“The measure of a man is what he does with power”-Plato

President Obama has several times claimed, “that under my Administration oil production is higher than it has been in a decade or more.” That is a true, but misleading, statement because during the period FY2007 through FY2012, all of the increased oil and gas production came from private and state land, over which Obama had no control, meanwhile production from federal lands, over which he does have control, decreased.  Obama was hypocritically taking credit for positive events that happened in spite of his policies.

That assertion comes from a Congressional Research Service (CRS) report, “U.S. Crude Oil and Natural Gas Production in Federal and Non-Federal Areas.” Here are the data graphically:

This result reflects the use of fracking on State and private land and the de facto moratorium on leasing Federal land.

According to the CRS report, “On non-federal lands, there were modest fluctuations in oil production from fiscal years (FY) 2008-2010, then a significant increase from FY2010 to FY2012 increasing total U.S. oil production by about 1.1 million barrels per day over FY2007 production levels. All of the increase from FY2007 to FY2012 took place on non-federal lands, and the federal share of total U.S. crude oil production fell by about seven percentage points.”

“The shale gas boom has resulted in rising supplies of natural gas. Overall, U.S. natural gas production rose by four trillion cubic feet or 20% since 2007, while production on federal lands (onshore and offshore) fell by about 33% and production on non-federal lands grew by 40%.”

CRS also says that the bureaucratic burden of drilling on Federal land is much more burdensome than on state or private land, and concludes that production from Federal land will remain lower because “the regulatory framework for developing resources on federal lands will likely remain more involved and time-consuming than that on private land.” CRS notes that time to process drilling permits rose from 218 days in 2006 to 307 days in 2011.

There is great potential for discovery and production of oil and gas on Federal land, including off-shore drilling. However, as noted by Investor’s Business Daily, President Obama chose instead “to withdraw tracts of federal land that had already been cleared for oil and gas development” and he ignored a judge’s order to lift a ban on off-shore drilling in the Gulf of Mexico. In effect, Obama administration policies close about 85% of potential off-shore areas to drilling.

The Wall Street Journal reports: “Mr. Obama has blocked exploration and production on significant areas of the Outer Continental Shelf, and the few leases he has put up for auction contain land that is of little value to drillers….The U.S. oil and gas boom has been a rare bright spot in the otherwise gloomy Obama economy. Imagine how much more energy the U.S. could produce, and how many more high-paid jobs it could create, if the Obama Administration stopped being an obstacle.”

See also:

Open federal land to energy exploration and development to boost economy

President Obama’s “all of the above” energy policy isn’t

Obama’s April Fools Joke Shows off-shore areas still blocked by Obama policy

The United States has recently experienced a boom in oil and gas production, but that has occurred almost exclusively on private and state lands. Federal land has been largely closed due to the policies of several administrations.

The American Energy Alliance has a new report “Beyond the Congressional Budget Office” which shows the potential of a more enlightened federal policy in energy development. Here is the executive summary:

While headlines have reported a boom in US oil and gas production, that boom has been related almost exclusively to exploration and development on private and state lands and waters. Even that limited expansion has had profound effects. Opening up Federal resources — in addition to private and state resources — to exploration and development can accelerate all of those trends. But recent administrations have yet to follow through on promises to allow access to Federal resources, instead proposing to levy increased taxes on oil and gas production.

The Congressional Budget Office (CBO), at the request of the House Budget Committee, recentlyreleased an analysis of lease revenues that could be expected to arise from a proposal to open Federal lands and waters to oil and gas leasing (the “CBO Assessment”). Specifically, the proposal aims to open areas that are statutorily or as a matter of administration policy prohibited from leasing. The issue has repeatedly been a hot-button political and economic issue in the last several years, most recently at the beginning of the Obama administration and then again as Republican challengers in the 2012 election placed opening the lands and waters at the center of their energy policy.

