US energy leader warns drilling bans risk economy

16 January 2008 19:01  [Source: ICIS news]

WASHINGTON (ICIS news)--US policymakers must build public support and remove barriers to exploration of vast domestic energy reserves or see the economy slip into still slower growth and greater job losses, a top energy official warned on Wednesday.

 

Red Cavaney, president of the American Petroleum Institute (API), charged that “the federal government has not been as committed to informing the American public about our nation’s energy challenges as [it] has been in informing the public about its environmental challenges”.

 

“Anyone who thinks we can continue to grow our economy without an increased energy supply understands neither the economy nor energy,” Cavaney said.

 

He noted that while the US becomes increasingly dependent on foreign suppliers of oil, natural gas and even refined products, 85% of US offshore oil and gas reserves and 75% of onshore energy resources remain closed to exploration and development under a 26-year-old congressional moratorium on drilling.

 

The US chemicals industry is heavily dependent on natural gas as both a feedstock and energy source, and the sector has faced a three-fold increase in natgas prices since 1999.

 

“What is needed today are policy choices to increase, not decrease energy production,” Cavaney said, citing recent legislation in the US Congress that, had they not failed, would have imposed punitive taxes and more development restrictions on the US energy industry.

 

“Barriers to oil and natural gas production only contribute to volatile energy prices, slower economic growth and lost American jobs,” he said.

 

He said that while Congress and other policymakers are right to commit increased focus on energy efficiency, conservation and alternative energy sources, “we also need to increase and diversify our oil and natural gas supplies, both within this country and abroad”.

 

“Our nation needs policies that promote greater supplies of oil and natural gas, not policies that hinder our industry’s ability to provide American consumers the energy they demand and need,” Cavaney said.

 

“We have abundant volumes of oil and natural gas resources beneath federal lands and coastal waters, but the bulk of these resources have been placed off-limits to development,” he said.

 

Cavaney spoke at the fourth annual meeting of the US Energy Association.

By: Joe Kamalick
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