Remove obstacles to increasing domestic oil and gas supplies, Bush tells Congress

President George W. Bush urged Congress to send a positive signal to world energy markets by removing obstacles to more domestic oil and gas production. He also rejected calls to quit filling the Strategic Petroleum Reserve while crude oil prices are near record levels but said he would consider suspending the federal gasoline tax through the summer and other proposals.

"If Congress is truly interested in solving the problem, they can send the right signal by saying we're going to explore for oil and gas in the US territories, starting with [the Arctic National Wildlife Refuge]," Bush told reporters at an Apr. 29 press conference.

"If we're generally interested in moving forward with an energy policy that sends a signal to the world that . . . we're going to become less reliant on foreign oil, we can explore at home as well as continue with an alternative fuels program," he maintained.

Congressional Democratic leaders immediately dismissed Bush's proposal. "Only President Bush could allow Big Oil to write our nation's energy policy, guarantee billions in oil tax breaks and refuse to stand up to [the Organization of Petroleum Exporting Countries], and then shirk responsibility for [gasoline] prices that have more than doubled and oil prices that have quadrupled since he took office," Senate Majority Leader Harry M. Reid (D-Nev.) said.

"President Bush's Rose Garden rhetoric will not lower gas prices for Americans struggling in a weakening economy. He must work with Democrats in Congress to invest in renewable energy and lessen our dependence on oil," he said in a written statement.

'Same failed energy policy'

House Speaker Nancy Pelosi (D-Calif.) termed Bush's call for more domestic drilling "the same failed energy policy that has brought record gas prices. Drilling has increased dramatically since 2000 – the number of wells on land has increased about 66% -- and yet the price of gasoline has more than doubled since President Bush took office."

Authorizing leasing within ANWR would not significant reduce US dependence on foreign oil or reduce retail gasoline prices, she continued. "Experts have concluded that opening up the Arctic for drilling would produce only a six-month supply of oil 10 years from now [but] nothing that will help consumers today," Pelosi said.

Bush said that a major reason for higher gasoline prices is that global oil production has not kept pace with growing demand. "Members of Congress have been vocal about foreign governments increasing their oil production. Yet they have been just as vocal in opposition to efforts to expand our production here at home," he said.

He said that the Department of Energy estimates that ANWR contains enough crude to allow US daily production to grow by about 1 million bbl, "which translates into 27 million gallons of gasoline and diesel every day."

Bush said that the country is making a transition to "a new era where we're going to have batteries in our cars that allow people to drive 40 miles on electricity." There will be more ethanol and alternative fuels, he predicted. "But in the meantime, we need to be sending a signal to the world markets that we intend to explore here in America," he said.

Expand refining capacity

"We can also send a clear signal that we understand supply and demand, and then when you don't build a refinery for 30 years, it's going to be a part of restricting supply. And therefore, we ought to expand our refining capacity by permitting new refineries and getting after it quickly," Bush said.

Pelosi also urged Bush to suspend crude oil purchases for the SPR before and after his press conference, but the president rejected the idea. Buying crude for the reserve represents one-tenth of one percent of total global demand, he said. "I don't think it's going to affect price when you affect one-tenth of one percent and I do believe it's in our national interest to get the SPR filled in case there's a major disruption of crude oil around the world," he said.

A full SPR is particularly necessary because Al Qaeda believes an attack on a major overseas oil production facility would disrupt US and other nations' economies, according to Bush. He said he does not see any cost benefits from suspending crude oil purchases for the reserve but feels "it costs you oil in the case of a national security risk."

"Contrary to the president's assertion, the American people would benefit from suspending these government purchases. It could reduce [gasoline] prices by 5 to 24 cents a gallon, a critical first step for America's families, businesses and the economy," Pelosi responded. She said that the SPR has been tapped previously by Bush, Bill Clinton and George H.W. Bush. "In 2000, this action brought the price of oil down by one third – from $30 to $20/bbl," she said.

Responding to a question about the proposal by Sen. John McCain (R-Ariz.), the presumed 2008 Republican presidential nominee, to suspend the federal gasoline tax from Memorial Day through Labor Day to ease upward price pressure, Bush said that he did not want to wade into presidential campaigns but added that he would consider this and other ideas.

