WASHINGTON D.C. — The interior department announced Tuesday that oil and gas lease sales on public lands increased 20 percent in 2011, generating more than $250 million in profits for taxpayers.  The fact, however, is that oil production on federal lands, lease sales, and revenue have drastically declined during the Obama administration.

“The American people need only to check their electric bills or the price they are paying at the pump to see just how well the Obama administration’s energy policies are working. Today’s announcement by the interior department that lease sales are increasing is misleading and disingenuous. The president promised to make energy prices “skyrocket,” and so he has. The American people deserve the facts about this administration’s anti-energy agenda, not more propaganda from Ken Salazar,” said IER Senior Vice President Dan Kish.

The Institute for Energy Research released the following facts to set the record straight:

Obama Claim:  The administration is increasing lease sales on public lands. Total leases issued on public lands were up 20 percent in 2011.

FACT:  Lease sales on public lands have steadily decreased over the last 25 years.

Obama Claim:  The administration raised more than $250 million in lease sale revenues in 2011, up 20 percent over 2010.

FACT:  Oil production on federal lands is down 13 percent in 2011: 97,721,813 barrels in 2011 versus 112,124,812 barrels in 2010.

FACT:  Offshore lease sales have plummeted more than $9.4 billion since the Obama administration took over. This means that Americans collected 258 times less revenue from offshore lease sales than they did during the last year of the Bush administration.

• 2008:  $9,480,806,620
• 2009:  $1,181,075,491
• 2010:     $979,569,294
• 2011:       $36,751,111

Obama Claim:  The administration is increasing the amount of federal lands available for domestic energy production.

FACT:  The average annual leases issued during the Obama administration is down 35.5 percent from the George W. Bush administration, down 50.7 percent from the Clinton administration, down 69.5 percent from the George H.W. Bush administration, and down 78.9 percent from the Reagan administration.

Secretary of Energy, Dr. Steven Chu

out how to boost the price of gasoline to the levels in Europe.”  Currently, a gallon of gasoline in Europe will set you back over $8.

Then, faced with the decision of who to place in charge of the Department of Interior, which controls much of America’s vast energy resources, he chose a senator who went on record to oppose any new drilling in the Outer Continental Shelf, even if gasoline prices reached $10 per gallon.

President Obama chose to surround himself with anti-energy advocates that view affordable energy as a problem, not a solution.  So it is important to keep that in mind as you watch him and members of his administration as they attempt to handle the current crisis of rising energy costs.  While they act as though affordable energy is the goal, observers must remember how these activists deliberately fought for higher energy prices before the public spotlight was shining so brightly on them.

Yesterday’s Senate Energy and Natural Resources hearing with Secretary Ken Salazar and BOEMRE director Michael Bromwich is a perfect example.  Salazar’s testimony wasted no time before taking credit for last year’s uptick in domestic oil production.  However, a 2008 letter to Congress from Ken Green, the president of the American Association of Petroleum Geologists, explains that “the process of leasing, evaluating, drilling, and developing an oil or natural gas field typically takes five to ten years.”

That means that most wells producing today are the result of leases granted under the Bush and Clinton administrations.  To judge the Obama Administration’s success in promoting domestic oil and gas production, one must look years down the road from his inauguration in 2009.  Judging from the Energy Information Administration’s projections for the Gulf of Mexico, the president’s policies are having the opposite effect of what he would like us to believe:

Then Salazar turned his attention to the leases that are not currently producing oil or gas: he complains that 70 percent of offshore leases and 57 percent of onshore leases are “inactive.”  While he never explains why companies would simply sit on leases for which they paid huge amounts of money, he insists that companies need “incentives” to speed things up.

This is the same tired argument that was used in 2008 and again earlier this year.  While Salazar seems ignorant of the facts, his colleague Michael Bromwich was exactly right when he recently testified that companies are “doing well” if they find oil on one out of every three offshore leases.

The reality is that not every lease contains oil or gas.  The same report that Salazar is citing notes that “producing acres as a percentage of leased acres have averaged about 30% over the past ten years.”  After millions of dollars of investment, companies may find no resources to produce.  Or they may find that, at current prices, the resources would not be economically viable to extract from the ground.  Unless Secretary Salazar wants to foot the bill for exploration and tell bidders which leases contain resources and which do not, there will continue to be a lot of very expensive dry holes as there have been for 150 years of drilling.

Even if companies do believe that they can find oil, the lease cannot be considered ‘active’ until the company receives the dozens of necessary permits to explore for energy.  The Obama Administration’s withholding of permits is well documented and has even resulted in a contempt order from U.S. District Judge Martin Feldman.  In the past year, they have issued only one new deepwater drilling permit.  Unless the administration starts issuing more permits, many leases are forced to remain in the ‘inactive’ category.

The Obama Administration is desperately trying to deflect blame for the rising price of energy.  Gone are the days when they could openly speak about the need to make energy prices “necessarily skyrocket.”  Now that they are under the glare of public opinion, the president and his allies are singing a new song.  But make no mistake about it – as global demand grows, the administration is restricting our energy potential and putting us at the mercy of state-owned energy companies that are inimical to American values.  Unless the Obama Administration reverses course on their anti-energy agenda, they will continue to put us at a long term disadvantage to the developing nations of the world.

