Less than one week after the Obama administration announced it was fast-tracking permitting times for renewable energy projects, the White House reported that the automatic budget cuts called sequestration set to kick in next week will slow down the permitting of oil and gas development on federal lands.
“Development of oil and gas on Federal lands and waters would slow down, due to cuts in programs at the Department of the Interior (DOI) and other agencies that plan for new projects, conduct environmental reviews, issue permits and inspect operations,” says a White house report. “Leasing of new Federal lands for future development would also be delayed, with fewer resources available for agencies to prepare for and conduct lease sales.”
President Obama has already come under fire for favoring renewable energy production on federal lands at the expense of oil and gas drilling as well as closing off federal lands to oil and exploration.
“The federal government takes in $40 for every $1 spent on drilling on federal lands,” said Thomas Pyle, president of the Institute for Energy Research. “Why would the administration allow the sequester to slow down permitting, unless the President is looking for ways to reduce energy production and increase prices for American consumers?”
In August, the administration announced that it would fast-track large-scale solar and wind projects on federal lands. This was followed by the Interior Department closing off 1.6 million acres to oil and gas exploration in November that was originally slated for shale development.
Permitting times for oil and gas projects increased dramatically between 2009 and 2011, increasing from 247 days to 307 days. However, the Interior Department reports that in 2012 the time it takes to approve an oil and gas drilling permit shrank to 228 days.
The number of new oil and gas leases issued annually has fallen from 2009 levels — from 2,072 leases that year to 1,729 leases in 2012.
Oil production on federal lands fell 11 percent between 2010 to 2011, according to IER. The energy think tank says this was mainly due to the Obama administration’s offshore drilling moratorium.
In his State of the Union Address, Obama promised to cut the red tape and speed up the issuance of oil and gas permits on federal lands.
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“And that’s why my administration will keep cutting red tape and speeding up new oil and gas permits,” Obama said. “That’s got to be part of an all-of-the-above plan.”
“He’s just putting us on the highway to hell,” said Daniel Kish, senior vice president for policy at the Institute for Energy Research. “His plan to increase the price of electricity is going to be expedited by him permitting deployment of more of this which gets forced into our electrical system and bumps out the stuff that’s more affordable.”
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