HOUSTON (Dow Jones Newswires), Feb. 25, 2009
Top executives at Devon Energy Corp. and Shell Oil Co. said Tuesday they will ask Congress not to stall the opening of new offshore drilling areas that can provide the U.S. with a reliable source of energy and jobs.
Marvin Odum, the head of Royal Dutch Shell PLC's U.S. operations, said that the recent plunge in oil prices has taken away much of the impetus to develop new hydrocarbon resources - with potentially damaging consequences in the long term. "Lower oil prices are allowing us to lose more time and not develop a comprehensive strategy for the U.S.," Odum said.
Nichols and Odum spoke to reporters a day before they and other oil executives testify at a House Natural Resources Committee hearing on oil and natural-gas development in the Outer Continental Shelf.
The hearings come as the administration of President Barack Obama takes a second look at a new five-year plan for offshore oil and gas leasing on the Outer Continental Shelf proposed by President George W. Bush just before he left office. The new plan seeks to allow drilling in various regions along the Pacific and Atlantic coasts no longer covered under a longstanding moratorium that expired last fall.
Early this month, U.S. Interior Secretary Ken Salazar extended the public comment period for the Offshore Drilling Plan by 180 days to gather more data about available resources and input from stakeholders.
The comment period for rules passed during the Bush administration will be extended into late September. It was originally a 60-day period. The House Natural Resources Committee is having a series of hearings on offshore drilling.
Besides Nichols and Odum, Exxon Mobil Exploration Co. President Tim Cejka, BP America Inc. Chairman and President Lamar McKay and Chevron North America Exploration and Production Co. President Gary Luquette will testify Wednesday before the House committee.
The opening of new offshore drilling areas "could generate a trillion dollars of government revenue, thousands of new jobs and enhance our nation's energy security," Nichols said.
To achieve energy security, he added, it's necessary to have a multi-pronged approach that includes increased efficiency and conservation, increased use of alternatives as well as a greater supply of hydrocarbons.
"Natural gas and oil are, have been and will be for a long time our nation's leading energy sources," Nichols said. "Offshore development is a vital component to that part."
With polls still showing strong support for drilling, the Interior Department and Congress have to tread a fine political line on offshore drilling policy, even with oil prices dropping from a $147 a barrel last July to around $38 recently and a large Democratic majority in both chambers.
The Minerals Management Service estimates that the areas along the Outer Continental Shelf in the lower 48 states hold about 18 billion barrels of oil and 77 trillion cubic feet of natural gas. The estimate is based on decades-old data and many experts say that number could be higher.
Copyright (c) 2009 Dow Jones & Company, Inc.
Most Popular Articles
From the Career Center
Jobs that may interest you