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Energy companies shut down nearly all of the U.S. Gulf of Mexico’s offshore production of crude and about two-thirds of the region’s natural-gas output as Hurricane Isaac raged toward the Louisiana shore Tuesday.

The U.S. Bureau of Safety and Environmental Enforcement, which oversees offshore-oil-and-gas operations, said as of 12:30 p.m. EDT, 1.29 million barrels a day of crude, or 93% of the oil production in the Gulf’s federal waters, were offline. About three billion cubic feet of natural gas, or about 67% of the area’s natural-gas production, were also shut in, and 503 of the region’s 596 manned oil-and-gas platforms had been evacuated, the agency said.

Evacuations are routine during the Atlantic storm season, when tropical storms pass over the Gulf’s thick nest of offshore-oil-and-gas platforms and pipelines, sometimes causing major havoc. But most observers expect Hurricane Isaac, which recently strengthened to Category 1 status with winds of 75 miles per hour, to leave little damage in its wake. Analysts with Tudor, Pickering, Holt & Co. said the tempest will create lots of flooding, but “is not expected to cause major onshore or offshore damage to energy infrastructure.”

Isaac is about 55 miles from the mouth of the Mississippi River, and some 135 miles southeast of New Orleans, with landfall expected as early as Tuesday evening, the National Hurricane Center said.

Energy companies also suspended activities on pipelines used to ship large amounts of oil and gas to the nation’s refineries and processing plants.

Enterprise Products Partners LP (EPD) said it has shut down all but one of its natural-gas hub platforms in the Gulf of Mexico, which help bring to shore the natural gas being produced by other companies offshore. The company also has suspended operations at its south Louisiana gas-processing plants.

“Producers are not sending any feed, so we’re not able to operate them at this point,” said Enterprise spokesman Rick Rainey.

The Destin Pipeline Co., Columbia Gas Transmission, Stingray Pipeline Co., Southern Natural Gas, Venice Gathering System and Discovery Gas Transmission have all suspended natural-gas transmission because of Isaac, according to the pipelines’ operators.

Kinder Morgan Energy Partners LP (KMP) said it closed 400 million cubic feet a day of natural-gas capacity from its Southern Natural Gas pipeline system.

Meanwhile, Shell Pipeline Co., a subsidiary of Royal Dutch Shell Plc (RDSA, RDSA.LN, RDSB.LN, RDSB), said it has shut in the 1.2 million barrel-a-day Capline pipeline, which delivers crude oil from the Gulf of Mexico to refineries in the Midwest. Valero Energy Corp. (VLO) said Tuesday it could reduce rates at its refinery in Memphis, Tenn., due to the closure of the Capline pipeline. “We could reduce rates on Memphis because of that, depending on how long it stays down,” Valero spokesman Bill Day said.

Valero shut its Norco and Meraux refineries in Lousiana on fears of power failures due to the storm. As of Monday, refiners had shut down about 1.3 million barrels a day of refining capacity, or 8% of the nation’s total capacity to turn crude into fuel, the Department of Energy said.

Shell Pipeline Co. also closed the 325,000 barrel-a-day pipeline that brings oil from Houma, La., to Houston, the company said Tuesday. The closure took place late Monday, Shell said. The pipeline delivers crude oil to refineries in St. Charles, La., and Port Arthur, Texas, among other delivery points.

Energy markets seem unfazed by the storm, as it becomes apparent Isaac won’t pack the wallop of hurricanes Katrina or Rita, and the refinery closures it is prompting might be short-lived.

Oil prices rose 75 cents in recent trading, to $96.22 a barrel, and Nymex gasoline has fallen three cents to $2.92 a gallon, both reversing Monday’s trends.

“Some of the fear premium is already coming back out of the gasoline market,” Citi Futures analyst Tim Evans said.

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Oil slid from the highest close in two weeks in New York amid speculation that its biggest gain in more than a month was excessive. Tropical Storm Ernesto slowed as it headed westward in the Caribbean.

Futures slipped as much as 0.8 percent after closing 4.9 percent higher on Aug. 3, the most since June 29. Prices finished last week with a gain of 1.4 percent after U.S. payrolls rose more than estimated and service industries expanded at a faster pace. Ernesto, located about 180 miles east of the Nicaragua and Honduras border, had winds of about 50 mph, down from 60 mph on Aug. 4, according to the U.S. National Hurricane Center.

