Remarks Prepared for Delivery by the Honorable Dirk Kempthorne,
Secretary of the Interior
U.S. Chamber of Commerce, Washington, D.C.
July 19, 2006
After hearing that I am former businessman, former Mayor, former Senator, former Governor and now the Secretary of the Interior, the folks here are probably wondering whether that I can keep a steady job.
I can say, however, that the Chamber of Commerce has been steadfast in their support during my career.
As Mayor, I saw the vital work of the Boise Chamber of Commerce in the vital work of building our city. I worked with the Chamber of Commerce to build a new shopping mall that triggered business development in Boise.
As Senator, I worked with Bruce Jostens in writing the Unfunded Mandates Reform Act that became law. My last two years in the Senate, the Chamber of Commerce said my votes agreed with their position 100 percent of the time.
As Governor, I worked with the Chamber of Commerce to pull Idaho from economic recession into one of the world's best places to work, raise a family and enjoy the great outdoors. Working together, we built highways, schools, parks and other infrastructure that is vital to healthy communities and families.
Now that I am the Secretary of the Interior, we need to work closer than we ever have before to help business all across America.
The truth is that the Department of the Interior's missions are crucial to the health and well being of the nation's economy and its people. President Reagan, "Only in Washington would the Department in charge of the Great Outdoors be called the Department of the Interior."
Now why is my new Department called Interior? Our nation, born in revolution against overseas tyranny, first needed Departments of State, War, Treasury and Justice to focus on issues exterior to the new United States. Later, a Department was needed to handle all of the issues that affected the interior of the United States. Thus, the Department of the Interior was born.
As the nation grew, so did Interior's responsibilities. Today, Interior manages one fifth of the land in the United States. The lands and waters we manage produce one-third of domestic energy. We provide water to 31 million Americans, manages relations with 561 Indian tribes, and conducts science for a changing world.
In our efforts to provide energy, water and public lands management, Interior helps American businessmen and women deal with the hard realities of competition and the business world. American businessmen and women do what it takes to succeed - even if it means working 18 hour days, seven days a week. The challenges they face have increased as the world has grown smaller. Their competitors are just as likely to be in Pakistan or China as they are in America. As a result, global events have a bigger impact today than ever on small businesses.
We saw that last week when Israel sent its army into Lebanon. Oil prices jumped on world markets. Somewhere in Idaho or Ohio, a small businessman struggling to make his payroll saw his costs rise and his bottom line suffer.
This morning I want to talk to you about where we are headed as a nation on energy policy, and to put a human face on this vital issue. I want to talk to you about business men and women who take huge financial risks, about the men and women who are on drilling rigs hundreds of miles off shore, and what policy makers in Washington are doing in working together to provide America the energy it needs.
You know the challenges we face better than I do. American manufacturers have lost three million jobs since 2001 because of high natural gas prices, according to the Industrial Energy Consumers of America. Yesterday oil sold on world markets for $77 a barrel, a record high. Gas prices are now so high that Americans get dizzy watching the dollar gauge at the pump spin faster than a one armed slot machine in Las Vegas.
The good news is that we have at the helm a President and Vice President who understand what it takes to produce energy. President Bush and Vice President Cheney were in the energy business when they worked in the private sector. This knowledge and experience led them to make writing a national energy plan the first order of business when they took office in 2001. This national energy plan was the catalyst for Congress to write the Energy Policy Act of 2005.
Both the National Energy Plan and the Energy Policy Act provide a framework for the nation to realistically address this serious energy situation. The three pillars of this framework are: conservation, diversification and increased production.
The Interior Department plays a major role in implementing both the national energy plan and the Energy Policy Act. As a result, roughly one third of the energy produced in the United States each year comes from public lands and waters managed by Interior. This includes almost half the nation's coal production, more than a third of domestic oil, 39 percent of natural gas, 17% of hydropower and 50 percent of geothermal.
The lands and waters we manage contain vast amounts of untapped energy. Federal lands in the Rocky Mountain area alone are estimated to contain 139 trillion cubic feet of gas -- enough natural gas to heat 55 million homes for almost 30 years. The Outer Continental Shelf contains huge amounts of natural gas and oil waiting to be produced.
The Energy Policy Act gave us 80 tasks to get done, and we are going to get them done. We welcome the opportunity to work with Congress and states to increase domestic energy production - to lower high energy costs, bring stability to natural gas prices, and strengthen national security. We have taken many steps in the past five years to increase our energy production, including doubling the number of permits to drill for oil and gas when compared to the previous five years. This increased permitting has led to a 17 percent increase in onshore natural gas production on federal lands.
