Two US House members from California offer contrasting OCS proposals

Two US House members from California presented dramatically different viewpoints as the Natural Resources Committee focused on state perspectives in its second 2009 Outer Continental Shelf hearing.

Two US House members from California presented dramatically different viewpoints as the Natural Resources Committee focused on state perspectives in its second 2009 Outer Continental Shelf hearing on Feb. 24.

Democrat Sam Farr, whose district includes the Monterey Peninsula, said that moratoriums should be reinstated while Congress develops a comprehensive ocean resources management strategy. Republican Dana Rohrabacher, whose district farther south includes parts of Long Beach, said that domestic offshore energy resources could significantly contribute to a US economic recovery.

Their remarks opened the committee's second of three scheduled hearings on the OCS. The first on Feb. 11 heard from witnesses representing environmental organizations and coastal tourism groups. A final hearing on Feb. 25 will present the oil and gas industry's perspective.

Natural Resources Committee Chairman Nick J. Rahall (D-W.Va.) said in his opening statement that the hearings were designed to give all sides a chance to present their viewpoints as the committee begins working to determine the best way to accommodate oil and gas drilling while ensuring that offshore resources are managed in an environmentally and fiscally responsible manner.

"Our coastal states are critical to this discussion. They are literally on the front lines of the offshore drilling debate and their needs and challenges are vitally important considerations for us all," he maintained.

"As I stressed at our last hearing, I am not opposed to drilling. I understand the benefits of domestic oil and gas production. But I am also aware of the risks. This ongoing discussion is designed to examine the trade-offs that would be involved in expanding offshore oil and gas drilling, and I look forward to working with members on both sides of the aisle as we determine the best way to move forward," Rahall continued.

'Greatest natural resource'

Farr said that since the waters off his district's coast are protected by legislation authorizing the Monterey Bay National Marine Sanctuary, he was testifying on behalf of the oceans, "perhaps the greatest natural resource on earth, and one that we all share." He said that while offshore oil and gas technology may have improved, it still poses risks from exploration through extraction to transportation.

"Further, the debate on fossil fuel extraction seems almost archaic given our understanding of the adverse effects of their consumption on our atmosphere. Granted, our economy is still oil-addicted, but if alternative, renewable energy source received the same level of investment as fossil fuel-based sources, surely we would make more substantial progress in weaning our oil dependency," Farr continued.

"If the US goal of reducing carbon emissions is to be realized, we might as well acquaint ourselves with the idea that drilling is not the solution, especially when clean, renewable energy sources are within our grasp," he said.

Rohrabacher disagreed with Farr's statement that offshore oil and gas activity poses unacceptable risks. Technology has improved dramatically since the 1969 crude oil spill in the Santa Barbara Channel, he said.

"Even with the old technology, the chance of an oil spill was greater from a tanker than from offshore drilling. The more environmental radicals say we can't drill, the more oil we've had to drill by tanker. They've ironically made oil spills more likely. Furthermore, by making us more dependent on foreign production which is not encumbered by the same standards, the outcome has been a total disservice for environmental concerns," he declared.

'Stuck in the '60s'

The same environmental activists who oppose offshore oil and gas activity also are fighting alternative energy development on the OCS and in the southwestern US deserts, according to Rohrabacher. "I think activists control policy in America. Many of them are very sincere, but they're stuck in the '60s. We have technology now that is better. We haven't had one new hydroelectric dam, nuclear power plant or refinery in 30 years. That's been at least $1 trillion out of our economy that would have been there otherwise. We're in serious times now and people need to look at all the options," he said.

The two House members agreed that federal revenue from offshore energy production should be shared with coastal states, but they disagreed on the way it should be handled. Farr said that a portion should go directly into an ocean trust fund based in Washington which would "support the focused efforts of coastal states, territories and agencies in addressing the critical ocean and coastal science, management and protection needs of our nation, and is essential to implement the many other recommendations of the national ocean commissions." Rohrabacher said that the money should go directly to coastal states and communities which feel the impacts of offshore energy development.

Officials from five states also presented widely varying views. Ted Diers, the coastal program manager in New Hampshire's Department of Environmental Services who also chairs the Coastal States Organization, said that it is essential that any offshore energy plan which is formulated retain provisions which protect state sovereignty, include both renewable and traditional energy sources, and direct portions of federal revenue both to coastal states and to an ocean management research fund.

Robert G. Marvinney, director of Maine's geological survey, said that the state has the highest per capita dependence on No. 2 heating oil of any in the nation. "The past several winters have been particularly difficult for low and middle-income and elderly [residents] who are making very difficult choices between home heating and other vital expenditures. Energy costs have grown from 5% to 20% of a typical Maine family's budget in just the past 10 years," he told the committee.

