Natural resources and the Outer Continental Shelf

Published 10:10 pm Monday, February 20, 2006

By By Jo Bonner
I was honored to participate last week in the Mobile Chamber of Commerce's Gulf Coast Energy Forum. The forum, designed to address the impact of high natural gas prices on business and economic development across the Gulf Coast, was a great success.
More than 250 participants came to the Arthur R. Outlaw Mobile Convention Center to discuss new solutions to one of the biggest threats to the economic competitiveness of our region-the soaring price of energy.
The economy of the Gulf Coast-and the American economy-run on energy-whether it's building airplanes and ships in Mobile County or roadway signs in Baldwin County-our economic development depends on energy. For our industries to expand and in order to attract new industries, we must have safe, reliable sources of energy.
In the aftermath of one of the busiest hurricane seasons ever, practically no one was exempt from the long lines at the gas pump and record fuel prices that were common not only to our area along the Gulf Coast but all across the nation.
At the end of November-almost three months after Hurricane Katrina-1.3 million barrels a day of refining capacity remained offline or running at reduced rates. More than 100 barrels of crude and 525 billion cubic feet of natural gas went unproduced from June through November because of the hurricanes.
Even with the Energy Policy Act signed into law last year, the problems highlighted during Hurricanes Katrina and Rita reveal that much more needs to be done to limit the United States' dependency on foreign oil and gas.
While there are no easy answers to our energy needs, we can improve in several areas.
In his State of the Union address last month, President Bush presented the "Advanced Energy Initiative to Help Break America's Dependence on Foreign Sources of Energy."
Today, the United States imports about 60 percent of its petroleum from foreign countries-30 percent of this comes from foreign countries whose governments are not particularly fond of our way of life.
The president set a national goal of replacing more than 75 percent of our oil imports from the Middle East by 2025, and the best way for us to achieve this goal is through new technology.
We must expand the use of our "homegrown" renewable fuels and help develop bio-based transportation fuels from agricultural waste products, such as wood chips, stalks, and switch grass.
It is also time to expand our domestic production of natural gas. We need to lift the moratorium on drilling for natural gas off the coast of the United States. Currently, drilling is allowed only off Alaska and parts of the Gulf of Mexico.
The U.S. Energy Information Administration (EIA) predicted prices to increase by nearly 50 percent this winter-due to supply disruption caused by the hurricanes, a hot summer, and the high price of oil. When oil prices increase, many consumers switch to natural gas, which drives up the price of natural gas.
I'm sure many of you have heard about possibly opening the Outer Continental Shelf, also known as OCS, in the Gulf of Mexico to help bridge the United States' gap in natural gas production.
This will be an ongoing issue for the remainder of the 109th Congress as we decide which states have control over leases in the Gulf.
I have cosponsored two bills that would allow the Outer Continental Shelf to be opened for exploration: the Outer Continental Shelf Natural Gas Relief Act (H.R. 4318) and the Domestic Energy Production through Offshore Exploration and Equitable Treatment of State Holdings Act of 2006 (H.R.4761).
H.R. 4318 and H.R. 4761 will allow states to take advantage of submerged lands on the Outer Continental Shelf to explore and to develop the production of natural gas.
Congressman Bobby Jindal (R-LA) is the sponsor of H.R. 4761. When he introduced this legislation last week, he said, "This is the number one priority on my legislative agenda this year."
He also said, "This bill will provide a great opportunity for states like Louisiana and Alabama. We are proud of our role in energy production, but for too long we have given of our resources without receiving any compensation in return. This bill will finally rectify that inequity and help us continue to be America's energy source."
This legislation gives Alabama, Mississippi, and Louisiana a fair share of the energy royalties generated off their coasts. It extends each state's zone of revenue sharing from the edge of their state waters to the 12 nautical mile mark, providing each state with 75% of all royalties generated within that zone.
These are not easy times, and there are no one-word answers to our energy needs. We cannot continue to only look at what we as Americans can do on the East Coast or on the West Coast, but we must look at what we can do right here in Alabama to make a difference.
Opening the Outer Continental Shelf to drilling will benefit not only Alabama but the entire country.
My staff and I work for you. Please call if we can be of service.
Jo Bonner is a U.S. congressman. His column appears weekly.

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