US Interior Sec. Salazar Gets Earful on Drilling

ATLANTIC CITY (THE WALL STREET JOURNAL via Dow Jones Newswires), Apr. 7, 2009

A contentious public hearing Monday highlighted the Obama administration's challenge to craft an energy policy that emphasizes alternative fuels but also recognizes the dominance of traditional sources.

Opponents of offshore drilling dominated the hearing, convened by the White House to gauge public opinion on whether the government should expand oil and natural-gas production in federal waters. Drilling supporters focused on the industry's improved safety record, as well as billions of dollars in potential government revenue.

On the first leg of a four-city tour, Interior Secretary Ken Salazar got an earful about medical waste, "tar balls" from industrial spills and other detritus that has washed up over the years on the Jersey Shore, a popular tourist destination. The message from the majority of the roughly 200 attendees, who identified themselves as White House supporters, was that drilling off the Atlantic Coast would create new risks for the environment and the tourism industry.

Many of President Barack Obama's supporters, particularly in the Northeast, strongly object to new drilling off their shores. The oil and gas industry, however, is playing up its safety record and pointing to the benefits that increased domestic production could bring in the form of billions of dollars in new government royalty collections, money that could prove tempting amid soaring government budget deficits.

According to an analysis of federal data by Securing America's Future Energy, a Washington-based group of business and retired military leaders that advocates increased domestic production, the offshore industry produced 10.2 billion barrels of oil between 1985 and 2007 with a spill rate of .001%.

"I hope [the government] recognizes that we have a tremendous environmental record that they can look at," said Denise McCourt, industry-relations director with the American Petroleum Institute.

But voices like Ms. McCourt's were in the minority at the hearing. One group in the back rows held up dollar bills whenever pro-drilling speakers had the microphone, to show that "money talks," members said.

A proposal published by the Interior Department in the final days of the Bush administration would let energy companies drill for oil and gas in all or some portion of 12 areas of the outer continental shelf, including four areas off Alaska, two off the Pacific coast, three areas in the Gulf of Mexico and three more along the Atlantic coast.

Six of the sites -- those located off California, in the eastern Gulf of Mexico and along the Atlantic seaboard -- had been off-limits to development under a quarter-century-old federal moratorium. But congressional Democrats allowed the moratorium to expire last fall amid intense voter anger over high gasoline prices.

Mr. Salazar, who has been criticized by some oil-industry executives for extending by 180 days the original 60-day public comment period on the Bush administration proposal, described the public meetings as an attempt to break with what he described as the "secrecy" of the previous administration when it came to forging energy policy.

He said the Obama administration hasn't decided whether to allow additional drilling in the areas of the outer continental shelf that have traditionally been off limits, saying only that the waters in question would be part of a "comprehensive energy program" that includes renewable energy sources such as wind, in addition to fossil fuels.

Many who attended Monday's hearing said they were more favorably inclined toward using coastal waters to host wind and wave-power projects. Mr. Salazar said the Interior Department will release final rules governing offshore renewable-energy projects "in a month or two," which would then allow lease sales and project development off the coasts. Mr. Salazar also said wind turbines off the East Coast could generate enough electricity to replace most, if not all, the coal-fired power plants in the U.S.

Revis James, a spokesman for the Electric Power Research Institute, a nonprofit group based in Palo Alto, Calif., said that while such a development "might be theoretically possible, in practical terms, it's not very likely that it will be economical."

Mr. Salazar's next stop is New Orleans, followed by Anchorage, Alaska, and San Francisco.

(Stephen Power in Washington contributed to this article.)  

Copyright (c) 2009 Dow Jones & Company, Inc.


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What next? | Apr. 16, 2009
Yea Matt, I live in Grand Junction and used to work the gas fields here. I passed through the ghost towns of Rifle and Parachute on I-70 the other day. And it reminded me of all the new schools and effort put into these communities by the evil companies such as Encana, Williams, Exxon/Mobil and Delta.

No one on the western slope will have a job left. Oh yea the jobs are already gone. Thats ok ,we all remember black Sunday around here and just how quick America realizes how important our resources are. I just can't wait to see how the Jimmy Carter, I mean, Obama administration reacts to the next boom because most people's cars run on gas and oil, and we heat our homes and cook with natural gas. And just when we had local production up enough to bring down the price, we get this kind of treatment. I think the government is stupid for waiting until the prices are choking out everyone at the pump before encouraging more domestic drilling. But good luck with those wind farms.

Matt Hutson | Apr. 11, 2009
What a bogus schedule, why doesn't Salazar visit the towns that have been impacted by his ongoing stupidity. I'm sure he would be welcomed in Grand Junction, CO where there are 1,000+ people out of work from the oil and gas industry since the first of the year. Salazar and his allies have blocked the development of pipelines, gas power plants and oil shale development when he was still a Senator. I guess the only thing Obama hasn't lied about is the "change", can't see that it has been for the better.

