Obama’s Energy Speech: Sound & Fury Signifying Nothing

Last week Barack Obama said that if you get better about inflating your tires, no additional oil would be necessary. Here’s the video clip.

Today, in a Michigan speech, Obama spoke at length on energy but apparently forgot about how important tire pressure was last week. But some helpful folks from the McCain campaign reminded the audience by passing out customized tire pressure gages.

Today, we’ll comment on two excerpts from Senator Obama energy speech. First Excerpt:

…in the short term, as we transition to renewable energy, we can and should increase our production of oil and natural gas. But we should start by telling the oil companes to drill on the 68 million acres they currently have access to but haven’t touched. And, if they don’t use it they should lose it -we shoudld require them to give up their leases to somebody who will do something.

Here at Liberty Works we’ve done considerable research into this latest ruse by the Democrats to resist making off shore oil fields available for drilling – the claim that big bad oil companies already have access to “68 million acres” but instead of drilling they whine that they need more.

The existing lease process already includes a ten year time limit. If the company doesn’t produce oil in ten years it loses the lease. The idea Obama and his friends in Congress are trying to sell, that oil companies would spend Billions to lease sections of ocean floor for ten years and then make no effort to recover their investment by producing oil is preposterous.

Some of those acres have been drilled and depleted once. The government leased them a second time to drillers with new technologies to see if they could pump out more oil. Some of the leased acres have been explored and found not to contain any oil.

But the biggest barrier to actual drilling comes up right after an oil company leases a section of the ocean floor, paying Billions of dollars. The company must then navigate years of bureaucratic permitting processes and sometimes years of litigation, before they can legally begin exploration and drilling.

Why is that, you ask? If a company is granted a lease to explore and drill for oil, then shouldn’t permission to explore and drill be automatic? Of course! Only in the alternative reality of the Bureaucratic/Administrative State would it not be. If the all-knowing Federal Government clears a section of ocean floor for drilling, shouldn’t Congress ban lawsuits that are brought for no other reason than to delay drilling and make it more costly?

Congress can quickly pass legislation that forbids lawsuits when the government has sold leases, and requires the Department of Interior to include in the lease permission to explore and drill. Further, Congress can require the leasing/permission process to take no more than a couple of months.

Second excerpt:

We should invest in the technologies that can help us recover more from existing oil fields.

The private sector already has invested, and continues to invest, in such technologies. There is no need for Obama’s “WE”, which in this context apparently means the government, to hurl Billions in taxpayer money, and cause more years of bureaucratic delay, to help “US” recover more oil from existing fields.

Government could help by simply getting out of the way, or at the very least, by streamlining permitting processes. Here’s an example:

The PXP Company operates the Inglewood oil field in the Baldwin Hills of West Los Angeles. Oil was discovered here when Standard Oil drilled a test well in 1924. It took Standard Oil only one year to develop a full-blown oil field with dozens of wells, producing 90,000 barrels of oil per day. Since then some 1600 wells have been drilled. Today, only a few of the wells are still operating, pumping about 7,000 barrels per day.

I grew up about a mile from the perimeter of the Inglewood oil field and as a child I rode my bike on the oil field roads. After 84 years as an active oil field, it’s covered with winding roads, wells, pipelines, tanks and sundry oil field infrastructure. It’s a dirty, ugly place. But it’s already there, and most of it is out of sight of surrounding homes and businesses.

PXP has the technology and the financial resources to extract a lot more oil from this existing oil field, by drilling new, deeper wells. Sounds pretty good, huh? New oil production without touching any new site! Just keep drilling in the same place, a place that’s already degraded from almost a century of oil and natural gas production.

But this isn’t 1925. Before PXP can drill new wells it must apply to and receive blessings from all of the following:

• California Environmental Protection Agency
• Los Angeles County Department of Toxic Substances Control
• California Air Resources Board
• California State Water Resources Control Board
• South Coast Air Quality Management District
  
• California Department of Conservation
• California Geological Survey
• California Division of Oil, Gas and Geothermal Resources
• City of Los Angeles Environmental Affairs Department
• Baldwin Hills Community Standards District
• Los Angeles County, Department of Regional Planning

PXP has invested years and millions of dollars in bureaucratic processes, with no guarantee that permission can be secured, or that lawsuits won’t stall the project. Nobody yet knows if this additional oil will be produced.

Obama is dishonest when he speaks as if more oil from existing oil fields could be had if only “WE” – government – would “invest” your money. In truth, a lot more oil could be produced in this country without spending a single taxpayer dollar. The only barriers are political.