Monday, April 5, 2010

After President Obama’s Andrews Air Force Base “energy pol-icy” statement Wednesday, Interior Secretary Ken Sal- azar said that last year he received more than a half-million citizen comments on lease sales. He didn’t say that while hundreds of thousands of those comments urged support for more domestic energy production, last week’s policy announcement offers less. My state, Alaska, is 20 percent the size of America, has about three-fourths of the nation’s coastline and embraces the bulk of federal lands in protected status (53 percent of America’s wilderness, 90 percent of its national parkland and 80 percent of its national wildlife refuge acreage).

We’re America’s great hope for energy and natural-resource development. Less than one-half of 1 percent of Alaska’s lands are privately owned by other than federally authorized native corporations. This one state could safely and significantly improve America’s balance of payments, employment, foreign energy imports and national security challenges -given reasonable access to our federal lands and waters.

Last year, the University of Alaska Institute of Social and Economic Research forecast that Alaska’s Outer Continental Shelf alone could produce tens of thousands of jobs annually and tens of billions in payroll over the next few decades. At its peak, our trans-Alaska pipeline transported more than 2 million barrels per day to U.S. consumers, making us the country’s largest oil-producing state. Today its throughput is down two-thirds, and the end of this pipeline’s life, this energy lifeline, is within sight.

Last month, a diverse group supported by organizations representing hundreds of the nation’s state regulators and many advisers from the federal government, industry and universities produced a moratoria study. Readers may find it on the Web site. It uses a version of the government’s National Energy Modeling System, offering the most reliable energy information available to the president and Congress. The Moratoria Study reveals that not producing energy resources in moratorium areas by 2030 will diminish the gross domestic product by 0.52 percent annually, increase foreign imports by 4.1 billion barrels, increase payments to the Organization of the Petroleum Exporting Countries by $607 billion, outsource U.S. jobs abroad, increase the prices of natural gas (17 percent) and electricity (5 percent) and decrease production of domestic oil (15 percent) and gas (9 percent). Not producing domestic oil and gas also will have the effect of transferring greater environmental impact to less regulated parts of the globe.

At this time of domestic travail, it makes imminent sense to develop domestic energy wealth using American workers. To minimize our resource potential is suicidal econ- omically. The Obama-Salazar announcement last week further weakens our country as environmental groups feign outrage. Why? First, the administration has, in effect, reinstated much of the moratoria area that Congress and the president released following the great oil price rise in August 2008. It has effectively renewed moratoria by canceling the lease-sale programs of the Interior Department’s Minerals Management Service (MMS) and giving lip service to opening up other areas by planning to study them, not develop them. Second, what federal lands are available are only somewhat available. Just as a goose thinks it is being fed when the farmer is fattening it for slaughter, the administration talks about a balanced energy program while calculating destruction of the golden egg.

As evidence, consider these federal actions over the past year, which include a cornucopia of delay strategies and zero encouragement to domestic energy production:

Y Shell Oil spent more than $3 billion to acquire Alaskan offshore leases from MMS and prepare for exploration, but of about 37 permits required for 2010, just three have been granted. Permit delays or litigation may again prevent 2010 exploration and, indeed, doom a multibillion-dollar project that could provide 35,000 jobs per year and more than $70 billion in payroll for several decades.

Y The Environmental Protection Agency’s obsession with regulating greenhouse gases could diminish the ability of any future lease sales to contribute to America’s economic recovery and job growth.

Y The White House has initiated an Ocean Policy Task Force process. This unnecessary initiative - unfamiliar to most Americans - could shut down vast expanses of federal waters to commercial fishing, domestic energy development and other activity - diminishing the value of lease-sale activities the president contemplates.

Y The National Oceanic and Atmospheric Administration has initiated a beluga whale critical habitat finding embracing more than one-third of Alaska’s Cook Inlet. This action could cripple Cook Inlet exploration and current economic activity upon which the majority of Alaska’s population depends.

Y The Army Corps of Engineers recently denied ConocoPhillips’ permit to construct a drill pad in the National Petroleum Reserve-Alaska, threatening 400 construction and 100 operating jobs and new production that could extend the life of the trans-Alaska pipeline. If this shameful abuse of regulatory power could be used to stop routine oil and gas development of leases already granted by the federal government - in an area already designated a National Petroleum Reserve - then how optimistic could anyone be about this administration’s new energy policy?

We’ll see whether the president’s announcement was for show or for real. The major indicator may be how well - if at all - he controls the proven, anti-development bias of his regulatory agencies.

Dave Harbour is commissioner emeritus of the National Association of Regulatory Utility Commissioners and a retired member of the Regulatory Commission of Alaska. He is publisher of

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