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Federal Oil Lands Lockdown: Disingenuous Obama at Work

“The President has bragged that ‘we produce more oil at home than we have in 15 years.’ Indeed domestic production rose from 5.6 to 6.4 million daily barrels in 2012 from the year before (12.5%). However, production from federal onshore and offshore areas has fallen significantly under his watch – and 96% of the above production increase was on state and private lands.”

President Obama insists he is determined to create jobs in America. He recently announced the creation of “promise zones” for five communities around the nation and a “manufacturing institute” aimed at fostering more high-paying jobs in energy efficiency.

He’s also said he has “a pen and a phone” to “sign executive orders and take executive actions that move the ball,” where Congress has failed to implement policies he believes are needed.

Unfortunately, the executive orders and actions Mr. Obama seems to have in mind will do little to create jobs beyond the Washington Beltway – and much to do the opposite. An obvious example is his determination to have EPA impose additional carbon dioxide emission restrictions, if Congress fails to enact taxes on hydrocarbon use, to save the planet from manmade global warming, climate disruption, extreme weather, or whatever term Arctic and Antarctic alarmists are using these days.

Another is to issue regulations and spend billions more to mandate and subsidize expensive energy efficiency, wind and solar, biofuel, alternative-fuel vehicles and other technologies, companies and financing schemes, while also promoting some natural gas activities and restricting others.

Green Jobs, Crony Jobs

That is what some “green” energy business leaders have recommended in an extensive report that they recently presented to the White House, promoting a “clean energy future,” regardless of what Congress or the American people might support, or what reflects genuine science and the overall national interest.

These actions will ensure employment for more bureaucrats, blue state friends, and campaign contributors. But they will also ensure continued unemployment for blue-collar workers and “fly-over country” (what Frédéric Bastiat and Henry Hazlitt call the unseen). They depend on government direction and ideological compatibility, taxpayer subsidies, and crony-corporatist arrangements among businessmen, politicians and regulators.

They will make barely a dent in a chronically feeble economy in which 94 million Americans are not working; four million are long-term unemployed; the 63% labor participation rate is the lowest in 35 years; December’s drop in unemployment was mostly due to more people dropping out of the workforce and job hunt; and many of the employment gains due to a magical government formula that turns 300,000 full-time jobs into 400,000 part-time positions.

The President’s proposed actions likewise will not reverse the rapid increase in 49ers – not the football players or California gold rushers, but companies that won’t hire more than 49 employees, because that would trigger ObamaCare and a host of other taxes and regulations, leaving even more people unemployed or underemployed.

Extending unemployment benefits another 3-6 months, and sending our grandkids the bill, will not soften or reverse this damage. Nor will raising the minimum wage, thereby compelling more companies to automate or find other ways to trim work forces and costs, leaving even more people unemployed.

The Real Opportunity

However, America offers countless opportunities for President Obama to use his (valid, constitutional) executive powers to unshackle the U.S. economy, create jobs and generate revenues.

First and foremost, he could instruct his overly zealous Executive Branch agencies to delay, pare back and eliminate regulatory and paperwork burdens, especially those they have inflicted on the nation since he took office in 2009. Far too many of those rules are justified only by anti-hydrocarbon ideologies, computer models, cherry-picked studies that do not reflect genuine mainstream science or medicine, and even illegal experiments on human test subjects.

The Heritage Foundation calculates that the EPA alone has promulgated more than 1,920 regulations over the past five years, including twenty “major” rules that are costing the United States more than $36 billion annually. According to the Competitive Enterprise Institute’s latest “10,000 Commandments” report, the total federal regulatory burden on America’s businesses and families now exceeds $1.8 trillion per year!

$379 billion of that is for environmental rules that often bring dubious benefits, and frequently impose human health and welfare costs well in excess of any supposed improvements. For example, EPA itself admitted that it was unable to quantify any direct health benefits from its costly utility “air toxics” MACT rule – and a January 2014 analysis demonstrates that the health and societal benefits of using oil, natural gas and coal outweigh any alleged “social costs of carbon” by at least 50 and as much as 500 to one.

In this context, EPA promises that it would reduce regulatory and paperwork requirements by $126 million are below the “inconsequential” level. The savings amount to an undetectable 0.033% of annual environmental regulatory costs or 0.008% of the total annual US regulatory burden. For an average US family earning $63,000 a year, that’s equivalent to the cost of movie tickets for one adult and two children ($21) in environmental costs, or a third of a cup of coffee (44 cents) in total compliance costs.

Even more importantly, President Obama could certainly order the issuance of permits to build the long-delayed Keystone XL pipeline, and instantly create thousands of jobs. He could also order the EPA, Interior Department, Forest Service and other federal agencies to unlock the lands and resources that are now off-limits to the American people who own them and ought to derive benefits from them.

Federal Land Bust

The President has bragged that “we produce more oil at home than we have in 15 years.” Indeed domestic production rose from 5.6 million barrels per day in 2011 to 6.4 million daily barrels in 2012 (12.5%) , according to the Energy information Agency. However, production from federal onshore and offshore areas has fallen significantly under his watch – and 96% of the production increase was on state and private lands.

The federal-land statistic is unnecessary and contrary to the public interest. America’s federal domain – onshore and offshore, in Alaska and our eleven westernmost Lower 48 States – contain numerous oil, gas, coal, rare earth and other mineral deposits. Many have already been delineated, while others await discovery and development via modern, ecologically sensitive prospecting, drilling, mining and production technologies.

