The Department of Interior on Monday will release a new five-year plan for offshore energy development, and news stories anticipate that the plan will acknowledge the U.S. need to access the abundant domestic oil and natural gas reserves on the Outer Continental Shelf. Interior’s media advisory states:
On Monday, April 30, 2007, Secretary of the Interior Dirk Kempthorne will announce a major proposal for expanded oil and natural gas development on the U.S. Outer Continental Shelf. The multi-year program would significantly increase the nation’s domestic energy supplies while protecting the coastal and marine environments, and provide a major economic stimulus to the nation and participating coastal states.
Steve Allred, Interior’s assistant secretary for Land and Minerals Management, and Johnnie Burton, director of the Minerals Management Service, will join Secretary Kempthorne for the announcement.
Without knowing the specifics, this appears to be a tremendously positive step for U.S. energy security and global competitiveness. The high cost of energy, especially natural gas, is a major obstacle to the manufacturing in America.
The NAM has produced a white paper and accompanying legislative proposal on the subject, “Energy Security for American Competitiveness.” We commend it for reading prior to Monday’s announcement; it provides essential context to balance what are sure to be screams of outrage from the anti-prosperity special interests. Two key paragraphs:
During roughly the last three decades, the U.S. population grew by 40 percent while energy requirements grew 47 percent. Today, imports account for fully 60 percent of our petroleum consumption, and 34 percent of our total energy consumption. The U.S. energy trade deficit is more than 25 percent of our total balance of payments. In the next twenty-five years this imbalance will worsen, as our energy consumption is forecast to grow by 34 percent, while production will only increase by 27 percent.
With domestic demand further outstripping domestic supply, energy prices can be expected to take a further toll on America’s competitiveness. Already, higher energy prices have cost the U.S. economy some 3 million jobs. In only the last ten years, the U.S. chemical industry has gone from a trade surplus of $20.3 billion to a trade deficit of more than $9 billion. The forest products industry has seen more than 200 mills closed and nearly 200,000 jobs lost in the last six years, with much of those closures and layoffs due to soaring energy costs, especially for natural gas. Unlike oil, which is priced globally, the price of natural gas varies significantly from
region to region because of the relative difficulty of shipping it overseas. In the U.S., for example, federal policies have mandated increased use of clean burning natural gas while simultaneously limiting access to domestic supplies, creating a market imbalance that imposes a significant burden on U.S. industry.
You can measure an elected official or candidate’s seriousness about the nation’s energy security by their attitude toward developing America’s domestic energy potential. We look forward to Monday’s announcement by Secretary Kempthorne with great anticipation and to the response from legislators and presidential candidates with great curiousity.
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