Energy leaders applaud president's lifting of offshore ban

Journal Record, The (Oklahoma City), Jul 15, 2008 by Jerry Shottenkirk

Predictably, the loudest applause for President Bush Monday when he lifted the executive ban on Outer Continental Shelf drilling came from the energy industry.

Industry leaders have long hoped for changes in the bans that began when George H.W. Bush was in office. There are two bans on drilling, and the ban from Congress won't be easily reversed, if at all.

Larry Nichols, chief executive of Devon Energy, said the time has come to develop more resources.

"We think that's a great step forward in opening up the oil and natural gas resources in this country," Nichols said. "If Congress would follow through and stop the obstructionism it has engaged in over the last 27 years, we could join the rest of the world in being able to make the resources offshore available to the American public."

Devon will be a major player if offshore drilling is permitted, he said.

"We have four exploration successes in the deepest waters of the Gulf of Mexico and are ideally suited to take advantage of any opportunities that develop."

Steve Hadden, Devon's senior vice president of exploration and production, said the timeline would vary if Congress drops its ban.

"Some of depends on where it is and how deep of water the exploration would be in," Hadden said. "We are producing now in the eastern part of the central planning area in the Gulf of Mexico offshore Alabama. Some of the eastern Gulf is close to existing infrastructure in areas where we could drill and bring production in a shorter amount of time."

Bruce Bell, chairman emeritus of Mid-Continent Oil & Gas Association of Oklahoma, said the idea has advanced a great distance from where it was.

"We are 50 percent of the way to being able to get on the Outer Continental Shelf, where we should have been 10 years ago," Bell said. "With gasoline at $4 and oil at $145 per barrel, now's the time for us to get busy and begin to develop the reserves we know are there."

Dewey F. Bartlett Jr., president of Keener Oil & Gas Co. of Tulsa and vice chairman of the Oklahoma Energy Resources Board, said Bush's actions marked an important step.

"When he brought it up before, he was putting Congress in a position where it would have to make the first move, and I think it's better for him to make the first move and put the pressure on Congress to show its true feelings on the subject. It's up to Congress now," Bartlett said.

U.S. Rep. Mary Fallin, R-Okla., applauded Bush's actions.

"It is obvious that one immediate solution to rising energy prices is to find and develop more domestic oil and gas reserves," Fallin said. "Modern technologies have made offshore drilling safer and cleaner than ever before. We must move aggressively to open those offshore areas that were off limits for far too long. Hopefully this decision by the president will inject some common sense into the debate in Washington."

U.S. Sen. Jim Inhofe, R-Okla., said the country needs to add to its reserves by putting the areas in play.

"Congress should follow the president's lead and lift the moratoriums on domestic energy exploration," Inhofe said.

He said 85 percent of the OCS, or an estimated 19 billion barrels of recoverable oil - is off limits.

Bush's actions were not welcome by all.

"Once again, the oilman in the White House is echoing the demands of Big Oil," House Speaker Nancy Pelosi said in a release. "The Bush plan is a hoax. It will neither reduce gas prices nor increase energy independence. It just gives millions more acres to the same companies that are sitting on nearly 68 million acres of public lands and coastal areas."

Environmentalists also sounded off against the president's move.

"President Bush has once again ignored the wise precedent set by his father and taken reckless action that has neither hope of reducing gas prices nor concern for long-term consequences," said Gene Karpinski, president of The League of Conservation Voters.

Bell said if Congress goes along with Bush, there would be a period of just a couple of years before production is seen.

He said it wouldn't take as long to see results at filling stations.

"The most important thing about this whole deal is not when that first barrel reaches market, but for the world market to realize we are serious about increasing our production dramatically," Bell said. "World demand is 85 million to 86 million barrels and our supply is about the same range. If we can show that in three, four or five years that we could add a million or 2 million a day production from offshore, that will have a chilling effect on the speculators who are assuming the price of oil is going to continue to go up because supply is not going up in other places. It would have a major psychological effect that would have a significant reduction in price immediately."

Polls have shown that nearly 70 percent of Americans are in favor of additional drilling, he said.

"Democrats and Republicans are both aware they have to do something to bring relief from $4 gasoline," Bell said. "It's nice to say we need new technologies, but they don't just happen overnight. What we can do that is a positive is to increase our oil production."