Question? If someone told you that the United States Government made you, the taxpayer, $931 million in revenues for domestic oil and gas exploration you would probably think… That’s great!
Now if I told you that figure, $931 million, is more than ten times less than the amount of revenue taken in last year what would your reaction be?
Shocked and appalled was the reaction of many critics of the way this administration has been handling U.S. oil and gas lease sales.
The Institute for Energy Research today released the following:
For Immediate Release: November 24, 2009
Actions Speak Louder Than Words
Obama Administration Breaks (non) Leasing Records, Presents a Clear and Present Danger To U.S. Energy Security
“Oil and natural gas are, and will remain for many years to come, a cornerstone of our nation’s energy base.” -Interior Secretary Ken Salazar, March 19, 2009.
The Department of Interior recently issued a press release that stated, “Since January of 2009, the Minerals Management Service has conducted two offshore auctions and Interior’s Bureau of Land Management has held 29 onshore oil and gas lease sales. Together these sales offered more than 55 million acres of U.S. public land for oil and natural gas exploration and development and generated more than $931 million in revenues that are shared between the states and federal government.”
Sound good? It isn’t. While these numbers may sound impressive, a closer look at the data reveals a different story. So do U.S. Treasury receipts from oil and gas lease sales, which last year were more than $10 billion in revenues – more than ten times the amount of revenue generated from lease sales under the Obama Administration in 2009.
Onshore:
To date, the Obama Administration has offered 2,888,354 onshore acres for lease, of which 1,028,299 have actually been leased. The Administration also rescinded or deferred 77,055 acres that were issued for lease in Utah in 2008. Accounting for this subtraction, fewer onshore acres were leased in 2009 than any other year on record. One explanation for the record low number of acres leased can be attributed to the Administration’s decision to rescind or defer the majority of the Utah leases issued in December 2008. As Kathleen Sgamma, government affairs director for Independent Petroleum Association of Mountain States, recently noted, “Why would any company want to go through the time and expense of participating in lease sales when there’s zero certainty that the leases will be issued and that there will be any return on their investment?”
Offshore:
Of the nearly 53 million offshore acres offered for lease in 2009, roughly 2.7 million were actually leased. Lease sale 208, which was mandated by Congress under the Gulf of Mexico Energy Security Act of 2006 and finalized one week before the Obama Administration took office, accounted for:
- 65 percent of the total offshore acreage offered;
- 70 percent of total offshore acreage leased; and
- 74 percent of the $930 million in revenues collected this year from all onshore and offshore leases.
The charts below compare the offshore acreage offered and leased under the discretion of the Obama Administration to previous years.
Conclusion:
The numbers speak for themselves. It’s been over a year since the vast majority of the American people demanded more domestic energy production. And one year later, with a record number of Americans out of work and a federal deficit spinning out of control, the Obama administration can take credit for leasing the smallest amount of taxpayer-owned lands in recent history, bringing in less than one tenth of the $10 billion in revenue generated from lease sales last year, and vastly reducing the opportunities to put Americans to work producing American energy. If the goal is less energy, less revenue, and fewer American jobs, the Administration is well on its way to fulfilling its mission.
Speaking, today in The New York Times,
Interior Secretary Ken Salazar fired back saying his department has scheduled 38 onshore oil and gas lease sales for 2010.“We believe that our oil and gas leasing program is robust, but it is also a program we have brought back into balance,” Salazar said in a call with reporters. “But you wouldn’t know it if you listened to the untruths coming out of” oil and gas industry groups.
Salazar said repeated attacks have “all the flavor and deception of election-year politics” and that oil and gas companies need to understand that they do not own the public lands; taxpayers do. He added that companies’ shareholders do not want industry trade groups to behave like an arm of a political party and said companies should choose a better path, to engage constructively and honestly with federal agencies.
Salazar also said too many federal leases get tied up in protest and litigation, which costs taxpayers and companies money, and that Interior is undertaking a comprehensive review of onshore programs to make them more efficient and more rational.
This type of reaction and deflection pointing not to the question at hand but rather to what they might do in the future is becoming commonplace for this administration.
The taxpayer is being done a disservice, by this administration, by not fully living up to past performance in oil and gas lease sales in light of the economic situation we currently find ourselves.
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