SPEAKERS CONTENTS INSERTS
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70–888 DTP
2001
A NATIONAL ENERGY POLICY
OVERSIGHT HEARINGS
before the
COMMITTEE ON RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
March 7, 2001, The Role of Public Lands in the
Development of a Self–Reliant Energy Policy; and
June 6, 2001, The National Energy Policy
Serial No. 107-1
Printed for the use of the Committee on Resources
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Available via the World Wide Web: http://www.access.gpo.gov/congress/house
or
Committee address: http://resourcescommittee.house.gov
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Mail: Stop SSOP, Washington, DC 20402–0001
COMMITTEE ON RESOURCES
JAMES V. HANSEN, Utah, Chairman
NICK J. RAHALL II, West Virginia, Ranking Democrat Member
Don Young, Alaska,
Vice Chairman
W.J. ''Billy'' Tauzin, Louisiana
Jim Saxton, New Jersey
Elton Gallegly, California
John J. Duncan, Jr., Tennessee
Joel Hefley, Colorado
Wayne T. Gilchrest, Maryland
Ken Calvert, California
Scott McInnis, Colorado
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Richard W. Pombo, California
Barbara Cubin, Wyoming
George Radanovich, California
Walter B. Jones, Jr., North Carolina
Mac Thornberry, Texas
Chris Cannon, Utah
John E. Peterson, Pennsylvania
Bob Schaffer, Colorado
Jim Gibbons, Nevada
Mark E. Souder, Indiana
Greg Walden, Oregon
Michael K. Simpson, Idaho
Thomas G. Tancredo, Colorado
C.L. ''Butch'' Otter, Idaho
Tom Osborne, Nebraska
Jeff Flake, Arizona
Dennis R. Rehberg, Montana
VACANCY
George Miller, California
Edward J. Markey, Massachusetts
Dale E. Kildee, Michigan
Peter A. DeFazio, Oregon
Eni F.H. Faleomavaega, American Samoa
Neil Abercrombie, Hawaii
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Solomon P. Ortiz, Texas
Frank Pallone, Jr., New Jersey
Calvin M. Dooley, California
Robert A. Underwood, Guam
Adam Smith, Washington
Donna M. Christensen, Virgin Islands
Ron Kind, Wisconsin
Jay Inslee, Washington
Grace F. Napolitano, California
Tom Udall, New Mexico
Mark Udall, Colorado
Rush D. Holt, New Jersey
James P. McGovern, Massachusetts
Anibal Acevedo-Vila, Puerto Rico
Hilda L. Solis, California
Brad Carson, Oklahoma
Betty McCollum, Minnesota
Allen D. Freemyer, Chief of Staff
Lisa Pittman, Chief Counsel
Michael S. Twinchek, Chief Clerk
James H. Zoia, Democrat Staff Director
Jeff Petrich, Democrat Chief Counsel
C O N T E N T S
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Hearing held on March 7, 2001
Statement of Members:
Calvert, Hon. Ken, a Representative in Congress from the State of California, Prepared statement of
Cubin, Hon. Barbara, a Representative in Congress from the State of Wyoming, Prepared statement of
Gallegly, Hon. Elton, a Representative in Congress from the State of California, Prepared statement of
Hansen, Hon. James V., a Representative in Congress from the State of Utah
Prepared statement of
McGovern, Hon. James P., a Representative in Congress from the State of Massachusetts, Prepared statement of
Pallone, Hon. Frank, Jr., a Representative in Congress from the State of New Jersey, Prepared statement of
Radanovich, Hon. George, a Representative in Congress from the State of California, Prepared statement of
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Rahall, Hon. Nick J., II, a Representative in Congress from the State of West Virginia
Prepared statement of
Rehberg, Hon. Dennis R., a Representative in Congress from the State of Montana, Prepared statement of
Udall, Hon. Mark, a Representative in Congress from the State of Colorado, Prepared statement of
Statement of Witnesses:
Bowles, Jim L., President, Americas Division, Phillips Petroleum Company, on behalf of the American Petroleum Institute
Prepared statement of
Geringer, Hon. Jim, Governor, State of Wyoming
Prepared statement of
Hocker, Christopher, President, National Hydropower Association
Prepared statement of
Response to questions submitted for the record
Hogan, Leland J., Rancher, Stockton, Utah
Prepared statement of
Response to questions submitted for the record
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James, Leslie, Executive Director, Colorado River Energy Distributors Association
Prepared statement of
Judd, Robert L., Jr., Executive Director, USA Biomass Power Producers Alliance
Prepared statement of
Knowles, Hon. Tony, Governor, State of Alaska
Prepared statement of
Martz, Hon. Judy, Governor, State of Montana
Prepared statement of
