Earlier this week, a coalition of activist groups sent a letter to President Obama demanding that he stop issuing new leases on public lands, including the Arctic. At the heart of the letter is an agenda to stop the use of oil and gas in America, but, like much of the rhetoric surrounding the Arctic, the groups ignore key facts in their farfetched speculations. The Obama Administration’s Secretary of Interior Sally Jewell retorted crisply, “I think it over-simplifies a very complex situation to suggest that one could simply cut off leasing or drilling on public lands and solve the issues of climate change.” Indeed, the reality of domestic energy development is far more complex than the activists suggest. Here are four key things to keep in mind when reading this letter.
FACT: The amount of federal land leased for oil and gas development is a small fraction of the total acreage.
The letter points out that in total there are 67 million acres of federal public land in total leased across the country for all fossil fuel development – a number that is slashed in half when considering only oil and gas development. According to the Bureau of Land Management, in 2014, there were roughly 34 million acres of federal land leased for oil and gas development under the agency’s jurisdiction. While that figure sounds like a big number at first glance, it’s but a small fraction of the total federal acreage across the country. Let’s take a look.
According to PBS [emphasis added],
In total, according to a 2012 Congressional Research Service report for Congress on federal land ownership,
“The federal government owns roughly 635-640 million acres, 28% of the 2.27 billion acres of land in the United States [emphasis added].” (Summary)
That figure excludes more than 88 million acres in Hawaii and “understates total federal land, because it includes only lands of the four major federal land management agencies and the Department of Defense” (page 22). It is also unclear how much, if any, offshore land is included in the report’s estimate.
Nonetheless, using the conservative figure of 635 million acres, only roughly 10 percent of federal lands are leased for all fossil fuel development and only about five percent of all federal acreage is leased for oil and gas development.
FACT: The oil & gas industry creates millions of jobs across the country and generates billions of dollars in federal revenue and tax dollars.
The letter claims that “stopping federal fossil fuel leasing also makes economic sense” – which does not make sense given the economic impact the oil and gas industry has made across the country. For example, the most recent lease sale in the Chukchi Sea contributed $2.7 billion in revenue to the federal government, and in 2014, the Department of the Interior received $13.4 billion in energy revenue, which it dispersed all across the country to the benefit of federal, state, local, and tribal governments. $11.7 billion, or roughly 87 percent of these funds, were paid by the oil and gas industry in the form of federal royalties, rents, fees, and other payments.
According to Energy Tomorrow [emphasis added]:
And that’s not even counting the number of jobs the industry creates across the country. Also from Energy Tomorrow (emphasis added):
“The oil and natural gas industry directly employs almost 2.6 million Americans, and supports 9.8 million jobs in America or 5.6% of total U.S. employment.
“For every 1 person directly employed by the U.S. oil and gas industry, an additional 2.8 jobs are supported throughout the economy.”
FACT: Emissions across the United States have dropped, even as oil & gas production has ramped up.
The letter also claims that “the science is clear” that “the cost of continuing federal fossil fuel leasing to our land, climate and communities is too high,” citing devastating impacts from emissions. These claims can only be made by ignoring actual scientific data. The reality is the United States has managed to lower emissions over the last 20 years, while oil and gas development has actually increased.
The federal Environmental Protection Agency’s (EPA) Greenhouse Gas Inventory found that methane emissions have decreased by 38 percent across the country, at the same time oil and gas production has increased by 26 percent. From the inventory:
“Since 1990, CH4 emissions from production of crude oil have decreased by 21 percent. This net decrease is due mainly to increasing voluntary reductions through Natural Gas STAR in the production segment [emphasis added].” (3-58)
The following chart, created by Energy In Depth using EIA data, demonstrates this trend for methane emissions:
And a report issued by Bloomberg New Energy Finance (BNEF) earlier this year found that on an emissions rate basis, “2015 will be the cleanest year in over 60 years for which we have historical data [emphasis added].”
FACT: The end goal of the “Keep it in the Ground” letter is to “Take America’s Domestic Energy Offline.”
Finally, it’s important to note the agenda of the signers and the extremes these organizations will go to in order to stop all oil and gas development. At the end of the day, they want to stop the supply in order to lower the demand for petroleum-based products, as the Executive Director of the Sierra Club, Michael Brune, told the Washington Post:
“Whether it’s with Keystone XL, or an expansion of drilling in the Arctic, or leasing on public lands, we need to see some examples of the fact that the president understands that energy supply and demand are linked.”
What the signers fail to acknowledge is the logic of supply and demand president’s administration has shown their understanding of supply and demand – the fact that global demand for energy is predicted to grow 37 percent by 2040, according to the International Energy Agency, and the ability to meet this demand is critical to America’s goals for energy independence and national security.
The shale revolution and America’s newfound energy independence exemplifies a critical milestone for our country, as the New York Times recently explained:
“The demise of OPEC as the price manipulator is what virtually every American president since Richard Nixon had in mind when they promised to find a way to make the United States energy independent, not chained to Middle East or OPEC oil…”
In fact, former Secretary of Defense Leon Panetta proudly proclaimed, “The U.S. has broken free of its dependence on energy from unstable sources.” Even more impressively, perhaps, the Times observed, “[T]he United States is overtaking the Organization of the Petroleum Exporting Countries (OPEC) as the vital global swing producer that determines prices.”
This letter is just another example of activists peddling agendas that fly in the face of scientific evidence, facts, and economic data. For the activists, here’s a dose of reality: Advances in technology are reducing the environmental footprint of the oil and gas industry, and slamming the brakes on development now, at a time when the demand for energy is growing, would be irresponsible and detrimental to the economy, the jobs market, and the consumers of energy – all of us.