The Obama administration announced today that the Department of Interior will hold a consolidated lease sale for the Central Gulf of Mexico region, thus concluding the lease sales scheduled in 2007 and required by law. The timing of the announcement and the high profile the administration is giving it appears designed to make the American public think that President Obama is fulfilling his State of the Union pledge to “open up more than 75 percent of our potential offshore oil and gas resources.” The facts, however, tell a different story. Consider the following:
1. The Obama administration claims that this sale is a component of the President’s desire to “promote safe and responsible domestic oil and gas production as a part of a comprehensive energy strategy.”
FACT: President Obama imposed a job-killing moratorium on offshore energy development in the Gulf of Mexico that cost America at least 12,000 jobs and more than $2 billion over the course of the first six months of the moratorium. The only reason the Administration is holding a new lease sale for the Central Gulf of Mexico is because the sale is required as a part of the Congressionally-sanctioned 2007-2012 Five Year Plan, according to the Outer Continental Shelf Lands Act of 1978 (OCSLA). If the administration did not hold this sale before June 30, 2011, it would not be fulfilling the intent of the law.
2. The Obama administration claims that this lease sale will open up new offshore lands for energy development.
FACT: Today’s announced lease sale does not open any lands for exploration that were not already scheduled two years before President Obama took office. The 2007-2012 Five Year OCS Lease Plan included 16 sales in 6 offshore areas. Of these 16 sales, the Obama administration cancelled or delayed a number of them. Of the 2 that remain in the Central Gulf, the administration has scheduled them for simultaneous sale, which means that only one sale will actually occur. The Obama administration also cancelled a lease sale for areas off the coast of Virginia, and permanently removed 5 sales off the coast of Alaska. In 2010, the Obama administration did not hold a single lease sale, the first time this has happened in many years.
3. The Obama administration claims that this sale is a part of its strategy to “increase responsible domestic production and reduce dependence on foreign oil.”
FACT: Even once the remaining 2007-2012 sales are complete, the administration has shown little interest in reducing America’s oil imports. The reductions in imports that have occurred in recent years owe more to the sluggish economy and reduced demand from American consumers than administration energy policy. Moreover, in recent weeks, the president single-handedly denied the Keystone XL pipeline permit, which would have made up to 830,000 barrels of North American oil available daily to U.S. markets.
4. The Obama administration claims that the terms of this sale will “ensure that taxpayers receive a fair market value for offshore resources.”
FACT: U.S. taxpayers received 258 times less revenue from offshore lease sales last year than they did under the last year of the Bush administration. Revenue from offshore lease sales has plummeted from nearly $9.5 billion in FY2008 to paltry $36.7 million in FY2011.
5. The Obama administration claims that it is developing a new Five Year Plan for 2012-2017 that will “make more than 75 percent of undiscovered technically recoverable oil and gas estimated on the OCS available for development.”
FACT: The United States currently has leased a mere 2.2% of available lands on the Outer Continental Shelf. The amount of un-leased lands that are not currently leased for energy development is equal to ten times the acreage of the entire State of Texas. Currently, limits on offshore production keep annual production to only 588 million barrels of oil — or less than 1/10th of our annual demand — even though the Bureau of Ocean Energy Management, Regulation, and Enforcement estimates that the U.S. has about 86 billion barrels of undiscovered oil in the Outer Continental Shelf. Nevertheless, the Obama administration continues to block exploration of the vast majority of America’s offshore resources.
Furthermore, the current Five Year Plan expires on June 30, 2012. The law mandates that the administration to present to Congress a new Five Year Plan, which requires a 60-day review period before final authorization. This means that the Obama administration must present the new Five Year Plan to Congress before May 1, 2012. If the administration does not produce a plan before then, the United States runs the risk of having no legal framework to develop the Outer Continental Shelf for the first time since the passage of OCSLA in 1978.