Laura Henderson (202) 621-2947
Patrick Creighton (202) 621-2951

IER sets the record straight on Obama Admin energy leasing program

Washington, DC – Yesterday afternoon Secretary of the Interior Ken Salazar held a press conference to defend the Administration’s energy leasing program and to announce the 2010 onshore leasing schedule. The Institute for Energy Research released the following fact check of the Secretary’s comments:

Sec. Salazar: “We believe that our oil and gas leasing program is robust, but it is also a program that we have brought back into balance.”

FACT: For the leasing program to be brought into balance, the Obama Administration should be leasing more land, not less. Under the first year of the Obama Administration’s “robust” oil and gas leasing program, fewer onshore and offshore acres have been leased than in any previous year on record. As a consequence, the Interior Department collected less than one-tenth the revenue from oil and gas lease sales this year than it did in 2008. At a time of staggering deficits and record unemployment, the “balance” into which this program has apparently been brought is hardly the type our economy needs as it attempts to make its way back.

Sec. Salazar: “The 9,893 parcels offered offshore covered more than 52 million acres.”

FACT: Lease Sale 208, an event mandated by Congress in 2006 and finalized one week before the current administration took office, accounted for 65 percent of the total offshore acreage offered, 70 percent of total offshore acreage leased, and nearly 75 percent of the $931 million in lease sale revenue generated in 2009.  In other words, the vast majority of acreage and revenue about which the secretary appears to be boasting was generated not through the work or discretion of his department, but by mandate of the previous Congress.

Sec. Salazar: “These [onshore and offshore] combined lease sales offered more than 55 million acres for oil and natural gas development on U.S. public lands, and have generated more than $931 million in revenues.”

FACT: While these numbers may sound impressive, a closer look at the data and U.S. Treasury receipts reveals a different story. Last year, oil and gas lease sales (bonus bids) generated more than $10 billion in revenues – which is more than ten times the amount of revenue generated from lease sales under the Obama Administration in 2009.

Sec. Salazar: “We are fast-tracking large-scale solar projects in the Southwest, and we’re clearing out red tape for transmission projects as we build a national electric superhighway. These clean-energy initiatives will create thousands of new jobs here at home.”

FACT: The number of new jobs created by any “clean-energy” initiatives will be small. The DeSoto Solar Center in Arcadia, Fla, considered the largest solar power plant in the United States, employs two full-time staff and six groundskeepers for one week a month during the rainy season. This past August, the Institute for Energy Research (IER) published a detailed policy analysis examining the key differences between the secretary’s rhetoric on “fast tracking” solar development out west compared to what has actually been accomplished in this space.

Sec. Salazar: “Trade groups for the oil and gas industry need to understand that they do not own the nation’s public lands. Taxpayers do.”

FACT: Sec. Salazar is correct. However, contrary to Sec. Salazar’s actions, the taxpayers have spoken, and the majority of Americans believe we should readily produce more of the untapped oil and gas resources we have right here at home. These resources do not belong to any one individual, company, or administration. IER posted THIS shortly after President Obama was elected.

Sec. Salazar: “They [oil and gas companies] have a responsibility to diligently develop the 26 million acres of public lands and 28 million acres of ocean that have been leased, but which today stand idle.”

FACT: The federal leasing process is a lengthy, cumbersome process, requiring many levels of environmental assessment before exploration can begin. A similar claim was made last summer, and it was widely debunked and roundly dismissed.  As the nation’s keeper of resources, we hope the Secretary understands that such claims are grossly misleading, wholly inaccurate, and thoroughly discredited by expert geologists and others familiar with the leasing process. The fact is, not every acre of taxpayer owned land contains economically recoverable energy resources.

Sec. Salazar: “… And so the fact of the matter is that large parts of the public domain have been made available to oil and gas companies for leasing, and those places are not being developed.”

FACT:  97 percent of the 2.46 billion acres of taxpayer-owned lands in the public domain are not leased for oil and gas exploration.  The small amount of acreage that is currently leased is in various stages of the leasing, exploration and development process, and the percentage of acres that are currently “producing” is in line with than the historical average.

Sec. Salazar: “We are undertaking a review effort here…  And the reform process has several goals.  The first of those goals is to make sure that the American taxpayer is getting a fair return back to the Treasury for the leasing of these lands, which belong to the American citizen.”

FACT: Last year lease sale revenues amounted to roughly $942 per acre leased.  This year, the taxpayer received about $254 in return for each acre leased under the Obama Administration.  Which is greater: $942 per acre of return for the U.S. taxpayer or $254/acre? Environmentally sound oil and gas development is synonymous with economic development. Affordable energy benefits all Americans and increased energy production creates good paying jobs. With unemployment above 10%, it’s a travesty is Administration is working to limit Americans access to job-creating American energy.

Sec. Salazar: “The second goal [of the reform process] is to make sure that we are leasing the public domain in the right places and avoiding the kind of litigation and protests that accompanied many of these leases in the past.”

FACT: In 2008 almost 42 percent of the parcels offered for lease were protested. This year, almost 50 percent of all the parcels that we offered for lease were protested.  Fundamentally, no real reform of the process can take place without addressing the systemic problem of dilatory litigation. Peter Morton of the Wilderness Society perhaps most candidly described this problem when he suggested, “if you bid on lease for federal land, you can expect [environmental] litigation.”


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