Let’s Not Repeat ‘Fuelish’ Mistakes of 1976

Today, I was reminded of those awful days of gas lines and fuel shortages in the 1970s by a FuelFix.com article, Obama Administration Repeating Energy Mistakes of 1976, that includes the following paragraphs:

All of this year’s stimulus-gone-sour stories represent another case of politicians refusing to learn from the past and, therefore, dooming us to repeat it. In 1976, Congress began pushing to use tax dollars to finance loan guarantees for synthetic fuels and other energy sources not demanded by the market. Many of the recipients of these loans defaulted, with political promises as well federal coffers left empty as a result.

The country needs politicians to step out of the way and let our innovators and entrepreneurs lead us out of this stagnant economy. Calling for billions of additional tax dollars while ignoring the millions of potential job opportunities simply trapped by red tape is reckless and wasteful. The stimulus has failed, and the “green” jobs revolution is coming up short.

Don’t remember the days of gas lines and fuel shortages?  Allow me to remind you, courtesy of a 1979 NewsNet5 video  from Cleveland.

Does anyone really want a return to gas lines and fuel shortages when we have one of the most resource-rich nations on the planet?  Shirley Knott.  Surely knot!

For those slow to agree with my conclusion, I offer up a pair of images (below) from the 1970s for your viewing displeasure:

The first is an image of gas rationing stamps being reviewing by someone from the U.S. Treasury Department’s Bureau of Engraving.  Though the stamps were printed in 1974 but never used, rationing — using an odd-even license plate system — was implemented.

The second is a sign that was commonly seen at gas stations in Oregon, advising drivers of when gas was available and for whom.

What are the options to suffering with fuel shortages and gas lines?  Expand inland and offshore drilling and trim back the number of cumbersome and restrictive regulations to a manageable few immediately.  Not only will such moves generate more than a million jobs in the oil industry right off the bat, but they will help the economy as a whole.  Yes, drill, baby, drill!

Just a friendly reminder as election day draws closer.  Please vote wisely in 2012!

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Experts Dismayed by President’s Decision to Sell Oil From Nation’s Strategic Petroleum Reserve

President Barack Obama has decided to sell 30 million barrels of oil from the nation’s Strategic Petroleum Reserve on the premise that doing so will offset supply disruptions caused by political turmoil in Libya. Of course, he didn’t act alone; he was acting in concert with 28 member countries of the International Energy Agency who agreed to release 60 million barrels of oil reserves.  Still, a lot of people are dismayed by the move.

Sen. James Inhofe (R-Okla.)

U.S. Sen. Jim Inhofe (R-Okla.), the ranking member of the Senate Committee on Environment and Public Works and a senior member of the Senate Armed Services Committee, released a statement about the president’s decision:

“President Obama’s decision to tap the Strategic Petroleum Reserve due to unrest in Libya is curious to say the least. The resources in the SPR are only meant to be tapped during national emergencies. Yet the President’s justification for sidestepping Congressional authorization is that the operation in Libya is not a war effort but solely a humanitarian mission.  Given the announcement today, are we to assume that the operation has changed course?  The President needs to provide a full explanation for this.”

After explaining that the SPR has been used under emergency circumstances only twice — once during Operation Desert Storm in 1991 and once after Hurricane Katrina in 2005 — Senator Inhofe added more concerns:

“Today’s announcement further demonstrates the critical need for the United States to increase domestic energy production.  Contrary to what President Obama likes to claim, we have plenty of resources here at home.  In fact, we have 163 billion barrels of recoverable oil-that’s 5,400 times more oil than what Obama wants to release from the SPR.  The biggest impediment to developing these resources is this Administration.”

The American Petroleum Institute, which represents 470 oil and natural gas companies, also released a statement outlining the organization’s concerns about the president’s decision:

“The release makes little sense for American markets.  Crude and gasoline inventories are above average, and crude and gasoline prices have been trending down for weeks, despite the loss of Libyan oil, which markets have already adjusted to.  The SPR was intended to be used for supply emergencies.

“There is no supply emergency.   We don’t know what impacts this might have on markets long term.  But we could and should be taking steps that would increase our own production by 2 million barrels a day or more for decades, which is possible if the government would grant much greater access to America’s ample oil and natural gas reserves.  This would do vastly more to help consumers, increase energy security, create jobs and deliver more revenue to our government.  It’s action that would truly strengthen our energy future, not a temporary gesture that has no lasting benefits.”

Finally, the Shallow Water Energy Security Coalition, a group of companies — including Apache Corporation, Arena Offshore, Chevron, Delta Towing, Dynamic Offshore Resources, Energy XXI, Ensco, Hall-Houston Exploration, Hercules Offshore, Phoenix Exploration, Rowan Companies, Seahawk Drilling, W&T Offshore, and Walter Oil & Gas — that explore, develop and drill for natural gas and oil in the shallow waters of the Gulf of Mexico, issued this statement:

“Today’s action by the administration to release 30 million barrels of oil from our strategic petroleum reserves represents the latest example of its seemingly ad hoc approach to managing U.S. energy policy.

“Only weeks ago, the administration was publicly taking credit for record high production levels in the Gulf of Mexico that, in reality, are the result of previous administrations’ policies – and are already projected to decline sharply in coming months due to the sluggish permitting process in effect in the Gulf.  The administration has also attempted to paper over the extent of the Gulf permitting delays, claiming that the BOEM’s current approval rate of 6 shallow-water permits per month mirrors “historical averages” that, upon further scrutiny, turned out to represent a selective slice of history in which permitting activity had temporarily slowed due to economic factors.

“While releasing supply from U.S. strategic reserves may make a short-term difference, Americans paying record-high prices at the pump should ask this administration why it has taken so little substantive action to date to manage the country’s longer-term supply needs.  It is time for a more serious approach to U.S. energy policy.  The BOEM must fulfill its fundamental duty to review and issue permits in a timely manner so the country can go forward with safe and responsible energy production in the Gulf.”

According to the nonpartisan Congressional Research Service, the United States has 163 billion barrels of recoverable oil, which is enough to maintain our current levels of production and replace our imports from the Middle East for more than 50 years.

Writing for the Heritage Foundation, Nicolas Loris offered what is arguably the best advise to President Obama:  Open Areas to Drilling, Don’t Open the Strategic Petroleum Reserve.

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Obama Administration Whitewashing Government Inaction Regarding Oil and Natural Gas Leases

In advance of President Barack Obama’s energy speech at Georgetown University, a top oil and natural gas industry leader called on the Obama Administration to abandon its policies “to defer, delay and deny access to domestic resources of oil and natural gas.”

In a statement to reporters during a media conference call this morning, American Petroleum Institute Upstream Director Erik Milito refuted a report by the Interior Department that U.S. oil and natural gas companies are sitting on oil leases granted by the government, refusing to turn them into producing leases.

“The report completely whitewashes the fact that in many cases, the reason these leases have no exploration plans is that BOEMRE is sitting on those plans,” Milito said. “This is like leasing an apartment from the government for $20 million dollars and the government refuses to give you the keys to the apartment – then the government proceeds to complain because you are not occupying the premises.”

Below, because I was unable to participate in the conference call today, I share an excerpt from the full text of Milito’s statement as prepared for delivery by API:

The disturbing reality is that 2011 could go down as the first year since 1957 that there has not been at least one offshore lease sale. Not one.

I’m certain that Americans find it difficult to reconcile that – and the fact that 85 percent of our offshore resources are off-limits to development – despite increased uncertainty in world oil markets and rising worldwide demand for crude oil.
President Obama has a speech on energy scheduled for later today.

We hope he will tell Americans that the administration will abandon their policies to defer, delay and deny access to domestic resources of oil and natural gas:  Resources that could help create U.S. jobs, grow the U.S. economy and provide royalties, rents, and revenues to the U.S. Treasury.

However, reports suggest that the President wants to provide “incentives” to develop the leases the industry currently has, but may or may not, actually have oil and natural gas on them.

The reports are that these incentives include shortening lease terms and increasing royalty rates through a graduated system.

These are not incentives.

They are, in fact, disincentives.

These are actions that will discourage investment here in the US and shift that investment to other parts of the world – to places like Brazil.

We hope the president will abandon energy politics in favor of energy policies that will provide Americans what they want and deserve: more energy, economic growth and more jobs.

We have a million American jobs that we can create if our industry is allowed to produce the oil and natural gas in knows how to produce.

