Hurt: Expanding American Energy Production

by Congressman Robert Hurt (R-VA05)

This past week started off with a great victory in the war on terror.

It is my hope that the death of Osama bin Laden brings some amount of justice and closure to the families of the victims of September 11th and to those who have lost loved ones throughout the war on terror.

As we remain vigilant in our fight against terrorism and continue our efforts to protect our country from those who seek to do us harm, we will be forever grateful to the brave men and women of our military and intelligence community whose hard work, dedication, and sacrifice helped bring Osama bin Laden to justice.

I want to congratulate the members of the Navy SEAL Team Six, based in Virginia, who were responsible for carrying out this mission. And I commend President Obama, President Bush, and their teams for their resolve in seeing this mission through to its success.

Returning to Washington this past week, the House voted on the first of three pieces of legislation aimed at maximizing American energy production to reduce the pain at the pump for 5th District Virginians.

Passing the House with bipartisan support, H.R. 1230, the “Restarting American Offshore Leasing Now Act,” would expand American energy production and create jobs by requiring the Secretary of the Interior to conduct oil and natural gas lease sales in the Gulf of Mexico and off the coast of Virginia that have been delayed or cancelled by the Obama Administration.

It is estimated that offshore energy development in Virginia could lead to the production of more than half a billion barrels of oil and 2.5 trillion cubic feet of natural gas. By reversing the Administration’s actions to delay Virginia’s lease sale, and tapping into these resources to increase our domestic energy supply, we will take a significant step towards lowering gas prices, reducing our dependence on foreign oil, and creating thousands of jobs for the Commonwealth.

Skyrocketing energy costs are directly and negatively impacting families and small businesses across Central and Southside Virginia, costing jobs, and threatening our economic recovery. The House has and will continue to take action to address this issue and help move us towards achieving true energy independence, and it is my hope that the Democrat-led Senate and White House will do the same by supporting this measure.

  • ToR


    This is not a significant step to lowering gas prices.

  • Jay D

    Dear Sir: “By reversing the Administration’s actions to delay Virginia’s lease sale, and tapping into these resources to increase our domestic energy supply, we will take a significant step towards lowering gas prices …”
    Energy and financial analyst consensus: this statement is untrue – domestic drilling will NOT impact short- or long-term pump prices. Why is leadership selling us this vote with a lie? Why is leadership disregarding EIA administrator Newell’s March 17th, 2011 House Committee on Natural Resources testimony? Why is house leadership relying on ICF study numbers (commissioned by the American Petroleum Industry)?
    Our Bay’s estimated value is over $1 trillion dollars and economic benefits to VA & MD estimated between $33 – $60 billion dollars per year. ICF’s State Level Analysis shows – at best– drilling offshore our coastline will produce a few hundred direct employment jobs AND our waters capable of yielding no more than 750 million barrels, total. Mr. Congressman, US consumption is 21 million per day; at best, Virginia’s waters have a maximum capacity to produce a 35-day supply.

    Impacts of greater access
    ~ When considering the effect of increased access to Federal lands, it is important to recognize that access does not typically translate into immediate or near-term production. The impact of greater access on market prices depends in part on actual production flows, on differences in the extent of global integration in oil and natural gas markets that have been discussed above, and on how a decision to increase access might affect market expectations – a factor that is very difficult to assess in today’s supply environment. In the short-term, oil markets react to many competing factors in a global context, and it is extremely difficult to disentangle the near-term impact of mid-to-long-term developments in the context of oil markets that see typical daily price movements in the range of 1-2 percent, and much higher fluctuations at times. Long term, we do not project additional volumes of oil that could flow from greater access to oil resources on Federal lands to have a large impact on prices given the globally integrated nature of the world oil market and the more significant long-term compared to short-term responsiveness of oil demand and supply to price movements. Given the increasing importance of OPEC supply in the global oil supply-demand balance, another key issue is how OPEC production would respond to any increase in non-OPEC supply, potentially offsetting any direct price effect….
    Access to offshore federal resources ~As of January 2009, the mean estimate of technically recoverable crude oil resources located in Federal offshore areas of the lower-48 states is 64.1 billion barrels. Of this amount, 3.7 billion barrels are estimated to exist in the Eastern/Central Gulf of Mexico region that is still under a Federal leasing moratorium….
    From the above, it is evident that the Eastern/Central Gulf oil resources now subject to a formal leasing moratorium represent only a small part of the Federal OCS. Even if the moratorium that restricts leasing in this region were to be lifted, lags associated with the awarding of new Federal offshore leases and with the exploration and development of such leases suggest that production would be unlikely to occur until after 2020.
    Given that OCS areas not under any leasing moratorium are estimated to account for over 95 percent of the total mean estimate of technically recoverable OCS resources…
    Areas where OCS leasing has been available for many years—including the Western Gulf, most of the Central Gulf, and Alaska—hold the vast majority of estimated technically recoverable OCS oil resources…
    … the full Annual Energy Outlook to be published this spring will include a large number of sensitivity cases that examine the impact of different market, technology, and policy assumptions. Several of these sensitivity cases will address the implications of alternative assumptions about the level of technically recoverable resources and access to those resources.