“This is a small correction after the massive move last Friday,” said Eugen Weinberg, head of commodity market research at Commerzbank AG in Frankfurt. “Brent near $110 is a bit excessive.”

Oil for September delivery slid as much as 77 cents to $90.63 a barrel in electronic trading on the New York Mercantile Exchange and was at $91.15 at 10:54 a.m. London time. It surged $4.27 to $91.40 on Aug. 3, the highest settlement since July 20. Prices are 8.2 percent lower this year.

Brent crude for September settlement fell 68 cents, or 0.6 percent, to $108.26 a barrel on the London-based ICE Futures Europe exchange. The European benchmark’s premium to West Texas Intermediate was at $17.63, compared with $17.54 on Aug. 3.

Technical Resistance

WTI is retreating after reaching technical resistance around $91.85 a barrel, data compiled by Bloomberg show. That’s the higher of two so-called leading span lines that define an “ichimoku cloud,” an area where buy orders tend to be clustered. Futures halted their gain near this line on Aug. 3.

Hedge funds reduced bullish oil bets for the first time in three weeks before reports showing U.S. economic growth sent crude to its biggest gain since June. Money managers cut net- long positions by 2.6 percent in the seven days ended July 31, according to the Commodity Futures Trading Commission’s Commitments of Traders report on Aug. 3. Wagers have dropped 50 percent from a 2012 high on Feb. 28.

Oil futures rose on Aug. 3 after Labor Department data showed payrolls gained 163,000 in July compared with a forecast for a 100,000 increase by economists surveyed by Bloomberg News. The Institute for Supply Management’s non-manufacturing index unexpectedly climbed.

Ernesto’s Trajectory

Ernesto was moving west at 12 mph, the Miami-based center said in a web advisory at 5 a.m. local time today, down from 15 mph earlier.

A hurricane watch is in place for the Yucatan Peninsula on the east coast of Mexico. The Gulf of Mexico to the north is home to 29 percent of U.S. oil production, 6.5 percent of the country’s natural-gas output and 40 percent of its refining capacity, according to the U.S. Energy Department.

“The previous peak of around $93 for West Texas looms as a bit of a psychological resistance level for the market,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. The weakening of tropical storm Ernesto “takes away a potential supply disruption,” he said.

South Sudanese officials will meet their Sudanese counterparts “soon” to conclude an oil deal and continue talks on security issues, said Pagan Amum, the south’s chief negotiator. South Sudan, which halted oil production in January amid a dispute with Sudan over transit fees, is able to resume production by September, he said in a statement published on the government’s website.

At independence, South Sudan assumed 75 percent of the previous country’s 490,000 barrels a day in oil production.

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The House voted 248-163 today for legislation that encourages more domestic oil and gas production by scaling back environmental regulations and opening up more federal land for drilling.

But the measure, like almost all the energy and regulatory bills adopted by the GOP House, is likely to die in the Senate. Just for good measure, the White House put out a statement saying President Barack Obama would veto the bill if it ever reaches his desk.

Among those making a case for the bill was Rep. Charles Boustany, R-Lafayette, who said that while the Obama administration lifted the post BP spill moratorium on deepwater drilling it continues to “slow-walk” permits. The Republican bill, he said, would allow a needed expansion of domestic oil and gas production.

“This bill would go forward and help us to streamline that process so we can get American energy production back up online in the Gulf of Mexico and to develop our energy security needs,” Boustany said. “We have the reserves. We have the opportunity.”

But the streamlining and forcing the Environmental Protection Agency to consider the costs of regulations, instead of primarily whether they’ll save lives by reducing toxic and dangerous emissions, sets a danger precedent, said Rep. Henry Waxman, D-Calif.

“Rather than basing smog standards on what is healthy for our children to breathe, this bill would require standards to be based on what industry says it will cost to reduce pollution,” Waxman said. “This radical proposal will undermine decades of progress on cleaning up the air….The regulations blocked by this bill would create tens of thousands of jobs installing pollution controls and modernizing oil refineries.”

For the second time in this session, Rep. Jeff Landry, R-New Iberia, persuaded his House colleagues to pass his amendment, increasing the maximum royalty payments due producing states from $500 million a year to $750 million a year, starting in 2023. That’s six years after Louisiana and other producing states are to begin taking in 37.5 percent of royalty payments under 2006 legislation, known as the Gulf of Mexico Energy Security Act.

Rep. Ed Markey, D-Mass., objected.