We have a lot more work to do. We will be issuing the five year plan for issuing offshore energy leases, doing research and development oil shale pilot projects, we will issue land management plans to allow for access to energy development that is done in environmentally responsible fashion and we will continue to expedite permitting of renewable and geothermal energy, and we will conduct research of methane gas hydrates.
Right now our most promising source of near term domestic energy is in the Outer Continental Shelf . . . our off shore areas. Production from on shore energy wells is beginning to slow down while deepwater oil production has increased more than 840%. Yesterday I returned from the Gulf Coast where I spent time with men and women hard at work on an oil platform, an oil drilling ship and an energy operations center
I wish every American could have the opportunity to see their professionalism and their mastery of technology, engineering and science to bring America the energy it too often takes for granted.
Men and women operate drilling platforms and drilling ships costing hundreds of millions of dollars to explore for oil and gas hundreds of miles from shore, in heavy seas, in the face of summer hurricanes and winter storms. There is no guarantee that oil and gas will be found; only 32% of offshore exploratory wells find energy that can be produced.
It's simply mind-boggling to think that 185 miles from New Orleans oil rigs are drilling more than 30,000 feet below the surface of the water. These rigs are drilling through 5,000 to 10,000 feet of water and then 10,000 to 20,000 feet of ocean floor to get oil. Thirty years ago, 600 feet was considered deep water drilling.
When we see the Space Shuttle come in for a landing, it takes our breath away. Drilling six miles beneath the surface of the Gulf in search of oil is also incredible in its technology.
The technology being used today to drill this deep is breathtaking. I was just on a drill ship in the Gulf that was 830 feet long. A vast array of computers and global positioning devices are connected to the ship's six propellers to ensure the ship does not ever move more than a half foot from its ocean position without any anchors.
The industry also has advanced the technology of directional drilling to the point where if a rig were on the site of the Washington Monument, it could produce oil from an area the size of the entire city of Washington. If I had known about that technology when I was governor of Idaho, I would have tapped some of Wyoming's oil and gas. The offshore energy industry has a good record of environmental safety. Tremendous advances in new technology have made oil spills from production platforms exceedingly rare. In fact, the amount of oil that seeps into the ocean from natural cracks in the seabed is 150 times greater than the amount of oil spilled from offshore platforms.
To illustrate this in a different way, since 1985 more than 7 billion barrels of oil have been produced in federal waters with less than .001 percent spilled. Last fall, two powerful hurricanes cut a swath through the Gulf of Mexico. Of more than 4,000 platforms in the Gulf, 3,000 were in the direct path of these storms. Although the impacts of last year's hurricanes devastated the coast, there was no loss of life associated with off shore energy production. Carefully designed offshore safety devices were a success story. They held. There were no well spills. All of the shut-off valves, below the ocean floor, worked as designed.
Offshore energy production is a huge source of revenue for the Treasury. It also helps fund environmental protection. Since 1982, Interior has collected more than $110 billion in offshore revenues. Last year alone we collected more than $6.3 billion from offshore revenue. This revenue helps pay for federal government operations. It is invested in the National Historic Preservation Fund for the purchase and maintenance of historic sites. It is invested in the Land and Water Conservation Fund for the purchase and maintenance of recreation lands. So when people ask, "Do you favor opening more of the offshore areas for oil and gas?" My answer is "YES."
We are in the middle of a legislative debate in Congress over whether we will be able to tap into more of the vast oil and gas reserves off the coast in the eastern Gulf of Mexico.
President Bush has made it clear that he will not support lifting the moratoria on oil and gas production off the coast of any state unless the state supports such a move.
But what about states that do support oil and gas exploration off their coasts? Shouldn't they receive some of the revenue from new leases in new areas to help pay the onshore infrastructure costs they incur in providing this energy to the nation.
Yes. And I look forward to working with Members of Congress and others in the nation in fashioning thoughtful and fiscally responsible legislation that addresses this issue.
While Congress continues to debate exploration in the Gulf, the Interior Department is moving ahead with its 2007-2012 leasing plan for the Outer Continental Shelf. Our Draft Proposed Program includes 21 lease sales in 26 OCS areas. We will issue our Proposed Program and Draft Environmental Impact Statement for public comment later this summer.
