[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
OFFSHORE DRILLING:
STATE PERSPECTIVES
=======================================================================
OVERSIGHT HEARING
before the
COMMITTEE ON NATURAL RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
Tuesday, February 24, 2009
__________
Serial No. 111-3
__________
Printed for the use of the Committee on Natural Resources
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COMMITTEE ON NATURAL RESOURCES
NICK J. RAHALL, II, West Virginia, Chairman
DOC HASTINGS, Washington, Ranking Republican Member
Dale E. Kildee, Michigan Don Young, Alaska
Eni F.H. Faleomavaega, American Elton Gallegly, California
Samoa John J. Duncan, Jr., Tennessee
Neil Abercrombie, Hawaii Jeff Flake, Arizona
Frank Pallone, Jr., New Jersey Henry E. Brown, Jr., South
Grace F. Napolitano, California Carolina
Rush D. Holt, New Jersey Cathy McMorris Rodgers, Washington
Raul M. Grijalva, Arizona Louie Gohmert, Texas
Madeleine Z. Bordallo, Guam Rob Bishop, Utah
Jim Costa, California Bill Shuster, Pennsylvania
Dan Boren, Oklahoma Doug Lamborn, Colorado
Gregorio Sablan, Northern Marianas Adrian Smith, Nebraska
Martin T. Heinrich, New Mexico Robert J. Wittman, Virginia
George Miller, California Paul C. Broun, Georgia
Edward J. Markey, Massachusetts John Fleming, Louisiana
Peter A. DeFazio, Oregon Mike Coffman, Colorado
Maurice D. Hinchey, New York Jason Chaffetz, Utah
Donna M. Christensen, Virgin Cynthia M. Lummis, Wyoming
Islands Tom McClintock, California
Diana DeGette, Colorado Bill Cassidy, Louisiana
Ron Kind, Wisconsin
Lois Capps, California
Jay Inslee, Washington
Joe Baca, California
Stephanie Herseth Sandlin, South
Dakota
John P. Sarbanes, Maryland
Carol Shea-Porter, New Hampshire
Niki Tsongas, Massachusetts
Frank Kratovil, Jr., Maryland
Pedro R. Pierluisi, Puerto Rico
James H. Zoia, Chief of Staff
Rick Healy, Chief Counsel
Todd Young, Republican Chief of Staff
Lisa Pittman, Republican Chief Counsel
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CONTENTS
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Page
Hearing held on Tuesday, February 24, 2009....................... 1
Statement of Members:
Capps, Hon. Lois, a Representative in Congress from the State
of California.............................................. 32
Prepared statement of.................................... 34
Hastings, Hon. Doc, a Representative in Congress from the
State of Washington........................................ 2
Prepared statement of.................................... 4
Rahall, Hon. Nick J., II, a Representative in Congress from
the State of West Virginia................................. 1
Prepared statement of.................................... 2
Statement of Witnesses:
Chrisman, Hon. Mike, Secretary for Natural Resources,
California Natural Resources Agency........................ 48
Prepared statement of.................................... 50
Response to questions submitted for the record........... 95
Diers, Ted, Manager, New Hampshire Coastal Program, New
Hampshire Department of Environmental Services, on behalf
of the Coastal States Organization......................... 52
Prepared statement of.................................... 54
Response to questions submitted for the record........... 99
Farr, Hon. Sam, a Representative in Congress from the State
of California.............................................. 5
Prepared statement of.................................... 7
Graves, Garret, Director, Office of Coastal Activities, State
of Louisiana............................................... 66
Prepared statement of.................................... 69
Marvinney, Robert G., Ph.D., State Geologist and Director,
Maine Geological Survey.................................... 57
Prepared statement of.................................... 58
Response to questions submitted for the record........... 102
Rohrabacher, Hon. Dana, a Representative in Congress from the
State of California........................................ 8
Prepared statement of.................................... 10
Wagner, Hon. Frank W., State Senator, Commonwealth of
Virginia................................................... 62
Prepared statement of.................................... 65
Response to questions submitted for the record........... 105
Additional materials supplied:
Kaine, Hon. Timothy M., Governor, Commonwealth of Virginia,
Letters submitted for the record by Chairman Rahall........ 74
OVERSIGHT HEARING ON ``OFFSHORE DRILLING: STATE PERSPECTIVES''
----------
Tuesday, February 24, 2009
U.S. House of Representatives
Committee on Natural Resources
Washington, D.C.
----------
The Committee met, pursuant to call, at 10:05 a.m. in Room
1324, Longworth House Office Building, Hon. Nick J. Rahall, II,
[Chairman] presiding.
Present: Representatives Rahall, Hastings, Abercrombie,
Grijalva, Costa, Heinrich, Capps, Inslee, Tsongas, Kratovil,
Brown of South Carolina, Gohmert, Smith, Wittman, Broun of
Georgia, Fleming, Coffman, Chaffetz, and Lummis.
The Chairman. The Committee on Natural Resources will come
to order, please. The Chair, at the very outset, is going to
recognize the Ranking Minority Member, Mr. Hastings.
Mr. Hastings. Thank you very much, Mr. Chairman. It is with
great regret that I inform the Committee of an absence today.
One of our newest Members, Mr. Cassidy from Louisiana, lost
his father, James Cassidy, on Sunday. I know that I speak for
all of the Committee Members when I say that our thoughts and
prayers are with Congressman Cassidy and his mother, Betty, and
his entire family at this difficult time, and thank you for
your indulgence, Mr. Chairman.
STATEMENT OF HON. NICK J. RAHALL, II, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WEST VIRGINIA
The Chairman. The Chair thanks its Ranking Member and
wishes to express his condolences to Mr. Cassidy as well.
The Committee is meeting today for the second in a three-
part series of oversight hearings designed to examine our
nation's current offshore drilling policy and help to determine
the course of that policy in the future.
Two weeks ago, on February 11th, we heard from
representatives of environmental organizations, tourism boards,
and the fishing industry. Today, we will hear from
representatives of coastal state governments from around the
country, and, tomorrow, we will hear from the oil and gas
industry representatives.
As I said two weeks ago, these hearings are intended to
afford all sides an opportunity to weigh in as we begin work to
determine the best way to accommodate drilling while also
ensuring that our offshore resources are managed in an
environmentally and physically responsible manner.
Our coastal states are critical to this discussion. They
are literally on the front lines of the offshore drilling
debate, and their needs and challenges are vitally important
considerations for us all.
As I stressed at our hearing last time, I am not opposed to
drilling. I understand the benefits of domestic oil and gas
production, but I also am aware of the risks.
The ongoing discussion is designed to examine the trade-
offs that would be involved in expanding offshore oil and gas
drilling, and I look forward to working with Members on both
sides of the aisle as we determine the best way to move
forward. I thank our witnesses for being with us today, and we
will be led off by our colleagues in this body. I now recognize
the Ranking Member, Mr. Hastings.
[The prepared statement of Mr. Rahall follows:]
Statement of The Honorable Nick J. Rahall, II, Chairman,
Committee on Natural Resources
The Committee is meeting today for the second in a three-part
series of oversight hearings designed to examine our Nation's current
offshore drilling policy and help to determine the course of that
policy in the future.
Two weeks ago, on February 11th, we heard from representatives of
environmental organizations, tourism boards, and the fishing industry.
Today we will hear from representatives of coastal state governments
from around the country. And tomorrow we will hear from oil and gas
industry representatives.
As I said two weeks ago, these hearings are intended to afford all
sides an opportunity to weigh in as we begin work to determine the best
way to accommodate drilling while also ensuring that our offshore
resources are managed in an environmentally and fiscally responsible
manner.
Our coastal states are critical to this discussion. They are
literally on the front lines of the offshore drilling debate and their
needs and challenges are vitally important considerations for us all.
As I stressed at our last hearing, I am not opposed to drilling. I
understand the benefits of domestic oil and gas production. But I am
also aware of the risks. This ongoing discussion is designed to examine
the trade-offs that would be involved in expanding offshore oil and gas
drilling, and I look forward to working with Members on both sides of
the aisle as we determine the best way to move forward.
I thank the witnesses for agreeing to appear today, and I now
recognize our Ranking Member, Mr. Hastings, for his opening remarks.
______
STATEMENT OF HON. DOC HASTINGS, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF WASHINGTON
Mr. Hastings. Thank you, Mr. Chairman. Today, we are to
hear from various states on their perspectives on OCS
development.
Studies have shown that offshore drilling will create
substantial economic benefits for the Federal government, as
well as for the states. These benefits include job creation,
tax revenue, and possible revenue sharing for the states.
Before the recess, Congress passed the largest spending
bill ever, directing billions of Federal dollars to states to
avert their budget crisis.
Today's hearing will focus on one of the largest sources of
Federal revenue: oil and gas bonus bids, rents and royalties.
In addition, we will focus on one of the best opportunities
we have to assist state governments, by sharing OCS revenue,
like we do with onshore mineral receipts.
A very conservative CRS report estimated that OCS
development off California would generate more than $120
billion in revenue sharing for the State of California, money
that I am sure the State of California could desperately use.
The same report suggests that the Atlantic Ocean could generate
more than $76 billion in shared revenue from what are even more
conservative estimates of the potential resources.
At a time when the Federal government is borrowing record
sums of money to fund its programs and transferring money to
the states, it seems reasonable and responsible that we should
use the OCS resources available in order to help states balance
their budgets.
Last year, the Democrat majority passed energy legislation
that locked up 88 percent of our OCS resources and had no
revenue-sharing provision for coastal states. Thankfully, this
legislation died in the Senate, but, fortunately, Congress did
pass legislation, or, rather, I should say, let lapse, that
ended a decades' long ban on OCS development.
First, a no-revenue-sharing approach is simply not
acceptable. Congress needs to establish a fair revenue-sharing
program for all coastal states, expanding this common-sense
policy beyond the several states along the Gulf of Mexico. This
must be a priority for this Committee and Congress.
Second, many of the states testifying before us today have
unemployment rates that are higher than the national average.
Knowing that OCS development is not just about energy--it is
also about creating new American manufacturing jobs and
building the infrastructure to harness this energy--I have to
wonder the extent to which these states have examined the job
impacts of expanded oil and gas development and what it would
mean to their states.
An American Energy Alliance study published yesterday
calculated that opening the OCS would create between tens of
thousands and hundreds of thousands of jobs in the states
testifying before us today. Over the life of production, it
would create over 1.2 million annual jobs across the country.
So, finally, Mr. Chairman, I hope today's hearing will
address our nation's growing dependence on imported natural gas
pipelines. Each of the witnesses before us today represents a
state where there is either an existing or a proposed liquefied
natural gas (LNG) terminal. From Callus, Maine, to Long Beach,
California, terminals to import natural gas are popping up all
across our coasts. Everyone believes that America has become
too dependent on foreign energy.
I hope that the witnesses before us will explain their
views on which is preferable: building LNG terminals that make
their states dependent on foreign natural gas, or the
responsible development of America's own natural gas resources
in the OCS that will create new jobs and bring revenue to their
states?
In closing, this issue is of major national significance.
America is too dependent on foreign nations for our energy
supplies. We can, and should, determine the most responsible
way to develop our OCS resources. I believe that we can free
America from our dependence on foreign oil, free America from
imported foreign natural gas, and invigorate America's economy
by harnessing the resources of America's OCS to create more
energy with the skill and knowledge of the American worker.
So, with that, Mr. Chairman, I look forward with you to
hearing from today's witnesses.
[The prepared statement of Mr. Hastings follows:]
Statement of The Honorable Doc Hastings, Ranking Member,
Committee on Natural Resources
Mr. Chairman, today we are to hear from various states on their
perspectives on OCS development. Studies have shown that offshore
drilling will create substantial economic benefits for the federal
government as well as for states. These benefits include job creation,
tax revenues and possible revenue sharing.
Revenue Sharing
Before the Recess, Congress passed the largest spending bill ever,
directing billions of federal dollars to states to avert their budget
crises.
Today's hearing will focus on one of the largest sources of federal
revenue: oil and gas bonus bids, rents and royalties. In addition, we
will focus on one of the best opportunities we have to assist state
governments--by sharing OCS revenue like we do with onshore mineral
receipts.
A very conservative CRS report estimated that OCS development off
California could generate more than $120 Billion in revenue sharing for
the State of California. Money that I am sure the State of California
could desperately use. The same report suggested that the Atlantic
Ocean could generate more than $76 billion in shared revenues from what
are even more conservative estimates of the resources.
At a time when the federal government is borrowing record sums of
money to transfer to the states, it seems reasonable and responsible
that we should use the OCS resources available in order to help states
balance their own budgets.
Last year, the Democrat Majority passed legislation that locked up
88 percent of our OCS resources and had NO revenue sharing provision
for coastal states. Thankfully this legislation died in the Senate and
instead Congress passed legislation that ended the decades long ban on
OCS development.
A ``no revenue sharing'' approach is simply not acceptable.
Congress needs to establish a fair revenue sharing program for all
coastal states, expanding this commonsense policy beyond the several
states along the Gulf of Mexico. This must be a priority for the
Committee and Congress.
JOBS
Second, many of the states testifying before us today have
unemployment rates that are higher than the national average. Knowing
that OCS development isn't just about energy, it is also about creating
new American manufacturing jobs and building the infrastructure to
harness this energy, I wonder the extent to which these states have
examined the job impacts of expanded oil and gas development and what
it would mean to their states.
An American Energy Alliance study published yesterday calculated
that opening the OCS would create between tens of thousands and
hundreds of thousands of jobs in the states testifying before us today.
Over the life of production, it would create over 1.2 million annual
jobs across the country.
LNG vs Offshore Gas
Finally, Mr. Chairman, I hope today's hearing will address our
nation's growing dependence on imported natural gas supplies. Each of
the witnesses before us today represents a state where there is either
an existing or proposed liquefied natural gas terminal.
From Calais, Maine...to Long Beach, California...terminals to
import natural gas are popping up all across our coasts. Everyone
believes that America has become too dependent on foreign energy. I
hope that the witnesses before us will explain their views on which is
preferable: building LNG terminals to make their states dependent on
foreign natural gas OR the responsible development of America's own
natural gas resources in the OCS that will create new job and bring
revenue to their states?
CLOSING
In closing, this issue is of major national significance. America
is too dependent on foreign nations for our energy supplies. We can and
should determine the most responsible way to develop our OCS resources.
Mr. Chairman, I believe that we can free America from our
dependence on foreign oil, free America from imported foreign natural
gas, and invigorate America's economy, by harnessing the resources of
America's OCS to create more energy with the skill and knowledge of the
American worker.
I look forward to hearing from today's witnesses.
______
The Chairman. I thank the gentleman.
Do any other Members wish opening statements? If not, we
will go to our colleagues, and we are very happy to have two of
them with us today comprising Panel Number 1. First, is
Representative Sam Farr from California's 17th District, to be
followed by Representative Dana Rohrabacher from California's
46th District.
Gentlemen and Dear Colleagues, we welcome you. We do have
your prepared testimonies, and, of course, they will be made
part of the record as if actually read, and you may proceed as
you wish.
STATEMENT OF HON. SAM FARR, A REPRESENTATIVE IN CONGRESS FROM
THE STATE OF CALIFORNIA [17th DISTRICT]
Mr. Farr. Thank you very much, Mr. Chairman and Ranking
Member Mr. Hastings and Members of my old Committee. I really
appreciate this opportunity to testify before you today, and I
feel it is quite an honor to be here.
It is interesting you are introducing us because, in
California, if you introduced both of us, you would introduce
me as from Northern California and Mr. Rohrabacher from
Southern California. We still have this territorial distinction
in our great state.
I am a coastal legislator and have been involved in these
issues for a long time, and one thing that I have learned for
sure is that our oceans are sick, and you have heard that
testimony in this Committee over and over again.
I would like to voice my opinion strongly in favor of
reinstating the moratorium. Let me explain.
I represent a district that has the fifth-largest, onshore
oil deposits in California. We have a vigorous oil drilling
program onshore.
Offshore, we have put the entire ocean and coastal area
into the largest marine sanctuary in the United States, and, in
that statutory law, we prohibited oil drilling in the ocean.
I am here today to advocate on behalf of the smart use of
oceans, first, on expanded oil drilling operations in the Outer
Continental Shelf, it is clear that these activities are not
without risk. The OCS drilling process offers numerous
opportunities for environmental risks, exploration risks,
extraction risks, and transportation risks.
In 1969, the Santa Barbara spill was the type of
environmental disaster that must be prevented. Another spill
would be an enormous insult to the coastal economies, the
industries and ecosystems, and an embarrassment to the
government that leased the land for such purposes.
The potential threat they pose is intolerable, and the
proposed minimal benefits from new drilling operations do not
outweigh the potential risk. In political terms, it is high
risk, low gain.
Further, the debate on oil drilling seems archaic, given
our understanding of the adverse effects of oil consumption on
our atmosphere. Our economy seems to be oil addicted, and we
have been talking a lot about how we must be less so.
If renewable energy sources receive the same level of
investment as fossil-fuel-based sources, we would make
substantial strides in ending our oil dependency. If the goal
is to reduce carbon emissions, we might as well get used to the
fact that drilling is not the solution, especially when clean,
renewable energy sources are within our grasp, many of which
come from the use of the ocean. The development of ocean tide
flows, current flows, thermal energy, wave motion, and wind
energy are all in the energy plans and near production.
I have long been an advocate for ocean conservation. I am
not alone in holding this view that healthy oceans mean healthy
economies and healthy people. I believe, from your previous
hearings, you have seen fishermen, environmental NGO's, and
President Bush's own Commission on Ocean Policy all agree. No
discipline of the Outer Continental Shelf resources should
proceed without recognizing that a type of ocean zoning is
essential in the first step. Look before you leap. Plan before
you develop.
The OCS is the host to many different regions ideally
suited for different purposes. There are fishing regions, there
are aquaculture regions, and there is wind farming. There are
other regions that unique to critical habitats and must be
conserved.
Sometimes these purposes can occur together, but not
always. A process must be put in place to, first, assess and
then allocate areas of OCS so that the ocean, the industries,
and economies all benefit in a sustainable fashion, and that is
the key word: ``sustainable.''
Finally, both the Pew Oceans Commission and the U.S.
Commission on Ocean Policy highlight urgent need for a
permanent ocean conservation trust fund. The reinvestment of
OCS revenue sources into this fund would represent a durable
source of funding the state and Federal ocean conservation
programs. We have put no money into creating health in the
oceans.
Currently, only 25 percent of the OCS drilling is
statutorily allocated. Seventy-five percent of the revenue is
lost in the general fund. It is an income just going in and
getting lost. Only if a quarter of the 74 percent were
redirected to the Ocean Trust Fund, you would find a huge
investment in ocean health. Reinvestment of revenues generated
from the ocean to put back in the ocean is a smart thing to do.
For too long, we have reaped the fullness of the ocean's
bounty. This bounty is neither inexhaustible or unlimited, and
we cannot expect to take forever without needing to give back.
I ask this Committee to do two things. First, I urge this
Committee to move to reinstate the moratorium on drilling lease
expansion. It has been here through many administrations and
only expired last fall.
I urge this Committee to consider any use of Outer
Continental Shelf money as conditional on both good planning
for ocean resource use and the establishment of a permanent
Ocean Trust Fund.
I would be glad to answer any questions you might have.
Thank you.
[The prepared statement of Mr. Farr follows:]
Statement of The Honorable Sam Farr, a Representative in Congress from
the State of California
Chairman Rahall, Ranking Member Hastings, and Members of the
Committee: Thank you for this opportunity to testify before you.
Today, you are taking up the issue of drilling on the outer
continental shelf (OCS), as the moratorium was allowed to expire in
September of last year. I would first like to voice my opinion strongly
in favor of reinstating the moratorium. I will then expand on several
other corollary issues that this drilling debate has raised. The state
waters of my district, California's 17th, are entirely protected by the
Monterey Bay National Marine Sanctuary and thus my presence here today
is not motivated by my desire to protect my own coastline from fossil
fuel exploitation. Rather, I am here to advocate on behalf the oceans:
perhaps the greatest natural resource on earth and one which we all
share.
First, on the issue of expanded drilling operations in the OCS, it
is clear that these activities are not without risk. The OCS fossil
fuel extraction process offers numerous opportunities for environmental
risk, from exploration, to extraction, to transport. True, the oil
spilled from these sources represents a small contribution to the total
oil spilled into the oceans, but that fact does not negate its impacts.
My own district on California's central coast may not be subjected to
drilling, but we are not immune from the effects of oil exploitation. A
recent small spill within San Francisco Bay injured birds from my
district and in some cases prevented our fishermen from working their
normal waters. On a larger scale, the 1969 spill from Platform A in
Santa Barbara is precisely the type of environmental disaster that must
be prevented. A repeat of this event would represent an enormous insult
to coastal economies, industries and ecosystems. Granted, such spills
are rare, but the potential threat they pose is intolerable. The
proposed minimal benefits of new drilling operations do not outweigh
the potential risks.
Further, the debate on fossil fuel extraction seems almost archaic
given our understanding of the adverse effects of their consumption on
our atmosphere. Granted, our economy is still oil-addicted, but if
alternative, renewable energy sources received the same level of
investment as fossil-fuel based sources, surely we could make more
substantial strides in weaning our oil dependency? If the U.S. goal of
reducing carbon emissions is to be realized, we might as well acquaint
ourselves with the idea that drilling is not the solution, especially
when clean, renewable energy sources are within our grasp. Re-opening
the OCS for fossil fuel exploitation is simply illogical given present
concerns over the use of fossil fuels and emission reduction targets.
There was concern in last week's hearing that decreasing U.S.
fossil fuel exploitation would result in increased foreign fossil fuel
exploitation with an associated greater environmental cost. I disagree
with this logic for two reasons. First, as the number one energy
consuming nation, if the U.S. can reduce its own demand, there will be
less production incentive in other nations. Second, as a global leader,
U.S. progress towards independence from non-renewable fuels will
certainly have a positive, long term, global effect.
As you know, I have long been an advocate for ocean conservation. I
am not alone in holding the view that healthy oceans mean healthy
economies and healthy people. The debate we are having at present
brings to the forefront several other key issues that warrant further
discussion: marine spatial planning and ocean conservation funding.
Unlike terrestrial regions opened for development, there is no
comprehensive spatial planning system for the oceans. This is
problematic because, like terrestrial regions, the oceans are comprised
by a staggering diversity of different habitats and resources. It is
imperative that a system is developed whereby the layout of these
different resources can be assessed and their uses coordinated. The OCS
is host to many regions, some of which will be ideally suited for
fishing, or aquaculture, or wind farming, or wave energy generation.
There will be other regions that are unique or critical habitats, which
must be conserved. In some cases, these multiple uses can occur
simultaneously, but in other cases, they are mutually exclusive. A
process must be put in place to first assess and then allocate areas of
the OCS so that the ocean, industries and economies all benefit.
This process is termed marine spatial planning and should begin
with a comprehensive review of resources in the OCS conducted in
coordination by appropriate state and federal agencies. Then,
determinations can be made based on the best available science as to
which resources can be utilized in which places. I believe that we are
on the brink of large-scale development of alternative, renewable
energy resources, and it is essential that this development occurs in
the most scientific, orderly and effective way possible.
Finally, in their assessments of the state of ocean policy in the
U.S., both the Pew Oceans Commission and the U.S. Commission on Ocean
Policy underscored the urgent need for a permanent ocean conservation
trust fund. In its 2006 Ocean Policy Report Card, the Joint Ocean
Commission Initiative gave the U.S. an F in the ``new funding for ocean
policy and programs'' category. In 2007, the grade was a D+. Clearly,
more effort and investment is necessary to address this deficiency.
Given the expected utilization of OCS resources for renewable
energy and other uses, I would urge you to consider the following fact:
the oceans are a common resource, they belong to everyone. It is
incumbent upon current OCS users, who are extracting billions in
revenues from the oceans, as well as future users, to reinvest a
portion of their revenue back into its source, the oceans themselves. I
have personally proposed the creation of such an Ocean Trust fund in my
bill, HR21, which has been introduced and referred to your committee.
This fund would satisfy the recommendations of the Ocean Commissions.
Reinvestment of OCS resource revenue into this fund would represent a
durable source of funding for state and federal ocean conservation
programs and is a logical reinvestment of revenues generated from the
ocean back to the ocean. This fund would support the focused efforts of
coastal states, territories and agencies in addressing the critical
ocean and coastal science, management and protection needs of our
nation and is essential to implement the many other recommendations of
the national ocean commissions.
For too long, we have reaped the fullness of the oceans' bounty.
This bounty, however, is neither inexhaustible nor unlimited and we
cannot expect to take forever without giving back. I urge you to move
to reinstate the moratorium on drilling lease expansion. I further urge
you to consider any resource exploitation activities conducted in the
oceans over the Outer Continental Shelf as conditional on both the
merits of good planning and the establishment of an ocean trust fund
and reinvestment in it.
Thank you very much for this opportunity to speak to you today.
______
The Chairman. Thank you, Sam. Dana?
STATEMENT OF HON. DANA ROHRABACHER, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA [46th DISTRICT]
Mr. Rohrabacher. Thank you very much, Mr. Chairman and
fellow Members. I appreciate this opportunity to testify on an
issue that deserves a much more serious discussion than it has
been given for these last four decades.
Let me preface my remarks by noting that I am a surfer. I
was proud to be the best surfer in Congress until another one
was elected--that is Brian Bilbray--and now that Duncan Hunter,
yet another surfer, has been elected, I am, rightfully, the
third-best surfer in Congress; however, it has been agreed to
that I am now the Chairman of the unofficial, yet powerful,
Surfers' Caucus.
The Chairman. Is this the ocean?
Mr. Rohrabacher. With that said, I love the ocean, and
preserving it is a high priority for me. I am also a scuba
diver, and if I thought that offshore drilling imperiled the
ocean, I would oppose offshore oil drilling, but that is simply
not true.
Decades ago, there were a few well-published accidents that
led to oil spills. 1969 is a long time ago. We should not be
basing our judgments on what is important for our people, or
what is good for the economy, based on what was done with
technology that was put to use in 1969. That was probably
technology that was developed long before 1969.
The technology since those days has dramatically improved.
Hurricanes can go right through our offshore oil operations in
the Gulf of Mexico without one drop being spilled. But even
with the old technology, the chances of an oil spill are much
more ominous by tanker-delivered oil than by that oil that is
provided by offshore rigs.
In my own district, which has had offshore drilling for
more than 30 years, there has been no significant problem with
these offshore rigs, yet, shortly after I was elected, there
was a major oil spill from a tanker, and, remember, the more
you say you cannot drill, the more the environmental radicals
have prevented us from doing that offshore oil drilling, the
more oil we have had to deliver by tanker. They, ironically,
have made it more likely to have oil spills off California and
off my district.
So those who claim the mantle of environmental champion and
aggressively oppose offshore oil drilling have, ironically,
made oil spills more likely.
Furthermore, by making us more dependent on foreign
production, which is not encumbered in many of these countries
by the same safety and environmental standards which I support,
the overall pollution, then, because when we are getting our
oil from overseas, it often does not have these same standards,
the overall pollution and environmental outcome has been a
total disservice to environmental concerns, again, turning
everything on its side and upside down. The environmentalists
are ending up arguing for something that hurts the environment
when looked at in a rational discussion.
So the environmental consequences of restricting offshore
oil and gas development have been exactly opposite to the
approach that we were led to believe. Having scuba dived, which
I have, below and around offshore rigs along California's
southern coast, I can assure you, the local fish are healthy
and plentiful.
Their natural instincts, which would drive them away from
something that had something that was going wrong with their
body, their natural instincts, I believe, are better than the
political instincts of those who have been in the forefront of
the fight against offshore oil drilling. But the economic
consequences of banning new offshore oil and gas drilling also
need to be addressed.
One of the reasons our economy, I believe, has been
faltering is that it has been weakened, in part, by the
transfer of wealth that comes from buying oil and gas from
overseas when we could produce that same energy domestically
from our own offshore oil reserves. Just off the coast of
California, there are enormous untapped oil and gas reserves.
The low estimate, and, again, they made estimates like this,
which were low estimates, in the Gulf of Mexico and found it to
be much more oil than what the low estimate was; the low
estimate is nine billion barrels of oil, as well as vast
deposits of clean-burning natural gas.
At $40 to $50 a barrel, which, I believe, is what we are
going to come down to, if not $60 a barrel when things all
balance out in the marketplace, at $40 to $50 a barrel, that
represents a value offshore of California at perhaps $500
billion, $500 billion of wealth, and, again, that is a low
estimate.
Why are the American people being denied this wealth when,
of course, not developing this energy puts it at greater
environmental risk? Why are we denying this to our people at a
time of hardship?
The Federal government, as well as state and local
governments, especially in California, sorely need new sources
of revenue. It is right there. Denying America the benefits of
our own country's oil and gas deposits is a sin against our
people, and it is bad environmental policy, to boot.
Most disconcerting, the real issue, I believe, that has
been the driving force all of these decades and that has led to
the restriction of offshore oil and gas deposits and, again,
certainly has not really been the environment, as I just
stated--it certainly has not been the economy. What has been
the driving force that has prevented our people from having
this wealth, to build schools, to provide healthcare, to make
sure that we did not have to ruin our economy by buying this
oil and fuel overseas? What has been the driving force? The
view. It is the view.
I am sorry. Maybe the view is important. That may be might
be environmentally sensitive, to really be concerned about the
view. We have some more serious things to be concerned about.
However, even with that issue, let me suggest that perhaps we
could require a better-looking facade on the part of offshore
oil rigs.
In Long Beach, they have beautiful facades, and no one
complains. I will tell you right now, if we would not be
developing our offshore oil rigs off of Long Beach, that city
would go belly up economically.
So, let us require the facades look beautiful. Let us paint
them in green trees, or whatever would make environmentalists
happy.
No. I would suggest that we require better-looking offshore
oil rigs, and let me also note, we can put wellheads under the
water now. Again, I am a scuba diver. A lot can be done that
was not done in 1969, with technology that had been developed
in the forties.
The fact is that we can have underwater wellheads that have
almost no chance of spilling, even in the middle of a hurricane
in the middle of the Gulf.
So, it is time for us to quite worrying about the view,
start standing up for the economy and the environment, but also
stand up for our people, who have a right to the benefit of
this vast wealth that is offshore, and especially that is true
in this time of economic hardship.
Thank you, Mr. Chairman, for letting me present my case.
[The prepared statement of Mr. Rohrabacher follows:]
Statement of The Honorable Dana Rohrabacher, a Representative in
Congress from the State of California
Mr. Chairman, members of the Committee, I appreciate this
opportunity to testify on an issue that deserves a much more serious
discussion than it has been given for these last four decades.
Let me preface my remarks by noting that I am a surfer. I was proud
to be the best surfer in Congress until another one was elected, Brian
Bilbray. And now that Duncan Hunter, yet another surfer, has been
elected, I am rightfully the third best surfer in Congress. However, it
has been agreed to that I am now chairman of the unofficial yet
powerful Surfers Caucus. With that said, I love the ocean, and
preserving it is a high priority for me. I am also a scuba diver, and
if I thought offshore drilling imperiled the ocean, I would oppose
offshore drilling. But that is simply not true.
Decades ago there were a few well-published accidents that led to
oil spills. 1969 was a long time ago. We shouldn't be basing our
judgments on what is important for our people or what is good for the
environment based on what was done with technology that was put to use
in 1969. That was probably technology that was developed long before
1969. The technology since those days has dramatically improved.
Hurricanes can go right through our offshore operations and the Gulf of
Mexico without one drop of oil being spilled. But even with the old
technology, the chances of an oil spill are much more ominous by
tanker-delivered oil than that which is extrapolated by offshore rigs.
In my own district, which has had offshore drilling for more than 30
years, there have been no significant problems with these offshore
rigs. Yet, shortly after I was elected, there was a major oil spill--
from a tanker! And remember, the more you say you can't drill, and the
more the environmental radicals prevent us from doing that offshore oil
drilling, the more oil we have had to deliver by tanker! They
ironically made it more likely to have oil spills off California and
off my district. So those who claim the mantle of environmental
champion and aggressively oppose offshore oil drilling have ironically
made oil spills more likely.
Furthermore, by making us more dependent on foreign production,
which is not encumbered in many of these countries by the same safety
and environmental standards, which I support, we essentially increase
the overall pollution of the planet. Again turning everything on its
head, the environmentalists are ending up arguing for something that
hurts the environment when looked at in a rational discussion. So the
environmental consequences of restricting offshore oil drilling and gas
development have been exactly opposite to the approach that we were
lead to believe. Having scuba dived, which I have below and around
offshore rigs California's southern coast, I can assure you the local
fish are healthy and plentiful. Their natural instincts, which would
drive them away if something was going wrong with their body, their
natural instincts I believe are better than the political instincts of
those who have been in the forefront of the fight against offshore oil
drilling. But the economic consequences of banning new offshore oil and
gas drilling also need to be addressed.
One of the reasons our economy, I believe, has been faltering is
that it has been weakened in part by the transfer of wealth that comes
from buying oil and gas from overseas, when we could produce that same
energy domestically from our own offshore oil reserves. Just off the
coast of California, there are enormous untapped oil and gas reserves.
The low estimate--and again, they have made estimates like this which
were low estimates in the Gulf of Mexico and found it to be much more
oil than what the low estimate was--the low estimates is 9 billion
barrels of oil as well as vast deposits of clean burning natural gas.
At forty to fifty dollars a barrel--which I believe is what we are
going to come down to, when things all balance out in the market
place--at forty to fifty dollars a barrel, that represents a value
offshore of California, at perhaps five hundred billion dollars! Five
hundred billion dollars of wealth and again, that is a low estimate.
Why are the American people being denied this wealth when of course,
not developing this energy of course put us at greater environmental
risk? Why are we denying this to our people at a time of hardship?
The federal government--as well as state and local governments--
sorely needs new sources of revenue. It's right there! Denying America
the benefits of our own country's oil and gas deposits is a sin against
our people and it's bad environmental policy to boot. The real issue I
believe that has been the driving force all these decades, that has led
to the restriction of offshore oil and gas deposits and again,
certainly not the driving force certainly hasn't really been the
environment as I have just stated, it certainly hasn't been the
economy. What has been the driving force that has prevented our people
from having this wealth to build schools, to provide healthcare, to
make sure that we didn't have to ruin our economy by buying this oil
and fuel overseas. What has been the driving force? The view. It's the
view. I'm sorry, maybe the view is important. That might be
environmentally sensitive. But to be really concerned about the view,
we have got some more serious things to be concerned about. However,
even with that issue, let me suggest, that perhaps we could, require a
better looking facade on the part of offshore rigs.
In Long Beach they have beautiful facades and no one complains, and
I will tell you right now if we would not be developing our offshore
oil rigs off of city of Long Beach, that city would go belly up
economically! So let's require the facades look beautiful, lets paint
them in green trees and or whatever would be make environmentalists
happy. No, I would suggest that we require better looking offshore oil
drilling rigs and let me also note we can put well heads on under the
water now. Again, I am a scuba diver, a lot can be done that wasn't
done in 1969 with technology that had been developed in the forties.
The fact is that we can have underwater well heads that have almost no
chance of spilling even in the middle of a Hurricane and even in the
middle of the Gulf. So it is time for us to quit worrying about the
view, start standing up for the economy and the environment but also
stand up for our people who have a right to the benefit of this vast
wealth that is off shore and especially that's true in this time of
economic hardship. Thank you Mr. Chairman for letting me present my
case.
______
The Chairman. I thank both of you. This is normally the
time we allow Members of the Committee to ask the panel
questions, but perhaps I will allow the panelists to ask each
other questions.
[Laughter.]
Mr. Farr. We would be delighted.
Mr. Broun. Do you need a motion, Mr. Chairman?
The Chairman. Well, before recognizing my colleagues, let
me remind them that we do have a State of the Union tonight,
and we have to be out of here by some reasonable hour. I
recognize the Ranking Minority Member, Mr. Hastings.
Mr. Hastings. Thank you, Mr. Chairman, and thank both of
you for your testimony. I think anybody listening today
probably got the arguments on both sides right here, and this
is what the issue is all about.
I just want to ask, I guess, both of you, in a broad way.
Mr. Farr, you are concerned about the pollution of the oceans.
The data that I have looked at, the largest contributor to oil
in the oceans is natural seepage, and the second-largest
contributor is runoff from urban areas. By far, way down, is
the extraction process.
