Energy and Power Subcommittee Explores Ways to Increase American Energy

March 17, 2011

WASHINGTON, DC - The House Energy and Commerce Subcommittee on Energy and Power, chaired by Rep. Ed Whitfield (R-KY), convened a hearing on Thursday as part of the American Energy Initiative, an ongoing effort by House Republicans to address rising energy costs, create new jobs, and increase America's energy security. Today the subcommittee focused on oil supplies in the Gulf of Mexico, specifically the impacts of the administration's drilling policies on jobs and gasoline prices. Former President Bill Clinton is reported to have recently echoed House Republican appeals for the Obama administration to lift the Gulf de facto drilling ban, calling the delays "ridiculous."

Several witnesses testified that the key to lower energy prices and more jobs is increasing exploration and production of American supplies, asserting that the rising price at the pump is inextricably linked to the administration's oppressive regulations on our oil and gas industries. 

Chairman Whitfield highlighted just how important the Gulf is to our nation's economy and security, calling attention to the fact that, "Over the past several years, 30 percent of our total domestic oil production has come from the Gulf."

James W. Noe, Executive Director of the Shallow Water Energy Security Coalition stressed the need for more immediate permitting in the Gulf, stating, "At gas stations all across America, millions of our citizens are now feeling the impact of this administration's policies. The prospects for a real and lasting economic recovery are seriously threatened by higher energy prices for every business and consumer. The solution is not to tap the Strategic Petroleum Reserve. The solution is to immediately resume domestic oil and gas production in the Gulf of Mexico."

Professor Joseph Mason from Louisiana State University summarized the mounting loss of economic activity from stalled development in the Gulf, estimating a total potential national loss in economic output at $4.4 billion and job losses totaling 19,000. Mason stated that, "Each day, more exploration and development activity in the Gulf is lost. The lost output will not be regained and the lost wages cannot be spent."

James Adams, President and CEO of the Offshore Marine Service Association (OMSA), urged the committee to act quickly to help put the Gulf of Mexico back to work, cautioning of more job losses unless offshore permitting resumes. Adams warned, "Business owners who are struggling to retain highly-skilled employees for as long as possible will be forced into making more layoffs in the coming months. Without exploration permits, the market will further contract, thus resulting in the shameful decapitalization of the American offshore industry and the permanent loss of a world-class workforce."

Some Democratic lawmakers were quick to repeat oft-cited statistics that understate America's resources - likewise referenced by President Obama last week in his claim that our nation holds only 2 percent of the world's oil reserves.  Witnesses explained that the 2 percent figure is misleading. The 2 percent figure does not count hundreds of billions of barrels of oil that America has, but that the government will not allow to be developed, such as oil shale, the Outer Continental Shelf, Alaska, and the Rocky Mountain west. In fact, 97.5% of the Outer Continental Shelf is not leased for energy, and the small area that is leased includes areas currently leased but blocked from development by the government in the Gulf of Mexico, California and Alaska.

Others repeated the claim that the U.S has experienced an increase in domestic oil production since President Obama took office, accusing the witnesses of propaganda in their calls for more drilling. Noe dismissed the notion that Obama was responsible for this production boost, noting that, "It is a fundamental misunderstanding of the way the oil and gas industry works for the Obama Administration to take credit for the increase in production. The increase in production we have seen in the last couple of years was the result of the new oil coming online that was decades in the making.these projects took years of planning and they were planned and executed under the apparatus of the prior administration. The federal government's EIA has already itself stated that production has declined in 2010 and will continue to do so in 2011."

Chairman of the Energy and Commerce Committee Fred Upton (R-MI) has pledged the Committee's support to an all-of the-above energy strategy. Today's hearing highlighted the important role increased oil production in the Gulf of Mexico will play in the ongoing effort to reduce energy prices and creating more American jobs.

Additional witness testimony from the hearing is available online HERE.

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