John Engler, president of the National Association of Manufacturers, has an op-ed in today’s Washington Times, “Drilling moratorium is a jobs moratorium“:

As economic woes continue to mount, the Obama administration now says it will work quickly to reopen some exploration and development of offshore oil and natural gas. Unfortunately, this is not enough. I believe our national priorities are the following: The oil spill in the Gulf of Mexico must be contained and the damage cur- tailed. The causes of the accident need to be understood and corrected so that future episodes can be prevented.

However, our country cannot afford to use this accident as an excuse for an overbroad moratorium that stops progress to the detriment of our economic and national security. We do not need to choose between energy security and environmental safety. We need to continue to strive for both.

The Wall Street Journal editorialized on the issue Wednesday, “A Second Oil Disaster: The deep water drilling moratorium threatens Gulf state economies.”

Heritage Foundation, The Foundry blog, “Don’t Fall For Obama’s Energy Shell Game“:

In fact, if anything, the policies announced by President Obama yesterday will actually decrease and delay future U.S. oil production. The President actually canceled four lease sales off the Alaska coast that were planned to begin producing oil within the next two years, delayed a planned lease off Virginia until at least 2012, and placed some areas off limits for at least seven years. Go back and look at President Obama’s actual announcement again: he only promised new exploration off the Atlantic coast. There is absolutely no guarantee that any new drilling will ever occur. Secretary Ken Salazar’s Interior Department still has full discretion to never allow a single drop of oil to be harvested from these waters. And that doesn’t even begin to address the court challenges the enviro-left will employ to attack and delay the entire process.

Will Yeatman, Competitive Enterprise Institute, “OCS Sleight of Hand“:

[While] all the talking heads are chattering about Obama’s supposed pragmatism, the EPA will release today its final rule to allow California to regulate greenhouse gases from automobiles under the Clean Air Act. That’s the real story, because once a “pollutant” (remember, we are talking about carbon dioxide, the stuff we exhale) is regulated under the Clean Air Act, it becomes subject to further and further regulation. The President will have the power (the obligation, according to well funded environmental lawyers) to regulate anything larger than a mansion — your small business, your office complex, your apartment building.

Thomas J. Pyle, Institute for Energy Research, “Obama Energy Announcement: More Imported Oil, Less Domestic Production, Fewer Jobs“:

America’s offshore energy resources belong to the American people. Not a company, not a special interest, and not a single administration. And a clear majority of the American people supports the commonsense strategy of producing more oil and gas here in America. Unfortunately, today, and to our economic detriment, the President once again ignored the will of the American people. (continue reading…)

The National Association of Manufacturers’ statement from Executive Vice President Jay Timmons, “Manufacturers Urge Continued Expansion of Offshore Development.”

American Petroleum Institute, a statement from President Jack Gerard:

The announcement by President Obama and Secretary Salazar is a positive development. We look forward to reviewing the details of the proposal, and we stand ready to work with them to make this a reality. We appreciate the administration’s recognition of the importance of developing our nation’s oil and natural gas resources to create jobs, generate revenues and fuel our nation’s economy.

Exploring for and developing our nation’s offshore resources could help generate more than a trillion dollars in revenues and create thousands of jobs to add to the already 9.2 million jobs supported by today’s oil and natural gas industry.

As we move forward, we hope that consideration can be given to other resource-rich regions, such as the Destin Dome area of the Eastern Gulf and areas off the Pacific Coast and Alaska. We also need to ensure that the permitting processes are handled in an expeditious way. The oil and natural gas industry has a proven track record of safe oil and natural gas development and the majority of the American people recognize this by supporting greater offshore development for the benefit of their communities, their states and their nation.

