Washington, D.C. — Today, responding to the American Petroleum Institute’s new report blaming environmental protections for high energy prices, government watchdog Accountable.US released the following statement and fact check.
It may be a new year, but the American Petroleum Institute is trafficking in the same old lies to keep the gravy train running for already wealthy oil and gas company executives. There is absolutely no correlation between the protection of our public lands and retail gasoline prices – and Big Oil knows it. The Biden administration should protect these cherished landscapes for future generations without further delay and the oil and gas industry should finally commit to paying their fair share in leasing royalties.”
Kyle Herrig, president of Accountable.US
RHETORIC v. REALITY
RHETORIC: Big Oil Says The Oil And Gas Industry Was Harmed By The Biden Administration’s Public Lands Leasing Moratorium. [API, State Of American Energy 2022, 01/07/22]
REALITY: Onshore Oil And Gas Production Has Trended Upward Since The Obama Administration And The Industry Has Millions Of Acres Worth Of Leases Stockpiled.
- Since President Biden’s Order To Pause New Public Lands Oil Leases, Royalties From Existing Leases Have Set Recent Record Highs. Between January and April of 2021, royalties from federal onshore oil and gas production totaled $919,242,807.59. This is more than any other Jan-April period on record. [Interior Office of Natural Resource Revenue, accessed 05/26/21]
- The Oil And Gas Industry Has A Stockpile Of 7,700 Unused Leases.“Onshore and offshore, the oil and gas industry is sitting on approximately 7,700 unused, approved permits to drill.” [Department of the Interior, accessed 02/25/21]
- The Oil And Gas Industry Has A Stockpile Of Unused Leases Covering 13.9 Million Acres Of Public Land. “Namely, of the more than 26 million acres under lease to the oil and gas industry onshore, nearly 13.9 million (or 53 per cent) are unused and non-producing. Offshore, of the more than 12 million acres of public waters under lease, over 9.3 million (or 77 per cent) are unused and non-producing.” [Offshore Energy, 01/28/21]
RHETORIC: Environmental Protections Are To Blame For High Consumer Energy Prices. [API, State Of American Energy 2022, 01/07/22]
REALITY: The Oil And Gas Industry Enjoyed Tens Of Billions In Profits In 2021.
- Oil And Gas Companies Benefit From Increased Oil Prices. “In addition, the surge in domestic oil production in recent years means that rising oil prices are no longer an unambiguous negative for the U.S. economy: Higher prices are bad news for drivers and consumers, but good news for oil companies and their workers, and the vast network of equipment manufacturers and service providers that supply them.” [New York Times, 07/06/21]
- “US Oil Explorers Are Making More Money Than At Any Other Time Since The Shale Revolution Began Over A Decade Ago.” “America’s right-leaning oil industry has little political will to help President Joe Biden lower energy prices by raising production. But there’s another reason why Texas wildcatters are refusing to help: the status quo is just so profitable. U.S. oil explorers are making more money than at any time since the shale revolution began over a decade ago, according to Deloitte LLP. And this may just be the beginning. Free cash flow, the key metric watched by investors, probably will increase by 38% next year, presuming oil prices remain elevated, according to Bloomberg Intelligence.” [Bloomberg, 11/15/21]
REALITY: There Is Not A Correlation Between Public Lands Oil Production And Retail Gasoline Prices
- A Side-By-Side Comparison Of Retail Gasoline Prices Oil Production On Public Lands Over Time Does Not Show A Strong Correlation. The price of gasoline has fluctuated independently of changing trends in public lands oil and gas production. [ONRR, accessed 02/18/21] and [EIA, accessed 02/18/21]
- For Example, Between January Of 2014 And February Of 2016, Oil Production Trended Upward While Gasoline Trended Downward With A Price Spike In The Winter Of 2015. [ONRR, accessed 02/18/21] and [EIA, accessed 02/18/21]
- Between September 2010 And June 2014, The Price Of Gasoline Spiked And Remained High While Oil Production Trended Downward. [ONRR, accessed 02/18/21] and [EIA, accessed 02/18/21]
RHETORIC: Many Oil And Gas Regulations “Hinder American Progress.” [API, State Of American Energy 2022, 01/07/22]
REALITY: API Routinely Opposes Regulations Even As Its Member Companies Cause Many Of The Worst Onshore Oil And Gas Spills Of The Last Decade.
