The Slow Track to Energy Security

Mark Green
Posted June 14, 2011

The Interior Department isn't 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.

The administration acknowledges the importance of oil and natural gas in the nation's energy future. Its projections show they will supply most of our energy for several more decades even with strong growth in renewable energy. Yet the government's follow-through in fostering more domestic development raises questions about its commitment.

The fact is, oil and natural gas development on U.S. public lands and federal offshore waters remains on a very slow track.

Sure, the department has extended some Gulf leases, and it produced a supplemental environmental impact statement for the Western Gulf lease sale. It has issued some deep-water permits. It put a better process in place for deeming exploration plans complete. And, after strong criticism, it abandoned the idea of creating a new "Wild Lands" category that would have spawned a new bureaucratic process and taken additional domestic onshore resources off the table. We commend them for those actions.

But not enough is happening to ensure the oil and natural gas development our nation needs and could have. Not enough is happening to create energy development jobs. Not enough is happening to spur domestic energy production and revenue.

The regulatory process is more time-consuming and uncertain than ever. Permitting onshore has averaged more than 200 days per permit. Approvals of offshore plans and permits continue to move along slowly as well.National Environmental Policy Act (NEPA) work on seismic activity, development of the five-year offshore program, and individual lease sales are taking far too long, and in some cases there is no sign that the work is being done at all. The unnecessary suspension of the use of categorical exclusions is adding more delay.

The administration's focus on safety following the Macondo well accident last year is understandable. That's been industry's focus, too: new standards, best practices and technology and development of a new offshore safety center. The industry supports a strong regulatory system and sufficient funding to ensure that NEPA work, plan and permit approvals, enforcement, and inspections can all be carried out in a timely manner.

The industry appreciates the various opportunities to meet with the government on permitting, but the certainty and predictability that are needed must be provided with greater detail and to the industry as a whole. While the industry understands the categories of information that must be submitted with an exploration plan or with an application for permit to drill, it needs not a checklist but clarity - on the level of information required to meet regulators' expectations and ultimately gain approval. The checklist won't address the continued ping-ponging that occurs with plans and permits.

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.

It's hard to make sense out of this given the abysmal state of our economy, the anemic job growth, and the trillion-dollar deficits. We know we will use more oil and natural gas.We know we have them in ample quantities. And there's good reason to believe that a strong effort to access and develop them could produce hundreds of thousands of jobs and increase long-term revenue to the government by more than $1 trillion.

While we must continue to insist on the highest level of safety in drilling operations and welcome a strong regulatory program, we also must do a better job at spurring our economy and creating more jobs in America through more development of domestic energy.

Last week, API launched its "Keys to the Future" program to help educate policymakers and the public about the important energy security and economic benefits of more domestic oil and natural gas development. API outlined a strategy for increasing the security of our liquid fuel supplies that would also create jobs, increase revenue for our government, and help support America's retirees. Opening up public lands and federal offshore areas to oil and natural gas development and approving the Keystone XL pipeline from Canada's oil sands region could provide secure liquid fuel supplies for 92 percent of the nation's consumption by 2035.

This is a national energy goal.The administration should consider it and do much more to encourage development of America's own oil and natural gas resources.