A new report by Democrats on the House Appropriations Committee details the various cuts and revenue losses resulting from the sequester, including the lost revenues from reduced oil and gas leases and coal sales.
The report says that the sequester will cause the Bureau of Land Management to process up to 400 fewer oil and gas drilling leases and issue 150 fewer leases. This will cost the government $150 million in revenue, according to committee Democrats.
“Instead of saving money, the sequester is costing Americans money and job opportunities as the Bureau of Land Management is forced to slow down approval of oil and gas drilling permits and cancel lease sales to meet the spending reductions required by the sequester,” the report reads.
House Democrats also note that the sequester will prevent two coal sales from occurring this year, which will cost the government up to $60 million in revenue.
The Obama administration received a volley of criticism when it was announced that oil and gas leases would be slowed. Oil and gas production on federal lands has fallen two years in a row, while the rest of the U.S. is experiencing an energy boom.
“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?”
Oil and natural gas production on private and state lands has increased under President Barack Obama. Non-federal lands produced 3,487,800 barrels of oil per day in 2009, which grew to 4,580,800 barrels per day last year. Non-federal lands also produced 16,233 billion cubic feet of natural gas in 2009, which grew to 20,242 billion cubic feet in 2012.
On federal lands, however, production has fallen since the beginning of Obama’s tenure. In 2009, the U.S. produced 1,731,500 barrels per day on federal lands, but in 2012 federal lands only produced 1,627,400 barrels per day. The total share of crude oil produced on federal lands fell to 26 percent in 2012 from 33 percent in 2009.
Natural gas production on federal lands fell from 5,376 billion cubic feet in 2009 to 3,724 billion cubic feet last year.
Obama promised to speed up permitting times for new oil and gas leases, but now the administration is doing the opposite by delaying and reducing oil and gas permits.
“America has vast untapped energy resources, but the Obama administration has repeatedly blocked and delayed the development of energy on federal lands,” Colorado Republican Rep. Doug Lamborn said.
House Republicans recently introduced a set of bills that would expand energy-development on federal lands by streamlining federal regulations that cause delays in issuing oil and gas drilling permits.
“By allowing us to responsibly develop our vast energy reserves, these bills will not only create jobs, but will lower energy costs and reduce our dependence on foreign oil,” Lamborn added.
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