Keeping New Publicly Owned Oil and Gas at Home

Strategic Energy Production Act Hurts Our Health and Economy

Matt Kasper and Daniel J. Weiss explain why the Strategic Energy Production Act is bad for Americans’ health and could raise prices due to increased oil and gas exports.

Oil field workers drill into the Gypsum Hills near Medicine Lodge, Kansas, on February 21, 2012. A new House bill would open public lands to gas and oil drilling.
<br /> (AP/Orlin Wagner)
Oil field workers drill into the Gypsum Hills near Medicine Lodge, Kansas, on February 21, 2012. A new House bill would open public lands to gas and oil drilling.
(AP/Orlin Wagner)

View full list of representatives that voted for and against the Markey amendment, and the oil and gas campaign cash they received (.xls)

On June 21 the House of Representatives passed H.R. 4480, the Strategic Energy Production Act of 2012. In addition to dramatically weakening health safeguards from smog and other air pollution, the bill would significantly expand oil and natural gas drilling on public lands, reducing places for hunting, fishing, hiking, and other uses.

Making matters worse, there is no guarantee that the oil and gas produced on these newly available publicly owned lands will benefit American families. Instead, big oil and gas companies could export these resources or refined products made from them. Americans would get the oil and gas pollution and higher prices while other nations benefit from the energy.

Oil companies are pushing for more exports to boost profits

The United States just became a net exporter of refined petroleum products. The House bill would allow oil companies to export even more oil and gas products produced from resources generated from drilling on public lands at time when Americans have been paying higher prices for gasoline and diesel fuel.

Energy Information Administration data demonstrate that U.S. exports of crude oil and other petroleum products are on the rise. The United States exported:

  • 2.4 million barrels per day of crude oil and petroleum products in 2010
  • 2.9 million barrels per day in 2011
  • 3.1 million barrels per day in March 2012—on pace to surpass 2011 export levels

Last year, gasoline and diesel fuel were the bulk of exported petroleum products as the United States became a net exporter of petroleum products for the first time since the Truman administration.

Oil companies want to increase exports of oil and natural gas products because they often can get a higher price for fuels exported to Europe or South America than they can domestically. In addition, this reduces the domestic supply of gasoline and diesel fuel, which can raise their prices. Both of these factors increase Big Oil company profits.

Jack Gerard, president and CEO of the American Petroleum Institute, or API—Big Oil’s lobbying arm—has repeatedly pressured Congress to increase domestic drilling and natural gas production in protected lands and waters owned by all Americans. He now wants to export domestically produced fuels. This would boost Big Oil profits after last year, in which the five largest oil companies made a record-high $137 billion in profits.

Last week, Reuters interviewed Gerard and reported that he wants the United States to ease restrictions on crude oil exports:

The United States should eventually consider easing its restrictions on crude exports, [Gerard] said.

Even with the rise in crude oil production, the United States still imported nearly 56 percent of the crude it used in April, according to data from API.

Due to an increase in domestic oil production and higher fuel economy, U.S. oil imports are at their lowest level in 14 years. Nonetheless, we still import 44 percent of our oil. API wants to begin exporting some of our domestic production to increase profits for Big Oil, threatening the recent decline in oil imports.

The boom in domestic natural gas production has kept electricity prices in check, and this natural gas can replace dirty coal-generated electricity. But Reuters reported that Big Oil also wants to begin exporting natural gas. The higher demand for gas would raise heating prices for families while increasing the cost of feedstocks for chemical and other industries. In addition, a 2012 report on natural gas exports by the International Energy Agency found that such exports could increase domestic greenhouse gas pollution.

Rep. Markey’s American Oil for American Soil amendment defeat reveals Big Oil’s congressional influence

Rep. Ed Markey (D-MA) proposed an amendment to prohibit the oil and gas produced from new leases under H.R. 4480 from being exported to other countries. He wants the oil and natural gas produced from newly opened, formerly protected public lands to be used in the United States. Markey said on the floor of the House that:

America’s number one export last year was American fuel—number one. No other product did we export more of last year than the fuel that is produced here in the United States. More than $100 billion in American-made fuels was sent overseas to China, to Morocco, to Singapore, and other countries.

Rep. Markey added:

Just this week, the president of the American Petroleum Institute announced that exporting America’s crude oil should be a serious consideration. Let me say that again: Big Oil is now stating publicly, in no uncertain terms, that they want to be able to export crude oil produced in the United States.

Despite Rep. Markey’s efforts, his amendment failed by a 161-256 vote. A Center for American Progress analysis of Center for Responsive Politics data demonstrates that those representatives who voted to export American fuels received significantly more campaign cash from oil and gas companies than those representatives who voted to keep American oil on American soil:

  • The 256 representatives—225 Republicans and 31 Democrats—who voted against the Markey amendment received a total of $39.8 million in campaign cash from oil and gas companies, an average of $155,000 each.
  • The 161 representatives who voted for the amendment—152 Democrats and nine Republicans—received a total of $5.3 million in campaign cash from oil and gas companies, an average of $32,919 each.

In other words, supporters of Big Oil’s fuel export agenda received an average of $5 in campaign donations to every $1 received by opponents. (See attached spreadsheet for oil and gas contributions by representative.)

The Strategic Energy Production Act is one of a series of bills that are part of the House Republicans’ “oil above all” agenda. These bills are offered as a solution to high gasoline prices though they do no such thing. High prices are invoked as an excuse to weaken public health safeguards or allow oil production on previously protected lands or waters. This bill would not only pollute our air and plunder our lands, but it would also send the oil and natural gas to other nations, rather than keeping these vital resources here for Americans. H.R. 4480 is bad for our health and recreation, and it is unpatriotic.

Matt Kasper is a Special Assistant for the Energy Policy team, and Daniel J. Weiss is a Senior Fellow and the Director of Climate Strategy at the Center for American Progress.

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Matt Kasper

Research Assistant

Daniel J. Weiss

Senior Fellow