That was the last year of the “Swinging ’60s” and the year of the last significant oil spill in American coastal waters from a drilling platform, this one near Santa Barbara, Calif. But it was largely in response to that unhappy event that Congress banned exploration and production of oil and natural gas from vast areas of the U.S. Outer Continental Shelf. Now, U.S. consumers and businesses have to deal with energy costs kept artificially high for reasons that long ago ceased to be valid. It’s time to bring the law up to date by supporting S. 3711, “the Gulf of Mexico Energy Security Act” introduced by Sen. Pete Domenici, R-N.M.
At a time when consumers and businesses in the United States are paying the highest natural gas prices in the world, the Domenici measure would within a year of enactment open up more than 8.3 million acres on the Outer Continental Shelf for exploration and leasing of production rights. Another 5.8 million acres could be included soon thereafter. Under current estimates, there are at least 1.26 billion barrels of oil and 5.8 trillion cubic feet of natural gas to be produced from these areas in the Gulf of Mexico.
TheNational Association of Manufacturers estimates that the natural gas supplies that would become available would be sufficient to heat and cool nearly 6 million U.S. homes for up to 15 years. As John Engler, NAM’s president and former governor of Michigan, noted during a recent editorial board meeting with The Examiner, “If you can’t support that, what can you support in energy?”
The Domenici bill recognizes two common-sense facts. First, the energy industry’s environmental safety record in this area is sterling in part because of lessons learned and applied in the wake of the Santa Barbara spill. There hasn’t been a platform spill since 1969. This is especially significant because so much of the U.S. off-shore industry is congregated off the coasts of Texas and Louisiana. When hurricanes Katrina and Rita struck last year, the industry received a hard blow, with serious damages inflicted on countless platforms. Even then, there were no spills.
Second, the United States is foolish not to open these areas up for exploration and production. We pay the highest prices in the world at a time when major competitors like Russia pay less than half as much per million Btu. At current rates, NAM estimates that the U.S. job base will take a $200 billion hit simply as a result of high natural gas prices. This hit will thus cost jobs and productivity that don’t have to be lost.
The House passed a version of OCS reform last month. The Senate should move expeditiously to approve the Domenici bill. Then both chambers should move as quickly as possible to resolve any differences between the two versions and get something to President Bush for signature.