“I would say to the gentleman from Louisiana that his State already won the baby in the king cake when the GOMESA giveaway was enacted back in 2006, and you’re already entitled to $150 billion worth of revenue coming out of the Federal Government and heading your way,” Markey said. “And so I just think it’s time or your region to give a little back to the other 46 States in the Union that didn’t benefit from that 2006 giveaway to you.”

Landry, whose amendment was adopted 244-173, strongly defended it.

“The citizens of Louisiana have passed a constitutional amendment that dedicates all of the proceeds from offshore royalty to go to wetlands restoration, coastal restoration, and hurricane protection,” Landry said. “This is buying us an insurance policy that the other 46 States, who I know have been so generous to help us when hurricanes ravage our coast, this helps to protect us. And I know that the gentleman from Massachusetts would love to protect the environment in Louisiana.”

Sen. Mary Landrieu, D-La., the chief sponsor of the GOMESA legislation, praised the House vote to raise the yearly cap from $500 million to $750 million.

“I commend Congressman Landry for passing this important amendment to advance the goal of bringing more offshore oil and gas revenues to coastal states–particularly Louisiana–that host energy production,” Landrieu said. “We need leaders who will work to lift the cap on oil and gas revenues for the benefit of our coastal communities.”

But Markey and other Democrats complained that Republicans refused to schedule votes on amendments designed to encourage alternative energy development, and defeated an amendment that would have denied new permits to oil companies that benefited from a mistaken provision in a 1990s drilling permit that spared them from paying most royalties. The amendment, Democrats said, would help to reduce the deficit and ensure that all oil companies  pay least modest royalty fees to develop oil and gas on federal property.

Republicans said that taxes or fees shouldn’t be increased on oil companies at a time American desperately needs industry jobs.

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The outlook for the U.S. energy supply is very different from what it was just four years ago, the last time oil prices were going up — and the last time Americans were electing a president. Back then, it seemed the only questions were how fast oil imports would continue to rise and whether the United States was destined to import increasing amounts of natural gas. But the years since have seen an astonishing revival in U.S. oil and gas production, and with it a change in the national conversation about energy. In the presidential campaign ahead, the debate over America’s energy policy is likely to be very different from years past.

The FP Survey on energy, which sounded the views of 57 experts, demonstrates just how much the debate is already changing. “Energy independence,” a chimera invoked by every U.S. president since 1973, has now become a serious subject for discussion. But nearly two-thirds of FP’s respondents do not think that the United States will be energy independent or that independence is a sensible goal in the first place. As one wrote, “Unless the United States wishes to adopt the economic policies of the former Soviet Union, the U.S. economy will always be linked to global markets for oil.”

Even without energy independence, the growth in the North American supply will have enormous geopolitical ramifications — not necessarily immediately, but over time — according to the respondents. The top three consequences they listed are “less U.S. reliance on and influence in the Middle East,” “diminished U.S. interest in combating climate change,” and “less European reliance on Russian gas” (presumably because of newly tapped supplies of shale gas).

Another major story is the changing picture of global demand. Oil consumption may be destined to continue to rise in emerging markets, but not in the traditional major consumers. U.S. oil demand, in fact, is down about 10 percent since 2005. Simply put, the United States and other developed countries have hit “peak demand.” An overwhelming share of respondents are convinced this is mainly a lasting structural change — the product of more efficient automobiles and shifting demographics — though, as one noted, it is “exacerbated by recession.”

Over the past few years, governments have heavily promoted renewable energy sources such as solar and wind. The FP Survey respondents believe renewables will grow dramatically as a percentage of U.S. energy consumption — nearly tripling by 2030. Wind energy alone will grow fivefold, they suggest, while solar energy will grow an astonishing 30-fold. But renewables are still growing from a very small base. Thus, by 2030, the respondents estimate, oil, natural gas, and coal will still account for 69 percent of U.S. energy, compared with 82 percent in 2011. Natural gas will gain markets, while coal will experience the steepest relative drop in market share.

How does the United States fit into the global picture? After all, the real growth in consumption is taking place in emerging markets. China already consumes more energy (not to be confused with just oil) than the United States. In the conclusion to The Quest, I offer a view of the future that comes in two parts. First, based on what is known and can be foreseen today, global energy demand will increase about 35 percent over the next two decades. Second, while renewables will grow in absolute terms, so will conventional energy, owing to the continuing surge in coal, oil, and natural gas consumption in emerging markets like China. Thus, on a worldwide basis, the mix in energy demand will not be too different from what it is today. The real changes in the composition will come after 2030.