Anonymous | Apr. 10, 2009
Do to the down turn I have been a casualty of the current economic times, having lost a well paying oil and gas job. I would like the liberals in the country to tell the rest of us hard working oil and gas men and women what they expect America to do. Tax and cap will be the ruin of this country, how does the government expect the average family to pay for the additional costs to there home and driving budgets? Do they think they can tax our way to energy independence? One day Americans will wake-up and demand the elected leaders listen to US!! We need ideas from all areas of the energy industry, not the liberal left forcing more tax on a very burdened US.

Phyllis Anderson | Apr. 10, 2009
Two years ago, a friend helped me get a job as a mud logger. I loved it. I live in Texas but had never even seen a rig up close. I had always heard the stories from friends (quite a few years ago) about the deaths and injuries, the oil spills, and of course I had heard the term "oilfield trash" so I really didn't know if I would like the job at first except for the excellent pay.

Well, over the last two years I learned a lot. Not just about mud logging, but about the much criticized drilling industry.

First, I met very few people that anyone could call "oilfield trash" I guess anywhere you go there are going to be those "trashy" people, but in my experience the oilfield has less than their share.

Second, I was lucky enough to get to drill in Mississippi, Louisiana, Utah, and Texas, and without exception the rigs I worked on all had excellent safety records.

Also, the most exciting thing was how communities flourished whenever drilling came to an area. Towns that had been just a small dot on a map were suddenly getting, Super Wal-Marts, Lowes, Home Depots, Hotels, NEW SCHOOLS and lots more. If you want to know the truth, Mr. Salazar, stop in some of these communities and talk to these people. They will all tell you how good the drilling industry has been to them.

Also, please remember that those people who follow you around protesting this are not your typical Americans. I know this because your typical Americans are too busy to do much more than stay informed and vote. They have jobs, and families, and civic responsibilities.

To be honest, I am not at all happy with the present administration, I feel like they don't care about me. One thing that would make me feel better about this Administration would be to see LOTS MORE DRILLING. That way I would be called back to work. (I was laid off on Jan. 17.)

Garrett Frazier | Apr. 10, 2009
It seems to be a "no-brainer" to promote domestic drilling. Drilling in domestic waters will increase the tax base for the government, provide jobs and curb a growing unemployment rate, utilize our own resources, and decrease our dependence of foreign oil. Based on the produced 10.2 billion barrels of oil between 1985 and 2007 with a spill rate of .001%, this seems like a "no-brainer."

Joe Engineer | Apr. 10, 2009
Salazar is an IDIOT. It would be impossible to ever get windmills to do that in any economically feasible way. He should be fired, and would be if he was in the real world.

Gene Mall | Apr. 9, 2009
Wind power is more unsightly than the offshore platforms. Wind power will require more transmission lines and here in New York, just this week the local and state government stopped the utilities from building a transmission line that would have reduced rates to millions of people. We will freeze in the dark before more drilling in offshore areas is approved.

Tad Jones | Apr. 8, 2009
I agree with Mr. John Brown's statement, put a tax on the states that escalate the price of energy for the average American, by shutting out drilling in their states. The next area of contest will be a uproar of wind turbines causing sight pollution for the same people that do not want a rig in their view. This is already happening in Europe. The recent policies passed though our out of touch Congress will only push the oil companies overseas where they can make a profit for their share holders. I have been in this business for 29 years, and when the economy makes the turn, the price of oil will be out of sight. Buy oil stocks and please vote for a person that has been to the school of common sense, if you can find one running for office.

Les Leonard | Apr. 8, 2009
We have plenty of natural gas available. Why don't we use it? Because we don't have the infrastructure to deliver it. It can be used for fuel to power our cars, factories, and to generate electricity. We import a lot of natural gas why?

Joe Way | Apr. 8, 2009
I have worked in the oilfield for nearly 35 years. The way these companies have evolved to work safely and in environmentally responsible ways is amazing.

The general public has little knowledge on the concept of drilling for hydrocarbons for our energy needs and what it takes to bring those products to market. Needless to say they also don't understand the great strides the oil & gas industry has made to provide energy for this country and the responsibility they now take for safety & environmental issues.

The U.S. has no energy policy even after 30 some odd years of floundering with the subject. This is the reason we are dependent on foreign production.

All concerned people should read up on natural gas; an extremely clean environmentally friendly fuel that is available today in abundance. If you are concerned about an economical, clean, abundant energy source that can satisfy our energy requirements this is where you should be looking.

The products derived from oil will not soon be replaced but we can curtail our usage by implementing natural gas more effectively.

On a different note; the oil & gas industry provides thousands of people like myself with decent jobs to support our families.

The latest job census of workers in the Gulf of Mexico directly affected by the jobs provided by the oil & gas industry was well over 90,000 jobs. Worldwide there are more than 200,000 Americans that can thank the oil & gas industry for a way to provide a living for their families.

