil Production: The President’s energy blueprint acknowledges that “rising gas prices serve as a reminder that we are still too reliant on oil, which comes at a cost to American families and businesses.” It “urges Congress to take up common-sense proposals that will further reduce our dependence on oil”.

At the same time, it boasts that since President Obama took office, “responsible oil and gas production has increased each year” in the United States. “Under my administration, America is producing more oil today than at any time in the last eight years,” the President said last year. “Over the last three years, I’ve directed my administration to open up millions of acres for gas and oil exploration across 23 different states. We’re opening up more than 75% of our potential oil resources offshore. We’ve quadrupled the number of operating rigs to a record high.”
If we are too dependent on oil, why is the President so bullish on producing more?

Energy Research: At a time the United States is under-investing in renewable energy R&D, the President’s new budget proposes $375 million for research on “cleaner energy from fossil fuels” including “more responsible” natural gas production and more funding for “clean coal” technology and carbon capture and storage.

While some fossil fuels are dirtier than others, none are clean. They all emit greenhouse gases when they are burned. They all involve environmental disruption when they are extracted. The cleanest of the fuels from a carbon standpoint, natural gas, has been accused of contaminating groundwater and leaking so much methane that it could be a bigger contributor to climate change than coal.

Meantime, clean energy is all around us but greatly underused. As others have pointed out, the greatest power plant ever created gives us free energy with no pollution, delivers it everywhere within seconds from 93 million miles away and won’t run out of fuel for 7 billion years. Rather than harvesting energy from the sun, why are we still trying so hard to dig it up from underground?

Corporate Welfare: To his credit, President Obama has urged Congress to repeal billions of dollars in taxpayer subsidies for the oil industry. But from the standpoint of an effective market, providing taxpayer money for research on “cleaner energy from fossil fuels” is no better. The coal, gas and oil industries are all grown up now and making pretty good livings. Most other businesses have to do their own R&D to remain relevant in a changing market. Why shouldn’t the fossil industries?

As for natural gas, why should taxpayers foot the bill to help the industry be more responsible? If gas companies don’t adopt more responsible production practices voluntarily, the government’s job is not to write them a check; it’s to implement regulations that protect the public. That’s what EPA is trying to do with the standards it announced last year to control methane and other air pollutants from oil and gas operations.

In the meantime gas companies aren’t showing a lot of interest in responsible production; instead they seem to be fracking and drilling as fast as they can before regulations can take effect.

Making Our Own Drug: The International Energy Agency predicts that fracking and horizontal drilling will make the United States the world’s largest oil producer sometime around 2017, surpassing even Saudi Arabia.

That would be a welcome change from nearly a half-century of dependence on foreign oil. But it also would make us the world’s biggest producer of one of the products most responsible for global climate disruption. Is that the title we want? Or, as the nation responsible for most of the greenhouse gases in the atmosphere today, shouldn’t we set a more moral example as the nation that leads the world to a low-carbon economy?

Shouldn’t we at least have a national energy plan that defines how and when we’ll end our dependence on oil, foreign or domestic- a downramp that signals our commitment to other nations and gives financial markets an incentive to capitalize our transition to clean energy?

Read more

A 2011 magnitude 5.7 quake in OK, linked to wastewater injection, buckled US Highway 62. (Credit: John Leeman)

After pulling massive amounts of fossil fuels out of the Earth’s crust so we can burn it up into our atmosphere, we have a good sense of where the stuff goes. Our oceans. A global greenhouse. Our lungs. But what happens to the ground formerly occupied by those fossil fuels?

It’s becoming increasingly clear that oil and gas extraction processes are actually weakening the structural integrity of the Earth’s crust just enough to cause more frequent earthquakes, in places not used to them.

Oklahoma, for instance, is not known for earthquakes. Yet the central U.S. has seen an elevenfold jump in recent years, including the Sooner State’s largest earthquake on record. This 5.7-magnitude quake occurred on November 6, 2011 near Prague, Oklahoma. And research published yesterday in Geology from the University of Oklahoma, Columbia University, and the U.S. Geological Survey has made a direct connection to the disposal of wastewater from conventional oil production:

A new study in the journal Geology is the latest to tie a string of unusual earthquakes, in this case, in central Oklahoma, to the injection of wastewater deep underground. Researchers now say that the magnitude 5.7 earthquake near Prague, Okla., on Nov. 6, 2011, may also be the largest ever linked to wastewater injection. Felt as far away as Milwaukee, more than 800 miles away, the quake — the biggest ever recorded in Oklahoma — destroyed 14 homes, buckled a federal highway and left two people injured. Small earthquakes continue to be recorded in the area.

The recent boom in U.S. energy production has produced massive amounts of wastewater. The water is used both in hydrofracking, which cracks open rocks to release natural gas, and in coaxing petroleum out of conventional oil wells. In both cases, the brine and chemical-laced water has to be disposed of, often by injecting it back underground elsewhere, where it has the potential to trigger earthquakes. The water linked to the Prague quakes was a byproduct of oil extraction at one set of oil wells, and was pumped into another set of depleted oil wells targeted for waste storage.

