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Offshore Drilling: Industry Perspectives 25 February 2009
On 25 February, the House Committee on Natural Resources held a hearing entitled “Offshore Drilling: Industry Perspectives” due to the fact that moratoria on drilling on the outer continental shelf (OCS) expired in September 2008. Witnesses included Presidents and CEOs from the oil and gas industry's largest corporations, including Shell, BP, Devon, the ExxonMobil Exploration Company, Chevron, and the Institute for 21st Century Energy.
All of the witnesses agreed with Marvin Odum, President of Shell Oil Company, that due to large global growth and the exponentially increasing demand for energy, especially from countries like India and China, “existing and developing energy sources will struggle to keep up with demand and oil and gas resources will be needed for decades to come.” As the US imports more than 12 million barrels of petroleum per day and nearly 60 percent of consumption and imports cost the US more than $600 billion in 2008, the oil and gas industry maintains its need to further develop and explore the OCS. As such, all witnesses said they would like to see a ban on the moratoria on offshore drilling and see expanded exploration and access of the OCS in places like Alaska where a de facto moratorium is in place due to continuous legal battles.
Furthermore, witnesses explained that the oil industry is one of America's largest employers, directly employing nearly 2 million people and supporting 4 million people in other industries. Therefore, expanding the industry even further would only employ thousands more Americans and combat the current economic downturn. Additionally, revenues from the OCS leasing department are the second largest source of revenue for the Department of Treasury, reaching $23.4 billion in 2008. Witnesses estimated the Department of Treasury could see up to $1.7 trillion in revenues if the development of off-limits OCS areas occurs.
Finally, witnesses dismissed claims that offshore drilling poses increased threats to the ocean and coastal environments. They maintain the environmental impacts from offshore drilling are miniscule thanks to advances in drilling and transportation technology. All were in agreement that gas and oil will play a vital role in America's future energy portfolio and must continue to be used and developed while the US transitions to greater energy efficiency and eventually renewable and clean sources of energy.
While witnesses and members may never come to a unanimous consensus on the issue of offshore drilling, its potential expansion, and investing in renewable and clean energy sources, legislation in regard to offshore drilling expansion has already been proposed. Congressman Ken Calvert (R-CA) has introduced H.R. 797, the Maximize Offshore Resource Exploration Act of 2009, which would “greatly enhance the Nation's environmental, energy, economic, and national security by terminating long-standing Federal prohibitions on the domestic production of abundant offshore supplies of oil and natural gas.” Finally, Congressman Ted Poe (R-TX) has introduced H.R. 1143, the DRILL NOW Act of 2009, which would limit “presidential withdrawals of offshore lands from disposition for exploration, development, or production of oil and gas, authorize States to petition for authorization to conduct offshore oil and natural gas exploration and extraction in any area that is within 50 miles of the coastline of the State and within the seaward lateral boundaries of the State extended, and to share offshore oil and gas revenues with States.”