House Natural Resources Committee takes yet another action promoting same oil and gas giveaways, mandates leasing quotas for oil companies

The U.S. House Natural Resources Committee meets on Wednesday to mark up a slew of bills, and sandwiched in among them are a familiar series of giveaways to the multibillion-dollar oil and gas industry. In fact, the legislation would mandate leasing quotas for oil companies and increase speculation on public lands.

“The oil and gas giveaway bills being considered in the House today mandate leasing quotas, a policy that is dramatically out of step with public opinion in the West,” said Center for Western Priorities Policy Director Greg Zimmerman. “Westerners acknowledge there is room for energy development, but polling shows that recreation and conservation are their highest priorities for public lands. Moreover, 90 percent of western voters say protected lands were vital to their local economies.”

Wednesday’s hearing continues the determination by House Republicans, over the last five years, to put the interests of oil and gas companies ahead of conservation and the future of America’s public lands. This, despite the fact that a majority of Westerners in oil and gas producing states want to see a balance struck between energy development and protection of public lands.

ADDITIONAL BACKGROUND

About H.R. 1965 – Sponsor Rep. Doug Lamborn (R-Colo.) 

  • The Lamborn bill blocks the public from participating in leasing decisions by creating “entrance fees” of up to $5,000 to join the conversation. It also mandates leasing quotas for oil and gas companies, encourages speculation, and bars the public, local officials and others from protesting potentially dangerous leasing decisions.
  • The Lamborn bill prevents the Bureau of Land Management (BLM) from protecting water, air and land from the impacts of drilling. It also rolls back the Obama Administration’s common sense approach to the failed “rock that burns,” oil shale, and in doing so endangers western water supplies and local economies.
  • The Lamborn bill continues to promote oil shale speculation despite the fact a Congressional Budget Office analysis of his proposal during the previous Congress found that opening up public lands to oil shale speculation would have zero effect on revenue.

About H.R. 1394 – Sponsored by Rep. Scott Tipton (R-Colo.)

Attitudes of Westerns about energy development and conservation (Hart Research)

  • About two in three (65%) voters say that permanently protecting and conserving public lands for future generations is very important to them personally, and another 63% say that ensuring access to public lands for recreation activities is personally important to them (as indicated by a rating of “9” or “10” on a zero-to-10 scale). By comparison, only half as many voters (30%) say the same about making sure oil and gas resources on public lands are available for development.
  • Voters reject the idea that there must be a single-minded, “either/or” approach to public lands. When explicitly given the opportunity to choose a third option, a majority (55%) instead say the government should put conservation on equal ground with drilling for oil and gas. This is the case among independents (59%), Republicans (64%), hunters and anglers (57%), and even among people who rate oil and gas as very important to them personally (57%). Democrats, in contrast, are divided between putting drilling and conservation on equal ground (44%) and focusing more on conservation and protection (47%).

# # #

State Department Inspector General Probing Keystone XL Contractor’s Conflicts of Interest

In yet another investigation into the Obama Administration’s activities, the State Department Inspector General is probing the conflicts of interest surrounding the contractor that performed the Keystone XL review,.

ERMProposalThe American public was supposed to get an honest look at the impacts of the Keystone XL pipeline. Instead, Environmental Resources Management (ERM), a fossil fuel contractor, hid its ties from the State Department so they could green light the project on behalf of its oil company clients.

Hiring an oil company contractor to review an oil pipeline that its clients have a financial interest in should be illegal – and it is. The Federal Government has strict laws to avoid conflicts of interest and prevent the hiring of contractors who cannot provide unbiased services.

Unredacted documents from the contractor’s proposal (revealed by Mother Jones) show that the company had worked for TransCanada, ExxonMobil and other fossil fuel companies that have a stake in the Canadian Tar Sands.

But, ERM misled the State Department at least twice in its proposal (see C&BP’s original post on ERM’s conflicts of interest)– which may have led to its selection by the State Department to review the Keystone XL pipeline.