- API Advocated For Relaxed Standards Around A Pollutant Linked To Asthma And Higher Mortality In 2017. “Exxon has told the EPA that estimating a risk of death from particulate matter is “unreliable and misleading” while, in 2017, API demanded the agency relax standards around nitrogen dioxide – a pollutant linked to asthma in children and higher mortality in adults from heart disease and cancer – claiming there was no proven association with harm and existing rules were “more stringent than necessary”.” [The Guardian, 03/18/21]
- API Backed Trump Methane Regulation Rollbacks In August 2020. “In August, API backed the Trump administration’s rollback of Obama-era regulations targeting methane emissions from the oil and gas sector, saying at the time that the revisions were consistent with the Clean Air Act.” [E&E News, 01/21/21]
- As Of 2017, Nine Of The Twenty Largest Onshore Oil Spills In The 2010s Came From API Member Companies, Resulting In 3,622,857 Gallons Of Oil Polluting Land And Waterways. [USA Today, 11/17/17]
RHETORIC: Asking The Oil And Gas Industry To Pay Their Fair Share In Taxes Is Harmful. After All, The Oil And Gas Industry Contributes To States And Communities Through Royalty Payments And Taxes. [API, State Of American Energy 2022, 01/07/22]
REALITY: Royalty Rates Are Outdated, Giving Oil And Gas Companies A “Sweetheart Deal” That Costs Western States Over A Billion Dollars Annually.
- Senator Chuck Grassley: Artificially Low Royalty Rate Is A “Sweetheart Deal” For Oil Companies. “The law no longer reflects fair market value. It has become a sweetheart deal for legacy energy companies. It’s shortchanging the taxpayer and depriving public coffers from their fair share of revenue generated from public lands.” [Senator Chuck Grassley, 03/06/20]
REALITY: Oil And Gas Companies Enjoy Billions In Tax Breaks And Government Handouts – In Many Cases Paying Nothing In Federal Income Taxes.
- 22 Oil And Gas Companies On The Fortune 500 Paid Nothing In Federal Income Taxes In 2018. [Institute On Taxation And Economic Policy, 04/11/19]
- Oil And Gas Companies Got $1.9 Billion In Tax Breaks From The CARES Act During The Pandemic. [The Hill, 05/15/20]
- The Main Street Lending Program Gave $828 Million In Bailouts To Oil And Gas Companies During COVID-19. “Forty-six fossil fuel companies have received Fed-subsidized loans totaling $828 million since the program started in July. The average loan size, $18 million, is nearly double the program’s average loan size of $9.8 million, or $9.2 million excluding fossil fuels. Twelve of the fossil fuel loans were worth $35 million or more, accounting for more than 30% of the program’s loans of that magnitude. See the full list of companies here.” [Bailout Watch, 12/16/20]
- Oil, Gas, Mining, And Related Companies Took In Over $4.5 Billion Through The Paycheck Protection Program (PPP). “In total, 22,382 oil, gas, mining and related extractive resource corporations received a staggering $4,530,469,847 in taxpayer-funded monies through the PPP. In contrast, the wind and solar sector received a total of $164,987,228, going to some 1,133 businesses. The average loan amount was nearly 40% higher for extractive resource corporations as well.” [Accountable.US, 12/11/20]
RHETORIC: The Oil And Gas Industry Provides Millions Of Jobs. [API, State Of American Energy 2022, 01/07/22]
REALITY: The Oil And Gas Industry Has Been In A Long-Term Job Decline Since 2014, With Automation Threatening To Increase Job Loss.
- The Oil And Gas Industry Increased Its Hiring During The Shale Boom But Begin Laying People Off In As Oil Prices Fell, Leading To 200,000 Layoffs From 2014 To 2019. “Then came the shale boom a decade ago and the industry ramped up its hiring. But problems started appearing in 2014 when the boom triggered a collapse in oil prices to US$50/bbl, and the talent narrative shifted to mass layoffs.2 From July 2014 to June 2016, the industry laid off 200,000 people (figure 1).” [Deloitte, 10/05/20]
As Oil And Gas Jobs Become Automated, The Industry Could Permanently Drop 140,000 Jobs.
- Automation In The Oil And Gas Industry Could Result In The Permanent Loss Of 140,000 Jobs In The US. “A recent analysis from the Norwegian research firm Rystad Energy, published last week, finds that “robotic drilling systems can potentially reduce the number of roughnecks required on a drilling rig” by 20 to 30 percent over the next decade, translating to hundreds of thousands of jobs lost and billions of dollars saved worldwide. In the United States, Rystad Energy predicts that could mean the permanent loss of 140,000 jobs.” [The New Republic, 04/05/21]
Oil And Gas Jobs Are Heavily Subject To The Industry’s Boom And Bust Cycles, Resulting In Jobs That Can Quickly Disappear.
- Oil And Gas Jobs Are Susceptible To A “Boom And Bust” Cycle That Can Create High Paying Jobs That Are Quick To Disappear. “But he started to get weary of the repeated rounds of layoffs as the industry went through its boom and bust cycles. […] Oil and gas jobs are lucrative but volatile. They can create incredible opportunities, particularly for workers without college degrees, but they can disappear at the drop of a spot price.” [NPR, 10/21/20]
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