  • John Jackson

    @Jay D, We’ve been trying this OPEC way for over 30 years with no commitment on true “energy independence” Oh, other than the subsidies (money given and not deductions) windmills and solar panels. It’s time we come to reality and start producing our own energy, we do have it. Then we won’t be completely dependent on foreign countries.

    What are the negative effects with drilling for oil? We might find some, politicians get to tax it and we actually become energy independent. Let the oil companies go for it. Oh, and you mention that we should worry about how OPEC would respond to our oil production. Aren’t you tired of being a hostage? Live life and enjoy your freedoms…and not the freedom to be offended.

    It’s funny. A person doesn’t mind if the price of oil “necessarily skyrockets” if they’re the one selling the oil.

    I wouldn’t exactly put my full faith in rports provided to the federal government’s reports, did you see the accounting gimmicks for healthcare? Please.

    Do you think that anything’s different when it comes the politicians worshiping their religious god, the green movement?

  • Jay D

    JJ, Never said, nor am I opposed to increasing domestic oil production – in fact, I support it.

  • John Jackson

    JayD, Ugh, sorry. Then I don’t know what you just said because it reads (to me) as though you refute Congressman Hurt’s claims?

  • Jay D

    I am. He’s lying. “By reversing the Administration’s actions to delay Virginia’s lease sale…we will take a significant step towards lowering gas prices, reducing our dependence on foreign oil, and creating thousands of jobs for the Commonwealth.”
    Virginia’s pissant amount of oil won’t make a bit of difference in any of the above. “Thousands of jobs” … Hurt and McDonnell pulled that one out of their ass. The ICF petroleum industry study indicates “most likely” is a couple hundred.

    I absolutely support increasing domestic supply and technology IS helping U.S. gas/oil producers convert previously uneconomic sources into proven reserves. But let’s not kid ourselves; exploitation come with associated risks. We drill wells far offshore for a very good reason: we don’t want oil companies mucking around in shallow waters near us. And frankly, importing oil ALSO allows us to export the damages associated with oil drilling.

    Last year after the BP spill, economists at the Center for Bus & Econ Research ran 4 scenarios to try to estimate Alabama’s 2010 impact cost – estimates for ONE state for ONE year:
    ~ “optimistic”: 7.5 percent of tourism revenue & 50 percent of fishing revenue, creating direct claims of $462.5 million, total economic harm of $1 billion and lost state and local tax revenue of $28.8 million.
    ~ “very likely”: 15 % tourism loss, 50 % for fishing, creating direct claims of $822 million, total economic harm of $1.72 billion and lost state and local tax revenue of $37.6 million.
    ~ “somewhat likely”: 20 % tourism loss, 80 % in fishing, creating direct claims of $1.12 billion, total economic harm of $2.38 billion and lost state and local tax revenue of $71.3 million.
    ~”worst case”: 30 % tourism loss, 80 % fishing, creating direct claims of $1.6 billion, total economic harm of $3.34 billion and lost state and local tax revenue of $102.8 million
    Is the cost of this spill paid by those of us who want cheap gas? No, the cost is borne by local taxpayers, Gulf Coast residents now in need of new jobs, and by the poisoned wildlife & estuaries. You really want to be ‘that guy’?