This revelation is nothing new.  In fact, it is a historical fact that only about 30 percent of leases will ever produce energy.  The report itself states that historically,“producing acres as a percentage of leased acres have averaged about 30%.” Two weeks ago, Michael Bromwich, the director of the Bureau of Ocean Energy Management, Regulation, and Enforcement, told the House Appropriations committee that companies are “doing well” if they find oil or gas on one out of every three offshore leases.

Back in 2008, when lawmakers were trying out these same arguments, IER showed how energy leasing actually works in the real world.  We’ve also shown who is really hoarding taxpayer land:

Disregarding the facts of energy production, the Obama Administration is misleading the American people.  In response to the report, Daniel Kish, senior vice president of policy at the Institute for Energy Research, issued the following statement:

“The Secretary of Interior’s bad imitation of Captain Renault – ‘I’m shocked, shocked…to find that companies aren’t producing oil on every acre they’ve leased’ – may fool some people.  But scientists in the field of geology dismissed this urban myth the last time opponents of US energy production tried it back in 2008 as an excuse to oppose lifting the offshore moratorium. “

“In 2008, then-Senator Salazar opposed opening the OCS even if gas prices reached $10 a gallon!  So no one should be surprised that he is now trying to cover up his worst-in-history energy record, especially as gas prices climb for motorists and businesses.  The Secretary should let Americans go back to work producing energy: offshore, in Alaska, and in the west on government lands.  In addition, the Administration should start celebrating our own oil production instead of Brazil’s.”

“The Secretary’s report today, and the implication that something is wrong when it is not, is showing the American people the same contempt his Department was found guilty of by a federal judge who ordered him to stop the moratorium on drilling in the Gulf.”

“Perhaps the Secretary, a rancher, would understand it better on his terms:  bulls do not produce milk, though they are an important part of the process.”

that the agency is at last granting one solitary deepwater drilling permit in the Gulf of Mexico. Could it be that the Administration is finally softening its position of maintaining a “permitorium” against all offshore drilling in the Gulf of Mexico?

Michael R. Bromwich, Director of the Bureau of Ocean Energy Management

Not even close. The Obama Administration remains as committed as ever to discouraging domestic oil production.

In the wake of the Deepwater Horizon incident, the Obama Administration brushed aside recommendations from respected engineers, scientists and industry experts, and slapped a moratorium on new deepwater drilling in the Gulf. The Obama Administration seemed to relent with much fanfare in November when officially the moratorium was lifted, politically positioning itself as taking a “reasonable position,” and the political pressure eased. Yet, in the ensuing months, approximately zero deepwater drilling permits were issued.

Keeping the permitorium in place is important to the Obama White House and it can be counted on to resist any deviation from that viewpoint. From day one of his presidency, Obama has pursued an energy agenda that puts a chokehold on affordable energy sources like oil, coal, and natural gas while lavishing generous government subsidies on the producers of costly energy sources like wind, solar, and ethanol. And with each passing week, American consumers pay higher gas prices at the pump, more for their electricity bills, and higher food prices.

Right on cue, the Obama Administration decided to issue one single drilling permit in an attempt to alleviate the intense public pressure to lift drilling restrictions. The White House doesn’t really expect that a drop of oil will actually be extracted as a result of this one permit. It’s all done with a backroom wink and a nod. Before any serious work is done in the Gulf, lawyers representing deep-pocketed anti-energy organizations can be counted on to file an injunction against any actual drilling.

This will happen just as surely as the sun will rise tomorrow. In fact, this sort of governing-through-litigation occurs with startling regularity. In early February, for instance, three environmental groups teamed up and filed a formal notice of intent to sue Interior Secretary Salazar for ignoring marine-mammal protection laws when on paper, at least, he approved offshore drilling in the Gulf. “Under Salazar’s watch, the Department of the Interior has treated the Gulf of Mexico as a sacrifice zone where laws are disregarded and wildlife protection takes a backseat to oil-company profits,” said Miyoko Sakashita of the Center for Biological Diversity. Judging from that strident rhetoric – wink, wink, nod, nod – you’d almost think Salazar favored drilling in the Gulf.

The Obama Administration has made a token gesture of issuing just one drilling permit in the Gulf of Mexico. It is no coincidence that the permit was approved the same week that Secretary Salazar goes to the Hill begging lawmakers for funding for more government bureaucrats.  What’s more, this isn’t a permit that will lead to any new drilling, but rather to resume a well that was already underway last year. This is vintage Obama Administration. Instead of winning the future, the White House would rather just win the news cycle. Meanwhile, workers in the Gulf remain without jobs and American consumers are feeling the pain at the gas pump.

WASHINGTON- In reaction to the Bureau of Ocean Energy Management, Regulation and Enforcement issuing the first permit for deepwater drilling since the Deepwater Horizon accident, Thomas J. Pyle, president of the Institute for Energy Research, issued the following statement:

“One day before Secretary Salazar will be forced to answer questions before our elected representatives, the Obama Administration issued a single permit for offshore drilling.  This further shows that the de facto moratorium in the Gulf is based on politics—not science, the economy, or putting Americans back to work.”

