Remarks as Prepared for Delivery by
the Honorable Dirk Kempthorne, Secretary of the Interior
American Petroleum Institute
Washington, DC
October 16, 2006
First, allow me to introduce to you the new Assistant Secretary of Land and Minerals, Mr. Steve Allred. He was just confirmed by the Senate to his new position. I have known and worked with Steve for a number of years. He is a good man with more than 40 years experience in engineering, management and leadership positions, half in private industry and half in public service.
Steve also has a civil engineering background that will enable him to meet the technical challenges of overseeing Interior's Minerals Management Service, Bureau of Land Management and Office of Surface Mining.
Most recently, Steve was a member of my Cabinet when I was Governor of Idaho. Prior to that Steve was a senior vice-president and group president for Morrison-Knudson Corp, now Washington Group International.
I predict Steve will find out, as I did when I took office, that the Interior Department has huge responsibilities.
We have a role in everything from managing dams to conserving endangered species to conducting earthquake research to overseeing surface mining to hosting hundreds of millions of visitors to parks and refuges. The list goes on. No wonder it has been called the “Department of Everything Else.”
Frankly, I agree with President Reagan who used to wonder why the Department that dealt with everything outdoors was called the Department of the Interior.
Overseeing environmentally sound energy production on public lands, of course, is one of our major responsibilities – whether it be oil and gas production on the outer continental shelf, natural gas production on BLM lands, or hydroelectric generation on our rivers. More recently, we’ve also had a major focus on alternative energy development. We take it very seriously.
I believe in practicing the walk-around theory of management. In my brief tenure in office so far, I have taken the opportunity to tour a wide range of energy facilities from the Gulf of Mexico to Wyoming to Alaska.
It was important for me to see the operations on the ground – and from the air and from the sea – so when I come back to Washington, I can tell people what I saw. Some people in Washington who have strong opinions on energy production have never actually been to the places where it is produced.
I also believe it is important to meet with the men and women who bring ingenuity and passion to their jobs -- frequently in dangerous conditions – so Americans will have the energy to heat their homes, run their businesses and provide for the needs of their families.
You have an extraordinary story to tell. America needs to hear it. I am pleased to see your recent advertising campaign that emphasizes the huge investment and extraordinary technology needed to develop energy reserves.
I don’t think many Americans have any idea about what it really takes to produce the gas they use in their cars or oil to heat their homes. They just turn up the thermostat or squeeze the trigger on the gas nozzle and take for granted something will happen. I’m glad you are giving the American people – as the ads say -- “fuel for thought.”
Let me share some experiences that made a big impression on me.
In July, I spent time out in the Gulf of Mexico on an oil drilling ship and a production platform. We were preparing to mark the one-year anniversary of Hurricane Katrina, the most destructive natural disaster in U.S. history. I was impressed that it resulted in no loss of life associated with offshore energy production, and no well spills.
Even though 3,000 of the 4,000 platforms in the Gulf were in the direct path of the storm, all of the shutoff valves that are below the ocean floor worked exactly as designed.
The American people need to know this.
I was amazed when I visited 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 thrusters to ensure the ship does not ever move more than six inches. This makes sure the drilling stays on target.
Likewise, I found it mind-boggling to learn that 185 miles from New Orleans drilling is occurring some 28,000 feet below the surface of the water – 9,000 feet of water and 19,000 feet below the sea floor. 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. I think drilling 28,000 feet beneath the surface of the Gulf is also breath-taking.
The American people need to know this.
In September, I met with managers at Wyoming’s Pinedale Anticline gas fields to learn about onshore energy production.
I was impressed that energy producers there have been able to greatly reduce impacts to wildlife by consolidating roads, pipelines, and production facilities; by using directional drilling and reducing truck traffic; and by developing temporary wooden pallets for well pads.
I got an up-close-and-personal lesson on directional drilling. I learned that the industry has advanced the technology of multi-directional drilling to the point where, theoretically, if a rig were placed on the site of the Washington Monument in Washington DC, it could produce oil from an area beyond the Washington beltway. This was quite a revelation to me.
