While Politicians Brayed, Drillers Barely Noticed Shutdown

Oil pumps in operation at an oilfield near central Los Angeles on February 02, 2011. World oil prices recently rallied close to $100 per barrel, as traders absorbed impressive fourth-quarter US economic growth and fretted over worsening political turmoil in Egypt. Most other commodity markets also won support this week from news that the US economic recovery picked up speed in the last three months of 2010, stoking hopes of strengthening demand for raw materials. The US economy grew at its fastest clip in five years in 2010, the Commerce Department reported, as the country bounced back from recession and fears of a double-dip recession ebbed. AFP PHOTO/Mark RALSTON (Photo credit should read MARK RALSTON/AFP/Getty Images)
National Journal
Clare Foran
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Clare Foran
Oct. 17, 2013, 4:35 p.m.

Al­though oil and gas drilling on pub­lic lands con­tin­ued dur­ing the shut­down, the In­teri­or De­part­ment’s Bur­eau of Land Man­age­ment stopped ap­prov­ing per­mits for new oil and gas wells when fund­ing lapsed Oct. 1. Now that the gov­ern­ment is back to work, an es­tim­ated 3,000 per­mit ap­plic­a­tions are pending re­view, a back­log that gen­er­ated cri­ti­cism from both sides dur­ing the shut­down.

Pres­id­ent Obama and oth­er Demo­crats blamed Re­pub­lic­ans and main­tained that the pause stalled Amer­ica’s en­ergy boom. Most oil and gas pro­du­cers, however, say the hold on fed­er­al per­mit­ting won’t have a ma­jor im­pact on their bot­tom line, lead­ing Re­pub­lic­ans to ac­cuse the ad­min­is­tra­tion of push­ing empty rhet­or­ic.

“Re­pub­lic­ans say they’re very con­cerned about drilling,” Obama said at a news con­fer­ence on Oct. 8. “Well, one of the things that hap­pens when the gov­ern­ment shuts down is, new drilling per­mits aren’t pro­cessed. So why would the Re­pub­lic­ans say to the folks who are in­ter­ested in drilling for oil, ‘Sorry, we can’t let those things be pro­cessed’ “?

A press re­lease from the of­fice of Sen. Ed­ward Mar­key, D-Mass., also said last week that “the Re­pub­lic­an-led shut­down of the U.S. gov­ern­ment is halt­ing en­ergy pro­duc­tion on fed­er­al lands,” while Sen­ate En­ergy and Nat­ur­al Re­sources Com­mit­tee Chair­man Ron Wyden, D-Ore., made a sim­il­ar charge dur­ing a pan­el meet­ing. He called do­mest­ic en­ergy pro­duc­tion “an ex­traordin­ary suc­cess story” and went on to say: “The gov­ern­ment shut­down puts that suc­cess story at risk be­cause you can­not get new per­mits.”

But rep­res­ent­at­ives of the oil and gas in­dustry say the hold on per­mit­ting did not make a sig­ni­fic­ant dent in their op­er­a­tions.

“It’ll cause some in­con­veni­ence, but it can take up to two years for the fed­er­al gov­ern­ment to ap­prove a per­mit, so pro­du­cers are used to wait­ing a long time as it is,” said Kath­leen Sgamma, vice pres­id­ent of gov­ern­ment and pub­lic af­fairs for the West­ern En­ergy Al­li­ance, a re­gion­al trade group for oil and gas pro­du­cers.

Dan Whit­ten, a spokes­man for Amer­ica’s Nat­ur­al Gas Al­li­ance, had a sim­il­ar as­sess­ment. “His­tor­ic­ally, per­mit pro­cessing has been an area where we feel the In­teri­or De­part­ment could do things a little more quickly — with or without a shut­down — so to the ex­tent that the shut­down has slowed the pro­cess fur­ther that’s not good, but more broadly we just think the gov­ern­ment should get back to work,” he said earli­er this week.

Con­ser­vat­ives sided with the in­dustry and took aim at Obama for shift­ing blame to Re­pub­lic­an law­makers.

“The Obama ad­min­is­tra­tion has already dra­mat­ic­ally slowed down ap­prov­al times for new per­mits — im­pos­ing so many lay­ers of red tape that it is now a mul­ti­year pro­cess,” House Nat­ur­al Re­sources Com­mit­tee Chair­man Doc Hast­ings, R-Wash., told Na­tion­al Journ­al Daily be­fore the shut­down ended on Thursday. “This gov­ern­ment shut­down will hardly make a dif­fer­ence in ap­prov­al times.”

Robert Dillon, com­mu­nic­a­tions dir­ect­or for Re­pub­lic­ans on the Sen­ate En­ergy and Nat­ur­al Re­sources Com­mit­tee, agreed, say­ing the pres­id­ent’s re­marks amoun­ted to little more than a polit­ic­al ploy. “The ad­min­is­tra­tion thinks that tak­ing the part of oil and gas de­vel­op­ment is go­ing to win the day and make Re­pub­lic­ans look bad,” Dillon com­men­ted. “The fact is, it takes two years or a year and a half to get a per­mit nor­mally — so what, it will take two years and two weeks now? This is man­u­fac­tured pain by the ad­min­is­tra­tion. It’s all polit­ics.”

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