“Secretary Salazar’s decision to let a bit of political steam out before his testimony this week before Congress is far too little and much too late to help those men and women who were left jobless by the Obama Administration’s de facto moratorium on energy production.  Even more, today’s decision will not bring back the rigs that left the Gulf for other countries where they were welcomed as vessels of economic growth.”

“Issuing one permit does not mean any activity will actually occur because environmental groups will certainly sue to stop Americans from getting back to work.  In this manner, the moratorium will continue to remain in place as lawsuits hold up the very few permits being issued for the Gulf.  Much like we have watched anti-energy organizations around the country delay and disrupt plans for environmentally responsible energy development on land, it is now open season on Gulf producers, workers, and all Americans who use gasoline.”

“The Obama Administration as a whole, and Secretary Salazar in particular, has made it abundantly clear that while they have no interest in helping Americans to create jobs, add to government revenue, and utilize the vast domestic energy supplies that lay dormant in the Western United States, they –even in the face of massive and unprecedented deficits – just can’t resist spending taxpayers’ hard-earned money on unproven, unreliable, unaffordable energy sources.

“According to the Western Energy Alliance, over the last five years, there has been a79 percent decrease in leases issued in Western states.   Of course, that plunge in leasing activity has led to massive revenue and royalty drop off, 46 percent and 33 percent, respectively.  If this government expects to have any credibility on energy security, job creation, or deficit reduction, they must readjust their priorities and allow access to the domestic energy supplies that will undoubtedly have a strong, positive impact on our economy.”

Yesterday, Interior Secretary Ken Salazar announced the government was continuing the ban on offshore energy. That should come as no surprise, given this administration’s poor record on promoting affordable domestic energy.

In addition, the President’s deficit commission is proposing to double the gas tax to generate revenues. Granted it is unlikely the new Congress will approve such a radical tax increase, this is still cause for concern and we will be monitoring it.

These decisions have but one inevitable outcome:  higher energy prices.

The economics of energy are simple: the more energy costs us, the less work we can do.  Every drop of oil we put off-limits here we have to get from foreign countries, some with unstable regimes. The more energy we buy from abroad, the fewer jobs we create here in America.

We are collecting your comments and delivering them to the White House and the new leaders on Capitol Hill.  Tell us what you think about policies that restrict our energy supplies by leaving a comment below.

“It is now abundantly clear that the Administration and Interior Secretary Ken Salazar will stop at nothing – lost jobs, tax revenue or a threat to national security – to enforce their vendetta against domestic energy production.  Despite promises made to Senator Landrieu and the thousands whose livelihood depends on energy development, they continue to pursue an “all or nothing” approach to alternative energy that will do nothing more than weaken our economy, increase our dependence on foreign oil and eliminate thousands of well paying, secure American jobs.”

“Offshore of Louisiana, we have proven, affordable, reliable energy resources that provide thousands of Americans with high-paying jobs and contribute billions to the Federal treasury.  Offshore of Maryland, some have proposed the development of an intermittent resource characterized by high costs, low reliability, and complete dependence on taxpayer subsidies.  Yet for some reason, this Administration continues to favor the unreliable, expensive, and, to date, mostly mythical resource and punish the affordable, reliable, and always dependable resource.

“Salazar’s sad attempt to justify his permitorium on offshore oil and natural gas production is bad enough by itself.  But to couple it in the same week with an announcement about streamlining the permitting process for an expensive, unreliable product that is only kept afloat through government, like wind power, is absurd.”

For a closer look at the efficacy of government subsidies for renewable energy in Spain, check out IER’s new video.

Washington, DC –  In response to the Obama Administration’s decision to prolong the moratorium on responsible offshore energy exploration and production, Thomas J. Pyle, president of the Institute for Energy Research issued the following statement:

“Ensuring the safety of those who work offshore is a principle that all can rally around. Unfortunately, what was announced today by the Interior Department under emergency rule-making authority are regulations that were proposed long ago – well before the tragic accident that occurred on April 20. This workplace safety rule was proposed in June of 2009 – meaning it took 15-months and a tragic accident in the Gulf for this Administration to move across the goal line. This is unfortunate.

“More unfortunate, however, is what the Secretary did not address today. And that’s the fact that this administration has no plans to lift the moratorium on offshore energy production – adding increased uncertainty to the men and women who stand ready to harvest the energy resources this country so desperately needs to jump-start our ailing economy. Secretary Salazar also failed to address the shallow water operations in the gulf, where his agency, since the April 20 accident, has only issued 10% of the normal permits for new wells. This de facto moratorium is causing small businesses to shut their doors.

“The American people, by wide margins, support the use of domestic energy resources. Today’s announcement, while not acknowledged by the Obama Administration, will further restrict that domestic production through a prolonged moratorium – keeping folks out of work and adding increased uncertainty to an already fragile economy.”

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