Wednesday, May 16, 2012

What the oil industry wants — in charts

Remember: what the oil industry wants, the oil industry usually gets.--SS       

What the oil industry wants — in charts:

In many ways, life has rarely been better for the U.S. oil and gas industries. Production is up, thanks to new fracking technology. Profits are high. There’s little chance Congress will cap carbon emissions anytime soon. What more could they ask for?

Quite a bit, it turns out. On Tuesday, the American Petroleum Institute released a report full of recommendations to the Republican and Democratic committees that are crafting their party platforms this summer. Basically, this is Big Oil’s wish list. It includes everything from opening up more federal lands for drilling to avoiding strict new federal rules on gas fracking. And API has also included a whole slew of charts that help give a better sense for what’s driving the oil and gas industry.

First up is this graph showing where the current boom in oil and natural gas production is taking place. For the most part, it’s occurring on private lands — in, for instance, the oil-rich Bakken shale formation that spans North Dakota and Montana. By contrast, oil and gas production has flatlined and even dropped in areas that are supervised by the federal government:

Does this mean the Obama adminsitration is stifling production on federal lands? That’s a little murkier. One big reason for the recent drop was the temporary moratorium on deepwater drilling in the Gulf of Mexico after the BP oil spill in 2010. This is gradually being reversed: As the Energy Information Administration explains, drilling has now resumed in this region, but it’s been a slow, fitful recovery, thanks to a “slower permitting process with increased environmental review.”

Still, API also argues that permits for new drilling on Western lands has been too sluggish — something the Obama administration recently said it would try to correct.

But speedier permitting, along with lower taxes and less regulation, is only a part of API’s wish list. The biggest request from the industry is for Congress to open up the rest of America’s coasts for oil and gas exploration. The key targets here are the Eastern Gulf of Mexico and the Outer Continental Shelf in the Atlantic and Pacific. (The Arctic National Wildlife Refuge is another target.) Here’s the map:

Bear in mind that opening up these areas isn’t as simple as it sounds — even many of Florida’s Republicans aren’t thrilled with the idea of a potential spill near the state’s beaches. Opponents of expanded offshore drilling argue that there’s not nearly enough oil in these parts anyway: A 2009 EIA analysis, for instance, found that opening these areas up would only lower gasoline prices by 3 cents per gallon by 2030. In response, API argues that there might be more oil in these areas than anyone suspects — the industry just needs a chance to look.

Finally, API contends that if we can open up all of these areas to exploration, keep building oil pipelines from Canada — the controversial Keystone XL pipeline is on their wish-list — and ramp up biofuels production, then the United States could be relatively oil independent by 2030. Here’s what that would look like:

Not everyone’s as impressed with API’s report. Three researchers from the Center for American Progress — Jorge Madrid, Kate Gordon, and Tina Ramos — have published a response to API. They argue that “dystopia” will ensue if the oil industry gets its way and we maintain our current dependence on crude for the next few decades. Here’s what dystopia looks like in chart form:

Carbon emissions keep going up, up, and up. The CAP report spends a lot of time dwelling on the consequences of unchecked global warming — e.g., by 2030 wildfires in Western states like Montana will increase by 300 percent. Though they also point out, as we have before, that the sort of oil independence promised by API is still no defense against high prices and other shocks.

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