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“UNRECOVERED GOLD IN THE GULF” mentioning the Department of Interior was published in the House of Representatives section on pages H8894-H8896 on Oct. 18, 2005.
The publication is reproduced in full below:
UNRECOVERED GOLD IN THE GULF
The SPEAKER pro tempore. Under a previous order of the House, the gentleman from Texas (Mr. Poe) is recognized for 5 minutes.
Mr. POE. Mr. Speaker, down in the depths of the warm waters of the Gulf of Mexico lies some old Spanish galleon with unrecovered gold, but there is another type of gold in the bottom of the Gulf of Mexico, black gold. We call it crude oil. There is also white gold there as well. We call it natural gas.
These natural gold reserves are energy for today's Americans and we need to drill for these gold reserves. According to the Department of Energy, families across the United States will experience winter heating bills that will be up to 50 percent higher for those who heat with natural gas. This alarming data is yet another reason for us to open up the Outer Continental Shelf and begin drilling for more natural gas and oil off our own coastlines.
The so-called global warming will not keep Americans warm this winter. We have got to become more self-sufficient when it comes to energy, natural gas and crude oil. It borders on the absurd to continue to be held hostage by foreign countries and foreign oil and ignore the billions of barrels that have yet to be drilled off the United States coastline.
Mr. Speaker, I have introduced H.R. 3811 to help relieve our energy woes and help stop U.S. dependence on foreign oil. This legislation will allow for safe oil and natural gas exploration along the Outer Continental Shelf. This bill would do away with all the moratoriums and executive orders that limit leasing activities while maintaining environmental.
Right now 90 percent of our coastline is off limits to drilling because the Federal Government prohibits it. In this chart, Mr. Speaker, I show the three places off the coast of Texas, Louisiana and Mississippi where we drill. All the red here, these are sacred places where we cannot drill for oil. Maybe Texas, Louisiana and Mississippi ought to join OPEC.
In any event, Mr. Speaker, we have got to drill off these other areas because there is oil and there is natural gas in these areas off our Outer Continental Shelf.
It is a myth, Mr. Speaker, that we cannot drill offshore safely. The best experts in the world are from the United States and they know how to drill safely. It is a myth perpetrated on the American people by environmental extremists. No one wants polluted waters. I certainly do not, but we can have both safe drilling and environmentally correct drilling as well.
Let us look at some of the facts, Mr. Speaker. This chart shows pollution from oil, crude oil. Most of the pollution that is in our oceans comes from nature itself, from seepage on the bottom of the ocean. About 63 percent comes from nature; 32 percent comes from jet skis and oil runoff from American soil; 3 percent comes from those tankers that are bringing crude oil in from the Middle East; and way down here 2 percent of the pollution of crude oil comes from offshore drilling. It is a myth to think that we cannot drill offshore in a correct, an environmentally correct way.
The National Academy For Sciences has furnished this information. The American public needs to know the truth about offshore drilling. If coastlines like Florida are worried about the environmental threats, maybe they should stop people from using jet skis and boating because more than a quarter of the spills come from just that. But maybe we should do some research.
According to the Department of Interior, since 1985 more than 7 billion barrels of oil were produced in Federal offshore waters, with less than .001 percent spilled. That is a 99.99 percent record for clean operations. My Jeep leaks more oil than this.
Katrina and Rita hit the coastline very hard, Mr. Speaker. There were high winds, billions of dollars in damages, refineries were closed, but we did not hear anything about oil spills from offshore rigs that were damaged. Why? Because it cannot occur. Even those violent ladies of the gulf could not get a good oil spill to happen.
People in these coastal States want cheap gasoline. They want natural gas, but they say do not drill off our coastlines. Mr. Speaker, this is hypocritical and it violates common sense. Plus, leasing these reserves will bring money to the United States Treasury and to State governments.
If Americans expect to continue driving and heating their homes at low prices, we must begin safe drilling in other places besides the gulf. Economies on the coast rely heavily on tourism and they voice concerns about the so-called environmental impact. Mr. Speaker, if fuel costs continue to rise, the planes and automobiles will be used less and these tourists will never show up at these coastal places. It seems like the consequences of higher gas prices could have a worse impact than an innocent oil rig that is 100 miles off the coast.
Around the world nearly every other major country with oil and gas reserves is promoting investment and developing their offshore capacity. They even drill in the North Sea, the roughest waters in the world, and they do so safely.
Mr. Speaker, we need to continue to explore the Outer Continental Shelf or we will suffer the consequences. Someone has said we will freeze in the dark and end up riding bicycles if we do not use common sense. Mr. Speaker, that is just the way it is.