O'Connor, Terry Vice President, External Affairs, Arch Coal, Inc., on behalf of the National Mining Association
Prepared statement of
Response to questions submitted for the record
Stanley, Neal A., President, Independent Petroleum Association of Mountain States
Prepared statement of
Additional materials supplied:
Alberswerth, David, Director, The Wilderness Society, Letter submitted for the record by Hon. Donna Christensen
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Mason, Tad, Vice President, TSS Consultants, Letter submitted for the record by Hon. Scott McInnis
C O N T E N T S
Hearing held on June 6, 2001
Statement of Members:
Flake, Hon. Jeff, a Representative in Congress from the State of Arizona, Prepared statement of
Hansen, Hon. James V., a Representative in Congress from the State of Utah
Prepared statement of
Kind, Hon. Ron, a Representative in Congress from the State of Wisconsin, Prepared statement of
McInnis, Hon. Scott, a Representative in Congress from the State of Colorado, Prepared statement of
Rahall, Hon. Nick J., II, a Representative in Congress from the State of West Virginia, Prepared statement of
Solis, Hon. Hilda L., a Representative in Congress from the State of California, Prepared statement of
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Udall, Hon. Mark, a Representative in Congress from the State of Colorado, Prepared statement of
Udall, Hon. Tom, a Representative in Congress from the State of New Mexico, Prepared statement of
Statement of Witnesses:
Norton, Hon. Gale A., Secretary, U.S. Department of the Interior
Prepared statement of
Response to questions submitted for the record
OVERSIGHT HEARING ON THE ROLE OF PUBLIC LANDS IN THE
DEVELOPMENT OF A SELF-RELIANT ENERGY POLICY
Wednesday, March 7, 2001
House of Representatives,
Committee on Resources,
Washington, DC
The Committee met, pursuant to notice, at 10:02 a.m., in Room 1324, Longworth House Office Building, Hon. James V. Hansen (Chairman of the Committee) presiding.
STATEMENT OF THE HON. JAMES V. HANSEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF UTAH
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The CHAIRMAN. The Committee will come to order. We appreciate your presence. This very important meeting we are having today will be regarding energy policy. Between this Committee and the Commerce Committee, we hope to be coming up with a policy that will determine the energy policy of America for the next few years.
Around the country this winter, Americans have opened their utility bills with dismay to see their costs double and sometimes triple from last year. Many Americans have written to ask, ''Who fell asleep at the switch? How can there be an energy shortage in one of the most prosperous and technologically-advanced countries in the world?''
Our current situation is the direct result of the lack of a coherent national energy policy and policies that have restricted the development of our domestic energy resources on public lands, thereby increasing reliance on foreign energy. To keep our economy prosperous and reinforce our national security, we must have reliable energy supplies at a reasonable cost. We have called this congressional hearing to explore how we may structure natural resource policy to help achieve a sustainable and self-reliant energy policy.
Over the last 150 years, the Federal Government retained land to hold in trust for the people. The principle guiding public land policy was multiple use and sustainable yield. Public land was a resource to be used in maintaining our national health, environment, and wealth.
Some time ago, we lost that vision and today we are paying the price. Currently, while national energy costs skyrocket, billions of barrels of oil and natural gas are locked beneath public lands, including the Arctic National Wildlife Refuge. Using public lands responsibly includes environmentally sensitive resource extraction. These two goals are not mutually exclusive. We have produced more than 13 billion barrels of oil since 1977 from Alaska's North Slope in a manner that has allowed wildlife to thrive and the caribou herds to increase five-fold.
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Clean oil remains untouchable in many parts of the United States and hydroelectric generation has been reduced. In one case, generating capacity at a Federal hydropower facility was reduced by one-third to comply with environmental regulations. That is enough energy to power 400,000 homes.
