President Obama outlined his plan for an increase in responsible domestic energy production during his weekly address on May 14, as part of the administration’s long term plan to reduce American reliance on foreign oil.
Obama is directing the Department of the Interior to conduct annual lease sales in Alaska’s National Petroleum Reserve, in order to speed up the evaluation of oil and gas resources in the mid and south Atlantic. There are also hopes that the strategy will create new incentives for companies to develop their unused leases both on and offshore.
Additionally, the administration is extending drilling leases in areas of the Gulf of Mexico that were impacted by the temporary moratorium, as well as certain leases off the coast of Alaska to give companies more time to meet higher safety standard for exploration and drilling.
Finally, Obama will establish a new interagency working group to ensure that Arctic development projects meet health, safety and environmental standards.
The President is hoping that these steps, along with eliminating taxpayer subsidies for oil companies and rooting out fraud and manipulation in the markets, will help to curb the rises on gas prices, while reducing US demand on foreign oil imports.
In response to the measures, API Upstream Director Erik Milito said that the address could have gone further to capitalise on the opportunities available for American energy production, jobs and economic growth:
“The president has acknowledged the need to increase environmentally sound oil production here in the United States,’ said Milito. ‘While this is a step forward for the national discourse on America’s energy future, we hope that these proposals are only the first in a series towards a more robust national energy plan.
‘If given access to key shale reserves, if we can get the oilsands pipeline built that will allow us to import more crude from Canadian oil sands, and if we can access areas of the US that are currently off limits, our industry can create over a million new jobs and generate over US$ 194 billion in revenue for the government in the next 15 years.
‘While the president’s strategy includes a couple of positive nuggets, America has two major issues to deal with: jobs and the deficit. Including increased taxes will lead to a drop in domestic production, domestic jobs, and domestic revenues. The oil and natural gas industry already supports 9.2 million American jobs and with a dedicated approach to domestic energy production, our industry can put more Americans to work and help decrease the deficit.’