Virginia Gov. Bob McDonnell, “White House Decision Ensures Virginia will be First State on Eastern Seaboard to Produce Natural Gas and Oil Offshore“:

I thank the President and Secretary of the Interior Ken Salazar for ensuring Virginia will be the first state on the East Coast to explore for and produce energy offshore. The President’s decision to allow energy exploration off Virginia’s coast will mean thousands of new jobs, hundreds of millions in new state revenue and tens of billions of dollars in economic impact for the Commonwealth. It will also help our nation take a further step towards energy independence. Environmentally-safe offshore energy exploration and production is good for Virginia workers, the Virginia economy and national security. Just this session the General Assembly passed, with bipartisan support, legislation I requested to authorize offshore oil and gas exploration and drilling and to allocate 80% of revenues to transportation and 20% to green energy research and development. (continue reading…)

From the governor’s office, a news release, “Governor McDonnell Signs Legislation Positioning Virginia to Become the “Energy Capital of the East Coast”

RICHMOND – Governor Bob McDonnell was joined by a bipartisan group of delegates and senators this afternoon as he signed legislation that will allocate 80% of future offshore royalties and revenues to transportation and the remaining 20% to the Virginia Coastal Energy Research Consortium, which researches and develops renewable energy solutions.  HB 756, a key piece of the Governor’s ‘Jobs and Opportunities’ Agenda, will allocate 80% of future offshore royalties and revenues to transportation (70% to Transportation Trust Fund and 10% to local transportation projects) and the remaining 20% to the Virginia Coastal Energy Research Consortium, which researches and develops renewable energy solutions.  Equally important, HB 787 provides a clear statement of the Commonwealth in support of oil and natural gas exploration, development, and production 50 miles or more off Virginia’s coast.  The Governor and members of his administration have been in steady communication with United States Secretary of the Interior Ken Salazar expressing strong support for keeping the offshore lease sale on schedule for 2011.  These pieces of legislation underscore those efforts and provide valuable evidence of Virginia’s readiness to lead on offshore exploration and drilling.

While signing the legislation, Governor McDonnell remarked, “These key pieces of legislation are necessary to help Virginia become the ‘Energy Capital of the East Coast.’  Virginians understand that this common–sense policy will lead to millions of dollars in revenue as well as thousands of new jobs.  Revenue gained from offshore exploration will go directly to two key areas–transportation and energy research and development.  Millions of dollars will go towards improving our transportation system that will ensure the free flow of commerce and attract further business investments in the Commonwealth.  By investing 20% in renewable energy research and production we will ensure that energy sources of the future, such as wind and biofuels, are made more commercially practicable.”

• HB756: http://leg1.state.va.us/cgi–bin/legp504.exe?ses=101&typ=bil&val=HB756
• HB787: http://leg1.state.va.us/cgi–bin/legp504.exe?ses=101&typ=bil&val=HB787

News coverage…

AP, “Va. gov McDonnell signs offshore energy bills”

WTVR, “McDonnell signs offshore drilling bills”

In February, Secretary of Ken Salazar extended the public comment period on the Minerals Management Service’s draft five-year program for Outer Continental Shelf oil and natural gas leases. As MMS explained:

The MMS is seeking comment on all aspects of the new program including energy development and economic and environmental issues in the OCS areas. Comments are also requested on the specific subjects of size, timing, and location of sales and on the issues of buffer zones, revenue-sharing, and the use of unitization to limit the number of structures. The public comment period is open until September 21, 2009…

So Monday is the deadline. The NAM has put together an online form that allows you to submit comments to the MMS, making this point:

[A] large-scale expansion of access to the OCS will reduce our dependence on energy imports. It will also serve as a key pillar for a comprehensive energy plan for which manufacturers have been campaigning for several years.

The American Petroleum Institute also has background materials available here on API’s Energy Tomorrow website. You can go directly to the MMS Web site to submit a comment.

We constantly stress the principle of energy security, that is, building U.S. economic resilience by robust development of all our energy resources. And let’s not forget jobs. A recent PricewaterhouseCoopers study found that the oil and natural gas industry supports more than nine million American jobs and contributed $1 trillion to the economy in 2007. More details about the study are available at the Energy Tomorrow posts here and here.

