Source: http://www.investors.com/NewsAndAnalysis/Article.aspx?id=517291
01/06/2010
Energy: As energy prices surge to uncomfortably high levels, a top administration official wants to make it harder for U.S. companies to get more oil and gas. Once again, we're shooting ourselves in the foot on energy.
Interior Secretary Ken Salazar couldn't have picked a worse time to announce that he's placing new barriers on the development of oil and gas resources. Last year's rise in oil was the largest in a decade, and crude prices today have topped $82 a barrel.
Yet Salazar on Wednesday announced plans, as the energy news service Greenwire put it, that "will require more detailed environmental reviews, more public input and less use of a provision to streamline leasing."
In short, private energy development efforts are going backward.
Worse, Salazar has politicized energy to an unseemly degree. In unveiling his new plans and trying to lay blame somewhere else for recent energy price jumps, he said: "The previous administration's 'anywhere, anyhow' policy on oil and gas development ran afoul of communities, carved up the landscape and fueled costly conflicts that created uncertainty for investors and industry."
This isn't the first time Salazar's turned our energy future into a political debate. In November, he lashed out at the oil and gas industry, accusing it of "behaving like an arm" of the Republican Party and decrying the industry's "untruths."
"Trade groups need to understand that they do not own the nation's public lands," he said.
He's right. They don't own it. We do. And because of Salazar's unwise and even hostile energy stewardship, we will likely suffer through years and years of higher prices for crude oil, natural gas and other badly needed resources.
As the chart shows, oil jumped from $44 a barrel at the start of 2009 to $83 a barrel at Wednesday's close. It's no accident.
Salazar's latest move partly reverses the clear intent of a 2005 law, passed by a Republican Congress, that would speed up and streamline permits for energy projects on public lands. In effect he's pawning our energy future to political expediency.
The U.S. is sitting on an immense supply of oil and gas, probably larger than anywhere else in the world. We have at least 86 billion barrels of oil and 420 trillion cubic feet of natural gas offshore. As much as 35 billion barrels of oil lies waiting to be tapped in Alaska and the Chukchi Sea. A massive 2.2 trillion barrels of energy lies in our oil shale deposits in Utah, Wyoming and Colorado.
Let's put this in perspective: Since 1859, when the first oil well was drilled in Titusville, Pa., the world has used 1.1 trillion barrels of oil. We have twice that amount locked up in oil shale deposits, mostly on federal lands. By comparison, the current No. 1 in proven oil reserves, Saudi Arabia, has just 266 billion barrels of oil.
Worldwide, according to the respected Cambridge Energy Research Associates, as many as 4.8 trillion barrels of crude may be left. And a lot of it is here in the U.S.
All this is important because, like it or not, the U.S. will still depend on carbon-based fossil fuels for 80% of its energy by 2035, according to the Energy Department. Yet this administration seems intent on leaving it in the ground, opting instead to enact a cap-and-trade law that will cost the U.S. economy trillions of dollars while doing little if anything to cut C02 output.
"When it comes to paving the way for the responsible development of homegrown, job-creating energy resources, no administration in history has done more to ensure producers do less," said Tom Pyle, head of the nonpartisan Institute for Energy Research.
During the next 25 years, U.S. energy consumption is expected to grow by 15%, according to government estimates. We desperately need all the energy we can get — now.
If not, we face a future of rising prices, higher inflation, slower economic growth and lower standards of living.
That may be change, but it doesn't sound very hopeful.
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