When President Obama touted low gasoline prices in his State of the Union address, the pronouncement was met with a collective groan from Republicans and the energy industry.
Sliding pump prices have acted as an economic stimulus for Americans. The cheaper prices are expected to save the typical family $750 this year, Obama said, a figure that comes from the U.S. Energy Information Administration, the Energy Department’s independent statistics arm.
But the industry and its allies in Congress contend Obama has had nothing to do with the surging U.S. oil and gas production he champions. In fact, they say, the U.S. has become the world’s biggest oil producer — which has contributed to a global oversupply that has pushed oil and gas prices down — despite his administration’s policies.
“Our nation’s energy industry deserves the credit for the growth we see today. We are experiencing an energy revolution in spite of the president’s policies that are intended to stifle the development of our domestic resources,” Sen. Jim Inhofe, R-Okla., the chairman of the Environment and Public Works Committee, said in response to Obama’s speech.
Oil prices have fallen below $50 a barrel and gas prices have dropped to near $2 per gallon, mainly caused by booming U.S. private-sector oil production, weak global demand and a decision by the Organization of Petroleum Exporting Countries to maintain production.
The oil and gas industry, whose rapid growth since 2009 has helped drive the U.S. economy and chip away at the trade deficit, is increasingly dissatisfied with recent moves from the administration.
The White House announcement earlier this month that it would regulate methane, a potent greenhouse gas, from hydraulic fracturing — or fracking — wells for the first time irked the industry. It said the regulations could undercut new production, and they are concerned the Environmental Protection Agency eventually will try to regulate existing wells to reach its goal of curbing the sector’s methane emissions at least 40 percent by 2025.
“I think the rub on that comes for us in the regulatory approach that they’re taking,” Marty Durbin, chief executive of industry group America’s Natural Gas Alliance, told the Washington Examiner. “Our real disappointment is that there is an opportunity to have a cooperative arrangement.”
One area where Obama might be able to claim some credit is the higher fuel-efficiency standards for vehicles that he signed into law in 2012. But that’s more about reducing future demand, even though car manufacturers are steadily ramping up models to meet those standards.
The Obama administration has long said it can’t do much to increase oil production in response to Republican attacks about why the administration has refused to open more federal lands to fracking.
The administration has maintained that federal land doesn’t have the same type of shale regions that have been so lucrative on private and state lands in North Dakota and Texas. A 2013 report for the Center for Western Priorities found 93 percent of shale oil and 90 percent of shale gas deposits were on non-federal lands.
But Republicans also have noted that drilling on federal land is falling. The Energy Information Administration said sales of crude oil and lease condensate — a form of light oil — from federal lands hit 606 million barrels in 2013, a 16 percent drop from the 722 million barrels produced when the fracking boom was kicking into full swing in 2010.
Despite the total figure falling, onshore oil production — where fracking would be most prominent — has increased every year since Obama took office, beginning at 104 million barrels in 2009 and hitting 133 million barrels in 2013.
Regardless, drilling proponents think more could be done, and they have accused the Obama administration of slow-walking approvals of applications for drilling on federal land.
With the backing of a number of oil and gas trade groups, Congress successfully extended a pilot program through the spending bill it passed in December that is designed to expedite processing such applications. Some Bureau of Land Management offices, primarily in the West, were overwhelmed with demand and racked up sizable backlogs.
“Continuing this program will increase new oil and natural gas production on federal lands by reducing permit delays and allow greater flexibility for the federal government to respond to the changing needs of the industry,” said Dan Naatz, senior vice president of government relations and political affairs with the Independent Petroleum Association of America.
