June 18, 2008

Washington, DC—Nevada Senator Harry Reid made the following statement today in response to President Bush’s proposal to drill offshore for oil:

“This week’s flip-flop on offshore oil drilling by President Bush and Senator John McCain is nothing more than a cynical campaign ploy that will do nothing to lower energy prices and represents another big giveaway to oil companies already making billions in profits.

“The facts are clear: Oil companies have already had ample opportunity to increase supply, but they have sat on their hands.  They aren’t even using more than half of the public lands they already have leased for drilling.  And despite the huge tax breaks President Bush and Republican Congresses have given oil and gas companies to invest in refineries, domestic production has actually dropped.

“Despite what President Bush, John McCain and their friends in the oil industry claim, we cannot drill our way out of this problem.  The math is simple: America has just three percent of the world’s oil reserves, but Americans use a quarter of its oil.  And the Energy Information Administration says that even if we do open the coasts to oil drilling, prices wouldn’t drop until 2030.

“President Bush and John McCain are not serious about addressing gas prices.  If they were, they would stop offering the same old ideas meant to pad the pockets of Big Oil and work with Democrats to reduce our dependence on oil, invest in the renewable energy sources, crack down on excessive speculation and stand up to countries colluding to shake down American consumers.

“Bush-McCain Republicans just don’t get it.  Their commitment to the failed policies of yesterday is why we have energy, economic and national security crises today.  They want to feed our addiction to oil; Democrats want to end it.”

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THE FACTS ABOUT OFFSHORE DRILLING

AMERICA CANNOT DRILL ITS WAY TO LOWER ENERGY PRICES OR ENERGY INDEPENDENCE

America Consumes 25 percent of the World’s Oil, But Has Just 3 Percent of the World’s Oil Reserves. Americans consume 25 percent of the world's produced oil, but our nation holds less than 3 percent of the world's proven oil reserves. [NRDC]

INCREASED OFFSHORE DRILLING WOULD NOT LOWER GAS PRICES

Bush Administration’s Own Energy Information Agency Found Outer Continental Shelf Drilling Would Have No Significant Impact on Gas Prices  “The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030… Because oil prices are determined on the international market, however, any impact on average wellhead prices is expected to be insignificant.” [Energy Information Administration, 2007]

On President Bush’s Watch, Offshore Drilling Has Increased, But the Price of Gas Has Skyrocketed. The number of offshore drilling permits issued and wells have increased dramatically from 3,000 permits and wells in 2000 to nearly 8,000 permits and 6,000 wells by 2006. Over the same time period gas prices have skyrocketed from $1.25 per gallon in January 2000 to over $4 per gallon today. [Bureau of Land Management, answers to questions submitted 3/1/07; EIA Historical Data]

OIL COMPANIES ARE NOT DRILLING IN AREAS CURRENTLY UNDER LEASE

Just 21 Percent of Outer Continental Shelf Leases Are in Production. There are 7,740 active leases in the outer continental shelf and only 1,655 are in production. [Department of Interior]

Just 19 Percent of Outer Continental Shelf Acres Under Lease Are Producing. There are over 41,000,000 acres in the outer continental shelf have been leased for oil drilling, yet only 8,123,000 acres are in production.

• 33 Million Outer Continental Shelf Acres Under Lease Are NOT Being Drilled. There are 33 million acres of the federal OCS lands that are under lease but are not producing. [Department of Interior]

Of 45.5 Million Acres of Federal Lands Leased to Oil and Gas Companies, 31 Million Acres Are Not Producing.  There are 45.5 million acres of federal onshore lands currently leased by the oil and gas industry—but there are over 31 million acres not producing. [Department of Interior]

MOST RECOVERABLE OFFSHORE OIL AND GAS IS OPEN TO DRILLING

79 Percent of Recoverable Offshore Oil Is Open to Drilling. Currently 79 percent of America’s technically recoverable offshore oil reserves are open for leasing, while just 21 percent are closed to drilling. [Minerals Management Service, 2006]

82 Percent of Recoverable Offshore Natural Gas Is Open to Drilling. Currently 82 percent of America’s technically recoverable offshore natural gas reserves are open for leasing, while just 18 percent are closed to drilling. [Minerals Management Service, 2006]

ON PRESIDENT’S WATCH, BIG OIL HAS MADE BILLIONS IN PROFITS BUT FAILED TO INVEST IN REFINERIES

On President Bush’s Watch, Big Oil Companies Have Made More Than $600 Billion in Profits. Since 2001, the major oil companies have amassed close to $600 billion in profits and they have used those excessive profits to purchase approximately $185 billion on stock buybacks rather than making serious and significant investments in clean alternative fuels, new refinery capacity and utilization, and renewable forms of electricity. [Based on ExxonMobil, Shell, BP, ChevronTexaco, and ConocoPhillips annual company financial reports for 2000-2008]

On President Bush’s Watch, Big Oil Has Failed to Invest in Refineries Allowing Refinery Utilization and Capacity to Fall from 93 Percent to 89 Percent. Since 2001, the Big Oil companies have failed to adequately invest in new refinery capacity and utilization and which has resulted in a reduction of refinery utilization and capacity from 93 percent to 89 percent. [Energy Information Administration]

PRESIDENT’S FATHER AND BROTHER OPPOSE OFFSHORE DRILLING

President George H.W. Bush Issued a Presidential Directive Banning Offshore Leasing or Preleasing Activity in All U.S. Coastal Waters Except Texas, Louisiana, Alabama and Alaska. “President George H.W. Bush, in 1990, responding to pressure from the states of Florida and California, and others concerned about protecting the ocean and coastal environments, issued a Presidential Directive ordering the Department of the Interior not to conduct offshore leasing or preleasing activity in places other than Texas, Louisiana, Alabama, and parts of Alaska — areas covered by the annual legislative moratoria — until 2000.” [CRS, 10/27/05]

Governor Jeb Bush Secured Agreement From President Bush  “Defusing two longstanding environmental disputes, President Bush and Gov. Jeb Bush announced deals Wednesday that could prevent drilling for natural gas off Florida's gulf coast and block the expansion of oil wells in a federal preserve beside the Everglades. The federal government will pay Chevron and two other companies $115-million for oil and gas leases in an area of the Gulf of Mexico known as Destin Dome, about 25 miles off the beaches of Pensacola.” [St. Petersburg Times, 5/30/02]

• Governor Bush Said “It Just Did Not Seem Right 25 Miles Off the Coast There Might Be Drilling.” “And Gov. Bush, boasting that Florida has some of the world's best beaches, said: ‘It just did not seem right that 25 miles off the coast there might be drilling. Today, that possibility doesn't exist.’” [St. Petersburg Times, 5/30/02]