Foreign Policy put that view to the respondents, and more than three-quarters agreed. But some highlight the uncertainty: “It totally depends on global action on climate,” one said. Another wrote, “Agree on total demand but disagree on the mix. I think total hydrocarbon demand will be lower.”

Shale gas, in terms of its impact, may well be the biggest innovation in energy supply in the last two decades. Although initially cheered by many environmentalists as providing more of an alternative to coal, it has become controversial because of questions about how it is produced. Yet it is already 37 percent of U.S. natural gas production, up from just 2 percent at the beginning of the last decade, and virtually all respondents expect it to continue to increase. The question is by how much. The top shale gas environmental issue, by far, is considered to be water impacts, followed by methane leakage, according to respondents. But nearly three-quarters are convinced environmental issues can be managed “so that shale gas production can continue on its growth track.”

“Peak oil” may have been a very hot topic back in 2008. But not today. Fully 85 percent of respondents reject the notion that world oil supply is about to decline. Implied in that answer, however, is that unconventional “liquids,” such as Canadian oil sands and liquids found with natural gas, will be an increasing share of supply.

Who will be the future heavyweight champs when it comes to world oil? Three-quarters of respondents believe the top producer a decade from now will be Saudi Arabia. But 18 percent cast their vote for Russia, and a few even for the United States. The top consumer? Most think that America will remain No. 1, but more than a third predict that by 2025 China will have outstripped the United States.

The surge in Chinese demand and the much-increased visibility of Chinese oil companies around the world have generated a new specter: the possibility of a geopolitical competition and even a clash between the United States and China over access to oil. Yet the heat around that question seemed much greater a few years ago, when peak oil was a more prominent concern than it is today. That shift is borne out in the survey. Three-quarters think access to oil will primarily be “a commercial matter” between the United States and China. But there are certainly dissenters. “Whether directly or indirectly,” one said, “access to oil will be the main source of tension in Sino-American relations.”

Oil prices have a habit of surprising. After all, they do not exist in a vacuum but are the product of economic growth, political development, and technology. Still, 55 percent believe that, five years from now, prices will be between $100 and $150 a barrel — around or not too much above where they are today. But notably, 22 percent think prices could be under $100, while only one respondent said they could be above $175. Sixteen percent answered, “Who knows?” Said one, “I would be rich if I could predict this.”

Forecasting oil prices is a fraught business, even for experts. But on one thing the majority agree: What happens with Iran, from sanctions on its oil exports to the possibility of conflict if its nuclear negotiations with major world powers fail, will have a big impact, given that the country has been a major exporter, at around 2.2 million barrels per day. Still, other factors could mute the impact of an Iran-related price spike, particularly the big increase in Saudi production and Europe’s weak economy. In terms of security of supply, one area is at the top of the list of concerns: 70 percent say that “the impact of a potential oil supply disruption” in some part of the Middle East is what “keeps me up at night.” (Twenty-three percent demurred, with one putting it this way: “I sleep well.”)

This is a U.S. election year, of course, and energy will likely be one of the major issues. On a scale of 1 to 10, 10 being worst, the respondents gave President Barack Obama what averaged out to a 5.8, with the biggest cluster around 7 and 8. Climate change, in various forms, was identified as America’s No. 1 energy problem, and many likewise think the Obama administration’s “biggest mistake on energy issues so far” is “not enough attention to climate change.” Agreeing with Mitt Romney, 56 percent support the proposed Keystone XL pipeline, which Obama has rejected for now, while 31 percent oppose it and 13 percent are not committed. At the top of the “biggest success” list for the Obama administration are “new fuel-economy standards” for automobiles and “a measured approach to natural gas drilling.”

Overall, the survey makes one thing very clear. For years, the prospects of an “energy transition” away from conventional energy and toward new alternatives have been much debated. Whatever the timing for any transition, the FP Survey demonstrates that a transition in energy thinking is certainly at hand.

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The United States is seeing a dramatic surge in oil and gas production and could overtake the world’s biggest producers, Russia and Saudi Arabia, in another decade, a US official said.

“Some of the numbers are eye-popping,” Daniel Sullivan, commissioner in Alaska’s department of natural resources, told a panel of experts at the International Economic Forum of the Americas in Montreal.

In the last quarter the US produced six million barrels of conventional and unconventional oil a day, he said, adding: “We haven’t done that in 15 years.”

Since 2008, the US added 1.6 million barrels of additional oil, and in 2011, the US registered the largest increase in oil production of any country outside of OPEC, he told hundreds of participants.

