Walk the Talk on Access

Mark Green
Posted June 15, 2011

It's not enough to talk a good game. The administration's call for increased domestic oil and natural gas production isn't being matched in terms of granting access to the reserves that would yield the energy America needs now and in the future.

Since the government resumed issuing deepwater drilling permits in March, just 15 have been granted and just one in the past month - and some of those are previously granted permits that were suspended when the administration put a moratorium on drilling after last year's Macondo accident.

America needs a permitting pace that reflects its energy needs but is getting a snail's pace instead. API Upstream Director Erik Milito:

"The Interior Department is not doing enough to prepare our nation for a secure energy future, and its policies are harming our economy and lessening the amount of revenue that our industry is producing for our government. ... Oil and natural gas development on U.S. public lands and federal offshore waters remains on a very slow track."

So what's the problem? We know there's enough oil on public lands and offshore that, when combined with oil from Canada, would supply 92 percent of America's liquid fuel needs by 2035. Unfortunately, the administration is more talk than action. Milito says permitting for onshore drilling averages more than 200 days per permit and that offshore projects are especially prone to time-consuming back-and-forth conversations between industry and government regulators:

"It becomes a ping-pong game when the government keeps sending the applications back for more information, such as worst-case discharge calculations and waste and discharge tables. We've seen at least 20 plans kicked back because the government doesn't like what it sees. It could be right, but it should be providing information about what it needs before deeming the application submitted. ... It's this type of process that's counterproductive to domestic energy security."

Good energy policy is about clarity and predictability, because exploration and development are expensive and take years to unfold. Delay means lost jobs, energy not brought to the market and tax revenues not deposited in governments' treasuries. That last point is key, as the administration keeps pushing for higher taxes on the major oil and natural gas companies - to reduce the federal deficit!

There's a better way: Give energy companies the clarity they need, work out kinks in regulatory processes and make the policy decisions to allow access to America's vast energy resources. Research shows the result will be jobs, revenues beyond what would be generated by the administration's tax hike proposals - and energy. Lots of it. More from Milito:

"We have a choice: Develop at home more of the energy we will use, benefiting our economy and energy security - or restrict development at home and look to foreign suppliers. Regardless of intent or rhetoric, the administration is on the latter path. It is delaying oil and natural gas development and encouraging investment dollars to go overseas. The result is sacrifice of U.S. jobs, revenue and energy security."