The present administration is spending tax dollars they don't have. Putting working people who pay taxes out of work and losing the royalties the oil & gas industry provides certainly won't benefit the govt's ambitious spending plans!!

Tom Davis | Apr. 8, 2009
How wrong this administration and Salazar will be over the long pull is going to be as damaging to our country as the havoc the financial mess and subsequent ill done bail outs have caused. "Not in my back yard" has always be the rallying cry of east and west coasts and yet they demand more than their share of petroleum in the form of gasoline. All those tar balls that have washed up can be natural oil seeps that are cracks in the sea floor due to natural occurring faulting. Medical waste (needles), are not an oil company related issue. We need all forms of energy over the next 25 years, at least, including foreign oil and nuclear.

America has wrongly bought into Global Warming theory but most will be dead before their great-grand children read about it in history books. Politicians are leading the country to the brink. The ones in power are interested only in their power base and are very ignorant of the real business world.

Bob Gibbens | Apr. 8, 2009
Today the US spends around $800 billion annually to import foreign oil from countries that do not particularly like us. During these times we need to preserve jobs, reduce the trade deficit, and become more energy efficient. Why any rationally thinking person concludes that punishing the energy industry with taxes and regulations that stymie domestic production and burden the very companies that are motivated to spend R&D money on renewable energy is sound policy is not logical.

John Brown | Apr. 8, 2009
It would do my heart good if we who have some common sense would come together and figure a way to wake up those tree hugging socialist liberal hypocrites that have a terminal NIMBY complex.

We can and darn well better, vote the buns in Washington and in state offices that actively hinder our industry out of office.

Further, I say the petroleum industry should enact special higher pricing and reduced product volume polices for the area around Washington DC, in states like Florida, California and other states on the Eastern seaboard that have damaged the petroleum industry. After all by enacting their unjustified, frivolous policies and standing in the way of exploration and production of the available domestic energy resources, they are the ones that run up the real cost of doing business. I also feel the states that harbor the power grabbing lying democrat liberal politicians that have stymied the petroleum industry for political gain should also share in paying their share of our added costs.

I'll bet if gas prices in Florida and in the other Eastern seaboard states were $2.00 higher than in the four Gulf Coast petroleum producing states it would have a favorable effect.

By the way, I live in Florida. WAKEUP AMERICA!!

Bill Farmer | Apr. 8, 2009
America must do all it can to be self sufficient in energy. This may mean a few will be negatively affected, but the nation as a whole is what is important.

Mark Gross | Apr. 8, 2009
What I don't understand is that a lot of these people who want the clean renewable energy don't see the overall picture. Sure, having clean renewable energy would be nice to have, but if you don't have the infrastructure to pass it on to every American ... and I mean every American, from the poorest to the richest, then how can you justify not more drilling? Drilling for oil and gas has come a long way from the days of old. Working on one, I have seen how the system works and I believe that we can drill for the natural resources in a very safe and productive way. I agree with the one gentleman that if you take away the goods that are made with petroleum products, people would sing a completely different story.

Herman | Apr. 8, 2009
Our government speaks constantly about not depending on foreign oil and gas, but have continued to down play drilling here in america. We have the best in the world in this industry as far as safety and technology. The east coast, west coast, Alaska and Florida's Gulf regions are safe from spills. The spill came from shipping not drilling. We say things but nothing is done. We as a people should stand up an realize that we can help the job market and economy by letting our drillers drill in America instead of making the middle east richer by using our technology abroad.

Art Vandeley | Apr. 8, 2009
"One group in the back rows held up dollar bills whenever pro-drilling speakers had the microphone, to show that 'money talks,' members said."

These people should have everything in their lives that is manufactured from petroleum products taken away for 1 year. We will then see how fast they are to hold up those dollar bills. The US oil & gas industry environmental policies are much better than days of old so these arguments about ruining the environment are just silly.

Bill Simpson | Apr. 7, 2009
How many opponents of oil drilling have any idea of the energy content of oil. Someone should ask them how they plan to accomplish the 39% of all work currently being done by oil with exactly what? They have no idea that a gallon of gas equals 500 hours of human labor. Without energy the work won't get done, causing a drastic fall in living standards. Ignorant politicians actually think that they can tax some fantasy fuel into existence. They haven't noticed the recessions that always follow big oil price increases.

Robert H Garcin | Apr. 7, 2009
Dear, Friend I think our government should wake up and see what has happened to us in the last 30 + years. We have been paying for all these bad discussions that our very good friends in washington put upon all the hard working tax payers That pay for the fuels that heat their homes and there cars that they expense back to every worker in the USA. But who controls our future in being dependent on foreign oil? The one we elect to keep making these bad moves time and time again. When will we wake up and smell the coffee?

Talk talk!! We have talked about this so long my children and my grandchildren will hear this until they are 60 years old also. But the middle east will get richer.

Regards, A very concerned USA born Citizen.

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