Witnesses
The Honorable Ken Salazar
Secretary, Department of the Interior
Accompanied by
The Honorable Bob Abbey
Director, Bureau of Land Management
The Honorable Tommy Beaudreau
Director, Bureau of Ocean Energy Management

 

Committee Members Present
Doc Hastings, Chair (R-WA)
Ed Markey, Ranking Member (D-MA)
Dan Boren (D-NE)
Mike Coffman (R-CO)
Paul Broun (R-GA)
John Fleming (R-LA)
Jeff Landry (R-LA)
Jeff Duncan (R-SC)
Glenn Thompson (R-PA)
Kristi Noem (R-SD)
Niki Tsongas (D-MA)
Rob Wittman (R-VA)
Rob Bishop (R-UT)
Rush Holt (D-NJ)
Bill Johnson (R-OH)
John Sarbanes (D-MD)
Louie Gohmert (R-TX)
Doug Lamborn (R-CO)
Scott Tipton (R-CO)
Don Young (R-AK)
David Rivera (R-FL)
Bill Flores (R-TX)
Mark Amodei (R-NV)
Raul Labrador (R-ID)
Tom McClintock (R-CA)
Grace Napolitano (D-CA)
Steve Southerland (R-FL)

 

On November 16, 2011, the House Committee on Natural Resources held an oversight hearing to discuss the future of oil and natural gas production on federally owned lands and waters. Secretary of the Interior Ken Salazar was the main witness and was accompanied by Director Bob Abbey of the Bureau of Land Management (BLM) and Director Tommy Beaudreau of the Bureau of Ocean Energy Management (BOEM). On November 8, the Department of the Interior (DOI) released its proposed five-year leasing plan for the outer continental shelf (OCS). It includes 15 proposed lease sales in the Gulf of Mexico, the Chukchi Sea, the Beaufort Sea, and Cook Inlet in Alaska. The proposal does not include lease sales on the Atlantic or the Pacific OCS. In regard to onshore gas production, DOI may be releasing new regulations to require drilling companies to disclose the chemicals used in hydraulic fracturing. Though Salazar said no decisions have been made, the potential regulations may come before 2012.

 

Chairman Doc Hastings (R-WA) began the hearing by claiming a need not only for fewer “government hurdles” in domestic energy production but also for exploration of more domestic energy producing areas and the development of a more dynamic energy portfolio. He cited the potential to generate federal revenue by opening up more areas for oil and gas production and pointed out the reliability of hydraulic fracturing in natural gas production. Ranking Member Ed Markey (D-MA) told Secretary Salazar he was pleased the five-year leasing plan did not include the East Coast but he was concerned that the Chukchi Sea, the Beaufort Sea, and the Cook Inlet were included in the plan: he does not think the oil industry has proved that it could effectively respond to an oil spill in Alaskan waters. As a solution to reduce the federal deficit, Markey called on the oil and gas industry to pay more to the U.S. government to lease federal lands. His legislation, introduced the day of the hearing, would reduce the deficit by $19 billion over the next decade by imposing a fee on non-producing leases, increasing inspection fees, and repealing and reforming several laws related to energy and mineral production and reclamation. 

 

Secretary Salazar explained President Obama’s plan to “secure the energy future of the United States of America” by investing in a broad energy portfolio that includes oil and gas production. He said, however, “We also believe we can’t just produce our way to energy independence” and described the administration’s efforts to increase fuel efficiency. After citing several statistics about heightened current domestic oil and gas production, Salazar called hydraulic fracturing the “Achilles heel” of the natural gas industry. He suggested that unless DOI develops a program to disclose chemicals used in hydraulic fracturing, natural gas production will not have such a “bright future” as imagined. Director Abbey called the public’s concern with hydraulic fracturing “understandable” and said DOI and BLM must remain “diligent” in monitoring the integrity of well bores to protect human health and safety. At the same time, Abbey said, responsible oil and gas development on public lands must provide a good return to the American taxpayer. Director Beaudreau highlighted the specifics of the proposed five-year leasing plan and described what steps BOEM is taking to gather feedback from stakeholders and the public who live and work in impacted areas. 

 

Chairman Hastings began the question and answer period by describing the Republican’s American Energy Initiative as a vehicle to “jumpstart the economy.” He contrasted the “opportunities” for drilling on the OCS before the 2010 BP oil spill with DOI’s proposed five-year leasing plan and asked Salazar why large parcels on the West Coast, East Coast, and other parts of Alaska were left out of the proposed plan. Salazar said it was important for the U.S. to “not have amnesia” about the BP oil spill and that significant issues still need to be resolved. In regard to Alaskan opportunities, Salazar told the committee that the administration does not believe leases in the Bristol Bay or the Arctic National Wildlife Refuge (ANWR) should be available but lease sales in the Chukchi and Beaufort Sea should be undertaken in a thoughtful way. Chairman Hastings and Salazar agreed that the passing of an organic act for the new BOEM and Bureau of Safety and Environmental Enforcement (BSEE) is a top priority. 

