The oil and gas industry has been working in unison with a few congressional allies to constantly blame the Obama administration for the current energy prices in the US, claiming that the government are blocking domestic energy development by not releasing enough permits for exploration and drilling.
The government has now hit back at these claims by releasing a report that proves that the claims against them are actually unfounded and that roughly 46 million acres of federal lands and waters leased for drilling are sitting idle. The oil and gas companies are only actively drilling or starting to develop less than a third of the area that they have leased offshore.
Ken Salazar, the Interior Secretary, said that this analysis highlights the White House’s commitment to allowing oil and gas drilling on federal land and waters. “We continue to make millions of acres of public lands available for safe and responsible domestic energy production on public lands and in federal waters. We also want companies to develop the tens of millions of acres they’ve already leased but have left sitting idle in order to further reduce our reliance on foreign oil as quickly as possible.”
But the oil and gas industry argue that it takes time for the companies to perform seismic tests of the region, and then plan for drilling permits. Kathleen Sgamma, vice president for government and public affairs at the Western Energy Alliance, said that, “the administration continues to deflect blame for leases that are not producing onto the industry, yet their rhetoric displays a misrepresentation of how oil and natural gas development on federal lands works.” The industry representatives profess that the information on leases is misrepresentative because the government delays on providing the drilling permits; but in 7,000 cases observed in the report, the companies had been granted both leases and drilling permits, and still haven’t started work.
In an attempt to spur the development of this idle land, the Interior Department has decided to boost the annual rates for offshore acres that are leased, but are not producing oil. They have also shortened the length of time that a lease can be held before initial drilling starts.
It does seem that the Obama administration is doing more than the oil and gas companies would lead us to believe to increase domestic production.
By. James Burgess of Oilprice.com
James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…