TRADING BLOWS

Energy Trade Groups Spreading ‘Untruths,’ Salazar Says

By David Frey, 11-24-09

	Interior Secretary Ken Salazar

Interior Secretary Ken Salazar took aim at oil and gas industry trade groups on Tuesday, accusing them of spreading “untruths” and launching “poison” attacks against the Obama administration.

“Trade groups for the oil and gas industry repeatedly launch attacks that have all the poison and assumption of election-year politics,” Salazar said in a conference call with reporters announcing a round of oil and gas leases for 2010. “Trade groups for the oil and gas industry need to understand that they do not own the nation’s public lands. Taxpayers do.”

Salazar announced 37 oil and natural gas leases on western public lands in 2010, and a sale in Alaska’s National Petroleum Reserve, the first in two years. The sales include thousands of parcels in a dozen states. That’s one more sale than is scheduled by the end of this year. So far, 32 lease sales have been held on 2.7 million acres. Four more are pending.

The announcement comes as Interior has come under increasing fire from trade groups, who have complained that lease sales have been sharply curtailed under the Obama administration. The Independent Petroleum Association of Mountain States has complained that the Obama administration has issued nearly 2,000 fewer leases on 1.1 million fewer acres in the intermountain West than the Clinton administration.

That group has complained that Obama has withheld $100 million worth of unissued leases in Colorado, Utah and Wyoming; reduced, deferred or withdrew other leases and created delays in permitting and environmental analyses. The result is an uncertainty in the leasing process that has left industry wary.

“Interior Secretary Salazar has repeatedly stated that the Obama Administration is not “anti-oil and gas,” the group said, “yet when it comes to Interior’s onshore natural gas and oil program, the record suggests otherwise.”

Salazar rebuffed those allegations, instead blaming any uncertainty on the Bush administration for issuing too many leases in inappropriate places that led to protests, often from environmental groups.

“In the prior administration there were shortcuts taken, including leasing parcels that were next to national parks and not doing the appropriate review.”

He said the new leases were being offered despite what he called “huge undeveloped oil and gas acreages” that have been leased but not developed. Of 53,585 active onshore leases, Salazar said, 26,000 are not in production.

BLM Director Bob Abbey said those undeveloped leases are largely because of economics. Since last year, oil prices have plunged from $130 to $75 per barrel, and natural gas prices have dropped from $10 per BTU to $3.75.

“Our philosophy in the BLM is to still move forward with leases that make sense, but the inventory of leases that are not producing are already high and may go higher,” Abbey said.

BLM reforms were aimed at limiting lease protests, which reached 50 percent of all lease sales offered, he said.

Salazar sought to assure industry that the Obama administration considered oil and gas an important part of the nation’s energy portfolio but encouraged them to expand into renewable resources and choose a “path of engagement” with the administration.

“Those companies need to make a choice,” Salazar said. “Their shareholders didn’t sign up to have their companies’ trade associations become like an arm of a political party.”

Salazar declined to specifically name any groups he believed were spreading untruths.

“The bullies thought they could boss their way around the playground and someone called their bluff,” said Mike Chiropolos, lands program director for the Colorado-based environmental group Western Resource Advocates. “The past eight years or so, big oil got used to having their ways on public land. That’s not the way things are going to go down anymore.”

Despite industry complaints, Chiropolos said, domestic oil production has hit an all-time high, largely due to off-shore leasing, while energy companies have shied away from less-productive onshore sites due to plunging fuel prices.

“this is a bunch of political posturing and Salazar called it for what it is,” Chiropolos said. “It’s election-year partisan politics form trade groups. I think they’re trying to distract the public and beat the drum for drilling on public lands and keeping the nation addicted to fossil fuels.”

Like this story? Get more! Sign up for our free newsletters.