I recall the debate in Utah several decades ago when we first set out to develop resources on the upper Colorado River. After extensive study, the Bureau of Reclamation ultimately identified two sites that were most feasible— Echo Park Canyon, in Dinosaur National Monument, and Glen Canyon.
Once that was done, we went through months and months of additional study and debate. Strong feelings were expressed on all sides. Both sites proposed were beautiful, rugged, and largely unexplored, and yet both sites were unique in that they shared the geological characteristic that made it possible to build one of the largest man-made structures at the time, to harness one of the wildest and untamed rivers in the hemisphere. After a long period of debate and negotiation, Congress ultimately decided that Glen Canyon was the best place to dam the upper Colorado River.
We used to hear former President Clinton say from time to time, ''you can't have mines everywhere,'' and I agree with that. You can only have mines where the minerals and resources are. Likewise with a dam, you can't have dams everywhere. You build dams on sites which are capable of accomplishing the purpose for which they are built.
In this instance, Glen Canyon was designed for three purposes: water storage, flood control, and to generate electricity for the growing population in the Southwest. You know, it has got another one now; it is called recreation. In fact, more people go there for more than one day than probably any other place in our whole park system.
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Once the site was proposed, opponents of the project cried out and said, ''This dam is too big. We will never be able to use all that power. You will upset the laws of supply and demand,'' et cetera, et cetera. Besides, why do we need hydropower when we already have all of that great coal in the Kaparowits plateau?
Thirty years later, when former President Clinton designated the Grand Staircase-Escalante National Monument, we were told that the Kaparowits coal would never be used, that markets would never be able to use all that coal, and that there was a glut of cheap power that would make the development of the coal resource uneconomical.
My, how times have changed. Let's not repeat the short-sightedness of the past. We have been given a sacred trust by the people to develop our natural resources wisely and maintain a healthy environment. It is time to return to the original concept of multiple use of access to our public grounds.
I will look forward to hearing from our witnesses.
[The prepared statement of Chairman Hansen follows:]
Statement of The Honorable James V. Hansen, Chairman, Committee on Resources
Around the country this winter, Americans have opened their utility bills with dismay to see their costs double and sometimes triple from last year. Many Americans have Written to ask, ''Who fell asleep at the switch? How can there be an energy shortage in one of the most prosperous and technologically advanced countries in the world?''
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Our current situation is the direct result of (1) lack of a coherent national energy policy over the past eight years, and (2) policies that have restricted development of our domestic energy resources on public lands, thereby increasing reliance on foreign energy. To keep our economy prosperous and reinforce our national security, we must have reliable energy supplies at a reasonable cost. We have called this Congressional hearing to explore how we may structure natural resource policy to help achieve a sustainable and self-reliant energy policy.
Over the last 150 years, the Federal government retained land to hold in trust for the public. The principle guiding public land policy was multiple use and sustainable yield. Public land was a resource to be used in maintaining our national health, environment and wealth.
Some time ago, we lost that vision and today we are paying the price. Currently, while national energy costs skyrocket, billions of barrels of oil and natural gas are locked beneath public lands including the Arctic National Wildlife Refuge. Using public lands responsibly includes environmentally sensitive resource extraction. These two goals are not mutually exclusive. We have produced more than 13 billion barrels of oil since 1977 from Alaska's North Slope in a manner that has allowed wildlife to thrive and the caribou herds to increase 5-fold.
Clean coal remains untouchable in many parts of the United States and hydroelectric generation has been reduced. In one case, generating capacity at a Federal hydropower facility has been reduced by 1/3 to comply with environmental regulations. This is enough energy to power 400,000 homes.
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We have been given a sacred trust by the people to develop our natural resources wisely and maintain a healthy environment. It's time to return to the original concept of multiple use on our public lands.
I look forward to hearing from our witnesses.
I now recognize the distinguished gentleman from West Virginia, the ranking Democrat on the Committee.
STATEMENT OF THE HON. NICK J. RAHALL, II, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WEST VIRGINIA
Mr. RAHALL. Thank you very much, Mr. Chairman. I join with you in welcoming our distinguished Governors of Alaska, Montana, and Wyoming to the Resources Committee this morning for this very important hearing on the role of public lands in the development of a national energy policy.