From Reuters, “California kills offshore oil lease project,” reporting on the elimination of revenue-producing language in the state budget agreement that would have also improved U.S. energy security.

LOS ANGELES, July 24 (Reuters) – The California state assembly killed a chance on Friday for the state’s first new offshore oil drilling lease since 1969, after the idea narrowly passed the senate earlier in the day.

The measure was defeated by a 43-30 vote in the assembly and was taken out of the budget bill approved on Friday that seeks to close a $26 billion budget deficit.

Plains Exploration & Production Co (PXP.N) had wanted to drill off an existing platform in federal waters into state waters. The project off Santa Barbara was to raise about $100 million annually for 15 years in oil royalty payments to the state.

The state had the opportunity to raise needed revenue under the strictest of environmental conditions, and yet said no. In another state, organized labor might have exercised its political clout in favor of jobs and growth (and even budget sanity), but in California, it’s the public employees unions that hold sway. The only thing they’re interested in drilling is the taxpayers’ wallets. So the environmental lobby gets its way.

Let’s look at those CNBC rankings again for top states for business. Ah, California. Business friendliness, and cost of doing business: 49th. The state actively discourages the creation of wealth.

It’s hard to escape the conclusion that California’s polity is irreparably broken.

The Washington Post columnist Robert Samuelson looks at the record and the rhetoric of the Obama Administration and energy and finds biases overwhelming energy realism. From “The Bias Against Oil And Gas“:

Considering the brutal recession, you’d expect the Obama administration to be obsessed with creating jobs. And so it is, say the president and his supporters. The trouble is that there’s one glaring exception to their claims: the oil and natural gas industries. The administration is biased against them — a bias that makes no sense on either economic or energy grounds. Almost everyone loves to hate the world’s Exxons, but promoting domestic drilling is simply common sense.

That’s the start of this must-read Samuelson column. (They almost all are, must-read, that is). Here’s the conclusion:

Improved production techniques (example: drilling in deeper waters) have increased America’s recoverable oil and natural gas. The resistance to tapping these resources is mostly political. To many environmentalists, expanding fossil fuel production is a cardinal sin. The Obama administration often echoes this reflexive hostility. The resulting policies aim more to satisfy popular prejudice — through photo ops and sound bites — than national needs.

In between Samuelson provides the numbers to make the economic case and briefly summarizes the record of Interior Secretary Ken Salazar, whose agency has been removing federal lands from consideration for energy production.

And really, you would think that an Administration that talks about jobs, jobs, jobs would be interested in sectors of the economy with a proven record of creating jobs, jobs, jobs.

Interior Secretary Ken Salazar continued the series of public hearings on developing the U.S. Outer Continental Shelf energy resources at Tulane yesterday, and representing manufacturers and NAM was Virginia Sawyer of the Louisiana Association of Business and Industry.

Almost 77 percent of the natural gas consumed in Louisiana is for industrial production, she testified, noting that the industrial sector employs 154,000 Louisianans in jobs that pay well above the state average. Let’s foster those jobs:

While tens of thousands of jobs may be created by the development of alternative electricity sources, hundreds of thousands of jobs in Louisiana and along the Gulf coast will be negatively affected if OCS oil and gas production is not aggressively continued. Orderly development of energy should be as fuel-neutral as possible.

From the Dow-Jones report of the hearing, held at Tulane University:

HOUSTON -(Dow Jones)- Louisiana representatives encouraged U.S. Interior Secretary Ken Salazar to authorize more offshore drilling for oil and gas at a regional meeting held in New Orleans Wednesday.

The representatives asked Salazar not to forget the importance of the oil and gas industry in the U.S. economy as a source of jobs and tax dollars.

“Lifting the ban on energy development on the outer continental shelf will create 1.2 million jobs across the country and $2.2 trillion in tax revenue,” said U.S. Rep. Joseph Cao, R-La. “These numbers represent more than four stimulus packages combined.”

