It is a real pleasure to be with you again.

It has been nearly three-and-a half years since I last addressed this group. The world has changed a lot since then. Think about it.

Four-and-a-half years ago, American Idol and Desperate Housewives were not yet U.S. passions. Three-and-a-half years ago, Arnold Schwarzenegger was a movie star. Now, he is the Guvernator.

On a more somber note, three-and-a-half years ago, many of us were wondering if our lives would be disrupted by a constant stream of terrorist incidents. Counterterrorism measures have frustrated many al-Qaeda plans.

Freedom has endured - and expanded. Today, twenty-five million people are free in Afghanistan. Twenty-five million more are free in Iraq.

But a few things have not changed. Three-and-a-half years ago, America was faced with a chronic energy shortage and a dangerous, growing dependence on foreign sources of oil. Three-and-a-half years ago, Congress was considering comprehensive energy legislation.

Today, America still faces a chronic energy shortage and a dangerous, growing dependence on foreign sources of oil. Today, Congress is still considering comprehensive energy legislation.

Yet today, the President is just as committed to responsible energy development as he was three-and-a-half years ago. He is just as committed to the three-part policy that he announced long ago: Promoting conservation and efficiency, increasing renewable energy production, and increasing domestic production of traditional energy sources.

Today, we in the Bush administration are just as committed to economic growth and environmental stewardship.

We believe the goals are not mutually exclusive; we can pursue both simultaneously. Secure supplies of energy are essential to strong economic growth. You, the Independent Petroleum Producers of America, play a vital role in procuring that energy in environmentally responsible ways.

Over the next several minutes, I am going to describe the Bush Administration's perspective on energy issues during the next three-and-one-half years.

President Bush kicked off his second term with a strong statement about energy security in his State of the Union speech. He reiterated the goal of lessening our dependence on foreign sources of energy.

In several energy speeches since then, he has highlighted new technologies and emphasized the need to diversity our energy supply. He has repeatedly urged Congress to pass an energy bill and to open ANWR for energy exploration.

The House of Representatives has passed energy legislation several times, including bipartisan support for opening ANWR. This year, we achieved a significant milestone when, as part of the budget reconciliation process, the Senate passed ANWR legislation for the first time.

This week, the Senate is debating the overall energy bill, and we continue to urge passage of this important legislation.

But we have not been sitting around waiting for Congressional action. We have been working within existing statues to improve energy production from Interior's lands and offshore areas. I will discuss our activities in more detail in a few minutes.

When this Administration took office, we realized the fundamental importance of energy production to our economy. The California energy crisis and a major electricity blackout highlighted the need for dependable energy supplies and distribution infrastructure.

September 11th made us focus on the international situation, and the national security interest of having strong domestic supplies.

But one new, important factor has emerged in our thinking and in the national debate. The factor is global energy competition, and the role energy plays in America's international competitiveness. The agenda for this conference similarly reflects this concern.

For many years, America has been the dominant purchaser on the international oil market. Although we complained about the dominance of oil suppliers, we didn't focus much on our fellow purchasers. Suddenly, that was changed. We have become abruptly aware of the dramatic increase in global energy competition.

The Energy Information Administration predicts that the emerging economies of China and India will more than double their energy use over the next 25 years.

A few years ago, I realized those countries were gaining in manufacturing and in high tech, but I did not appreciate how rapidly they are growing. I was stunned to see an estimate by Goldman Sachs that China's gross domestic product could surpass that of the United States in 2041.

We are in grave danger of losing our dominant status. But most Americas don't think that way. Senator Pete Domenici called the prevailing attitude, "economic arrogance" - the idea that America will inevitably come out on top, no matter how much we stifle our economic engine.

Unfortunately, in the history of the world, nation after nation has reached the top of the heap; then tumbled into a "has-been". The Greeks, the Romans, the Ottoman Empire, the Spanish, the British - all enjoyed their age of dominance. Like them, the United States has no immunity from the forces of historic change.

We need to wake up and reexamine our course of action, before it is too late.

China is reaching out to acquire the energy it needs. Last fall for example, China signed an oil and gas agreement with Iran worth at least $70 billion. Sino-pec Group, a Chinese State run energy company, announced this year that they will be drilling for oil and gas in Central Asia and Cuba.

China has also reached out to Venezuela, South Africa and Angola.

India has also reached out to secure its energy future. In an article earlier this month, The New York Times reported, "Fed by a decade-long economic boom, India's ever-growing appetite for energy is quietly reshaping the way it operates in the world, changing relations with its neighbors, extending its reach to oil states as far flung as Sudan and Venezuela, and overcoming Washington's resistance to its nuclear ambitions."

The increased consumption of India and China is one of the reasons we have seen almost shocking energy prices.

Last year, oil prices increased by about $9 per barrel, the equivalent of about a $32 billion tax on consumers. I am sure you all hear constantly from your friends and neighbors about high gasoline prices.

High natural gas prices are another real concern from the international perspective. The picture is, if anything, more disturbing.