The state has responded by focusing on renewable and alternative energy sources, including cellulosic ethanol from its extensive forests and potential wind and tidal power in the Gulf of Maine, Marvinney said. The area immediately off its coast is geologically unsuitable for oil and gas development, but the Georges Bank fishing area farther out has potential and was leased during the 1970s, he continued. Any new oil and gas activity there will need to recognize the area's vital role as a commercial fishing resource, he said.

Rig construction

"The proximity of the Georges Bank is such that any support base for exploration and development activities there would likely be situated in Massachusetts or Rhode Island. That said, Maine has a track record of benefiting from petroleum exploration. One Maine corporation recently constructed two semi-submersible platforms for petroleum development; [its] work would certainly be enhanced by Georges Bank development. However, this corporation has also demonstrated that [it] can compete globally since those two rigs were deployed in waters off Brazil," Marvinney said in his written testimony.

Frank W. Wagner, a Virginia state senator, noted that the Old Dominion has taken the lead in asking the federal government to resume leasing off the East Coast. The state's official policy is to request that the federal government allow for exploration of natural gas only and no closer than 50 miles from the shoreline, he said. "However, there are many in Virginia, including myself that, consistent with Navy training requirements and environmental review, would take a much broader approach," he said, referring to the concentration of military bases around Norfolk.

"We in Virginia were pushing this policy long before $4/gal gasoline and prior to the current large-scale recession in which we find ourselves. During peak energy prices last summer, it was estimated that this nation was spending nearly $700 billion a year importing hydrocarbon energy from outside the borders of this country. This dollar figure is surprisingly similar to the [Troubled Assets Relief Program] package and the economic stimulus package that this Congress passed within the last few months," Wagner said.

Mike Chrisman, California's natural resources secretary, said that while California has a long history of offshore oil and gas development, the 1969 Santa Barbara Channel spill had major ramifications for both the state and the nation. "While the risks of such an event can be reduced today because of new technologies, for California the adverse environmental and economic impacts of new oil and gas leasing and development off our coast (from oil spills, air quality, water quality and visual impacts) far outweigh the benefits generated from these activities," he said.

The state and its residents have become leaders in energy efficiency and development of renewable energy, Chrisman told the committee. "California uses less electricity per person than any other state in the nation. Indeed, over the last 25 years, California's per capita electricity use has remained nearly flat while nationwide demand has increased 50%. This has occurred despite the fact that homes are bigger and our population tends to have more appliances, televisions and other electronic equipment. Whether we are talking about electricity, natural gas or transportation fuels, gains in energy efficiency can temper energy demand, hold down consumer prices and reduce the environmental impact associated with traditional energy sources," he said.

Other businesses thrive

Garret Graves, director of Louisiana's Office of Coastal Activities, said that other businesses in the state have benefited from the oil and gas exploration and production off its coast. "After several decades of production, we're one of the top tourist destinations in the world. More than 24 million tourists visited our state last year. Tourism in the New Orleans area, including this week's Mardis Gras celebration, provides a $5 billion economic impact yearly. It's one of the state's largest economic sectors and generates an estimated $10 billion annually," he said.

In his written testimony, Graves noted that MMS reported that less than one thousandth of 1% of the more than 4.7 billion bbl of oil which have been produced since 1980 have been spilled. The DOI agency also found that there has not been an oil spill of more than 1,000 bbl in the last 15 years from a US offshore platform, and that during Hurricanes Katrina and Rita in 2005, there were no identified environmental impacts from any OCS spills.

"As we look at our economic challenges, we should continue to look at oil and gas as a source of our energy. We have extraordinary resources out in the ocean which could be recovered and significant revenue that could be generated. I urge the committee to look at all the tools that are available and not say no to offshore production," he told the committee.

Several committee members expressed their own views. "I agree with Mr. Farr that we should have smart use of the oceans. There are critical habitats there. But as I've traveled my district in East Texas, farmers tell me they looked for a Prius tractor and couldn't find one. They also couldn't afford diesel fuel and gasoline," said Louie Gohmert (R-Tex.).

"Listening to the discussion here, we seem to agree on some basic concepts. We need a comprehensive energy policy. We need to be less reliant on foreign sources. Where we disagree is how we develop that energy policy. No one has developed a credible road map using all the tools in our energy toolbox because they try to eliminate certain options such as leasing more federal lands to generate revenues. I think the American public is frustrated that we can't do this," observed Jim Costa (D-Calif.), who chairs the committee's Energy and Mineral Resources Subcommittee.

Contact Nick Snow at nicks@pennwell.com

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