What is your comment on that, observation on that,
statistic, which is, by the way, well grounded?
Mr. Farr. Well, two things. First of all, I think that this
whole argument has to go to, how do we want to position
ourselves in the future regarding our dependence on oil, and
are we going to continue to be addicted and, therefore, do OCS
when you have, I think, sort of high-risks/low gains.
You know, the economy of California's coastline is so much
greater than all of the oil extraction, and that economy is
based, like in a lot of the states, on the beauty and
attraction of coast beaches. The number-one attraction in the
United States of America, the number-one attraction in the
whole country, for visitors is the Los Angeles beaches, and, on
those beaches, you are not seeing them involved with oil
spills.
I think, in response to your question about runoff, because
we are killing the oceans--we are dumping everything we do not
like into the oceans that we do not know what to do with, and,
at the same time, we are taking everything that we want out of
it, not only in food supplies but mineral supplies as well.
The oceans are paying a price for that, and we, in
California, understand that urban runoff has a big ocean-
pollution problem, and what we are doing, community by
community, up the coast, is developing a tax base to
essentially collect all rainwater runoff and pretreating it or
ponding it before it goes into the ocean, essentially stopping
the pollutants from getting in.
Los Angeles was the first region in the state to do that,
and it has done it extremely well, and I know our community
just passed a bond measure last November to do the same in my
district.
So, the seepage has been a problem, but it gets
exacerbated, I think, by the risk involved, as I said, by
exploration risks, by transportation risks, and by extracting
risks. I think those give you a higher degree of potential
damage than actual seepage that occurs.
Mr. Hastings. Dana?
Mr. Rohrabacher. Well, there is natural seepage, and, in
fact, again----
The Chairman. Have you seen it in your area?
Mr. Rohrabacher. Yes. I have surfed up in Santa Barbara,
and it is all over my feet, and everybody knows that who surfs
in Santa Barbara. The fact is that if you did not have any
offshore oil wells, the seepage would be worse because the
buildup would not be actually alleviated.
Let me note that the argument that, ``Well, we have to get
ourselves off of dependence on oil, thus we are going to
restrict the amount of oil that we produce,'' is like saying,
``You know, our people are eating too much. Let us start
restricting farmers.''
I mean, this does not correlate. It is not something that
is going to lead to something good. Restricting the amount of
food is not going to lead people to eat less.
The fact is, restricting oil has done one thing:
Restricting oil development has led us to buy oil from
overseas, and then what happens? It a much greater risk to
transport that oil to us via tanker. So, it has had just the
opposite.
In terms of urban runoff, my good friend, Sam, and I are in
total agreement for those types of environmental controls and
emphasis. I would actually suggest that if we really want to do
it right, let us agree to offshore oil drilling and direct the
revenue from the offshore oil wells to the communities along
the coast who can then use those new financial resources to
deal with the problem of urban runoff and some of the other
major environmental issues that coastal communities have.
Mr. Farr. Can I add one thing to that point?
Mr. Hastings. Let me make this point because my time is
running down here, and that is that if you had revenue sharing,
presumably, states and municipalities along the coast could
share in that revenue to do exactly what you are saying, Dana.
Is that correct? Is that what you are suggesting?
Mr. Rohrabacher. It is, but I would actually go further
than that. I would suggest that we codify that so a certain
percentage of the funds are not just going to the state but go
directly to those coastal communities opposite that offshore
oil development.
Mr. Hastings. Sam, and then I just want to make one more
point, go ahead.
Mr. Farr. Last year, we received $23 billion from OCS
activity, and $17 billion of that just went into the general
fund. So, you have a revenue source there that could do a lot
of things, and my point in this was that this Committee, as the
Resource Committee, ought to take a look at that revenue stream
and direct it toward doing some beneficial things for the ocean
because it is distributed back to the states.
It is an awkward formula: The states get money from state
lands oil drilling in the first few miles offshore. Then there
is this buffer zone between the state and Federal lines, and if
there is an oil rig out there, the deposits may be on
underlying state lands or Federal lands, so there is a sharing
process for the boundary, and then everything beyond that
boundary just comes to the Federal government. Of that, as I
said, $23 billion was raised last year, and $27 billion just
went into the general fund to go be spent on other things. I
believe that that is the Resource Committee's money and that we
ought to spend it on more than just the Land and Water
Conservation Fund.
Mr. Rohrabacher. Let us have a compromise here, and all the
new revenue should go to the coastal communities.
Mr. Hastings. I was going to make precisely that argument,
Dana.
One last point, I want to make: If the issue is to protect
the oceans, and natural seepage is the largest polluter in the
oceans--that is well established--and the second is runoff from
urban areas, there is the option--I say this facetiously--for
people that live on the coast to move inland; therefore, they
would not have their runoff into the ocean. Do you suppose that
that is an option?
Mr. Rohrabacher. [Laughter.]
Mr. Hastings. Thank you, Mr. Chairman.
The Chairman. The gentlelady from Massachusetts, Ms.
Tsongas.
Ms. Tsongas. Thank you very much for your testimony, and I
agree with you, Congressman Farr, and we have heard testimony,
that our oceans are sick. Living in Massachusetts, which is
also a coastal state, we know that to be true, and there is
much work to be done.
An important part of the debate on the use of the Outer
Continental Shelf, then, obviously, has to take into account
its impact on our oceans, and I think that is as true as we
begin to look to the oceans for sources of renewable energy.
I am wondering what your thoughts are on a process that
takes into account, as we look more and more to the oceans for
that source, takes into account the potential impact of using
them in that way, how your state has been working to do that,
because it has been such a leader in looking at the ocean as a
source of alternative energy.
Mr. Farr. Well, in the past, we have always looked at the
ocean as just out there, this big, flat plane, and treated it
as one spot, but, as we get more and more information, we learn
that, just like on land, there are natural habitats that are
unique and that should be preserved, and there are unique fish-
breeding areas and things like that, as we have done on land.
When you think about San Ignacio Lagoon in Mexico, which
the world opinion has preserved to allow breeding grounds for
the gray whales, and that is, as we discover more of this, we
are going to discover that there are wind zones, there are
tidal zones, there are zones that can be tapped for energy
production, and I think that is what is missing from this, that
we have not thought about this as potential for all kinds of
energy development, not just oil and gas, and we ought to look
before we leap, and that is why I think the moratorium is
important. Put it on now so that we can have a better
understanding of what the potential developments for all kinds
of energy uses are in the ocean, not just oil.
Ms. Tsongas. Do you think that should be a national
strategy or a state-by-state process?
Mr. Farr. Well, it ought to be a national strategy because
the states only have out to three miles; we have out to 200
miles of our jurisdiction.
Ms. Tsongas. Well, as you know, in Massachusetts, we have
the Cape Wind Project, which is on Nantucket Sound, and the
process of citing those wind turn bites has been as contentious
as any discussion we have had about offshore drilling.
I think, as we go forward, we are going to have to take
into account the natural opposition to anything that changes
the sightlines or capacity to use our oceans and our sounds in
a recreational capacity, and I do not think just painting trees
on anything quite solves the problem.
It is a discussion we have to have, going forward, and yet
we all know how we have to reduce our dependence on fossil
fuels as we protect our natural resources, so thank you for
your testimony.
The Chairman. The gentleman from Colorado, Mr. Coffman.
Mr. Coffman. Thank you, Mr. Chairman and both Mr. Farr and
Mr. Rohrabacher.
It is interesting, when we talk about the revenue issue and
its potential for mitigating issues, I know, in Colorado, that
we have a revenue source that is derived from royalty payments
for oil and gas developments that goes to local governments to
mitigate any economic impact that they have in their
communities, whether it is having to build new roads or,
because of increased population, to do the development, to
build new schools, whatever the needs are for those local
governments.
I am wondering, what would be the impact if, instead of the
Federal government deriving revenue from the offshore
development, if we simply dedicated those revenues to those
local communities that were impacted by that offshore
development, or, certainly, visually impacted or potentially
environmentally impacted, to develop their own programs to
mitigate those effects, or even to use those dollars for other
environmental programs in the marine environment? Would there
be more acceptance of offshore drilling if there were a better
system of dividing the revenue?
Mr. Farr. I do not think you are going to buy off the local
community by sharing the revenues, and I do not think you have
the votes in this Congress because we are very parochial about
Federal money and not wanting to give it to local governments
to spend.
In the OCS funds, there are eight statutorily derived funds
from it--they are kind of locked box--and one is American
Indian tribes and allottees, which get money from it, and I am
sure your state receives from it: the Historic Preservation
Fund, the Land and Water Conservation Fund, the Reclamation
Fund. There is a thing called ``state share,'' which is that
boundary-line money, and then the state share from onshore
revenue that they get.
Those are the only funds; 74 percent of the rest of the
money coming in just goes into the general fund.
I think you have to find a national purpose, if you are
going to use Federal dollars, because I do not think the inland
legislators just want the coastal states to get these monies,
particularly to local governments, and that is why I am
suggesting that we ought to earmark a fund, an Ocean Trust
Fund, to deal with the aspects of governance of the ocean.
I am carrying a bill, H.R. 21, and many of you are co-
sponsors of that bill. It will be before this Committee later
this year, and that is the concept there, to pay for that
governance structure with funding such as OCS.
Mr. Coffman. If I could just go first, is not it a national
purpose, and, Mr. Rohrabacher, if you could also reflect on
this, is not there a national purpose right now, in terms of
the economic and national security of this country, economic
security, lessening our trade deficit, national security?
I am an Iraq War veteran, and kind of tired of having our
dollars go to regimes that do not necessarily like us.
Mr. Farr. Well, I guess that is Mr. Rohrabacher's argument,
that we ought to drill in U.S. before we buy oil abroad, and
that is certainly a great argument. I just think we ought to be
smarter about how we develop energy systems. I think that is
part of this whole economy, the green energy issue, which has
really caught on in California--that is where the venture
capital, private money is going--and we ought to be
appreciative of that and support it.
Look, offshore oil in California is about 10 percent of the
entire California oil supply, the production. It is very
little, and it is high cost to get out to the ocean. I think if
you had a lot of oil companies here, and you asked them,
``Would you rather grow onshore rather than offshore?'' they
would all tell you, onshore is a lot less expensive and
probably safer.
Mr. Rohrabacher. Let me just suggest that restricting
offshore oil development has not meant that we will be
producing energy in another, more environmentally efficient
manner. We, obviously, now bring it in from overseas, which has
made it more likely to have an oil spill, as I mentioned, but
just like our colleague from Massachusetts can tell you, they
have tried to put not oil rigs offshore but windmills, and,
even with that, you have had total opposition or enormous
opposition.
Solar installation. I have a bill that is asking the Bureau
of Land Management to facilitate, rather than block, the
request for permits to put solar energy facilities in our
deserts. We have 190 of these that have been held up for five
years because people are more concerned about the little
insects and the lizards and their habitat than about producing
clean energy.
It does not mean, just because we are going to restrict
offshore oil, that we are going to get that energy from
someplace else. This same gang that is opposing offshore oil
wells is generally opposing these other things as well.
We need to do what is in the interest of our country,
environmentally, economically, and every other way, and the
best thing for us to do would be to take these revenues from
the new offshore oil revenues, give it to these local
communities along the beach to handle the runoff, which Sam and
I agree on.
In my own city, Surf City, USA--Huntington Beach--they had
a horrible challenge about finding money to fix the sewer
systems. Let us use that money from offshore oil rigs to fix
the sewer systems in coastal communities.
Now, these are things that would have tangible, positive
results rather than all of the rhetoric we have been hearing
for three decades about what happened in 1969 at the Santa
Barbara oil spill.
The Chairman. The gentleman's time has expired. The
gentleman from New Mexico, Mr. Heinrich.
Mr. Heinrich. I wanted to return to this idea you brought
up about more of a zoning approach. I am not an all-or-nothing
person when it comes to OCS, and I do agree with Mr.
Rohrabacher that we should start avoiding the rhetoric and
actually move toward some places where we might have common
ground.
I am intrigued by this idea because, obviously, when it
comes to how we manage our surface resources, for example,
throughout the Intermountain West, we take a zoning approach.
We do not drill in national parks and wildlife refuges, but we
do drill on many places where we find that is the highest-and-
best use.
I am curious as to what you think some of the steps we need
to take to have a more accurate, zoned approach to OCS
resources would be. As you know, I have spent quite a bit of
money in your district because of, basically, the diving
resources that are there. That is a big part of the economy,
and, with all due respect to Mr. Rohrabacher, I am not really
interested in going to Monterey to dive on an oil rig. That
said, there may well be places where that is the highest-and-
best use.
Mr. Rohrabacher. The fish are pretty good off those oil
rigs.
Mr. Coffman. How do we move toward a more accurate way of
looking at this, in a more nuanced way, instead of an all-or-
nothing approach?
Mr. Farr. That question is the problem for the U.S.
Government because we have never had a comprehensive policy
about the oceans. It has all been stovepipe, and we have 144
different statutory provisions relating to the ocean, and
almost every single agency of the Federal government has a
different administrative role.
This bill that has actually come out of this Committee--I
have been working on it for about six years--is this whole
comprehensive policy that was given to us as recommendations by
not only one oceans commission, but two, one created by
Congress, and the other created by a nonprofit. Their
recommendations are very similar, and they are into this bill.
It is not zoning, per se, because what we do not do is
create any new government. We work with the existing regional
processes, but there is a lot more coordination of decision-
making and information in this so that the right hand knows
what the left hand is doing.
I think you are going to hear, in the next panel, what
California has done with its offshore own state lands. They
have begun, way ahead of the Federal government, creating
marine protected areas, essentially, the first part of kind of
what are areas that have such significant biological
significance that they need to be protected from fishing?
There are ones that there are ``no fish, no take,'' and
there are others where there is a limited take and limiting
fishing. Different styles fit different environmental
ecosystems, and you can hear from the next panel that it was
done with a lot of controversy but, nonetheless, the states put
them into place, and way ahead of the Federal government.
President Clinton directed that we create, in the Federal
system, marine protected areas, but we have not yet done that.
I might add that one of the experts on this whole issue of
offshore oil drilling, who represents it more than anybody in
the country, is sitting here in this Committee. It is Lois
Capps, who represents Santa Barbara, and she is certainly
familiar with the pressures from both the environmental
community and the drilling community, and that community has
developed a lot of expertise in the risk issue and also the
cost-benefit issue.
Mr. Coffman. One more question for you real quick, Mr.
Farr. Regarding the idea of the Ocean Trust Fund, I am very
familiar with the Land and Water Conservation Fund. It has had
an enormous positive benefit on the State of New Mexico. We
have not always been good about making sure those dollars get
spent where they were designed to be spent. Do you have any
concern that we would create this Ocean Trust Fund but then,
you know, fail to fund it?
Mr. Farr. Well, of the OCS money, only 3.8 percent goes to
the Land and Conservation Fund, and it is set in that fund, but
Congress does not always appropriate all of the monies,
something that this Chairman, Chairman Rahall, has been very
concerned about. The money is there, and we have not been
appropriating it.
I do think we can put conditions on that Ocean Trust Fund,
certainly, to manage it any way one would think necessary, but
I do think it is important that this Committee create such a
fund. We need a process. We have done that for exploring space,
and yet that policy has not yet been developed for the ocean,
and, you know, that is 73 percent of the planet.
It is interesting that Google--you might have heard it from
this Committee--has always had this site, ``Google.earth,'' and
Sylvia Earl pointed out that if 73 percent of the earth is not
even in your site, you cannot call it ``Google.earth''; you
have to call it ``Google.dirt.'' But just last month, Google
opened up all of what is known in exploration of the oceans,
and it is very, very small.
There is a whole frontier out there, and I think that my
point here is that Congress, in their wisdom--it is a huge
resource-policy issue--is that we really need to look before we
leap. We need to be a little bit smarter about how we are going
to approach the oceans rather than just doing the same old,
same old, because there is oil out there, we take it; there are
fish out there, we take it; and we dump things. We just cannot
do that anymore. We have to be smarter about this, and that is
the point of this whole hearing.
Mr. Rohrabacher. I would suggest that if we are really
going to do this smarter, and I agree with you on some of the
challenges that you have outlined for us, in terms of oceans--
again, I am a scuba diver and a surfer. I want to protect the
oceans, setting up a fund here in Washington, D.C., being
managed by who knows who, whatever special interests managed to
get themselves appointed to head the fund, I think, is a lot
less effective than giving the money to local communities, like
Huntington Beach, to correct their sewer problem, and I think
that that will be much better spent, and the people, locally,
know.
We care about the ocean locally. We are in the ocean, and
we depend on it for tourists, but give that revenue to the
local communities, not to some national fund, and it would be
more wisely spent. But I agree with Sam that we should be
spending much more money on the oceans. NOAA should have a
budget that is much higher, and, in fact, I think NASA and NOAA
should be basically on par with each other because utilizing
the oceans, like utilizing space, for the benefit of mankind
makes all of the sense in the world, and investing in that
makes all of the sense in the world as well.
The Chairman. The gentleman from Virginia, Mr. Wittman.
Mr. Wittman. Thank you, Mr. Chairman.
Gentlemen, I think you have brought up some great points,
specifically concerning onshore runoff into the oceans. I think
we have all kinds of challenges there--ocean acidification--so
I think those are obviously apart of an issue, and you speak of
a comprehensive ocean policy. I think that is absolutely
needed.
If we go back, though, and we get to the energy issue, it
seems like, to me, too, also going forward, that we need a
comprehensive energy policy looking at all of the different
sources of energy. I do not think anybody here does not believe
that we should not be pursuing aggressively alternative and
renewable sources of energy but also looking at the sources of
energy that we have here in the United States as a bridge to
that and, hopefully, getting away from some of those foreign
sources.
Let me ask this. I know both of you all have, what seems
like to me, some things in common but also some differences,
but what do you see as our development of a comprehensive
energy policy and using our sources of energy while we can
quickly get to these alternative and renewable sources that,
hopefully, take us into the future because we all know we are
at peak oil production right now. The world is not going to
find any more oil, so that is a decreasing source, but we have
to make sure we transition.
Obviously, we want to do that safely. Having been an
environmental health specialist for 27 years, and looking at
the current technology, it does appear as though we can put
proper controls in place for development of our own sources and
minimize risk. Now, we will never get risk to zero, but I think
we can manage it and minimize it, and I just want to get your
thoughts and ideas about how that part of a comprehensive
energy policy should take place.
Mr. Farr. Well, as you know, from your professional
background, that the best investment and fastest investment is
conservation. Use less, and you have more resources to
distribute.
California, before you got elected, when I was here, we had
the big energy crisis in California, and I think the joke
around Congress was, ``It is you, all you Californians out
there, in your SUVs and hot tubs drinking your Merlot. You just
deserve to have big energy costs.''
Well, now, it is very interesting because what we have
discovered is that California, per capita, is the lowest user
of energy in the United States, and how did we do that? That is
the answer to your question. We did it piece by piece. We did
it in energy conservation in building materials. We did it in
less water usage, less pumping charges, irrigation practices.
It was just sort of all of these best management techniques,
including business that led it and made money on it because you
buy the equipment from the private sector.
I think that that is a good lesson, that there is a great
economy out there that has not yet been tapped, and it is doing
things and just doing them smarter.
Now, that is my point, and there are a lot of green carrots
out there in that stimulus package to get that investment and
to get those things built. I tell you, it works, and, again,
the experts on that for the state are sitting right behind me,
and they are going to be on your next panel, and they can give
you a great deal of detail and politics about it.
Mr. Rohrabacher. I would agree with my good friend, Sam,
that we need a comprehensive approach to energy, and I believe
that those people who are opposing offshore oil are just
fencing off an area that should not be fenced off from a
comprehensive approach, but I certainly am very supportive.
For example, I think that we have invested in solar energy
research. I have been in Congress over 20 years. We have been
supporting it, the Science Committee, research into solar
energy, all of these years, and that has been bipartisan
support, and we have now reached a point where solar energy is
very competitive with other sources of energy. I believe the
comprehensive approach America should take--I know this is
going to surprise a lot of people, but the electrification of
our country. Transportation and other uses of electricity
should be expanded, and then we should seek to find clean ways
of producing electricity.
We have nuclear power, which is an alternative. Again, some
of those people who claim to be for the environment have
opposed nuclear energy development, which, in and of itself, as
we know, is a clean source of electricity. They have a thing
called the ``high-temperature, gas-cooled reactor,'' which now
solves the waste problem, and we should be moving forward in
developing these new types of reactors that are safer and solve
the waste problem. We should move to electrification of our
railroads, electrification of cars. These are things that we
should move forward, but we need to produce electricity then.
The same people who are opposing offshore oil development
calling themselves ``environmentalists'' are opposing windmills
off of Nantucket, and they are also opposing solar energy
installations in the desert because they are concerned about
those lizards and ants and there habitat.
We need a comprehensive and full commitment on producing
and electrifying America. That is the clean source of energy
that will make our air cleaner, keep our oceans cleaner, and,
again, I agree with Sam that we ought to make sure we spend
more money on ocean-related research and activities. Thank you.
The Chairman. The gentleman's time has expired. The
gentleman from Arizona, Mr. Grijalva.
Mr. Grijalva. Thank you, Mr. Chairman. Granted that, in
Arizona, we are not as intimate with this issue of offshore
drilling as some of the other states that are represented.
If I may, just a reaction from my colleagues, and thank you
both for your comments today. Recently, Secretary Salazar
delayed the implementation of the previous administration's
five-year plan on leasing oil and gas exploration offshore. He
extended the comment period for 180 days--that would take us
into September 23rd; canceled the scoping meetings that were to
be held in preparation for the implementation of the Bush
proposal, and, instead, there are going to be four regional
meetings.
He has instructed appropriate agencies to develop
information about fossil and renewable resources offshore, with
the strong suggestion that more information is needed, and how
are we going to obtain that information: cost-benefit,
environmental issues, economic issues, obviously.
So, your reaction not only to the postponement but to this
renewed longer process and the discussion of the five-year
plan. Mr. Farr?
Mr. Farr. Well, I support his effort because that was
placing a moratorium, which, frankly, I think this Committee
led the effort, long before I got here, through many different
administrations. Bush I, I remember, was involved in
supporting. In fact, the National Marine Sanctuary in my area
was signed into law by Bush I. It is the largest marine
sanctuary, and it prohibited oil and gas.
I think that there is obviously a knowledge that we need to
know more about the ocean and the impacts on the ocean before
we just continue to do same old, same old policy that treats
the oceans like land. I think that the issue here is probably
best stated by T. Boone Pickens, who has made all of his money
in oil, and he is here telling you, you cannot drill your way
out of this problem, and he echoes Dana's concerns more than
anybody about the importation of foreign oil.
So, how do we develop this policy? I think that is the big
issue. There are so much smart things to do. Let us not just
charge ahead doing things that we know are not going to be the
final solution, that are not going to be high risk/low gain.
So, the moratorium that he imposed, I think, makes good sense.
Mr. Rohrabacher. I would suggest that, at a time when our
men and women--I just got back from Afghanistan--a time when
our men and women are being sent overseas, and let us be fair
about it--if we were not dependent on those energy resources
overseas, we would not probably be sending, or have sent, our
people to Iraq. But for us, then, to hesitate to develop our
own resources, and knowing that when we buy oil from overseas,
quite often it goes to finance governments that are hostile to
America's interests and, indeed, are financing people who are
shooting at our own soldiers.
At a time like this, especially, and at a time of vast
economic hardship, when we could use the wealth here rather
than sending it overseas, not only for national security but
for our economy, it makes no sense for us to be delaying the
development of our own energy resources.
There needs to be a comprehensive approach. I am with Sam
on that. We should not just say, ``Oh, we are going to just do
oil.'' As I say, I think solar, right now, is competitive with
oil in the production of electricity. We should be moving
toward producing and electrifying our society. Thank you.
Mr. Grijalva. Thank you, Mr. Chairman, and I agree. I think
the information that is needed has to be comprehensive, and I
really think it is an opportunity, and I applaud the Secretary,
an opportunity to look at all consequences, intended and
unintended, with the pursuit of the plan that Bush was
proposing. So, let me thank the gentleman and you, Mr.
Chairman.
The Chairman. Thank you. The gentleman from Georgia, Mr.
Broun.
Mr. Broun. Thank you, Mr. Chairman. I would like to ask
Congressman Farr a couple of questions to kind of clear some
things up for me.
Do you see a difference between--you used the words
``conservation'' and ``moratorium on drilling''--just overall,
do you see any difference between conservation and total
prohibition of development?
Mr. Farr. I do not understand the question.
Mr. Broun. Well, as a word ``conservation'' to you, does
that mean total prohibition of development, or does that mean
responsible utilization of resources? What does the word
``conservation'' mean to you versus ``prohibition''?
Mr. Farr. To me, personally? Well, my life experience is
conservation has been best-management practices, being smart
about it. We have national parks, but we do not put a fence
around them; we open them up. We actually contract out to the
private sector to run the parks, the concessionaires. We put
roads in them. We put hotels in them.
We put visitors serving accommodations, and part of that is
to enjoy the incredible natural wonders, but it is also a great
educational aspect for Americans, and it gets them out of
doors. It is the same thing with National Forests, where we
actually have oil and gas development and timber operations and
other mining operations.
It depends on where you are and what the issues, but
conservation is essentially being a smart use of whatever it
is.
Mr. Broun. We could, then, have responsible development of
natural resources, wherever they may be, and still be good
conservationists. Is that correct?
Mr. Farr. Yes.
Mr. Broun. OK.
Mr. Farr. Yes.
Mr. Broun. Well, then, would you agree to Outer Continental
Shelf drilling if we could guarantee that there are no oil
spills from that operation?
Mr. Farr. Not necessarily. That is what I think the last
question went to. You make a proposal. What I point out is,
where are those oil and gas deposits? We know that from our
research, from the Mineral Management Agency, and prioritizing
those along with onshore capacity of being able to service
offshore rigs, and we have not done that matchup.
Communities have zoned what they want for the future of
their community, and sometimes just a Federal decision to come
in and plop down an oil rig. It was not a Federal decision up
in the cape, but those are not necessarily in balance with the
local economy.
I do not think you have ever been to my district, the
Monterey Peninsula----
Mr. Broun. I have.
Mr. Farr.--but, you know, that area is a small community
but one of the highest tourist communities in the United
States, and what we learned is we sell scenery here. We sell
coastal scenery and mountain scenery and valley scenery, and
that is what people come back over and over again for.
They like to see things in their natural settings, so the
emphasis goes into local communities on how to plan and how to
zone and how to protect and how to make sure that that scenic
look, the quality of life, is protected in those areas, and I
think that is the same kind of scrutiny that needs to be given
to any kind of development.
Mr. Broun. Are you aware, then, how far out can people see,
actually, if they are on the coast? For instance, if there is
an offshore rig that is 50 miles out, can they see it from the
shoreline, from California?
Mr. Farr. I do not know. Lois Capps ought to answer that
question because there have been proposals that the oil and gas
companies can hide these rigs underwater and do not have to
have anything above water, and I do not know whether that is
possible, but I think there is technology out there that can
allow for safe production of oil and gas.
My point is that, before we just go back into that
process--we have been out of it for a long time with this
moratorium--that we ought to look at all of the aspects on the
table and ask a lot more questions. This is sort of a question
of investment, is, where is the smart use of our limited
natural resources?
I think that that is both the scenic resources, and I think
that that is both the scenic resources and the extraction
resources that benefit society, and I think all of these
arguments are just do it with the best management practices
that are available, known to mankind and that they are done
wisely. These lease sales are based on a lot of old data and
old information that can be challenged today, and I think that
is why it is so controversial.
Mr. Broun. Well, I am a conservationist, and I agree that
we need to have responsible development of resources, and I
support an all-of-the-above energy policy that would help
promote conservation and promote alternative sources. Would you
support also an energy policy that is an all-of-the-above to go
ahead and develop our resources that we have in a responsible
manner but also look for alternatives and conservation, all of
the other things, such as nuclear energy, wind, solar, tide,
geothermal, et cetera? Would you support that kind of an energy
policy?
Mr. Farr. Well, I think that we have never developed that
kind of an energy policy. That is the point of this Committee's
role in this discussion, is that we lack that comprehensive
commitment. We have committed to what we know how to do best,
which is historical oil and gas development, hydro development.
A lot of people will question whether that is the best way
to get the end result, and, as you know, in California, which
is the most populous state in the union, we are tearing down
dams because we find that there is a higher economic value to a
natural system. A lot of people live off of that natural
system, including private sector fishermen, and they need
healthy streams.
So, in every instance, there are trade-offs, and I think,
without having a national policy of what we want to develop,
whether it is going to be nuclear or oil or solar, wind, tidal,
whatever it may be, that we have lacked all of these new
alternatives in the mix and given them a fair opportunity to
compete.
Mr. Broun. Mr. Rohrabacher?
Mr. Rohrabacher. I will just note that Sam did not mention
that certain groups have insisted that we tear down
hydroelectric dams in California. You wonder why things are
going screwball in California? I mean, we are going bankrupt.
We cannot pay any of our bills.
The Chairman. The gentleman's time has expired.
Mr. Rohrabacher. That is the kind of logic----
The Chairman. The gentleman from Maryland, Mr. Kratovil. I
am sorry. Going in order, I skipped Mr. Costa. The gentleman
from California, Mr. Costa.
Mr. Costa. Thank you very much, Mr. Chairman.
You know, in listening to the discussion here, I am
reminded of the fact that we agree on some basic concepts: one,
we ought to have a comprehensive energy policy. We agree on the
fact that we generally need to figure out ways in which we
reduce our dependency on foreign sources of energy.
Where we, I think, get the disagreement is, how do we
develop that comprehensive energy policy, and how do we do it
in a way that is practical and cost-efficient that looks at the
near term, the intermediate, and the long term? And no
administration and no policy in Congress that I have been able
to detect thus far has been able to develop a credible roadmap
that uses all of the energy tools in our energy toolbox because
we conveniently, for political or ideological reasons or
whatever, put certain things that we do not want to put on the
table, whether it is nuclear, whether it is expansion, in the
near term, of Federal lands for oil and gas as a trade-off to
take those revenues to further accelerate renewables, and it
always becomes a zero-sum game where, instead of advancing a
comprehensive energy policy in this country, more often than
not, it seems to me, anyway, to become a political gamesmanship
of ``gotcha'' as we try to deal with this political
constituency or that.
Do either of you two gentlemen, who I know well and who
know the political turf battles that we have in California,
want to explain to me how we get past that?
Mr. Farr. Well, Jim, you and I have known each other a long
time. We served together in the California legislature.
Mr. Costa. Yes.
Mr. Farr. I do not know if there is a magic way of doing
that. Essentially, that is what politics is all about, and----
Mr. Costa. But I am talking about the policy. You and I
both understand the politics. I am talking about the policy. I
mean, how do we get there from here? I think the American
public is frustrated that we cannot seem to sit down, on a
bipartisan basis, and develop a roadmap, using all of the
energy tools in our energy toolbox, near term, mid term, long
term, realizing that you have to crawl, and then you walk, and
then you run.
When we put a man on the moon, we did not start with the
Apollo program; we started with the Mercury program, and then
we started with the Gemini program, and then we advanced to a
stage, eight years later, where we could go to the moon. I do
not understand why we cannot be practical here.
I think a lot of the practicality is going to require that
we subsidize a lot of the old-fashioned energy development, and
we have not subsidized, until recently, in the discussion, the
alternatives and the new ideas that are on the table. That is
what science and technology is all about.
I think, all things being equal, and you tried to do that
somewhat in your energy policy in California, was to allow for
consumers to buy green-generated power, to try to use market
forces, that did not work very well.
I just believe that it has not been a balanced--let
everybody in on equal terms, and then allow the marketplaces to
decide, but it has to be equal. We have not made the laws yet
to make it equal.
Mr. Costa. Dana, do you want to take a try at it?
Mr. Rohrabacher. Well, I think the activists basically
control policy in the United States of America. I mean,
activists do, and we have had activists who were very sincere
people who just are stuck in the sixties, frankly. Yes, OK, we
do not live in the sixties anymore.
Mr. Costa. You had me until there.
Mr. Rohrabacher. The fact is, is we have technology now
that is better than we had back in the 1960s, and we have not
had one new hydroelectric dam, not one nuclear power plant, not
one new refinery in 30 years. That has meant at least a
trillion dollars out of our economy that would have been there
otherwise.
People should take some serious looks at the fundamentals,
and the fundamentals are, and I agree with Sam on a lot of
things he is talking about, in terms of using smart technology,
but there are some things that are being written off that are
now smart that used to be stupid. For example, nuclear power
did have a big problem, but, right down in San Diego, General
Atomics, has developed a thing called a ``high-temperature,
gas-cooled reactor'' that gives us tremendous potential in
dealing with the waste issue, which has been one of the main
impediments to nuclear energy.
We have new technologies that are going to make windmills--
attachments that you can put on these windmills that will
double the amount of electricity they generate, so they are
becoming competitive.
Solar energy is becoming competitive.
What we need, I believe, is to make sure that we focus our
resources on developing and maintaining an open-meter system so
that anybody that puts electricity into the system is getting a
credit for it, and maybe even paid for, by putting it in there,
and thus you can do it from all of these various sources of
energy. We do not need necessarily to subsidize people; just
let them make a profit in utilizing the technology that is now
coming online.
I think that is the best comprehensive approach to energy
that we could all agree on, and it would, again, make a very
widespread area of the number of people who would be
contributing to solve the problem from many different
directions.
Mr. Costa. My time has expired, but I want to thank the
Chairman and observe, with both of my colleagues who I enjoy
working with, that I think that the answers to the questions I
posed to both of you still reflect our difficulty in trying to
figure out how we develop a process to use all of the energy
tools in our energy toolbox that is near term, mid term, and
long term. We just cannot wish our way from Point A to Point B,
and I think that is the frustration and why we are stuck
without an energy policy so far.
Let me just make a note. Sam, and you and I agree, and
sometimes we agree to disagree, but we have removed some check
dams and smaller dams, but, in a water-deficient state as
California, we are not talking about removing Shasta, we are
not talking about removing Folsom, and we are not talking about
removing Friant Dam. We are not talking about removing any of
these major, maybe two-million-acre-feet of water deficiency,
in California.
I do not want to mislead my colleagues from other states
that somehow we have really lost our minds in the middle of a
drought, that we are now removing all of the sources of surface
supply water in the state. Nor are we removing what is my
favorite dam, every time we get around this circular
conversation, which is Hetch Hetchy, which is the primary
source of water for the City and County of San Francisco, and
which John Muir, the famous John Muir, who created the Sierra
Club, had a stroke trying to save Hetch Hetchy, which he called
the ``Little Yosemite,'' but it is now a big lake. We are not
talking about removing that dam either.
Mr. Rohrabacher. Some people are.
The Chairman. The gentleman's time has expired.
The gentleman from Texas, Mr. Gohmert.
Mr. Gohmert. Thank you, Mr. Chairman. I appreciate both of
you all, and I appreciate the viewpoints, and, of course,
Texas, where I am from, we have dealt with some of these
issues, and we have heard Mr. Danson talking about 200 million
people in the world rely on fishing, and, therefore, we should
not have offshore production, but when it was pointed out that,
actually, in Texas Gulf, adding the rigs has caused fishing to
proliferate because they see it as an artificial reef and
actually do quite well proliferation around those areas, and it
has actually helped fishing.
In fact, of the 100 rigs that are taken down each year, 10
of them are reconditioned and sunk in designated places for
artificial reefs, and the rest of them are taken ashore. Some
of them are reconditioned and then used again.
I appreciate my friend, Mr. Costa, pointing out what he
has, and I agree also with my friend, Mr. Farr, that we should
have smart use of the oceans. There are critical habitats
there, but man and energy production can go hand in hand, but
what I have seen, from my district, as I have been all over
East Texas and continue to go and talk to people, this
transition to, like, solar power, which I think could end up
being our best hope, and hydrogen and some of the other
technologies are terrific, but it seems like solar may provide
the best hope. But as I go around East Texas, the farmers tell
me, ``You know, we looked for a Prius tractor, and we could not
find one. We are still having to buy diesel and gasoline, and
that ends up affecting the price of food. It affects
everything.''