 

Ranking Member Markey asked Salazar why leases on the East Coast OCS were left off the proposed leasing plan but parts of the Alaska OCS were included. Salazar said, “We have to take into consideration the opinion of the states.” After describing the features of a particularly strong storm last week in Alaska, Markey asked Salazar if the infrastructure was in place in Alaska to respond to a potential oil spill. Salazar responded, “We could always pull plans if the infrastructure isn’t ready.” Ranking Member Markey described his concerns with Coast Guard capabilities, the potential for heavy storms, and the lack of baseline scientific data as reasons for possibly pulling back on selling leases in the Alaskan OCS. Beaudreau told Markey about BOEM’s environmental programs which study climate change, marine mammals, ocean currents, and other issues in the Arctic Ocean. 

 

Concerned with federal regulation of hydraulic fracturing, Representatives Louie Gohmert (R-TX) and John Fleming (R-LA) challenged Salazar to name a scientific study that found contamination in water wells as a result of shale gas development and asked him if he was aware of any deaths as a result of hydraulic fracturing. Salazar conceded he was not aware of either. Gohmert went on to declare that the administration was using “scare tactics” to enact regulations. Representatives Doug Lamborn (R-CO), John Sarbanes (D-MD), Glenn Thompson (R-PA), Paul Broun (R-GA), and Scott Tipton (R-CO) asked Salazar questions about potential federal regulation of hydraulic fracturing. Salazar repeated to many of the congressmen that proper regulation of the controversial drilling technique would protect the industry from another environmental disaster and moratoria in multiple states. Broun and Hastings asked Salazar to submit for the record the department’s interactions and collaborations with the Environmental Protection Agency (EPA). After Thompson asked how the department would decide to regulate hydraulic fracturing now after millions of wells have been safely drilled in the United States, Abbey replied, “by listening to the public.” Sarbanes, whose district borders the Chesapeake Bay, pointed out the overlap between the Marcellus shale and the Chesapeake Bay watershed. He praised natural gas as an energy resource with “great promise” and “great potential” but cautioned that the U.S. should move forward carefully and thoughtfully with hydraulic fracturing. In a discussion with Representative Grace Napolitano (D-CA), Salazar said “we support hydrofracking.” 

 

Several members were interested in discussing the particulars of the proposed five year leasing plan. Representative Rob Wittman (R-VA) asked why Salazar and DOI ended up leaving lease 220, located off the coast of Virginia, out of the proposed plan even though it was opened up for purchase before the 2010 oil spill. Salazar answered that since then DOI has found significant conflicts between oil and gas development and the Department of Defense (DOD) activities in that area. Wittman and Salazar agreed that it would be worthwhile to work with DOD to figure out a solution. Representatives Niki Tsongas (D-MA), David Rivera (R-FL), Bill Flores (R-TX), Jeff Landry (R-LA), Rush Holt (D-NJ) and Raul Labrador (R-ID) asked Salazar questions related to offshore drilling and the proposed leasing plan. Returning to Markey’s concerns about drilling off the coast of Alaska, Tsongas told Salazar she was concerned that Royal Dutch Shell, a company that has purchased leases in the Chukchi Sea, might not have a worst-case scenario plan for an oil spill. Beaudreau and Salazar reiterated that Shell’s agreement is conditional and that they have to prove containment capabilities and demonstrate adequate spill response plans before they receive a permit. Beaudreau told Tsongas about an interagency working group tasked with reviewing Shell’s plan. Representative Landry told Salazar he hopes shallow water operators will see their leases extended as a result of the 2010 moratorium, as deepwater operators have. Flores disputed Salazar’s earlier claim that the eastern Atlantic was not included in the proposed leasing plan because it lacked the infrastructure. He argued that the infrastructure would only be built by making those areas available for drilling. Salazar told Flores that DOI had received stakeholder feedback on the proposed leasing plan from several oil and gas producers and from the American Petroleum Institute. Sporting a blue beanie with a button that said “Obama Energy Policy,” Representative Don Young (R-AK) again pressed Salazar to explain DOI’s position on drilling in ANWR. Salazar replied, “Our position is drilling in ANWR is not appropriate.” Holt asked whether it was “a good idea” for taxpayers to subsidize seismic surveys in the Atlantic. Salazar responded that good information is in the public’s interest. 

 

Representatives Flores and Labrador discussed the length of time it takes for a producer to develop a well from the initial lease purchase date. Flores displayed a graph that showed an average time of 9.5 years. Labrador took issue with Salazar’s claim that, under the Obama Administration, oil production is at its highest since 2003 if the average lease takes 9.5 years to develop. 

 

Representative Rivera told Salazar his concerns with the close vicinity foreign oil platforms to Florida. Rivera has introduced the “Foreign Oil Spill Liability Act” (H.R. 3393) to impose strict penalties on the owner or operator of the platform. 

 

Representative Rob Bishop (R-UT) discussed his legislation, the Action Plan for Public Lands and Education Act of 2011 (H.R. 2852), to provide proceeds of the sale of federally owned lands to state education efforts. 

 

Many other issues unrelated to oil and gas drilling on federal lands were brought up, including the Keystone XL pipeline and a recent BLM wilderness lands report.

  

Opening statements, witness testimonies, and a webcast of the hearing can be found on the committee web site.