OCS, oil shale activity should be part of bigger energy plan, Salazar says

Leasing of more of the US Outer Continental Shelf and development of oil shale should be considered only as part of a larger national energy strategy, US Interior secretary nominee Ken Salazar said on Jan. 15.

Salazar, who is currently Colorado's senior US senator, told the Senate Energy and Natural Resources Committee during his confirmation hearing that President-elect Barack H. Obama has made development of a new energy economy a top priority of his administration.

"We need to look at the OCS as an element within a comprehensive energy strategy. Given the opening up of a five-year plan with DOI, it's up to you and me to determine how we move forward on developing the OCS. There are places there where it is appropriate for drilling. There may be other places where it should be off-limits," Salazar said.

"The important thing is to move forward thoughtfully and make sure development occurs in a thoughtful way with attention to the affected communities," he maintained.

"With respect to oil shale, I believe we need to look at it as part of a comprehensive energy plan but should not be reckless in how we move forward . . . We shouldn't move forward too quickly until we answer all the questions surrounding its potential development. That's why the R&D initiatives that have been developed already are so important. They can provide answers to these very important questions," Salazar continued.

Restore integrity

He also pledged to restore DOI's integrity, starting with the US Minerals Management Service's royalties management program. "The issue obviously needs a review. I plan to look at recommendations and bills which have been proposed and hope to move forward to address the issue in the coming month, including developing a statutory, comprehensive approach to royalties management," he said.

"If confirmed, my first priority will be to lead [DOI] with openness in decision-making, high ethical standards and respect for scientific integrity. I will work to ensure that the department's decisions are based on sound science and the public interest, and not on the special interests. I want the public to be proud of the department's work and I want those who work for the department to be proud of their service," Salazar said.

He said that he would remain committed to reducing US dependence on foreign oil. Obama shares his belief that excessive US dependence on imported oil is "a grave threat to our national security, our planet and our economy," he indicated.

"We need to develop our resources, but we need to develop them in a responsible and thoughtful way. We can develop oil and gas resources, but we also need to make sure we take care of the habitat our hunters and fishermen value," Salazar maintained.

He said that there are opportunities, as US oil and gas resources are developed, to continue supporting the Land and Water Conservation Fund as well as to address economic problems. "As we deal with royalty reform, particularly with the MMS, we can work to make sure the money doesn't disappear into the dark hole of the Treasury but is used for land and water restoration and to help local communities which are affected by energy development," he said.

Regulatory delays

Committee members raised specific questions about overlapping regulation which leads to delays. "The number of differing agencies which must move the permits through creates a level of complexity and a process that can take years to go through . . . The way that we have our system set up is not conducive to an efficient process."
Ranking Minority Member Lisa Murkowski (D-Alas.) said.

"In all areas where there's a process in place, if we can find better ways to do it, we should. While the 2005 Energy Policy Act set up new processes [for oil and gas permits], we need to set up similar processes for electricity transmission siting," Salazar replied.

Byron L. Dorgan (D-ND) said that on an Indian reservation in his home state, he has been trying to get DOI and the Bureau of Indian Affairs "to create a one-stop shop so that oil wells can be drilled there the way they're being drilled on private land around the reservation. As it is, there are no less than 49 different processes involved. That needs to be addressed." Salazar responded that it would make sense to not place the reservation at a disadvantage if the process has been expedited around it.

Chairman Jeff Bingaman (D-NM) said that he thought it was terrific that Salazar recognizes the importance of the Interior secretary's being a major participant as the Obama administration formulates its energy, environment and global climate change policies. Committee member John Barrasso (R-Wyo.) asked the nominee if he believes that the Endangered Species Act should be used to address global climate change impacts. "There is no doubt that global warming and climate change is having a major impact on activities and lives around the world, including the species we want to protect. We will move forward carefully in considering this but currently have no plans," Salazar said.

When Bob Menendez (D-NJ) asked how he sees his role in relationship to former US Environmental Protection Administration chief Carol M. Browner who Obama has designated coordinator of his administration's energy, environment and global warming policy, Salazar replied: "In my conversation and agreement with the president-elect, I report to him. That means that I will play a keystone role in helping to craft the energy moon shot we will take in part through the economic stimulus package that is being crafted and in the energy legislation that will come before this Congress."

Contact Nick Snow at nicks@pennwell.com

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