Coming on the heels of the Trump administration’s self-styled "Energy Week" in late June, the Interior Department issued an order on Thursday designed to speed up the permitting process for oil and gas drilling on federal lands.
Secretary Ryan Zinke’s order is the latest Trump administration effort to loosen restrictions on the fossil fuel industry and boost domestic oil and gas production. The White House is pushing for more oil, natural gas and coal output so that the United States can become a net energy exporter as part of President Trump’s “energy dominance” agenda, The Post's Juliet Eilperin and I report.
The Interior Department said the average approval time for a drilling permit during the last fiscal year under the Obama administration was 257 days, though the most recent statistics suggest it was 220 days. The result of that approval pace, according to the agency, was that the Bureau of Land Management (BLM) had 2,802 drilling permit applications pending when Trump took office in late January.
Zinke said the aim of his order is to untangle the bureaucratic knot so the BLM can review permit applications within 30 days.
But how feasible is that?
What's working in Zinke's favor: As the Interior Department itself notes, BLM is required by law to review permit applications within 30 days. Part of the order simply seeks to get the bureau in compliance with statute.
Plus, despite rhetoric from the Trump White House against Obama's energy policy, in this instance, the previous administration had already taken steps that will help. A number of factors account for the current delay in permitting, but one of the major reasons is that until recently companies filed via paper forms rather than electronically. The BLM announced in late December that it was moving to a default electronic system, which it estimated would cut the average processing time to 115 days for 90 percent of all applications.
What's working against Zinke: Despite the law, the problem seems somewhat intractable. Zinke himself cautioned on Thursday: “This is not going to be done overnight."
The vast majority of all BLM sites lack archaeological and historic data, meaning they have to be physically surveyed before the agency grants a permit. And the drilling permit is only one step in the process: Before that, companies have to get a lease for oil and gas development to even consider drilling on a particular parcel.
More broadly, boosting oil and gas production on federal lands will only play a bit part in increasing overall domestic fossil-fuel production, should the Trump administration succeed. The vast majority of onshore oil and gas production takes place on private and state land. Federal land accounts for only 4.8 percent and 11.3 percent of total U.S. crude oil and natural gas production respectively, according to data from Interior’s Office of Natural Resources Revenue.
Or as The Post's Tim Meko and Laris Karklis wrote in February after analyzing and mapping U.S. oil and gas assessments: "There isn’t much overlap in lands the government owns and the oil- and gas-rich geologic formations."
In addition, despite the praise the business community heaped on Zinke following the secretarial order (The U.S. Chamber of Commerce: "today he delivered in a big way"), it's unclear how much interest there will be in developing the public lands given how low energy prices remain. Environmentalists note oil and gas firms let leases they already hold go to waste, often preventing those parcels from being used for camping or other recreational activities. According to the Wilderness Society, only 12.7 million acres of public land of the 27 million acres currently under lease were in production during fiscal 2016. That's slightly less than half.
“It’s not clear why processing more permits will do anything to produce more energy on public lands,” Nada Culver, a senior director at the Wilderness Society, said after Zinke’s announcement. “It seems to me to be the same message we keep hearing, but it doesn’t match up with the situation on the ground.”
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-- Eight Democratic members of the House this week joined a group of senators on the other side of the Capitol in calling for the firing of William C. Bradford, an Energy Department official found by The Post to have sent offensive tweets about people of Jewish and Japanese origin, among others, before taking his current job as director of the Office of Indian Energy.
"Most disturbing perhaps is that his position is integral to Native American and Alaskan Native tribes and villages who seek to maximize the value of their energy resources," the representatives, led by Norma J. Torres (D-Calif.), wrote to Energy Secretary Rick Perry. Read the full letter here.
The Energy Department has not yet said what, if anything, will happen to Bradford.
-- OOPS: During a tour of a coal plant in West Virginia on Thursday, Perry said this about the law of supply and demand of economics, according to Taylor Kuykendall, a reporter for S&P Global Market Intelligence:
DOE Rick Perry at coal plant:"Here’s a little economics lesson: supply and demand. You put the supply out there and the demand will follow."— Taylor Kuykendall (@taykuy) July 6, 2017
The problem: This is not at all what the law of supply and demand means.
The Post's Max Ehrenfreund writes that "if Perry was suggesting that no matter how much coal the industry produces, there will be demand for it, he was clearly mistaken. Of course, demand for coal — or any other item — is not infinite. People will only buy so much of it at a given price, and producers will only be able to sell more if they bring down the price."
Perry was responding to a question about a shale gas boom, CBS News noted.
“"The market will decide which of these — they're going to pick and choose," Perry continued. "I mean, that's really pretty simple. All too often, you have in the last eight years, you have an administration that was over here putting its thumb on the economic scale as well as the technology scale because they said this is where we want to go."
The response to Perry’s remark was swift:
From CNBC's Carl Quintanilla:
Adam Smith, call your office. https://t.co/e8CYoAqK21— Carl Quintanilla (@carlquintanilla) July 6, 2017
From NBC News's Bradd Jaffy:
That's ... that's ... not how supply and demand works https://t.co/vwHmCAPixP— Bradd Jaffy (@BraddJaffy) July 6, 2017
From a former New York Times labor reporter:
Yikes >> Looks like Rick Perry was watching "Field of Dreams" when he was supposed to be taking Economics 101. https://t.co/l2rexcp0qS— Steven Greenhouse (@greenhousenyt) July 6, 2017
From Axios's business editor:
Totally. Coca-Cola flooded the market with New Coke, and it became the world's best-selling soda. https://t.co/M1hn3P20Ro— Dan Primack (@danprimack) July 6, 2017
But Ehrenfreund also noted that "another possible interpretation of Perry's odd remark is that he might have been repeating a theory that was once widely accepted among economists: "On this theory, demand and supply will always be in balance across the economy as a whole. These days, however, many economists view this logic as deeply and dangerously mistaken."
