February 25, 2009 at 18:04 PM EST
Heads of Oil Industry Push Offshore Drilling
Major companies in the oil industry pushed the U.S. Congress Wednesday for the permanently lifting of a moratoria that blocks them from drilling offshore and reach tremendous amounts of oil and gas resources.
(IBTimes) -- 02/25/2009 --

Major companies in the oil industry pushed the U.S. Congress Wednesday to permanently lift moratoria that block them from drilling offshore to reach potentially tremendous amounts of oil and gas resources.

Heads of Shell, BP America, Inc., Devon Energy Corporation, ExxonMobil and Chevron told lawmakers that drilling offshore is essential to meet the energy challenges of the future. They argued that once the economy recovers the nation's demand for energy will also increase.

The companies also remained firm in stating that fossil fuels will continue to be a major source of energy in the coming decades. Natural gas and oil will meet half of the energy demand by 2030 and much of that energy demand can be found offshore, said Larry Nichols, Chairman and CEO of Devon Energy Corporation today.

The executives were testifying before the House Natural Resources Committee.

<b>Outlook if Exploration Approved</b>

The companies did not give a precise quantity of resources available from the Outer Continental Shelf, saying they can't evaluate unless they explore off-limits areas, which currently account for 85 percent of the outer shelf.

Committee Chairman Rep. Doc Hastings, a Republican from Washington state, said during the hearing that even if exploration is approved it will take from 10 to 20 years for companies to start production. Nichols estimated that in a matter of a year or two, resources could be brought online for exploration from the Gulf of Mexico.

The OCS could add 1 million barrels of oil per year by 2025, said Gary Luquette, President of Chevron North America Exploration and Production Company.

<b>Arguments against Moratoria</b>

"A moratorium is not a strategy nor a solution," to help the U.S. economy recover from its current recession, said Shell Oil Company's President Marvin Odum.

Exxon Mobil's Exploration Company President Tim Cejka - whose firm partakes in offshore drilling in other countries - said there is no other country in the world that has moratoria like the U.S.

<b>Concerns</b>

Opponents of offshore drilling have expressed concerns about environmental issues to the Congress during previous hearings. Risks of spills could damage the ocean, kill birds, fish and have repercussions on tourism, they say. They also note that when fossil fuels are used to generate energy this releases large amounts of greenhouse gas emissions which have been blamed for global warming.

A recent report from the Minerals Management Service estimates about 6,200 barrels of oil are spilled each year on the Outer Continental Shelf due to drilling, a member of the Congress said today. Oil executives said they have new technology to drill responsibly.

<b>Energy and the Economy</b>

President Barack Obama's administration has emphasized that alternative energy is the way to win in the economy of the future. The government has allocated funds to develop renewable energy sources such as wind and solar which Mr. Obama has said will boost the creation of "green" jobs, improve the environment and lead to oil independence.

At the hearing, however, the executives encouraged Congress to fully develop the domestic resources saying drilling offshore will also create jobs, create high federal , state and local tax revenues, keep the money inside the country and also contribute to oil independence.

Oil imports are currently about 65 percent of the total U.S. consumption.

"The choice is clear. We can continue to import increasing volumes of oil and gas, or we can develop more of our own domestic resources," commented Mr. Odum today.

<b>Politics of Moratoria</b>

The Congress acted in August 2008 to lift the moratoria, during the last days of former President George Bush's government. However, Secretary of Interior Ken Salazar, appointed by President Barack Obama, decided to delay the plan for 6 months.

Hastings remarked at the hearing that Salazar's decision was not a delay but "a moratorium."

About International Business Times

The International Business Times is composed of twelve high-growth online editions (ibtimes.com) that give readers local reports balanced with multinational perspectives. Exclusive and transparent insights from global markets make The International Business Times an indispensable news source for business-minded individuals.

Stock Market XML and JSON Data API provided by FinancialContent Services, Inc.
Nasdaq quotes delayed at least 15 minutes, all others at least 20 minutes.
Markets are closed on certain holidays. Stock Market Holiday List
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
Press Release Service provided by PRConnect.
Stock quotes supplied by Six Financial
Postage Rates Bots go here