However, 62% of the nation’s onshore public lands were already off limits to these activities by 1994. That’s more than 410 million acres, an area equal to Arizona, Colorado, Montana, New Mexico, Utah and Wyoming combined. The situation is far worse today – with millions more acres officially locked up in restrictive land use categories (some of which should not be changed), and millions more simply made unavailable by bureaucratic fiat and foot-dragging.

Technically recoverable energy resources on these onshore and offshore lands total 1,194 billion barrels of oil and 2,150 trillion cubic feet of natural gas, Institute for Energy Research analyst Daniel Simmons noted in congressional testimony. At $100 per barrel of oil and $4 per thousand cubic feet of gas, those resources are worth $128 trillion! Developing them could generate some $150 billion in bonuses, rents and royalties over the next ten years alone – plus billions more in local, state and federal tax revenues, according to the Congressional Budget Office. Using those CBO numbers, an IER study concluded:

· If the government made more of these areas available for exploration and production, America’s GDP could increase by $127 billion annually for the next seven years, and $450 billion annually in the long term. Those activities would create 552,000 jobs annually over the next seven years, with annual wage increases of up to $32 billion, hugely benefitting workers’ and families’ health and welfare.

· Over the next 37 years, opening these lands would also increase America’s cumulative economic activity by up to $14.4 trillion … employment by 1.9 million jobs per year … wages by $115 billion annually … and local, state and federal royalty and tax revenues by a cumulative $3.8 trillion!

Opening more onshore lands to metals and minerals exploration and production would do likewise.

Real, Sustainable Jobs Await

Recent studies by Wood McKenzie, ICF International and other analysts support these IER conclusions and note that the petroleum industry alone currently supports some 9.2 million jobs. That is vastly more than all the “green” jobs created with billions of borrowed subsidy dollars, and lasting only until Solyndra, A123, Fisker and other crony-capitalist boondoggles went bankrupt.

The real, long-lasting, revenue-generating employment created via these resource development programs would include primary jobs for miners and roughnecks on oil rigs; secondary jobs in steel making, construction, pipelines, refineries, transportation and other sectors supporting the primary work; indirect jobs in hotel, restaurant, retail, accounting and other sectors that benefit from the increased energy extraction, payrolls and economic activity; and numerous manufacturers that enjoy access to more reliable and affordable energy and minerals.

However, as IER’s Simmons points out, the Department of the Interior has leased only a paltry 2% of federal offshore areas and less than 6% of onshore lands for oil and gas development. It has also stalled endlessly on issuing permits to drill on lands it has leased, in areas that are supposed to be available for multiple use and energy development. Indeed, it now takes DOI an average of 307 days to issue a drilling permit – compared to 154 days in 2005, and to 10 to 27 days respectively in North Dakota and Colorado.

The Department’s Bureau of Land Management has also proposed new regulations for hydraulic fracturing on public lands under its control – with the likely result that they will delay and discourage investments, and ensure that the jobs, energy and revenues associated with fracking continue to be realized only on state and private lands.

The double standard of our “dedicated public servants” is unsettling. One the one hand, BLM, EPA, Forest Service, and Fish and Wildlife Service are moving to fast-track permits for installing hundreds of bird and bat butchering wind turbines – and issue 30-year eagle-killing permits for the installations.

On the other hand, the same agencies are doing what they can to delay, block and bankrupt development of Alaska’s huge Pebble Mine gold, copper and molybdenum deposit; Montana’s Finley Basin tungsten, copper, gold, silver and molybdenum deposit; and Arizona’s Rosemont Copper project – all of which would generate thousands of jobs and billions in payrolls and government revenues.

In conducting these energy and mineral exploration and development projects, we can and must protect human health and environmental quality – from genuine threats, not speculative, exaggerated or computer scenario risks. We can and must do so without raising energy and business costs needlessly higher, killing more jobs, and stifling private investment and government revenue opportunities.

Conclusion

We can no longer operate under the federal land mantra of guilty-until-proven-innocent.

If President Obama really does care about creating jobs and opportunities for the middle class, he will think and act outside of his ideological box, and pay less attention to his most rabid environmentalist base. We will know soon whether he is capable of doing that – and what kinds of executive orders and actions he really has in mind to move the ball on job creation.

___________

Paul Driessen is senior policy analyst for the Committee For A Constructive Tomorrow (www.CFACT.org) and author of Eco-Imperialism: Green power – Black death.

4 comments

1 Chris F { 01.24.14 at 6:44 pm }

Don’t hold your breath Paul. This imposter is ideologically bent on bringing this country down as his last five years have demonstrated and he will do no such thing as approve keystone XL or open up federal lands to drilling, fracking or mining.
We will get nothing positive until someone who loves and cares for the USA is in the White House. Then maybe some legislation can be changed that prevents such a destructive debacle from ever happening again.

2 rbradley { 01.25.14 at 2:53 pm }

Chris’s comment reminded me of this quotation from Ludwig von Mises:

“The interventionists do not approach the study of economic matters with scientific disinterestedness. Most of them are driven by an envious resentment against those whose incomes are larger than their own. This bias makes it impossible for them to see things as they really are. For them the main thing is not to improve the conditions of the masses, but to harm the entrepreneurs and capitalists even if this policy victimizes the immense majority of the people.”

3 Chris F { 01.26.14 at 12:03 pm }

rbradley: In it’s simplest form, “the end justifies the means”.

4 Weekly Climate and Energy News Roundup | Watts Up With That? { 01.26.14 at 7:39 pm }

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