To help America obtain a secure energy future, we must tap into our greatest asset, and that is the ingenuity and inventiveness of the American people. In fact, if you look back at the history of energy use in America, you see that we have risen to the challenge of finding new energy sources in every generation. In the mid-19th Century, America depended almost exclusively on firewood for energy.
The first great change in America's energy usage came with the rise of coal as a major energy source in the mid-1880s. Then, starting in the 1920s, we turned increasingly to petroleum until, by 1950, oil became what some call the nation's "most important energy source."
We have seen other sources of energy arise including natural gas, hydroelectric and nuclear power. But as President Bush noted in his State of the Union earlier this year, we have a dependence, an addiction in terms of oil. We must now turn to the ingenuity of the American people to find new sources of energy. Some of the solutions are literally right under our feet. Oil shale, for example, holds tremendous energy potential for our future. The Green River formation in Colorado, Utah, and Wyoming contains an estimated 800 billion barrels of potentially recoverable oil from shale. This is enough to meet the current U.S. demand for oil for 110 years. By contrast, Saudi Arabia has 260 billion barrels of proven reserves. To promote development of this resource, Interior initiated an oil shale research, development and demonstration project on public lands. In addition, we have begun a programmatic environmental impact study for commercial leasing of oil shale and tar sands resources on public lands.
The federal government cannot do this alone. If we are to succeed, we need to work hand-in-hand with states, tribes, universities, industry and conservation groups. We can produce energy in an environmentally responsible fashion. We are seeking to write energy development plans that use best management practices that protect the environment. Our land management plans are open for public comment. We work with hunting, fishing and conservation groups to protect wildlife migration corridors, habitat for threatened and endangered species, viewsheds, and water quality. We extend cooperating agency status to state and local officials to be sure we have taken into account the views of those who live closest to the land that we seek to develop.
Last year many of you worked with the Administration to open ANWR for oil development. The Administration came within three votes of opening ANWR for development. ANWR should remain a policy option because we can develop this resource in ways that can protect the environment. Exploration would occur only in winter when the landscape is covered with ice and snow. The footprint would be 2,000 acres on federal land, an area the size of a regional airport in an area the size of the entire state of South Carolina. Advanced technology would limit the impact on the environment and its wildlife.
Of course, we have other forms of alternative energy such as wind, biomass and geothermal that can reduce our dependence on foreign oil. The Interior Department is working to promote these, especially on federal lands. For example, over the past five years, Interior has expedited the processing of pending geothermal lease applications on public lands. Since 2001, more than 200 leases have been issued, compared to 25 leases from 1996-2001. Incidentally, I'm proud to say that Boise is not only the capital of Idaho, but some would say the capital of geothermal energy. Idaho also has the only state capitol building in the United States. that is heated by direct use of geothermal energy, as is much of downtown Boise.
Other possibilities for the future resemble things out of science fiction. Methane hydrates are frozen pockets of natural gas found deep in the ocean, and in Alaska and other arctic areas. The United States has vast amounts of gas hydrates that dwarf known amounts of conventional natural gas. Scientists are at work finding ways to develop this vast resource. I am convinced that given a chance, American ingenuity, perseverance and competitiveness will find solutions to our current energy crisis. The role of the government is to both provide support when needed and to get out of the way when needed and warranted.
We have watched in the past year how quickly market forces can bring about innovation. It used to be, for example, that it was rare to see a hybrid car on the road. Now, with energy prices climbing, just about every automaker is offering a hybrid, and Americans are buying them.
Last week I was in a national park in San Francisco. They have a building there that is insulated with recycled pulverized denim that comes from old jeans worn by prison inmates. The Statue of Liberty, with its beacon of hope, is lit by wind energy. Wind farms across America will generate enough electricity this year to light up more than 2,700 Statues of Liberty. The Department of Interior is second only to the Defense Department in the use of solar energy.
I say all this to make the point that Interior is not just talking about conservation, but living it. I am sure that all across America, innovative companies are thinking of new ways to meet our energy needs. This administration is determined to help them succeed and, with your support, we will take the steps necessary in Washington to make it possible. Interior will do its part in managing public resources to continue to supply more than a third of the nation's energy.
Let us hope that America is finally waking up from energy denial. Let us hope that we will do what is sensible and necessary to ensure we do have the energy to run our business, to heat our homes, and to preserve our way of life. I am confident we will accomplish all of them.
U.S. Department of the Interior