The administration of President George W. Bush still supports leasing in the Arctic National Wildlife Refuge and working with coastal states to increase access to the Outer Continental Shelf as ways to reduce reliance on imported oil and gas, US Energy Sec. Samuel W. Bodman said Mar. 29.
But it doesn’t feel that federal support for oil and gas research is justified at current prices, he told the National Ocean Industries Association’s 2006 annual meeting.
Bodman said reducing US reliance on unstable foreign oil and gas supplies has been a cornerstone of Bush’s energy policy for some time.
The “advanced energy initiative,” which Bush announced in his state of the union address, increases funding for clean energy programs and research at the Department of Energy by 22%, the secretary said.
“The money will go to develop technologies that will allow us to make greater use of clean coal, solar, wind, and nuclear energy to meet our electric power needs. It will also go to develop hybrid batteries, hydrogen fuel cells, and new ways of making ethanol to meet our transportation needs,” he said.
Difficult choices had to be made to free money to pursue these new technologies in a tight budget environment, Bodman continued.
“One of them, as you know, was not to seek funding to support research and development projects for the oil and gas industry. President Bush and I both believe that at current price levels, there is enough incentive for companies in this industry to fund these projects on their own,” he said.
Noting that many NOIA members are closely watching development of the new 5-year OCS lease sale plan at the Minerals Management Service, Bodman said, “I want to see producers like you gain as much access as possible to the 86 billion bbl of oil and 420 tcf of gas we believe are out there and can be recovered.”
Gas price, supply
Bodman said that since the Department of the Interior began to develop the present 5-year OCS plan in 2000, average natural gas prices have more than doubled. “Any steps we can take to expand our future access to nearby supplies will have an immediate, positive impact on markets and should help hold down future price increases. This will strengthen our economy over the long run,” he maintained.
Bodman began his address by paying tribute to the oil and gas industry’s response to Hurricanes Katrina and Rita late last summer. “Thanks to your hard work and improvising, much of the damage the hurricanes did to the oil and gas infrastructure has already been set right. The oil and gas is flowing again,” he said.
He said that in January, the federal government held a forum in Mississippi of federal, state, and local officials and private business people to discuss ways to improve hurricane responses.
“There was a general consensus that within the oil and gas sector, there needs to be more cooperation across company lines to repair shared infrastructure. The electric power industry has long relied on mutual aid agreements to restore essential facilities and services in the aftermath of storms and other natural disasters, and last year’s hurricanes highlighted the value of those arrangements,” he said.
Bodman said that if hurricanes damage the Gulf Coast’s energy infrastructure again in 2006, the administration will be ready again to tap the Strategic Petroleum Reserve and waive fuel blend standards where appropriate.✦
