| By Sean Higgins |
| Fri., March 11, 2011 4:56 PM ET |
In his Friday press conference to discuss gas prices, President Obama was rather defensive, straining to counter the notion that his administration has been unfriendly to oil drilling, something most people would like to see a lot more of these days.
Where do people get that notion? Perhaps his Interior Department appealing a judge’s ruling that it act on several pending deepwater permits had something to with it.
Obama claimed repeatedly that he is not against drilling, then made the following comments:
There is more we can do, however. For example, right now, the (oil) industry holds leases on tens of millions of acres — both offshore and on land — where they aren’t producing a thing. So I’ve directed the Interior Department to determine just how many of these leases are going undeveloped and report back to me within two weeks so that we can encourage companies to develop the leases they hold and produce American energy. People deserve to know that the energy they depend on is being developed in a timely manner.In other words, Obama is arguing that the oil companies themselves may be to blame for the fact that there isn’t more drilling. For some reason they’re ignoring making a profit. It’s a bizarro-world inversion of the usual complaint against oil companies — that they are reckless and all-too eager to despoil pristine lands in search of black gold.
Nevertheless, it is a familiar talking point that Democrats have been throwing out there for years now. The Interior report Obama mentioned will probably come in the coming weeks or months and “prove” this point. Obama clearly hopes it will take the pressure off of his administration for high gas prices and throw it on the oil companies.
But is any of this true? Technically yes, says the oil industry, but the claim is extremely misleading. As Richard Ranger, a policy analyst with the American Petroleum Institute, has explained:
“The process of looking at an area that might have oil and gas potential and narrowing your search over time and over a sequence of steps to actually producing oil and gas involves kind of casting a big net first and over time through geologic work,” Ranger said. “[Y] You prioritize some over others, you may be lucky on those first ones you drill, you may not — then you drill prospects further down your priority list.”
Ranger also explained it’s not always a cut-and-dried situation. Some areas will have oil and gas, some won’t and some might have it, but it may not be economically feasible to pump it out of the ground.
“When you drill, you have results that are either sufficient oil or gas to allow production or a dry hole or somewhere in between where you think we may have production but we may need some further work to determine whether this formation, this target, is economic to produce. Those steps consume several years from the point of leasing to a point of decision.”Update: Ex-President Bill Clinton calls offshore drilling permit delays "ridiculous".
Investors.Com