The American people need to know this. We can produce energy safely and responsibly, while meeting the highest of environmental standards.
I also took an extended trip to Alaska. I visited the Alpine Production Facility, the National Petroleum Reserve-Alaska, the Prudhoe Bay Production facility, the Trans-Alaska Pipeline System Pump Station 1, and the 1002 Area of ANWR.
I saw both Alaska’s world-class wildlife resources and the state’s world-class energy resources. I do not believe the two are mutually exclusive.
I was honored to accompany North Slope Borough Mayor Edward Itta to a subsistence camp that his family has used on the vast tundra for generations. He shared with me a glimpse of the subsistence lifestyle that is the essence of the Inupiat [in-you-pea-yut] heritage and culture.
You don’t take it lightly when a man like Mayor Itta tells you that environmentally sensitive energy development on the North Slope is critical to his people.
The American people need to know this.
I am particularly encouraged by what I learned about the Alaska gas pipeline project. It is clear to me that this is a vitally important project to Alaska and to the nation, and I want to assure you that the 18 federal agencies that have signed the federal interagency Memorandum of Understanding are eager to begin work to permit the gas line. We at Interior are particularly pleased that an Alaskan – Drue Pearce – will be tasked with getting the gas flowing. She does an excellent job, with dedication and great insight.
I’m also encouraged by the prospects for increasing energy development in the Gulf of Mexico and other outer-continental shelf areas.
The Minerals Management Service is currently finalizing the Proposed 5-year Leasing Program to open more offshore areas to oil and gas exploration. We have published the proposal with the draft environmental impact study for a 90-day comment period. It includes 21 lease sales in 7 planning areas.
We’re proposing to open a number of areas that have not been available for more than 10 years. These include the previously leased “Sale 92” acreage in the North Aleutian Basin off the southwest coast of Alaska.
This is important because development offshore of Alaska holds great promise.
We’re committed to managing energy development in a way that protects Alaska’s wildlife species, onshore and offshore, such as whales, polar bears, waterfowl, caribou, and walruses.
We’ll continue to study environmental impacts and to use the special knowledge and expertise provided by local native Alaskans, including local subsistence hunters and North Slope villagers who I had the honor of meeting.
An issue that has been in the news lately is what is known as the 98-99 price threshold issue. In 1998 and 1999, the previous administration did not include price thresholds in offshore leasing contracts. All leases issued by the Bush Administration have included price thresholds, and we will continue to include them.
Several companies have expressed willingness to renegotiate their 98-99 leases. This Administration believes the U.S. government must always remain a reliable business partner. At the same time, we must assure that we are delivering value to the American public for the resources we manage.
Now that Steve Allred is on board, I have directed Steve to take a fresh look at the issue, to review these negotiations, to consult with Congress and to reach a fair and equitable resolution. When I worked with Steve in Idaho, I saw first hand his ability to successfully conclude complex negotiations with all parties.
One reason that I recommended Steve for this position is that he supports what President Bush said when he unveiled his National Energy Policy back in 2001: “Energy production and environmental protection are not competing priorities. They are dual aspects of a single purpose...to live well and wisely upon the Earth.”
One of the advantages I have as a new Interior Secretary is the perspective of having served both in a statehouse and in the U.S. Senate.
President Bush and I share a fundamental belief that the people who live and work on the land often know how to manage that land better than those in Washington. It behooves us to listen to these people.
To this end, I joined Agriculture Secretary Mike Johanns, Commerce Secretary Carlos Gutierrez, EPA Administrator Steve Johnson, and Council on Environmental Quality Chairman Jim Connaughton in holding Cooperative Conservation “Listening Sessions” in 25 locations across the country.
The purpose of these sessions was simple and straight-forward. We wanted to hear what the American people had to say about how we can do our job better and how we promote more effective conservation through cooperation and voluntary partnerships.
Few people dispute the need for laws and regulations to protect our environment and its wildlife. But at the same time, most people recognize that laws and regulations can only take you so far – and at times they can become counterproductive. There should never be over-regulation.