So, as my friend, Mr. Costa, was talking about, until we
get to that comprehensive picture--and Mr. Farr, you were
talking about--we are shooting ourselves in the foot. Boone
Pickens is often quoted for saying, ``We can't drill our way
out of our problem,'' but not everybody knows, he added to
that, ``but you do not stop drilling. You drill what you got,
and, in the meantime, you go after all of these other
resources.'' He is a big advocate for using what we have got.
I have been concerned about what this Committee has done in
the last couple of years. We have taken huge amounts of coal,
some of the largest deposits of coal in the world, and put them
off limits. We recently voted to put off limits the second-best
source of nuclear material that we have. We have put off limits
most of the Outer Continental Shelf drilling.
We have put off limits ANWR, and we had a report that if
the U.S. was allowed to pursue the Alaskan resources that we
put off limits, even though it would make a tiny footprint in
areas where nothing grows and nothing lives, it would provide
about two million-plus jobs around the country, and that,
within a few years, it would have added 349,000 jobs in
California as a result of pursuing Alaskan resources.
I do not really have a question. I think it has all been
said but not said by everybody, but I appreciate your
perspective, but we do need a comprehensive plan, and it just
seems like, if we were pursuing the offshore drilling and doing
it responsibly, I would be all for using the proceeds that the
Federal government got from that to help fund the future
research for the solar and the other things to let us get to
the next generation because, otherwise, we are going to so hurt
our economy, like my friend, Congressman Rohrabacher was
saying, that we are so economically dependent, we do not have
the chance.
Thank you all for your investment in this Committee
hearing.
The Chairman. There being no question from the gentleman
from Texas, the gentleman from Maryland is recognized, Mr.
Kratovil.
Mr. Kratovil. Thank you. That is something that I am still
trying to get used to, as a prosecutor, all of us, with our
statements and then rather short questions, but let me say
this.
Similar to Mr. Heinrich, I am not an absolutist from New
Mexico. I would never say never to opening up additional areas
for drilling, assuming we could do it in a way that was
environmentally safe and assuming we weighed the risks of doing
so versus the benefits that we get from it. But having said
that, and Mr. Costa and I actually had a discussion of this
outside after a vote, my question is this: In all of these
discussions that we have, and I asked this of the last panel,
we talk about opening up additional areas, and yet we still
have, of the 40 million acres that are available right now,
less than 10 of those are producing.
It seems to me that the question that we are consistently
debating at these panels is the Question No. 2, whether we
should be opening up additional areas when we really have not
answered Question 1, which is, why are we not using the other
acres that are available?
So, my question is, what is your perspective, both of your
perspectives, on why that is not happening?
Two: Do we think that there is an effective way to utilize
those areas that are already available, and, if there is, why
are we not doing it, and, if not, what are the things that
prohibit us from making use of those?
Third: Is that factor, the fact that we are not using
those, part of your basis for the arguments that you have of
opening up additional ones or, in your case, continuing the
moratorium?
Mr. Farr. I think that what is new to the whole discussion
on this is global warming. We have kind of debated whether it
was real or not real.
Secretary Chu said something that really struck me, that,
underneath the tundra is nothing but carbon, and on top and
between the tundra is all of this bacteria that is frozen and
that if, just like meat, if you take meat that you have had in
your freezer and put it in your refrigerator and leave it
there, after a few weeks, all of a sudden, you are going to see
stuff growing on that meat. That is the bacteria that have been
there that have been awakened by no longer being frozen and
starting to do their job, and they could do this job on the
carbon in the tundra in the North.
That would be a natural release of carbon far greater than
all of the man-made carbon releases on the planet, and it would
be forever, and, certainly, life on this planet would be
severely threatened.
So, in essence, we are in a race to see whether we can stop
global warming or hold it at a level before it really
devastates, and we know that this carbon release is the
problem.
Why are we trying to spend a lot of money on figuring that
out while, at the same time, saying, ``Well, let us go out and
just be more dependent on carbon fuels''?
See, I think that is the big argument, is, how do we get
ourselves off, not just, the United States, but how do we get
the world off, of dependence on this? You know, are we going to
find something that is going to replace oil? I do not think so,
but, certainly, we can cut down our dependence on it. I think
that is the leadership role that this country has to play.
Mr. Rohrabacher. To answer your question directly, many of
the people who have purchased the rights to drill in these
areas have found themselves also thwarted by other maneuvers by
activist groups, et cetera. You guys know more about that than
I do.
I am on the Science Committee, but I am not on this
Committee, and my guess is that there have been, as we have
seen for the development of other energy resources throughout
the country, there have been activist groups that, even though
someone has a right to build a solar facility, for example,
have a right to build solar facilities in the desert, you have
activist groups right now that have prevented 190 solar
projects from being built in the desert, and these guys make
themselves known to the Bureau of Land Management, where they
have their natural allies, and develop people inside the Bureau
of Land Management, and, all of a sudden, you find roadblocks
being placed in the way of people who have already purchased
the fundamental right to do something.
In terms of global warming--I am glad Sam mentioned that--I
believe that that really is the motive of a lot of people who
are just opposing any new development of oil or coal or gas. It
is basically that they bought into the argument that carbon
dioxide is going to change the climate off the planet. I would
suggest that I know that, 15 years ago, we were told that there
would be a big jump in the temperature of the planet. Right
now, it has not gotten any warmer for the last eight years. If
their predictions on that were not accurate, I am certainly not
going to let their judgments on global warming prevent us from
having the energy America needs to be prosperous.
Mr. Kratovil. But in response to that, would you agree,
then, before we are talking about opening up these additional
areas, that we would want to address whatever those obstacles
are that you are discussing and the acres that are available?
Mr. Rohrabacher. You know, there is reasonable opposition,
and then there are people who just are obstructionists because
they are out to save the world, and they are going to do
anything, even if it is not reasonable, unless you agree with
every one of their tenets of what is going to happen.
Mr. Kratovil. I know, but my point is, if you open up
additional acres, you are still going to be having those same
obstacles, are you not?
Mr. Rohrabacher. You know what? I would suggest that we go
to work on the problem of obstructionists, activists,
obstructionists, as well as moving forward with trying to open
up new areas for development.
We need the energy. We are wasting hundreds of billions of
dollars a year going overseas, sometimes to our enemies. It is
ridiculous not to have that. Our activists apparently do not
care about that. The activists who are putting the roadblocks
in the way apparently do not care about that.
Mr. Kratovil. But just a last comment on that. Again, I am
saying that I am not someone that would automatically rule out
opening up additional areas.
Mr. Rohrabacher. Right.
Mr. Kratovil. But my point is, we are having that
discussion, and, as far as I can tell, no one has really
answered the first question, which is, ``What are those
obstacles? What are those problems?'' and, one by one,
addressing them in the 40 million acres that are already
available before we start talking about----
Mr. Rohrabacher. I would suggest that this would be a good
subject for a hearing of this Committee of exactly why
different energy projects, including offshore oil projects,
have not gone forward, and I think that you will find, in most
cases, that there have been very well-financed activists who
have made it their job to obstruct and to put roadblocks up. As
I say, they are even doing that with solar energy projects in
the middle of the desert because they are worried about the
habitat of insects and lizards.
The Chairman. The gentleman's time has expired.
Mr. Rohrabacher. All right.
The Chairman. The Chair would advise the gentleman from
California, Mr. Rohrabacher, if he wants an answer to that, to
attend tomorrow's hearing. We will be glad to welcome you. We
will allow him to sit.
Mr. Abercrombie. Mr. Chairman, are we bringing the lizards
in tomorrow?
[Laughter.]
The Chairman. The Chair recognizes the gentleman from
Nebraska, Mr. Smith.
Mr. Smith. Thank you, Mr. Chairman and colleagues. I
appreciate your testimony here today. I believe that, Mr. Farr,
I first met you at your property at a wedding along the coast,
and I certainly think that it is a beautiful area, and, quite
actually, I would be interested in preserving the beauty of
that territory as well.
I hope that we can arrive at an agreement, with this entire
issue, that we can satisfy, at least a little bit, both sides.
Now, I have been interested to learn about New Zealand and
its development of hydropower. I believe, if my numbers are
accurate, that 80 percent of New Zealand's electricity comes
from hydropower, including, I would say, diverse hydropower,
which would include harnessing tidal pressures.
If there is a problem with the apparatus of a drilling
platform for petroleum, whether it is above water or below
water or in between, you name it, wouldn't we also have a
problem, then, with the apparatus of harnessing the tidal
pressures that would accomplish that as well? Can you speak to
that?
Mr. Farr. My whole point of my testimony, and I think that
the hearings you are having in this Committee, is that we do
not have a comprehensive energy policy in this country. You are
the Resources Committee. You are responsible not only for the
wise use of resources but also for the protection and health of
all of the resources, and I do not think, without that, we can
be smart about how we want to then harness energy and the risks
involved.
There is a macro argument, which I think Mr. Costa was
bringing into, is the macro argument about developing that
policy, and then there is the micro argument about each one of
those developments, whether it is oil and gas, nuclear or wind
or solar, whatever the controversy being, where and place, and
I guess that is what leads me to the fact that we have to be
smarter about where we want to do this and start developing an
opportunity to do it smartly.
I am not trying to endorse or suggest that one is better
than the other. I just think that we need some time. We need a
moratorium on just going over offshore well drilling.
I am very protective of the oceans. They are sick.
Everybody will come in here and tell you, the oceans are dying.
If the oceans die, we die.
Mr. Smith. Right. But wouldn't a moratorium impede our
ability to have a comprehensive policy?
Mr. Farr. No. It is a moratorium. It is not permanent. It
gives you an ability to breathe, an ability to look at all of
these other options.
Mr. Smith. But you are saying that would not remove OCS
from the table.
Mr. Farr. Oh, no. Moratorium, it is temporary.
Mr. Smith. But doesn't the permitting process that would
accompany----
Mr. Farr. The ban is permanent. Excuse me?
Mr. Smith. But doesn't the permitting process effectively
engage a moratorium?
Mr. Farr. A moratorium stops the permitting process.
Mr. Smith. Right. So, isn't the permitting process rather
rigorous, as it stands right now, or is it not rigorous enough?
Mr. Farr. I do not know. I have been through those lease/
sale arguments on our coastline and got very involved in it,
and, frankly, every time, regardless of administration, we have
been able to convince the administration that it was high risk/
low gain, and they took it off the lease/sale charts, and then
we created a National Marine Sanctuary, and, in that,
statutorily prohibited oil and gas development.
So, my backyard is protected, and I am here because I think
that, as Congress, we need to commit ourselves to being
responsible for the oceans.
Mr. Smith. Well, I appreciate that. When we look at the
comprehensive approach that we absolutely must engage, I hope
that we can keep everything on the table. That is what I would
like to do. Mr. Rohrabacher?
Mr. Rohrabacher. Well, again, when we are talking about
offshore drilling, which is, I guess, the subject that we are
supposed to be focusing on today, it has nothing to do with the
health of the ocean.
I am a scuba diver. I am a surfer. I am in the water a lot,
and I would challenge Sam to a surfing contest right now, but I
think it would be unfair. But the fact is that this has nothing
to do with the health of the ocean. It has everything to do
with the view. The people up on Nantucket did not want their
view disturbed by windmills, for Pete's sakes.
The Chairman. Have you had your triplets on surfboards as
well?
Mr. Rohrabacher. Actually, I have had my kids out on boogie
boards, at this point.
The Chairman. Reclaiming my time.
Mr. Rohrabacher. They will be surfers soon.
And, again, the view is important, and I think maybe we can
do some things and require some things that would protect the
view for those rigs that will be within sight of the coast. In
Long Beach, we have facades on top of offshore oil wells that
are very beautiful, and people like them. Also, wells can be
underwater. But it has nothing to do with the health of the
ocean.
Mr. Smith. Right. Now, Mr. Farr, did you say earlier that
you would be agreeable to, like, a zoning type of approach?
Mr. Farr. No. I do not want to get that controversial, at
this point because that is debatable, but it seems to me that
without comprehensive policy, and, look, I have another bill
coming before this Committee, and it does not get into the
micro details; it sets up sort of the governance structure so
that all of these things can come to bear, so that we have one-
stop discussions.
Right now, we have just conflicts of the sea, where the
Navy and Interior and Commerce and NOAA, they are different
aspects of governance, and it is very complicated and,
actually, not very smart.
Mr. Costa. Would the gentleman yield for a moment?
Mr. Smith. I do not know if I have any time, but, with the
Chairman's permission, I would.
The Chairman. The gentleman's time has expired. The Chair
will recognize the gentlelady from California, Mrs. Capps.
Mrs. Capps. Thank you, Mr. Chairman. I actually want to
thank you for a series of hearings, this being the second one.
Are you suggesting that I yield at the moment, because I will
have a pretty packed five minutes?
The Chairman. It is your time.
STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN CONGRESS FROM
THE STATE OF CALIFORNIA
Mrs. Capps. Thank you. I would like to use it, if I could.
I hope there is more time later--a series of hearings on
offshore drilling, and thanks to my neighbor colleague, Mr.
Farr, acknowledging that I am the sole Member of this
Committee, I believe, who represents a congressional district
impacted by offshore and gas development.
These are very useful hearings, and maybe yours is as well,
Mr. Rohrabacher, but I appreciate the fact that, though you
represent Huntington Beach, you still enjoy coming up to Santa
Barbara once in a while to surf. Let that be part of the record
as well.
Today's testimony on the state perspective, I believe, is
really going to help guide us in drafting our legislation, but
I do want to pick up on a couple of themes that came up in our
last hearing, and I also want to say thank you to our
colleagues. Usually, a Member of Congress comes to testify,
gives five minutes' worth, and gets up and leaves, and you are
really spending an inordinate amount of time, and I think it is
very valuable that we have this opportunity to share,
particularly, I guess, as a Californian as well, in between the
two districts that are represented here on the platform.
Mr. Broun mentioned, and it has come up since then, about
the distance from shore and the view. I submit that the view is
not the issue. Routine toxic discharges from rigs is the issue,
or, at least, one of the basic ones, and these spills impact
our ecosystems and our fisheries and all that we value about
our oceans.
For example, just last week, Federal and state officials
investigated an oil spill at Exxon-Mobil's platform,
``Harmony,'' four miles from the shoreline in my district. This
spill stretched for about a mile, but it was from lubricating
oil for the platform and not oil pumped from the well, but, all
the same, it is a reminder to all of us that this business of
drilling is dirty, and it is often a very dangerous business.
These spills happen regularly. Thankfully, our state's Office
of Emergency Services was on hand to deal with this spill.
One other topic came up again today that was addressed, but
it was at the last part of the hearing, the last time we met,
and it has to do with natural seeps. The anecdotal evidence was
submitted today. It was submitted before.
I happen to be the representative of the constituent whose
organization, ``Save Our Seeps,'' is promoting the notion that
offshore drilling reduces the seeps because it is extracting
the oil another way, and, actually, the whole thesis is based
on a study done by a person from U.C.-Santa Barbara who,
himself, submitted a letter, which I submitted to the
testimony, disassociating himself from that movement because he
states that the evidence is clearly not there, and, in fact,
that it is impossible to distinguish the tar off your feet,
which is the anecdotal evidence, as to where it comes from,
that there is no way of determining that it is from a natural
seep, whatever that is, or from a platform.
In fact, the anecdotal evidence seems to be that the seeps
are still there, but the offshore drilling apparently has not
made a difference in all of these years that that has been
happening, and I would suggest that, before this becomes a
reason for continuing drilling, we ought to have a lot more
studies of that fact.
But I want to, rather, pivot to the future and the real
basis for what these hearings are intended to do, and I want to
associate myself with the remarks that are commending Secretary
of the Interior Salazar for delaying the schedule for
implementing the five-year plan but wanting to use this time to
develop a comprehensive energy policy.
While we are meeting here, and that is the reason I was
late, there is another hearing going on in another committee
having to do with efficiency in energy use as it relates to
climate change. These are huge topics, and it is very
worthwhile that we look at offshore oil drilling as once piece
of what now we need to see as a major energy policy, and the
truth is that environmental consequences are just one reason to
oppose offshore drilling, and, in fact, we really do need, for
a variety of reasons, many of which have been emphasized here
today, we need to shift away from using fossil fuels. That has
been one of our major sources of energy, and they are not going
to be sustainable for the future and that that is one of the
major reasons we are involved in this discussion, and that is
why I commend the Secretary.
But I also have to give a lot of credit to my neighbor, Sam
Farr, for being a pioneer, really, in ``Oceans 21'' and
acknowledging the fact that the two studies that have been
conducted are only further evidence of the fact that we really
desperately need a comprehensive oceans policy as well.
In a way, they need to sit side by side, the oceans policy
and then our energy policy, and they are directly related, one
to the other, because until we understand more of what the
ocean means to our very survival and also to our way of life,
then we will not really understand how the pieces of how we
want to deal with energy relate to that overall picture.
Now, I want to ask you a particular question, Sam. We have
been hearing a lot about oil drilling generating revenue for
coastal communities. The fact is that these communities would
likely see, is it not true, a fraction of the money that
companies promise them, and, at the end of the day, we have to
live with the projects for decades? The whole leasing apparatus
that MMS conducts is based on studies that have been done that
are a guesstimate, really, at best, of what is going to come to
live with.
A lot of the numbers are speculative, and many of them are
all over the map, and if these projects are not successful, and
we are living with some of those consequences, too, communities
do not get any money, and they do live with the rig and the
platform for years and years to come. Maybe you would like to
comment on that piece of it, but also--the red light is already
on--I hope you have been able, Mr. Farr, to give an overview of
why it is that we need an Oceans 21 policy.
Mr. Farr. Well, we need a comprehensive policy, and, in
that policy, we need a trust fund that we need to have some
money for, and that is the bill. One source could be this OCS
fund, of which, I pointed out, 74 percent just goes into the
general fund, and I think this Committee ought to be concerned
about that.
Look, California is certainly not the leading, but it is up
there in the major oil-producing states--we do not think of
California so much as a big oil state, but it is. It also,
because it is a coastal state, is a refining state, so oil
comes from other places into California, and that is the
shipping. We actually have reduced the amount of shipping
because we got bigger ships, and a lot of our coastal-dependent
energy development has switched to natural gas, which is
shipped by pipeline and not by sea.
But of all the oil and gas produced in California and the
revenue thereon, only 10 percent comes from offshore, and I
think it is important that the state, because OCS is more of a
Federal decision than a state decision, but California, as a
state, has taken a position that they have a moratorium on oil
and gas development in their state waters and have strongly
supported moratoriums here at the Federal level.
I think that, again, being a state that is in the oil
business, I think they are being away ahead of the Federal
government in deciding to look before we leap, to look at the
alternatives. California has developed hydropower, nuclear
power, solar power, wind power, biomass power, geothermal power
with our volcanic, in Northern California. We are probably more
diversified in power production than any state in the union,
and we are looking for even more, essentially, these ocean
currents and things like that.
Here is the point of the whole thing: One, to get a
comprehensive policy about how we manage the oceans, which goes
far beyond just the energy issue, and, in the meantime, as this
hearing has been asking, is, do we reinstate the moratorium?
And I think the answer is yes.
Mrs. Capps. Thank you.
[The prepared statement of Mrs. Capps follows:]
Statement of The Honorable Lois Capps, a Representative in Congress
from the State of California
Thank you, Mr. Chairman.
I'm pleased our second hearing on offshore oil and gas drilling
before this Committee will focus on coastal state perspectives.
As one of six states producing oil and gas off their coasts, my
home state of California has done its part to provide energy to the
nation.
The 23 oil and gas platforms found off my congressional district,
for example, have produced more than 2 billion barrels of oil over the
years.
But oil development off our coast has long been a thorny
proposition--beginning in 1908 with the Santa Barbara Chamber of
Commerce's opposition to the construction of an oil pipeline on Stearns
Wharf.
And as was discussed at our last hearing--the devastation from
the1969 Santa Barbara oil blowout was so great it galvanized Central
Coast residents; indeed it galvanized virtually the whole state,
against more offshore drilling.
Clearly, Californians were outraged by the damage to the
environment and wildlife.
But we also realized that another blowout would wreak havoc on our
economy as well, especially tourism, fishing, and the industries that
rely on them.
So Californians became committed to ensuring it wouldn't happen
again.
Mr. Chairman, a little history might be in order here:
Since 1969, 24 city and county governments, including both Santa
Barbara and San Luis Obispo counties, have passed anti-oil measures.
These laws usually require voter approval before any new onshore
facilities to support offshore drilling could be built or they ban them
outright.
In 1994, the California Legislature passed, and then-Republican
Governor Pete Wilson signed into law, a permanent ban on new offshore
oil leasing in state waters.
Every year since 1999, the State Assembly has adopted a resolution
requesting that the Federal Government enact a permanent ban on
offshore drilling off the California coast.
I've introduced a bill every Congress to enact such a ban. And I
have been joined by a majority of my California colleagues in
supporting this legislation.
Our Governor has stood his ground on offshore drilling, too,
stating recently ``I am unwilling to put our environment at risk for
the sake of new energy exploration on California's coast.''
In 2006 Governor Schwarzenegger signed the ``West Coast Governors'
Agreement on Ocean Health'' further representing his commitment to
reduce offshore energy impacts.
These actions have been met with widespread public acclaim.
Most recently, 60% of the citizen comments from California opposed
the Bush Administration's new proposed 5 year oil and gas leasing
program.
The public knows ruining all of our coastal areas in an effort to
drill our way to ``energy independence'' isn't going to work.
And that's why coastal communities continue to speak--in strong
bipartisan voices--to protect their sensitive coastal resources and
productive coastal economies.
Mr. Chairman, I am dedicated to working with you and my colleagues
on this Committee to develop positive solutions to our energy needs.
It's time to commit to alternative energy sources instead of
increasing our dependence on fossil fuels to help meet the energy needs
of the nation.
Thank you again for your leadership in calling this hearing.
______
The Chairman. The gentlelady's time has expired. The
gentlelady from Wyoming, Mrs. Lummis.
Mrs. Lummis. Thank you, Mr. Chairman. I join Representative
Capps in complimenting you for being here today and staying and
involving yourselves in the discussion. I, further, want to
compliment Representative Farr for his idea about creating a
trust fund.
Wyoming has a Permanent Mineral Trust Fund. We created it
in 1974, so we could take our nonrenewable resource, oil and
gas and coal, and take the revenue off that, or a portion of
the revenue off that, and convert it into a permanent resource,
which is cash, interest income off state investments.
As state treasurer, I managed Wyoming's Permanent Mineral
Trust Fund and the diversification of the permanent fund
revenues into an income stream that, last year, was the largest
source of income for the state's general fund and, in normal
price of oil and gas and coal years, is the second-largest
source of income for the state's general fund.
I would encourage you to look at the Wyoming model, the
Alaska model, the Alberta model, and, particularly, the Norway
model, as great examples of taking these nonrenewable
resources--oil, gas, coal, and other hydrocarbons--and
converting them to this renewable resource.
In fact, Norway Fund looked at the price of oil from the
year 1900 to the year 2000, and if you had left it in the
ground versus invested it over time, the returns on the
investment of producing it and converting it into income that
can be used, of course, over and over--it regenerates itself by
the country of Norway--created an enormous plus for the people
who live there.
The fact that you want to use this income off this fund,
and I would encourage you to look at it as a permanent fund
with a permanent corpus that is inviolate, the interest income
of which could be used to conserve the oceans, or whatever
renewable project you have in mind, is a great way to solve a
number of problems--the income problem, having a constant
source of revenue to do it--and also to be part of the global
sovereign wealth cast of characters. You know, the United
States is the largest debtor nation in the world and does not
itself have a sovereign wealth fund, so I am a big advocate of
your idea.
I also have a question for Representative Rohrabacher. I
chose to schedule my mid-life crisis and went to a surfing
school off the coast of your beautiful state and learned, at
that time, that when it rained during the night, the surfing
school was suspended the next morning because of the runoff
into the ocean. That became a hazard to those of us who were
trying to learn how to surf, particularly me because I was
swallowing a lot more of the ocean water.
Mr. Rohrabacher. What city were you in?
Mrs. Lummis. I was in LaJolla.
Mr. Rohrabacher. LaJolla?
Mrs. Lummis. Yes.
Mr. Rohrabacher. All right.
Mrs. Lummis. ``Surf Divas'' is the----
Mr. Rohrabacher. There is a fine break in LaJolla called
``Tourmaline,'' and I have surfed there many times.
Mrs. Lummis. Well, it was magnificent. As I said, I did
swallow enough of the water to probably absorb the effects of
global warming in the ocean, but it was wonderful.
Mr. Rohrabacher. You are absolutely right. After it rains,
there is a major urban runoff problem in California and
throughout the United States. Whenever it rains, all of the
bird droppings and dog droppings and all of the other stuff
that accumulates in an arid temperature is washed right into
the ocean, and we surfers know very well that we should not be
in the ocean the next day after a rain, sometimes two days
after a rain.
Mrs. Lummis. Yes.
Mr. Rohrabacher. And I would agree with Sam that we need to
tackle that. I think resources from offshore oil drilling
dedicated so that local communities can actually confront that
challenge would be a very good use for the resources. I would
say, however, the admonition is, that should not be controlled
at the national level at some trust.
If, in Wyoming, we decided that all of the oil revenue from
around the United States would be in a national trust rather
than a Wyoming trust, you would have been left out of the
decision-making process of what to do with that money in
Wyoming.
We should get this money down to the local area, and, as
you are pointing out, there are some very important needs to
focus on in the coastal areas.
Mr. Costa. Will the gentlewoman yield for a moment?
Mrs. Lummis. Indeed.
Mr. Costa. Just to underline the point, and I made it last
week----
Mr. Rohrabacher. Yes.
Mr. Costa.--and it is what frustrates me, in part, about
this conversation, the National Academy of Sciences, in a study
done in 2002, the most recent, comprehensive examination, is
the greatest source of pollution that impacts the oceans that
Sam cares about, that Dana cares about, that we all care about,
is nonpoint-source pollution; it is a result of 85 percent of
the pollution of the oceans around the world.
We had a billion and a half people living on this planet
200 years ago. Today, we have six billion people living on it,
and lots of people live around the oceans of the world.
In California, Sam knows, we have tried, and water bonds
that I have carried provided funding for point- and nonpoint-
source pollution. You were the strongest advocate to make sure
that there was a dedicated fund for the nonpoint-source
pollutions.
We are focused here on what is, at best, five percent or 10
percent of the problem, while 85 percent of the degradation of
the oceans is a result of nonpoint-source pollution and
overfishing.
Mr. Rohrabacher. I would suggest not even that. I would
suggest that getting our oil from offshore oil rigs is a much
cleaner and much safer, environmentally, way of getting oil
than by tanker.
Lois Capps said, in 1969, there was a big oil spill off
Santa Barbara. We all remember that. That was 1969. The fact
is, all of the major oil spills since 1969 have been from
tankers. The Exxon VALDEZ accident up in Alaska, which was a
catastrophe; that ship was headed for my district. It was
headed for Long Beach. Now, the fact is, it could have had an
accident closer to my beaches, and that is wrong, and the fact
is, we have had offshore drilling for 30 years with no
significant problems.
Now, yes, there is some oil that gets spilled in the water
when they are greasing their equipment. OK. Let us try to
regulate that, control that. I bet you that company is fined
for what they did, but I will tell you, the risk of a major oil
spill that is brought on us by a tanker is a so much greater
threat to our environment than having some oil dripping off the
rig as you are trying to grease the machinery on the rig.
With that said, I agree with you, what you are saying, but
I think that, even in that five percent-area, it is better to
have offshore oil than to bring that oil in by tanker, which is
what happens when we do not develop our offshore oil resources.
The Chairman. The gentlelady's time has expired.
Mrs. Lummis. I applaud the discussion, and I thank you, Mr.
Chairman.
The Chairman. The gentleman from Hawaii is recognized, Mr.
Abercrombie.
Mr. Abercrombie. Thank you, Mr. Chairman.
I want to follow up, Mrs. Lummis, on your observations. As
a new Member, I commend to you from last year what we call a
``nonpartisan bill'' here, H.R. 6709, ``The National
Conservation, Environment, and Energy Independence Act,'' that
we put together, a group of Members--no lobbyists, no staff--
just to prove, I suppose, that Members are not total dolts.
It goes to precisely what you are talking about here: Can
we use the existing carbon-based resources that we have as a
bridge to an alternative-energy future by subsuming the
royalties and the payments and the fees associated with it to
invest in renewable energy, et cetera?
Mr. Bishop worked with us on that, Mr. Costa, and our much-
lamented retired friend from Pennsylvania, John Peterson, a
real genuine loss to this body, who was instrumental in putting
us all together--in fact, alerting us all to this in a very,
very positive and productive way--and we intend to carry
through with that and invite, obviously, Mr. Farr and Mr.
Rohrabacher to join with us to try and do the same thing this
year.
We are going to revise it. I know that Senator Reid and
others are now proposing to put together a National Energy Grid
and to modernize that, and this will become part of the bill.
Mr. Rahall has been very, very sympathetic and empathetic
to this process of trying to put together something. In fact,
he just put out an editorial today which was sufficiently
ambiguous to encourage me, so I am going to proceed further
with that.
I would welcome your participation in that as well. The
whole idea, I think, of the offset if very, very important.
Mr. Chairman, I have really no questions for the two
witnesses, other than to put on the record that we intend to
move forward with this. We are working on it right now, the
staff, so anybody who is listening now, if you want to
participate in this, get in touch with our staffs, Mr. Costa,
myself, and Mr. Murphy in Pennsylvania, and others. We will be
putting together a group.
We consciously submitted it with three or four Republican
and Democratic sponsors from the beginning, and then I think we
had a list of about 20 Republicans and 20 Democrats, and we
just cut it off arbitrarily, not capriciously, I assure you,
but cut it off, at that point, just to introduce it to show
that we had no intention of letting this devolve into a
partisan rhetorical contest, but, rather, could we deal with
offshore and onshore leasing of resources--natural gas was the
impetus to all of this--could we get at the natural gas
resources?
We think it is more important now than ever to be able to
do that, precisely because of the price of oil dropping. We
want to get past this spiking and dipping of carbon-based
resources to be able to do this.
One last thing, Mr. Chairman. I met with the counsel
general of Norway in Hawaii just recently, somewhat dumbfounded
that he would have a particular interest in us, but it is
because Norway is in the advance of many other places in the
world, in terms of its environmental consciousness, as embodied
in law and legislation, and its understanding of how to apply
the most modern technological means to ensure safety with
regard to the exploration and extraction of carbon-based
resources, and he saw Hawaii as a template, as a demonstration
place, for alternative energy resources, so we are going to be
working together on that.
I do believe this is not just a national question for us
but an international question as well, particularly in light of
global warming and what that might do to the oceans. Thank you,
Mr. Chairman.
The Chairman. The Chair will respond to the gentleman from
Hawaii. If he thinks my article was ambiguous, it is in order
to entice him to read it a second, third, and fourth time.
Mr. Abercrombie. My thoughts exactly.
The Chairman. The gentleman from Louisiana, Mr. Fleming, is
recognized.
Mr. Fleming. Thank you, Mr. Chairman, and also thank you to
the gentlemen, our witnesses today, for their hard work.
First of all, before I get to my question, I want to
respond to a comment from my colleague, Mrs. Capps, and that is
from this paper, Derek Quigley, et al., which is an
environmentalist researcher, and, just very briefly, part of
the conclusion.
It says: ``A spacial coincidence between offshore oil
production at Platform Holly and the observed decrease in
seepage around Holly are probably related and attributable to
the impact of oil production on reservoir pressure.'' This goes
back to comments made by Mr. Rohrabacher. ``Oil production from
the Monterey formation oil and gas reservoirs caused subsequent
declines in reservoir pressure, thus removing the primary
driving mechanism of the seepage. This finding implies that
worldwide oil production may lead to declines in natural
emissions of hydrocarbons on a global scale.''
I think that is a very powerful conclusion, Mr. Chairman,
but let me get to my question.
I want to get to the end-game question here on a lot of
this. I have heard testimony--this is our second set of
testimony--that addresses this issue about offshore drilling,
and when we are able to show things like, well, there is much
less oil spillage. We have gone far beyond that. We have the
technology that is much better today.
Then somehow the argument turns to, well, it is all about
the hydrocarbons, the CO2 that is in the air.
Then when we talk about, well, alternative forms of energy,
we get into windmill, but then we hear Ted Danson, who says he
does not want it in his backyard.
We talk about solar, and we hear about, I guess, lizards
and bugs. They do not like that.
Nobody seems to want nuclear these days. So, my question
is, is the end game, from an environmental standpoint, and,
trust me, I believe in being good stewards with our
environment--I am not at all promoting anything other than
that, but is the end game that we return to the Stone Age? Is
the end game that we go to horse and buggy?
I sort of picture in my mind movie stars coming to the Emmy
Awards or the Academy Awards in chariots instead of limousines.
So, my question for both of our witnesses today is, this
seems to be a very sinuous, and sometimes circuitous, argument,
that as soon as we begin to trap it down to one or two items,
somehow it is a moving target, and we are going to something
else.
The question is, really, what is the end game in all of
this discussion?
Mr. Farr. I do not think we have an end game because we do
not have a policy, and so what happens, if you just sort of
same old, same old, you are going to end up, I think, causing--
you may have an end of lots of things.
Look, Mr. Rohrabacher and others have talked about the fact
that there are permitting problems with some things, but let us
look at the record. California has probably more solar houses
than anyplace in the world, more use of reclaimed water for
reclamation for agriculture, and my own district has the
largest reclaimed agriculture use of water in the United
States.
It is these alternatives that have come along that are
smart and are better, and I think that is what we are asking
for in this. Let us give us time to be smarter about the end
game, and not all of the alternatives are given an equal
opportunity to compete.
Developing resources are also wanting to be dealt with
fairly; that is, if there are subsidiary, or if there is tax
policy, they want to be treated equally so that they can
compete equally, and if you can compete equally, then the
market can determine price, but if your competitor has all
kinds of advantages that you do not have, then you cannot
compete fairly, and the common business practice is a level
playing field.
I think what the discussion here is, what is it going to
take for the United States of America to develop a level
playing field for all kinds of fascinating ideas that can
produce energy? And I do not think there is ever going to be
one. I think it is going to be all of these.
I think we are going to continue to drill for oil and gas
in the United States, but we have to have an awful lot of other
opportunities because of just the discussion about distribution
networks. We spent a lot of money on the stimulus to make sure
they work. You can produce the energy out in the middle of
South Dakota, but how do you get it from the wind farms there
to places that use it?
The moratorium is a time-out, and that is what this
discussion is about.
Mr. Rohrabacher. Sam and I, you know, look, we both want a
clean environment, and we both are concerned about the health
of our people, and water reclamation in California is something
I have been a long supporter of.
In Orange County, we have a major, cutting-edge, water-
reclamation project that I have been very honored to support
over the years, but let me just note that the standard of
living that we have in California and elsewhere, we are
coasting on things that were done years ago.
There have been no hydroelectric dams built in California,
or anywhere else in the United States, for 30 years. Yes, we do
have people in California that are tearing down hydroelectric
dams, even though they are smaller, but they are also opposing
building new hydroelectric dams, which would take care of our
people's needs.
We have not had any new nuclear powerplants built in this
country for 30 years. We have not had any new refineries built
for 30 years. Yes, we have had a national policy, all right.
The national policy has been not to develop our energy
resources, and we have had activists with very high-sounding,
you know, goals and rhetoric, but the fact is, that rhetoric
has led us to a situation where billions, hundreds of billions
of dollars, have been sent overseas now to buy energy that we
could have produced at home.
I agree with Sam that we should be developing these new
energy resources. I think we have come to the point now, as I
say, where solar will be competitive. That is why I think that
the national policy should be an open-meter system. If we are
going to spend money, let us subsidize an open-meter system so
that anybody putting energy into that grid will get credit for
it, and it is going to require us to subsidize it to do that
because, right now, people are paying money to get into the
grid and take the energy out. We need this to be give and take
with a national grid system, and, by doing that, we will open
up the possibilities for solar and for wind.
By the way, there is a fellow in my district who has
developed a paint to paint on houses [off microphone] and, in
fact, we turned that off, and 20 and 30 years ago, offshore oil
development and all of these other sources, we are paying a bad
price for that now. Our economy is suffering, our people are
suffering, and I think it has a lot to do with our negative
energy policy for the last 30 years.
The Chairman. The gentleman's time has expired. The
gentleman from Washington, Mr. Inslee.
