Hurricane bills on tap {ANWR, Gas Pipeline}

U.S. House committees approve legislation to open ANWR to oil and gas drilling; speed Alaska gas pipeline construction by limiting loan guarantee

Proposals to open Alaska’s arctic coastal plain to oil and gas drilling and to place a two-year sunset on federal loan guarantees for the Alaska Natural Gas Pipeline are part of new energy packages adopted Sept. 28 by U.S. House committees on Resources and Energy and Commerce.

Congress is revisiting various energy proposals in response to the havoc wreaked by recent hurricanes on the nation’s energy supplies. With crude oil prices expected to rise 34 percent this winter and natural gas costs expected to jump 71 percent, the lawmakers seek to increase domestic energy supplies and prevent supply disruptions like those seen after hurricanes Katrina and Rita in August and September.

The House Resources Committee approved “The National Energy Supply Diversification and Disruption Prevention Act” on a 27-16 vote.

The draft version of the bill included a provision to explore the 1002 Area of the Arctic National Wildlife Refuge for oil and gas.

“Part of the reason we’re here today is there are signs of stirring in the other body as if they are finally realizing their position opposing these measures is ridiculous,” said Resources Chairman Richard W. Pombo, R-Calif.

Pombo cited passage of a budget bill that included ANWR drilling on a 51-50 vote last spring as evidence that the proposal has gained favor in the Senate.

Rep. Edward Markey, D-Mass., offered an amendment to strike drilling on the arctic coastal plain. Markey said ANWR likely contains 2.5 percent of the world’s oil supplies, but he opposed drilling there because it does nothing to really solve the nation’s energy problems.

“Drilling in the Arctic refuge would result in oil being transported to California to be put into largely inefficient vehicles,” without anything being done to make those vehicles more efficient, he said. The amendment failed 14 to 28.

The House Energy and Commerce Committee approved the “Gasoline for America’s Security Act of 2005,” a bill designed to fix the price spikes and dry gas pumps that drivers encountered nationwide after the hurricanes shut down many Gulf Coast oil refineries. “It is unfortunate that it takes a hurricane to show us just how acute that problem is,” said the panel’s chairman, Rep. Joe Barton, R-Texas.

The measure, which passed on a voice vote, encourages expeditious construction of the Alaska Natural Gas Pipeline by placing a two-year sunset on loan guarantees that Congress authorized for use in building the $20 billion pipeline last fall.

Barton said the nation needs the abundant natural gas supplies that the 4.5-billion-cubic-feet-a-day Alaska pipeline would carry to the Lower 48. The clock would start ticking when Barton’s bill becomes law.

The Energy and Commerce bill also directs the Federal Trade Commission to launch an investigation into price gouging, cuts the number of “boutique” fuels currently required for different parts of the country from 19 to six, and encourages carpooling to conserve gasoline.

The Resources committee approved an amendment offered by Rep. Steve Pearce, R-N.M., that provides royalty reductions for onshore deep gas wells on federal land. The Secretary of Energy will have the discretion to determine the standards for the eligibility of wells and to place limits upon the royalty incentives based upon market conditions.

Pearce said the amendment is aimed at helping small independents engage in more costly deep gas plays.

The Resources legislation also includes language to allow states to opt out of a federal ban on offshore oil and natural gas drilling, a proposal that faces strong Senate opposition. The bill would expedite the development of renewable energy projects on federal lands, an idea dropped during energy conference talks this year because of Senate concern.

Environmentalists and Democrats oppose most of the proposals. They are supporting alternative legislation, including a bill by Science Chairman Sherwood Boehlert, R-N.Y., and Markey, D-Mass., that would boost the average fuel efficiency standard from 25 miles per gallon to 33 miles per gallon by 2016.

Better late than never.

In the wake of the hurricane disaster in New Orleans, the frailty of America’s energy supply has become all too apparent. For the next number of years, the Gulf of Mexico will remain in the line of fire for more predicted hurricanes. Yet it supplies 28% of America’s oil production. Any damage to the flow of crude oil there has a dramatic effect on the nation’s fuel supply. It is a valuable egg in a fragile basket.

If there is one message that the government and American people need to heed from this situation, it is that diversifying one’s supply of oil is the best way to prevent price spikes and fuel shortages and other national energy worries. We need a new egg in a stronger basket. The Gulf of Mexico can’t do it alone.

That diversification is at hand and is now before Congress: open the Arctic National Wildlife Refuge to oil and gas exploration. ANWR has the potential to be America’s largest oil field and is in an area not susceptible to natural disasters. In nearly 30 years of production in Prudhoe Bay, just 50 miles west of the Coastal Plain of ANWR, there have been no natural disasters or delays in supply caused by nature.

Alaskan oil is also produced under the strictest environmental regulations on the planet, and oil from ANWR will be produced on solid ground, not in an ocean on vulnerable drilling platforms. Oil from ANWR’s coastal plain would take approximately 8 years to bring on line and by that time could tally Alaskan oil to equal one third of US domestic production, surpassing output in the Gulf.

There's More... "ANWR Oil – A New Egg in a Strong Basket

Two year sunset. Some kind of agreement between the state and the three players might be announced very soon. That would be a go-ahead, but there would be a lag of some years before actual construction would begin. There is surveying to be done, the EIS written with fancy graphics and maps, and pipe needs to be ordered. There is also a great deal of gravel work to be done. In the meantime the young people will continue to pretend to be students at the university and to clerk at Fred Meyers. The heavies of the oil business--labor and management execs and superintendents--are still living quiet suburban lives of backyard barbeques where their neighbors little suspect what kind of lions and bears live right next door.

The left needs to realize that employers of energy producers, pipelines and distributors pay higher wages. Developing energy domestically is not only strategically sound it pays the average employee better too. Imagine all the dollars invested in developing LNG in Dubai, Libya, UAE and Nigeria that could be spent here in the United States instead. Imagine all the billions of dollars being invested in the Mideast and the percentage of that money however small that is being donated to terrorist organizations like Hamas and Al Qaeda.

I'll tell you, Fairbanks and Anchorage are totally crazy with people going everywhere in all directions 24/7. This was true 10 years ago and it hasn't let up at all. If the Natural Gas Pipeline takes 10 years to build, it will continue to be crazy that much longer, and once gas is finally flowing at 4 billion cubic feet a day there will be another 50 years of crazy. ANWR won't do anything in that respect. There is a totally new shopping district in Fairbanks that looks like anything the best of New Jersey or California can offer. It is in fact lower 48, just a couple years behind. Outside is now in the Interior.

Do not forget the engineering, planning and scheduling. That front end stuff is what I am after. Gas Pipelines take compressor stations. The producing fields will have modifications for production of the gas in place of re-injection. New predomiately Gas fields like Point Thompson and CD6 will be brought into production. Gas Plants removing CO2 and NGL's will be designed and built. There are lots and lots of manhours to be spent that are not specific to the big straw, just related and required.

That's right. We see the pipeline, but the support facilities and infrastructure have to be built. Some of it--structures that would not be out of place for scale at Cape Canaveral or Vandenberg--will be built in Seattle and elsewhere and shipped up on barges. Gravel will be moved. A lot of gravel. Construction camps will be renovated and other will be built out in the middle of nowhere. We have done it before, we will do it again. It's practice for building the moonbase and the settlements on Mars--many similarities.

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