I approach this issue perhaps slightly differently, perhaps a lot differently than Chairman Hansen and our distinguished panel that is going to be testifying this morning. That is certainly no surprise to the Chairman. We have worked together on this Committee for a number of years, or decades perhaps.
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Certainly, Federal lands have a role to play in producing energy for our Nation. For instance, almost 23 million acres of these lands are currently subject to Federal onshore oil and gas leases. Now, this happens to be greater than the size of my home State of West Virginia. It is the size of Indiana and just slightly less than the size of States like Ohio, Kentucky, Tennessee, and Virginia. Now, when you toss in the geothermal and coal leases, well, you start to get to the size of these States.
Acreage aside, energy production from Federal lands, both onshore and offshore, is making a sizable contribution to our energy needs. Oil production from Federal areas account for 27 percent of the U.S. total, natural gas 38 percent of the total, and coal 23 percent of the total, to the pleasure, I am sure, of the governors from the Powder River Basin.
And here is something I am sure that certain people do not want you to know, but it is worth stating today, and I am going to repeat it. Natural gas and coal production from Federal leases was at an all-time high during the Clinton administration, surpassing the amount produced during the Reagan years, let alone Bush the First. And let me repeat that. Natural gas and coal production from Federal leases was at an all-time high during the Clinton administration, surpassing the amount produced during the Reagan years, let alone Bush the First.
With this noted, I become somewhat puzzled when I hear talk about opening more Federal lands to energy development. Now, which areas are we talking about here? The big production comes from offshore oil. Yet, exploration for new fields is constrained by drilling moratorium bans supported by the President during the campaign, as well as the governors of those coastal States. And when it comes to onshore, certainly a viable energy policy should not include opening Federal park and wilderness areas to new oil and gas drilling.
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So does it all boil down to little old Alaska, opening up a national wildlife refuge so that 10 to 15 years in the future oil may begin flowing to the lower 49 States, if it is not first exported to Japan, an undetermined amount of oil at that? Does that represent the hope and the salvation of our Nation's energy security? That, in my view, is quite a roll of the dice approach to addressing our energy needs.
Certainly, Alaska has a role to play. An issue I intend to examine is whether we have fully explored the potential for the 23-million-acre National Petroleum Reserve in Alaska to not only contribute to our energy needs, but to Alaska's thirst for shelling out a $2,000-per-year check out of its $27 billion North Slope oil kitty to every man, woman, child, and infant residing in the State, a State, I might add, with no income tax and no statewide sales tax. I notice there is a little rumbling in the audience. Everybody is trying to find out where to sign up for this check.
But rather than becoming bogged down in controversy over the Arctic Refuge, I also think it would be constructive if we have more dialogue over the potential of constructing the North Slope gas pipeline already authorized by Federal law. We ought to examine more fully the contribution that that can make in providing a more immediate return in meeting America's energy needs.
With that, I again welcome our Governors this morning and look forward to your testimony.
[The prepared statement of Mr. Rahall follows:]
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Statement of The Honorable Nick Rahall, a Representative in Congress from the State of West Virginia
Thank you, Mr. Chairman. I would like to welcome the distinguished governors of Alaska, Montana and Wyoming to the Resources Committee for today's hearing on the role of public lands in the development of a national energy policy.
I approach this topic from perhaps a different perspective than does Chairman Hansen and the governors who are with us this morning.
Certainly, Federal lands have a role to play in producing energy for our Nation. For instance, almost 23 million acres of these lands are currently subject to Federal onshore oil and gas leases.
That is greater than the size of my home State of West Virginia. It is the size of Indiana, and just slightly less than the size of States like Ohio, Kentucky, Tennessee and Virginia. Toss in Federal geothermal and coal leases, and you start to get to the size of those States.
Acreage aside, energy production from Federal lands, both onshore and offshore, is making a sizable contribution to our energy needs. Oil production from Federal areas account for 27 percent of the U.S. total. Natural gas, 38 percent of the total. And coal, 33 percent of the total...to the pleasure, I am sure, of the Governors from the Power River Basin.
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And here is something I am sure certain people do not want you to know: Natural gas and coal production from Federal leases was at an all time high during the Clinton Administration, surpassing the amount produced during the Reagan years, let alone Bush the First.