These figures compared to a daily output in March of about 9.923 million barrels a day by Saudi Arabia, the largest producer of the OPEC nations, and 9.920 million by Russia, according to the industry data compiler Joint Organizations Data Initiative.

Sullivan said the respected consultancy, PFC Energy, had estimated that by 2020, “the US could be the largest hydrocarbon producer — that’s oil and gas — in the world, overtaking Russia and Saudi Arabia.”

In Alaska alone, the potential off the coast was viewed as the largest of any country, about 40 billion barrels in conventional oil, according to the US Geological Survey.

US President Barack Obama has indicated that offshore oil resources could help mitigate global disruptions in supply, and his administration has tried to craft an energy strategy that balances business interests with environmental concerns, especially in the Arctic.

In November the Obama administration proposed a new plan for offshore oil and gas leases in the Gulf of Mexico and off the coast of Alaska, including the environmentally sensitive Arctic.

But it did not open up for exploration the politically sensitive Atlantic or Pacific coastlines, or the eastern Gulf of Mexico along the Florida coast.

Unless it faces a last minute challenge, Shell is expected to begin drilling test wells off northern Alaska in July, opening up new possibilities for oil exploration in a previously untapped, pristine environment.

Sullivan argued that the benefits of the shift in energy security could be substantial, especially in terms of growth and jobs for a country where half the US trade deficit is due to imports of oil.

He said in 2010-2011, there were 600,000 jobs created in the shale oil and gas industry.

But addressing the same audience, the chairman of the World Energy Council drew a more somber global picture.

Pierre Gadonneix said the economic crisis meant energy demands had slowed down, even though they were starting to grow again, and that oil prices remained high.

“Future growth is threatened by the prospect of climate change and the drain on our natural resources,” he said, adding the main challenges would be to improve the security of energy supply, to improve competitiveness and to struggle against “energy poverty.”

“We must recall that more than 1.3 billion people still do not have access to electricity in developing and developed countries,” he said.

Pointing to “big accidents”, chiefly in the Gulf of Mexico where a BP oil spill in 2010 unleashed five million barrels of oil into the seas, Gadonneix urged plant operators and governments to agree on global standards for operations.

Countries struggling to become economically efficient and feed global demand for energy increases also spoke at the forum.

Iraq’s Vice President Khudier Mosa Jafer Alkhuzaie said the country’s “oil industry was the engine for the entire economy.”

Iraq had huge reserves of oil — more than 103 billion barrels — along with large reserves of natural gas.

“We expect investments in this area will help us develop the oil industry in Iraq,” he said, pointing to a fiscal law adopted in 2006 that lowers obligations imposed on foreign companies and “facilitates the liberty of movement for foreigners and their capital.”

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Crude output in the United States is at its highest in 14 years, adding to inventories that are keeping oil prices in North America low and feeding into a global oversupply leading Arabian Gulf producers to adjust their export levels.

Production rose above 6 million barrels per day (bdp) in the first three months of this year, according to the US Energy Information Administration (EIA).

“Strong growth in US crude-oil production since the fourth quarter of 2011 is due mainly to higher output from North Dakota, Texas and federal leases in the Gulf of Mexico, with total US production during the first quarter of this year topping 6 million barrels per day for the first time in 14 years,” the EIA said.

In the final quarter of last year, the US produced 5.9 million bpd but the production increases were met with sluggish demand, as the US battles harsh economic times.

A lack of transport options from the US crude hub at Cushing, Oklahoma, has led to a supply glut there. A pipeline connecting the US Gulf coast to Cushing was reversed this month, but experts say the impact of unblocking this bottleneck has yet to be felt on inventory levels.

“Stocks in Cushing are still high, even with the opening of the pipeline,” said Sammy Al Mehaid, an oil market analyst at the office of the Opec governor for Saudi Arabia. “The extra supply is adding bearish momentum on the US domestic market.”

US crude inventories remain near heights last reached in 1990, EIA data shows.

The price of crude on the New York Mercantile Exchange (Nymex) has dropped from about US$98 to about $85 a barrel this year.

The Cushing bottleneck created a wide disparity between US and European prices, with the European benchmark Brent trading in the region of $100 a barrel.

Strong US production is adding to a global supply overhang that has pushed prices down in spite of the stand-off over Iran’s nuclear programme that added a hefty risk premium to the price of a barrel of oil.