As you know, the natural gas market has been largely confined to North America. We enjoyed some of the least expensive natural gas in the world. But our confined market is more easily rocked by changes in usage. The effect has been dramatic.

America is simply not producing enough natural gas. We currently produce 20 trillion cubic feet of natural gas per year and consume 22 tcf.

That is expected to become far worse in the future. About 90 percent of new electricity plants expected to come online in the next decade will be fueled by natural gas.

As this group is very aware, three years ago natural gas cost about $3. By last April, prices had risen to more than $5. This spring, natural gas prices had risen to more than $7. That price spike has made natural gas more costly here than anywhere else in the world.

Those prices have posed problems for many industries, but they have been especially painful to the chemical industry. Last month, an article in Business Week had the self-descriptive title, "No longer the lab of the world: U.S. chemical plants are closing in droves as production heads abroad."

The article pointed out that "Chemical companies closed 70 facilities in the U.S. in 2004 and already have tagged 40 more for shutdown." Chemical industry jobs have declined by over 90,000 in 5 years.

I have met with industry leaders. They are concerned about the "deindustrialization of America."

Shutdowns are hard on communities. Take Blytheville a small community (of about 20,000 people) in North-Eastern Arkansas. Last year, a nitrogen fertilizer production facility shut down in Blytheville, taking with it about 100 jobs. Those lost jobs translated into the loss of an estimated $5 million in payroll salaries.

Blytheville's loss is another's gain. The Business Week article I mentioned a few moments ago said that, "Of 120 chemical plants being built around the world with price tags of $1 billion or more, just one . . . is in the U.S. . . . China, by comparison, has 50."

After enjoying a long surplus, America now has a deficit in its balance of trade in chemicals. That deficit has contributed to America's overall trade deficit.

So what can be done? There are no easy solutions. But there are straightforward ones. We simply must increase our supplies of domestic energy.

The role of America's energy industry has always been important - though usually unappreciated. Your significance has grown even further. We need to continue working together to produce the energy America needs, in an environmentally responsible way.

For offshore energy development, we are still working to resolve some of the difficult issues that have arisen with the five-year plan.

Offshore production is very controversial states. The President has supported existing offshore moratoria based on the principle of deference to the views of coastal states. Accordingly, in California and Florida, this Administration has not advocated new leasing in moratoria areas.

In California, we are in negotiations to buy out existing leases close to the shore near Santa Barbara. Other states like Virginia have become interested in new offshore production. We look forward to hearing their views in our five-year planning process.

At the same time, we are working for increased production in the established areas.

First of all, we are happy to highlight that offshore production platforms have a sterling safety record. Only about 2 percent of the oil in the off-shore waters of North America comes from oil and gas exploration and production. In contrast, natural seeps contribute 63 percent of the oil in those waters. In other words, the accidental spills of a full year equal three days of natural seeps.

Less than one one-thousandth of the billions of barrels produced each year from offshore facilities leaks into the ocean.

Since May 2001, my Department has held 14 Outer Continental Shelf oil and natural gas lease sales on schedule, even as we have done a comprehensive consultative process with interested parties. Those sales have resulted in the leasing of almost 19 million acres of Outer Continental Shelf Lands.

We have continued the royalty incentive program to promote interest in deep water leases, and expanded it to promote the development of deep wells in shallow waters.

In January of last year, a new regulation extended the deep gas incentive to leases issued before the incentives were first provided in 2001, to promote additional deep drilling for natural gas on the shelf.

The technologic advancement offshore has been phenomenal, with new records being set frequently.

One new record was the launch of the largest floating oil platform in the world, BP's Thunder Horse, which now sits atop the largest reservoir discovered in the Gulf of Mexico to date.

Over the life of the field, Thunder Horse has the potential to produce approximately 1 billion barrels of oil equivalent. At its peak, the facility is designed to process 250,000 barrels of oil per day and 200 million cubic feet of natural gas.

You may find it interesting that, each day, the Thunder Horse platform will produce nearly four times the energy that is daily generated by all of the existing solar and wind facilities in our nation.

Energy comparisons like that are one of the reasons that fossil fuels figure large into future energy equations.

We are encouraging the construction and expansion of liquefied natural gas terminals too. The Federal Energy Regulatory Commission (FERC) has approved four new LNG terminals and expansions at three existing ones within the last two to three years.

It is also important for us to continue encouraging responsible onshore energy development as well.

There are great resources of energy onshore. In Alaska, we are moving forward in the National Petroleum Reserve Alaska. We are both working toward production in areas that are already open, and considering opening additional areas to leasing. We are also working with FERC and the Department of Energy on the Alaska natural gas pipeline.

Our largest domestic onshore resource for natural gas is in the Rocky Mountains - specifically concentrated in five basins. They contain almost 140 trillion cubic feet of natural gas - enough to heat all of the 55 million homes presently using natural gas for almost the next 40 years.

We are going to continue to increase access for responsible producers. During the last four years, the Bureau of Land Management processed more than 22,000 applications for permits to drill (APDs), and approved more than 17,000 of them. That marks a 74 percent increase in approvals compared to the late 1990's.