National Ocean Industries Association
Basic Facts About Offshore Oil and Natural Gas
U.S. offshore energy production is an essential component of the nation's energy and economic security. U.S. offshore development accounts for more than 25 percent of the country's natural gas and more than 30 percent of its oil. Each year, offshore energy development contributes between $4 and 6 billion in revenues to the federal Treasury. Millions are also paid to states and local communities. The federal offshore produces approximately 600 million barrels of oil and about 4.5 trillion cubic feet of natural gas annually.
The U.S. offshore industry leads the world in developing and commercializing advanced technologies that protect sensitive environments and improve the quality of life for all Americans. The U.S. offshore energy industry operates in accordance with the world's most stringent standards for human safety and environmental protection.
Since 1985, more than 7 billion barrels of oil were produced in federal offshore waters with less than 0.001 percent spilled--a 99.999 percent record for clean operations. Government statistics show that the injury and illness rate for offshore workers is about 70 percent lower than for all of private industry. Thirty percent of the 15 million fish caught by recreational fishermen annually off the coasts of Texas and Louisiana are caught near platforms. Conservative estimates show annual catches of approximately 450,000 pounds of reef fish annually, valued at approximately
$2 million.
national benefits
Producing America's Energy
The submerged lands of the outer continental shelf (OCS) of the United States have proved to be one of the most bountiful sources of offshore oil and natural gas in the world. On a per-day basis, the OCS currently produces about 13.9 billion cubic feet of natural gas and about 1.3 million barrels of oil. The federally managed OCS provides the bulk--about 89 percent--of all U.S. offshore production. Five coastal states--Alaska, Alabama, California, Louisiana and Texas--make up the remaining 11 percent.Offshore Energy Revenues Enrich the Nation
Between 1953 and 2002, the offshore energy industry has contributed more than $145 billion to federal revenues. Most of these revenues were derived from royalty payments that are assessed on oil and natural gas produced from federal lands--typically one-eighth or one-sixth of oil and natural gas' market value. Royalties, rents and bonus payments are collected by the Minerals Management Service (MMS)--which often results in that agency serving as the second largest collector of federal revenues after the Internal Revenue Service.
Although most the revenues derived from offshore energy activity are deposited directly into the federal Treasury, these revenues are also the source of funds for the Land and Water Conservation Fund and the National Historic Preservation Fund. State and federal agencies use the Land and Water Conservation Fund Act to buy parks and recreation areas. Annually nearly $1 billion dollars in OCS revenues flow to this program.
Likewise, the National Trust for Historic Preservation has received more than $2.5 billion in offshore energy proceeds to help preserve historic legacies since 1982. Like the Land and Water Conservation Fund, money from the National Historic Preservation Fund is distributed to states whether or not they have any offshore leasing or production seaward of their coasts.
Coastal states in producing areas also have a direct claim on OCS revenues under Section 8(g) of the Outer Continental Shelf Lands Act. For leases on the submerged lands lying outside the 3-mile state zone and as far as 10 miles offshore, 27 percent of the royalty, rent and bonus revenues are paid directly to the adjacent states.
States have used these funds for a variety of programs. Alabama established the ``Forever Wild Program'' with offshore leasing and production money to acquire, maintain, and protect unique habitats. Mississippi has a similar ``Gulf and Wildlife Protection Fund'' and Louisiana uses its money for education.Employment
The Gulf coast of Texas, Louisiana, Mississippi and Alabama is the birthplace of offshore prospecting for oil and natural gas, and the economic benefits of that development continues to accrue to that region to the present day. There are more than 85,000 jobs that are directly related to the industry, and an equal number of workers employed in supporting jobs indirectly related to OCS activity.
The average salary and benefits for workers of producing companies employed as a direct result of activity in the Gulf of Mexico was estimated to be $52,580 in 1992. (The last year for which statistics are available.) Since then, a shortage of skilled labor due to the recent boom in industry activity has pushed earnings even higher. In addition to payroll expenditures, producers pay several billion dollars each year to vendors and contractors who support OCS activities.
Safety and Environmental Performance
The National Academy of Science's National Research Council recently released the results of a comprehensive study entitled, Oil in the Sea III: Inputs, Fates, and Effects. The report finds that although the amount of oil produced and transported on the sea continues to rise, improved production technology and safety training of personnel have significantly reduced both blowouts and daily operational spills. In fact, the report states, today, accidental spills from platforms represent only 2 percent of petroleum inputs in U.S. waters and about 4 percent worldwide. Furthermore, the MMS has found that most spills are quite small--with the median being three barrels or less. Between 1971 and 2000, 41 percent of all spills were less than three barrels in size, 81 percent were less than 10 barrels, and 96 percent were less than 100 barrels.