“Price is not giving you a true picture of supply and demand, it’s still being highjacked by geopolitical uncertainties,” said Mr Al Mehaid.

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U.S. oil output in the first quarter of 2012 rose 11.6% from a year earlier and topped 6 million barrels a day for the first time in 14 years, the federal Energy Information Administration said Friday.

The rise came on higher output from North Dakota, Texas and from federal lease areas in the Gulf of Mexico.

The EIA said that North Dakota, which passed California in December to become the third-largest oil-producing state in the nation, moved ahead of Alaska in March to take the role of second-biggest oil producer on rising output from the Bakken shale oil region.

North Dakota pumped a record 575,000 barrels a day in March, narrowly ahead of Alaska’s 567,000 barrels a day. North Dakota’s March output set a record and was up 215,000 barrels a day, or 59.7% from a year earlier.

Texas, at 1.755 million barrels a day, remains the biggest U.S. producer by a wide margin.

After registering output of 5.5 million to 5.6 million barrels a day in each of the first three quarters of 2011, EIA estimates that U.S. average quarterly oil production climbed to more than 5.9 million barrels a day in the fourth quarter, then averaged 6.175 million barrels a day in the 2012 first quarter.

The EIA said the last time U.S. quarterly oil production was above 6 million barrels a day was in the fourth quarter 1998.

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After a drumbeat of complaints from energy companies that the Obama administration is blocking domestic oil and gas production, the Interior department released a report claiming that U.S. oil and gas producers are sitting on millions of acres of idle government land leases.

Secretary of the Interior Ken Salazar says that if producers were sincere about wanting to increase energy production, they would activate millions of acres of public land already leased to them. What should they be doing on that land? Drilling.

In a statement issued Tuesday, Salazar says the administration wants companies “to develop the tens of millions of acres they’ve already leased but have left sitting idle.”

A report released by the Department of the Interior claims that of 36 million government acres leased offshore for oil and gas production, 72 percent sit idle. Onshore, in the lower 48 states, says the report, more than half of federally leased acreage sits idle, “neither producing nor under active exploration or development by companies who hold those leases.”

The American Petroleum Institute calls the administration’s claim “absurd” and “willfully misleading.”

In a statement, API CEO Jack Gerard says that just because a lease doesn’t fit the government’s definition of active doesn’t mean it’s idle. Where a lease truly is idle, the reason often is that the producer must hold off drilling while they wait years to get the necessary government permissions.

Erik Milito, API director of upstream and industry operations, says there’s another reason some leases aren’t being used: There’s only a 30 to 40 percent success rate to finding oil. A producer has to narrow down its leases to find the few ones good enough for drilling.

The fallacy behind Salazar’s assertion–which Milito characterizes as being, ‘We don’t have to open up any more public land to you, because you’re not using the leases you’ve already got’–is the belief “that you just put a pipe in the ground, and you’re ready to go–that there’s always oil there.”

Kathleen Sgamma, vice president of government and public affairs for the Western Energy Alliance, whose members produce, she says, 27 percent of the natural gas and 14 percent of the oil in the U.S., cites a more basic reason a lease may be idle: Its oil and gas may be uneconomic to extract.

As energy prices fluctuate, and as technology improves, she says, idle leases are brought into production. The most dramatic and most recent example is the 200,000-square-mile Baaken oil field underlying North Dakota and Montana. As recently as five years ago, she says, many leases here sat idle. Then technology and economics made production possible, and production boomed.

The DOI report, she says, “Actually is useful, since it shows that we’re becoming more efficient at operating on public lands. To have 44 percent of public lands in production is very high, compared to the 30 percent it’s been historically. There will always be maybe 30 percent of leases that don’t pan out. But of the rest, we estimate half are somewhere in the [drilling] process. If government is truly serious about increasing production, they would remove some of the red tape.”

The Alliance says that when you add up the time required for prospecting, drilling, and waiting around for government approvals, 19 years can pass before a lessee actually sees oil. During part of that time, the government counts the lease inactive.

She says she knows the government can move energy projects ahead more aggressively when it wants to, because it has done exactly that with wind and solar projects. It’s only politics, she says, that accounts for the different treatment accorded oil and gas.

A spokesman for the Department of the Interior, asked to respond to the industry’s contention that DOI’s report is both misleading and absurd, says, “The report speaks for itself. The notion that we have somehow locked up federal lands clearly doesn’t square with the facts. Our goal is to continue expanding safe and responsible development, and we will continue to take steps to deliver on that priority.”

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