And we have 9.2 million jobs to protect – the jobs across the country supported by our industry.

We urge the president to join the oil and natural gas industry in helping us create and protect those jobs.

It is not too late to get America’s energy policy back on track.

If you oppose the Obama Administration’s actions that are literally killing the nation’s oil and natural gas industries, costing American jobs and making us more dependent on foreign sources of energy, CONTACT YOUR ELECTED OFFICIALS IN THE NATION’S CAPITOL, let them know how you feel, and make sure they know you’ll be watching their votes.

UPDATE 3/30/11 at 5:30 p.m. Central: Cross-posted at Andrew Breitbart’s BigGovernment.com.

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‘Gas Strike’ Fueled by Emotion and Ignorance (Update)

This morning, I came across a Facebook event, titled “GAS STRIKE,” that nearly a half-million people have signed up to “attend” today.  Sadly, their effort — which involves boycotting gas stations for one day — is a misguided effort driven more by emotion and ignorance than common sense.

Oil companies produce the oil and make it available on the marketplace, but the price is set by the markets in much the same way as farmers accept the going rate for commodities such as corn and soybeans.

Americans who want “change” in the form of lower gas prices at the pump should stop venting their outrage against oil companies and the small business owners who operate gas stations and convenience stores across the nation.  After all, it didn’t work when tried June 19.  Instead, they should demand President Barack Obama and his underlings — a group that includes Interior Secretary Ken Salazar, Energy Secretary Dr. David Chu and everyone in the EPA — end their war of regulation and red tape that is preventing U.S. oil and natural gas companies from tapping domestic sources of energy.

No one but the Obama Administration is responsible for gasoline prices reaching $4 per gallon and higher. If Obama wants to improve the everyday lives of Americans via lower fuel prices, he needs to conduct business in a way that allows more drilling onshore and offshore so that we can actually reduce our dependence on foreign oil and keep 9.2 million Americans gainfully employed and contributing to the economy.

To learn more about how gas prices are set, read The Facts about Rising Gas Prices, an Energy Tomorrow blog post published yesterday.

If you need help paying for gasoline until the Obama Administration ends its war against “Big Oil,” buy a “Will work for fuel” t-shirt.

UPDATE 3/10/11 at 12:28 p.m. Central: Sen. Jim Inhofe (R-Okla.) makes my point in a just-released video (below).  He even mentions Obama’s statement about skyrocketing electricity prices, a topic I covered in this Nov. 3, 2008, post.

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Future of Drilling in Gulf of Mexico in Jeopardy

Long-term Gulf of Mexico deepwater development could be seriously jeopardized if permitting timelines are extended, according to a new analysis by Wood Mackenzie.  The study projects nearly one-third of U.S. deepwater production could be rendered uneconomic, which could significantly impact deepwater production, resulting in less energy production, less investment and less revenue to government.

“The potential harm is alarming,” said Kyle Isakower, American Petroleum Institute vice president of economic and regulatory policy, in a news release today.  “We are talking about a transformation of the future relevance of deepwater Gulf development to U.S. domestic energy production – and a major threat to Gulf region jobs and to the nation’s energy security.  Based on the development impacts outlined by Wood Mackenzie, we believe as many as 125,000 jobs could be lost in 2015.”

More from the study:

The graphics above show what’s at risk from one-year (left) and two-year (right) delays in permits for drilling in the Gulf of Mexico.

A slowdown in Gulf permitting has already cost jobs and will reduce Gulf oil and natural gas production and government revenue this year.  Unless policymakers reverse course, 2011 could be the first year without a lease sale in the Gulf of Mexico since 1964.

As much as 680,000 barrels of oil equivalent Gulf production PER DAY could be at risk in 2019, according to the study sponsored by API.  That’s approximately equal to total current Alaska oil production, 12 percent of total current U.S. oil production, or about 34 percent of total current Gulf deepwater oil production.

On top of the production impacts, the Wood Mackenzie study projects as much as $70 billion in investment and $18 billion in revenue to government could be at risk (cumulatively from 2011 to 2022).

If you oppose the Obama Administration’s actions that are literally killing the nation’s oil and natural gas industries, costing American jobs and making us more dependent on foreign sources of energy, CONTACT YOUR ELECTED OFFICIALS IN THE NATION’S CAPITOL, let them know how you feel, and make sure they know you’ll be watching their votes.

