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Administration’s “Balanced” Strategy Threatens Alaskan Oil

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Administration’s “Balanced” Strategy Threatens Alaskan Oil

February 5, 2015

Just days after the President took credit for America’s “booming energy production” during his State of the Union Address, his administration enacted a series of  policies that threaten America’s resurgence as a top producer of oil and gas.

On January 25, President Obama used his executive authority to ban oil production on  12 million acres of Alaska’s Artic National Wildlife Refuge by classifying it as wildnerness, including an estimated 1.5 million acres of oil deposits. Two days later, the Bureau of Ocean Energy Management proposed opening a large portion of the South Atlantic Coast to oil and gas exploration, but dealt the Alaskan energy industry another blow by blocking development of over 9.8 million acres in the Beaufort and Chuckchi seas. 

Together, the onshore and offshore plans could ultimately cost substantially more than a few million barrels of oil. The administration’s plans could result in the closure  of the Alaska Oil Pipeline, destroying the only means to transport 27 billion barrels of untapped oil in the Arctic Outer Continential Shelf to refineries. 

The “all-of-the-above” energy policy at one time advocated by the president is now being rebranded. The White House explained in a post on its website that the President’s energy strategy is now a “balanced,” all-of-the-above plan.  The White House credited lower gas prices, reduced dependence on foreign oil, and America’s position as the a leading producer of oil and natural gas all to the administration’s energy policies. 

True, oil prices are low, crude production is at a 30 year high, and America is indeed among the leading producers of oil and natural gas. This is largely due to the shale oil and gas boom in the United States, which has taken place on private lands and has been propelled by advances in hydraulic fracturing and horizontal drilling. These technological advances have made the extraction of previously- unrecoverable deposits economically feasible. 

The president has not offered any evidence that his all-of-the-above energy policy contributed to the success of the fracking industry, or that his policies expedited the extraction of oil and natural gas. If anything, they have held back the industry’s growth.

Marketed production of crude oil, natural gas, coal, and other fossil fuels on federal lands has fallen by 16 percent from 2009 to 2013.  Production from federal land was 33 percent of the county’s entire output in 2009, yet 25 percent in 2013. Production of natural gas and crude oil on federal lands fell by 19 percent from 2009 to 2013.

The number of applications approved for offshore oil and gas drilling has plummeted under President Obama, with his annual average 63 percent lower than it was under his predecessor, President George W. Bush. Production in federal waters in the Gulf of Mexico, Alaska, and California has fallen by 18 percent since 2009.  The average number of offshore federal leases activated has been 363 a year under Obama, down from 656 under Bush.

Even in the face of these figures, the White House stated last week, “The President’s all-of-the-above energy strategy has supported economic growth and helped in reducing our dependence on foreign oil—and today, the U.S. is the world’s leading producer of oil and natural gas.”

President Obama should read his own press statements, and allow Alaskans to develop their own resources. Americans should be allowed to produce oil and gas both in Alaska and off the South Atlantic Coast.


Matthew Sabas is a research associate at Economics21 at the Manhattan Institute for Policy Research.

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