Jane Van Ryan
Posted June 8, 2009
In Washington this week, the House and the Senate will continue to work on energy bills on parallel tracks. I've written about the draft version of the House bill, so today I'm turning to a provision in the Senate bill that would require an inventory of oil, natural gas and renewable energy resources along the nation's coastlines. According to reports, this provision would lead to new seismic testing along the nation's coastlines to get fresh look at the Outer Continental Shelf's (OCS) energy potential.
There's no question that existing information about OCS energy resources is sadly out-of-date. According to the Minerals Management Service (MMS), it's believed that there are 86 billion barrels of oil and 420 trillion cubic feet of natural gas that could be produced in federal waters. But these estimates are based on 30-year-old technology that has been proven to provide conservative figures. For example, using this old technology a few decades ago, estimated Prudhoe Bay area reserves were listed at 7-9 billion barrels of oil. By the end of 2005, 15 billion barrels of oil and natural gas liquids had been produced, and another 2.5 billion barrels of oil is likely to be recovered with even more oil in satellite fields.
To gather more accurate estimates of the energy potential of the Outer Continental Shelf, the Senate bill proposes to spend $850 million. That's 850 million taxpayers' dollars.
Here's a better idea: Let private companies conduct the seismic tests at their expense and allow the oil and natural gas industry to develop the energy it finds. The tests won't cost you and me any tax money, and the government would still receive all of the data under existing regulations. Plus, this nation would reap the benefits of developing our own energy resources--more jobs, more revenue for federal, state and local governments and less concern about energy security.
As API's President and CEO Jack Gerard put it, "We hope this bill is amended to allow greater development of our domestic oil and gas resources."
For more information, read the transcript or listen to the audio of API's Mark Kibbe and Robert N. (Bobby) Ryan, an expert in global oil and natural gas exploration from Chevron, discussing OCS inventory in a recent blogger conference call.
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