Remarks as Prepared for Deliver
For the Honorable Dirk Kempthorne, Secretary of the Interior
Energy For America's Future
The 2007-2012 Proposed
FinalOffshore Oil and Gas Leasing Program
April 30, 2007
In his National Energy Policy, President Bush stated, “America must have an energy policy that plans for the future, but meets the needs of today. I believe we can develop our natural resources and protect our environment.”
Consistent with the President’s directive for responsible energy development, today I am submitting to the President,Congress and to the American people for their review our Programfor future energy development of the Outer Continental Shelf.
We arerequired by law to propose a 5-year Program for the development of energy resources in the 1.76 billion acres of the Outer Continental Shelf.
This area contains vast energy resources.
Itsupplies as much as 20 percent of our domestic natural gas and more than 25 percent of our domestic oil.
To fulfill our obligations under the law and to help provide America the energy it needs, we are proposing 21 oil and gas lease sales on the Outer Continental Shelf over the next 5 years.
These areas could yield an estimated 10 billion barrels of oil and 45 trillion cubic feet of gas over the next 40 years.
To put this into perspective:
- 10 billion barrels of oil are equal to the amount of oil imported from the Persian Gulf over a 10-year period.
- 45 trillion cubic feet of gas is enough to meet the natural gas needs of every residential customer in the Country for almost 10 years.
This increased production will generate an estimated $170 billion, in today’s dollars, of net economic benefit for the United States.
Our Program:
- Includes 48 million acres of new areas that have not been available for leasing consideration for years – in some cases for more than 20 years.
- Adheres to the highest of environmental standards, setting aside areas of particular sensitivity and ensuring enough time for environmental study and analysis before final leases are issued.
- Shares revenues for the first time with states from leases issued in the Gulf of Mexico.
Among the many decisions that I will make as Secretary of the Interior, I consider this to be one of the most important because of its far reaching impact.
This energy production will create jobs.
It will create greater economic and energy security for this and future generations.
It will make America less dependent on foreign energy sources.
It will help stabilize energy prices.
It will help protect America from supply disruptions.
It will provide coastal states adjacent to offshore energy production with hundreds of millions of dollars of new revenues to pay for roads, bridges, environmental restoration and other needs.
These states will receive these funds from:
- The new Gulf of Mexico revenue sharing program passed by Congress and signed into law by President Bush last year.
- The new Coastal Impact Assistance Program that will allocate nearly $250 million for each of the next four years.
- Revenues from leases within three miles of state waters.
- Revenues distributed to states through the Historic Preservation and Land and Water Conservation Funds.
This Programwill also provide billions of dollars of revenue for the Federal Government. In fact, the offshore energy development program is one of the largest sources of non-tax revenue for the Federal Government.
Under our Program, new leases in the Gulf of Mexico will pay the recently-increased royalty rate of 16 and 2/3rds percent, which President Bush recommended and I implemented this past January. This rate increase alone will generate an estimated $4.5 billion of federal royalties over the next 20 years.
Our Program also balances the critical need for domestic energy resources with the equally critical need to protect human, marine, and coastal environments.
The Program was developed using the rigorous analysis required by the Outer Continental Shelf Lands Act and National Environmental Policy Act.
As a result of this analysis and listening to the views of more than one hundred thousand interested citizens, environmentally sensitive areas were removed from proposed lease sales.
For example, our Program sets aside migration corridors for the Bowhead Whale that are vital to subsistence whalers in Alaska.
To provide further protection, additional site-specific analysis of environmental effects will take place prior to individual lease sales.
In the development of this Program, we consulted extensively with Members of Congress, state, local, and Tribal officials, industry, environmental organizations, and interested citizens.
We received comments from 245 Federal, State, local, and Tribal governments, officials, and organizations.
In addition, 77 environmental and other public interest groups, 170 oil and gas companies, and 247 non-energy industry and business groups also submitted comments that we reviewed and analyzed.
We held three separate comment periods that generated almost 125,000 comments.
Seventy-five percent of the comments we received from the public supported some level of increased access to the domestic energy resources of the Outer Continental Shelf.
At President Bush’s direction, this Program gives great weight to the desires of coastal states regarding oil and gas development near their shores.
Let me tell you the specifics of our offshore oil and gas leasing Program:
This Program schedules a total of 21 lease sales in 8 of the 26 Outer Continental Shelf planning areas.
There are nearly 180 million acres available for leasing under this Program.
Of these, more than 48 million acres are not currently offered.
The new acreage includes:
- More than 8 million acres in the Gulf of Mexico;
- More than 37 million acres offshore Alaska, more than 5 million in the North Aleutian Basin, an area that has not been offered in over 20 years; and
- About 3 million acres off the coast of Virginia.
In the Central and Western Gulf of Mexico Planning Areas - the two areas of highest energy resource potential and interest - the Program continues to schedule annual area-wide lease sales. Six lease sales will be held in the Central Gulf and five lease sales will be held in the Western Gulf.
In the Alaska Region, the Program proposes multiple lease sales in the Beaufort and Chukchi Seas, one sale in the North Aleutian Basin, and up to two sales in Cook Inlet.
The final Program also schedules a sale in the Mid-Atlantic in late 2011, in an area located offshore Virginia.
I should point out that no Virginia offshore lease sales can occur unless the President modifies a 1998 withdrawal and Congress discontinues the moratorium on leasing there.
The Commonwealth of Virginia asked that Federal offshore areas near its coast be considered for inclusion in the five year Program under certain conditions. The draft Program we submitted last year proposed that no oil and gas activity occur within 25 miles of Virginia’s shore lines. In response to Virginia’s request, the Program includes a 50-mile buffer in which no oil and gas activity may occur.
In addition, at my direction, the Program includes a no-obstruction zone protecting the entrance to the Chesapeake Bay.
What happens next?
Earlier today I briefed Members of Congress that I am submitting our five-year Program and Final Environmental Impact Statement. Under the law, Congress has 60 days to review the Program.
In the absence of any action by the Congress, I am authorized by law to approve the new 5-Year Program at the end of those 60 days.
The current 5-year leasing Program ends June 30, 2007.
The new Program will go into effect on July 1, 2007.
I am very pleased and proud of the hard work that has gone into the preparation of this extraordinary Program.
I want to recognize and congratulate Minerals Management Service Director Johnnie Burton for her leadership in this effort. Johnnie and her staff have done terrific work in bringing this vital component of our Nation’s energy security to the finish line.
Our 5-year Program is a key element in the President's National Energy Policy.
This policy seeks to develop responsibly all sources of domestic energy -- traditional, renewable and unconventional -- while at the same time increasing energy conservation.
With that, Johnnie and I will answer any questions you may have, together with Assistant Secretary Steve Allred.