The industry remains under intense scrutiny by its two primary regulators--the MMS and the U.S. Coast Guard--as well as a host of other governmental agencies with oversight responsibilities such as the Environmental Protection Agency and the National Oceanic and Atmospheric Administration. However, it is the MMS that regulates all exploration, development, and production activities on about 8,000 active leases to ensure that these activities are conducted safely and in an environmentally sound manner. The MMS reviews and approves industry exploration and development plans before allowing any operations to commence, monitors all lease operations to ensure that industry is in compliance with relevant requirements, and conducts scheduled and unscheduled inspections. In 1997, MMS conducted over 12,000 inspections of OCS facilities.
Innovation Boosts U.S. Energy
The Deepwater
Between 1996 and 1999, technological advances coupled with economic incentives passed by Congress under the 1995 Deepwater Royalty Relief Act, encouraged energy companies to acquire more than 2,600 leases in waters 800 meters or greater pushing the total number of leases in the Gulf of Mexico to more than 7,000.
The number of deepwater exploratory wells drilled more than doubled from 1996 to 1998, despite the limited number of rigs that can work at such water depths and the decline in crude oil prices during this time period. During that same period, production from deepwater wells jumped 50 million barrels, bringing total Gulf of Mexico deepwater oil production to more than 570 million barrels in 2001--nearly a 535 percent increase from 1995. By 2002, deepwater activity contributed 959,000 barrels of oil and 3.6 billion cubic feet of natural gas per day to U.S. energy supplies--approximately 61 percent of the Gulf's total production.
Innovative technological leaps have enabled this thrust into ever-deeper waters. Floating drilling rigs and production platforms are now able to maintain position over top of a well thousands of feet below without the need to moor a fixed structure to the ground. Dynamic positioning systems using computer-controlled directional propellers compensate for wind, wave or current to keep the vessel stationary relative to the seabed, while innovative hull designs maintain stability even in ``hundred-year'' storms. As a result, drilling is now taking place in waters more than 10,000 feet deep, an accomplishment that would have been unimaginable just 20 years ago. Since 2001, industry has announced 11 major discoveries in waters exceeding 7,000 feet.The Deep Shelf
Trapped more than 15,000 feet within the earth's crust, so-called ``deep natural gas'' represents a tremendous untapped domestic energy resource. Government studies estimate that there could be more than 20 trillion cubic feet of untapped deep natural gas deposits in the Gulf of Mexico--about as much as is currently being produced from all areas in North America on an annual basis!
Annual gas production from Federal waters of the Gulf of Mexico has exceeded additions to proved gas reserves every year since 1984, causing a decreasing trend in remaining proved gas reserves. New discoveries of deep gas on the OCS offer the best short-term opportunity for achieving the large reserve additions and necessary high flow rates to offset declining gas production, which has been falling since 1997. Recent deep gas discoveries on the OCS have shown these new completions can produce as much 20 to 80 million cubic feet per day.
Unfortunately, despite significant advances in deep gas technology, these prospects remain very challenging to find and develop successfully. Since 2001, Gulf natural gas production has decreased from 5,128 BCF to 4,175 BCF in 2003. Deep gas discoveries may help reverse this trend however: deep gas production increased from a relatively low 284 billion cubic feet in 2000 to 421 billion cubic feet in 2002.New Life for the ``Dead Sea''
As recently as the late 1980s, many experts agreed that oil reservoirs in the Gulf were drying up. With oil and natural gas output slackening, some dubbed the Gulf of Mexico the ``Dead Sea''. However, leading edge technologies breathed new life into the Gulf--technologies that have enabled more efficient exploration in deeper waters and production from the deepest recesses of the earth's crust. Now the Gulf is widely recognized to be among the most promising areas in the world and oil production levels have increased sharply every year since 1996.
Leading edge offshore technology helps the country to find and produce the energy to heat our homes, fuel our cars, run our computers and drive the economy in faster, safer, cleaner and more efficient ways than ever thought possible. These innovations began with the natural gas and oil industry but they enrich the lives of all Americans. As the leading technological laboratory in the oil industry, the Gulf's transformation provides an interesting snapshot of the advances that have reverberated around the world and helped to keep energy abundant, affordable and clean.
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