Manhattan Institute for Policy Research.
search  
 
Subscribe   Subscribe   MI on Facebook Find us on Twitter Find us on Instagram      
 
 
   
 
     
 

Washington Examiner

 

Has Obama Seen the Light On Oil?

January 27, 2012

By Diana Furchtgott-Roth

On Thursday President Obama announced that he would expand oil leases in the Gulf of Mexico. Should we now forget his veto of the Keystone XL pipeline, which would bring Canadian oil down to our refineries in the Gulf, creating 20,000 jobs? Has Obama now seen the light on oil?

On a visit to Intel, in Chandler, Ariz., Obama said, "We're actually importing less oil as a percentage than any time in the last 16 years. So we're opening up the oil and the gas industry here in the United States."

The Department of Interior's new lease sale in the Gulf of Mexico would make another 38 million acres available for oil and gas exploration, with the potential to extract a billion barrels of oil and 4 trillion cubic feet of natural gas.

This sounds good on the surface, but not when drilling deeper into the details.

Most of the western and central Gulf of Mexico is already leased, and many of those areas without leases are not in demand. So new leases will have to be in the central Gulf or eastern Gulf, near Florida.

Florida has thus far done a good job of stopping large lease sales in the eastern Gulf. They fear that the sight of rigs would deter tourists, or that some environmental snafu would tar the pristine coastline.

Coastal states typically control the territory three nautical miles from the coast at low tide, and can decide whether or not to lease the area for oil and gas. But Texas and Florida own the area nine miles out.

Florida has a lot of congressional representatives, and it is a swing state in a presidential election year. Obama, running for re-election, might not think this is the time to push Florida to expand leases in the eastern Gulf.

If Obama were serious about oil development, he might have responded to the state of Virginia's request to allow the early stages of exploration, which includes "shooting seismic."

"Shooting seismic" is a complex and highly technological endeavor that involves initiating an explosion and using sound waves to map the structure of rock formations to identify potential oil and gas reserves.

This action would help scientists in their understanding of the basins and outer continental shelf of the Atlantic. Leasing federal waters off the coast of Virginia was part of the current five-year plan that the Minerals Management Service, now renamed the Bureau of Ocean Energy Management, Regulation and Enforcement, issued in 2007.

Allowing seismic exploration in all unleased waters would be a promising way to allow the industry to look at the long-term potential of U.S. offshore resources.

If the president wanted to increase oil production, speeding up permitting on existing leases would likely do far more, as oil companies have many areas in development where they want to start producing.

Lou Pugliaresi, president of the Energy Policy Research Foundation, told me, "We are at the leading edge of an American petroleum renaissance which offers enormous opportunity not only for new oil and gas production, but the deployment of large scale and high value-added capital investment petroleum infrastructure and new refining and petrochemical capacity."

He continued, "Deploying this capital involves substantial political risk from our unpredictable and often punitive regulatory structure."

Obama's announcement may reflect some understanding of the economic growth potential from fossil fuels. But unless his comments are accompanied by a return to common-sense environmental and regulatory rules, the American economy will not reap the benefits of this opportunity.

For a start, how about giving the green light to the Keystone XL pipeline?

Original Source: http://washingtonexaminer.com/opinion/columnists/2012/01/has-obama-seen-light-oil/2139296

 

 
PRINTER FRIENDLY
 
LATEST FROM OUR SCHOLARS

‘Afroducking’ The Law: Deadly Excuses For Endangering Others
Nicole Gelinas, 11-17-14

2014’s Most Encouraging Democratic Victory
Daniel DiSalvo, 11-14-14

Bring Deferred Prosecution Agreements Out Of The Shadows
James R. Copland, 11-12-14

Coal Trumps IPCC, Again
Robert Bryce, 11-12-14

World Leaders, Ignore Obama And Do These Five Things Instead
Diana Furchtgott-Roth, 11-12-14

ACA Architect: ‘The Stupidity Of The American Voter’ Led Us To Hide ACA Costs
Avik Roy, 11-11-14

Cancer Drug Prices: A Convenient Scapegoat for a Complex Problem
Paul Howard, 11-11-14

A Supreme Court Case That Could Upend Obamacare
Diana Furchtgott-Roth, 11-11-14

 
 
 

The Manhattan Institute, a 501(c)(3), is a think tank whose mission is to develop and disseminate new ideas
that foster greater economic choice and individual responsibility.

Copyright © 2014 Manhattan Institute for Policy Research, Inc. All rights reserved.

52 Vanderbilt Avenue, New York, N.Y. 10017
phone (212) 599-7000 / fax (212) 599-3494