House committee passes new energy supply bill
Oct 2, 2005 5:30 PM, By Forrest Laws
The House Resources Committee is using the Hurricane Katrina and Rita disasters to try to pass legislation that would open a portion of the Arctic National Wildlife Refuge to drilling for oil.
The legislation, the National Energy Supply Diversification and Disruption Prevention Act, would also allow natural gas production in federal waters of the outer continental shelf — another move that is likely to spark opposition from environmental organizations.
“Today this committee sent a clear message to American families,” said House Resources Committee Chairman Richard W. Pombo, R-Calif., in a statement issued after the committee voted 27-16 to pass the bill. “We are taking steps to update regulations that unnecessarily suffocate safe energy production here at home.”
The National Corn Growers Association and other farm organizations hailed the bill’s provisions opening the Arctic National Wildlife Refuge to drilling and the Peterson-Abercrombie amendment that would permit drilling for natural gas on the outer continental shelf.
“It is unfortunate that it took two devastating hurricanes to bring such an important issue as increasing and diversifying our domestic resources of energy to the forefront,” said NCGA President Leon Corzine.
“I applaud Chairman Pombo for introducing legislation that will increase production here in the U.S., thus increasing our supplies, and bring some stability to natural gas prices that affect all of us, from the farmers in the fields to those around the country who are trying to heat their homes.”
The bill would authorize production on 2,000 acres of the Arctic National Wildlife Refuge’s coastal plain and provide other incentives for energy sources, including alternative and geothermal resources.
Although it just passed the new National Energy Policy Act a few weeks ago, the Republican leadership removed a provision opening the ANWR to drilling because of Democratic opposition that threatened to stall the energy bill in Congress again.
Republican congressmen said the new legislation is needed to prevent future disruptions such as those brought by the devastating hurricanes of the last month. Critics say it would be years before oil could flow out of the ANWR or natural gas from the outer continental shelf.
“The energy bill signed into law earlier this year was a good first step, but more needs to be done to increase our nation’s capability to meet our energy demands,” said Rep. Jim Gibbons, R-Nev. “The recent hurricanes in the Gulf Coast underscore just how precious our limited refining and production efforts are.”
Rep. John J. Duncan Jr., R-Tenn., took a swipe at environmental groups who have long opposed drilling in the ANWR or on the OCS regions.
“Policies encouraged by environmental extremists have prevented our country from using vast quantities of its natural gas, oil, and other resources,” he said. “These policies are bad for the entire economy, but they do the most harm to low-income Americans by increasing the cost of basic activities such as driving to work or simply heating a home.”
“The American people are facing increased energy costs and all indications show these rates will get worse before they get better,” added Rep. Ken Calvert, R-Calif. “Congress must continue to address the glaring and fundamental energy shortfalls that exist in our country, particularly the need to increase the production of domestic sources of energy.”
Prior to the committee’s vote, Pombo noted crude oil prices are expected to rise 34 percent and natural gas costs are expected to rise 71 percent and that recent events have proven U.S. vulnerability to supply disruptions.
The Corn Growers’ Corzine said U.S. agriculture depends on natural gas for many basic items in the food chain. Farmers and related agribusinesses use natural gas for irrigation, crop drying, food processing, crop protection and nitrogen fertilizer production. Studies are showing the high prices of fertilizer, natural gas and diesel are having a dramatic effect on farmers’ expenses.
According to the Alliance for Energy & Economic Growth, the outer continental shelf region has 635,000 cubic feet of technically recoverable resources on federal lands and 102 billion barrels of oil. That’s enough natural gas to heat more than 60 million homes for 100 years and enough oil to fuel almost 60 million cars for 30 years.
Corzine said agriculture is the foundation for reliable food, fiber, feed and energy, and farmers need a stable supply of natural gas and other energy sources as well. “The energy bill took important first steps, but more is needed to assure consumers that we will have a dependable supply of domestic energy resources.
The bill’s highlights include:
• Authorizing production of the mean estimate 10.4 billion barrels of oil in the northern coastal plain of ANWR.
• Codifying into law the federal moratorium on oil and gas production in federal waters of the OCS bordering coastal states but giving states authority to opt out and allow energy production should the governor and state legislatures approve.
• Encouraging the development of U.S. oil shale, a rock that produces oil when heated.
• Diversifying fuel sources by encouraging more renewable energy, such as wind and geothermal power. The bill expedites the development of environmentally responsible renewable energy projects on federal lands.
The provisions opening the outer continental shelf to drilling for natural gas are contained in the Outer Continental shelf Energy Relief Act of 2005, a bill introduced by Reps. John E. Peterson, R-Penn., and Neil Abercrombie, D-Hawaii on Sept. 28.
e-mail: flaws@primediabusiness.com