Sen. Mary Landrieu (D-LA) also strenuously warned against tax provisions in the Obama and Congressional budgets that could burden the energy sector and called for expanded development of domestic energy resources. From her testimony:

I come today to urge you to look very hard at the proposed tax increases that would diminish the muscle and power of this industry that has served this country so well for so long.

Excellent, clear statement.

Video of the hearing is available here. Next week, Anchorage and San Francisco.

Chairman Nick Rahall of the House Natural Resources Committee continues his hearings on Outer Continental Shelf energy development this upcoming week, with valuable input from manufacturers and energy companies.

On Tuesday, “Offshore Drilling: State Perspectives“:

Witnesses:
Panel 1
Representative Sam Farr, CA-17, Member of Congress

Panel 2
The Honorable Mike Chrisman, Secretary, California Natural Resources Agency
Ted Diers, Chairman, Coastal States Organization
Robert G. Marvinney, Ph.D., State Geologist and Director, Maine Geological Survey
Honorable Frank W. Wagner, State Senator, Senate of Virginia
Garret Graves, Director, Louisiana Governor’s Office of Coastal Activities

That’s Frank Wagner, member of the National Association of Manufacturers and co-owner of Davis Boat Works, Inc., which marked its 50th year of operations last year.

On Wednesday, it’s “Offshore Drilling: Industrial Perspectives“

Witnesses:
Marvin E. Odum, President, Shell Oil Company
Lamar McKay, Chairman and President, BP America, Inc.
Larry Nichols, Chairman and Chief Executive Officer, Devon Energy Corporation
Tim Cejka, President, ExxonMobil Exploration Company
Gary Luquette, President, Chevron North America Exploration and Production Company
Karen A. Harbert, President & CEO, Institute for 21st Century Energy, U.S. Chamber of Commerce

In related news and commentary:

• Jim McTeague, Barron’s, “Testing: Obama’s Will to Drill“
• Ben Lieberman, FrontPage Magazine, “With the Bad Economy, the Time For Offshore Drilling is Now“
• Joseph Mason, Houston Chronicle, “Offshore exploration key to our financial recovery“

Americans stand to gain a lot, from both an energy and economic standpoint, if Congress permanently lifts the moratoria on exploration and production in the OCS. But those gains must be accompanied by a broader political discussion on natural resources, lest we continue to needlessly turn away sources of economic growth in the midst of recession.

The House Natural Resources Committee has been holding a hearing today, the first of three on the topic, “Offshore Drilling: Environmental And Commercial Perspectives“‘

Chairman Nick Rahall (D-WV) opposes offshore development of oil and natural gas resources, so he’s led off with the OCS critics, including former TV star Ted Danson. Ted Danson!

“He has devoted his life to protecting our oceans,” Rep. Rahall said on public radio’s Power Breakfast. “We need somebody of his expertise to tell us just what are the implications of drilling in our oceans.”

The reporter appears to suggest that the economy has overwhelmed the OCS energy issue in the news, to which Chairman Rahall responds, “We need that type of star power.”

The temptation is to mock Danson as just another vapid actor, claiming to have special knowledge of an issue because his surly Becker was an inspiration for House.

But … just because you’re rich and married to Mary Steenburgen doesn’t disqualify you from having an opinion. Public engagement is to be welcomed from all walks of life, and TV stars have the First Amendment right to petition their government for redress of grievances just as John and Jane Q. Public do.

Danson always seemed like a smart fellow, too. It’s just in this case that he’s very, very wrong on the environmental case — OCS drilling can be conducted in an environmentally sensitive manner – and his policy antagonism to fossil fuels and energy production will make America poorer and more dependent on foreign energy.

We look forward to more balanced, pro-jobs testimony in the upcoming hearings in Chairman Rahall’s series, no matter who it comes from — a wealthy entertainment figure or average Joe who drives a car, heats his home, and has a job thanks to America’s energy sector.

Full Committee Oversight Hearing: “Offshore Drilling: Industrial Perspectives”
February 25, 2009

Full Committee Oversight Hearing: “Offshore Drilling: State Perspectives”
February 24, 2009