Nearly a year to the day after announcing a broad expansion in offshore oil drilling, President Obama is again pushing for more domestic production. As Living on Earth’s Mitra Taj reports, this time, instead of inviting oil and gas companies to drill in new locations, the president wants them to get the oil and gas from unused leases they have access to now.
CURWOOD: With uncertainty in the Middle East and general nervousness in energy markets, the prices of oil and retail gasoline have been rising. Stepping forward on the issue, President Obama made a major speech on energy security. He called for more domestic drilling, advanced bio-fuel production, and made a forceful case for cutting America’s dependence on foreign oil. From Washington, Living on Earth’s Mitra Taj reports.
TAJ: In his speech on energy security, President Obama spoke passionately about the need to use less foreign oil. He also made a strong case for drilling more domestic oil to do so.
OBAMA: Meeting the goal of cutting our oil dependence depends largely on two things: first, finding and producing more oil at home; second, reducing our overall dependence on oil with cleaner alternative fuels and greater efficiency.
TAJ: A year ago—minus one day—the President said almost the same thing:
OBAMA: The answer is not drilling everywhere all the time. But the answer is not, also, for us to ignore the fact that we are going to need vital energy sources to maintain our economic growth and our security.
TAJ: Obama might have thought his message in support of domestic oil needed repeating. His speech last year was followed by BP's massive oil spill in the Gulf of Mexico, which pitted many conservationists and much of his Democratic base against the oil industry and the pro-drilling crowd.
The President's interest in drilling - together with his ongoing support for bio-fuels, electric cars, and natural gas - tries to bridge those competing interests by setting a popular goal: cutting imports of foreign oil.
OBAMA: By a little more than a decade from now, we will have cut that by one third. That is something that we can achieve.
TAJ: But Obama’s speech got mixed reviews from both energy and environment lobbyists. Jack Gerard is the president and CEO of the American Petroleum Institute.
GERARD: The President's message - it doesn't add up. It's difficult to say, ‘I'm for the development of American oil and natural gas,’ and then the proposal you put on the table increases the cost on American oil and gas - but that’s not consistent.
TAJ: Gerard says the slow pace of giving permits for offshore drilling since the BP spill has taken a financial toll on the industry. If the administration were serious, he says, it would allow for more offshore drilling in places currently off-limits. That was a part of the President’s proposal last year before the disaster in the Gulf of Mexico, and now he wants oil companies to drill the leases they already have. A recent Interior Department report found that more than 70 percent of offshore oil and gas leases are inactive, but some say pointing to them is playing politics.
LEVI: The reality is, just because you bid for a lease doesn't mean there's economic oil there - you're buying an option.
TAJ: That’s Michael Levi, an energy and climate analyst with the Council on Foreign Relations.
LEVI: Politically, any opportunity the President has to blame oil companies for sitting on their hands helps blunt criticisms from people who claim, incorrectly, that he is blocking oil development by sitting on his hands too much.
TAJ: The President pitched both incentives and disincentives to get the oil flowing from idle leases. His new proposal would give companies less time to produce oil and gas on their leases and reward them for rapid development with fewer fees and royalty payments.
The idea of feeding more carrots to the oil industry seems to go against Obama’s repeated calls to cut subsidies. And it disturbs Anna Aurilio, the Washington director of the green group Environment America.
AURILIO: The oil companies already get more than four billion dollars a year in subsidies from the US government, every single year, so I don't know why we need to give oil companies any additional or different incentives.
TAJ: Aurilio says domestic drilling aside, she's pleased with the President’s long-term plan for cutting oil consumption. The President emphasized that real change requires time to develop low-carbon alternatives, like advanced bio-fuels, and called on politicians not to get mired in short-term posturing on rising gas prices.
But analyst Michael Levi says it’s probably no accident that Obama decided to deliver his energy speech, like last year, just ahead of the season of high gas prices.
LEVI: We all know that everything else being equal, gasoline prices rise in the summer. And the president I’m sure would like to position himself as having offered solutions in advance of that happening.
TAJ: But the president was clear that no energy policy enacted now, including more domestic oil drilling, can lower gas prices immediately.
OBAMA: We can’t rush to propose action when gas prices are high and then hit the snooze button when they fall again. We can’t keep on doing that. The United States of America cannot afford to bet our long-term prosperity, our long-term security, on a resource that will eventually run out.
TAJ: That’s a message that might need repeating. After the President’s speech, Republicans on Capitol Hill pointed to rising gas prices in a new push to open the Arctic National Wildlife Refuge to drilling, and Democrats responded: there’s plenty of oil in idle leases. For Living on Earth, I'm Mitra Taj in Washington.
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