OCI Question 6

First, ERM answered “No” to the question “Within the past three years, have you (or your organization) had a direct or indirect relationship (financial, organizational, contractual or otherwise) with any business entity that could be affected in any way by the proposed work?“ ERM appears to have added to the Yes/No questionnaire that, “ERM has no existing contract or working relationship with TransCanada.” Regardless of the addendum, the oil company contractor misled the State Department by checking “No” to the specific question above. Despite the fact that unredacted documents show that ERM worked for TransCanada and other fossil fuel companies with a stake in Keystone XL pipeline in the three years prior to its proposal.

Second, ERM claimed it was not an energy interest. The State Department question defines an energy interest in part as any company or person engaged in research related to energy development. Yet, ERM has worked for all of the top five oil companies and dozens of other fossil fuel companies. In other words, ERM is clearly an energy interest.

How can we trust ERM to perform an honest review of the Keystone XL pipeline, if it can’t answer a yes/no question honestly?

These misleading statements should have been flagged by the State Department and the contractor should not have been able to perform the review because of these seeming conflicts of interest.

ERMLetterBecause of the issues above, Checks & Balances Project (C&BP) and 11 environmental, faith-based and public interest organizations sent a letter  [.PDF] on April 8, 2013, calling on Secretary of State John Kerry and the State Department Deputy Inspector General Harold Geisel to investigate two things: first, whether ERM hid conflicts of interest which might have excluded it from performing the Keystone XL environmental assessment and second, how State Department officials failed to flag inconsistencies in ERM’s proposal.

A few weeks later, C&BP received a voicemail from a Special Agent at the State Department’s Office of Inspector General (OIG):

Hello Mr. Elsner, my name is Special Agent Pedro Colon from the State Department’s Office of Inspector General.  I’m calling to inform you that we have received your request and are reviewing the matter.  If you have any questions please contact me at 703-284-2688.

On May 7, 2013, I called Special Agent Colon but he was unable to speak at the time. I followed up the next day and spoke with the Special Agent via phone regarding the request for an investigation. I asked a few basic questions about the status of the complaint and asked specifically if C&BP would be informed should the complaint be fully investigated by the Office of Inspector General (OIG). Special Agent Colon informed me that he could not speak to any of the questions and referred us to other staff in the OIG.

On May 9, 2013, I received an email from the OIG General Counsel saying, “that the complaint was being processed per the OIG hotline procedures and is under review.” (See the entire email correspondence here [.PDF])

I then asked the OIG General Counsel the same question he asked Mr. Colon:

If the hotline is moved out of the review process and onto the next step (an investigation?), will I be notified?

The OIG  replied via email saying that the OIG Office of Investigations will not comment if it is engaged in an investigation.

The correspondence between C&BP and the OIG indicates that there is a probe into the Keystone XL review conflicts of interest.

The public was supposed to get an honest look at the impacts of the Keystone XL pipeline. Instead, ERM, an oil company contractor, misled the State Department, in what appears to be an attempt to green light the project on behalf of oil industry clients.

The American Public needs a full investigation into the conflicts of interest and misleading statements of the Keystone XL review contractor, Environmental Resources Management.

Secretary Kerry needs to stop the Keystone XL process until the Inspector General completes a full investigation of these conflicts of interest and the State Department has an unbiased review of Keystone XL’s impact.

Colorado oil production up nearly 50 percent since 2010

According to the Colorado Oil and Gas Conservation Commission (COGCC) oil production exceeded 48 million barrels in 2012, a 49 percent increase over 2010 levels.

The 2012 oil production levels are the highest since 1961 and are in increase of 24 percent over 2011 levels.

cogcc_oil_production_graph

According to COGCC gas production reached its highest level since 1952.

cogcc_gas_production_graph

Senators get it wrong on oil & gas production at Jewell nomination hearing; Industry is following the oil to nonfederal lands

The Senate Energy and Natural Resources convened, Thursday, to question President Obama’s Interior Sec. nominee, REI Chief Executive Officer Sally Jewell. The three-hour hearing was generally friendly, but some Senators couldn’t pass up the chance to repeat oil and gas industry talking points, rather than deal in facts.

The Checks and Balances Project watched the hearing and used Twitter to fact check senators. Sen. Lisa Murkowski (R-AK), Sen. Joe Manchin (D-WV) and Sen. Tim Scott (R-SC) all ignored the facts about western land use and energy development at various points during the hearing.

