Interior Secretary Ken Salazar heard from two polar opposites last week -- Anchorage, AK, which was gung-ho for oil and natural gas development on the Outer Continental Shelf (OCS), and San Francisco, which resisted the prospect. Alaska Gov. Sarah Palin even went as far as to suggest that halting oil and gas development would exacerbate global warming.
"Stopping safe, responsible domestic energy production of preferred fuels does not solve the issues associated with global warming and threatened or endangered specifies, but really it can make it worse," she said during a Department of Interior hearing in Anchorage last Tuesday. The hearing in Alaska's largest city was the third of a four-city tour to gather information to be used in rewriting a five-year leasing plan for the OCS that was issued in the final days of the Bush administration (see NGI, Jan. 19). It was followed by a hearing in San Francisco last Thursday.
Palin said a "dramatic increase in natural gas" will be key to meeting the nation's energy needs during a transition to green energy alternatives. "Keeping Alaska's OCS lease sales [and] exploration and development programs on schedule, especially in the Beaufort and Chukchi Seas, is critically important to that effort."
The Alaska offshore has mean technically recoverable oil reserves of 30 billion bbl and mean technically recoverable gas reserves of 221 Tcf, according to Palin.
"Delaying the [development of the] OCS will lead to premature shutdown" of the Trans Alaska Pipeline System as well, which would mean the end of oil production from the North Slope, she said. Palin further noted that "access to the large gas potential in the OCS" is critical to the success of a gas pipeline from Alaska to the Lower 48 states.
"This is not a choice between producing energy and protecting the environment. I am confident that we can and we will do both," agreed Sen. Lisa Murkowski (R-AK). "I'm confident that we can have all of our resources [traditional and renewable] for the benefit of our economy and our energy security without harming our environment, without harming our fisheries, without harming the land that is so essential," she said.
"The potential for oil and gas produced offshore [Alaska] is great," Murkowski said. The Chukchi Sea alone has the potential for 15 billion bbl of oil and 77 Tcf of natural gas, she noted.
"Let Alaska help meet that worthy goal" of President Obama's to reduce the country's dependence on foreign energy sources, Murkowski said. In addition to oil and gas, she noted that Alaska's offshore has "rich opportunities" for harnessing wind, tidal and wave energy sources.
"I applaud the Obama administration for [its] focus on renewable energy resources and conservation, but oil and gas will continue to supply the majority of this nation's energy for a long time. I believe most of it should come from secure, reliable domestic sources, especially Alaska," said Sen. Mark Begich (D-AK).
In addition to pushing for greater development of OCS oil and gas, Palin and Begich called for a change in the current federal law to provide for sharing of OCS revenues with states that allow drilling off their coastlines. "Alaska is one of the only states that does not receive a portion of revenues generated in the OCS," Palin said. A share of OCS revenues should accrue to coastal states, Begich agreed.
But the audience in San Francisco last Thursday was a sharp contrast with the Anchorage crowd. West Coast officials were vehemently opposed to any new offshore oil and gas development, citing economic, environmental and "spiritual" reasons for continuing a ban on OCS. Opponents included U.S. Sen. Barbara Boxer (D-CA), Oregon Gov. Ted Kulongoski, and California Lt. Gov. John Garamendi.
Salazar also quizzed officials on renewable energy development. There was general agreement that the nation needs to begin transitioning to more reliance on renewables, although speakers disagreed on how much, if any, of this development should be sited offshore.
Boxer and Garamendi said that aside from any exploration and production activity, the California coast is responsible for $23-45 billion in economic activity annually, led by year-round tourism, recreation and fishing. They called on the Obama administration to reinstitute the drilling ban as part of updating the five-year plan (2010-15) for OCS leasing. Former President Bush last July removed the executive ban on oil and natural gas drilling in much of the federal OCS, while Congress let its moratorium on offshore drilling expire last October (see NGI, Oct. 6, 2008; July 21, 2008).
Boxer and other California congressional representatives questioned why more OCS acreage should be opened when the oil and gas industry is not actively pursuing leases on 68 million offshore and onshore acres that it already has. Producers dispute the allegation that they are idly sitting on leases.
In responding to questions raised by Salazar, Kulongoski said the nation needs to transition away from fossil fuels, but it will take a long time, and in that transition, oil and gas will continue to play a major role.
"I think it is going to be a considerable amount of time before all of the renewables we talk about make an appreciable impact on the country's energy portfolio," Kulongoski said. "We are going to be using oil and gas for some time, but we have to tell the people we want to change and move forward; this [fossil fuel reliance] can't continue forever."
Rep. Barbara Lee (D-CA), who represents Oakland, said she thinks the best environment going forward is one in which "our coastline remains free of offshore drilling and our demand for fossil fuels is diminished." She wants an emphasis on renewable energy sources as a means of developing new, good-paying urban-based jobs for young people. "I think it is very critical that we invest in R&D [research and development] in the renewable energy sources and also look at how we train our young people as a pathway out of poverty."
Officials, particularly from coastal areas such as Santa Barbara County where an infamous oil spill occurred 40 years ago, expressed deep distrust of the oil and gas industry, saying that the "drill, baby, drill" cry of some officials is "dead." A letter was given to Salazar signed by 27 state legislators supporting a continued ban on offshore drilling.
"There is no infrastructure to support all of this proposed additional drilling," said Peter Douglas, the executive director of the California Coastal Commission, who also warned renewable energy advocates not to rush into coastal developments of wave and wind power.
A representative from the Western States Petroleum Association urged more domestic drilling, including in California, to begin curtailing the nation's growing dependence on foreign sources of oil,. He said producers have more than proven that this can be done in "an environmentally responsible manner."
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