Mr. Inslee. Thank you. I just want to make a couple of
points.
First off, I want to applaud the great State of California.
There are actually some great things they have done. I know
Congressman Rohrabacher is proud of his state, but I want to
express some admiration of what California has done in energy.
While the rest of the country has increased its per capita
usage of electricity by 40 percent over the last 20 years,
California has kept it flat, on a per-capita basis, and that is
because, instead of spending more money on some of the very
expensive generating capacity, it has decided to spend less
money on efficiency, and it has been very, very effective. So,
we want to laud California for its leadership in that regard.
The second point I want to make: When it comes to offshore
drilling, there is a lot of discussion about spilling and the
possibilities of spillage, and I want to make the point that
there is a 100-percent certainty of oil spillage on every
single offshore oil drilling that has ever been drilled, or
will ever be drilled, and the reason that every single, and I
hope I am scientifically accurate on this, but I believe it is
true, every single carbon atom that comes out of those wells
ends back in the ocean or on land.
When we burn the oil coming out of these offshore wells, it
goes into the atmosphere's carbon dioxide. It lingers in the
atmosphere for sometimes in a hundred years, but it eventually
comes back down to the ground and goes into solution into the
ocean, which is now acidifying the ocean.
I just want to make that point because when we adopt our
national policy, we ought to adopt it with the knowledge that
100 percent of the pollution, or potential pollution, that
comes out of wells ends up back in the ocean, or, at least, 70
percent of it because 70 percent of the world's surface is
oceans. Right now, the oceans are becoming acidified. They are
now 30 percent more acidic than they were in pre-industrial
times, and they are becoming more acidic three to five times
faster than the scientists thought just a few years ago.
Research off Tatoosh Island, where I live in Washington, shows
horrendous acidification going on.
I just want to make that point that when we decide what to
do in offshore drilling, we should not blind ourselves to the
fact that every single offshore oil drill ends up with a spill
into the ocean via the atmosphere, and I just want to make
those comments, and either one of my colleagues would be happy
to hear your comments about that.
Mr. Farr. Mr. Chairman, is Mr. Inslee your last
questioning?
The Chairman. On the majority. There are three left on the
minority side, unless the panel would like to stay for a second
round of questions.
Mr. Farr. I think the second panel is going to be better
than the first.
The big picture here: When I was on this Committee, what I
was awed about is that you have the responsibility for natural
resources in the United States of America, and the awesome
responsibility of that is that you have created, by recognizing
that certain areas require certain kinds of management, and out
of that create a National Park System. You deal with the
National Forest Service, even though it is in the Agriculture
Committee, but a lot of the policies come out of this
Committee.
You determine that certain resources in America need to be
labeled as rivers that are wild and rivers that are scenic. You
have created this ability to look at land onshore and think
about how to manage it. The largest resource in your
jurisdiction is the ocean, and nobody has ever done that.
Nobody has ever looked at the ocean and said, ``Hey, why do not
we create these kinds of management policies?''
Your hearing today is about whether you ought to continue
drilling in the ocean. The ocean is sick. Every witness up here
will tell you that. For those of us that are coastal-dependent
economies, that means that the food we take out of the ocean is
at risk and that other local economies are at risk, and all we
are asking is just put a moratorium on more oil and gas
drilling until we get this right, until the Committee has been
able to use its jurisdiction as a responsible resource
management to look at the big picture of the oceans.
So, in answer to your question, we get off target in
arguing nuclear, oil, this, that, wind, and all of these other
things. It is really about the jurisdiction and responsibility
of that jurisdiction and leadership, and I applaud you on
having these hearings, and I applaud you, hopefully, for having
the hearing on my bill and passing it, which many of you are
co-sponsors, because that kind of leads us in the direction of
being able to answer, what is America and the United States of
America going to do about addressing the biggest resource of
all, its ocean resource?
Mr. Rohrabacher. I would hope that people also see that my
friend, Sam, has pitched his bill. I hope you could all co-
sponsor my bill, which directs the Bureau of Land Management to
facilitate not only the granting of permits to actually start
installing solar projects out in the desert. There have been
190 of these solar projects that have been held up by
bureaucratic roadblocks that you could all sign under my bill
to help create those solar projects.
The argument that we have just heard from our colleague,
not from Sam, but our friend here, but let me just note that
that argument that any oil is going to get back into the ocean;
that is not just offshore oil; that is all oil. So, you would
have to oppose any development of any new oil resources
anywhere in the United States, which is under our jurisdiction.
I would have to suggest that there is along argument as to
whether what the effect of CO2 is all about and
whether or not it causes global climate change, et cetera, that
could go on for hours on that hearing. There are many notable
scientists who disagree with that proposition that you just
outlined.
If you will just indulge me on one thing, before I became a
congressman, I was a journalist, and I guess one of the
greatest slogans I was able to use when I first ran for office
was, ``Vote for Dana. At least, he is not a lawyer.'' But, as a
journalist, I got to meet all kinds of people, and I covered
all kinds of events in Los Angeles. I was a reporter down
there, and I remember I was called out to interview Jacques
Cousteau, who happened to have been one of my heroes. Jacques
Cousteau was a hero of mine, and because I am a scuba diver, I
am a man of the ocean.
I went there to hear him at UCLA, and he was talking to
some students, and he was going on about how the oceans are
dying: ``Within 10 years, all of the oceans will be dead.''
Now, this is 1973. OK? ``The oceans will be dead.'' I kind of
felt, even then, that maybe we could try to find something
positive we could focus on rather than to focus on the
negative.
When I went up to him after his meeting with the students.
I told him I was a reporter, and I would like to ask a few
questions. I said, ``Isn't it possible that we are going to be
able, in the future, to harness the oceans for farming and
other things like that that would be beneficial to mankind?''
and he got right into my face--I will never forget it because
there was a bunch of students watching--and he goes, right in
my face, he goes, ``Didn't you hear me? The oceans, 10 years
from now, will be dead, black goo.'' I will never forget that,
``black goo.''
Now, that was 10 years ago, and I was contemplating that
about two weeks ago when I was on my surfboard, and I sat out
there and watched the porpoises come by and fish jumping out of
the water and the pelicans jumping into water right next to me.
Now, I will tell you something: The oceans are not black
goo, and Jacques Cousteau is not around with us anymore, but
there are a lot of people, even with the stature of Jacques
Cousteau, who overstate challenges. Maybe they do it in order
to try to motivate us to act in a certain way that is positive,
but they create a false impression that could lead us to bad
policies that would affect us badly in the long run.
Mr. Farr. And we had a moratorium that entire time.
The Chairman. The gentleman's time has expired.
The colleagues have been so kind with their time today that
the Chair did indulge them for a couple of advertisements,
which we heard during that last conversation.
The gentleman from Utah is recognized, Mr. Chaffetz.
Mr. Chaffetz. Thank you. I appreciate it. The renewable
energy that I need, at this point, starts with chicken strips
down in the cafeteria, so I will be very brief. Renewable
energy; who is going to fight against that? Of course,
naturally, I would love to do it.
I wish we did not have to go through the process of
extracting the resources that we do, but, Mr. Farr, from your
advantage point, and your expertise, renewables, the so-called
``wind farms'' and all these types of things that, in their
very best-case scenario, very best-case scenario, over the next
five years, maybe even 10 years, what percentage of our energy
do we really think we can extract from them, and what
percentage do we see now, and where do we think we can actually
get to?
I want to be as optimistic as I can, but I do not see
anything that can overtake the propulsion of our automobiles
and our homes and everything else, especially if we are not
willing to advance nuclear and some of these other things that
I consider to be clean. Everything has its drawbacks, but we
have, you are right, no national energy policy. I would like to
see us get to one, but where in the world do you think we can
be, based on what we know today?
Mr. Farr. The California Secretary of Natural Resources is
on the next panel. The State of California is supposed to have
33 percent by 2020.
Mr. Chaffetz. OK. So, then if we look at the trajectory,
and you can go back over the last 30 years and where we are
going in the future, our demand is going to increase,
undoubtedly. Do we concur with that idea that demand is not
going to diminish over the course of time. Right? We are going
to have more people, more demand.
Mr. Farr. Yes, but the demand is also proportional to what
kinds of effectiveness and technology you have in using the
fuel, and whether you get 10 miles a gallon or 33 miles a
gallon has a lot to do with that.
Mr. Chaffetz. I guess what I am trying to get at is, what
do we have that works today? What actually works today, and
what percentage? It is difficult. I am not trying to pin you
down to specifics on each individual one, but that is a burning
question for me because I think the American people, myself
included, my kids, my family, we all have a desire to be
conservationists. I am a conservative. I like to conserve
things, but I do not see viable alternatives that I can go and
plug in and that are actually on the market that I could
actually do.
You know, I saw one of my colleagues driving a million-
dollar hydrogen vehicle. It is probably not very practical.
Mr. Farr. Not yet.
Mr. Chaffetz. By the way, I want to leave some time for
Dana here.
Mr. Farr. Every single source of alternative energy is
utilized in California that has been developed. As I said, we
have hydro, geothermal----
Mr. Chaffetz. What percentage is it today, the goal being
30-something percent? Twenty percent of all of the energy used
is renewable.
Mr. Farr. In California, the biggest energy-using state in
the United States.
Mr. Chaffetz. Mr. Rohrabacher?
Mr. Rohrabacher. Well, I would suggest that when people
focus basically just on conservation, I think that that is
helpful, the conservation is helpful, but we also have to focus
to have a balanced approach on production of more energy. Had
we had the same obstructionists at play when we were building
our hydroelectric dam system or our current nuclear power
systems, California would be in a total catastrophe now for
energy.
One of the reasons why we have had conservation of energy
in California, by the way, is the price has been permitted to
go up, and thus people naturally conserve. But I am totally
supportive of the efforts of the Governor and other people in
California to push these renewables.
For example, I am proposing that we have an aqueduct system
from Northern California, Sam's area, to take his water and
bring it south to my area, which, of course, I support totally,
but I would see no reason why that aqueduct system, if running
the length of the state, why do not we cover that aqueduct
system with solar collectors so it shields the water from
evaporation and can produce the electricity at the same time?
Those are the kinds of creative ideas that will happen if you
have an open-meter approach.
So, in other words, we subsidize a lot of things today. Let
us subsidize basically the open-meter system. That will not
work unless we do subsidize it, but because, right now, people
have to pay to take the electricity out, but if we end up
paying them to put it in, how are the electric companies going
to function?
We can subsidize that and open up the avenue for all of
these new, across-the-board advances in energy technology, and
I am very optimistic. I am for electrification of our country.
In California, Elan Musk has invested in Tesla Motors. The
Governor has been very supportive of that, and I just think
that we have a great new tomorrow. Not only are the oceans not
going to be black goo, but our cities are not going to be
desolate and overwhelmed with pollution. We are going to solve
these problems by moving forward with more production and
cleaner production.
Mr. Chaffetz. Thank you, and thank you, Mr. Chair.
The Chairman. The gentleman's time has expired. The
gentleman from South Carolina, Mr. Brown.
Mr. Brown. Thank you, Mr. Chairman, and thank you,
gentlemen, for being a part of this discussion. This is a very
major concern of mine. I live on the coast of South Carolina,
and we are certainly concerned about our beautiful beaches,
which are our number-one tourist attraction, I guess, almost in
the country; probably number two or number three in the whole
country. So, we are very sensitive to any impact that offshore
drilling might have.
We are also concerned about, not only just in America but,
as a worldwide perspective, Mr. Chairman, and I would hope
that, as we look at generating a new energy policy, that it
will be done in a worldwide perspective, not just in the
American perspective because we are just not isolated on this
planet. We are a part of it, and sometimes we talk about it as
though America is just a standalone unit. We are actually
extracting some 70 percent of our energy from offshore, and it
comes from some places that we feel are not environmentally
sound like America.
So, as we talked about, Mr. Farr, about the moratorium, and
I noticed you said that you would be in favor of continuing the
moratorium, and I would hope, Mr. Chairman, that everything we
had in the energy bill would be on the table, and the all-of-
the-above solution that my good friend from Hawaii talked
about, we tried to come up with something, I guess, in the last
Congress to try to meet out energy needs in an environmentally
sensitive way, but I think the all-of-the-above solution has
got to be a part of it.
Is Yucca Mountain going to be expanded? Are we going to
open Yucca Mountain? Is nuclear power going to be a part of the
21st Century solution? All of these things have to be included.
I know I have traveled to some of the countries. We are
talking about drilling up in ANWR, and maybe the carbon is
being emitted there, but isn't it true, Mr. Farr, that some 97
percent of our carbons actually come from nature, not from some
man-made source? It is 97 percent.
Mr. Farr. Of what?
Mr. Brown. Of the carbons.
Mr. Farr. That we release on the planet?
Mr. Brown. Yes, sir.
Mr. Farr. I do not know the answer to that question.
Mr. Rohrabacher. I can let you know. As a Member of the
Science Committee, I have been through many hearings on this. I
have never heard a witness claim that, of the CO2
production and other supposed greenhouse gases, no one has ever
estimated that more than 10 percent of it--most people
guesstimate more like five percent of that--is actually
produced by human beings. The rest is produced by nature. These
great fires that we just had down in Australia; I mean, that is
putting stuff into the air, a huge amount.
Let me just add that sometimes, in our state, the fire
people in our state have told me they have been denied the
right to have controlled burns during the time when it is wet
so the fires would not get out of control. Environmentalists/
activists have prevented them from having controlled burns in
the name of stopping air pollution, and then what happens? We
end up in the dry times with massive fires that put ten times
as much pollution into the air.
Now, these are well-intended people, but they have horrible
consequence, even for the environment, in the long run.
Mr. Brown. Let me ask you another question on that same
note. They are trying to suppress any development in the United
States of all of our energy, the oil shales, offshore drilling,
or whatever else that is available, but yet we import 70
percent of our energy from countries that are mining it however
way they can. Are we helping the planet by saying that we do
not want to do it, but it is OK; you can treat the environment
any way you want to, and we are going to still buy your
products. Mr. Farr, what do you think?
Mr. Farr. Well, two things. First of all, I think it is
very smart. We are complaining about the fact that we have to
import Middle Eastern oil to run our automobiles in the United
States because we get so little efficiency out of our
automobiles, and I think that there are arguments that this
Committee has heard that if you just improve the automobile
efficiency, you will not have to be so dependent on foreign
oil.
It seems to me that if we do not invest in this brain trust
of people creating alternative energies, that we are going to
allow that brain trust to be somewhere else. People are using
the examples of Norway. The wind energy came from the
Scandinavian countries. In California, because we were the
first state to develop wind farming in the past, in Norway and
the Scandinavian countries, there has just been a solar, modern
windmill to replace the old ones. We did it in a farming style
of orchards, wind orchards.
We required that the company, in order to get this huge
market in California, move their development and build these
wind turbine machines in our state.
I think that if we are not smart about these alternative
energies, we are going to lose that brain trust and
manufacturing capacity to another country. So, part of the
world leadership, we need to be ahead of them because we need
to sell them our technology, and I think that that technology
will be readily marketable because it will be an alternative to
the carbon amounts that we are putting into the air.
The only question here, and I keep getting back to it, is
the question before this Committee is, should we continue to
have the moratorium on offshore oil drilling as we have had for
the last 10, 20 years? And I think, from all of the evidence
that has been brought today, is, yes, we should.
Mr. Brown. You know for a fact that when we had an oil
embargo back in, I guess, the seventies, some 35 percent of our
energy was coming from offshore. Because we had the
moratoriums, now it is 70 percent. Can you imagine the number
of jobs we could create? I know, when the price of oil was $150
a barrel, it was, like, $700 billion a year we were spending as
a balance of trade just for energy. It is probably less than
that now since the price has decreased, but it is still a
tremendous amount of funds.
Look at all of the jobs that we could create here in this
country that we are now exporting to these foreign countries.
Mr. Rohrabacher. And the point you made earlier was very
important, and that is, yes, so we have not gotten our oil from
our own offshore oil development, and what do we do? We are
importing it now from overseas, and the point you made was many
of those countries that provide us oil overseas do not have the
same environmental controls and safety controls that we have
here.
Thus, those people who are supporting the moratorium have
actually set up a situation where more pollution is coming into
the air globally than would be done if we would have taken
those same oil resources domestically from offshore.
Mr. Brown. And I appreciate that remark, that comment,
there, too, because we are on a planet. Not just America is
focused on the atmosphere, but whatever happens in China,
whatever happens in India, is going to impact our quality of
life here in America. Thank you.
Mr. Farr. Yes, but that ocean right off your coast, which
is a huge economic asset to your state; the health of that
ocean is really dependent on the health of the economy of your
state.
If that ocean were acidic, and everything was dying in it,
and the beaches were polluted, the real estate values would
drop, people would not use the coastal zone for development,
and it would be a disaster, and we know that the oceans are
headed that way unless we take better care of them. So, why
would we want to continue to drill for oil and gas? Why do not
we just buy some time?
Mr. Rohrabacher. We certainly do not want our oceans to
become black goo.
Mr. Brown. Well, just to answer that, Mr. Farr--Mr.
Chairman, I know my time has expired, but, in Dubai, you go
there today, and some of those other countries over there, the
immigrants there, they have filled in the ocean. That impact is
not going to impact my ocean off Myrtle Beach?
Mr. Farr. It is going to have some impact on the global
oceans' health, yes, but because of currents and everything
like that, I doubt that it is going to affect Myrtle Beach.
The Chairman. Gentlemen, just one quick observation by the
Chairman. I have been in this body over three decades and have
seen a lot of our colleagues testify before committees. It is
usually a perfunctory five minutes each, and very few, if any,
questions from members of the Committee.
This morning has been drastically different. Just two of
our colleagues, Sam Farr and Dana Rohrabacher, have been here
for two and a half hours now answering questions from our
colleagues, large numbers of Members attending on both sides of
the aisle, for which I am deeply appreciative. But also I am
deeply appreciative of your time.
It shows the amount of interest in this issue, it shows the
importance of this issue to our nation's energy and national
security, and this particular Chairman is deeply appreciative
of your time and spending two and a half hours before us, and
that, I might add, without a single question from the Chairman.
Thank you, gentlemen.
[Pause.]
The Chairman. The Chair will call our second panel composed
of the following individuals: The Hon. Mike Chrisman,
Secretary, California Natural Resources Agency; Mr. Ted Diers,
Chairman, Coastal States Organization; Robert G. Marvinney,
Ph.D., State Geologist and Director, Maine Geological Survey;
the Hon. Frank W. Wagner, State Senator, Senate of Virginia;
and the Hon. Garret Graves, Director, Louisiana Governor's
Office of Coastal Activities.
Gentlemen, we welcome you to the Committee on Natural
Resources. We appreciate your being with us all morning, as you
have, and traveling long distances to be with us, in some
cases.
We do have all of your prepared testimony. As with all
witnesses, it will be made a part of the record, as if actually
read, and you each are recognized for five minutes to proceed
as you desire, and we will start in the order in which I
introduced the panel.
STATEMENT OF HON. MIKE CHRISMAN, SECRETARY, CALIFORNIA NATURAL
RESOURCES AGENCY
Mr. Chrisman. Thank you, Mr. Chairman. It is nice to be
here. Thank you for the opportunity to testify today. I join
you in saying that the last two and a half hours was quite
illuminating. It was interesting to listen to the questions the
Members have asked and how you have teed up the issues. I think
it was very informative for all of us.
It is, indeed, a pleasure for me to appear today. As I
think all of you know, and you have heard numerous times today,
we have, in California, a long history of offshore oil and gas
development that dates back to 1896, and you also heard
Congressman Rohrabacher refer, a number of times, to the year
of 1969, the devastating oil spill off of Santa Barbara, in the
Santa Barbara Channel.
I need to put a context to that because that particular oil
spill released more than three million gallons into the Pacific
Ocean and killed thousands of birds and other marine mammals
along 35 miles of our coastline in California.
While the risk of such an event today is reduced because of
the new technologies and improved response procedures that we
have all developed, we continue to believe that the adverse
environmental and economic impacts of new oil and gas leasing
and development off our shore far outweigh the benefits
generated from these activities.
The majority of Californians, nearly 38 million of them
now, reside and live within our coastal zone in California.
The National Ocean Economic Program has determined that
California's ocean-dependent industries contribute more than
$46 billion annually to the state's economy each year. As you
can see, our economy thrives on tourism, particularly in our
coastal areas.
We have consistently opposed new leasing off of
California's shores for oil and gas exploration. Governor
Schwarzenegger continues that opposition. He has held this
position before taking office and has not wavered since that.
His position was reaffirmed in our 2004 Ocean Action Plan that
we also released. His position has been repeated in
correspondence to Congress, to this Committee, to both the
former and current president, and to the U.S. Department of the
Interior.
Last year, Governor Schwarzenegger opposed the lifting of a
congressional moratorium on leasing the Outer Continental
Shelf, a position consistent with over 25 years of state policy
embraced by Governors of both parties.
We have the California Coastal Sanctuary Act that has
precluded leasing in state tidelands, that being lands from
zero to three miles out, for oil and gas development since
1994.
The California State Legislature has repeatedly passed
measures opposing new offshore oil and gas development in the
waters offshore our protected state waters.
Governor Schwarzenegger has also joined with Governor Ted
Kulongoski from Oregon and Governor Chris Gregoire from the
State of Washington to oppose any new offshore oil and gas
leasing, exploration, and development off our Pacific Coast, up
and down the Pacific Coast of California and the West Coast.
So, again, there should be no ambiguity on where we are,
where the States of Oregon and Washington are, on the Pacific
Coast.
However, as we look to a new long-term energy picture, and
there was a lot of discussion here today about that, we do see
OCS alternatives worth pursuing. California is coordinating
with the Minerals Management Service and the Federal Energy
Regulatory Commission to evaluate options for sustainable
offshore energy production, such as wave and ocean current
technology. The energy-production potential and environmental
impacts of these technologies are being evaluated now.
We, in California, have been recognized as a leader in
energy efficiency and development of renewable energy. You
heard it responded to and answered many times in the
conversation today. Our per capita use of electricity has been
flat over the last 30 years while the rest of the country has
increased 50 percent.
Despite these successes, of course, we continue to set
these very aggressive goals. You heard a question coming to
Congressman Farr. Again, pursuant to the Governor's executive
order, we have increased our state's renewable energy standard
to 33 percent renewable power by the year 2020 in California.
This effort is the most aggressive in the United States.
To assure that this goal is attainable, the directive also
calls for a streamlined review and approval process for
renewable energy sites, making it easier for wind, solar, and
geothermal projects to be developed in California.
We encourage the Obama administration and Congress to
support a national energy policy that increases the efficiency
of our energy use. We applaud Secretary Salazar in his
pronouncement, on February 10th, to create a new and open
process to develop a comprehensive national energy strategy. We
applaud the Secretary's commitment, and California will commit
to work with all of you to increase energy efficiency across
the country.
Let me conclude by saying that California stands ready to
work with this body, this Committee, this Congress, and the
Obama administration to help craft a comprehensive, science-
based, national energy strategy for a Five-year Oil and Gas
Leasing program here in the United States. Thank you again for
the opportunity to be here.
[The prepared statement of Mr. Chrisman follows:]
Statement of The Honorable Mike Chrisman, Secretary for Natural
Resources, California Natural Resources Agency, State of California
Chairman Rahall and members of the Committee, thank you for the
opportunity to appear today to discuss our experience with energy
development off the California coast. California has a long history of
offshore oil and gas development, which dates back to some of the
earliest offshore production anywhere in the United States, starting
off the Ventura County coast in 1896. California is also home of the
1969 Santa Barbara oil spill, which originated in the federal Outer
Continental Shelf. It was an accident 40 years ago that had major
ramifications for environmental protection in both California and for
our nation. While the risk of such an event can be reduced today
because of new technologies, for California, the adverse environmental
and economic impacts of new oil and gas leasing and development off our
coast (from oil spills, air quality, water quality, and visual impacts)
far outweigh the benefits generated from these activities.
A state of approximately 38 million people, the majority of
Californians live within the coastal zone. California's economy thrives
on tourism, even with the current downturn in the national economy.
People are drawn to our Southern California beaches, our rugged north
coast, and many spectacular coastal destinations in-between. We have
many federal, state, and local parks, three National Estuarine Research
Reserves, three sites within the National Estuary Program and four
National Marine Sanctuaries along and offshore our coast. The National
Ocean Economic Program has determined that California's ocean dependent
industries contribute over $46 billion dollars to the state's economy
annually. People journey to California to enjoy the outdoors, to swim,
to surf, to scuba dive, and to fish among other ocean sports. Others
come to patronize seaside resorts and restaurants. The impact of
another 1969 caliber oil spill anywhere along California's coast would
have a devastating impact on our population, recreation, our natural
resources, and our coastal dependent economy.
California Position on Offshore Oil and Gas Drilling
Governor Schwarzenegger has long opposed new leasing off the
California coast for oil and gas exploration, development, and
production. He held this position before taking office and has not
wavered from it. This consistent position was included in the
Governor's 2004 ocean action plan titled, ``Protecting Our Ocean,
California's Action Strategy.'' Since that time his position has been
repeated in correspondence to Congress, to this Committee, to the
President, and to the U.S. Department of the Interior. Last year,
Governor Schwarzenegger also opposed the lifting of the congressional
moratorium on leasing on the Outer Continental Shelf. This position is
consistent with over 25 years of state policy embraced by governors of
both parties. The California Coastal Sanctuary Act has precluded the
leasing of our state tidelands (0-3 miles offshore) for oil and gas
development since 1994. The California State Legislature has repeatedly
passed measures opposing new offshore oil and gas development in the
waters offshore our protected state waters. In addition, the California
Ocean Protection Council, the State Lands Commission, and the
California Coastal Commission all oppose new offshore oil and gas
leasing off the coast. Governor Schwarzenegger joined Governors
Kulongski (Oregon) and Gregoire (Washington) opposing any new offshore
oil and gas leasing, exploration, and development off the coasts of
California, Oregon, and Washington. There should be no ambiguity about
where California stands on the issue of new offshore oil and gas
leasing off California--we oppose it.
Looking at the long term energy picture, we do see OCS alternatives
worth pursuing. California is coordinating with the Minerals Management
Service and the Federal Energy Regulatory Commission to evaluate
options for sustainable offshore energy production, such as wave and
ocean current technology. The energy production potential and
environmental impacts, of these technologies are being evaluated now.
We have been working closely with the federal government to explore
these possibilities, and look forward to continue working on these
prospects with the Obama Administration. Additionally, California is a
leader in setting energy efficiency standards that we believe are a
model for the nation. Our recent experience with fluctuating gasoline
prices has demonstrated that we all need to find ways to increase
energy efficiency, and California has been a leader on that front for
years.
We applaud the February 10, 2009 announcement by Interior Secretary
Salazar to create a new, open-, process to develop a comprehensive
energy strategy for this nation. The Secretary's four point plan
provides a reasonable approach for states to provide input into the
development of this energy policy. We applaud the Secretary's
commitment to provide a fair and science based process and look forward
to working with the Administration as this comprehensive plan is
developed.
Offshore Oil and Gas Development off California
I want to dispel the myth that California only consumes oil and gas
and does not produce it. This is simply not true. California has a long
history of production of both onshore and offshore oil and gas.
Currently, 27 oil and gas platforms are in production off the
California coast. Of those, four are in state waters (within 3 miles of
shore) and 23 lie within the federal waters on the Outer Continental
Shelf (beyond 3 miles from shore). California also has substantial
onshore oil and gas facilities currently in operation. Figures for 2007
indicate that California produced over 200 million barrels of oil at
onshore facilities. Offshore production was 14.8 million barrels in
state offshore waters and 24 million in federal waters. Onshore
production of natural gas provided 269.9 billion cubic feet in 2007.
Production in state waters was 7.2 billion cubic feet and 35.2 billion
cubic feet was produced in federal waters that same year.
Alternative/Renewable Energy
California is recognized as a leader in energy efficiency and the
development of renewable energy. We support congressional action to
aggressively support national policies that increase the efficiency of
our energy use. Our policies have proven to be extremely successful,
from an economic and environmental standpoint. California uses less
electricity per person then any other state in the nation. Indeed, over
the last 25 years, California's per capita electricity use has remained
nearly flat, while nationwide demand has increased 50 percent. This has
occurred despite the fact that homes are bigger and our population
tends to have more appliances, televisions, and other electronic
equipment. Whether we are talking about electricity, natural gas, or
transportation fuels, gains in energy efficiency can temper energy
demand, hold down consumer prices, and reduce the environmental impact
associated with traditional energy sources.
Although California has been leading on renewable and efficient
energy production for years, we continue to set aggressive, yet
achievable goals. On November 17, 2008 Governor Schwarzenegger signed
an Executive Order (S-14-08), which re-establishes California's already
ambitious Renewable Portfolio Standard (RPS) at a new nation-leading
level and calls for a restructuring of the process of developing
renewable energy sites to make it easier to achieve our renewable
goals. Under the current standard, California utilities must obtain 20
percent of their electricity load from renewable energy sources by
2010; the Governor's Executive Order increases that goal to 33 percent
by 2020. To ensure that goal is attainable, the directive also calls
for a streamlined review and approval process for renewable energy
sites--directing state agencies to sign a Memorandum of Understanding
(MOU) with each other and with federal agencies (US Fish and Wildlife
Service and Bureau of Land Management) to create a streamlined process
making it easier for wind, solar and geothermal sites to be built in
California.
These policies have proven to be extremely successful in
California, from both an economic and environmental standpoint. We
would encourage the Obama Administration and Congress to support a
national energy policy that would increase the efficiency of our energy
use throughout the nation. We would be happy to work with the Congress
to help craft a new energy strategy that builds on California's
experience with energy efficiency.
Regulation of Offshore Oil and Gas Activities
California has regulatory jurisdiction over all aspects of oil and
gas development from the onshore components of processing facilities
and pipelines, to all aspects of offshore production which would
include exploratory rigs, production platforms, pipelines, marine
terminals, or other facilities associated with the offshore oil and gas
development.
On land, our state and local governments have primary permit
jurisdiction over the siting and construction of facilities. In state
waters our California Coastal Commission and State Lands Commission
have authority over the issuance of permits or authorizations to drill
within state tidelands. On the Outer Continental Shelf (beyond state
waters) several federal agencies such as the Minerals Management
Service, the U.S. Environmental Protection Agency, and the U.S. Army
Corps of Engineers have direct regulatory jurisdiction. However,
California like other coastal states has a unique jurisdiction over
activities on the Outer Continental Shelf that can ``affect'' resources
within California's Coastal Zone, including our state tidelands. This
jurisdiction is provided by the ``federal consistency'' provisions of
the federal Coastal Zone Management Act. Essentially, no permits for
new offshore oil and gas operations can be issued absent a finding that
the activity is ``consistent'' with California's federally approved
Coastal Zone Management Act, which is administered in California by the
California Coastal Commission. Such decisions can be appealed to the
Secretary of Commerce in cases where an applicant disagrees with the
findings of the Commission.
As mentioned previously, all of the state tidelands off California
are off limits for the extraction of oil, except under a few
extraordinary circumstances. The position of the Governor, the state
legislature, and our key agencies of jurisdiction maintain opposition
to new leasing and development of oil and gas resources from the Outer
Continental Shelf consistent with our statutory prohibition for such
development in State Tidelands.
Conclusion
Let me conclude by saying that California stands ready to work with
Congress and the Obama Administration to help craft a comprehensive and
science based national energy strategy and a Five Year Oil and Gas
Leasing Program. We believe such an approach should be developed with a
look toward all of our energy options including energy efficiency,
alternative renewable energy sources, and of course the development of
oil and gas resources in locations where local and state governments
support it, and where the environmental impacts can be mitigated.
______
The Chairman. Thank you. Mr. Diers?
STATEMENT OF TED DIERS, CHAIRMAN,
COASTAL STATES ORGANIZATION
Mr. Diers. Good afternoon. My name is Ted Diers. In my day
job, I am the manager of the New Hampshire Coastal program
within our Department of Environmental Services, but, today, I
am here as the Chair of the Coastal States Organization,
representing the Governors of the 35 coastal states,
commonwealths, and territories, and to talk to you a little bit
about some of our concerns, interests, and maybe a way forward
as you start to work out some of these issues.
Our 35 coastal states, territories, and commonwealths are
at the forefront of ocean and coastal management. Whether it is
addressing sea level rise or hazards or renewable energy
proposals, coral bleaching, coastal states, we are sort of at
this nexus of all of these different issues and where they come
together in the most populous parts of our country.
The coasts and oceans represent an important source of
energy for the United States, including oil, natural gas, and
renewable energy in the form of tidal, wave, wind energy, and
probably things we have not even imagined yet. So the states,
as we have members who certainly have production and those that
do not, certain ones that want it and do not, but there are
some things that we do come together around, and especially
that we do need a comprehensive energy policy, and, within
that, the states have certain great consensus around three
things, and that is what I would like to talk about for just a
couple of more minutes here.
The first is that we need to retain state sovereignty and
Federal consistency authority.
The second is that planning out into the ocean needs to
include both traditional and renewable energy development, and
really be science based around the resources that are out
there.
Third, we need the establishment of a permanent trust fund
because it is through that that we will have the money to do
the science and the management and the planning to be able to
have a sustainable resource.
Quickly, about state sovereignty, Section 307 of the
Coastal Zone Management Act, known as the ``Federal consistency
provision,'' grants states authority to review Federal
activities, licenses, and permits that have a foreseeable
impact on our land or water resources. These activities that
are Federal activities must be consistent, to the maximum
extent practicable, with the enforceable state policies. Those
state policies which are created by the states are approved by
the Federal government.
Consistency applies before a permit is issued, and this is
really important to recognize, from the state perspective,
because, from my perspective, as a coastal manager, consistency
is our ticket to the dance. This is how we interact between the
Federal agencies and those people who are applying for
projects. It allows you to have a dialogue that happens before
an impact, before a permit, is in place. Countless numbers of
projects have been approved through this project over the
years.
Furthermore, I just want to note one thing that has not
come up today, and that is that the resources that are out in
the Outer Continental Shelf and those resources which are
within our coastal zone; it is very hard to differentiate them
sometimes. Fish, currents, wave, wind; they do not really care
about a line that sits three nautical miles off our shoreline.
I want to talk a little bit about, again, planning out into
the ocean and our offshore resources. There is another point
that has not really been made too much today, which is that
there is significant ``regionality'' in how we need to think
about our offshore resources. We do have some great regional
efforts that are coming together in this state, largely led by
the states, and I think this is a really interesting movement
that is going in regional ocean partnerships, from the Gulf of
Mexico Alliance to our West Coast Governors Agreement to, in my
own backyard, the Northeast Regional Ocean Council.
We are working together. We are willing to work with our
Federal partners and also with the Minerals Management Service
as they plan for offshore activities. Just a point there is
that while MMS does look at offshore drilling, no one is really
looking at those renewable resources yet, and that is something
that we need to come together around.
Finally, a permanent trust fund. Chairman Rahall, you
noted, in the first hearing, that money from the ocean appears
to go everywhere but the ocean, so I think that we need to
solve some of that, and the revenues do need to be used for
science and management in the future.
It has been said by Robert Ballard that we know more about
the surface of Mars than we do about the bottom of the ocean.
The only problem in that is that we are not trying to manage
the surface of Mars yet, and so this is a real challenge.
I just want to conclude briefly, again, by stating that
there are three things that we really want to make sure are
looked at and maintained in a comprehensive energy policy: one,
that state sovereignty and Federal consistency are maintained;
two, that we do planning that looks at both renewable and
traditional sources of energy; and, three, that we have the
dollars to do great science and management in our offshore
areas. Thank you very much.
[The prepared statement of Mr. Diers follows:]
Statement of Ted Diers, Manager, New Hampshire Coastal Program, New
Hampshire Department of Environmental Services, on behalf of the
Coastal States Organization
Introduction
Good morning, Mr. Chairman and Members of the Committee. My name is
Ted Diers and I am the Manager of the New Hampshire Coastal Program of
the New Hampshire Department of Environmental Services. I also serve as
Chair of the Coastal States Organization which represents the Governors
of the nation's thirty-five coastal states on the sustainable
management of the nation's ocean, Great Lakes and coastal resources.
Thank you for holding this important hearing this afternoon and for
inviting me to testify on behalf of the coastal states.