Here are five statements from the hearing where senators got it wrong on U.S. oil and gas production*:

“They’ve driven us backward on the development of nearly a trillion barrels of oil shale in the Green River formation in Colorado, Utah, and Wyoming.”

– Sen. Tim Scott (1:29:38 – 1:30:05)

The facts: BLM released a revised PEIS late in 2012 that gave oil shale speculators access to 600,000 acres of public lands. For more than a century, people have tried and failed to make oil shale – a rock that doesn’t actually contain oil – a viable energy source. Along the way, billions of American taxpayer dollars have been risked, with nothing to show for it. According to Taxpayers for Common Sense, the federal government awarded nearly $7 billion in the 1980’s (over $12 billion adjusted for inflation) on oil shale loan and price guarantees.

Being from South Carolina, Sen. Scott may not know all this about oil shale, since they don’t have any. We suggest he reads our Century of Failure report, and visits No More Empty Promises, to learn more.

* * *

“If you look at the amount of production we have off of federal lands, that you would be responsible for, has declined, when private land production has increased. So it looks like the Department of Interior was going a different direction when the economy and the market was driving it – in the private sector – in a complete different direction.”

– Sen. Joe Manchin (54:20 – 54:45)

The facts: Earlier this week the Salt Lake Tribune ran a story on a new report which shows that price and geology are the reason there’s more drilling on private lands today:

Overproduction of U.S. natural gas, not burdensome drilling regulations, is driving energy developers from western public mineral leases to non-federal lands rich in oil to the east…According to the new report, 89 percent of shale oil and mixed oil and gas in the Intermountain West occupy non-federal deposits even though the feds control much of the region’s lands.

Phil Taylor at Greenwire also wrote on oil shale production on federal lands, showing that it’s actually on the rise.

* * *

“Despite tremendous resources on federal lands, nearly all gains in energy production have occurred on State and private lands.”

– Sen. Lisa Murkowski (Opening statement)

The facts: In 2011 the Bureau of Land Management held three of its five largest-ever lease sales for the rights to drill on public land for oil and gas. Those are just some of the 6,314,914 acres of public land the Obama Administration has leased to oil and gas companies – nearly 2.5 times as much as the Administration has permanently protected. A Denver Post story, U.S. oil and gas drilling moving to private land where the shale is, cited a new report from the Center for Western Priorities on the industry’s shift to drilling on nonfederal lands, saying that:

…nationally 93 percent of the shale oil and mixed oil-gas plays and 90 percent of the pure shale natural gas plays were not on federal land.

Oil and gas companies have plenty of public land – so much that 20 million acres of leased lands and nearly 7,000 approved drilling permits lay idle. The most valuable commodities are on private lands, so that’s where industry is drilling.

* * *

“It seems the President’s ‘all of the above’ strategy has not included public land very much. It seems like our success has been on private lands, state lands, but not on public lands, federally owned.”

– Sen. Tim Scott (1:31:08 – 1:31:20)

The facts: Obviously, Sen. Scott also needs to get up to speed on basic facts on U.S. oil and gas production. If CWP’s report isn’t enough, Sen. Scott should read a recent Congressional Research Service report that stated:

Any increase in production of natural gas on federal lands is likely to be easily outpaced by increases on non-federal lands, particularly because shale plays are primarily situated on nonfederal lands and is where most of the growth in production is projected to occur.

Sen. Scott may also want to check out a report (pg. 22) from the Bipartisan Policy Center that states:

This shift [in drilling location] generally reflects a coincidence of geography. The large shale formations that have attracted most of the recent development activity are located in parts of the country where the federal government simply does not have large land holdings (including notably the Bakken, Barnett, Haynesville, Marcellus, and Fayetteville plays).

* * *

“This administration has obstructed access to billions of barrels of oil in ANWR, off our Atlantic, Pacific, and Gulf coasts, and on federal lands out west.”

– Sen. Tim Scott (1:29:38 – 1:30:05)

The facts: The oil and gas industry are sitting on 7,000 idle, green lighted drilling permits, and the federal government consistently approves drilling permits faster than industry can drill new oil and gas wells. Any delays in the permitting process are largely attributable to industry, and not the federal government.