For example, we heard a lot about the Endangered Species Act during the listening sessions. We will be taking into account these comments as we go forward. Most Americans support the goals of the Act to recover imperiled wildlife,
In the past 33 years, we have listed more than 1,300 domestic species as threatened or endangered. We have, to date, only been able to de-list 10 species because of recovery. If a hospital took in 1,300 patients over 30 years and only discharged 10, we would say that hospital is failing to help its patients get well.
Based on the experience of more than three decades, we can do a better job of administering the Act to the benefit of both endangered species and the people who live and work in that habitat.
Last week, I was at our last listening session in Boise. A local rancher expressed what a lot of people in America know to be true. Government regulations can only go so far in conserving threatened and endangered species. If we are going to actually recover species, we need to work with landowners and local communities to conserve and restore habitat through voluntary partnerships.
"If the Feds want cooperation, all they have to do is start cooperating," he said.
In the coming months, we are going to examine the Act -- where it is working, where it is not working, and what we can do better.
Last week, I also had an opportunity to visit the Blackfoot Valley in Montana, where I saw first-hand the power of cooperative conservation as an alternative to regulation. The valley is a scenic area depicted in the movie “A River Runs Through It.”
In the 1990s, residents of the valley became concerned over growing environmental issues including degraded water quality, loss of wetlands, fragmentation of wildlife habitat, and the development of vacation homes that threatened the valley’s traditional rural way of life.
In many places, this might have led to a deluge of government regulation and litigation. Instead, more than 500 local landowners, 27 state and federal agencies, and a number of non-profit organizations created the Blackfoot Challenge.
Since the late 1990s, the partners in the Blackfoot Challenge have voluntarily contributed more than $5 million to restore and enhance more than 2,600 acres of wetlands, 38 miles of streams, and 2,300 acres of native grasslands. Private landowners have voluntarily set aside nearly 90,000 acres of their land permanently through conservation easements.
Together, these partners took an honest look at the entire landscape. The landscape where they live and work and play and raise families. The landscape that they share with all kinds of wildlife – elk and deer and birds and fish – which also make the Blackfoot River valley home.
And together, they found ways to accommodate the change and development they were faced with, while protecting the natural environment and landscape they cherish.
This is the type of thinking that I believe we all need to bring to the management of federal energy resources.
We must consider our resource management decisions from a landscape perspective. We must consider the patterns of energy development and understand their relationship to important land and resource values. We must think strategically, not simply wellhead-to-wellhead.
As you know, one of the essential components of energy development is the identification and designation of appropriate energy gathering and distribution corridors. This enables you to get the energy into the homes and the businesses of Americans who need it.
I recognize and appreciate the commitment that many of your companies have made to reduce the impact caused by your transportation networks. For example, on the Pinedale Anticline, several operators have worked to reduce the number of truck trips off the mesa by up to 125,000 per year. That is significant. By concentrating traffic and consolidating development infrastructure, the companies are protecting east-west migration corridors for wildlife.
We also must consider another important set of corridors – migration corridors which are essential for the movement of wildlife.
I think you all understand this already. On my second day as Secretary, I invited representatives from the energy industry and the conservation community to join me in my office for lunch, and we talked about these very issues. It was the right thing to do – to invite these groups to sit down at the same table. I have also visited with many of you and your employees as I have walked around your operations where we’ve talked about these very issues. And so I am encouraged that we all seem to understand that there is room for improvement in our land-management policies and practices.
We invite you to join us in developing a vision for the future that affirms our dual responsibility to support responsible development of energy resources and to promote effective stewardship of our environment. Our vision must recognize and accommodate the needs of both humans and wildlife. Together, through creativity and innovation, I believe we can design an improved management framework that lays out a dynamic mosaic of multiple uses across landscapes. I am confident that this approach will better serve the land, the wildlife and the interests of the American people.
Your industry has a huge role to play. Time after time you have risen to the challenge of providing the energy America needs in an environmentally sound way. It is very impressive.
Let us put our minds together to reach this goal. Let it be “fuel for thought.”
Thank you.
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U.S. Department of the Interior