Let me start by saying that the 35 coastal states, territories, and
commonwealths that are members of the Coastal States Organization are
at the forefront of ocean and coastal management in this nation.
Whether it's addressing sea level rise and hazards in the Gulf States,
renewable energy proposals off the northeast coast, or coral bleaching
in the pacific islands, coastal states are on the front lines of these
issues. Our ocean and coastal resources are not only important to us at
the state level, but to citizens throughout this nation.
Coastal and ocean areas also represent an important source of
energy for the U.S., including oil, natural gas, and renewable energy
in the form of tidal, wave and wind energy. Use of the oceans for
energy production requires a commitment to responsible development that
promotes protection of living marine resources, seafloor habitats, and
coastal communities. Such development must proceed from an
understanding that our oceans are held in public trust for all
citizens, and that multiple uses (including energy production) must be
consistent with the long-term productivity of these resources.
As the U.S. crafts a national energy policy, including coastal and
offshore energy development, it is important to consider three key
factors which I will address today: 1. the retention of state
sovereignty and consistency authority; 2. the planning for the nation's
Exclusive Economic Zone including traditional and renewable energy
development; and, 3. the establishment of a permanent trust fund.
Our position is simply stated--The development of offshore
renewable and traditional energy must be part of a comprehensive plan
in which the states are full partners, addresses regional needs and
opportunities and uses the best science possible. And, that effective
planning and good science has costs associated with it.
State Sovereignty and Consistency Authority
While offshore energy production benefits the entire nation, the
impacts from activities associated with exploration, development and
production on state coastal lands and federal offshore lands are felt
most in coastal states. Thus, it is vital for state authority and
sovereignty to be maintained. CSO recommends that Congress and the
Administration consult with coastal states in the development of any
new leasing program or formula of revenue sharing. In the past,
offshore moratoria have been the result of a fractured, exclusive and
federally-driven energy policy. If indeed we are heading in direction
of a ``post-moratorium'' world, the ability for a state to review
actions related to offshore oil and gas drilling is essential.
Section 307 of the Coastal Zone Management Act, known as the
federal consistency provision, grants states authority to review
federal activities, licenses and permits that have reasonably
foreseeable effects on any land or water use or natural resource of the
coastal zone. These activities must be consistent to the maximum extent
practicable with the enforceable policies of a coastal state's
federally approved coastal management program. This has been a primary
method of ensuring more sustainable development of the nation's coasts.
Consistency applies before a federal permit is issued; thus, it
facilitates early consultation between states, federal agencies and
permit applicants in order to avert disputes from arising after
substantial commitments have been made by agencies and applicants. In
practice, consistency is important as a ``ticket to the dance''--
allowing states to have a seat at the table in decisions related to the
coasts. Without these early reviews, there would be much more
uncertainty, litigation and calls for federal legislative intervention
in actions in coastal communities. To increase efficiency for states,
federal agencies and applicants, many states have created streamlined
approaches to energy related activities.
In granting states consistency authority, Congress recognized that
federal interests and activities must be balanced with the sovereign
interests of states in managing coastal resources. This is the
underlying philosophy of the CZMA and the consistency provision. State
coastal programs must receive federal approval for a state to exercise
its consistency authority; likewise, each enforceable policy upon which
it relies must also receive federal approval.
Furthermore, the resources of the OCS and the coastal zone are many
times difficult, if not impossible, to differentiate. Fish, currents,
wind and wave care little about an imaginary line drawn 3 nautical
miles from our shores. As the committee considers offshore energy, the
retention of consistency under the CZMA must be a priority.
Planning for the Exclusive Economic Zone including Oil and Gas and
Renewable Energy Development
Given the prices and impacts of oil consumption, offshore oil and
gas development must be considered in the context of the development of
renewable energy and both must be balanced with the care of oceans and
coasts and the economic viability of coastal communities. The energy
needs and even the offshore resources of any particular state do not
occur in a vacuum. There is significant ``regionality'' to both
offshore needs and opportunities. Thus, the regional scale is
appropriate for science based planning. The states are moving to take
on some of these regional needs through the development of regional
ocean partnerships. From the Gulf of Mexico Alliance to the West Coast
Governors Agreement, the Great Lakes Commission to by own back yard in
the Northeast Regional Ocean Council, the state are working together to
create the framework for large-scale problem solving. This regional
ocean partnership movement is a distinct opportunity for the state and
federal government to work together.
Development of diverse and numerous sources of alternative
renewable energy is critical to our nation's energy security and
environmental well-being. The federal role is crucial because virtually
every site where ocean renewable energy technology is likely to be
tested or deployed is subject to federal jurisdiction. Unlike
conventional wind and solar, ocean renewable energy technology cannot
be tested or deployed on private land. The industry will emerge and
mature in the United States only if the federal government uses its
resources and authorities to plan for and encourage appropriate use of
the marine areas it controls.
While the Minerals Management Service plans for offshore oil and
gas drilling, no federal or interstate body has taken on the task of
planning for renewable energy development. Furthermore, there are
myriad other coastal offshore uses and resources to consider when
planning for energy development. CSO encourages the consideration of
renewable energy in a national energy policy and legislation, including
planning that addresses uses, resources, and impacts.
Establishment of a Permanent Trust Fund
Great science and planning cost money. In the first OCS hearing in
this series by the Committee on February 10, Chairman Rahall, you noted
that ``money from the ocean appears to go to everything but the
ocean.'' Indeed, even though coastal states are affected exponentially
by the impacts of offshore energy development, receipts derived from
sales, bonus bids and royalties under the mineral leasing laws are paid
to the Treasury through the Minerals Management Service. But, these
revenues are not directly applied to pay for Federal or State agencies'
examination, monitoring and managing wildlife, fish, water and other
natural resources related to energy and mineral exploration and
development.
The establishment of a Trust Fund provides a mechanism for
reinvestment of the revenues generated from these public lands toward
protection of coastal resources and communities. The Trust Fund can
support the focused efforts of coastal states, territories and
commonwealths, other appropriate coastal authorities, and federal
agencies in addressing critical ocean and coastal management needs of
our nation including restoration, protection, and enhancement of
natural processes and habitats. This will help minimize the impacts of
relative sea level rise, global warming, and ocean acidification and
provide technical assistance and research to better anticipate and plan
for the impacts of global warming and ocean acidification on ocean and
coastal resources.
In its Final Report, the U.S. Commission on Ocean Policy identified
a myriad of challenges to improve the management of our nation's ocean
and coastal resources. The Commission recognized that to meet these
challenges additional investments would be necessary, and Outer
Continental Shelf receipts were identified as the primary source of
funding. Additionally, the Commission recommended that a portion of OCS
revenues should be shared with coastal states (Recommendation 24-1).
Revenues shared with the states should further the goals of improved
coastal and ocean management.
In 2006, the Coastal States Organization adopted a policy on
revenue sharing which states that ``Because the coastal states face a
number of challenges in conserving their coastal resources and
protecting their coastal communities, OCS receipts should be used to
further the goals of coastal and ocean restoration, conservation,
preservation, mitigation, research, and education.'' While the coastal
states may not agree on the presence of offshore oil and gas drilling
off their shores, they do agree in the reinvestment of funds from these
public resources. Furthermore, these funds should be provided over and
above existing appropriations to meet the increasingly complex and
unmet needs of ocean and coastal managers.
It has been said that we know more about the surface of Mars that
we do about the bottom of the ocean. The problem with that is we are
not yet trying to manage use conflicts on Mars, but we are here on
Earth.
Conclusion
The oceans will continue to play an important role in access to
sustainable and reliable energy. By retaining the state review
authority, reinvesting a portion of public trust revenues on marine and
coastal resources, and planning for both traditional and renewable
energy development, new energy legislation will enhance our nation's
ability to meet pressing ocean and coastal needs in an economical,
efficient, and sustained manner.
In legislation regarding OCS activities, CSO requests:
Federal consistency authority under the Coastal Zone
Management Act should be maintained and states' authority within their
own jurisdictions should not be weakened in any way.
Congress and the Administration should commit to planning
for the EEZ that includes energy policy based on development of
traditional and renewable energy sources, and is enhanced by state-led
regional partnerships.
Revenues should be shared with coastal states and used to
further the goals of coastal and ocean management, restoration,
conservation, preservation, mitigation, and research.
Thank you again for the opportunity to address the Committee and
for holding this important series of hearings. The Coastal States
Organization stands ready to work with you to continue this progress of
making important improvements to energy policy and coastal and ocean
management. We look forward to the advancements that we can make in the
coming year.
______
The Chairman. Thank you. Dr. Marvinney?
STATEMENT OF ROBERT G. MARVINNEY, PH.D., STATE GEOLOGIST AND
DIRECTOR, MAINE GEOLOGICAL SURVEY
Mr. Marvinney. Thank you very much, Chairman Rahall and
Members of the Committee, for this opportunity. I am Robert
Marvinney. I am the Maine State Geologist, and I am speaking
here on behalf of Maine Governor John Baldacci. I will
summarize some of the key points from my written testimony,
focusing on, first, Maine's focus on renewable energy
resources; a brief discussion of the past exploration for oil
and gas off the New England Coast and what opportunities that
may come from offshore oil and gas for Maine; and a bit on the
fisheries at Georges Bank.
Currently, Maine has the highest per capita dependence on
No. 2 heating oil of any state in the nation, and this is a
critical concern for us, particularly with the severe winters
we have experienced over the last several years. That makes--
for low- and middle-income people--very difficult choices
between vital expenses and home heating, and those energy costs
have risen dramatically in the last 10 years.
The Governor has focused several efforts on renewable
resources in the state. We have a Wood To Energy Task Force
that looks at using the vast forest resources of the state--we
are the most heavily forested state in the Nation--and using
those to meet some portion of our energy needs. We are working
on wood pellet systems, and the University of Maine is also
looking at ethanol from wood and other areas.
We have also had a Wind Power Development Task Force that
looked at onshore opportunities for wind power development and
have moved considerably forward on that, and, most recently,
the Governor established an Ocean Energy Task Force to look at
the indigenous and renewable resources, potential offshore,
that address our energy needs and increasing our state's energy
independence, reducing greenhouse gas emissions, and limiting
our vulnerability to unpredictable foreign fuel supplies. But
we are not ignoring any potential offshore, and, certainly, we
recognize that wind has a huge potential off the coast of
Maine.
The past efforts at oil and gas exploration were in the
1970s and 1980s, mostly in the Georges Bank area. The remainder
of the Gulf of Maine really does not have the kind of geology
that would be suitable for the development of the existence of
oil and gas. It is really an extension of our rock-bound coast
well offshore.
We are talking primarily about the Georges Bank, where, in
the seventies and eighties, there were 10 exploration wells and
associated exploration work, and, in the MMS, their summary
reports show that these wells did not make any discoveries, nor
did they generally find the kinds of geologic conditions that
were conducive to the development of oil and gas resources
there.
Of course, there has been exploration and development on
the shelf off of Nova Scotia, and there is at least one
significant discovery at Sable Island, with a gas resource.
That was discovered 30 years ago, and, in the following time,
some smaller discoveries have been made but nothing
substantial.
There is certainly a potential for offshore resources
there, and MMS has made some assessments that the entire North
Atlantic planning area, extending from New Jersey through the
coast of Maine, might have two billion barrels of oil and 18
trillion cubic feet of natural gas. I just want to point out
that, for comparison, that same assessment suggests that the
Gulf of Mexico might have 45 billion barrels of oil and 230
trillion cubic feet of gas, much larger numbers than the North
Atlantic.
There is certainly potential for oil and gas offshore, and
there is some potential for economic opportunities for the
Northeast. I think, though, if I were standing on the coast of
Maine, looking offshore across most of the Gulf, which does not
have the potential, out to the Georges Bank, I think we are
mostly concerned about the potential costs of oil and gas
development because just the proximity of the greatest
potential for oil and gas is closer to other New England
states.
So, from a strictly provincial viewpoint of the State of
Maine, we do not see a tremendous amount of benefit coming from
that activity in that area. However, Georges Bank is a huge
fishery resource for the State of Maine, and the largest dollar
value of our fishery resource comes from that Georges Bank,
where the situation of nutrients and currents makes it a highly
productive spawning ground and growth area for many kinds of
commercial species.
I am not saying that there are not problems with fisheries,
but we certainly feel that the effort should focus on
rebuilding those fisheries.
So, in summary, we are not opposed to offshore oil and gas
drilling, but we think it ought to be focused in the areas with
the greatest potential and preserve other areas for their
greatest potential of other resources. I think we agree with
other states that there ought to be revenue sharing with these
offshore resources, and also our concern about the Georges Bank
fisheries is our greatest concern, and we want to make sure
every effort is put in place to protect those resources. Thank
you.
[The prepared statement of Mr. Marvinney follows:]
Statement of Robert G. Marvinney, Ph.D., State Geologist and Director,
Maine Geological Survey
Chairman Rahall and members of the House Committee on Natural
Resources, thank you for this opportunity to provide Maine's
perspective on offshore drilling and our nation's energy future. I am
Robert Marvinney, State Geologist and Director of the Maine Geological
Survey, speaking on behalf of Maine Governor John Baldacci.
My testimony today will focus on these main topics:
Maine's focus on renewable energy resources. The Governor
and Legislature are considering all options in a comprehensive energy
plan that focuses on efficiency, renewability, reduction of greenhouse
gas emissions, and energy independence. In these areas the Gulf of
Maine holds high potential as a source of renewable wind and tidal
power.
Past exploration on the outer continental shelf of the
New England states did not discover optimum conditions for hydrocarbon
generation and accumulation. Recent assessments by the Minerals
Management Service indicate some potential for undiscovered reserves in
the North Atlantic Planning Area, but these are small when compared to
other parts of the OCS with more favorable conditions.
Exploitation of hydrocarbons on the OCS may bring
economic benefits, but due to the proximity of potential reserves to
other parts of the coast, Maine is not likely to be a significant
recipient of these benefits.
The Georges Bank is among the most significant fisheries
in the northeastern United States, and supports a significant part of
the economy in New England coastal communities. We are concerned about
additional stress to this resource.
Renewable Energy Resources
Currently, Maine has the highest per capita dependence on #2
heating oil of any state in the nation. The past several winters have
been particularly difficult for low- and middle-income and elderly
Mainers who are making very difficult choices between home heating and
other vital expenditures. Energy costs have grown from 5% to 20% of a
Maine family's budget in just the past 10 years1.
In response to this crisis and his commitment to a state energy
policy focused on efficiency, renewability, greenhouse gas reduction
and energy independence, Governor Baldacci established several
important groups to focus on segments of the energy market. Maine is
the nation's most heavily forested state, and the Governor's Wood to
Energy Task Force focused on harnessing the wood supply to meet a
significant portion of our energy needs. Maine people use the State's
forest resources for cordwood and pellets to heat homes and businesses
and as biomass to generate electricity. University of Maine researchers
are advancing the process to make cellulosic ethanol from wood.
In 2007, the Governor established a Task Force on Wind Power
Development, the recommendations of which have been instrumental in
advancing the implementation of onshore wind power in Maine.
In November 2008, Governor Baldacci established the Ocean Energy
Task Force2 to focus primarily on Maine's indigenous and
renewable offshore energy potential and its promise to address state
and regional energy needs, including increasing our state's energy
independence, reducing greenhouse gas emissions, and limiting our
vulnerability to the unpredictable costs and supplies of fossil fuels.
While ignoring no potential energy option in Maine's offshore
environment, this effort will focus in particular on the enormous
potential of tides and wind. Tidal power is quickly achieving
commercial viability, and one developer has been working with a
community and testing its in-stream tidal energy device. It is
estimated that the Gulf of Maine holds as much as 150 gigawatts of wind
potential in both shallow and deep state and federal
waters3.
Petroleum Exploration History and Oil and Gas Potential of the Georges
Bank
The Ocean Energy Task Force will also consider the potential for
offshore oil and gas reserves in its comprehensive review of the ocean
energy resources of the Gulf of Maine. Most of the Gulf of Maine is
underlain with geology that is not suitable to the generation of oil or
natural gas. The rocks are basically an extension of the high-grade
metamorphic rocks and granite intrusions that characterize the
rockbound coast of New England and have been heated well beyond the
optimal conditions for hydrocarbon generation.
The area with the highest potential for oil and gas reserves is the
Georges Bank, a relatively shallow plateau situated more than 100 miles
southeastward from the Maine coast. The oval shaped Bank is
approximately 150 miles long, 75 miles wide, and with waters as shallow
as 30 meters along its northwest edge, forms a barrier to the deeper
Gulf of Maine waters to the north (Figure 1). The northeastern most
portion of the Georges Bank falls within Canada's territorial waters.
[GRAPHIC] [TIFF OMITTED] 47607.001
.epsThe only oil and gas exploration activity on the Georges Bank
was conducted during the 1970s and early 1980s when 10 wells were
drilled in the most promising areas identified through the best
exploration methods then available. In a summary report, the Minerals
Management Service indicated that hydrocarbons were not discovered in
these wells, that thermally mature source rocks are lean in the organic
material necessary to generate hydrocarbons, and that other units
lacked adequate porosity to be considered good reservoir
rocks5. As this Committee is aware, the Georges Bank was
under annual congressional moratoria on oil and gas leasing from 1982
to 2008. No wells have been drilled on the Canadian portion of the
Georges Bank and a leasing moratorium has also been in effect there
since 1988.
Our colleagues in neighboring Nova Scotia, however, have
demonstrated that geology similar to that of the Georges Bank can be
productive. Since exploration began on the Scotian shelf in the 1950s,
24 significant hydrocarbon discoveries have been made in this part of
Canada's outer continental shelf6. These have been mostly
natural gas discoveries. The most notable, Sable Island, may eventually
produce a total of 2 trillion cubic feet (Tcf) of gas, although
estimates vary widely. Since the Sable Island discovery over 30 years
ago, a very active exploration program has brought little additional
reserve forward. With improved technologies, exploration is advancing
toward deeper waters, which may hold the best potential for significant
new reserves.
The government of Nova Scotia is actively supporting exploration
activities on the Scotian Shelf due, in part, to the revenue sharing
agreement with Canada's national government that brings to the province
$500 million in royalties annually6. In 2010, the governments of Canada
and Nova Scotia will decide whether or not to extend the moratorium on
Georges Bank leasing which is set to expire at the end of 2012.
While past exploration has not uncovered notable reserves, nor
found conditions generally favorable for hydrocarbon accumulation,
there is some potential for petroleum discoveries on Georges Bank and
elsewhere in the North Atlantic. The Minerals Management Service
periodically conducts assessments of undiscovered hydrocarbon reserves
of the outer continental shelf nationwide, most recently in 20067.
These assessments take into account past exploration data and
information for new discoveries in areas with analogous geology, which
for the Georges Bank include the Scotian Shelf. The assessment of
undiscovered, technically recoverable reserves for the entire North
Atlantic Planning Area, which extends from the border with Nova Scotia
in the Gulf of Maine to the Delaware border, is a mean of 2 billion
barrels of oil and 18 Tcf natural gas (Table 1). The greater proportion
of this potential is probably in the southern part of this region near
New Jersey where earlier exploration wells discovered gas. For
comparison purposes, this same assessment indicates that the Gulf of
Mexico area contains undiscovered reserves of 45 billion barrels of oil
and 230 Tcf of gas--over 20 times more oil and 12 times more gas than
the entire North Atlantic Planning Area. Additionally, Gulf of Mexico
states already have in place the infrastructure necessary to support
exploration and development activities.
Oil and gas exploration and development techniques have improved
dramatically in the past 30 years, and if applied to the Georges Bank
could possibly generate new discoveries, but these would likely be
small compared to other areas of the Outer Continental Shelf.
[GRAPHIC] [TIFF OMITTED] 47607.002
.epsPotential benefits of oil and gas development at Georges Bank
Georges Bank oil and gas development could provide benefits to the
state of Maine, the Northeast region, and the U.S. Although a
substantial period of time is necessary for exploration and development
activities, eventually, new hydrocarbon resources could be brought on
line that, in small measure, reduce dependence on unstable foreign
sources. In addition to the exploration and development jobs
themselves, such activities would generate on-shore support jobs.
However, I think we need to be clear about the limited extent to which
such development has potential to directly benefit Maine. The proximity
of the Georges Bank is such that any support base for exploration and
development activities there would likely be situated in Massachusetts
or Rhode Island. That said, Maine has a track record of benefiting from
petroleum exploration. One Maine corporation recently constructed two
semi-submersible platforms for petroleum development; their work would
certainly be enhanced by Georges Bank development. However, this
corporation has also demonstrated that they can compete globally since
those two rigs were deployed in waters off Brazil.
Georges Bank Fisheries8
Georges Bank is the most westward of the great Atlantic fishing
banks--those now-submerged portions of the North American mainland that
extend from the Grand Banks of Newfoundland to Georges Bank. They rank
among the world's most productive fisheries. Lying adjacent to New
England's famous seaports, Georges Bank is single-handedly responsible
for the development of coastal fisheries in towns such as Gloucester,
Massachusetts and Portland, Maine. The varied nature of sedimentary
environments on Georges Bank is a key element in the development of the
biological community. Seafloor sediment originally was transported to
the bank by glaciers. During and after glacial retreat, the rise of sea
level and the action of tidal and storm currents marked the start of an
erosional episode on the bank that continues today. Gravel formed
through this process is an important habitat for the spawning and
survival of several fishery species9. For instance,
distribution patterns of juvenile cod indicate that the gravel habitat
is where they are best able to avoid predators and to find food
sources. The topography and position of the bank result in upwelling of
nutrient-rich waters circulating in the Gulf of Maine. These nutrients,
introduced into the sunlit waters over the bank, and interaction with
warm Gulf Stream currents on the southern edge of the Banks, support
exceptional rates of productivity, including many species of commercial
importance. These are important spawning, juvenile and feeding grounds
for cod, haddock, herring, and other commercial species. The scallop
resource on Georges Bank is also very productive and valuable. In
Maine, a substantial portion of the fishing fleet is dependent on the
Georges Bank, and the largest dollar value of the commercial catch
brought to Maine ports comes from this location.
Certainly, there are issues with over-fishing the Georges Bank, but
government efforts focus on managing the fishery to rebuild stocks.
Under current conditions, the fishery resources of Georges Bank are
important to the economy of Maine and New England. With rebuilding of
these resources, their economic value will be increased very
significantly.
Summary
1. We are not opposed to offshore drilling in general and
recognize that for the near term, the nation needs sources of oil and
gas that are not vulnerable to foreign ownership and control. However,
oil and gas development efforts should be focused in the areas with the
greatest potential, and where infrastructure is already in place to
support the activity.
2. Wherever additional areas of the Outer Continental Shelf are
accessed for oil and gas development, states should benefit directly
through revenue sharing, as occurs with states around the Gulf of
Mexico and in Canada.
3. The Georges Bank has great economic value as a fishery. In
spite of the troubled nature of the fishery, it supports a substantial
portion of the New England economy. We are concerned about potential
negative impacts of oil and gas development on the fishery.
4. Oil and gas development could bring additional jobs to the
region, but these would most likely be in southern New England.
5. We believe the resources of the Gulf of Maine are most suitable
to renewable energy development, with tidal and offshore wind power
being the primary resources. Renewable wind power may provide
manufacturing and support employment and contribute to a sustainable,
secure energy future.
Notes
1. Daghar, H., as presented to Ocean Energy Task Force: http://
www.maine.gov/spo/specialprojects/OETF/Documents/
Dagher%2012%2017%2008.pdf
2. Ocean Energy Task Force website: http://www.maine.gov/spo/
specialprojects/OETF/index.htm
3. Dagher, H., Director, University of Maine Advanced Structures
and Composites Center: http://www.aewc.umaine.edu/072208Dagher.pdf
4. Gulf of Maine times, 2000, Vol. 4, No. 1, map copyright
MapWorks 2000.
5. Edson, G.M., Olson, D.L., and Petty, A.J., 2000, Georges Bank
Petroleum Exploration: Minerals Management Service OCS Report 2000-031,
20 p.
6. Canada-Nova Scotia Offshore Petroleum Board: http://
www.cnsopb.ns.ca/
7. Minerals Management Service, 2006, Planning Area Resources
Addendum to Assessment of Undiscovered Technically Recoverable Oil and
Gas Resources of the Nation's Outer Continental Shelf, 2006
8. Fisheries information in this section compiled from discussions
with George Lapointe, Commissioner, Maine Department of Marine
Resources.
9. USGS Fact Sheet, Geology and the fishery of Georges Bank,
http://pubs.usgs.gov/fs/georges-bank/
______
The Chairman. Thank you. Senator Wagner?
STATEMENT OF HON. FRANK W. WAGNER,
STATE SENATOR, SENATE OF VIRGINIA
Mr. Wagner. Thank you, Chairman Rahall, Congressman
Hastings. I am glad I do not have to follow Congressman
Rohrabacher or Congressman Abercrombie. They are certainly
tough acts to follow.
As you know, Mr. Chairman, Virginia has taken a leadership
role in asking the Federal government to open up the Atlantic
Outer Continental Shelf for exploration of hydrocarbons. The
official policy of Virginia is to request that the Federal
government allow for exploration for natural gas only and no
closer than 50 miles from our own coastline.
However, there are many in Virginia, including myself,
that, consistent with Navy training requirements and
environmental review, would take a much broader approach.
We, in Virginia, were pushing this policy long before $4-a-
gallon gasoline and prior to the current large-scale recession
in which we find ourselves.
During peak energy prices last summer, it was estimated
that this nation was spending nearly $700 billion a year
importing hydrocarbon energy from outside the borders of this
country. This dollar figure is surprisingly similar to the TARP
package and the economic stimulus package that this Congress
passed within the last few months.
Mr. Chairman, imagine for a minute, if those hundreds of
billions of dollars we currently spend outside the borders of
this country buying energy were spent inside this country,
developing our own natural resources, employing Americans to
produce American energy for American industry.
At a time when job creation and economic stimulus is
absolutely critical, putting Americans back to work developing
our own natural resources will go a long way toward restoring
America's economic vitality.
Mr. Chairman, I need not tell you that states are
struggling. I just drove up from Richmond, where Virginia is
attempting to close a nearly $4 billion deficit. This Congress
has authorized revenue sharing with coastal states, in some
instances, as part of opening up more areas of the Outer
Continental Shelf. We sincerely hope that you continue the
program.
Mr. Chairman, I ask you to only look north to our friends
in Canada. They are already in the Atlantic Outer Continental
Shelf, recovering some 500 million cubic feet of natural gas a
day off of Nova Scotia in the Sable Island area. It is also my
understanding that they have opened up significant oil deposits
off of Newfoundland farther out in the Atlantic Basin.
To our south, Cuba is already entertaining leasing
structures and putting together programs just within 50 to 70
miles off the coastline of Florida, yet we continue to restrict
access to potential reserves of an unknown amount because this
nation has chosen to restrict even the basics of exploration to
make this determination. In this instance, ignorance is not
bliss.
Mr. Chairman, because of Virginia's actions, we are
currently in the MMS Five-year Leasing Plan with a potential
lease sale occurring as early as 2012. We would encourage you
to work with Secretary Salazar to keep Virginia on schedule.
We, in Virginia, recognize there is no one silver bullet
for this nation's energy problems. The solution must be thought
of as a silver shotgun shell where each pellet is equally
important as the others. Opening additional OCS is one of those
pellets. Expansion of nuclear power and revisiting prior
decisions on breeder reactors is another. Conservation, energy
efficiency, development of renewables, and alternative energies
are all pellets that go in that shotgun shell.
Three years ago, in Virginia, we passed a comprehensive
energy plan, which I have authored and with bipartisan support.
The Virginia energy plan includes all forms of energy I just
mentioned, as well as expansion of energy research and
development, expansion of conservation, and moving forward.
However, we do not hold the keys, Mr. Chairman. You, in
Washington, do. Please unlock these doors. Once we have opened
up the MMS action to date with regard to Virginia's OCS, open
that door for other states that want to follow Virginia.
Facilitate the expansion of our nuclear industry. Open up more
areas for energy development. Continue to expand the good work
to date on funding R&D. Expand our efforts to use existing
energy more wisely.
We, as a nation, are at a critical juncture where the
health of our economy and the health of our economy and the
health of our planet are intertwined. We look to you, our
Federal representatives, to make the right decisions for the
future of our country. Please hear my plea to allow us
Americans to take advantage of our domestic resources so that
we may secure America's energy independence while putting
Americans back to work.
Thank you for allowing me this minute, Mr. Chairman, and I
will take the last minute just to kind of go off script a
little bit and talk.
We have heard a lot of talk about what we are doing here.
What we are doing is we are restricting ourselves from our own
national energy resources, yet, at the same time, buying the
same hydrocarbon resources from outside our border.
I can tell you, Mr. Chairman, I know you know this, and I
know all of the Members of the Committee, Americans out there
are nervous. They are afraid. They are very concerned about
their jobs. They are very concerned about the economic future.
We start talking about renewables, and MMS is still trying to
put a five-year plan together for offshore leasing for
renewables.
The obstacles that are up as part of the permitting
processes mean there is no quick solution as equally as
important as opening up these areas and doing these other
things. We need to look at the process of getting these things.
We talk a lot about green jobs; I spent weeks, years,
trying to get one small renewable project permitted in
Virginia, and we are still no closer than we were before.
I think we really need to look at this in the context of
not just what we do but also how we get there from where we are
today. I think it is a very serious problem. I think it is a
core problem for this economy and this nation, and I hope that
you all can make the right decisions here and move forward in a
bipartisan manner but recognize that it is all of our resources
for all ourselves. Thank you, Mr. Chairman.
[The prepared statement of Mr. Wagner follows:]
Statement of The Honorable Frank W. Wagner, Senator,
Senate of Virginia, 7th District
Thank you, Chairman Rahall, Congressman Hastings, for the
opportunity to testify before you today.
As you know, Mr. Chairman, Virginia has taken a leadership role in
asking the federal government to open up the Atlantic Outer Continental
Shelf for exploration of hydrocarbons. The official policy of Virginia
is to request that the federal government allow for exploration for
natural gas only no closer than fifty miles from our own coastline.
However, there are many in Virginia, including myself, that
consistent with Navy training requirements and environmental review,
would take a much broader approach.
We in Virginia were pushing this policy long before $4 a gallon
gasoline and prior to the current large-scale recession in which we
find ourselves.
During peak energy prices last summer, it was estimated that this
nation was spending nearly $700 billion a year importing hydrocarbon
energy from outside the borders of this country. This dollar figure is
surprisingly similar to the TARP package and the economic stimulus
package that this Congress passed within the last few months.
Mr. Chairman, imagine for a minute, if these hundreds of billions
of dollars we currently spend outside the borders of this country
buying energy were spent inside this country, developing our own
natural resources, employing Americans to produce American Energy for
American Industry.
At a time when job creation and economic stimulus is absolutely
critical, putting Americans back to work developing our own natural
resources would go a long way towards restoring American economic
viability.
Mr. Chairman, I need not tell you that states are struggling. I
just drove up from Richmond where Virginia is attempting to close a
nearly $4 billion deficit. This Congress has authorized revenue sharing
with the coastal states as part of opening more areas of the Outer
Continental Shelf. We sincerely hope you continue the program.
Mr. Chairman, I ask you to only look north to our friends in
Canada. They are already in the Atlantic Outer Continental Shelf
recovering 500 million cubic feet of natural gas a day off of Nova
Scotia. Canada is also expanding hydrocarbon recovery in the Atlantic
basin off Newfoundland. To our south, Cuba is moving forward with
development of their offshore resources. Yet, we continue to restrict
access to potential reserves of unknown amount because this nation has
chosen to restrict event he basics of exploration to make this
determination. Mr. Chairman, in this instance ignorance is not bliss.
Mr. Chairman, because of Virginia's actions, we are currently in
the MMS five-year leasing plan with potential lease sales occurring as
early as 2012. We would encourage you to work with Secretary Salazar to
keep Virginia on schedule.
We in Virginia recognize that there is no one silver bullet to
solve our nation's energy crisis. The solution must be thought of as a
silver shotgun shell, with each pellet as important as the next.
Opening additional OCS areas is one pellet. Expansion of nuclear
power and revisiting prior decisions on breeder reactors is another.
Conservation, energy efficiency, development of renewables and
alternative energies are pellets, and the list goes on.
Three years ago in Virginia we passed a comprehensive energy plan,
which I authored, with bipartisan support. The Virginia Energy Plan
includes all the forms of energy just mentioned as well as the
expansion of energy research and development.
However, we do not hold the keys, Mr. Chairman. You in Washington
do. Please, Mr. Chairman, unlock the doors. One has been opened with
MMS action to date with regards to Virginia's OCS. Open that door for
other states that want to follow Virginia. Facilitate the expansion of
our nuclear industry. Open up more areas for energy development.
Continue to expand the good work to date on funding energy R&D. Expand
our efforts to use our existing energy more wisely. We as a nation are
at a critical juncture where the health of our economy and the health
of our planet are intertwined. We look to you, our federal
representatives, to make the right decisions for the future of our
country. Please hear my plea to allow us as Americans to take advantage
of our domestic resources so we may secure America's energy
independence while putting Americans back to work.
Thank you for allowing me to testify before you today. I would be
happy to answer any questions at the appropriate time.
______
The Chairman. Thank you, Senator. Mr. Graves?
STATEMENT OF HON. GARRET GRAVES, DIRECTOR,
LOUISIANA GOVERNOR'S OFFICE OF COASTAL ACTIVITIES
Mr. Graves. Thank you, Mr. Chairman. Happy Mardi Gras. It
is a state holiday, but apparently nobody else got the
headline.
The Chairman. Happy Mardi Gras to you, too.
Mr. Graves. I want to thank you very much for the
opportunity to testify today. It is actually better, for both
my health and marriage, that I am here versus there, I am sure.
I want to show a quick satellite depiction from NOAA of
North America. You can see, 60 million years ago, how the
Mississippi River Delta was somewhere near Illinois perhaps.
Over this 55-million-to-60-million-year period, you can see the
evolution. The point here is that you have an extraordinarily
dynamic coastal area in Louisiana, an extraordinarily dynamic
delta in coastal Louisiana, that today is one of the most
productive areas in the nation.
An MMS report, years ago, determined that the evolution of
the oil and gas industry has had profound impacts on the
culture, geography, society, and the economy of the state in
the 20th century.
In reviewing the testimony in the hearing that was held by
this Committee on February 11th, a number of issues were
repeated, and they pertain to tourism, commercial fishing,
recreational fishing, and the maritime industry. Those concerns
that were brought up were hypothetical projections or estimates
of what would happen if additional offshore production were
established in states that currently do not host such
production, or if production was expanded where states that are
currently hosting.
I can show you exactly what is happening in Louisiana
rather than giving you theories or hypothetical suggestions of
what is happening. This is really what we are facing and what
we have seen in Louisiana after several decades of production.
New Orleans is one of the top tourist destinations in the
Nation and the world. We have 10 million visitors to New
Orleans alone and over 20 million visitors to Louisiana last
year, and it is one of the state's largest economies, totaling
$10 billion just last year.
The commercial fishing industry; we have the top commercial
fishing industry in the continental United States, the top
producer of crabs, oysters, crawfish, and we were the top
producer of shrimp until Katrina wiped out our infrastructure,
but we will take that back from Texas. The commercial fishing
industry represents 50,000 jobs in the state and has a $2
billion economic impact.
Here is some NOAA data showing, and confirming, again, the
importance of the commercial fishing industry to Louisiana. The
top fishing ports in the Nation are in Louisiana, with the
exception of one in Dutch Harbor, Alaska.
On the recreational fishing side, Louisiana is home to
numerous national and world fishing records. There are 1.2
million saltwater anglers just in 2006, and recreational
fishing in our coastal area represents a $3 billion annual
impact, tens of thousands of jobs, and Louisiana has the
fourth-best recreational fishing industry in the nation,
measured by economic activity.
In addition, in terms of the sustainability and the
productivity of our ecosystem, many of you may remember that
alligators were on the brink of collapse several years ago. As
a result of improvements to the ecosystem in coastal Louisiana,
the alligator population has rebounded. Now, we actually have
hunting seasons for alligator, in addition to a very active
farm-raised alligator community and population: boots, belts,
and other products I will be selling later. But, again, just
showing the success of the ecosystem.
On the maritime side, once again, there were concerns
expressed in the previous hearing that oil and gas development
would box out the maritime industry by requiring the use of the
ports and limited slips, and things like that. Louisiana is
home to five of the top 15 ports in the nation, and that does
not count the impact from oil and gas activity. It is not
measured in these statistics.