If Sen. Scott would like to come visit the West to see this all for himself, we’d be happy to show him around.

*Transcribed by Checks and Balances Project from Energy and Natural Resources Committee Archived Webcast,

Seven things you need to know about oil production and drilling on your public lands.

With less than three weeks to go before Election Day, the rhetoric around gas prices and drilling is heating up at campaign events around the country. The issue was also front and center in Tuesday night’s presidential debate.

Predictably, data about oil production on federal lands and its effects on gas prices is being spun and twisted to fit a range of agendas. While the data shows that industry interest for drilling permits has moved away from public lands to private lands – there is a simple explanation for the shift that industry lobbyists and PR pros aren’t telling you. Drilling companies go where the most profitable resources are, and today that means shale oil, the vast majority of which is under private lands.

We want to help the public by laying out the hard facts about oil production on federal lands and its impact on the price at the pump (or lack thereof) so that the next time there is a sound bite or lofty rhetoric, the public knows the truth.

Here are seven things to you need to know about oil production and drilling on your public lands.

1. Oil production is at its highest level in eight years.

Despite the conventional wisdom spun by industry and on campaign trails by Big Oil politicians, the U.S. is the world’s third largest oil producer. In fact, domestic oil production is at its highest level in eight years.

Oil Production Graph
Source: “U.S. Field Production of Crude Oil,” Energy Information Administration, accessed 18 October 2012.

2. The vast majority of shale oil and gas resources are found under private and not public lands.

The latest oil boom in the lower 48 states is due largely to an unconventional resource known as “shale oil,” (oil trapped within shale rock). The vast majority of both “shale oil” and “shale gas” (natural gas trapped within shale rock) is found under private and not public lands. The location of these resources, not safeguards for air and water, explain the shift in drilling from public to private lands.

Source: Adam Sieminski, Testimony of the Energy Information Administration, U.S. House, Subcommittee on Energy and Power Committee on Energy and Commerce, 2 August 2012.

3. Natural gas prices have plummeted, while oil prices have rebounded since 2008.

The major factor driving whether a rig drills for oil or natural gas is price. Most of the energy resources under federal public lands are natural gas. As we saw above, most shale oil resources are under private lands. Given that natural gas prices plummeted and oil prices have rebounded since 2008, there is a strong incentive for drill rigs to move from public to private lands.

Source: “Cushing, OK WTI Spot Price FOB,” Energy Information Administration, accessed 18 October 2012.
U.S. Natural Gas Wellhead Price,” Energy Information Administration, accessed 18 October 2012.

4. Despite the fact that most shale oil resources are under private lands, oil production was higher on public lands in 2011 than it was in 2007.

One would of course expect oil production to skyrocket on private lands, but oil production has also increased on public lands by about 19,000 barrels per day.


Source: Marc Humphries, “U.S. Crude Oil Production in Federal and Non-Federal Areas,” Congressional Research Service, 20 March 2012.

5. More oil production from public lands will not affect the price at the pump.

The Associated Press found that “[g]as price spikes have had little to do with the level of oil produced in the United States.” This is because the price of oil is set on a world market, and increasing demand from countries such as China and India is raising the cost of oil. So, drilling companies make more money drilling for oil when prices spike, but it won’t lower the price at the pump.

Click the snapshot below to view the Associated Press’s interactive chart on their website.


6. The U.S. Bureau of Land Management continually approves drilling permits faster than the number of new wells industry develops.

Critics often point to declining permit numbers as proof positive that the federal government is blocking development, but the facts tell a different story. Industry is submitting far fewer permits to drill on public lands because of the shift from public lands natural gas resources to private lands shale oil deposits, and the federal government can’t approve a permit unless industry submits an application for it. More importantly, the federal government consistently approves drilling permits faster than industry can drill new oil and gas wells. The only thing holding back industry is industry.

Source: “Number of Drilling Permits Approved by Fiscal Year on Federal Land,” U.S. Bureau of Land Management, last updated 9 November 2011.
Number of Well Bores Started (Spud) During the Fiscal Year on Federal Lands,” U.S. Bureau of Land Management, last updated 9 November 2011.

