White House praises oil drilling while blocking it on federal land
Skyrocketing domestic oil production is really starting to pay off, as oil exports caused government economists to revise economic growth in the second quarter upward by 1.7 percent to 2.5 percent growth.
The Obama administration hailed the news, attributing it to the administration’s policies. However, the oil boom has been occurring on private and state lands while oil production on federal lands has been falling.
“This stronger estimate of growth was a result of an upward revision in net exports, with the trade data showing that a key part of the revision is because the trade deficit in petroleum fell to a record low in June,” according to the White House blog.
“This is yet another reminder that the President’s focus on increasing America’s energy independence is not just a critical national security strategy, it is also part of an economic plan to create jobs, expand growth and cut the trade deficit,” the blog post ads.
However, the Obama administration has been heavily criticized for closing off federal lands to fossil fuels development during an energy boom.
“Where the feds are in charge, production is sucking wind. Where they aren’t, we’re breaking records,” said Daniel Kish, senior vice president of policy at the Institute for Energy Research.
While production booms on non-federal lands and boosts U.S. exports, production on federal lands is lagging. In fact, all of the increased oil production from 2009 to 2012 took place on non-federal lands, according to the Congressional Research Service, while the share of oil production on federal lands fell by seven percent.
Oil production on federal lands was down 31 percent from 2011 levels, while production on state and private lands increased by 15 percent, reports the Energy Information Administration.
“You have to work pretty hard to have such completely different outcomes at the time of an energy revolution in North America,” Kish added. “The White House is taking credit for something that is happening on non-government lands, and if the government was responsible for all the oil and gas development our [gross domestic product] would be stuck in the mud.”
Another reason for increasing oil exports is because of a sluggish economy at home which means low gasoline demand and increasing ethanol blending requirements from the federal government.
Yet, recently calls for Congress to repeal the ethanol mandate have reached a new high as refiners reach the limits of what they can safely blend into the fuel supply and the prices for renewable fuel credits skyrocket.
“I think we need to get rid of it [the RFS] and we need to think of a better way to handle this,” Oklahoma Republican Rep. James Lankford told The Daily Caller News Foundation. “It is not that the fuel is economical, it’s not that the fuel is what the consumer wants, it’s that the federal government is requiring this much to be sold.”
The White House says that the production of biofuels has doubled since 2007 and substituting gasoline powered for natural gas powered vehicles has increased by 25 percent in 2012.
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