We have the top tonnage port in the hemisphere, the largest
port system in the world between Baton Rouge and New Orleans,
and over 30 states today rely upon our port system for maritime
commerce.
In addition to those benefits, and, again, showing you
exactly what is happening in Louisiana, where we produce more
offshore oil than anywhere else in the nation, there are
additional benefits. We produce up to 20 percent of
domestically generated oil and gas. We have safe, stable,
secure, and clean production. Since production began offshore
in Louisiana, we have produced 14 billion barrels of crude oil
and condensate and 135 trillion cubic feet of natural gas.
Just from the production offshore of Louisiana, it is
estimated that the U.S. Treasury has received direct benefits
related to rents, bonus bids, and royalty payments totaling
$150 billion, and, as many of you know, virtually no money has
been returned to the state from that $150 billion.
In addition, 320,000 jobs are sustained as a result of
offshore oil and gas production. It has an annual economic
impact of $65 billion, and that is the petrochemical industry,
which includes onshore, offshore, and associated industrial
activity, and the direct OCS impact is $6 billion annually.
Louisiana is a laboratory. I am not going to sit here and
tell you that we have not made mistakes and that there were no
adverse impacts from oil and gas production in Louisiana, but
one thing is, is that we have cleaned up the industry. We have
changed our coastal management practices to make them more
sustainable, but, again, there have been impacts from that
production, but I think that showing the maritime, showing the
fisheries, showing the healthy ecosystem, it shows that it is
possible to have a sustainable oil and gas activity while
having a sustainable ecosystem.
In coastal Louisiana, the Corps of Engineers identified
9,300 miles of pipelines. We have some of the most intense
energy infrastructure in the world, and these all represent
pipelines, these lines here in the Gulf of Mexico, again, the
most intense energy infrastructure in the world. In the state,
we have almost 40,000 miles of pipelines related to the energy
industry.
Another concern that was expressed at the previous hearing
was from spills, and that is something that clearly is very
important. After Hurricanes Katrina and Rita, we did experience
some spills, but the majority of those spills were results of
onshore activities that were not related necessarily to
offshore production.
The third bullet down there identifies that an MMS study
found that there were no spill contacts to the shoreline; there
were no oiled-up marine mammals, birds, or other wildlife;
there were no large volumes of oil on the ocean surface to be
collected or cleaned up; and there were no environmental
impacts from any spills from Hurricane Katrina or Rita. There
were no major spills, and I want to clarify, the word ``major''
is a term of art defined by the Coast Guard, and it signifies,
it represents, a spill in excess of 100,000 gallons. But with
over 120 offshore platforms destroyed as a result of those two
hurricanes, again, no major spills.
Again, we had approximately eight million gallons that were
discharged or lost, the majority of that being onshore. That
compares to 11 million from the VALDEZ spill. Natural seepage,
as was discussed earlier, from oil and gas activity in the Gulf
of Mexico represents a larger loss or discharge in the
environment than anywhere, in any spill source or anything else
in the United States, and there is up to an 800-percent greater
chance of losing or discharging oil and gas into the atmosphere
as a result of shipping rather than production. So, obviously,
the closer to production the consumption of that product, the
safer you are.
I know I am out of time, so I am just going to very quickly
run through a couple of slides here.
This just depicts the subsidies that the Federal government
is currently putting toward the various sources of energy
production. You guys talked earlier about the need to use
solar, use wind, and other types of alternative energy sources.
Clearly, they are important, but, in looking at this, you have
extraordinary subsidies that are being put toward those energy
sources. It is simply not sustainable. It is not competitive,
and especially when we are facing economic challenges, I think
we need to continue to look at oil and gas as a source of
energy.
We are continuing to import in excess of 60 percent of our
oil consumed in the United States, and that includes from
volatile sources, like Nigeria and Venezuela. We have
extraordinary reserves that are recoverable out in the OCS
today--let me blaze through--showing the significant
improvements in energy efficiency. I believe that continued
investment in energy efficiency should be part of a package and
could be funded from additional offshore revenue generated from
new production.
This shows the current projections, and it is commendable
that California is attempting to achieve a 33-percent renewable
portfolio, but, in many other states, it is simply
unachievable, and, again, it is not economic.
I would urge that the Committee continue to look at all of
the tools that are available, to not say ``no'' to offshore
drilling. I am not going to sit here and be a knuckle dragger
and tell you that you can drill your way out of the energy
challenge because that is not the case, but I do think that
continued expansion and development of the offshore area should
play a key role in the development of future comprehensive
energy policy.
[The prepared statement of Mr. Graves follows:]
Statement of Garret Graves, Director, Office of Coastal Activities,
Member, Mineral Board, and Chair, Coastal Protection and Restoration
Authority, State of Louisiana
Happy Mardi Gras. Mr. Chairman, Ranking Member and Committee
members, thank you for the opportunity to participate in today's
important hearing. I am Garret Graves, Director of the Louisiana Office
of Coastal Activities, a member of the State's Mineral Board and Chair
of the Louisiana Coastal Protection and Restoration Authority.
Louisiana's coastal area is often referred to as a ``working
coast'' and is home to the world's best food, the unique Cajun culture,
five of the nation's top 15 ports, the top producer of fisheries in the
continental United States, the largest source of domestic oil, number
two domestic provider of natural gas, the second largest percentage of
oil refining capability in the country, the nation's highest capacity
of Liquefied Natural Gas terminals capacity and the home of over two
million people that rely upon a resilient, progressive, sustainable and
productive coastal area. The Office of Coastal Activities was
established to coordinate the various policies affecting activities in
Louisiana's coastal area. It operates similar to the Council on
Environmental Quality in that the office is designed to function across
all state agencies and advocate the consensus state coastal policy.
I commend the Committee for taking on the extraordinary task of
developing comprehensive national energy policy. It is a challenging
effort that, while necessary, I would not wish upon anyone. Your
approach to take a step back and fully evaluate all energy sources,
their potential to meet energy demand in both the short and long-term,
and to implement progressive, sustainable energy policy is exactly the
recipe that is needed to reduce the volatility in energy prices, reduce
the burden on consumers' pocketbooks, increase employment opportunities
and to improve our national, economic and environmental security--as
President Obama has defined in his energy goals.
Last month, the Department of the Interior's Minerals Management
Service released a draft plan for offshore oil and gas development that
included the potential for additional production offshore California
and new oil and gas production areas on the east coast. Released by the
previous Administration, the plan would go into effect following the
current 2007-2012 offshore plan. The release of the draft plan was the
impetus for many thoughts and discussions on a comprehensive energy
policy and evoked many strongly-held opinions from communities across
the country. I believe this was the intent of the proposal. Secretary
Salazar's recent decision to provide for additional time to consider
this draft plan was appropriate considering the significant change in
policy that could result.
In reviewing the Committee's previous outer Continental Shelf
hearing on February 11, and the response of a number of coastal states
regarding the anticipated impact of the draft 2010-2015 plan, I believe
it important to share and hope that the Committee considers the
experiences of Louisiana related to offshore energy development.
Offshore Louisiana has provided approximately 85 percent of the
outer Continental Shelf (OCS) oil and an estimated 81 percent of OCS
natural gas. This translates to over 14 billion barrels of crude oil
and condensate and 135 trillion cubic feet of natural gas produced
offshore our state. As you can see, we have had more offshore
production of oil and gas than any other area of the nation. Rather
than rely upon beliefs or feelings, I hope that some of our actual
experiences will weigh heavy during this Committee's deliberations.
There are many experts that have predicted the collapse of tourism,
fishing, maritime and other coastal activities with the introduction of
offshore production. The facts in Louisiana prove otherwise:
Tourism
New Orleans is one of the top national and world tourist
destinations.
Before Hurricane Katrina tourists to New Orleans alone
had over 10 million visitors per year.
Tourism, including this week's Mardi Gras celebration, in
the New Orleans area provides a $5 billion economic impact annually.
Replacing the revenue from tourist visits to New Orleans
would require imposing a tax of $3000 per family statewide.
The State of Louisiana had over 24 million tourists
visits last year.
Tourism is one of the largest economic sectors in the
state and generates an estimated $10 billion annually.
Oil Spills
According to the Minerals Management Service, since 1980
over 4.7 billion barrels of oil have been produced and less than one-
thousandth of one percent of that has spilled.
The MMS also found that there has not been a spill
greater than 1000 barrels in the last 15 years from an offshore
platform.
An MMS study determined that Hurricanes Katrina and Rita:
no spill contacts to the shoreline
no oiling of marine mammals, birds, or other wildlife
no large volumes of oil on the ocean surface to be
collected or cleaned up
no identified environmental impacts from any OCS spills
from Hurricanes Katrina or Rita
no major spills
Fisheries
Louisiana is the top producer of seafood in the
continental United States.
The state produces more oysters, crabs, crawfish than any
other
More shrimp is harvested offshore Louisiana than any other
state (pre-Katrina)
Louisiana is a top recreational fishing destination
In 2006, an estimated 1.2 million recreational anglers
tested their saltwater fishing skills in Louisiana's coastal waters
Numerous national and world fishing records have been set
in Louisiana's coastal area.
According to the National Oceanographic and Atmospheric
Administration, Louisiana has the fourth best recreational fishing
industry in the nation (measured by economic impact).
There is an estimated $3 billion annual economic impact
from recreational saltwater fishing in Louisiana.
Tens of thousands of jobs in our state are dependent upon
the recreational fishing industry.
The commercial fishing sector generates over $2 billion
in sales annually and supports an additional 50,000 jobs.
Maritime
Five of the nation's top ports are located in Louisiana's
coastal area.
Louisiana is home to the top tonnage port in the
hemisphere and the largest port complex in the world.
Over 30 states rely upon Louisiana's port system for
maritime commerce.
I would like to reemphasize that these are realized not projected
statistics.
While Louisianans have benefited by the extraordinary economic
activity associated with Louisiana's tourism, fisheries and our
maritime industries, the nation has been the true beneficiary of our
hosting federal oil and gas activities:
Energy
An estimated 17-20 percent of domestically-produced oil
and gas comes from Louisiana.
30 percent of the nation's crude oil supply and 34
percent of the natural gas consumed in the U.S. is either produced in
Louisiana, in the Louisiana OCS or requires Louisiana's energy
infrastructure for passage to market.
Fiscal Impact to U.S. Treasury
In addition to indirect benefits to the economy and
revenues generated by income taxes, OCS energy production provides one
of the largest non-tax revenue streams to the U.S. Treasury.
In recent years, direct OCS revenues to the federal
treasury were estimated to approach $10-12 billion annually.
Jobs
A study performed for the Mid-Continent Oil and Gas
Association determined that the energy industry (includes onshore and
offshore production) has a $65 billion annual economic impact on the
state.
OCS production has an economic impact of nearly $6
billion annually and supports over 320,000 jobs in the state.
I recognize that many believe that increasing oil and gas
production will prolong America's dependence upon fossil fuels and
threaten the health of the environment. The State of Louisiana commends
the Committee for its continued focus on promoting diverse alternative
energy sources to meet our nation's growing energy demands. We believe
that wise investments of the nation's resources include efforts to
improve the competitiveness and efficiency of wind, solar, geothermal,
hydropower, nuclear, wave, tidal, biomass and many other energy
sources. For countless reasons, it is an appropriate and laudable long-
term goal to power our homes, cars, businesses and industrial
activities with alternative sources of energy. Unfortunately, cost
competitiveness issues and a lack of appropriate infrastructure prevent
access to many alternative energy technologies for most Americans. With
the current state of the economy, Congress should be very sensitive to
any policies that would increase financial pressure in the form of
higher utility and fuel costs on our already-struggling families.
As we all know, it would be impossible to simply flip a switch to
fulfill all energy demands with alternative sources overnight. It is
difficult to predict any scenario whereby conventional fuels will not
continue to play a major role in powering our economy as part of a
near-term or transitionary energy strategy. This near-term strategy may
take 15 years or it may take much longer, but significant thought must
be given to how and where our conventional fuel demands will be met.
The United State is currently importing nearly 60 percent of the
oil we consume. This is up from 24 percent in 1970. In addition to
increasing our trade debt, current supplies of oil are being met by
increasingly volatile or threatening countries. The top five exporters
of oil to the United States include the unstable regulatory
environments of Venezuela and Nigeria. In addition, many of
environmental standards related to oil production fail to compare to
the stringent standards in the United States. It is often said that we
should not expand OCS production in the United States because it would
take up to ten years to get new production areas online. While we could
quarrel over the timing of bringing production online, it is
counterproductive to the larger issues before the Committee. We should
focus on a comprehensive vision that plans for our long-term goals
while providing for our immediate and transitional needs.
I urge the Committee to keep in mind that oil imports have steadily
increased since the 1970s and are projected to continue to increase for
the next several years. The United States has one of the most stable
regulatory climates in the world and we maintain some of the most
stringent environmental standards. For those of us concerned about the
environment, I would assume that this concern expands beyond the
borders of the United States--the global environment. Would it not make
more sense to meet our near-term demands for conventional fuels by
expanding domestic production areas? If properly implemented, this will
increase employment opportunities, reduce our trade deficit, prevent
the transfer of billions of dollars per month to foreign governments
and increase our energy security.
Earlier this month, Secretary Salazar said, ``We need a new,
comprehensive energy plan that takes us to the new energy frontier and
secures our energy independence''. President Obama established a goal
of eliminating our dependence on Middle Eastern oil within 10 years.
While it would be premature to endorse the proposed 2010-2015 OCS plan,
a responsible expansion of domestic production areas combined with
increased energy efficiency, conservation and strategic investments in
expanding alternative energy production and development are fundamental
components of any solution. Oil and natural gas prices will increase
again. We cannot drill ourselves out of our energy demand, but we can
take responsible steps to transition ourselves onto a path of true
energy independence.
To summarize my initial recommendations to achieve the President's
energy goals:
1. Recognize that any near-term or transitionary comprehensive
energy strategy will continue to rely upon conventional fuels
(including natural gas) beyond that which are currently produced
domestically;
2. Expand efforts to improve energy efficiency and the
conservation of energy resources;
3. Supplement the tens of billions of dollars previously-invested
in alternative energy research, development and incentives to improve
the competitiveness and infrastructure associated with alternative
energy sources (including nuclear and hydropower);
4. Make strategic investments in improving the efficiency of
conventional fuels;
5. Recognizing the stringent environmental standards in the United
States, determine where significant reserves of accessible hydrocarbons
can be safely produced domestically;
6. Ensure that investments in this transitionary strategy will
complement longer-term efforts to achieve energy independence and
improve our energy security by meeting our energy demands with clean,
safe, stable domestically-produced energy; and
7. Energy revenues should be shared with host states as outlined
below.
Our experiences in Louisiana demonstrate the ability to allow for
the coexistence of multiple uses of coastal areas; however, I do not
want to suggest that OCS activities are without impact or cost to
states.
As the nation's top energy source and the ``guinea pig'' for many
early oil and gas production practices, Louisiana has experienced
adverse impacts from energy production. These cumulative impacts from
decades of production include:
Stress upon our landside infrastructure to support
offshore activities.
The loss of coastal wetlands as a result of early
practices related to accessing hydrocarbons in the coastal area.
The intrusion of saltwater into freshwater ecosystems.
Congress should accompany any new expansion or increase in domestic
oil and gas production with a program to allow for the sharing of
energy revenues. While Congress did provide for the limited sharing of
offshore production revenues in the Gulf of Mexico Energy Security Act,
pursuant to the act revenue sharing begins in 2017. This program is too
far in the future to address the current needs in coastal states like
Louisiana and would prevent proactive steps to be taken by states
initiating offshore production.
Rather than reinventing the wheel, Congress should simply model any
energy revenue sharing program after that which has been used for
onshore production areas on federal land since 1920--the Mineral
Leasing Act (MLA). Under this law, 50 percent of energy revenues from
production of resources on federal lands are shared with states that
host such production. In the case of the MLA, there are no strings
attached to the use of these shared revenues. In recent years, the
states of New Mexico and Wyoming have shared $1 billion annually from
this program.
In addition to the 50 percent going directly to states that host
onshore energy production, an additional 40 percent goes into the
Reclamation Fund to carry out water projects in these same states. In
effect, 90 percent of the energy revenues from production on federal
lands are returned to states while only 10 percent goes to the U.S.
Treasury. In the case of offshore production today, virtually all
revenues generated from production in the OCS goes to the Treasury.
Quite simply, the disparity between onshore production and offshore
production revenue sharing is illogical and contrary to the nation's
best interests.
In the case of Louisiana, our citizens adopted a Constitutional
amendment by an overwhelming margin that dedicates any OCS revenue
sharing to a coastal trust fund to be used for coastal restoration and
hurricane protection.
Louisiana has lost up to 35 square miles of coastal lands and
wetlands per year in recent years. Since the 1930s, we have lost over
2300 square miles. In 2005, the state lost over 200 square miles of
land in just two days. Hurricanes Katrina and Rita had an extraordinary
impact on our coastal ecosystem that exacerbated land loss. This may
seem like a parochial issue or ``Louisiana's problem'' to many of you.
I would like to help you to understand why this is actually the
nation's challenge.
Following the 2005 hurricanes every consumer in America was paying
an average of 75 cents to one dollar a gallon in higher fuel prices.
This was a result of the energy infrastructure damage in our state. A
recent study found that if just one of Louisiana's energy ports were
shutdown for three weeks, the loss in revenues to U.S. firms would
exceed $10 billion.
In addition, responding to the 2005 hurricanes Congress has
appropriated funds or established programs totaling nearly $150
billion--the key word here is ``responding''. Had revenue sharing
provisions been in place, I estimate that nearly 80 percent of the 1800
lives that were lost and 80 percent of the funds appropriated by
Congress could have been saved. Further, the fuel price spikes
experienced by consumers nationwide would have been averted. Under the
Louisiana Constitution, the state would have utilized its revenue
sharing funds for measures to protect, restore and improve the
resiliency of coastal Louisiana.
Finally, we urge that Congress establish parity on state seaward
boundaries. Currently, the states of Texas and Florida enjoy a state
seaward boundary of three marine leagues, or roughly nine miles.
Louisiana, Mississippi and Alabama have a seaward boundary of only
three miles. The disparity dates back to when states were admitted to
the union and its basis is simply irrelevant to sustainable coastal
management. Providing consistent or expanded state boundaries would
allow states to exert greater control over those areas which affect
onshore and near shore activities. It will reduce conflicts related to
coastal consistency determinations and result in improve management of
coastal resources.
Recommendations related to the expansion of offshore development:
1. Identify those areas with significant recoverable hydrocarbon
reserves;
2. Evaluate the impact of the recovery of reserves with states;
3. Weighing state interests, consistency with ongoing coastal
uses, energy independence goals and national security determine which
new production areas should be developed;
4. Establish an offshore revenue sharing program comparable to
that under the Mineral Leasing Act for onshore energy production;
5. Energy revenue sharing should have a historical component
recognizing and addressing needs related to historical and cumulative
impacts of multi-decadal production;
6. Revenue sharing should provide sufficient resources to allow
for proactive efforts to prevent adverse impacts from offshore
development;
7. A portion of offshore energy revenues should be dedicated to
the development of onshore and offshore alternative energy resources;
and
8. As recommended by the Oceans Commission, an ocean and coastal
trust fund should be established to address coastal and near-shore
management efforts of all coastal states and territories.
I appreciate this opportunity to share experiences from Louisiana's
long offshore development history and look forward to your questions.
______
Mr. Abercrombie. Mr. Chairman?
The Chairman. Yes.
Mr. Abercrombie. Before we go to the questions, could Mr.
Graves make available to us a document which incorporates his
slides and commentary because I think your well-crafted
commentary here is very good, that we have here, but it does
not contain the slides?
Mr. Graves. Sure.
Mr. Abercrombie. And I think it would be very valuable if
we could have them. I learned a lot from them. I am a big fan
of what you are doing down in Louisiana. I have seen it myself,
when the speaker, the then-majority leader, took us down there
in connection with Katrina. This is very, very valuable
information for us to have as to with regard to a practical
implementation of what we would like to do here. Could we do
that?
The Chairman. Mr. Graves, if you could do that, by
unanimous consent, we will allow you to submit that at another
time, a later time, for the record of today's hearing.
Mr. Graves. Yes, sir.
The Chairman. And also, I would like to ask unanimous
consent that a letter from Governor Tim Kaine, from the
Commonwealth of Virginia, requesting that the letter he sent to
Secretary Salazar, on February 19, 2009, be made a part of
today's hearing record as well.
[The letters from Governor Kaine submitted for the record
follow:]
[GRAPHIC] [TIFF OMITTED] 47607.003
.epsSec. 67-300. Offshore natural gas and wind resources.
A. In recognition of the need for energy independence, it shall be
the policy of the Commonwealth to support federal efforts to determine
the extent of natural gas resources 50 miles or more off the Atlantic
shoreline, including appropriate federal funding for such an
investigation. The policy of the Commonwealth shall further support the
inclusion of the Atlantic Planning Areas in the Minerals Management
Service's draft environmental impact statement with respect to natural
gas exploration 50 miles or more off the Atlantic shoreline. Nothing in
this Act shall be construed as a policy statement on the executive or
Congressional moratoria on production and development of natural gas
off the Atlantic shoreline.
B. It shall be the policy of the Commonwealth to support federal
efforts to examine the feasibility of offshore wind energy being
utilized in an environmentally responsible fashion.
(2006, c. 939.)
______
[GRAPHIC] [TIFF OMITTED] 47607.004
.epsThe Chairman.Gentlemen, thank you for your testimony. I
would like to ask a question, I guess, to the entire panel.
In recent days, of course, we have seen some activity and
statements made here in Washington by some Governors of our
states that they will not accept parts of the stimulus package,
in particular, your Governor, Mr. Graves. And, by the way, Mr.
Graves, we welcome you back to Capitol Hill. I understand you
used to be on the staff of our former colleague and dear
friend, Billy Tauzin, so we welcome you back.
Anyway, your Governor, among some others, has said that----
Mr. Abercrombie. Mr. Chairman, excuse me. Could Mr. Graves
give us the information despite the fact that he worked for
Billy Tauzin?
The Chairman. Governor Jindal, in particular, has said that
he will not accept parts of the stimulus package. He may accept
some programs but not others, and some of the Governors are
reserving the right not to be told by the Feds what to do.
This is yet another example of the states wanting it their
way. We have so often heard states saying they resent Federal
mandates and Federal intrusions, et cetera, et cetera. We have
this problem when it comes to OCS oil and gas drilling. We have
the same problem. Some states fully support unlimited offshore
drilling, some states support it with qualifications: drilling
for natural gas only, drilling only if they ran the program,
drilling if they get their half of the revenues, and on ad
infinitum.
However, these are Federal waters. These are Federal oil
and gas resources, and we are a nation comprised of a union of
states. These are lands that belong to all of our American
people. The fact of the matter is that the states do not exist
in a vacuum. We all have neighbors who may or may not support
what your state wants to do on offshore oil and gas leasing.
So, my generic question is, how do we address this
situation? How do we reconcile the problem? Senator?
Mr. Wagner. Mr. Chairman, you make the statement, and,
certainly, you have heard a lot of testimony that there will be
some impact to those states where the activity occurs. I know
you have entertained some revenue sharing in some of the most
recent parcels that you have put out, but while we recognize
that that is Federal land, we also recognize that that is
Federal land in Wyoming, Federal land in Colorado.
That is Federal land, yet the revenue sharing contemplated
for those states with activity off their shore is far less than
the current revenue sharing ongoing from that Federal property
that is collectively owned by all of us around the nation, yet
the revenue share back to these states is a much greater
percentage, off the top of my head. I am sure someone on the
Committee knows.
Under that same concept, we would look to see that those
lands adjacent to our state, from three miles out to the end of
200 miles, get that same consideration. In fact, I know of one
plan recognizing that border states may also have consequential
impacts if the revenue sharing spreads even up, you know, north
and south, in the case of the Eastern Seaboard, with other
states so that all states where the activity is constructing
off their shore would probably enjoy some of those benefits
also.
Clearly, I think you have heard a lot of statements today
about--we all understand it is about money, who knows best how
to spend that money, and we happen to feel that, in Virginia,
that we had part of the bill--it is not currently part of it,
but 40 percent would go to our efforts to clean up the
Chesapeake Bay, 40 percent would go to transportation,
statewide, so some of you folks can get back and forth, if you
live in Virginia, a little easier than you can right now; 10
percent for energy tax credits to encourage conservation, and
10 percent to help fund research and development as matching
money to use for Federal efforts.
Those were our thoughts in Virginia with regards to the
stimulus package. We were facing a $4 billion deficit. This
will help plug that hole significantly for this year. What we
are already talking about right now in Virginia is the ``cliff
effect,'' that we are seeing significant revenue drop off.
January was a shocker for us--we did not get the results until
three weeks in--some 15-some percent in income tax collections.
It very much concerns us, if this trend continues. We see
that, while it is a one-time, in the absence of that, that the
cliff could become much larger next year when we go back to
contemplate our biannual budget next year.
So, that is our concern now. We have kind of escaped for
the next 10 or 11 months, but it is not escaping us unless we
see a significant economic turnaround, that we are going to be
facing a very, very large cliff and a very large funding hole
next year that, quite frankly, will be very, very difficult to
patch up.
Mr. Chrisman. Mr. Chairman, if I might, from California's
perspective, our Governor has said we are going to take the
Federal stimulus dollars to California because we see the
dollars, we think, being well spent, in terms of the
partnership programs and our transportation infrastructure
across the state in many other areas that we think are
important.
You asked specifically about in the context of OCS offshore
drilling in Federal waters. What do we do next? How do we get
through this conversation, this debate, that you have obviously
had in Congress for a number of years and are obviously trying
to tee up again, from a policy conversation?
I would suggest you do exactly what you are doing and
continue to do exactly what you are doing, and what the Obama
administration is proposing to do, in terms of a national
conversation and debate around a coherent, short-, medium-, and
long-term energy policy for this nation that recognizes that we
have conservation as an integral part of it, smart metering.
You have heard a lot of the conversation today, really good
ideas put forward today. They need to be a part of this
continued conversation and debate, getting us, the states,
involved in it as we move through this process because we all
have a stake in it.
In California, as you have heard, we have experienced a lot
of this. Back in the mid-to-late seventies, as a result of the
energy crisis, we decided, as a state, we were going to get
more energy efficient. You heard the results of that today.
We did it through appliance standards, water-reuse
opportunities, and other activities that have essentially
created some real good opportunities for us in California, in
terms of our electricity use. But, at the end of the day, in
California, there are 38 million people. We have a growing
population across this nation. We have all got to be a part of
this growing debate, and what you have teed up here, I think,
is the right approach.
The Chairman. Does anybody else wish to address the
question? Yes?
Mr. Graves. Mr. Chairman, I think you addressed that
question to me, to some degree, so I feel like I need to answer
it. I just want to clarify, the Governor did express concern
about the unemployment benefits and the strings that were
attached to those funds. I need to be very careful with I say,
or I will be applying for them.
I believe that the Governor's concern in this case was that
the program established an unsustainable benefit program,
whereby, after two to three years, when the Federal funds were
no longer available, the state would be unable to sustain that
level of benefit, and that was the concern that the Governor
had, but we are continuing to evaluate all of the stimulus
revenue streams, and we will continue to make determination on
whether or not we would access those based upon the conditions
associated with the funding.
In regard to your second question on how to, I guess,
strike that balance of the Federal resource, yet the impact
perhaps upon the state, Mr. Chairman, I think that a sweet spot
can be found in this case.
For example, the State of Virginia is willing to produce,
they have expressed an interest to produce--I know that Senator
Warner pushed legislation in the Senate recently, last
Congress, to try and open up some of the OCS areas offshore of
Virginia. Associated with that, providing for revenue sharing,
like is done under the Mineral Leasing Act since 1920, where
the States of Wyoming and New Mexico receive in excess of a
billion dollars a year, with no strings attached on those
monies.
So, again, there are impacts, but I think providing funds
and sharing those revenues with the states, like is done for
production on Federal lands onshore, you can address those
impacts, and you can have healthy, sustainable, offshore energy
production areas in the United States.
The Chairman. OK. My time has expired, but I will ask a
follow-up question on my second round. I now recognize the
Ranking Member, Mr. Hastings.
Mr. Hastings. Thank you very much, Mr. Chairman, and thank
all of you for your very enlightening testimony.
Mr. Chrisman, I would like to ask you a couple of
questions. In your written testimony, you stated, and I want to
quote you directly on your written statement, you ``want to
dispel that myth that California only consumes oil and gas and
does not produce it.''
However, according to ``ca.gov,'' which is, obviously, a
government organization, California only produces about 37
percent of the petroleum that it uses and only produces a
little over 13 percent of the natural gas that it uses. This is
according to ``ca.gov.''
Don't you think that a reasonable person would suggest that
you could use the OCS resources, and it is estimated, by the
way, to be about 10 million barrels of oil and about 16
trillion cubic feet of natural gas, to reduce its dependence on
out-of-state energy? And that is especially so since and
overwhelming amount of your gas goes to producing electricity.
Mr. Chrisman. It is a debate we continue to have. We have,
in California, recognized that the trade-offs, as I said in my
prepared comments to you and my comments here today, for
offshore oil and gas development, for us, are not, at least at
this stage of the game, are not worth the risk.
We have opted to go the energy-efficiency route, to go the
alternative route in all that we are doing in California.
Mr. Hastings. But you are not dispelling the myth, then,
are you?
Mr. Chrisman. No, of course, not.
Mr. Hastings. But you said that in your statement. I just
wanted to make that point.
So, in a way, you are correcting that you are not
dispelling the myth that you do not produce oil and gas.
Mr. Chrisman. The myth that we are talking about is that we
do not produce any. We do some.
Mr. Hastings. Right.
Mr. Chrisman. I am not going to quibble with the numbers
that you presented. I am sure they are correct, but, at the end
of the day, as we look at the long-term growth of California,
clearly, the alternatives that we are talking about--the
transportation fuel, the low-carbon standards that we have put
in place in our transportation fuels and others--we think, is
the right approach.
Will we continue to have the debate about the need to
access that energy in the Outer Continental Shelf? Yes, we
will. We will continue to have that, but, at this stage of the
game, we are where we are and continue to be very strongly in
that position.
Mr. Hastings. You also stated in your testimony about what
California has done, and you alluded to it just a moment ago,
about your renewable. While I am sitting here listening to this
testimony, there is an article that showed up in one of my
large papers in my district, the Yakima Herald-Republic, and it
reports that wind power from a wind farm in my district is
being sold, lock, stock, and barrel, to Southern California
Edison. It is a wind farm that produces enough electricity for
100,000 homes, which, by my math, equates to a city of about
400,000 to 500,000 people, which is a substantial part.
I have to tell you that when I hear testimony from a state
that does not want to utilize the resources it has and would
rather by resources from my state on energy production, I find
that sort of attitude somewhat disturbing, and I say that
because wind turbines--listen, I am all in favor of alternative
energy, but when a state puts in standards, like you do, and
now you are going to import enough electricity from just only
one company to electrify a city of up to 500,000 people, I find
that disturbing. Any response to that?
Mr. Chrisman. I mean, we are contributing to the economy of
your state by doing that, and, at the end of the day, we are
all on a west-wide grid in the United States. We all share
power. We all depend on hydropower certain times of the year
from Washington, from the Bonneville Power Project. At certain
times of the year when hydro is at a peak, we will ship a lot
of the hydro north to other parts of the western grid.
Mr. Hastings. Let me ask this question, then, in this
regard, because you have a standard of so much renewable that
has to be--our state does the same thing.
Mr. Chrisman. Right.
Mr. Hastings. So, what is the response to my constituents,
where we build these wind farms in my district and ship it to
California? When you testify here, you say, ``Well, it may help
our economy,'' but you do not want to help yourself by going
offshore.
Mr. Chrisman. But we help ourselves by building our own
wind farms, by having 21 percent of the nation's available
solar power that we are using for our own folks. That is
exactly what we are doing.
Mr. Hastings. According to Mr. Rohrabacher, there are some
problems getting that decided because of lawsuits.
Mr. Chrisman. Well, we are in the midst of making that
happen. We are working on that right now, expanding upon that
21 percent available solar nationally. That is what our figures
are. We are expanding them now.
Are there challenges? Of course, there are challenges. We
are working in partnership with the Bureau of Land Management
out in the desert region to put these solar farms in place and,
at the same time, get the environmental permits necessary not
only to site them but to get the transmission lines in place to
get them----
Mr. Hastings. One last question. I appreciate the
indulgence, Mr. Chairman.
Can you meet, within your own state, the standards that you
put in place of renewable energy?
Mr. Chrisman. We are convinced we can. We are just over 20
percent right now----
Mr. Hastings. OK.
Mr. Chrisman.--and we are setting at 33 by 2020. We are
convinced we can. We will probably exceed that.
Mr. Hastings. One last question to Senator Wagner. The
Chairman put into the record a letter from Governor Kaine. Are
you familiar with that letter?
Mr. Wagner. Yes, Mr. Chairman and Congressman Hastings. It
was delivered to me while I was sitting in the Committee
yesterday by the Deputy Secretary of natural resources, so the
first I saw it was at about 2:00 yesterday.
Mr. Hastings. What does it say, essentially?
Mr. Wagner. The letter basically says that he supports
Secretary Salazar's position to extend the delay, that since
the existing regulations do not provide for natural gas only
and do not provide for exploration only, that his position is
that Virginia does not want to be in the program because of
what has gone on. So, he supports the delay, and he asks for
additional study and that type of thing, as near as I can
recall.
Mr. Hastings. Thank you very much, Mr. Chairman.
The Chairman. Thank you. The gentlelady from New Hampshire,
Ms. Carol Shea-Porter.
Ms. Shea-Porter. Thank you, Mr. Chairman. I am sorry that I
arrived a little late, but if you do not mind, I am going to
say I will brag about the person who is sitting here from New
Hampshire. I am very happy to see you here today, Ted. Ted is
the manager of the New Hampshire Coastal program, which is
really critical for conservationists, and your wisdom and your
experience contribute a lot, and we thank you for your work.
I will start out by asking you some questions. In your
testimony, you had talked about, and I am going to quote you
exactly, ``multiple uses must be considered with long-term
productivity of these resources.''
Can we do that? Can we really have long-term productivity
if we have multiple uses of the oceans?
You also talked about putting money into these programs.
Will money fix these problems, or are these issues really the
tension between the multiple use of a critical resource, for
example, the fisheries, versus oil? Do they have to be in an
adversarial position there? How do you think we would be able
to solve that?
Mr. Diers. Thank you very much for having me here also.
Usually, I am the only person from New Hampshire in the room in
Washington, so it is great that there are two of us.
Ms. Shea-Porter. That is the whole state now. We are here.
Mr. Diers. I think that the issue is, to some extent, we do
not know because we have never really tried, and I think that
that is one of the issues that was being raised by Mr. Farr
this morning, and I think it has been raised by a number of the
questions that have come up today, is that I do not know that
we have ever given it the full college try, in doing some very
large-scale, Federal-state-partnership kind of planning that
would happen on a regional basis in which the states and the
feds go together as full partners and have a great, scientific
assessment of our resources, and what are the impacts of those.
We can barely count the fish.
I think it is really challenging that we need to put
resources toward that kind of examination, and I think that
that is what the states have largely been saying, is that,
before we charge ahead in some direction, that we need to make
sure that we have looked at these issues, and especially as it
relates to, we do not want to preclude some sort of renewable
energy source as we are developing some traditional energy
source and then trying to protect some of the resources that, I
think, Dr. Marvinney talked about in the Gulf of Maine, for
instance.
That all needs to come together in a rational and
comprehensive energy policy, and so I think that that is really
what we are talking about and what the states have been trying
to put across.
Ms. Shea-Porter. It is sort of like jumping off of a
building, and they keep telling you there is a net there, but
you are not entirely certain because we have not done enough
research to know, at this point. We have not put enough money
into these programs to really study the impact.
Mr. Diers. I think that the two Ocean Commission reports
that came out made that very, very clear, that we have not, and
I think the Chairman, in his comments last week, also said that
we are not putting enough money into oceans, or the money that
was coming in is going everywhere but oceans.