7. Industry is sitting on more than 7,000 federal drilling permits with a green light to drill.

Lastly, industry does not use the drilling permits that have already been issued for oil and gas development. In fact, there are more than 7,000 unused drilling permits that industry could develop on federal public lands.


Source: “Approved Applications for Permit to Drill – Not Drilled,” U.S. Bureau of Land Management, 30 September 2011.

Reality check on gas prices, public lands

Rhetoric in the public debate on gas prices is heating up from politicians this week. Unfortunately, oil and gas apologists continue to push misinformation on the American public.

Instead of exporting American resources so that oil companies get richer, let’s use our oil at home to the benefit of all Americans.

There is another simple step we can take to help American families whose pocketbooks are hurting because of high prices at the pump. We should end the billions in special tax breaks to Big Oil and reinvest those funds in transportation solutions, high tech vehicles, and the next generation of renewable fuels.

Here are some facts to consider about gas prices and energy development.

Oil and gas drilling
Oil and gas drilling in America is its highest level since Ronald Reagan was in office. Over the last four years, there appears to be a direct correlation between gas prices and drilling activity. Higher prices means more drilling, but more drilling has failed to lower gas prices.


Domestic oil production
Earlier this year, the Associated Press found that there is no correlation between how much oil is produced and the price of gas. In fact, domestic crude oil production is at its highest level since the late 1990’s.

Over the last four years, oil production has increased right alongside the price of gas. Clearly, we need an all-of-the-above energy policy that goes beyond oil.

Public lands
The Congressional Research Service found that oil production on federal lands is higher in 2011 as compared to 2007.

Oil and gas companies have also failed to develop more than 20 million of acres of public lands that are already leased for oil and natural gas. According to a May 2012 Interior Department report, the oil and gas industry had conducted production or exploration activities on just 56% of public lands leased in the U.S.

Checks and Balances Project launches Western Lands and Energy Dashboard

FOR IMMEDIATE RELEASE:

January 27, 2012

Checks and Balances Project launches
Western Lands and Energy Dashboard

In wake of State of the Union energy debate, watchdog group works to counter claims
by API, Western Energy Alliance

Denver – Today, the Checks and Balances Project launched its Western Lands and Energy Dashboard examining oil and gas development and public lands access in the West.

The dashboard is an impartial counter to the rhetoric of industry lobby groups such as American Petroleum Institute and Western Energy Alliance as well as politicians with deep industry ties as a result of oil and gas campaign contributions.

The dashboard presents the facts and figures of the oil and gas industry and public lands development in a simple and clear way, with links to original sources.

“After the State of the Union address, we saw a pile-on by industry lobbyists and Big Oil politicians to spread misinformation about the health of America’s oil and gas industry,” said Matt Garrington, Denver-based co-director of The Checks and Balances Project. “Our research demonstrates that business is booming for the oil and gas industry, and that those companies continue to underutilize existing access to public land while demanding taxpayer handouts.”

“Last year, under the Obama administration, oil companies reported $104 billion in profits and enjoyed the highest level of drilling activity since the Reagan era. This is the sort of information the oil and gas industry and their supporters in Congress neglect to mention. We want to set the record straight,” continued Garrington.

The dashboard contains a series of slides that focus on specific areas of interest. Every fact in the slides is cited to original sources, including government agencies, industry data, and nonpartisan think tanks.

“The Checks and Balances Project is committed to providing accurate data regarding our nation’s energy production and land use,” said Garrington. “This is why we created the Project, to counter industry spin with cold, hard facts.”

The organization plans to add new research over time and update existing slides as new data becomes available.

Among the key findings are:

  • Drilling activity is at its highest level in 25 years.
  • The oil and gas industry saw windfall profits of $104 billion in the first three quarters of last year, due primarily to a dramatic rise in the price at the pump.
  • The oil and gas industry receives $9.4 billion every year in special tax breaks and subsidies.
  • Over 20 million acres of public lands leased for energy development remain idle.
  • The oil and gas industry has failed to develop 6,500 drilling permits issued by the BLM.
  • The oil and gas drilling industry employed 615,900 people in 2010, adding over 40,000 jobs during President Obama’s first two years in office.
  • The U.S. is now a net exporter of petroleum products for the first time since 1949.

The dashboard can be found at: www.checksandbalancesproject.org/dashboard

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