See Our Monday Washington Times Op-Ed

 

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Dave Harbour

 

After President Obama’s Andrews Air Force Base ‘Energy Policy’ statement Wednesday, Interior Secretary Ken Salazar (NGP Photo) said that last year he received over a half million citizen comments on lease sales.  He didn’t say that while hundreds of thousands of those comments urged support for more domestic energy production, this week’s policy announcement offers less.

 

My state, Alaska, is 20% the size of America, has about ¾ of the Nation’s coastline and embraces the bulk of federal lands in protected status (53% of America’s wilderness lands, 90% of national park lands and 80% of national wildlife refuge acreage). We’re America’s great hope for energy and natural resource development. Less than .5% of Alaska’s lands are privately owned by other than federally authorized Native corporations. This one state could safely and significantly improve America’s balance of payments, employment, foreign energy imports and national security challenges-- given reasonable access to our Federal lands and waters.

 

Last year the University of Alaska Institute for Social and Economic Research forecast that Alaska’s OCS alone could produce tens of thousands of jobs annually and tens of billions in payroll over the next few decades. At its peak, our Trans Alaska pipeline transported over 2 million barrels/day to U.S. consumers, making us the country’s largest oil producing state. Today its throughput is down 2/3 and the end of this pipeline’s life--this energy lifeline--is within sight.

 

Last Month, a diverse group supported by organizations representing hundreds of the nation’s state regulators and many federal government, industry and university advisors produced a ‘Moratoria Study’. Readers may find it on the ‘www.naruc.org’ website. It uses a version of the government’s National Energy Modeling System, offering the most reliable, energy information available to the President and Congress.

 

The Moratoria Study reveals that NOT producing moratoria area resources by 2030 could diminish the gross domestic product by .52% annually, increase foreign imports by 4.1 billion barrels, increase OPEC payments by $607 billion, outsource U.S. jobs abroad, increase natural gas (17%) and electricity (5%) prices, and decrease domestic oil (15%) and gas (9%) production.  It will have other non-modeled effects including increased subsidies to the poor. NOT producing domestic oil and gas will also have the effect of transferring greater environmental impact to less regulated parts of the globe. 

 

At this time of domestic travail, it makes imminent sense to develop domestic energy wealth using American workers. To minimize our resource potential is economically suicidal. The Obama-Salazar announcement this week further weakens our country as environmental groups feign outrage. Why?

 

First, the Administration has, in effect, reinstated much of the moratoria area that Congress and the President released following the great oil price rise in August of 2008. It has effectively renewed moratoria by cancelling Minerals Management Service (MMS) lease sale programs and giving lip service to opening up other areas by planning to study them, not to develop them.

 

Second, what federal lands are available are only ‘somewhat’ available.   Just as a goose thinks it is being fed when the farmer is fattening it up for slaughter, the Administration talks about a balanced energy program while calculating destruction of the golden egg.

 

As evidence, consider these Federal actions over the last year, which include a cornucopia of delay strategies and zero encouragement to domestic energy production:

 

·         Shell Oil spent over $3 billion to acquire Alaskan offshore leases from the MMS and prepare for exploration; but of some 37 permits required for 2010, only 3 have been granted.  Permit delaysor litigation may again prevent 2010 exploration and, indeed, doom this multi-billion dollar project that could provide 35 thousand jobs per year and over $70 billion in payroll for several decades.

·         EPA’s obsession with regulating greenhouse gases could diminish the ability of any future lease sales to contribute to America’s economic recovery and job growth. 

·         The White House has initiated an Ocean Policy Task Force process. This unnecessary initiative--unfamiliar to most Americans--could shut down vast expanses of federal waters to commercial fishing, domestic energy development and other activity… diminishing the value of lease sale activities the President contemplates.

·         NOAA has initiated a Beluga Whale critical habitat finding embracing over 1/3 of Alaska’s Cook Inlet. This action could cripple Cook Inlet exploration and current economic activity upon which the majority of Alaska’s population depends.

·         The Corps of Engineers recently denied ConocoPhillips’ permit to construct a drill pad in the National Petroleum Reserve-Alaska, threatening 400 construction and 100 operating jobs and new production which could extend the life of the Trans Alaska pipeline. If this shameful abuse of regulatory power could be used to stop routine oil and gas development of leases already granted by the federal government-- in an area already designated a “National Petroleum Reserve”-- then how optimistic could anyone be about this Administration’s new energy policy?

 

As a former regulator, I believe that time will tell whether the President’s announcement today was ‘for show’ or ‘for real’. The major indicator may be how well—if at all—he controls the proven, anti-development bias of his regulatory agencies.

 

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Dave Harbour is a Commissioner Emeritus of the National Association of Regulatory Utility Commissioners, a retired member of the Regulatory Commission of Alaska. He is former Chairman of the Alaska Council on Economic Education and the Anchorage Chamber of Commerce. He is publisher of: www.northerngaspipelines.com