U.S. Sen. David Vitter today was joined by U.S. Sen. Tom Coburn (R-Okla.) on a letter to President Obama urging him to lift restrictions on the development of oil and gas, as well as alternative sources of energy, on federal lands in order to spur job creation and boost the economy. Vitter and Coburn led a group of 22 senators in signing the letter sent to the White House following the president's State of the Union address, which focused partly on energy policy.
"We can look at a state like North Dakota and see the tremendous job growth they've seen in the energy sector lately -- and that's largely due to the fact that a majority of their resources are on privately owned land and aren't subject to the stifling restrictions coming out of Washington, D.C.," said Vitter. "We know for a fact that there are tremendous proven reserves on the Outer Continental Shelf. Energy producers in Louisiana and along the Gulf Coast are just waiting to create jobs to develop those resources, but the federal government has to lift some of the crippling policies that have put nearly 98 percent of the OCS off-limits."
In its report to him last week, the president's own jobs council recommended "expanding and expediting the domestic production of fossil fuels - including allowing more access to oil, gas, and coal opportunities on federal lands" in order to create jobs.
The full text of the letter from Vitter, Coburn and their colleagues is below.
January 25, 2012
The Honorable Barack Obama
President of United States
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500
Dear President Obama:
We write to convey our concern with the management of our nation's abundant energy resources, particularly those located on federal lands and waters.
There is a growing threat to consumers and our economy from the potential disruption in energy supplies stemming from the instability in the Middle East, particularly Iran. We believe the federal government should take commonsense steps here at home to safeguard Americans by removing the unnecessary obstacles placed in the way of energy development on lands and waters owned by taxpayers. Especially during a time of increasing volatility overseas and rising fuel prices, the single greatest impact the federal government can have on our nation's energy security is to expand access to its vast energy resources--both traditional and alternative--available on federal lands and waters. While proven reserves have increased dramatically in recent years due to improvements in technology, energy production from federal resources has fallen.
According to the U.S. Energy Information Administration (EIA), the United States relies on foreign countries for almost half of our petroleum resources, with a significant portion of that coming from unstable regimes. Additional analysis shows our economy will rely on fossil fuels for nearly 70 percent of its energy needs through 2035. While these facts are not disputed, the course of action to address it often is. Seeking to develop alternative energy technologies is a necessary goal in the long-term, but it is not sufficient for our nation's current and foreseeable needs.
Fortunately, our country holds within its borders extensive traditional energy resources that could sustain our energy needs for decades to come. According to a recent Congressional Research Service report, the United States' combined recoverable oil, natural gas, and coal resources is the largest in the world. However, much of this is restricted from exploration and production. Hundreds of thousands of jobs and trillions of dollars in economic activity may be foregone if current policies remain in place.
The 1.76 billion acre endowment of our Outer Continental Shelf (OCS) is a good example. Of those 1.76 billion acres, only 38 million acres are actually leased to energy companies, meaning the federal government has provided access to a mere 2.16 percent of our total potential resources. Yet, while the federal government has provided financing for other countries, such as Brazil, to develop offshore resources, it has consistently restricted companies from doing the same within U.S. waters.
Moreover, as a result of the 2010 moratorium and uncertainty about future permitting, 11 drilling rigs representing 14 projects have left the Gulf of Mexico since April 2010. These rigs have gone to countries such as Brazil, Egypt and Angola with some rigs later relocating to the North Sea--taking a cumulative $21.4 billion of associated lost U.S. capital and operating investment with them. In addition, the EIA projects that Gulf oil production will be down more than 12 percent in 2012 over 2010.
In 2007, the EIA projected total 2010 U.S. oil production on federal lands to be 850 million barrels. Today's actual production on federal lands is 714 million barrels, a 16 percent decline from what was projected. Arbitrary federal land restrictions now serve as a primary roadblock to domestic energy production. Federal land designations now exceed the total amount of developed lands in the United States. Wilderness areas, the most restrictive of land designations, total over 100 million acres. In many cases, wilderness areas are now used for purposes beyond their original intent on lands clearly unsuitable for the designation rather than maintaining the integrity of our most sensitive public lands. These restrictions, which are rich in resources, prevent the responsible development of natural resources.
Information developed by the Western Energy Alliance shows an unfortunate regression in federal policy, specifically at the Department of Interior. Their analysis shows that the ratio of revenue returned per dollar spent by the federal government has fallen from $46.07 to $40.12 for onshore energy production, and an unprecedented falloff of $118.54 to $30.08 for offshore energy production over the last three years.
This is in sharp contrast to production occurring on non-federal lands. For example, since 2005 oil production in North Dakota has been growing at a rate of 26 percent a year. Thus it is increasingly clear our nation is reliant on foreign sources of oil, largely because we do not first access our own. Utilizing our nation's natural resources located on federal lands could create American jobs, produce American energy resources, reduce our foreign imports and trade deficit, keep more of our nation's wealth at home, and protect our national security interests.
Needless to say, reducing restrictions to access our federally managed lands would allow American industry the freedom to develop abundant traditional energy reserves. Additionally, it would provide a more realistic economic environment for emerging alternative energy technologies, allowing them to be developed according to true market conditions. This approach could weed out faltering technologies and spare taxpayers the risk of subsidizing wasteful projects, as we experienced with Solyndra.
Finally, let us be clear in our disappointment in the recent decision to not approve the Keystone XL pipeline project, which is clearly in our national interest. Considering the potential for supply disruptions in the coming year, the federal government could well be facing price constraints that are a result of international conflicts, for example, in the Strait of Hormuz. It would be unfortunate if the only tool available to calm markets is further sales from our strategic reserves. Providing more access to both onshore and offshore resources and construction of a strategic pipeline from Canada are clear ways forward. We urge you to re-consider this decision and provide a clear path forward for increasing domestic production and transporting new energy supplies.
Kay Bailey Hutchison
Cc: Secretary Clinton, Secretary Salazar, Secretary Chu