Recent reports from Standard & Poor's indicate the US oil and gas supply is being threatened by the Bush administration's failure to counter the effects of plunging supplies and tensions in other producing nations. The US offshore oil and gas program is a case in point that exemplifies why the US needs to take a fresh look at how it is managing its own resources.
The US offshore is an important source of domestic oil and gas. Today more than 25% of our domestic production of oil and gas comes from the offshore areas of six states: Alabama, Alaska, California, Louisiana, Mississippi, and Texas. An estimated 60% of the remaining US domestic oil and gas resources is located offshore. Yet much of it is currently off-limits because of congressional and presidential restrictions.
An overly aggressive leasing policy in the early 1980s led to the initial restrictions. Since then the areas off-limits to leasing have grown from less than 1 million acres to more than 600 million acres today. These restrictions are political in nature, have no basis in sound science, and ignore the impressive advances in technology. Something dramatic needs to be done to unlock the potential of this resource to the benefit of the American people.
Offshore exploration technology in water depths as great as 10,000 ft rivals the space industry in complexity and safety. Nations throughout the world embrace this technology and seek American companies to help develop their offshore energy resources.
This exploration is accomplished without sacrifice of the environment or threat to the safety of those involved. The worker safety record for offshore exploration and development is remarkable. According to Bureau of Labor Statistics data, the injury rate for offshore oil and gas workers for the year 2000 was less than one third the injury rate for all US workers.
As a nation we are vulnerable because we depend on the Organization of Petroleum Exporting Countries for almost 50% of our oil imports. In the past 30 years we should have learned the consequences of dependence on high levels of imports from areas of political and military unrest. American men and women in uniform risk their lives to ensure our secure access to oil and to preserve our standard of living.
Politics the driver
But politics continues to be the driving factor as more and more acreage is put off limits despite an admirable environmental and safety record.
Recent actions have been taken to curry voter approval rather than deal with a difficult but important issue for our nation's economy and national security.
In Florida, in an apparent bid to bolster Gov. Jeb Bush, the Bush administration bought back leases in the eastern Gulf of Mexico preventing development of a significant natural gas discovery. In California, the administration also is attempting to help Republican gubernatorial candidate, William Simon, by supporting his efforts to prevent further offshore oil and gas activity off California. These actions may help the election prospects of these men, but the long-term interests of the American people are a heavy price to pay.
Decisions on energy policy should be based on sound science and the use of best available technology. In addition, it is essential that the American public understands the real risks of development, including the risks of failing to pursue development.
One of the factors inhibiting development is the public perception that offshore oil development results in oil spills. Yet a recently released study by the National Academy of Sciences, "Oil in the Sea III: Inputs, Fates, and Effects," concludes that only 3% of the ocean pollution caused by human activity is the result of offshore oil and gas activity. Far more pollution results from land-based runoff and small watercraft than from offshore oil and gas development.
Natural oil seeps that result from geologic formations beneath the seafloor account for 150 times more oil in the water than does offshore oil and gas development.
Return to sanity
How do we bring sanity back to the energy picture? The US can't hope for a rational energy policy until the American people become better informed about the true risks of drilling-which are much less than generally supposed -and about the true costs of increasing imports.
In the future we will need to develop our domestic resources, particularly natural gas, and will not be able to do so because we will not have permitted the necessary predicate events, namely the timely and careful exploration essential to safe development. Environmentally conscious development takes time.
We need to find a way that allows the American people to make informed decisions, yet our political process is not good at solving this type of problem. No one in political life wants to alienate a voter by either supporting fuel efficiency standards, higher fuel costs, or a more expansive offshore oil and gas program. To deal with politically charged issues such as military base closures, our political leaders settled on a commission to look at the facts and to make recommendations. This may be the route to follow for the changes needed in the offshore oil and gas program.
Americans need the facts presented to them so that they realize that just saying "no" has a price, be it a reduced standard of living or military action. The president and the Congress would need to agree to the establishment of such a commission and provide funding. They also would need to appoint the members of such a commission, taking care to include representatives from the various stakeholder groups.
As Americans, we need to wake up to the fact that our choices have consequences. When it comes to energy, the costs to our economy and our security will only get higher and higher if we fail to address this issue in a thoughtful manner. A fresh look is sorely needed.
The author
Carolita U. Kallaur was named associate director for offshore minerals management, Minerals Management Service, on Jan. 21, 1997, and served in that post until 2002. Prior to that position, from Nov. 12, 1995, Kallaur served as deputy director of MMS. Kallaur also served as the chief financial officer for MMS, served as chair of its Information Resources Management Council, and was the MMS representative on the Department of the Interior Management Council. Prior to her appointment as deputy director, she served in that position in an acting capacity, starting on Aug. 20, 1994. On Jan. 26, 1993, Kallaur was designated by Interior Sec. Bruce Babbitt to serve as the acting director of MMS, assisting the transition between administrations. She served in that capacity until July 8, 1993, when a permanent director was named. She was then named special assistant to the director and, later, acting deputy director.
Kallaur began her federal career with Interior in 1968 as an economist with the Bureau of Land Management. She was chosen to work with the secretary's Office of OCS Program Coordination and was then named assistant director for OCS program coordination. She joined MMS when it was formed in 1982 and has served as chief of the Offshore Leasing Management Division, deputy associate director for offshore leasing, and program director of the Office of International Activities and Marine Minerals. Kallaur has a BA and an MA in economics from the University of Connecticut.
