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US FAVORS HARD, COSTLY CHOICES ON GAS SUPPLY

Bob Tippee

It's only a coincidence. But it reflects a US political prejudice that endlessly obstructs policy-making on energy.

On Dec. 2, ChevronTexaco Corp. reported that it had applied to build and operate a deepwater port off Louisiana to import liquefied natural gas.

Also on Dec. 2, the 9th US Circuit Court of Appeals upheld a lower court ruling that blocks oil and gas drilling on undeveloped federal leases off California.

The US needs projects like ChevronTexaco's LNG-import scheme, called Port Pelican. It needs new sources of gas supply.

And it would need expansion of its capacity to import gas no matter how the court ruled on California oil and gas leasing.

Importing LNG, though, is a hard and relatively expensive way for a country to procure natural gas.

An easier and cheaper way is to produce gas from domestic resources.

As a nation, the US prefers the hard and expensive way.

It won't lease federal acreage for oil and gas activities off the West and East Coasts, in most of the Eastern Gulf of Mexico, and in much of the onshore West.

And where it has issued oil and gas leases in those areas it restricts activity. The 9th Circuit Court of Appeals ruling, for example, upholds the state's ability to annul rights to conduct operations under existing federal leases.

Operators encounter similar obstacles on federal onshore leases.

Refusal to lease and to allow full work on existing leases forecloses exploration and development of gas resources estimated by the National Petroleum Council at 21 tcf off the West Coast, 137 tcf in the Rocky Mountains, 24 tcf in the Eastern Gulf of Mexico, and 31 tcf off the East Coast.

That's potential gas supply the US could tap the easy and cheap way. But absurd phobias about drilling and production steer it toward harder and costlier choices.

Judges in the California court ruling felt obliged to invoke memories of the 1969 Santa Barbara Channel oil spill, as though industry hasn't learned anything about environmental safety in the past third of a century.

And Californians wonder why their energy costs so much.

(Online Dec. 6; author's e-mail: bobt@ogjonline.com)


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