EPA regs could hamper oil, natural gas production, report says

Despite rhetoric to the contrary, the Obama administration is poised to deal a major blow to U.S. oil and natural gas, a leading industry group charged Thursday.

Domestic production of both fuels could plummet if proposed Environmental Protection Agency regulations, designed to limit emissions from well sites, go into effect later this year, according to an extensive new study commissioned by the American Petroleum Institute.

The natural gas extraction technique known as “fracking” would be hardest hit, and fuel extracted via the popular process would drop by about 52 percent, according to a new study commissioned by API. Total gas production would decrease by about 11 percent, while domestic oil production could fall by as much as 37 percent, the report says.

The survey comes as the Obama administration is facing increasing heat over its energy policy, particularly in light of surging gas prices at the pump for consumers. Polls suggest the issue is cutting into President Obama’s political support, and Mr. Obama was in suburban Maryland on Thursday for the latest in a string of speeches defending his administration’s record on energy and attacking his Republican critics for pushing what he said were unrealistic solutions to the current squeeze.

“Every time prices start to go up — especially in an election year — politicians dust off their three-point plans for $2 gasoline. They head down to the pump, make sure a few cameras are following them, and start acting like they can wave a magic wand and you’ll have cheap gas forever,” the president said in prepared remarks to an audience at Prince George’s Community College in Largo.

Mr. Obama openly mocked skeptics of his proposals to promote alternatives to fossil fuels, comparing them to those who questioned the commercial viability of television or argued against Christopher Columbus’ voyage to America.

“If some of these folks were around when Columbus set sail, they probably must have been founding members of the Flat Earth Society. They would not believe that the world was round,” Mr. Obama said.

The API study was released the same day a top House Republican released data from the Energy Department showing that fossil-fuel production on federal lands has fallen since Mr. Obama took office. The information compiled by the Energy Information Administration (EIA) shows that total fossil-fuel production on federal lands has dropped 7 percent since 2009 and 13 percent since 2003. From 2010 to 2011, total oil production on federal lands is down 14 percent and gas production dropped 11 percent.

Leading Republicans say they see a disconnect between the administration’s words and its actions. House Natural Resources Chairman Doc Hastings, Washington Republican, said the new EIA data show that President Obama’s “anti-energy policies” are taking the country in the wrong direction.

“President Obama has been more than happy to take credit for his predecessors’ actions to advance energy production on federal lands, however, we know that while bringing federal oil and natural gas production online can take the better part of a decade, slowing production can happen relatively quickly,” Mr. Hastings said in a statement.

A White House spokesman did not return a request for comment on the report.

The White House released its own report on Monday saying that overall U.S. crude oil production is at its highest level since 2003, at 5.6 million barrels per day. The administration’s interagency report said domestic oil production increased by an estimated 120,000 barrels a day last year over 2010.

But Republicans argue that Mr. Obama isn’t doing enough to increase energy production on federal lands, action that is directly in his control.

Mr. Hastings said the EIA data reveal that America is relying increasingly on oil and natural gas production on state and private lands. He said that’s due to “regulations, red tape and President Obama’s policies that are driving production off of federal lands.”