These are serious, serious issues that we have not fully
addressed, and I think that we are just now at the cusp of
having the kinds of technologies and the kinds of analytical
tools that we can use to be able to do this. We are at the
point where we finally, I think, can start to do this, but it
is going to require some significant resources and some
significant critical will to make that happen.
Ms. Shea-Porter. I think they have to get it right when
more than half of the world depends on the oceans for essential
protein. If we make a mistake, and we cannot pull back from it,
we are going to create a problem that is larger than any of us
could ever imagine. I appreciate your warning that we have to
really take a good, hard look at this.
Dr. Marvinney, I wanted to ask you--you talked about the
cost of development versus the return, and you were citing
Georges Bank. Can you talk a little bit about why Georges Bank
is so critical, tied in with the issues that we just brought
up?
Mr. Marvinney. Well, it is a hugely valuable fishery for
the State of Maine and for the rest of New England, the other
New England states, and, I am sure, New Hampshire as well, and
I do not have numbers on what that economic value is, but it is
a big reason why our coastal seaports are what they are today.
It has been driven by that fishery and the economics that go
with the fishery, and certainly there have been a lot of issues
with these fisheries over the years, with overfishing, et
cetera, and we are collectively trying to work on that.
I think that the comments of Mr. Diers on working together,
states and the Federal agencies, is a primary way to go because
there are so many overlapping issues here, in terms of these
resources, we need to be sure that one activity is not going to
harm another activity that is already in place.
Ms. Shea-Porter. Thank you.
Mr. Graves, not to pick on you at all here, but I, too, was
down in Louisiana during Katrina, and I read the papers every
day, and the picture that you portrayed up there was quite
different from what they were talking about in the papers, and
I also had lived in Louisiana before, and I know that a lot of
the land was degraded, and it was not necessarily the offshore
drilling but the refineries and everything tied in with it. So,
it adds to the sense of urgency that we need to really fully
invest in our renewables so that we are not trapped like that.
But I want to have you talk a moment, if you would, please,
about all of the reasons that they thought that New Orleans
suffered so greatly, for example, the loss of the land, the
acres of the wetlands, and the fact that they built that
channel in and how that allowed the surge for the water.
I love your state. I have lived there, and I urge everybody
to go and be a tourist there. It is a great place, but there is
a problem, and there has been a problem for a long time. I know
that the source of the water was the Mississippi when I lived
there, and they would have problems and tell people, ``You
might have to worry about your drinking water today until they
clean it out.''
So, could you address what you realistically see as some of
the problems with having oil and gas? I would like to say, up
front, that I support drilling. I know that we need to do this
right now. What I am trying to do here is say there are some
problems and that if we invested in renewables right now with
the same sense of urgency that we have faced other problems in
our history, that we would be able to switch over, at some
point.
Mr. Graves. Congresswoman, thank you for the opportunity to
respond. I appreciate you going to Louisiana just after Katrina
had happened.
Ms. Shea-Porter. It is a great state.
Mr. Graves. Since the early 1930s, the State of Louisiana
has lost in excess of 2,300 square miles of land, the greatest
land loss in the nation, by far. If we were the State of Rhode
Island, we would no longer exist. If we were the State of
Delaware, nearly three-quarters of the state would be gone.
The primary cause of that land loss is not related to oil
and gas production. I want to be clear. The early oil and gas
production, in my opinion, was done in a manner that was not
sustainable, but the major cause of land loss in Louisiana was
the channelization of the rivers--the Mississippi River and the
Atchafalaya River--that began in the 1800s and continued after
the Great Flood of 1927.
It did achieve its goal of reducing flood losses in those
areas, but it had an adverse impact of cutting off the
sediment. The reason I showed a satellite depiction of the
changes in North America landscape over 60 million years was to
show that, was to show that the river caused the accretion of
land. It was a delta-building process. Whenever the river was
channelized, you cut off that sediment material from continuing
to build the delta, and it now goes into the deep part of the
OCS, where it has no beneficial use whatsoever. So, again, that
is the primary cause.
To be clear, going back to the 1940s and the 1950s and even
1960s, there were access channels that were cut into our
coastal area to get to hydrocarbons and produce those
hydrocarbons. We now know that that also caused the intrusion
of saltwater into freshwater estuaries, and that did have an
adverse impact on the ecosystem.
The channel you referred to is known as the ``Mississippi
River Gulf Outlet,'' and, as you know, that channel was a man-
made channel. It was not cut for oil and gas development; it
was cut for maritime purposes to provide an alternative to the
Mississippi River.
You will be happy to know that, two months ago, I signed an
agreement to close that channel, and construction is underway
to close that channel.
So, again, just to be clear, there are adverse impacts. I
think, if the Mississippi River and the Atchafalaya River had
not been channelized, I think that the sediment from the river
likely would have refilled those cuts into our coastal area
that caused the intrusion of saltwater.
Last, if I could just respond to your water-quality issue,
and I am glad you brought that up as well, in Louisiana, we do
have water-quality problems, and the majority of those are
actually represented or recognized in the Gulf of Mexico, where
we had the largest dead zone, each spring, in the nation, and
it grows to around 10,000 square miles, an oxygen-depleted zone
that is virtually devoid of marine life.
But the important thing to know, in this case, is that the
nutrients--the nitrogen and the phosphates and other
chemicals--that cause that dead zone are not as a result of
discharge from Louisiana. We drain 32 percent of the contiguous
land mass of North America and two-thirds of the United States,
and the runoff from the Midwest, the runoff from the rest of
the nation, is what caused our dead zone, and you can see,
where we are with a 10,000-square-mile dead zone and the
largest producer of fisheries in the continental U.S.--no
relationship to the oil and gas industry.
The last point, if you do not mind, is that you talked
about the structures, and you talked about the habitat in the
coastal area. In Louisiana, I can tell you, from personal
experience, that the structure that is established by oil and
gas infrastructure is where the fish are. That is where you
catch fish. So, there is a win-win situation there.
Ms. Shea-Porter. OK. Thank you. I was thinking about this
town, but I could not remember the name of it, but I know this
is going to be familiar to you now, the Murphy oil spill. You
know what happened there. I was there at the time, and we know
that there was that terrible spill and that it ruined the
community. I remember the heart-breaking stories there.
Now, the point I am making again: I appreciate the fact
that Louisiana is willing to be a center for gas and oil
drilling, and, by the way, that water spill that I was
referring to was not from the Midwest, but we will let that go;
it was right from Louisiana.
But the problem here is that anytime we do this kind of
drilling, there is going to be some risk, whether it is in the
offshore or whether it is the refineries or wherever. There is
going to be some environmental pain there, and I appreciate the
fact, again, that Louisiana absorbs so much of it, and I know
that we need the gas and the oil. This is not to say that we
can stop today; we cannot.
But would you talk for a moment about what happened to the
people of St. Bernard Parish and how you think that could have
been avoided and still be heavily into this business, and what
you see, in terms of the future, and do you have a basic belief
in our ability to use renewables and eventually phase out some
of this?
The Chairman. Before the gentleman can answer, we have five
votes. I do want to allow a response, but just as a way of
housekeeping here, we have five votes on the Floor of the
House, at the current time, and that is going to take, I would
estimate, an hour.
Would the panel be able to return, if we recess for one
hour? Would the panel be able to return in one hour, for a half
an hour? That should wrap it up.
We do have three or four Members left to question. We
should be able to wrap it up in a half-hour once we return in
an hour. So, if you can hold that response, Mr. Graves, until
we return in one hour.
Mr. Abercrombie. Mr. Chairman?
The Chairman. Yes, Mr. Abercrombie.
Mr. Abercrombie. Before Mr. Marvinney leaves, Doctor, could
you please let Governor Baldacci know that he still owes me
spaghetti sauce that his mother makes that he said he was going
to get to me, and I have yet to see it?
The Chairman. And me, too.
Mr. Marvinney. I will be sure to pass that on. Thank you.
The Chairman. The Committee will stand in recess for one
hour.
[Whereupon, at 1:36 p.m., a recess was taken.]
The Chairman. The Committee on Natural Resources will
resume sitting, and the next gentleman to be recognized is the
gentleman from Virginia, Mr. Wittman.
Mr. Wittman. Thank you, Mr. Chairman. I want to thank the
panel members for your participation today. I appreciate your
patience. I know today was a long affair, so we appreciate your
patience there.
I want to especially thank Senator Wagner for coming here.
I especially appreciate your hard work there in Virginia on
crafting an energy policy there that now stands as the state's
energy policy today, so we appreciate that.
In order to follow up on that, you spoke, a little bit
earlier, about Virginia's energy policy and about how the
current policy supports just natural gas exploration in the
OCS, and I wanted to ask you if you think that that is a
practical position, from a public policy standpoint, and
whether that really lends itself to wise policy for the
development of our hydrocarbons offshore in the OCS.
Mr. Wagner. Let me just start, Mr. Chairman and Congressman
Wittman, by saying that, a year prior to the Energy Bill, we
did pass a piece of legislation that called on our Virginia
liaison office, who are lobbyists in Washington that represent
the Commonwealth of Virginia, to lobby to lift the moratorium,
which included oil and gas, and it passed in overwhelming
numbers in the Senate and the House, and was conferred to then-
Governor Warner, now Senator Warner, who vetoed the bill
because he said he wanted to study it for an additional year.
He did complete that study. Amazingly, it came out about a
day after he left office, and the study determined that it
would have been altogether appropriate to pursue that.
So, as part of the comprehensive energy plan, that language
was kept in the bill in its exact form that it passed.
Somewhere after it passed the general assembly, in those same
words, and while it was sitting on Governor Kaine's desk, I got
worried that perhaps all of that would be struck, and what you
see, a product of negotiation between myself and the Governor's
Office, is that language, and, concurrent with that language
going on, I was in conversations with him, and that is because
they were considering, at the time, removing Virginia from the
five-year plan, and that language, MMS conveyed to me, would be
sufficient to keep Virginia in the five-year plan, which was
really the goal. We do not have a whole lot of say with regards
to our policy.
Having said that, I think it is totally impractical. I
think everyone in this room knows that the government does not
have the facilities or the capabilities to actually do the
exploration, the 4-D exploration, they do now. Those
capabilities are controlled by those in the industry. Clearly,
they are not going to expend the type of resources that they
would need to actually go out and do the surveys to confirm
whether or not, what type, and where it is without reasonable
certainty that they could then develop it, should they so find
it.
So, obviously, it is an impractical policy, from my
standpoint. Again, the 50-mile negotiation that we negotiated
in Virginia was determined by our geography, which indicates
that there is not going to be much of interest within 50 miles.
I know that may not be the area. There are other areas,
particularly in North Carolina, where those deposits might be.
I think it would be a bad step if this Committee would move
forward with 50 miles as the limit barrier to go forward with.
I think it is one of those areas that just, in terms of
negotiating, was something that I was able to negotiate with
the Governor's Office and not really give away anything.
So, as a practical step, I think that is an impractical
position, and I think it is important that we move forward with
and do that. Having said that, you know, I hope that there are
substantial resources off the coast.
Mr. Wittman. Thank you, Senator. As you well know, under
the current Outer Continental Shelf Lands Act, exploration, by
itself, of just natural gas resources is not something that is
allowed as they go forward with the five-year plan to look at
leasing off of Virginia.
Based on that, do others in the general assembly agree with
the Governor's request in providing a limitation to just
natural gas exploration in the OCS off Virginia?
Mr. Wagner. I would say the views vary as much, and I do
not want to pin down any specific legislator on their
particular views. Certainly, I think the vote that most
legislators took, on behalf of my original bill, would be
indicative that they are supportive of the entire measure.
I think the Energy Bill got through with major equal
proportions with that same language in. Obviously, the
negotiated language was taken up during the veto session and
accepted by everybody, but I think there are those that
definitely want to move forward with it and move forward with
it relatively rapidly.
It is interesting that we talk about the tourism issues and
that type of thing. I do represent half of the City of Virginia
Beach. Obviously, tourism is a major component of our business
triad right now, and an overwhelming percentage of people
support the particular positions that a number of us have taken
in that area in support of it.
What we found actually impacted tourism, this last year,
was $4-a-gallon gasoline, the lack of availability, and the
state of the economy, at that point, and I think what you are
going to see impacting tourism this particular summer, as the
tourism season comes in, is going to be the economy itself,
people taking less trips, people spending less money.
That is what we saw in Virginia, significant reductions in
tourism along the Shenandoah Valley. Our hotels were filled in
Virginia Beach. What we found is that they were not spending
the money that they would have normally spent out there, and so
it was directly related, we felt, to fuel prices.
Mr. Wittman. Let me ask one final question. I talked, a
little bit earlier, about a comprehensive U.S. energy policy.
Can you tell me, in that context of a national comprehensive
energy policy, what do you see as a reasonable policy for
drilling in the OCS off of Virginia?
Mr. Wagner. I think that a reasonable policy would be that
we do take advantage of those resources. Whether you subscribe
to the greenhouse gas theories or do not subscribe to the
greenhouse gas theories, the fact of the matter is, we import a
substantial, 60-some percent of our hydrocarbon energy from
outside our borders, to the extent that we produce it
ourselves, as opposed to importing it, only improves this
economy.
I think our focus, Job One, ought to be Job One for
America. That should be our focus right now, and, clearly, that
is going to be a part of that issue. I think, equally
important, as a part of our strategy, whether you subscribe to
greenhouse gas or not, is clearly the expansion of the nuclear
industry. That is an industry that we basically made practical
in this country.
We invented many of the things they use. We walked away
from it; France did not. We could take a lesson off of what
France has done, both with that and the use of the breeder
reactor technology, to recycle their spent rods that we take
out of our reactor that are now part of our storage problem.
They are actually a significant resource, if we go back and
revisit our decision to walk away from breeder technology and
reuse those rods. Eighty percent of the energy in those nuclear
rods is still available in that rod at the point where we can
no longer use them in our reactors, at this point.
I think a number of issues do that, and I think we can get
here. Remember, the demands on natural gas and many of the
policies that you have pushed forward in Washington here only
serve to increase the demand on natural gas in this country,
particularly, the clean air laws and number of those issues
have really substantially--the large growth area we see in
natural gas in Virginia and probably around the Nation is in
the generation of electricity, where, more and more, it has
become a part of the base load or, at least, more frequently
coming online.
The Chairman. Thank you. I want to continue where we left
off before we broke for the votes on the House Floor, and Ms.
Carol Shea-Porter was asking a question of Mr. Graves, and you
may respond to it now, Mr. Graves.
Mr. Graves. Thank you, Mr. Chairman. Congresswoman, thank
you for your question.
As I recall, there were approximately two million gallons
that were spilled at the Murphy oil refinery in Chalmette,
Louisiana, St. Bernard Parish. There was actually a larger
spill that occurred on the west bank of the Mississippi River,
Blackman's Parish, the Bass facility.
Both of those facilities, I think it is very important to
keep in mind, were refining and storing facilities that were
not necessarily related to the offshore production. I talked
earlier about the MMS study that found that, in regard to the
offshore production, there were no major spills, and there was
no shoreline impacts, that natural processes absorbed the oil,
and the oil evaporated.
Those were storage facilities where we had a Category 5
hurricane with, at one point, wind gusts as high as 235 miles
per hour, which took a huge tank battery and picked it up and
moved it.
I do not know if it is even possible to design structures
that are resilient enough to withstand the extraordinary
beating that they took.
One thing that is important to keep in mind, and you hit on
this earlier, we have lost, as I said, 2,300 square miles of
land in coastal Louisiana. That land, I do not think I drew
this connection, and I need to, that land serves as a vital
buffer between the Gulf of Mexico and some of the developed
areas of coastal Louisiana.
With the loss of those 2,300 square miles, there is a rough
equation that the Corps of Engineers developed where they said
that, for every 2.7 miles of healthy wetlands, you reduce storm
surge by one foot. Well, these facilities, in many cases, had
10, 20, 30 miles of buffer between them and the Gulf of Mexico,
and now, in many cases, like the Bass facility and, to some
degree, the Chalmette facility, the Gulf of Mexico is lapping
at their doors.
So, again, just to recap, I think the wetlands buffer was a
significant cause of that.
Number two, these were facilities that were not necessarily
related to offshore production. They were related to the
petrochemical industry, that it would have come from somewhere
but not definitely from the offshore.
The other question that you asked, if I recall, is you
asked if I thought there was a role for renewables in the
future, and, if so, how to proceed. The answer, in my opinion,
is, absolutely. I think that renewables have to play a major
role as a future energy source, and I commend California,
again, for their efforts to try and achieve a third, and I
think that we should set goals to try to develop and produce a
larger share of our energy from renewable sources over the long
term.
But it is vital to keep in mind that we have to develop a
transition plan. We are not going to be able to, as I said in
the testimony, flip a switch and, overnight, go toward
renewable fuels. There is going to be a role in that transition
plan for the continued production of oil and gas, and rather
than us shutting down all production domestically, like I
believe I have heard some propose, that demand for oil and gas
production is going to have to be met.
So, we can either produce it here and expand oil and gas
production as part of that transition plan where we have the
safest, most stringent environmental standards, where we have a
stable regulatory environment, or we can produce it in
Venezuela, we can produce it in the Middle East, we can produce
it in Nigeria, where, by the way, last week, three Americans
were taken captive, and where you have much less-stringent
environmental standards.
Ms. Shea-Porter. Let me just say, for the record, that I am
not one to say stop because we cannot. My whole point here is
that we need to start getting very, very active, and we cannot
just have one way to provide energy and that this is the point
where we make a decision about investing in our future.
We know what our present is, and our present definitely has
oil in it, and our near future has oil in it, but I also would
want to point out that there is benzene in the sediment of that
community, and that was Murphy Oil. I know that there was some
damage done by the oil rigs, but the point is that, as long as
we need to produce oil, we are going to have some of these
unintended consequences. So, it is not simply what happens out
in the ocean; it is what happens when we bring it in and where
we have it along our coastline in our communities.
But you are absolutely right, and I hope that we never
frame the argument ``either/or'' because I do not think it is
that. I think it is, both, everything we can do right now so
that we can supply our energy needs with an eye to our future,
and I think we have probably used up all of the time that we
could reasonably expect to use right now, so I thank you very
much for your testimony today, and I thank all of you.
Mr. Costa [presiding]. I thank the gentlewoman, and it
appears that you got a second round, and since I did not get my
first round on this panel, I will indulge the Committee, with
everyone's permission.
Mr. Graves, could you explain to me, succinctly, very
briefly, why somehow it is safe to drill off the coast of
Louisiana, Texas, Mississippi, and, yes, California, and
nowhere else in the country?
Mr. Graves. Mr. Chairman, I do not agree with that
statement. As I said before, I think that there were some
impacts from the early production. I think we have refined the
technology, we have refined the production techniques, and I
think it is safe to produce.
Mr. Costa. It was somewhat, in all fairness, a rhetorical
question because I do not agree with it either, but I think you
made the point well in your statements and with your slide
panel.
Mr. Diers, the Chairman of the Coastal States, how many
coastal states does that include?
Mr. Diers. We have 35 members, the Coastal States
Commonwealth----
Mr. Costa. Eastern coastal states?
Mr. Diers. All of them, including our territories and
islands.
Mr. Costa. All of them, OK. Well, you are a real powerful
guy.
I remember a controversy that came up, but I noted your
testimony, and your colleague from the Northeast as well,
talking about utilizing the oceans and having a balanced
approach, but on wind renewable and efforts to introduce and
develop wind renewables, I believe it was off of Massachusetts
that it was very controversial.
What renewables should or should not be considered? I
guess, is my question. I mean, I can understand why some people
have problems with oil and gas, but answer the question,
please.
Mr. Diers. Sure. I would say that our position, from a
broader, coastal states perspective, is the same as it is on
the offshore drilling. It is that we hope that the states will
continue to have a key role to play in those decisions.
Mr. Costa. I understand, but there was controversy,
particularly around wind power, on a project that I read a bit
about. I am not an expert. What was the source of that
controversy?
Mr. Diers. Well, I do not actually work in Massachusetts. I
believe you are talking about the Cape Wind project, and my
understanding is that there was a conflict in uses the people
wanted there at that particular site and that that was the----
Mr. Costa. Would it be fair for all of the panel members,
and if any of you disagree, shake your head, that part of when
we are balancing a renewable portfolio versus a traditional oil
or gas, and I understand why, and we have that with other
issues that are off the coast, that are inland, but there is
just a NIMBY syndrome. Some people do not want--I mean, isn't
there a percentage of that? Mr. Chrisman?
Mr. Chrisman. There is a number of issues we have been
discussing here today. One is an energy policy, a renewable
portfolio that California has established that I actually voted
for and supported. I want to commend you and the Governor, and
I think it is a standard that we ought to try to obtain
nationwide, and I also applaud myself since I voted for some of
that effort over the years, in terms of a balanced energy
package that was using all of the energy tools in our toolbox.
But the other part of the discussion that has taken place
here today is the impact on the oceans, and I would just like
to try to put it in perspective. One of our colleagues, earlier
today, made the comment that the moratorium was responsible for
improvements, but I am trying to understand that because the
fact is that, in four states, we have not had a moratorium. I
am not so sure how we can credit the moratorium for helping
improve the fisheries.
What would you, as Natural Resources Agency Secretary in
California, what impact would you say, in terms of not the
energy portfolio--that is a separate discussion--but in terms
of helping deal with the degradation of fisheries in the ocean?
Mr. Chrisman. Congressman, as I understand it, the question
is not so much the oil impact but other impacts. Is this what
you are talking about, degradation of the oceans?
Mr. Costa. I made the comment, and if any of you have any
new information, please, I am always trying to get the newest
information.
It was a 2002 National Academy of Sciences report that
basically studied all of the various analyses on contributing
sources of degradation to the oceans and fisheries, and it
basically said that over 85 percent of it was as a result of
nonpoint-source pollution, runoffs and all the kinds of things,
and I think they attributed, in North America, one percent was
the result, and I do not know if these figures are accurate or
not, was the result of oil and gas production, and three
percent around the world. Do any of you have any newer figures
on that?
Mr. Chrisman. I get what you are asking, and I think, quite
frankly, they are the figures that we keep using as we look at
the work that we are doing in the California Ocean Protection
Act, the recognition that what we really have to do is we have
to take a look at the adverse water-quality impacts along the
coast, pretty significant, up into our estuaries where our
water supply projects come from. There is significant
degradation there.
But in the ocean, it is, in certain parts of our state,
particularly in Southern California, where we have numerous
sewer outfalls all up and down the coast in Southern
California, we see significant degradation of the fisheries and
the fisheries resource.
Mr. Costa. So, there are two discussions here, and I
understand why people want to link them, but one is the
degradation of the oceans and the fisheries, and the other is
as to whether or not we should encourage additional oil and gas
development, OCS, because that might somehow diminish our
impacts to move to renewables.
I am one of those who do not believe that that is--some of
my colleagues----
Mr. Chrisman. I do.
Mr. Costa. I mean, I think there is a short-term, an
intermediate, and a long-term energy policy----
Mr. Chrisman. I agree.
Mr. Costa.--which continues to seem to miss us here, for
whatever reasons that I cannot quite put my finger on.
So, if you were trying to get your best bang for your buck
for protection of the oceans, the impacts of the 27 platforms
in California, would you say that is significant, or would you
say that that is de minimis.
Mr. Chrisman. It is de minimis.
Mr. Costa. And are we not doing a lot of slant drilling
within that three-mile area along California and deriving
literally hundreds of millions of dollars to the State Lands
Commission that Californians enjoy spending for other
environmental and park purposes?
Mr. Chrisman. Are you referring to the PXP?
Mr. Costa. Well, there is that, and then there is the
existing facilities. I think, out of the 27 platforms----
Mr. Chrisman. Historically, we have, yes.
Mr. Costa. Five of them are in the three-mile limit----
Mr. Chrisman. Right.
Mr. Costa.--and we do slant drilling off of Vandenberg and
Ventura County----
Mr. Chrisman. Yes.
Mr. Costa.--and they seem to work OK.
Mr. Chrisman. They work fine, off of existing platforms.
Mr. Costa. Right, right. Let me ask a final question
because we have taken a lot of time, and I think it is just Doc
Hastings and myself, and we probably ought to give you folks a
break.
I just think that, as we try to strive to, whether it is a
20-percent or 30-percent renewable portfolio, that we be
careful about the issues. I mean, a lot of people have agendas
around here, and California is no different, but it seems to me
that trying to develop that policy, and I asked that question
to our colleagues earlier, and I said I would ask it to you
again, what is missing, as we develop a near-term,
intermediate, and long-term, comprehensive, sustainable energy
policy, that you think you are doing in California that we are
not doing here?
Mr. Chrisman. What is missing is, and I have said it in my
answer to the question of the Chair, what is missing is the
conversation that has begun here, with the president and
others, about an integrated, national energy policy that
recognizes all of the issues that we have been talking about
today and gets us, at the states, engaged with you, at the
national level, to bring this about because there are going to
be significant regional differences with respect to the policy,
significant regional differences in demands. There are going to
be ocean issues and ocean-degradation issues that are not
applicable to other parts of the nation.
So, it is the work that gets done here, in the policy
conversation, and focus, with the support of the president,
with the support of the administration, and the support of the
Congress, to carry forward and recognize that we have to get
that short-term, medium-term, and long-term energy policy in
place.
Mr. Costa. All right. One final question, and then the
Ranking Member has a few questions that he would like to ask.
We know that, out of the 27 platforms in California--I like
to remind my colleagues, especially my California colleagues,
that we do drill in California--and while five of them are
within the three-mile limit, the 23 that are in the Federal-
designated area, OCS, with the new technologies that I have
been becoming more familiar with in the Gulf of Mexico, where
they are able to actually go out in deep water and develop
these pods on the ocean floor and develop multiple wells to
further expand that resource, clearly, you made it clear about
the Governor's emphatic statement about his view about
additional drilling.
I am just wondering, in those 23 platforms that exist in
California, if that new technology was implemented that would
allow for additional development of that resource. Is that in
that emphatic no and no but no, or would that be considered?
Mr. Chrisman. It would be considered, but we have to be
careful. We had a Plains Exploration Petroleum Company that it
was actually a platform in Federal waters for the proposed
slant drilling into state waters. We have the authority, in
statute, the state lands commission has the authority, to
regulate that, and so, with the Governor's support, we took to
the state lands commission the support to allow that additional
slant drilling to take place. The state lands commission turned
it down.
Mr. Costa. Yes. I think I remember that vote, two-to-one.
All right.
Mr. Chrisman. The Governor--we supported that move.
Mr. Costa. Well, I applaud the Governor for supporting that
move.
My questioning is completed at this time, and I will submit
further questions, in written form, for the other witnesses.
Thank you, all of you, for your good work. We will listen
to my colleague, the gentleman from Washington, and then, when
he is finished, we will conclude the hearing. I will ask for
unanimous consent that our Members submit additional questions
for the record.
My good friend, Doc Hastings, will be the final word on
today's, I think, helpful and informative panel. It is good to
see all of you, especially Mike. Thank you.
Mr. Hastings. Thank you, Mr. Chairman. Let me thank you for
coming here today and for staying through, which is a normal
interruption for us, the necessary votes and staying for an
extra hour and 15 minutes.
This hearing is the second of three hearings, and we are
talking about drilling in the Outer Continental Shelf, and we
have characterized it a great deal about energy, which, of
course, is true, but there are a lot of byproducts, for
example, that come from petroleum and natural gas. You are all
drinking water out of a container that is a byproduct of
petroleum and natural gas, and I would suggest that probably,
with the exception of Senator Wagner, all of you flew here. Am
I right? The other four of you, except Senator Wagner, flew
here. You drove, too?
Mr. Marvinney. I took a train.
Mr. Hastings. You took a train? OK.
Let me broaden this and get you all to say ``yes,'' in a
way, by saying, have you flown in the past month or the past
year, anybody, all of you, at one time? All right.
The reason I bring that up is because the newer generation
of airplanes, and I am from Washington State, even though
Boeing does not have a plant in my district, but the new 787 is
built entirely of carbon composites, entirely of carbon
composites, and a lot of the airplanes that are being built
today, different parts of them are carbon composites.
So, if we look at offshore and the byproducts of all of
this, we have to go beyond just what energy produces, as
necessary as that is, and for us to wean our way from that is
going to be a very long process. Now, ironically, one of the
reasons that the 787 is so attractive is because its much
lighter weight, which means it burns less fuel, so it is a win-
win situation.
I think that is worth talking about, although I certainly
believe that we need to be energy independent, that we start
with that basis.
Mr. Chrisman, you and I had an exchange earlier. I want to
ask you another question, and, Mr. Marvinney, I am going to ask
you a similar question. Do you know how many LNG facilities,
liquid natural gas facilities, are planned in California to be
built?
Mr. Chrisman. The last number, the possibility, being
proposed was four, none of which have attained the necessary
permits yet.
Mr. Hastings. OK. Is this something that you support?
Mr. Chrisman. Yes, we do.
Mr. Hastings. You do. OK. Mr. Marvinney?
Mr. Marvinney. I believe there are only two that are in the
discussion phase, at this point.
Mr. Hastings. OK. And do you support them?
Mr. Marvinney. I think it is part of our transition from
fossil fuels to other sources, so we need to find ways of
increasing that.
Mr. Hastings. So, it is part of the fossil fuel transition.
Let me just ask this question. Since we know the Outer
Continental Shelf has huge deposits of natural gas, don't you
really think that it might be more advantageous to open that up
rather than to ship natural gas from, say, Saudi Arabia or
Venezuela or Brazil? Doesn't it seem to be more logical to
utilize the resources we have rather than to bring that in,
either one of you or both of you? Would you like to answer
that?
Mr. Chrisman. Yes, I would, because we debated this very
question, and we opted, because so much of our electric
generation comes from natural gas, in addition to hydro
facilities, but natural gas is our predominant generating
capacity, we opted to support liquefied natural gas because of
the price of natural gas at the time; for us, it was more
economical.
We spent some time talking to the folks where we were
actually talking about buying the gas, actually off of
Australia. We actually visited some of their facilities, looked
at it, and we essentially made an informed decision, on our
part, to support the importation of LNG, the creation of those
terminals.
Mr. Hastings. And you think that is a better option than
having your own domestic supply of liquid natural gas?
Mr. Chrisman. The option that we are looking at is a
balance.
Mr. Hastings. I understand that. That is why I asked the
question. You said you made the decision to import natural gas.
Do you think that is a better option rather than having our
own?
Mr. Chrisman. No. I think it adds to our balance, our
balance of fuels that we are bringing into California. It adds
an additional source of supply for us that we need for our
population.
Mr. Hastings. When will those plants be built? Do you know?
Mr. Chrisman. I do not know.
Mr. Hastings. Can you give me a rough----
Mr. Chrisman. They have met some significant opposition
along the coast. We were hoping we would have one built now.
Our best estimate is that our need in California, and, again,
we have debated the need--there are those, in significant
numbers, at home that disagree with the need, but, essentially,
we are looking, we think, at maybe two LNG terminals in
California will get done.
Mr. Hastings. By when?
Mr. Chrisman. We hope, over the next eight to 10 years.
Mr. Hastings. Eight to 10 years. Now, couldn't we develop
the our Outer Continental Shelf resources and not have to worry
about these LNG terminals?
Mr. Chrisman. We could, yes.
Mr. Hastings. Is that an option, too?
Mr. Chrisman. No.
Mr. Hastings. That is not an option.
Mr. Chrisman. No.
Mr. Hastings. OK. I wonder why, but go ahead, Mr.
Marvinney.
Mr. Marvinney. As I said in my testimony, we are not
opposed to offshore oil and gas exploration and development. I
just think it needs to be in the places where there is the
greatest potential for those resources and consider the great
potential of other resources in some of the other areas.
So, certainly, where there are appropriate gas resources, I
think that is an important part of the picture.
Mr. Hastings. Well, I think everybody would agree that you
do not want to drill where there is no product to drill. That
makes sense, but, as I understand the industry, you do not know
that until you drill, which makes it kind of difficult to find
out. There are other tests, but you really do not know until
you drill.
Let me just conclude. I thank you. Mr. Chrisman, in due
respect, I really feel that your response that it is better to
import than utilize our own resources----
Mr. Chrisman. That is not what I said, Congressman. What I
said was, it is part of our mix.
Mr. Hastings. Right, but given the 10-year time period when
you could probably go out to the Outer Continental Shelf and
get natural gas, if we started today, that might be a shorter
timeframe, and I thought you responded to me by saying, no,
that was not an option.
Mr. Chrisman. For us, it is not an option. We do not
support going out in the Outer Continental Shelf.
Mr. Hastings. OK. Well, I think that maybe we are passing
each other in the night, but I still interpret that as being a
``no.''
I mean, here we are. You know, your state has gone through
some very tough fiscal times. Everybody in the country knows
what you went through. Your unemployment rate is nearing 10
percent, and it just seems to me, part of becoming energy
independent, part of getting product that can be used by a
whole variety of other things, is a positive thing in order to
help our economy, and we know, by testimony we heard on this
panel and other panels, that you can do it in an
environmentally safe way, why we would not do that.
I just want to make that observation. Clearly, there is a
divide in this country. Hopefully, the side that I think we
ought to do it, knowing we can do it in an environmentally safe
way, is the proper way to go.
At any rate, once again, I want to thank you for your time
here and for your testimony, and, Mr. Chairman, thank you very
much.
Mr. Costa. Thank you very much. Yes?
Mr. Hastings. I ask unanimous consent to submit for the
record the UCSB study.
Mr. Costa. Without objection, and, once again, I will
indicate, for staff and Members who are in their offices or in
other committees, that unanimous consent be allowed to Members
to submit additional questions for the record. As we always
urge Committee Members, if they do have those additional
questions, that 10-day period, we urge them to submit them
earlier rather than later, and we will follow through with the
distinguished panels that we had today and ask that the
questions be answered in a timely fashion.
So, without any further ado, I want to thank all of the
Members who participated and both panels for a very good
Committee hearing.
The Natural Resources Committee hearing today is now
adjourned.
[Whereupon, at 3:10 p.m., the Committee was adjourned.]
[Additional material submitted for the record follows:]
Response to questions submitted for the record by Mike Chrisman,
Secretary, California Natural Resources Agency
(Question 2). To all panelists: A number of legislative proposals
regarding the Outer Continental Shelf have proposed that any new
revenues that accrue as a result of new offshore oil and gas activity
be shared with the States, as is now the case with the Gulf of Mexico
States. At the hearing, Congressman Farr suggested the formation of an
Oceans Trust Fund, while Congressman Rohrabacher suggested giving
revenues directly to coastal communities to allow them to address local
needs, such as reducing urban runoff and repairing sewers, although it
was not clear whether only communities that have drilling off their
shores should be provided with funding to address those needs, or if
all communities should have access to such funding, regardless of the
proximity of offshore drilling. Please provide the positions of your
state governments regarding the best use of any potentially shared
offshore revenue: would you prefer an Oceans Trust Fund model that
provided revenue nationally to address ocean issues, a revenue sharing
model that only included states or communities that have offshore
drilling off their shores, a revenue sharing model that provides shared
revenues directly to states and coastal communities regardless of
whether they have drilling off their shores, or another model entirely?
Also, are there any analogous revenue sharing programs that Congress
should look at as good models for how to move forward, should we decide
to increase the amount of OCS revenues shared with states and local
communities?
Response:
In its Final Report, the U.S. Commission on Ocean Policy identified
a myriad of challenges to improve the management of our nation's ocean
and coastal resources. The Commission recognized that to meet these
challenges additional investments would be necessary, and Outer
Continental Shelf (OCS) receipts were identified as the primary source
of funding. Additionally, the Commission recommended that a portion of
OCS revenues should be shared with coastal states (Recommendation
24-1).
California supports revenue sharing, but only if it does not
provide incentives for new OCS oil and gas development. In addition,
revenues shared with the states should further the goals of improved
coastal and ocean management, restoration, conservation, preservation,
mitigation, research and education and the Congress and the Obama
Administration should consult with coastal states in the development of
any new program or formula of revenue sharing.
The California Ocean Protection Council, which I chair, supports
the establishment of the ocean trust fund supported by the Coastal
States Organization in its Call for Action and is included within H.R.