In fiscal year 2004, the Bureau of Land Management processed more than 7,300 applications for permits to drill. That is the most applications it has processed in the last two decades.

So far this year, the Bureau has processed about 1,000 more applications than it did at this time last year.

More resources will be set aside to reach those goals. The President's budget assumes that revisions in cost recovery rulemaking will raise an additional $9 million in fees. Those monies will enable the Bureau of Land Management to further accelerate the processing time for applications for permits to drill and reduce the number of pending applications.

We are currently considering a reprogramming of money from other BLM programs to immediately provide some additional revenue for processing APDs.

We are also committed to opening rights of way. In fiscal year 2003, the Bureau of Land Management issued 1160 energy rights of way, including oil, gas, and electric transmission. The Bureau did even better in fiscal year 2004, by authorizing 1,900 rights of way.

All of those APDs and rights of way create potential difficulties, because tapping into that resource is an inherently intensive land use process.

Those impacts must be minimized for the long-term use of the resource. We must address concerns from other affected users of public lands, including those whose private land is impacted in split estate situations. The more impact there is, the greater the likelihood of a public backlash against energy production.

I am pleased that there are efforts in Wyoming to reach solutions between surface and subsurface interests.

To protect our lands, and to prevent future conflicts, I am committed to the use of Best Management Practices. The Bureau of Land Management has required all Field Offices to identify, evaluate and incorporate appropriate site-specific Best Management Practices when evaluating applications to drill and right-of-way approvals.

I have recently heard good reports about the extent to which producers are pursuing those practices. For instance, in April of this year, Jim Mosher, Executive Director of the North American Grouse Partnership, toured the Fidelity Exploration and Development Company's coal bed natural gas developments in the Powder River Basin of north eastern Wyoming and south eastern Montana.

An article that will be published in Jim's next newsletter, the Sage Partnership News, will include the following observations: "What we saw during our tour were consistent examples of what we've asked of the industry. To the extent possible, electrical lines were buried, gas and water lines were buried mostly along road right-of-ways, well pads were small and quickly reclaimed to minimize the area disturbed and the surface infrastructure was colored and placed to minimize visual disturbance and compressor stations insulated to minimize sound. . . . Exempting for main roads required for heavy equipment travel, all access roads to wellheads were two-track."

The Bureau is establishing an annual, "Best Management Practices program." We commend those good practices, and we look forward to recognizing the best.

Good examples can help us inform the public about how energy can be produced in a way compatible with environmental protection. But please remember - it's the bad examples that make the headlines and stick in people's minds. We need to work together to meet high standards.

You all have heard about my concept of Cooperative Conservation. Conservation groups, energy executives and state and federal regulators can come together to formulate wise land planning and best management practices.

There is a great deal of potential for cooperation between ranchers and the owners of subsurface rights. Sometimes the ground they share becomes ground zero for conflicts. But those conflicts can be resolved if the parties work together. I urge you to do so.

Much of what we hope to accomplish in the next three-and-a-half years depends on people like you. We need you to be good stewards.

There is energy security in energy diversity. So at Interior, we are also looking to encourage the responsible development of less common energy sources like coal bed methane and oil shale.

Methane hydrates - frozen natural gas - occur in the Arctic and in the deep ocean. Resources are estimated at 1,000 times as large as conventional natural gas. We have been working with private companies and the Department of Energy on research and development to create technologies that will let us tap this abundant energy source.

The U.S. has vast reserves of oil shale - an estimated 1.5 trillion barrels are thought to be recoverable. More than 70 percent of those resources are on federal lands in Wyoming, Utah and Colorado.

I am from Colorado. I well remember the oil shale saga of the 1970's. There were huge federal investments and wide searches for viable technologies. An underground nuclear explosion was even tried out.

But it ended in a bust. Thousands of jobs were lost, and as a consequence, oil shale became a symbol of bad investments.

Today, that is changing. Oil shale is becoming respectable again.

The Bureau of Land Management is developing a program to authorize oil shale research, development and demonstration projects on public lands.

We published a notice in the federal register earlier this month. Interested parties will have 90 days to nominate public land for these activities. We will then evaluate the applications.

This is certainly not something either the government or individual companies undertake lightly. The projects require billions of dollars in investments. There are many unanswered questions about environmental impacts.

But success can transform America's energy picture.

We are going to work with all parties to find the best ways to use and conserve our federal lands.

True, they are important places for energy production. But they have many other important purposes as well.

They are places of recreation and repose for people. They are places were people earn their livelihoods in tourism and ranching. Our public lands are important for wildlife - including both game species and endangered species. Above all, they are a legacy - to ourselves and our descendants.

We must use them carefully and wisely. We must be good stewards.

Ultimately, that is what responsible energy production is all about. It is more than besting a competitor or striking a rich reservoir. It is about building a better future, about making America a brighter place.

That is a high calling. The future belongs to all of us. Together, we can make it bright.