Drilling for clean en­ergy

The Covington News - - Opinion -

The con­tro­ver­sial bans on drilling off­shore and in the Arc­tic Na­tional Wildlife Refuge have pre­served pre­cious oil and nat­u­ral gas re­serves owned by the pub­lic. Thank en­vi­ron­men­tal­ists for this un­in­tended gift.

But for th­ese bans, we would have wasted the re­serves without a strate­gic plan. Leas­ing and drilling would have low­ered world oil prices by a few cents, ben­e­fit­ing more for­eign con­sumers than Amer­i­cans.

The fed­eral rev­enue from roy­al­ties, lease pay­ments and taxes would have been used to meet cur­rent fed­eral ex­pen­di­tures. And our re­main­ing pub­licly owned oil and nat­u­ral gas would be sub­stan­tially de­pleted. Con­se­quently, our de­pen­dence on for­eign en­ergy sources would be even greater than it is — and it is likely that the cur­rent com­mod­ity price cri­sis would be worse.

We hope this price cri­sis prompts the adop­tion of a strate­gic plan to use the re­main­ing value of our fed­er­ally owned oil and nat­u­ral gas re­serves to fund a clean, af­ford­able and in­de­pen­dent en­ergy fu­ture for Amer­ica, a goal wor­thy of short- term en­vi­ron­men­tal con­ces­sions and risks. Vir­tu­ally all gen­eral drilling bans should be lifted. We should per­mit drilling off­shore and in the ANWR and re­quire that it be done with ap­pro­pri­ate care.

Be­fore grant­ing ad­di­tional drilling rights, how­ever, we should fun­da­men­tally change the terms of fu­ture oil and gas lease agree­ments to en­sure that tax­pay­ers cap­ture more of the rev­enue from our re­main­ing re­serves. To­day’s agree­ments pro­vide ex­cep­tional prof­its for lease­hold­ers when prices rise, so much so that lease­hold­ers have a sig­nif­i­cant fi­nan­cial in­cen­tive to de­lay pro­duc­tion un­til prices rise. That must change.

To achieve a huge net win for the en­vi­ron­ment, the fed­eral rev­enue from fu­ture oil and gas pro­duc­tion should be placed in a trust fund and used to foster a clean en­ergy fu­ture for Amer­ica. This must sup­ple­ment, not re­place, other en­vi­ron­men­tal com­mit­ments we have made.

We should jump- start the nec­es­sary fed­eral in­vest­ments for this se­cure en­ergy fu­ture by im­me­di­ately is­su­ing bonds ( per­haps called En­ergy In­de­pen­dence Bonds) against this ex­pected rev­enue. Is­su­ing such bonds would guar­an­tee that our re­main­ing oil and nat­u­ral gas rev­enue is ac­tu­ally used to es­tab­lish en­ergy al­ter­na­tives. The bonds would have to be re­paid with that rev­enue.

Opin­ions vary con­cern­ing the vol­ume of re­main­ing fed­eral oil and gas re­serves and the amount of fed­eral rev­enue they would pro­duce. But by any mea­sure, it is an enor­mous sum. Es­ti­mates are in the tril­lions of dol­lars, as­sum­ing com­pe­tent fed­eral man­age­ment. In a sharp break from cur­rent prac­tice, none of this rev­enue should be shared with host states. Most host states al­ready en­joy rev­enue from oil and gas pro­duc­tion on state lands. They have no le­gal or in­her­ent claim to fed­eral rev­enue, and the drilling bans have re­moved any prac­ti­cal ex­pec­ta­tion of rev­enue from the ar­eas they af­fect.

Lift­ing those bans would still give host states wind­fall ben­e­fits from jobs, eco­nomic stim­u­lus and tax rev­enue re­lated to fed­eral pro­duc­tion. Most im­por­tant, host states would di­rectly ben­e­fit from fed­eral ex­pen­di­tures used to se­cure Amer­ica’s en­ergy in­de­pen­dence. Di­vert­ing rev­enue to states would ham­per our na­tional ef­fort. We are all in this to­gether.

Sim­ply adopt­ing a plau­si­ble U. S. strate­gic plan for en­ergy in­de­pen­dence would have a pos­i­tive im­pact on world oil prices. And ab­sent a sig­nif­i­cant sup­ply dis­rup­tion, oil’s eco­nomic stran­gle­hold would be elim­i­nated if do­mes­tic de­mand stayed flat or grew only slightly while U. S. con­sump­tion of al­ter­na­tives to oil, in­clud­ing nat­u­ral gas, in­creased by a few per­cent­age points a year. With prompt fed­eral action, we could quickly achieve th­ese de­mand and growth rates and greatly re­duce oil’s pres­sure on prices.

The United States can be vir­tu­ally free of fos­sil- fuel use within a few decades — if we pur­sue this goal ag­gres­sively. ( Air travel may be the ex­cep­tion.) To meet such an ob­jec­tive, we would turn prin­ci­pally to so­lar and wind en­ergy. Nu­clear should be in the mix as well, at least for the near fu­ture.

We should re­think bio­fu­els, dis­cour­ag­ing those that com­pete with food pro­duc­tion or de­grade the en­vi­ron­ment while en­cour­ag­ing those that cap­ture en­ergy from waste. We are in­trigued by the pos­si­bil­ity of build­ing a di­rect cur­rent su­per­high­way that would per­mit the ef­fi­cient trans­mis­sion of nu­clear, so­lar and wind power through­out the na­tion. But we should adopt a strate­gic plan be­fore mak­ing any such tac­ti­cal de­ci­sions. Clean en­ergy tech­nolo­gies de­vel­oped with fed­eral fund­ing should be fed­er­ally owned and strate­gi­cally shared with other na­tions.

Tak­ing th­ese rea­son­able steps promptly would avoid an eco­nomic train wreck that now seems in­ex­orable while greatly im­prov­ing our na­tional se­cu­rity. Amer­ica would again be lead­ing the world, this time to­ward a sus­tain­able fu­ture.

Jim Mar­shall, a Demo­crat, rep­re­sents Ge­or­gia’s 8th District in the U. S. House. Roscoe Bartlett, a Repub­li­can, rep­re­sents Mary­land’s 6th District and co- au­thored this col­umn.

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