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API: Keep Interior's Eyes on Natural Gas Prize

The U.S. Department of Interior's (DOI) decision to establish renewable energy zones should be applied to natural gas and oil resources as well, according to the American Petroleum Institute (API).

On Wednesday DOI Secretary Ken Salazar issued an order formally establishing a task force to identify zones on U.S. public lands where DOI can facilitate a rapid move to large-scale production of solar, wind, geothermal and biomass energy (see Daily GPI, March 12).

"We agree with Secretary Salazar that our country needs to tap its plentiful domestic energy resources, including oil and natural gas," said API President Jack Gerard. "The oil and natural gas industry is one of the world's largest producers of renewable energy, including wind, geothermal and solar and have invested more in emerging energy technologies than the U.S. federal government and private sector combined.

"We are encouraged by Secretary Salazar's pledge that his department would facilitate 'a rapid and responsible move to large-scale production' of alternative energy, and we call on the department to apply this streamlined approach to the permitting process of the most important domestic energy source, oil and natural gas."

Salazar's order made the production, development and delivery of renewable energy top priorities for DOI. While DOI "will continue to responsibly develop oil and gas resources on public lands," the department's focus will turn toward renewable energy, Salazar said. The shift in priorities was made to help reduce the nation's dependence on foreign oil, build a clean energy economy and create jobs, he said.

On Thursday Sen. Lisa Murkowski (R-AK), the ranking Republican on the Senate Energy and Natural Resources Committee, said DOI is displaying an apparent bias against conventional natural gas and oil production. She said the Obama administration's fiscal 2010 budget amounted to a "war on domestic production."

"Punishing the domestic oil and gas industry will not bring on the age of renewable energy any faster," Murkowski said. "It will increase our dependence on foreign oil and further threaten our energy and economic security."

Obama's budget proposes to repeal the expensing of drilling costs ($3.34 billion over 10 years); repeal percentage depletion for oil and gas ($8.25 billion); repeal the marginal well tax credit; repeal the enhanced oil recovery credit; increase geological and geophysical amortization costs for independent producers ($1.18 billion); levy an excise tax on Gulf of Mexico production ($5.28 billion); and repeal the manufacturing tax deduction ($13.29 billion) (see Daily GPI, Feb. 27).

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