In many ways, life has never been better for the U.S. oil and gas industries. Production is up, thanks to new fracking technology. Profits are high. There’s little chance Congress will cap carbon emissions anytime soon. What more could they ask for?
First up is this graph showing where the current boom in oil and natural gas production is taking place. Mostly, it’s occurring on private lands — in, for instance, the oil-rich Bakken shale formation that spans North Dakota and Montana. By contrast, oil and gas production has flatlined and even dropped in areas that are supervised by the federal government:
Does this mean the government is stifling production? That’s a murky question. The first two years of the Obama administration saw a rise (pdf) in oil production on federal lands. Then there was a drop in 2011. But a big reason for the drop was the temporary moratorium on deepwater drilling in the Gulf of Mexico after the BP oil spill. This is now being reversed: As the Energy Information Administration explains, drilling has resumed in the region, but it’s been a slow, fitful recovery, thanks to a “slower permitting process with increased environmental review.”
But it’s not all about the Gulf of Mexico. API also argues that permits for new oil and gas drilling on Western lands has also been too sluggish — something the Obama administration recently said it would try to correct.
Still, speedier permitting, along with lower taxes and less regulation, is only a part of API’s wish list. The biggest request from the industry is for Congress to open up the rest of America’s coasts for oil and gas exploration. The key targets here are the Eastern Gulf of Mexico and the Outer Continental Shelf in the Atlantic and Pacific. (The Arctic National Wildlife Refuge and parts of the Rocky Mountains are their big onshore targets.) Here’s the map:
Bear in mind that opening up these areas isn’t as simple as it sounds — even many of Florida’s Republicans aren’t thrilled with the notion of a potential spill near the state’s beaches. Opponents of expanded offshore drilling argue that there’s not nearly enough oil in these parts anyway: A 2009 EIA analysis, for instance, found that opening up the Outer Continental Shelf would only lower gasoline prices by 3 cents per gallon by 2030. In response, API argues that there might be far more oil in these areas than anyone suspects — the industry just needs a chance to look.
Finally, API contends that if we can open up all of these areas to exploration, keep building oil pipelines from Canada — the ever-controversial Keystone XL pipeline is on their wish-list — and ramp up biofuels production, then the United States could eliminate oil imports from everywhere but Canada by around 2030. Here’s what that would look like:
Yes, we’d still be relying on Canada, but API argues that dollars used to buy Canadian oil are more likely to be recycled back into the U.S. economy than dollars used to buy oil elsewhere.
Not everyone’s as impressed with API’s report. Three researchers from the Center for American Progress — Jorge Madrid, Kate Gordon, and Tina Ramos — have published a response to API. They argue that “dystopia” will ensue if the oil industry gets its way and we maintain our current dependence on crude for the next few decades. Here’s what dystopia looks like in chart form:
Carbon emissions keep going up, up, and up. The CAP report spends a lot of time dwelling on the consequences of unchecked global warming — e.g., by 2030 wildfires in Western states like Montana will increase by 300 percent. But they also point out that the sort of energy security promised by API is still no defense against high prices and other shocks.