CAP’s Tom Kenworthy in a WonkRoom cross-post.
On March 31st, the House Natural Resources Committee held yet another hearing to tie rising gas prices to an oil industry agenda. The panel’s Grand Oil Party leadership continues to ignore reality. It’s not the Obama administration’s supposed imposition of “regulation after regulation, roadblock after roadblock” that’s holding up more domestic oil drilling, as claimed by Rep. Doc Hastings (R-WA), the committee chairman. He acts as if his panel can help reduce gas prices at the pump by hiding the truth and smacking the Obama administration.
The facts are simple:
– As the head of the Energy Information Administration told Hastings’ panel the other day, opening up more federal lands to oil drilling will have at best a marginal impact on gas prices and even if there is a reduction it could be erased by OPEC cutting production.
– The oil and gas industry has failed to use more than two-thirds of the offshore leases they hold in the Gulf of Mexico and more than half of those they hold onshore.
– The industry has almost 7,200 drilling permits on federal lands that it hasn’t used yet, according to BLM data obtained by E&E news.
– In Wyoming alone, the oil and gas industry has idled nearly 12,000 natural gas wells that were actually producing. The cause? A “downturn in pricing” — in other words, low natural gas prices, according to Wyoming Oil and Gas Conservation Commission supervisor Tom Doll.
– The United States has 1,738 drill rigs actively exploring for or producing oil and gas right now, a 20 percent increase over a year ago. That’s more than the rest of the world has combined, not including Russia and China where the company that collects the data, Baker Hughes, says reliable information is not available.
The truth is that drilling and production are largely dictated by world energy markets and the industry drills and produces when it thinks it can make the most excessive profits. And when prices are down, the industry counts on people like Hastings allowing them to stockpile leases and drilling permits until prices rise. Americans will only stop being harmed by spiking gas prices when they are no longer hostage to the oil industry.
— Tom Kenworthy, a Senior Fellow at the Center for American Progress.