    The FACTS are: MMS (now BOEMRE) estimated there are approx 18 billion barrels TOTAL in the underwater areas “now off-limits to drilling”significantly less than in oil fields already open for business in US waters off the Gulf, Alaska and southern California, where there are 10.1 billion barrels of known oil reserves as well as an estimated 85.9 billion more.

    Yet oil companies have yet to tap into this 85+ billion barrel offshore oil (already available for lease/development). Why? Because oil company stocks are valued, in large part, by how much proved reserves they have. So just having the new leases in hand is worth billions of dollars.

    JJ, are you beginning to see the big picture?

  • North Dakota’s really getting it right.

    Although Virginia certainly does not have the reserves that North Dakota has access to, we are morally obligated to maximize the contribution of the resources we do have to the betterment and well being of Virginia’s citizens.

    Explore. Drill. Prosper.

  • John Jackson

    JayD, You may want to lay off the kool-aid.

    The Obama administration conducted a cluster. I’ll spare you all the details but I’ll make two points, the first thing Obama did was send lawyers to investigate the problem and then he did not waive the Jones Act blocking foreign aid that helped the federal government neglected responsibilities.

    In 1990, oil companies provided 8 cents per barrel of oil to the federal government to “be used to prepare for spills, including like stockpile oil containment booms” But the Federal Government neglected to do that and actually put roadblocks to stop the cleanup. Just ask Bobby Jindal in trying to get equipment that was docked by the Coast Guard.

    In addition, Obama gave $2B to Petrobras and rights to drill in the Gulf to Mexico and Cuba. Cuba doesn’t even have drilling rigs but they’re going to have China drill.

    So, don’t throw these slanted surveys and expect me to drink that kool-aid. I watched the idiotic professors and media out there trying to get proof for their green movement agenda. Heck, I didn’t even touch on the moratorium, delay tactics in providing leases and the billions of $$ of oil research wasted.

    Just please…there is SOOOO much more I could go into but the BP Oil spill was a cluster from the Federal government from the beginning. Just imagine when they’re responsible for your heathcare.

    Besides, let the oil companies go…they have a better record than governments do…just look at the oil spill in Kuwait and Iraq in the 1990s.

  • Jay D

    #1 – Thread isn’t about Obama’s conduct before/after the spill or drilling rights off Cuba; it’s about whether or not drilling off Virginia’s coast meets minimum criteria of any basic risk/reward assessment AND whether/not it’s OK to lie to your constituency …to promote a party agenda?
    #2 – If you consider DOE reports, US Geological Survey reports, petroleum industry generated data & reports, and university economic impact studies to be ‘slanted’ ~ what sources WOULD you consider as un-slanted? Name one, just one.
    #3 – I don’t wear berks, have a green agenda, or view oil companies as anything other than large corporate entities, with the exact same goals as my business: 1) generate profits and 2) increase shareholder value.

    #4 – My position is simple and quite specific: data overwhelming supports conclusion that drilling off Virginia’s coastline will likely produce, at best, inconsequential oil supplies and few new jobs. We don’t have anything close to Gulf or Dakota’s Bakkan Formation deposits. We DO have miles of shoreline and the Chesapeake Bay, a national treasure that also happens to support a huge percentage of Virginia and Maryland’s economies.

    “Besides, let the oil companies go; they have a better record than governments do” Cool Aid in my fridge? YGTBFKM.

    “We used to be fishermen. Now all we can hope for is to find work cleaning up for the guys who put us out of work.” ~ Freddy Johnston, Venice, La Fisherman, May 1, 2010, Telegraph

    “Of the spills recorded in 2009, 112 were contained by specially-constructed spill containment facilities and did not reach the environment. 122 spills breached secondary containment and did affect the environment. Of these, 92% reached a land mass and 8% reached a water body.” ~, May 7, 2010, BP

    “…I’m ready to drill on the offshore, I have no problem with that. But don’t look for big reserves off the East Coast of the United States.” ~ T. Boone Pickens, Founder and Chairman, BP Capital Management, March 31, 2010, Financial Market Regulatory Wire

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