President Barack Obama pledged that by 2025 the United States will cut oil imports by one-third through the expansion of domestic sources and regulation.
The United States will continue to develop offshore oil and gas sources along with alternatives, including biofuels and natural gas, said Obama during a speech at Georgetown University on March 30.
Obama referenced a Department of Interior report that showed 57% of all onshore oil and gas leases and 70% of offshore leases have not been explored or developed. Obama said the department is developing incentives to hasten exploration, including shortening some lease terms to encourage earlier development.
Republicans and the oil industry have complained the administration has been slow to issue deepwater drilling permits since lifting the moratorium imposed after the BP oil spill.
Obama's comments regarding undeveloped offshore leases drew criticism from American Petroleum Institute Upstream Director Erik Milito. He likened the president's remarks to a landlord refusing to provide a tenant with keys to an apartment and then complaining about the premises being vacant.
"The report completely whitewashes the fact that in many cases the reason these leases have no exploration plans is that the BOEMRE is sitting on those plans," said Milito.
The BOEMRE is the Bureau of Ocean Energy Management, Regulation and Enforcement, which is the federal agency responsible for overseeing offshore oil and gas development.
The American Iron and Steel Institute issued a statement supporting all types of new energy development referenced during Obama's speech but expressed concern regarding proposed regulations.
"The abundant supply of natural gas now available in this country as a result of newly accessible shale deposits can help drive both economic recovery and energy independence," said AISI President and CEO Thomas Gibson. "We are pleased that the president acknowledged this key domestic energy resource in his speech, but are concerned that his proposals to increase regulation of natural gas production will undermine our ability to access this strategic, low-cost, clean energy."
Obama's speech didn't offer much that hasn't already been said regarding energy policy, said Fadel Gheit, a managing director and senior analyst with investment firm Oppenheimer & Co. Inc.
"It's nothing new; we've heard this from five previous presidents," Gheit said. "Plans are fine but the implementation is the difficult part."
Gheit said Republicans are making it more challenging for the president to implement an energy policy.
"The Republicans jumped on him immediately," Gheit said. "They say he caused the jump in gasoline prices because of the moratorium, which couldn't be farther from the truth."
The United States will continue to develop alternatives to oil by increasing natural gas supplies and biofuels production, Obama said. His administration has set a goal to generate 80% of the nation's electricity from "clean energy" sources by 2035. This includes sources such as natural gas, nuclear power, clean coal, wind, solar and biomass.
Industry experts say the United States has an abundance of natural gas supplies that have been unlocked in shale formations by new drilling technologies. The United States currently has gas supplies that could last the country more than 100 years, Gheit said.
Obama said he will address environmental concerns regarding natural gas exploration by launching an initiative to develop recommendations for shale gas extraction practices.
Biofuels will also play a role in energy security, Obama said. His administration has set a goal to break ground on at least four commercial-scale cellulosic or advanced biorefineries over the next two years.
The president wants to cut energy usage by consumers by developing fuel economy and greenhouse-gas emissions standards for 2017 through 2025 model year passenger vehicles. Current standards for model years 2012 through 2016 will raise average fuel economy to 35.5 miles per gallon.
Obama also noted his previously announced goal of putting 1 million electric vehicles on the road by 2015. His 2012 budget proposes a $7,500 tax credit for consumers who purchase electric vehicles.
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