Politics, Energy, and the President

Kyle Isakower
Posted January 19, 2012

As befitting a day when, for the president, political interest trumped the national interest, he opened his 2012 campaign advertising with a commercial touting – wait for it – his energy accomplishments. And they say irony is dead. The commercial links to a webpage trumpeting the president “Boosting Domestic Energy Production.”

While it is great that the president recognizes Americans’ overwhelming support for increased domestic oil and natural gas production, any gains made in the past few years have happened not because of the president’s policies, but in spite of them. Consider this: The area of energy production the president has the most control over is drilling on federal lands.  In a study we released yesterday, this is what boosting domestic energy production looks like in the Western states:

                              
Leases? Down. Permits? Down. Wells? Down. And not just by a little. Now, I know what you’re thinking: This is because of the struggling economy, right?  No.

                        
Permitting on non-federal lands has rebounded.  So what does this mean?  Well, it means fewer wells in the future.

                         
Fewer jobs:

And less government revenue:

And activity onshore in the West is only part of the story. The president has also put forward a fig-leaf of a  5-year plan (which, for example, puts the waters off Virginia off-limits, even though drilling has bi-partisan support in the state) and has pursued a permitting slowdown in the Gulf that already has led to the departure of 11 rigs and more than $21 billion in capital investments, while costing 90,000 jobs. And then there’s hydraulic fracturing. One more chart, this one from IER on federal production versus production in North Dakota, which is by the way, 96 percent non-federal land.

                        
North Dakota oil production went from 54.3 million barrels in 2008 to 104.8 million barrels in 2010 on non-federal land; on federal land it actually dropped from 8.4 million barrels to 8.2 million barrels.

The tremendous growth in North Dakota has been fueled by the extraction process of hydraulic fracturing, a process on which no less than eight agencies in the president’s administration are tripping over themselves to increase regulation.  This, although the process already is well-regulated at the state level – and it’s widely recognized regulation should remain at the state level – and despite the fact that industry has developed operational guidelines and is committed to transparency and working with state officials to develop regulatory regimes that work.

As I said before, America’s energy renaissance is in spite of, not because of the president’s policies.  If he really wants to boost domestic production, he should let us do our jobs of safely and responsibly developing our energy resources.  And, by the way, doing so will also create jobs.  Given his illogical Keystone XL decision yesterday perhaps the president hasn’t noticed, but those are needed too.