21 (Farr). California also has extensive experience with two Coastal
Impact Assistance Programs (CIAP) that were established by the
Commerce, Justice, State (H.R. 5344) Fiscal Year 2001 Appropriations
Act and more recently the Energy Policy Act of 2005. These laws
authorized funds to be distributed to Outer Continental Shelf (OCS) oil
and gas producing states to mitigate the impacts of OCS oil and gas
activities. Though this model only provides revenue to producing
states, it could be adapted to include all coastal states. Under this
model, states must submit a Coastal Impact Assistance Plan (Plan) that
meets the federal government's approval to be eligible for CIAP grant
funds. A producing state or coastal political subdivision (CPS) may use
the funds for a variety of projects to help mitigate the impacts of
offshore energy development.
Other models have been proposed, including H.R. 701, Conservation
and Reinvestment Act (CARA) in the 106th Congress. CARA passed the
House on May 11, 2000, and was approved by the Senate Committee on
Energy and Natural Resources on July 25, 2000, but did not progress
further. This approach would have allocated revenues from OCS oil and
gas activities for federal and state resource acquisition and
protection, urban recreation, wildlife protection, and related
purposes. It would have created and funded a new coastal energy impact
assistance program, amended and funded the Land and Water Conservation
Fund (LWCF), funded the Urban Park and Recreation Recovery program and
the Historic Preservation Fund, increasing funding for wildlife
conservation, and funded land restoration and easement programs.
Another model, which should be evaluated, is the ``Coastal and Ocean
Protection Plan Implementation Act'' that was introduced in June 2007
by former Sen. Stevens of Alaska. This bill would have established an
ocean and coastal development impact assistance fund and grant program
and an ocean policy trust fund and would have provided funding to
federal agencies, coastal states, local governments, and non-
governmental entities to address ocean and coastal protection.
(Question 3). To all panelists: Do you believe that states have an
adequate role in the current MMS offshore leasing planning
process? Or is there any way that you would like to see the
states roles strengthened?
Response:
We support any processes that will facilitate full state
participation in all phases of the federal offshore energy policy and
leasing processes. We are encouraged by the recent decision of the
Department of the Interior to take a broader look at offshore energy
production, be it oil and gas, wind, wave, ocean currents, or energy
conservation. We also concur with the recent emphasis on folding
offshore energy evaluations into this comprehensive energy policy
approach. This type of comprehensive approach to energy policy has been
lacking in the MMS process to date.
We also want to underscore the importance of maintaining the
federal consistency provisions within the Coastal Zone Management Act.
These provisions are essential to the federal/state partnership
envisioned by Congress. Our concern about maintaining this authority is
paramount and any legislation that would weaken this authority would be
unacceptable to California.
(Question 4). Secretary Chrisman, could you provide the Governor's
position on the Plains Exploration and Production (PXP)
proposal to allow an existing federal platform to drill a new
well into California state waters? Does the state believe that
it has the authority to require a platform operating in federal
waters to cease operations as of a certain date? Does the state
believe that the PXP model proposed at this site could also be
used to access additional oil fields under state or federal
waters?
Response:
The following is an overview of the recent developments with PXP's
proposal.
On January 29, 2009, the California State Lands
Commission considered PXP's application for a permit. Despite much
public testimony supporting the project and support from environmental
stakeholders and the local community, the permit application was
defeated 2 to 1. Commission decisions cannot be appealed.
Governor Schwarzenegger's representative on the
commission supported PXP's application due to unique circumstances and
benefits of the proposed project; e.g., drainage of oil from federal
waters, agreements by the company to cease operations of this facility
and the entire Tranquillon Ridge and Pt. Pedernales fields by a certain
date, and property donations to the community.
The commission's legal counsel in consultation with
California Attorney General's office has determined that PXP may
reapply for a permit. It is our understanding that PXP is aware that
may reapply and this it is currently weighing its options. If PXP
decides to reapply it will have to develop a project proposal that
addresses the concerns of the commission.
The State Lands Commission does not believe that it has the
authority to require a platform operating in federal waters to cease
operation as of certain date. Note: California's CZMA agency for the
open coast, the California Coastal Commission, has not yet considered
and voted on PXP's proposal. This would not occur until an approval was
achieved by the State Lands Commission.
State Lands Commission engineering experts believe that is
technically feasible to use the directional drilling technology that
was incorporated into the PXP proposal at other sites in California to
access additional oil fields under state or federal waters. However,
the PXP proposal presented a unique set of circumstances (e.g., federal
drainage, agreements by the company to cease offshore drilling
operations, and property donations to the community) that are not
likely to lend themselves to development of other sites. However,
consistent with my testimony, the Schwarzenegger Administration remains
opposed to new offshore oil and gas drilling off the California coast.
(Question 5). Secretary Chrisman, at the committee hearing on February
11, 2009 a witness argues that additional oil drilling along
the California coastline would help reduce natural oil seeps.
Does the state agree with that argument?
Response:
According to the California State Lands Commission approximately
2,000 individual seeps are believed to exist in the Santa Barbara
Channel and Santa Maria Basin. Our engineering experts with the State
Lands Commission do not believe there is sufficient proof that
additional oil drilling would be helpful in reducing natural oil seeps.
They also note that there is very little data focusing on the
relationship between natural seepage and production. For the following
reasons we believe that a theory of significantly reducing seep
activity through increased production is not realistic:
Most oil is not being produced from the same (probably
shallow) geological structures as those from the seeps. Therefore there
will be little or no impact, unless these geologic structures are
somehow connected.
When pressures begin to subside with production, natural
repressurization could occur through aquifer influx; or water or
produced gas is commonly injected back into the structure to maintain
high pressure for production. This is regular practice by the
operators.
(Question 6). Secretary Chrisman, the committee has been told that
California has more stringent environmental requirements for
oil and gas production in state waters than the federal
government has in other parts of the OCS. For example one of
our witnesses at the February 11, 2009 hearing described how
California requires operators to treat and dispose of drilling
muds onshore, rather than disposing of them on the sea bottom.
Could you provide a list of environmental requirements imposed
by California that are not regularly imposed by the federal
government?
Response:
California has a long history of placing special requirements for
offshore oil and gas operations. The precautions pertaining to drilling
muds is just one example. Some others include:
Oil Spill Containment and Cleanup. California has placed
special requirement for equipment to be placed at the site of
operations and with special cleanup organizations (spill cooperatives
and contractors) who can respond to larger spills. In addition, there
is a $0.05 surcharge applied per barrel for the state Oil Spill
Prevention and Response fund (collected monthly by the Board of
Equalization) for preparedness and prevention activities of the state.
For marine response to oil spills, the state maintains the Oil Spill
Response Trust Fund. Currently, fees are generated at $.25 per barrel.
The fund is capped at $58 million. Per statute, the fund is to be kept
at 90% of this cap.
Safe Navigation. Prohibitions of the placement of any
facilities in buffer zones of the vessel traffic lanes.
Air quality. Restrictions placed on emissions from
drilling facilities, work and supply boats, and onshore facilities.
Habitat and Fisheries Protection. Reducing impacts from
the placement of pipelines to bottom habitats such as eel grass, rocky
bottoms, and placing equipment or operations that would interfere with
commercial or sport fishing.
(Question 14). Secretary Chrisman, could you provide the committee
with an update on where California stands with the Coastal
Impact Assistance Program--how close is the state to receiving
funding through that program, and on what projects does the
state expect to be using that funding on? Also, please describe
the state's experiences with the CIAP program, including any
ways that the state believes it should be modified.
Response:
The California Natural Resources Agency, which I head, is Governor
Schwarzenegger's designated lead agency for implementing the Coastal
Impact Assistance Program (CIAP) in California. As such, the Agency has
developed and drafted with substantial public input a Coastal Impact
Assistance Plan (Plan) for expenditure of $20.6 million in CIAP grant
funds. The Plan includes 80 total project proposals from 17 eligible
coastal counties and 9 state agencies. The Natural Resources Agency is
finalizing the Plan so that it can be submitted to the MMS headquarters
and the MMS's Pacific OCS Regional Office by the end of March 2009.
These 80 projects fall under one of the following 15
categories:
1. Climate Change
2. Coastal Habitat Restoration
3. Coastal Protection and Public Access
4. Coastal Sediment Management
5. Coastal Water Quality
6. Coastal Wetlands
7. Energy
8. Invasive Species
9 Mapping
10. Marine Debris
11. Marine Law Enforcement
12. Marine Life Protection Act/Marine Life Management Act
Implementation
13. Public Education and Outreach
14. Science and Research
15. CIAP Administration
The Natural Resources Agency has enjoyed a close working
relationship with MMS staff, especially staff at the Pacific OCS
Regional office. However, development of the state Plan has not been
without significant problems. Specifically, in June 2008, after
completing a 30-day public comment period on a draft Plan, the Natural
Resources Agency was informed by MMS headquarters that the funding
level assumptions contained in the Plan would probably not come to
fruition. We were further directed by MMS headquarters to redraft our
Plan based on lower funding expectations. The Natural Resources Agency
followed this direction and redrafted the Plan. A revised draft Plan
was circulated for public comment during October/November 2008.
One fundamental way that the CIAP could be modified to
benefit the states is to change the requirement that each project
contained within a state's Plan have its own grant agreement. As with
the NOAA CIAP, the Natural Resources Agency would prefer to execute one
grant agreement with the MMS covering all projects with each state or
local jurisdiction. This change would streamline the granting process
and greatly reduce the administrative burden on the MMS, states, and
local jurisdictions. It would also enable grant funds to flow to grant
recipients much more quickly.
In drafting future CIAP type programs, Congress should
consider allocating grant funds using a formula that uses currently
available OCS revenue information and does not rely upon waiting for
future revenue information. This change to the CIAP will provide states
with more certain grant funding allocation information and thus enable
them to develop CIAP plans not vulnerable to fluctuating OCS revenue.
(Question 15). To all panelists: Last September the House passed a
bill that would have created a 50-mile buffer zone where
drilling was not allowed, and then a 50-mile zone where states
would get to decide where drilling was allowed. What are your
states' opinions on the use of buffer zones, and do you believe
that 50 miles, or some other distance, is appropriate?
Response:
Governor Schwarzenegger has a long standing policy of opposing new
offshore oil and gas leases off the coast of California. In addition,
the Governor has taken every opportunity to ensure that the
(Congressional) moratorium on offshore oil and gas leasing is
maintained.
We do not believe that buffer zones would eliminate the impact of a
major oil spill off our shores. This position is based on our
experience with oil spills in California such as the 1969 Platform A
spill in the Santa Barbara Channel and our observations of other spills
(such as the Exxon Valdez in Alaska and the tanker vessel Puerto Rican
off San Francisco Bay). These events demonstrate that a buffer zone of
50 or even 100 miles would not eliminate the impacts during a major oil
spill. Oil spilled during a major accident can travel long distances
(well over 1,200 or more miles in the case of the Exxon Valdez).
______
Response to questions submitted for the record by Ted Diers,
Chair, Coastal States Organization
I very much appreciate the opportunity to offer testimony on state
perspectives on offshore drilling and support the efforts of the
Committee on Natural Resources to develop an energy policy for the U.S.
that includes traditional and renewable energy development offshore
while recognizing the importance of coastal ecosystems and communities.
The responses on behalf of the Coastal States Organization to the
questions forwarded on March 9, 2009, are below.
1. One of the concerns raised by those who are not supportive of new
offshore drilling, particularly along the East Coast, is what
role neighboring states would have in drilling decisions. For
example, hypothetically, if New Hampshire wanted to allow
drilling off its coastline, what kind of say should Maine or
Massachusetts have on that? Are existing Coastal Zone
Management Act provisions adequate to protect coastal states
interests? Or is there a need for a new regional approach on
these decisions, similar to what Mr. Diers mentioned in his
testimony?
Through the federal consistency provision, the Coastal Zone
Management Act (CZMA) provides states the ability to confer with a
neighboring state on a consistency review. Thus, states have the
ability, under the current statute, to review according to their own
enforceable program. In addition, the current CZMA encourages
coordination among states related to planning for such development. In
the hypothetical above, Massachusetts would review what would be the
direct impacts that New Hampshire's activities might have on the
Massachusetts coastline and resources.
CSO does support an approach that incorporates regional
coordination. It allows for more fluidity - energy production often
implicates an entire region (the vast distances vessels go, the nature
of oil spills/cleanups). The existing regional partnerships could
provide an on-the-ground mechanism for such regional planning without
creating a new governance scenario or governmental layer.
2. A number of legislative proposals regarding the Outer Continental
Shelf have proposed that any new revenues that accrue as a
result of new offshore oil and gas activity be shared with the
States, as is now the case with the Gulf of Mexico States. At
the hearing, Congressman Farr suggested the formation of an
Oceans Trust Fund, while Congressman Rohrabacher suggested
giving revenues directly to coastal communities to allow them
to address local needs, such as reducing urban runoff and
repairing sewers, although it was not clear whether only
communities that have drilling off their shores should be
provided with funding to address those needs, or if all
communities should have access to such funding, regardless of
the proximity of offshore drilling. Please provide the
positions of your state governments regarding the best use of
any potentially shared offshore revenue: would you prefer an
Oceans Trust Fund model that provided revenue nationally to
address ocean issues, a revenue sharing model that only
included states or communities that have offshore drilling off
their shores, a revenue sharing model that provides shared
revenues directly to states and coastal communities regardless
of whether they have drilling off their shores, or another
model entirely? Also, are there any analogous revenue sharing
programs that Congress should look at as good models for how to
move forward, should we decide to increase the amount of OCS
revenues shared with states and local communities?
In its Final Report, the U.S. Commission on Ocean Policy identified
a myriad of challenges to improve the management of our nation's ocean
and coastal resources. The Commission recognized that to meet these
challenges, additional investments would be necessary, and OCS receipts
were identified as the primary source of funding. Additionally, the
Commission recommended that a portion of OCS revenues should be shared
with coastal states (Recommendation 24-1). CSO's position is that
revenues shared with the states should further the goals of improved
coastal and ocean management, restoration, conservation, preservation,
mitigation, research and education. In addition, Congress and the
Administration should consult with coastal states in the development of
any new program or formula of revenue sharing.
CSO does not have a formal position on any particular revenue
sharing model but notes that the Coastal Impact Assistance Program
(CIAP) was established in 2005 by the Energy Policy Act of 2005,
authorizing funds to be distributed to Outer Continental Shelf (OCS)
oil and gas producing states to mitigate the impacts of OCS oil and gas
activities. Though this model only provides revenue to producing
states, it could be adapted to include all coastal states. Under this
model, states must submit a coastal impact assistance state plan (Plan)
that meets Minerals Management Service approval to be eligible for CIAP
funds. A producing state or coastal political subdivision may use the
funds for: projects and activities for the conservation, protection, or
restoration of coastal areas, including wetlands; mitigation of damage
to fish, wildlife, or natural resources; planning assistance and the
administrative costs of complying with this section; implementation of
a federally-approved marine, coastal or comprehensive conservation
management plan; and, mitigation of the impact of OCS activities
through funding of onshore infrastructure projects and service needs.
Other models have been proposed, including H.R. 701, Conservation
and Reinvestment Act (CARA) in the 106th Congress. CARA passed the
House on May 11, 2000, and was approved by the Senate Committee on
Energy and Natural Resources on July 25, 2000, but did not progress
further. Both proposed bills allocated revenues from OCS oil and gas
activities for federal and state resource acquisition and protection,
urban recreation, wildlife protection, and related purposes. Both bills
would have created and funded a new coastal energy impact assistance
program, amended and funded the Land and Water Conservation Fund and
funded the Urban Park and Recreation Recovery program, Historic
Preservation Fund, land restoration and easement programs, and the
Payment in Lieu of Taxes Program. These two models provide a valuable
starting point for discussions of revenue sharing models.
3. Do you believe that states have an adequate role in the current MMS
offshore leasing planning process? Or is there any way that you
would like to see the states roles strengthened?
CSO does not have a position on the adequacy of the MMS offshore
leasing planning process. However, in the planning process, consistency
review must be maintained and respected. This review enables states to
take part in planning and informs MMS of the potential impacts in the
coastal zone. Early consultation through consistency review allows for
a more predictable process for both the state and the applicant, and
for changes to be made before significant financial resources are
invested.
4. Mr. Diers, you mention in your testimony that federal consistency
authority under CZMA should be maintained, and states'
authority should not be weakened. Do you feel there is any need
to strengthen state consistency requirements with respect to
offshore drilling and other offshore energy development?
No--it is CSO's position that consistency is an effective tool as
written in the current CZMA. In CSO's efforts toward CZMA
reauthorization, it advocates that the consistency provisions be left
as status quo. Having said that, it is vital that consistency not be
weakened as a result of energy legislation. Indeed, CSO encourages the
explicit reference to CZMA consistency in any future energy legislation
so that there is no doubt of Congress' intent to maintain the states'
authority to review energy-related actions affecting the coastal zone.
Since the enactment of the CZMA, early consultation and
consultation between states, the consistency provision has been
primarily a tool to find common ground between federal projects and the
needs of the nation's coasts resulting in very few state consistency
objections. In 2005/2006 alone, over 8,000 consistency reviews were
conducted and only 60 objections were filed by the states: this is less
than 1%.
In addition, many states have found creative ways to use the
consistency provision to form better partnerships and processes. These
tend to help both the applicant and the review agency. For example,
Alaska uses a memorandum of understanding with the Minerals Management
Service to facilitate reviews of OCS activities. North Carolina's
coastal program facilitates review of energy projects by identifying
information needs up front to avoid delays and increase predictability
for industry. Texas developed a general concurrence for its review of
OCS oil and gas exploration plans.
5. Mr. Diers, in our February 25th hearing, Mr. Larry Nichols of the
American Petroleum Institute states that the Coastal Zone
Management Act ``allows a state to block offshore activities
that are inconsistent with its coastal zone management plan.
That block can be removed only by the federal government
through an arduous appeals process, which can be followed by
litigation if the state disagrees with the federal government's
decision.'' The implication of his statement seems to be that
states possess all the authority they need now to effectively
block drilling from happening off their shores. Do you believe
that states have enough authority under CZMA to effectively
block offshore activities? Is it clear enough what constitutes
an ``affected state'' for the purposes of making consistency
determinations for offshore energy siting under the CZMA?
It is important to note that framing consistency review as a method
to ``block activities'' is not supported by the evidence. There have
been fewer than 40 objections that have gone through the entire
objection and appeals process. Louisiana, for example, has only had 1
objection in state history. Furthermore, the appeals process was
designed to be streamlined with specific timeframes and clarity on the
process of review. The consistency review itself is also time-limited
and cannot drag out a process; rather, it is usually the other siting
and permitting concerns which tend to extend the length of project
review.
The consistency review is not put in place to block activities--the
purpose of the review is to determine consistency of the project with
state law. In fact, both producing states, as well as neighboring
states, that can show an impact to coastal zone resources have
authority to review. Producing states are particularly reliant on
consistency review in order to manage the myriad development processes
and associated impacts that go along with offshore energy development.
The consistency review incorporates many elements beyond environmental
concerns. For example, in my own state of New Hampshire, of our sixteen
enforceable policies, only a few are related to natural resources. Most
are related to managing conflict with human uses.
6. Last September the House passed a bill that would have created a
50-mile buffer zone where drilling was not allowed, and then a
50-mile zone where states would get to decide where drilling
was allowed. What are your states' opinions on the use of
buffer zones, and do you believe that 50 miles, or some other
distance, is appropriate?
CSO does not have a position on 50-mile or any other ocean buffer.
However, it is important to note that a 50-mile buffer may not
represent an ecosystem-based approach. Through a regional ecological
and economic analysis, one might find that a 50-mile buffer is adequate
but to our knowledge, no one has done such an analysis. This is clearly
an important area of research and the type of policy assessment that is
best accomplished at the regional level, and in partnership between the
state and federal government.
______
Response to questions submitted for the record by Robert G. Marvinney,
Maine Geological Survey, Augusta, Maine
1. To Mr. Diers, Mr. Marvinney, and Mr. Wagner: One of the concerns
raised by those who are not supportive of new offshore
drilling, particularly along the East Coast, is what role
neighboring states would have in drilling decisions. For
example, hypothetically, if New Hampshire wanted to allow
drilling off its coastline, what kind of say should Maine or
Massachusetts have on that? Are existing Coastal Zone
Management Act provisions adequate to protect coastal states
interests? Or is there a need for a new regional approach on
these decisions, similar to what Mr. Diers mentioned in his
testimony?
Response: Existing Coastal Zone Management Act provisions leave the
question of the role of neighboring states in these types of situations
open to interpretation. The more realistic probability is the potential
for oil and gas leasing on the Georges Bank, a major fisheries resource
for the fisherman of Maine and New England. The proximity of the
Georges Bank to Massachusetts presents the possibility that
Massachusetts' interests might dictate more strongly than Maine's in
this situation, in spite of the critical nature of this resource to
Maine's economy. This can be addressed by directing the Minerals
Management Service to engage in discussions early and often in the
process with the most proximal state and neighboring states, and by
weighting input from each equally. Maine is not opposed to the
responsible development of oil and gas resources of the nation's OCS.
The regional approach should be this: we need to consider the entire
potential energy endowment of the entire OCS, including traditional oil
and gas and renewables, and then develop a strategy to exploit these
where each potential is the greatest. For oil and gas, this is the Gulf
of Mexico, where the highest potential exists for significant reserves
and where the infrastructure is already in place to support these
activities. For the Gulf of Maine, the greatest potential is wind, and
work is already underway to support this effort.
2. To all panelists: A number of legislative proposals regarding the
Outer Continental Shelf have proposed that any new revenues that accrue
as a result of new offshore oil and gas activity be shared with the
States, as is now the case with the Gulf of Mexico States. At the
hearing, Congressman Farr suggested the formation of an Oceans Trust
Fund, while Congressman Rohrabacher suggested giving revenues directly
to coastal communities to allow them to address local needs, such as
reducing urban runoff and repairing sewers, although it was not clear
whether only communities that have drilling off their shores should be
provided with funding to address those needs, or if all communities
should have access to such funding, regardless of the proximity of
offshore drilling. Please provide the positions of your state
governments regarding the best use of any potentially shared offshore
revenue: would you prefer an Oceans Trust Fund model that provided
revenue nationally to address ocean issues, a revenue sharing model
that only included states or communities that have offshore drilling
off their shores, a revenue sharing model that provides shared revenues
directly to states and coastal communities regardless of whether they
have drilling off their shores, or another model entirely? Also, are
there any analogous revenue sharing programs that Congress should look
at as good models for how to move forward, should we decide to increase
the amount of OCS revenues shared with states and local communities?
Response: There should be some reinvestment of new revenues from
OCS oil and gas activities into ocean issues and affected ocean
communities, although Maine does not have a position on which approach
would be preferred.
3. To all panelists: Do you believe that states have an adequate role
in the current MMS offshore leasing planning process? Or is there any
way that you would like to see the states roles strengthened?
Response: MMS is striving to engage states at an early stage in the
discussions of potential offshore leasing. Past history, however,
demonstrates that the views of the Department of Interior and MMS most
often prevail when there are differences with the views of the states.
There should be a strengthened role for states in the planning process
to ensure that state's views are given equal standing with federal
views.
4. Secretary Chrisman, could you provide the Governor's position on
the Plains Exploration and Production (PXP) proposal to allow an
existing federal platform to drill a new well into California state
waters? Does the state believe that it has the authority to require a
platform operating in federal waters to cease operations as of a
certain date? Does the state believe that the PXP model proposed at
this site could also be used to access additional oil fields under
state or federal waters?
5. Secretary Chrisman, at the committee's hearing on February 11th, a
witness argues that additional oil drilling along the California
coastline would help reduce natural oil seeps. Does the state agree
with that argument?
I oppose direct revenue sharing with states that is contingent on
them opening their coastline to drilling, but I am in favor of using
OCS revenue in a way that benefits all the states. How do your state
governments feel about this issue?
6. Secretary Chrisman, the committee has been told that California has
more stringent environmental requirements for oil and gas production in
state waters than the federal government has in other parts of the OCS.
One of our witnesses at the February 11th hearing, for example,
described how California requires operators to treat and dispose of
drilling muds onshore, rather than disposing of them on the sea bottom.
Could you provide a list of environmental requirements imposed by
California that are not regularly imposed by the federal government?
7. Mr. Diers, you mention in your testimony that federal consistency
authority under CZMA should be maintained, and states' authority should
not be weakened. Do you feel there is any need to strengthen state
consistency requirements with respect to offshore drilling and other
offshore energy development?
8. Dr. Marvinney, the American Petroleum Institute recently put out a
report entitled ``Untapped Oil and Gas Resources,'' in which the
authors develop what they call an ``alternative resource case'' by
multiplying the amount of oil that MMS currently thinks is in the
Atlantic Ocean--3.8 billion barrels--by 4.8, reflecting the increase in
our known Gulf of Mexico resources since 1975. In your opinion as a
professional geologist, is that a valid estimation?
Response: The API analysis is a useful statistical exercise that
may help to define the broad range of potential resources in the
Atlantic. However, it is strictly a statistical analysis that must be
tempered with geological realities. There are profound differences in
the geology of the Gulf of Mexico and the geology of the Atlantic, and
the north Atlantic, in particular. The first difference is in the
nature and duration of sedimentation in the Gulf of Mexico. The
Mississippi delta system has been operational for 10s of millions of
years, bringing enormous amounts of sediment into the Gulf that trapped
prolific organic material. The burden of sediment further weighted the
crust, bringing this organic-rich sediment into temperature zones
conducive for the development of oil and gas. Along the Atlantic
seaboard, and particular the north Atlantic, there are no analogous,
large-scale, long-duration deltaic systems. The exploration work of the
1970s and 1980s confirmed the lean organic nature of the sediments and
their thermal immaturity.
The second major difference is in the nature of the mobile
substrate beneath the oil-generating units in the Gulf of Mexico.
Massive and thick salt sequences in the Gulf of Mexico beneath the oil-
generating units have been mobilized by their buoyancy relative to the
overburden materials, and have risen in salt diapers that have provided
avenues and traps for oil migration and accumulation. While there is
salt in the Atlantic OCS, it is far less extensive, thinner, and
subsequently less mobile, providing fewer opportunities for hydrocarbon
accumulations.
The API analysis is interesting, but it is far more instructive to
consider the hydrocarbon development history of nearby analogous areas.
The Scotia Shelf off Nova Scotia has seen considerable exploration with
the latest tools available. Since the discovery of the Sable Island gas
field more than 30 years ago, very little has been added to the proven
reserves of the shelf, in spite of extensive exploration. This is far
more relevant to the potential for oil and gas reserves in the north
Atlantic than the API statistical analysis.
9. Dr. Marvinney, in the table you include in your testimony, showing
the MMS estimates of economically recoverable oil from the Atlantic and
Gulf of Mexico regions, it appears that at $46 a barrel oil, about 80%
of the undiscovered oil in the Gulf of Mexico is economically
recoverable, while the figure in the Atlantic is only 58%. Is it
accurate to say that not only is there more oil in the Gulf, but it's
also more economical to get to?
Response: This is probably a reflection of the greater potential
for larger fields in the Gulf of Mexico compared to the Atlantic and
also perhaps that there is support and processing infrastructure
already in place.
10. Dr. Marvinney, your testimony mentions a Maine company that
constructed two offshore drilling platforms that were used
internationally. Has this company been involved in constructing
platforms to be used in U.S. waters, and if so, could you provide
additional details of who has contracted those platforms and where they
are to be deployed.
This company is Cianbro, and information about their Amethyst
Project at this website: http://www.cianbro.com/CurrentProjects/
PastHighProfileProjects/Amethyst
SemisubmersibleDrillingRigs/tabid/343/Default.aspx
The two semi-submersible rigs that this corporation completed in
Portland, Maine were subsequently deployed in deep water off Brazil.
Large portions of these rigs were originally constructed in shipyards
in Gulf of Mexico states, but those corporations were unable to meet
their contractual obligations. Cianbro transported the pontoon
assemblies and deck boxes to Maine where they were mated, completed,
and taken on sea trials. Cianbro is currently constructing large
components for use in a refinery expansion project in a Gulf of Mexico
state. I do not know if Cianbro has constructed platforms for use in
U.S. waters.
11. Mr. Graves, Louisiana is the first state to receive money under
the Coastal Impact Assistance Program. Please list the projects, along
with a short description, that Louisiana is funding with that money?
Also, please describe the state's experiences with the CIAP program,
including any ways that the state believes it should be modified.
12. Mr. Graves, you mention an Ocean and Coastal Trust Fund in your
testimony--a fund that would benefit all coastal states. You also call
for additional revenue sharing with Louisiana specifically. What do you
think the breakdown should be between money that goes specifically to
Louisiana, and money that goes to a Trust Fund that benefits all the
states?
13. Mr. Diers, in our February 25th hearing, Mr. Larry Nichols of the
American Petroleum Institute states that the Coastal Zone Management
Act ``allows a state to block offshore activities that are inconsistent
with its coastal zone management plan. That block can be removed only
by the federal government through an arduous appeals process, which can
be followed by litigation if the state disagrees with the federal
government's decision.'' The implication of his statement seems to be
that states possess all the authority they need now to effectively
block drilling from happening off their shores. Do you believe that
states have enough authority under CZMA to effectively block offshore
activities? Is it clear enough what constitutes an ``affected state''
for the purposes of making consistency determinations for offshore
energy siting under the CZMA?
14. Secretary Chrisman, could you provide the committee with an update
on where California stands with the Coastal Impact Assistance Program--
how close is the state to receiving funding through that program, and
on what projects does the state expect to be using that funding on?
Also, please describe the state's experiences with the CIAP program,
including any ways that the state believes it should be modified.
15. To all panelists: Last September the House passed a bill that
would have created a 50-mile buffer zone where drilling was not
allowed, and then a 50-mile zone where states would get to decide where
drilling was allowed. What are your states' opinions on the use of
buffer zones, and do you believe that 50 miles, or some other distance,
is appropriate?
Response: Given the geographic location of the Georges Bank, more
than 100 miles from the coast of Maine, such buffer zones would do
little to allay our concerns about fisheries impacts.
16. To Dr. Marvinney, State Geologist, Maine: In your testimony, you
state that ``the resources of the Gulf of Maine are most suitable to
renewable energy development, with tidal and offshore wind power being
the primary resources. Renewable wind power may provide manufacturing
and support employment and contribute to a sustainable, secure energy
future.'' To what extent is renewable energy production in conflict
with oil and gas production?
Response: In terms of geography, there would be little conflict
between the likely footprint of oil and gas activities and the likely
footprint of renewable energy activities. The only real potential for
oil and gas in the Gulf of Maine is on the Georges Bank, more than 100
miles from the Maine coast. The likely locations for wind power
projects and tidal power projects are all within 50 miles of the Maine
coast.
______
Response to questions submitted for the record by Hon. Frank W. Wagner,
Senator, 7th District, Senate of Virginia
1. To Mr. Diers, Mr. Marvinney, and Mr. Wagner: One of the concerns
raised by those who are not supportive of new offshore
drilling, particularly along the East Coast, is what role
neighboring states would have in drilling decisions. For
example, hypothetically, if New Hampshire wanted to allow
drilling off its coastline, what kind of say should Maine or
Massachusetts have on that? Are existing Coastal Zone
Management Act provisions adequate to protect coastal states
interests? Or is there a need for a new regional approach on
these decisions, similar to what Mr. Diers mentioned in his
testimony?
Response to Question 1:
I believe the Administrative Process for lease sales under the
current structure allows more than ample opportunity for bordering
states to address their concerns.
I have been involved in actions to date regarding Virginia's
inclusion in the Department of the Interior's MMS five-year plan. In
the course of this very deliberate process, I have attended public
hearings as far away as New Jersey. Comments and concerns were
solicited and received not just from Virginia and bordering states, but
indeed all over the nation.
I will also bring to the Committee's attention that Canada did not
come to Ohio, Michigan or Pennsylvania for the 2,000 gas wells in Lake
Erie; nor did they include Maine or any other New England states prior
to the major offshore operation off of Nova Scotia and their major oil
fields off the coast of Newfoundland.
In a similar manner, Cuba is not seeking Florida's position on
their development of Gulf of Mexico hydrocarbon deposits.
Look only to the Gulf of Mexico to see how thoroughly and
effectively the existing Administrative Process is working for Texas,
Louisiana, Alabama and Mississippi.
2. To all panelists: A number of legislative proposals regarding the
Outer Continental Shelf have proposed that any new revenues that accrue
as a result of new offshore oil and gas activity be shared with the
States, as is now the case with the Gulf of Mexico States. At the
hearing, Congressman Farr suggested the formation of an Oceans Trust
Fund, while Congressman Rohrabacher suggested giving revenues directly
to coastal communities to allow them to address local needs, such as
reducing urban runoff and repairing sewers, although it was not clear
whether only communities that have drilling off their shores should be
provided with funding to address those needs, or if all communities
should have access to such funding, regardless of the proximity of
offshore drilling. Please provide the positions of your state
governments regarding the best use of any potentially shared offshore
revenue: would you prefer an Oceans Trust Fund model that provided
revenue nationally to address ocean issues, a revenue sharing model
that only included states or communities that have offshore drilling
off their shores, a revenue sharing model that provides shared revenues
directly to states and coastal communities regardless of whether they
have drilling off their shores, or another model entirely? Also, are
there any analogous revenue sharing programs that Congress should look
at as good models for how to move forward, should we decide to increase
the amount of OCS revenues shared with states and local communities?
Response to Question 2:
With regards to revenue sharing, I suggest that the best method is
a direct appropriation back to the state and coastal communities.
The Committee may also want to consider a hybrid where the states
receive directly 50% of the revenue share and the two adjacent states
split the other 50% of the revenue share.
I believe the states and the local communities are in the best
position, and need the flexibility, to apply the funding to their
specific needs.
For example, Louisiana has used the majority of their entire
revenue share to restore the critical Mississippi delta habitat. That
obviously is not a problem in Virginia. However, cleaning up and
restoring the Chesapeake Bay is our number one environmental problem.
We have pressing commitments (the majority of which are unfunded) to
upgrade our sewage treatment plants, improve storm water run-off
quality and act more aggressively to address our non-point source
pollution problems.
One piece of legislation considered by the General Assembly in
anticipation of royalties would have allocated 40% of all funds to
clean up the Chesapeake Bay, 40% to transportation (there is a direct
correlation between congestion and pollution), 10% for tax credits/
deductions for improvements in energy efficiency and 10% for renewable
energy research and development.
3. To all panelists: Do you believe that states have an adequate role
in the current MMS offshore leasing planning process? Or is there any
way that you would like to see the states roles strengthened?
Response to Question 3:
Having been part of the Administrative Process for the Department
of the Interior's current five-year plan, it has been my observation
that MMS has listened carefully and addressed many of Virginia's
concerns with regards to the planned lease sale.
As an example, Virginia has asked for, and MMS has agreed to, a 50-
mile restriction of any activity from our coastline. MMS has held
public hearings to listen to the concerns of not just political
leaders, but all interested parties and citizen groups.
Furthermore, there is active state and local participation in all
NEPA applications for exploratory and production drilling permits.
Therefore, I believe the existing system more than adequately takes in
the concerns of state and local governments.
15. To all panelists: Last September the House passed a bill that
would have created a 50-mile buffer zone where drilling was not
allowed, and then a 50-mile zone where states would get to decide where
drilling was allowed. What are your states' opinions on the use of
buffer zones, and do you believe that 50 miles, or some other distance,
is appropriate?
Response to Question 15:
Throughout my involvement as a politician, most of the major
objections to offshore drilling have come from waterfront residents,
who have been given the impression that platforms will be built in
their backyards. These residents and hotel guests do not want,
naturally, giant platforms erected right off shore that spoil the view
shed. If sightline becomes an issue, a 15-mile buffer would take care
of this objection, as the eye's view only extends approximately 7
miles.
In Virginia, I negotiated with the Governor's office on an
appropriate buffer. Because there is nothing of geological significance
within 50 miles of the shore, it was quite easy for me to cede this
point in order to get other language in my bill creating the Virginia
Energy Plan.
However, this is not the case in all areas. Significant offshore
deposits in California, Louisiana and Texas are within a few miles of
the coast. But, thanks to new directional drilling techniques, these
reserves could be tapped while keeping production platforms out of the
view shed.
Thus, it would be my recommendation that a 15-mile buffer be
established for any production platform and further, no exploratory
drilling ships should be sited within 3 miles of the coast. These
buffers will allow full access to all potential reserves while ensuring
that no permanent structure is within the view shed of the coastline.