WASHINGTON — President Barack Obama is scheduled to arrive in Oklahoma City on Wednesday for part of a four-state energy tour that will focus in Oklahoma on domestic energy production and the highly charged issue of the Keystone XL pipeline.
The president plans to travel Thursday to a pipe yard in Payne County owned by TransCanada, the company that has proposed building the Keystone XL pipeline to carry crude from Canada to the Texas Gulf Coast.
The administration in January rejected a permit for the northern segment of that pipeline because a route through Nebraska is still being finalized, but the president promised to expedite approval for the segment connecting the oil storage hub in Cushing to Port Arthur, Texas.
The pipe yard where the president will deliver remarks Thursday contains a few miles of pipe for that 500-mile construction project, according to TransCanada spokesman Terry Cunha.
Cunha said Tuesday that no TransCanada representatives will participate in Thursday's event.
“This is purely a White House event that is using our pipe yard for a backdrop,” Cunha said.
TransCanada had some hesitation about the event for safety reasons but not because there was any animosity between the company and the administration, Cunha said. After discussions with the White House, the company is comfortable with the safety measures taken for the pipe yard event, he said.
TransCanada is still waiting for approval from the U.S. Army Corps of Engineers before it can proceed with the
Building that segment will relieve a bottleneck of crude in Cushing and move cheaper domestic crude to refineries, Cunha said.
Obama's energy tour, which also will take him to Nevada, New Mexico and Ohio on Wednesday and Thursday, comes as the administration is being blamed by Republicans and oil company trade groups for not doing enough to increase domestic production and lower gasoline prices.
The president has countered by saying that domestic production has increased under his administration and that oil imports have dropped in every year of his term.
“Under my administration, America is producing more oil today than at any time in the last eight years,” the president said in a speech in Maryland on Thursday.
The administration, he said, has also “opened millions of acres of land in 23 different states for oil and gas exploration. Offshore, I've directed my administration to open up more than 75 percent of our potential oil resources.”
Before arriving in Oklahoma, the president on Wednesday is scheduled to visit oil and gas production fields outside of Maljamar, N.M., which, according to the White House, is home to more than 70 rigs drilling on federal land.
Energy executive responds
Harold Hamm, CEO of Continental Resources Inc., which has used horizontal drilling and hydraulic fracturing in North Dakota and Montana to tap into crude oil resources previously considered unrecoverable, said Tuesday that it was “ironic and almost absurd” that the president is going to Oklahoma to talk about his energy policies.
“The renaissance going on in the United States with crude oil and natural gas is because of one thing — it's horizontal drilling, precision horizontal drilling,” he said.
Hamm, who is an energy adviser to Republican presidential candidate Mitt Romney, said permitting for drilling on federal land has dropped dramatically in the last few years.
The Energy Information Administration, part of the U.S. Energy Department, reported last week that onshore production on federal lands is at its highest level since 2003 and that offshore production is higher than it was in 2008.
Hamm said that was production from permits approved before Obama took office in 2009. Since then, he said, federal drilling activity has slowed.
In many of his speeches about energy, Obama has been calling on Congress to eliminate the tax breaks used by oil and gas companies to write off risk and depletion of their resource. Since taking office, the president has proposed using $4 billion a year from the tax breaks to fund clean energy projects.
The Senate last year rejected a proposal to end the tax breaks for the five largest oil and gas companies.
Hamm said the tax breaks Obama is targeting “are the same deductions every other business in America gets. These are not subsidies.”