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Daniel J. Graeber

Daniel J. Graeber

Daniel Graeber is a writer and political analyst based in Michigan. His work on matters related to the geopolitical aspects of the global energy sector,…

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No Energy in U.S. Energy Debate

Rep. Ed Markey, ranking member of the House Energy Committee, said an investigation into Shell's offshore Alaska campaign suggested the company wasn't ready to work in extreme environments. An Interior Department report found problems with the way Shell managed its Alaska campaign last year. Last week, Markey added that he wanted to restrict oil and gas exports to ensure U.S. energy security.  Amid the firestorm over Republican pressure to pass the Keystone XL pipeline, some party leaders on the other side of the aisle are embracing a protective model as a way to keep the domestic economy going. The political debate around energy, however, is becoming less about energy and more about partisanship.

Principal Deputy Assistant Secretary for Land and Minerals Management Tommy Beaudreau led the Interior Department's review of Shell's work offshore Alaska. The New Years Eve grounding of drillship Kulluk gave environmental campaigners the fodder they needed to reiterate their position that arctic oil and gas exploration wasn't safe. Beaudreau found that "Alaska's harsh environment was unforgiving" to Shell's lack of oversight in Alaska.

Markey, D-Mass., said the report showed Shell wasn't prepared to drill in the harsh arctic environment of the Beaufort and Chukchi Seas.

Related article: Using Oil Revenues to Research Alternative Fuels

"Until Shell demonstrates beyond a shadow of a doubt that they have the capability to drill in the arctic safely, their drilling plans should remain on ice," he said.

Shell last month said it was suspending plans offshore Alaska to prepare its equipment and personnel for resumption of activity "at a later stage."  A report prepared for Shell estimates the reserve potential in northern Alaskan waters may be as high as 65 billion barrels of oil and 305 trillion cubic feet of natural gas. Markey and Rep. Rush Holt, D-N.J., introduced legislation, however, that would limit how much oil and gas from the United States gets to foreign markets. Markey said exporting domestically-produced natural resources should be "off the table" so the domestic economy can enjoy the benefits of the oil and natural gas boom.

Related article: Is the U.S. Oil Boom About to Bust?

That's much of the same rhetoric used by Markey's counterparts in the Republican Party, who've embraced energy development as a way to stimulate the U.S. economy.  House Energy and Commerce Committee Chairman Fred Upton introduced a measure that would cut the White House out of the Keystone XL decision-making progress. Slated for a vote before the end of May, the chairman said there's no reason the U.S. energy sector shouldn't be able to refine and keep most of the oil coming out of the planned Canadian pipeline. Critics, however, say most of Keystone's oil would head overseas.

OPEC in its latest monthly report conceded that U.S. oil and natural production was gaining an enduring foothold in the energy market. At home, U.S. manufacturing output increased 0.8 percent in February after a 0.3 percent decline in January. Unemployment for February was 7.7 percent, down 0.2 percent from January. Consumer spending, meanwhile, is considered resilient despite higher gasoline prices. To that end, the fuel economy rating for model year 2012 passenger vehicles was reported by the EPA at 23.8 mpg, the highest on record. Media and public commentary alike may dispute many of the figures surrounding politics and the U.S. economic and energy debate. But much of the debate is just that – political.

By. Daniel J. Graeber of Oilprice.com




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