French economist Jean-Baptiste Say claimed that "the money consumers use to buy goods and services must come from, ultimately, those same consumers selling something else on the market. As a result, the supply from producers on the market would always be matched by demand," Ehrenfreund wrote.
-- G-20 negotiators are close to a compromise on a joint statement that highlights the United States’s withdrawal from the Paris climate agreement while emphasizing other nations’ continued support for the pact. Politico reported that as the global summit begins today, diplomats said that the text of the communique is still in flux, and leaders at the meeting, including President Trump, may still request changes to the statement.
-- "It will take about 15 minutes": During his remarks in Warsaw on Thursday, President Trump called for a long-term deal with Poland to export liquefied natural gas.
As Trump told Polish President Andrzej Duda, according to the Washington Examiner: "I think we can enter a contract for LNG within the next 15 minutes, do you have anybody available to negotiate? It will take about 15 minutes. We're becoming a great exporter of energy."
Duda laughed and responded: “I believe that after the conclusion of those negotiations, there will be a long-term contract for U.S. LNG deliveries to our LNG terminal.”
As The Energy 202 noted yesterday, the LNG push from the United States into Eastern Europe challenges Russia's grip on the region.
-- California vs. Trump: California Gov. Jerry Brown (D) announced plans for a global environmental summit in San Francisco.
“Look, it’s up to you and it’s up to me and tens of millions of other people to get it together to roll back the forces of carbonization and join together to combat the existential threat of climate change. That is why we’re having the Climate Action Summit in San Francisco, September 2018,” Brown told the audience in a video message, the New York Times reported.
“It’s hard to grasp the mortal danger that climate change represents,” Brown told the Los Angeles Times. “I believe that California, New York, France and Germany and the other countries — we have to get our act together, strengthen our commitment and bring as many nations along as we can.”
-- Rex Tillerson, Trump's secretary of state and former chief executive of ExxonMobil, the largest U.S. energy company, received good news and (potentially) some bad news this week.
Good news: Tillerson won an award. On his way back from G-20 summit in Hamburg, Tillerson will stop by the World Petroleum Congress to receive a lifetime achievement award for his career spent climbing the corporate ladder at Exxon, The Post's Carol Morello reports.
Bad news: Tillerson might be deposed. Eric Schneiderman, attorney general of New York, told the Associated Press that his team may interview the former CEO as part of its investigation into whether the oil and gas firm misled investors about the risks of climate change.
-- Food for thought: New York State Comptroller Thomas DiNapoli is a shareholder in both ExxonMobil and Domino’s. He has concerns about both companies’ effect on the environment.
InsideClimate News reported that DiNapoli has been part of a growing trend of shareholders pushing for companies to disclose climate-related risks.
"There are many products consumers enjoy daily that suppliers produce in ways that destroy rainforests and promote climate change," DiNapoli said, according to the report "More and more companies recognize that by taking steps to buy palm oil or soy from suppliers that do not contribute to deforestation, they are promoting better environmental practices and protecting their shareholder value."
InsideClimate News noted that shareholder resolutions on climate concerns with food and beverage companies has spiked from 12 in 2011 to 131 this year, mostly regarding deforestation linked to supply chains. Palm oil, beef and soy are among products with the biggest climate impacts.
-- A new climate of concern: A new survey found that nearly 40 percent of Americans believe climate change may cause human extinction.
The latest survey by the Yale Program on Climate Change Communication released this week found that 39 percent of people think the odds that “global warming will cause humans to become extinct” are 50 percent or higher.
The survey also found that a majority of Americans (70 percent) believe global warming is happening, with 46 percent who are “extremely” or “very” sure it’s happening. That’s the highest level since the program began its survey in 2008.
More than half of Americans, the report found, believe global warming is mostly human caused, another record level since the survey began.
-- Bloomberg has a nice long-read this week on the Isle de Jean Charles, the first town to get government funding to move as a result of global warming. The Obama administration awarded the state of Louisiana $48 million to move fewer than 40 families in the small town that includes many members of the Biloxi-Chitimacha-Choctaw tribe.
The story describes a weekend meeting to talk through three possible locations for the new community, and runs through some of the dilemmas the community is facing:
“Build too close to Isle de Jean Charles, and residents would remain exposed. Build too far north, and fewer would move. Compromise meant a relatively flood-prone site that could nonetheless cost $30 million.”
- President Trump will attend the G-20 summit in Hamburg, Germany starting today.
- The Senate returns from its July Fourth recess on Monday. The House returns on Tuesday.
- The Sustainable Energy Coalition is hosting the 20th Congressional Renewable Energy and Energy Efficiency EXPO and forum on July 11.
As President Trump meets with global leaders at the start of G-20 today, here's a mashup of some awkward handshakes the president has had with foreign leaders:
Watch President Trump's full speech in Warsaw:
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