FYI: If you enjoy this blog and want to keep reading stories like the one above, show your support by using the “Support Bob” tool at right. Thanks in advance for your support!

‘Big Oil’ Urges Washington to Promote Energy Policies That Will Aid Recovery, Reduce Debt

Earlier today, I encouraged my readers to Watch ‘State of American Energy’ Speech Live.  Below, I share the text of an API news release about the important speech delivered moments ago by Jack Gerard, president and CEO of the American Petroleum Institute, at the Newseum in Washington, D.C.:

Jack Gerard, API President & CEO

“U.S. oil and natural gas companies are a major force in our economy and, with the right policies in place, could drive even greater economic benefits,” said API President and CEO Jack Gerard, during a “State of American Energy” address in Washington today.  “These companies produce most of the nation’s energy, put millions of people to work and deliver billions in taxes and royalties to our government.  The study shows increased access to areas currently off-limits would create jobs, grow the economy and dramatically increase revenues to the Treasury, at a time when the U.S. deficit is of national concern.

“We urge the Congress and the administration to promote energy policies that will aid our economic recovery and reduce our debt.  This study shows increased taxes would take us backwards.”

Click to download Wood Mackenzie Report (pdf).

Increased access could (by 2025) create 530,000 jobs, deliver $150 billion more in tax, royalty and other revenue to the government, and boost domestic production by four million barrels of oil equivalent a day, according to the Wood Mackenzie study, Energy Policy at a Crossroads: An Assessment of the Impacts of Increased Access versus Higher Taxes on U.S. Oil and Natural Gas Production, Government Revenue and Employment.” Raising taxes on the industry with no increase in access could reduce domestic production by 700,000 barrels of oil equivalent a day (in 2020), sacrifice as many as 170,000 jobs (in 2014), and reduce revenue to the government by billions of dollars annually.  An additional 1.7 million barrels of oil equivalent a day in potential production that is currently of marginal economic feasibility would be at greater risk of not being developed under the modeled tax increase.

Click to download SOAE Report (pdf).

In conjunction with the Gerard address today, API also issued a “State of American Energy” report, which analyzes the U.S. oil and natural gas industry’s role in building a stronger economic and energy future for our nation through safe and reliable production of domestic energy resources.  It shows the industry can do much more to help with economic recovery, job growth and increased revenues to the government.  The findings in the report complement the Wood Mackenzie study and note the critical importance of sound energy policy to achieving the benefits of expanded energy development.

API represents more than 450 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America’s energy, supports more than 9.2 million U.S. jobs and 7.5 percent of the U.S. economy, and, since 2000, has invested nearly $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.

I encourage you to read the speech, the API report and the Wood Mackenzie study, then share this post and the information it contains with others who are concerned about our nation’s energy future.

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Obama Administration Snubs Jobs, Energy Security With De Facto Offshore Drilling Moratorium

Despite published reports that an offshore drilling moratorium would cost the United States 175,000 jobs per year through 2035 and despite the fact that 61 percent of voters favor offshore drilling, the Obama Administration decided yesterday to go the other way.

Citing the Deepwater Horizon oil spill as a chief reason, Interior Secretary Ken Salazar said his agency will no longer include large areas of the Eastern Gulf of Mexico and the Mid and South Atlantic for offshore drilling leases through 2017.

“As our country looks for ways out of the hole of lackluster economic growth and job creation, (this) decision shows that this administration would rather keep digging than take the ladder to increased economic prosperity offered by developing our nation’s domestic energy resources,” said American Petroleum Institute President and CEO Jack Gerard.

“The oil and natural gas industry is a reliable vehicle for growing the economy and creating good-paying jobs. This decision shuts the door on new development off our nation’s coasts and effectively ensures that new American jobs will not be realized. It will stifle investment, deny billions in revenue for critical government services and increase our dependence on foreign energy sources.

“The oil and natural gas industry is committed to safe and environmentally responsible operations, and both the industry and regulators have added new safeguards to ensure such operations. This reversal on new lease sales off America’s coasts comes on top of a de facto moratorium, which has all but stopped new drilling in the Gulf of Mexico.”