As Climate Progress has written before, this practice of disposing chemical-laced water generated during the extraction of oil and gas has far-reaching effects. Drillers have been doing this for more than a decade, and the researchers note that the Oklahoma quake did not actually require very much wastewater. In fact, because we have been doing this for so long, the built-up pressure in the Earth’s crust changes the criteria of how quakes happen. The study’s abstract notes:

Significantly, this case indicates that decades-long lags between the commencement of fluid injection and the onset of induced earthquakes are possible, and modifies our common criteria for fluid-induced events.

So we could be paying for more than a decade of wastewater injection and fracking for quite some time with earthquakes. There’s not much more room 9,000 feet down. Wellhead records indicate that pressure in these areas underground increased by a factor of ten from 2001 to 2006.

Read more

By a vote of 221-207, Republicans passed Rep. Paul Ryan’s (R-WI) budget for the third consecutive year. The House Republican budget slashes funding for poverty programs and dramatically transforms Medicare for seniors, all while it grants tax breaks to special interests like Big Oil.

Ryan’s budget could mean a $2.3 billion additional tax break for the five biggest oil companies, according to a Center for American Progress analysis. Republicans would still maintain the industry’s $4 billion annual tax breaks at the same time they slash research and investment in clean energy.

According to data from the Center for Responsive Politics, Republicans who voted for Ryan’s budget have received more than $38 million from oil and gas over their careers. On average, the “yeas” received over four times the career oil cash as the “nays”:

Career contributions:

221 Yeas (221 Republicans) – $38,056,766

207 Nays (197 Democrats and 10 Republicans) – $7,830,295

The 221 members who voted yes received more than $12,400,000 in the 2012 cycle alone, compared to nearly $2 million for the no votes. The vote makes the 113th Congress no different from the 112th, when House members voting for a polluter energy package received $38.6 million.

Big Oil hardly needs the help from taxpayers. While consumers faced record gas prices in 2012, the oil industry earned an outstanding $118 billion profit (and a trillion dollars over a decade).

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.

Cross-posted from Huffington Post

Given the relentless “all of the above” energy strategy pursued by the Obama Administration, the release this past Friday of a positive environmental impact report for the proposed Keystone oil pipeline was no big surprise. The U.S. State Department essentially declared that since the extra-dirty tar sands oil designated for the pipeline was going to be shipped and burned one way or another, building the pipeline down from Canada to Gulf coast refineries would not have that much impact on the environment — despite warnings from climate scientists that burning all the tar sands oil would be “game over” in the fight to stop climate change.

This conclusion by the State Department was a laughable bit of self-fulfilling logic. But perhaps the biggest surprise in the report was the tacit admission that the tar sands oil isn’t going to be burned in the U.S. at all. Instead, it is destined for refining and export overseas.

The State Department report details how Gulf Coast oil refineries will use the tar sands crude oil delivered by Keystone to replace supplies from Venezuela and Mexico, refine the crude into high-end products like gasoline, and then export the refined fuel overseas. Meanwhile, as if to add insult to injury, fuel prices paid by U.S. consumers in the Midwest are expected to jump as the pipeline will siphon off crude oil supplies that are currently landlocked in America. The U.S. State Department did not, of course, highlight these findings at the top of its report but instead buried them down in the “market analysis” section, where it left a clear trail of breadcrumbs.

Interestingly, the State Department went way out of its way to argue that the pipeline won’t be used to export unprocessed crude oil. (Though the industry clearly expects otherwise: see here.) Yet at the same time, the State Department admits, using painstakingly disconnected phrasing, that the crude oil delivered by the pipeline will be processed by Gulf coast refineries and then exported, in a shell game whereby export refineries replace declining crude oil supplies from Venezuela and Mexico with Keystone Canadian tar sands oil.

Regarding the pipeline’s impact on the export of refined crude, the State Department report says: “…future refined product export trends are also unlikely to be significantly impacted by the proposed Project.”

And what exactly are those trends? The State Department reports that: “In 2005, exports began increasing… Export volumes have increased to over [3 million barrels of oil per day] in the first half of 2012. This increased volume of refined products is being exported by refiners as they respond to lower domestic gasoline demand and continued higher demand and prices in overseas markets.”

And why use the extra dirty crude oil to be delivered by the Keystone Pipeline? The State Department says: “Gulf Coast refiners’ traditional sources of heavy crudes, particularly Mexico and Venezuela, are declining and are expected to continue to decline. This results in an outlook where the refiners have significant incentive to obtain heavy crude from the oil sands.”

And there you have it, a shell game, with Keystone as the lynchpin for the whole effort. Gas prices go up for Midwesterners, big oil refineries profit from the overseas export of fuel processed from dirty tar sands oil, and the rest of us are that much further in the hole in our fight to stop climate change. The environmental impact statement appears to be a clear signal that the Obama Administration is headed down the road to approval. However, the growing backlash against the pipeline creates a headache for the president who just made a very public commitment to protect the climate. A fight is clearly in the works.

– Hunter Cutting is a consultant and writer.