(John Kemp is a Reuters market analyst. The views expressed are
By John Kemp
LONDON, April 22 The White House likes to claim
a share of the credit for the drilling revolution that has
transformed North America's energy production and security.
Except the revolution has largely taken place on private
rather than public land, and energy producers feel frustrated
about the numerous obstacles and long delays in obtaining
permission to drill in areas directly controlled by the
"Crude oil production has grown each year President Barack
Obama has been in office to its highest level in 17 years," the
Council of Economic Advisors wrote back in the summer of 2013.
"Over the past four years, domestic oil supply growth has
accounted for over one-third of global oil production growth."
"Government-funded research supplemented private industry's
work to develop the technology that sparked the boom," the
council explained ("Reducing America's dependence on foreign
oil", Aug. 29, 2013).
The theme has often been taken up by the president himself
to underline his commitment to an "all of the above" approach
that embraces fossil fuels such as oil and gas, renewables like
solar and wind as well as measures to reduce wasteful energy
consumption while increasing efficiency.
"We are drilling," the president told an audience in
Maryland in 2012. "Under my administration, America is producing
more oil today than at any time in the last eight years. We've
quadrupled the number of operating oil rigs to a record high."
The president assured his listeners that "my administration
has opened millions of acres of land in 23 different states for
oil and gas exploration".
"So do not tell me that we're not drilling. We're drilling
all over this country."
Dismissing complaints that regulations make it hard to
obtain permission to drill, the president joked: "I guess there
are a few spots where we're not drilling. We're not drilling in
the National Mall. We're not drilling at your house. I guess we
could try to have, like, 200 oil rigs in the middle of the
Oil production on federally owned and managed lands, where
the U.S. government has most influence on the outcome, has
fallen since 2009, bucking the nationwide trend, according to a
report by the nonpartisan Congressional Research Service (CRS).
All the increase in oil and gas production has come from
land in private or state ownership, where the federal government
plays a minor role ("U.S. crude oil and natural gas production
in federal and non-federal areas", April 10, 2014).
U.S. oil production has climbed almost 40 percent from 5.233
million barrels per day in 2009 to 7.235 million barrels per day
in 2013, the CRS explains.
But while daily output from non-federal lands has risen 60
percent to 5.576 million barrels, production in federal areas
has actually fallen 6 percent to 1.658 million.
Production from federal onshore areas has risen almost
80,000 barrels per day (28 percent) but the increase has been
slower than on private and state lands, and more than offset by
reduced output in offshore areas.
The share of oil produced in federal areas has fallen from
34 percent in 2009 to just 23 percent in 2013.
"Claims that very recent federal policies have had a
significant role in the increase in domestic oil production are
therefore deeply misleading," Senator Lisa Murkowski, the top
Republican on the Senate Energy and Natural Resources Committee,
said in a report last year.
"About 96 percent of the increase in domestic oil production
is attributable to growth on state and private land. Indeed, the
overall domestic increase is in spite of federal policies that
stymie production," she complained ("Energy 2020: A vision for
America's energy future", February 2013).
It is taking longer and longer for would-be drillers to
obtain the necessary permission to bore oil and gas wells on
federally managed lands.
The average time taken to process an application for permit
to drill (APD) had risen to 307 days in 2011, from 218 days in
The federal government's Bureau of Land Management has
almost halved the time it takes to process an APD, from 127 days
to 71. But the amount of time it takes the industry to complete
the APD has soared from 91 days to 236, as the requirements
become more onerous.
State regulators in some states, such as North Dakota,
process drilling permits far more quickly, in days or weeks.
Like many other representatives and senators from
energy-producing parts of the western United States, where
federal lands are concentrated, most but not all of them
Republicans, Murkowski called for an expedited permitting
process to speed up drilling.
But for the rest of this administration, the obstacles and
delays to drilling on federal lands look set to get worse rather
The U.S. Department of the Interior, which has lead
responsibility, shows little sign of responding to complaints
It faces conflicting pressure from environmentalists,
worried about pollution, landscape blight and greenhouse
emissions, and oil and gas producers, anxious to be allowed
access to resources.
Under the Obama administration, the department has
prioritised environmental concerns. Conservationists such as the
Sierra Club and the Natural Resources Defense Council have been
among the administration's staunchest supporters.
The Interior Department recently issued a 32-page landscape
mitigation plan to accommodate both infrastructure development
and conservation needs on the lands it controls ("Strategy for
improving the mitigation policies and practices of the
Department of the Interior", April 10, 2014).
In theory, it is meant to be part of an attempt to strike a
better and more effective balance between the need to promote
development while preserving important wilderness areas and
In practice, the strategy, like much of the work coming from
the department in recent years, is long on theory and short on
ideas for practical improvements.
"Given the inherent and sometimes difficult conflicts
associated with the department's responsibilities for both
managing development and conserving the natural and cultural
resources of the nation's lands and waters, effective mitigation
of the impacts of development is critical," the strategy
It promotes the idea of a "landscape-scale" approach to
solving the problem, but fails to come up with any specific
ideas for how to achieve that goal.
"Rigid bureaucratic procedures are now straining to
accommodate escalating expectations for federal lands at the
same time that the resilience of those lands is being
increasingly compromised," the strategy admits.
Balancing the competing demands on federal lands from
mineral developers, farmers, conservationists and local
communities has long proved a thorny problem for Interior.
Most disputes can be traced back decades. Under the current
administration, however, the conflicts have been resolved by
making it exceptionally difficult to drill on federal lands.
Many oil and gas developers have given up trying. APD
applications have actually been falling in recent years as
exploration and production companies turn their attention to
resources that are easier to access.
OUT OF FAVOUR
In contrast to fossil fuels, Interior has encouraged the
development of wind farms and solar installations in federal
Under a regulation approved in 2013, infrastructure such as
transmission lines and roads associated with renewable energy is
now treated separately, and more favourably, than comparable
developments linked to mining and fossil energy, in a move
specifically intended to encourage renewable energy development
on public lands.
Extensive solar developments have also received more
favourable treatment under a "roadmap for utility-scale solar
development on public lands" approved in 2012.
Under the current administration, the playing field has been
deliberately tilted in favour of renewables such as wind and
solar and against fossil fuels like gas and oil.
That is consistent with the administration's stated
climate-change goals, though it hardly constitutes the "all of
the above" approach professed by the White House.
But despite industry complaints, the bias against oil and
gas development on public lands looks set to remain in place at
least until the administration's term ends in January 2017.
(Editing by Dale Hudson)