North Aleutian Basin

Background Write today

The oil and natural gas community working with consumers, having recently enjoyed some success in the legislative process with the Gulf of Mexico Energy Security Act and the administrative process of expanding access to OCS acreage through the Minerals Management Service 2007-2012 Five Year Plan process.

Now this recent positive change faces the realprospect that the legislative process may be used to re-impose the moratoria in areas where the Administration has announced it will grant relief.Specifically, Representatives Jay Inslee (Washington), Maurice Hinchey (New York) and Wayne Gilchrest (Maryland) have expressed plans to introduce language (PDF) in the House 2008 Appropriations to restore the moratoria on the North Aleutian Basin (also known as the Bristol Bay Area of Alaska). http://www.house.gov/inslee/docs/pdfs/bristol_bay_protection_act_april_2007.pdf

At the same time, Congress is developing climate and energy policies that would increase the use of natural gas and other domestic resources, further stretching an already strained domestic supply.

Action is required immediately to convince other members of the House of Representatives, the House Committee on Natural Resources and the House Committee on Appropriations that this and other actions restricting access to both onshore and offshore federal lands will have significant impact! The nation’s economic development, regional economies, national energy security will be adversely impacted. This will be particularly true with those industries and individual consumers who rely on the availability of secure sources of petroleum products for their livelihood and wellbeing.

Congressional members along with the Administration need to hear from you regarding the benefits of expanded access, including:

• Improved national energy security, as reliance on domestic sources is increased and dependence on foreign energy imports is reduced;
• Enhanced performance across sectors of the U.S. economy that are impacted by rising oil and natural gas prices, including agriculture and manufacturing; and
• Reduced prices for consumers who are paying more and more each year to fill up their gas tanks and warm their homes.

Economic Development

Oil and natural gas production is critical to the U.S. economy:

• Oil provides 97 percent of U.S. transportation fuel, and U.S. consumers paid billions more in 2005 for increased transportation fuel costs.
• Oil and natural gas are used in 96% of all manufactured goods – plastics, medicines, machinery, etc.
• Higher fuel prices cost U.S. commercial air carriers $9.6 billion in fiscal year 2005.
• During 2003/2004 seasons, U.S. farmers paid $6 billion for energy-related expenses – 41 percent increase from previous years.
• High energy prices (particularly natural gas) have cost the economy 2.8 million U.S. jobs since 2000.
• The March 2007 Census Bureau Trade Deficit reported that oil is the main factor in driving the trade deficit to high levels, as petroleum imports accounted for $22.1 billion — or more than one-third of the gap.
• Expanding ethanol production is heavily dependent on natural gas for its production.
• According to Advanced Research International, the U.S. would collect an additional $27 to $57 billion in royalties by 2025 from OCS production.

Regional Benefits

Expanding access to the nation’s oil and natural gas resources is critical to the economies of coastal states:

Alaska

• The strongest support for oil and natural gas leasing in the North Aleutian Basin has come from those who would be most directly impacted by such a program -- the citizens of the region themselves, who desire a more resilient, diversified economy that could result from offshore oil and natural gas development.
• Offshore oil and natural gas development would provide thousands of jobs and help offset a local unemployment rate of 33 percent.
• The Minerals Management Service estimates that there are approximately 8.6 trillion cubic feet of natural gas reserves in Alaska’s North Aleutian Basin, enough energy for 7.4 million homes for 15 years.

Gulf of Mexico

• High natural gas prices have hurt the manufacturing and agriculture sectors in states along the Gulf of Mexico and caused the loss of thousands of jobs in Florida, Alabama, Louisiana and Texas.
• Increasing energy prices are affecting consumers and end-users throughout the region, as many are paying between 17 and 100 percent more each year for electricity, gasoline and other goods.
• Offshore oil and natural gas operations taking place in the Gulf of Mexico have an annual positive impact of billions of dollars on state economies in the region.
• According to National Ocean Industries Association, thirty percent of the 15 million fish caught by recreational fishermen annually off the coasts of Texas and Louisiana are caught near platforms. Estimates show annual catches of approximately 450,000 pounds of reef fish, valued at approximately $2 million.

Virginia

• Virginia’s manufacturing industries have seen a loss of 66,100 manufacturing jobs. State residents are also paying approximately $300 more a year to heat their homes and 35 percent more to fill up their gas tanks, resulting in less money going back into the local economy.

National Energy Security

Accessing oil and natural gas is critical to national energy security:

• The country’s dependence on foreign oil has grown from roughly a third in the 1970s to 56 percent today. By 2025, our dependence will reach 68 percent, if nothing changes, according to the U.S. EIA.
• The top five exporting countries included Canada, Mexico, Saudi Arabia, Venezuela and Nigeria accounted for 72 percent of U.S. crude oil imports in February.
• More than 80 percent of all federally controlled coastal waters are currently off-limits, yet the OCS is conservatively estimated to hold more than 466 trillion cubic feet of natural gas resources and 91 billion barrels of oil. These resources are enough to:

• Heat 100 million homes for 60 years.
• Drive 85 million cars for 35 years

Environmental Considerations

Oil and natural gas production is performed safely and environmentally soundly in the U.S. and around the world:

• According to MMS, offshore oil and natural gas development has an outstanding safety and environmental record. The National Academy of Sciences determined that less than 1 percent of all oil entering the seas is from drilling and extraction activities. Twelve exploration wells and 154,000 miles of 2D seismic completed in the Southeast Bering Sea left no environmental impact.
• No fisheries have been damaged in the more than 40 years of OCS production in the U.S. and Norway with 33 billion barrels of oil produced. Fishing and oil & natural gas production have peacefully and productively coexisted for 34 years in Norway, 40 years in the Cook Inlet of Alaska, 58 years in the Gulf of Mexico and 10 years in Eastern Canada (Newfoundland).
• According to the National Ocean Industries Association, more than 97 percent of the 4,000+ platforms in the Gulf of Mexico survived the record-breaking hurricanes of 2004 and 2005.

Recommended Action:

Action is required immediately to convince other members of the House of Representatives, the House Committee on Natural Resources and the House Committee on Appropriations that restricting access to both onshore and offshore federal lands will have significant economic and national security impact.

Please contact your representative today.

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