US energy leaders urge rapid access to offshore oil, gas

25 February 2009 21:24  [Source: ICIS news]

WASHINGTON (ICIS news)--US energy industry leaders on Wednesday urged Congress to allow and accelerate exploration and development of offshore energy oil and natural gas resources, saying they are essential to the nation’s future.

In the third of three hearings before the House Natural Resources Committee, American Petroleum Institute (API) chairman Larry Nichols warned that while policymakers focus on developing alternative energy sources such as solar and wind, the US must continue to develop its own domestic conventional resources.

“Our approach to offshore natural gas and oil development - and to all domestic energy development - must be based on the economic and energy realities facing our nation,” Nichols said.

“Every respected energy study on future demand comes to the same conclusion about the next several decades: we need all the energy we can produce in an environmentally responsible manner,” he said in testimony before the panel.

Referring to US offshore oil and gas reserves in outer continental shelf (OCS) regions recently removed from congressional drilling bans, Nichols said that “The OCS contains vast, untapped resources of natural gas and oil that can keep our economy strong and provide jobs, higher incomes, economic growth and global competiveness”.

In two previous hearings, the committee heard testimony from environmentalists, tourism and fishing industry representatives and coastal state government officials, some of whom urged Congress to re-impose an offshore drilling ban.

Committee Chairman Nick Rahall (Democrat-West Virginia) said the hearings are meant to inform federal policy on balancing OCS energy resources against environmental and other concerns.

Rahall said earlier that while he is not opposed to renewed OCS oil and gas drilling, he does not think those offshore resources are sufficient to make a meaningful difference in meeting US energy needs.

Nichols, joined in testimony by chief executives of major US exploration and development firms, noted that OCS areas that technically are now open to development probably contain vastly more oil and gas resources than estimated in the late 1970s when the last seismic surveys of parts of the OCS were done.

Saying that “the more we explore, the more we know,” Nichols pointed out that early surveys of US reserves in the Gulf of Mexico were extremely low and the area has since produced three times as much oil and gas as first estimated and that known reserves are five times more than originally anticipated.

Lamar McKay, president of BP America, voiced support for alternative and renewable energy resources, noting that his company is a major investor in wind power and biofuels research.

“But until technologies such as clean coal, carbon capture and renewable sources can come on line in a major way, far and away the greatest potential source of new domestic energy supply is the oil and natural gas that lies off our shores,” McKay said.

The US petrochemicals and downstream chemicals industries are heavily dependent on natural gas as a feedstock and process fuel and, along with many other manufacturing interests, they have lobbied Congress hard for renewed access to offshore oil and natgas reserves.

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By: Joe Kamalick
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