Statement by the President on Energy

Business Wire, June 18, 2008

WASHINGTON -- Rose Garden

10:30 A.M. EDT

THE PRESIDENT: Good morning. I want to thank Secretary Kempthorne and Secretary Bodman for joining me. For many Americans, there is no more pressing concern than the price of gasoline. Truckers and farmers and small business owners have been hit especially hard. Every American who drives to work, purchases food, or ships a product has felt the effect. And families across our country are looking to Washington for a response.

High oil prices are at the root of high gasoline prices. And behind those prices is the basic law of supply and demand. In recent years, the world's demand for oil has grown dramatically. Meanwhile, the supply of oil has grown much more slowly. As a result, oil prices have risen sharply, and that increase has been reflected at American gasoline pumps. Now much of the oil consumed in America comes from abroad -- that's what's changed dramatically over the last couple of decades. Some of that energy comes from unstable regions and unfriendly regimes. This makes us more vulnerable to supply shocks and price spikes beyond our control -- and that puts both our economy and our security at risk.

In the long run, the solution is to reduce demand for oil by promoting alternative energy technologies. My administration has worked with Congress to invest in gas-saving technologies like advanced batteries and hydrogen fuel cells. We've mandated a large expansion in the use of alternative fuels. We've raised fuel efficiency standards to ambitious new levels. With all these steps, we are bringing America closer to the day when we can end our addiction to oil, which will allow us to become better stewards of the environment.

In the short run, the American economy will continue to rely largely on oil. And that means we need to increase supply, especially here at home. So my administration has repeatedly called on Congress to expand domestic oil production. Unfortunately, Democrats on Capitol Hill have rejected virtually every proposal -- and now Americans are paying the price at the pump for this obstruction. Congress must face a hard reality: Unless Members are willing to accept gas prices at today's painful levels -- or even higher -- our nation must produce more oil. And we must start now. So this morning, I ask Democratic Congressional leaders to move forward with four steps to expand American oil and gasoline production.

First, we should expand American oil production by increasing access to the Outer Continental Shelf, or OCS. Experts believe that the OCS could produce about 18 billion barrels of oil. That would be enough to match America's current oil production for almost ten years. The problem is that Congress has restricted access to key parts of the OCS since the early 1980s. Since then, advances in technology have made it possible to conduct oil exploration in the OCS that is out of sight, protects coral reefs and habitats, and protects against oil spills. With these advances -- and a dramatic increase in oil prices -- congressional restrictions on OCS exploration have become outdated and counterproductive.

Republicans in Congress have proposed several promising bills that would lift the legislative ban on oil exploration in the OCS. I call on the House and the Senate to pass good legislation as soon as possible. This legislation should give the states the option of opening up OCS resources off their shores, provide a way for the federal government and states to share new leasing revenues, and ensure that our environment is protected. There's also an executive prohibition on exploration in the OCS. When Congress lifts the legislative ban, I will lift the executive prohibition.

Second, we should expand oil production by tapping into the extraordinary potential of oil shale. Oil shale is a type of rock that can produce oil when exposed to heat or other process[es]. In one major deposit -- the Green River Basin of Colorado, Utah, and Wyoming -- there lies the equivalent of about 800 billion barrels of recoverable oil. That's more than three times larger than the proven oil reserves of Saudi Arabia. And it can be fully recovered -- and if it can be fully recovered it would be equal to more than a century's worth of currently projected oil imports.

For many years, the high cost of extracting oil from shale exceeded the benefit. But today the calculus is changing. Companies have invested in technology to make oil shale production more affordable and efficient. And while the cost of extracting oil from shale is still more than the cost of traditional production, it is also less than the current market price of oil. This makes oil shale a highly promising resource.

Unfortunately, Democrats in Congress are standing in the way of further development. In last year's omnibus spending bill, Democratic leaders inserted a provision blocking oil shale leasing on federal lands. That provision can be taken out as easily as it was slipped in -- and Congress should do so immediately.