My turn: Offshore policy offers insight into domestic energy plans

Posted: Monday, April 13, 2009

On Tuesday, Secretary of the Interior Ken Salazar will come to Alaska to gather input on the Interior Department's plans to open federal waters for oil and gas exploration. He is holding a field hearing at Anchorage's Dena'ina Center.

Salazar's authority over federal lands and waters makes him a key player when it comes to Alaska issues, because of the fact that 60 percent of Alaska is under federal ownership.

In an ominous note, two months ago, the new-to-the-job Salazar announced a six-month extension of the public comment period on the existing five year plan for offshore development created by the Bush Administration. He also asked for a fast-track report that would assess offshore resources nationwide.

Federal waters in Alaska have been one of the few places where offshore leases have been offered and exploration pursued in the past ten years. However, development has been slowed by legal wrangling and environmental opposition. Shell's exploration in the Beaufort Sea has been stymied by court actions, costing millions in lost productivity while stranding an armada of ships ready to get to work.

The prospect of future delays could adversely affect the future Alaska lease sales in the Beaufort and Chukchi Seas, as well as a North Aleutian Basin offering. But, in a larger sense, these initial moves reveal that the Obama administration does not recognize that access to resources is a critical part of our national energy debate.

To wean ourselves off our massive dependence on foreign oil, we must open more areas to development. We can't talk tough about not being subject to pressure from Middle East sheiks and South American dictators, and then not face the necessity of producing more oil and gas here at home.

Access to offshore waters for drilling has been subject to federal delay before. In a last-minute move, President Bill Clinton delayed lease sales in Alaska, and it was two years before the Bush administration was able to get leasing off Alaska's north coast back on track. In light of serious declines in onshore oil production, access to offshore resources opens the door to the next generation of oil production in Alaska, extending the life of an industry responsible for high-wage jobs, government revenues and the economic vitality of the entire state.

In addition to offshore delays, the administration's 2010 budget calls for more than $30 billion in new taxes on our energy industry, and other proposals could mean hundreds of billons in higher costs for energy consumers in the next eight years.

This would mean less energy production, fewer jobs, diminished investment and less revenue at a time when our country and our state need all of the above. Proposed higher federal taxes will hurt investments in Alaska more than anyplace.

Two years ago, many cheered as Gov. Sarah Palin raised oil taxes significantly higher. The semi-saving grace was that a portion of those higher state taxes could be offset by federal tax deductions. If Congress raises taxes as well, the impact will make Alaska a much more expensive place to do business at a time when many oil and gas producing countries are considering slashing taxes to attract investment.

A recent Associated Press article put it this way, "Plunging crude prices have begun to play out in favor of Western oil companies in one regard, giving them leverage with oil-rich countries that only months ago had no reason to compromise."

And, while most would agree that renewable energy holds great potential, even with technological advances in wind, water, solar and geothermal, the U.S. economy still runs on oil and gas. By 2030, renewables are estimated to supply less than 10 percent of domestic energy, leaving us reliant on oil and gas to supply the vast majority of our energy needs.

On Tuesday, let's hope we can convince Secretary Salazar that Alaska can aid America's economic recovery with offshore and onshore drilling opportunities that will create high-paying jobs and revenues for government while decreasing our reliance on foreign sources of oil.

• Andrew Halcro writes at andrewhalcro.com. He is a former state legislator and newspaper columnist, and is president of a state-wide car rental company.



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