But while the Administration cannot shy away from exploring the fiscal benefits of opening Federal lands, the CBO study was restricted to analyzing just one component of those benefits: lease revenues. This paper highlights the larger economic effects, including economic growth, wages, jobs, and both federal and state and local tax revenues, of opening Federal lands and waters to oil and gas leasing, relying solely upon the CBO natural resource and oil and gas price

estimates to show these broader economic effects in order to maintain direct comparability with their analysis. This paper also seeks to “complete” the CBO Assessment by taking measurements of output, jobs, wages and tax revenues into consideration.

The findings of this paper demonstrate that opening federal land that is currently closed-off because of statutory or administrative action would lead to broad-based economic stimulus, including increasing GDP, employment, and wages. Specifically:

GDP increase:

• $127 billion annually for the next seven years.

• $450 billion annually in the next thirty years.

• $14.4 trillion cumulative increase in economic activity over the next thirty-seven years.

These estimates include “spill-over” effects, or gains that extend from one location to another location. For example, increased oil production in the Gulf of Mexico might lead to more automobile purchases that would increase economic activity in Michigan. Spillover effects would add an estimated $69 billion annually in the next seven years and $250 billion over thirty years.

Jobs increase:

• 552,000 jobs annually over the next seven years.

• Almost 2 million jobs annually over the next thirty years.

Jobs gains would be felt in high-wage, high-skill employment like health care, education, professional fields, and the arts.

Wage increase:

• $32 billion increase in annual wages over the next seven years.

• $115 billion annually between seven and thirty years.

• $3.7 trillion cumulative increase over thirty-seven years.

Increase in tax revenue:

• $2.7 trillion increase in federal tax revenues over thirty-seven years.

• $1.1 trillion in state and local tax revenues over thirty-seven years.

• $24 billion annual federal tax revenue over the next seven years, $86 billion annually thereafter.

• $10.3 billion annual state and local tax revenue over the next seven years, $35.5 billion annually thereafter.

Read the full report here.

MasterResource also has a three-part series on this subject:

Part I: Expanding “Depletable” Resources

Part II: Coal Issues

Part III: Federal Land Potential

The Arizona Geological Survey has just released its winter edition of Arizona Geology magazine which is available for free download here. Each story is well-documented with photos and videos.

The lead story is a case study of the June, 2010, Shultz wildfire near Flagstaff which denuded the forest and with heavy rains, lead to flooding. “In June 2010, the Schultz Wildfire burned 15,000 acres of woodland on the east slope of the San Francisco Peaks in the Coconino National Forest. Near record monsoon rains in July and August produced debris flows and floods, the latter of which damaged dozens of homes, caused the temporary evacuation of over 1000 people, and led to one drowning death.”

The story on Arizona earthquakes shows maps of locations and magnitudes of 50 earthquakes recorded in Arizona during 2010. These observations are made possible by the new Arizona Integrated Seismic Network (AISN) which is in its third year in operation. The story tells us why Arizona earthquakes occur where they do. The article also provides a link to discussion and photos of the strong April 4, 2010, earthquake in northern Baja California, just southwest of Yuma.

Until recently, topics concerning geology were mostly absent in the displays and interpretive signs found within Grand Canyon National Park. That omission has now been remedied.

Billed by its creators as “the world’s largest geoscience exhibition at one of earth’s grandest geologic landscapes,” the Trail of Time interprets the geology of Grand Canyon’s spectacular views and its largely inaccessible rocks. The trail leads visitors towards key geologic concepts that can be read in the rocks of the canyon and serves to help people contemplate and more fully appreciate the enormity of geology and the larger meaning of geologic thought. One of the recurrent themes presented on the trail is that of “deep time…”

In the article titled “Summary of Oil and Gas Activity” we learn that oil & gas exploration and production, although small, does occur in Arizona. Additional wells were drilled for geothermal energy exploration and to test for carbon dioxide sequestration.

The Winter edition of Arizona Geology contains very interesting articles. Give it a look at:

http://www.azgs.az.gov/arizona_geology/winter10/arizonageology.html