Clinton, Obama's observations

Sen. Hillary R. Clinton (D-N.Y.), who is pursuing the Democratic presidential nomination, said on Apr. 28 that she would fund a suspension of the levy with a windfall profits tax on oil companies. Her opponent, Sen. Barack Obama (D-Ill.), told an audience Apr. 29 in Winston-Salem, N.C., that the "gas tax holiday" idea was "a gimmick that would save you half a tank of gas over the entire summer so that everyone in Washington can pat themselves on the back and say that they did something." He also supports a windfall profits tax, he said.

Responding to a reporter's statement that the World Bank estimates that 85% of the increase in world corn prices since 2002 has been due to the growth of ethanol demand, Bush said he thought that weather, increased demand for corn and higher costs of raising it were responsible for 85% of the increase and that ethanol represented only 15%.

"By the way, the high cost of gasoline is going to spur more investment in ethanol as an alternative. The truth of the matter is it's in our national interest to have our farmers grow energy as opposed to us purchasing it from parts of the world that are unstable or may not like us," he added.

"We've put a lot into ethanol. As a matter of fact, the solution to corn-fed ethanol is cellulosic-ethanol . . . and we're spending a lot of money along those lines. But energy policy needs to be comprehensive and we got to understand that we're in a transition period. The problem is that there's been a lot of focus by the Congress in the long-term steps such as hydrogen and the intermediate steps such as biofuels and battery technology research, but not enough emphasis on the here and now," Bush declared.

Pelosi said that congressional Democrats are pressing the Federal Trade Commission to use the authority it received in 2007 Energy Independence and Security Act to investigate record gasoline prices.

"The House has also passed legislation to crack down on oil price gouging, hold OPEC accountable for oil price fixing, and repeal profit subsidies for profit-rich Big Oil companies so that we can invest in a renewable energy future. However, President Bush and most of his Republican allies in Congress have opposed these efforts. Today, American consumers face more pain at the pump, paying a record $3.61/gal," she said.

Contact Nick Snow at nicks@pennwell.com

Related Articles

CEQ should withdraw federal agency GHG guidance, CLNG recommends

03/27/2015 A seventh US natural gas group joined six others in calling for the White House Council on Environmental Quality to withdraw revised guidance it is...

Delayed West Ells SAGD project to start up this summer

03/27/2015 Full first steam from the West Ells thermal oil sands project in the Athabasca region of Alberta is slated to commence in late June, with productio...

NPC report outlines prime Arctic oil and gas research needs

03/27/2015 Most of the US Arctic’s offshore potential conventional oil and gas can be developed using existing field-proven technology, a new National Petrole...

Wyoming seeks judicial review of BLM’s new fracing regulations

03/27/2015 Wyoming’s government sued in response to the US Bureau of Land Management’s final rule covering hydraulic fracturing on onshore public and Indian t...

Iraq lets contract for Karbala refinery

03/27/2015 Iraq, through a subcontractor, has let a contract to Copperchase Ltd., Cramlington, Northumberland, UK, to build security fencing at the country’s ...

Chevron to sell Caltex Australia interest

03/27/2015 Chevron Global Energy Inc. has entered an underwriting agreement for the sale of its 50% interest in Caltex Australia Ltd. to what it described as ...

Polarled pipeline installation under way from Norwegian Sea

03/27/2015 The Solitaire pipe-laying vessel has started Stage 1 of the Statoil ASA-operated Polarled installation project connecting Aasta Hansteen field...

Schlumberger subsidiary pleads guilty to violating US sanctions

03/26/2015 Schlumberger Oilfield Holdings Ltd. (SOHL) agreed to plead guilty and pay a fine of more than $232.7 million for conspiring to violate the Internat...

Motiva to integrate Norco, Convent refineries in Louisiana

03/26/2015 Houston-based Motiva Enterprises LLC reported it will integrate the company’s two Louisiana refineries—the 220,000-b/cd Norco facility and the 227,...
White Papers

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by
Available Webcasts

On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected