Friday, December 5, 2008

Natural Gas Development is Now!

By Randall Luthi

From News Services

Thursday, December 04, 2008

Oil prices have fallen. Pump prices are lower than they have been in years. OPEC, for the moment, has decided not to cut production. The public wants alternative and renewable energy in our future. So why should we pursue increased offshore development of oil and gas resources in the Atlantic now?

One simple reason: Our nation’s economy is energy dependent. This is one statement that most everyone can agree on. Energy powers our economy, transportation, food production, national defense, our homes and the very essence of our society. Our families and livelihoods depend on having a secure, reliable source of energy at a reasonable price.

The Energy Information Agency, predicts U.S. demand for energy will grow nearly 24 percent by 2030.

The good news is that during the same period, EIA projects domestic energy production to increase. The bad news is that it will lag behind demand. Currently, that gap is met by imports.

Without a significant increase in domestic production, imports will also have to increase to meet the projected demand in national energy consumption.

Some of the debate that took place in Congress concerning lifting the ban on offshore oil and gas development revolved around the statement that we cannot drill our way to energy security. At the same time, I argue, we cannot tax our way to energy security.

We cannot grow our way to energy security by using food as fuel. And we cannot slow walk our way to energy security through conservation alone.

We must develop as many energy sources as we can. We must do it quickly and safely. And we must do it within realistic environmental regulations. The answer includes enhanced development of traditional sources of energy.

Part of the solution is renewables. The Minerals Management Service was given the authority to manage the offshore alternative energy program including wind, wave and current energy. Even with development full speed ahead, it will take time to make a transition to these alternate sources of energy. Our energy bridge during this transition will still depend on the development of coal, oil and gas. Otherwise, we may be walking, not driving, to our future.

We have also invested too many energy eggs in the energy basket of the Gulf of Mexico. The Gulf currently produces approximately 25 percent of our oil and 15 percent of our natural gas. As we saw this year, when hurricanes roared through the Gulf, production was shut down. The Southeast, including metro Atlanta, experienced severe fuel shortages. Even today, 16 percent of our oil and 24 percent of our natural gas has not returned to full production as a result of hurricanes Ike and Gustav. We must diversify our energy production locations and drilling would help.

According to our best estimates, our domestic sources of oil and gas resources on the Outer Continental Shelf are quite substantial. I emphasize “our” because those resources belong to this nation. We estimate our offshore lands contain approximately 86 billion barrels of oil and 420 trillion cubic feet of natural gas. These are conservative figures based on 30-year-old data.

In removing the presidential withdrawal, President Bush recognized the importance of including the affected states in the process of deciding where we should develop the nation’s resources. He also recommended the sharing of the revenues with the states generated from these federal leases.

Offshore production platforms have a remarkable safety record. According to a National Academies of Science study, approximately 1,700 barrels of oil per day enters the marine environment off North America through natural seeps in the ocean floor. This is 150 times more than has been spilled from energy production activities in the federal waters of the Outer Continental Shelf. We will never eliminate entirely the risk of a spill, but we can, and we have, reduced that possibility through increased technology and safety measures. A clean environment and energy production are not mutually exclusive.

Yet we continue on a path that leads to more dependence on foreign sources of energy. We’ve been presented unique opportunities to secure our energy future. We can. We should. I believe we must.

> Randall Luthi is the director of the Federal Minerals Management Service.

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