With this noted, I become somewhat puzzled when I hear talk about opening more Federal lands to energy development.
Which areas are we talking about? The big production comes from offshore. Yet, exploration for new fields is constrained by drilling moratoriums; bans which President Bush supported during his campaign, as well as by the governors of the coastal States. And when it comes to onshore, certainly a viable energy policy should not include opening Federal park and wilderness areas to new oil and gas drilling.
So does it all boil down to little 'ole Alaska, to opening up a national wildlife refuge so that 10 to 15 years in the future oil may begin flowing to the lower 48 unless it is first exported to Japan? An undetermined amount of oil at that. Does that represent the hope and salvation of the Nation's energy security?
That, in my view, is a roll of the dice approach to addressing our energy needs. Certainly, Alaska has a role to play. An issue I intend to examine is whether we have fully explored the potential of the 23 million acre National Petroleum Reserve-Alaska...to not only contribute to our energy needs...but to Alaska's thirst for shelling out a $2,000 per-year check out of its $27 billion North Slope oil kitty to every man, woman, child and infant residing in the State. A State, I might add, with no income tax and no statewide sales tax.
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I notice the audience is getting restless, governor, they want to know where to sign up.
Rather than becoming bogged down in controversy over the Arctic Refuge, I also think it would be constructive if we have more dialogue over the potential constructing the North Slope gas pipeline—already authorized by Federal law can make in providing for a more immediate return in meeting America's energy needs.
With that, I welcome our witnesses and look forward to hearing the testimony. Thank you.
The CHAIRMAN. I thank the gentleman from West Virginia.
As you know, the policy of the Committee is if you are present when the gavel falls, you will be recognized by seniority and after that in the order in which you arrived. But in the interests of time, we are going to go straight to our three distinguished Governors. We are very honored to have you with us at this particular time.
We understand that Governor Knowles, of Alaska, has an airplane to catch, and so we will go to you first, Governor, if that is all right.
Governor Knowles, we will turn to you, sir.
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STATEMENT OF HON. TONY KNOWLES, GOVERNOR, STATE OF ALASKA
Governor KNOWLES. For the record, I am Tony Knowles, the Governor of Alaska, and I welcome this opportunity to testify on the vital issue of developing a self-reliant national energy policy and the central role that America's public lands play in that effort. I applaud you and the national administration for focusing on this issue which is so important to America's jobs and families.
I address you today in two capacities, first as Governor of a State which serves as America's energy storehouse. Since completion of the trans-Alaska oil pipeline nearly 25 years ago, Alaska has been supplying a significant portion of this nation's domestic oil production. And now, with development of our natural gas, North America's largest proven reserve, we will continue to help meet America's energy needs.
Second, I represent my fellow governors of oil- and gas-producing States as Chairman of the Interstate Oil and Gas Compact Commission (IOGCC). These 37 States produce more than 99 percent of the oil and natural gas produced onshore in the United States, and are committed to the conservation and maximum utilization of America's oil and gas reserves.
My message today is simple. To continue America's prosperity which I believe is threatened by a looming energy crisis, we must meet our nation's energy needs through a combination of conservation and increased supply. The key to increased energy supply is the environmentally-responsible development of this nation's enormous energy resources, most of which lie beneath our public lands. Our access to those lands obligates us to accept the profound responsibility for enlightened stewardship. No longer can access to public lands be an excuse for environmental destruction.
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As this Committee knows well, this country is suffering from a combination of high energy prices and energy shortages. We need to look no further than the news video of senior citizens being pried from stopped elevators during California's rolling blackouts or subsequent plant closures and layoffs to know that.
New energy supplies will come from many sources, but our obligation for jobs and families of Americans is to look at home first. America's public lands hold the vast majority of those new energy resources. In my own State of 375 million acres, one-fifth of the land mass of the rest of America, we have no choice but to look to public lands, as they constitute 88 percent of our land mass.
Mr. Chairman, I submit that we need to look no further than the 49th State for a national model on how to find and produce energy resources on public lands, while protecting the wildlife and the environment. We in Alaska apply a simple standard to development issues, whether producing oil from a newly discovered reserve or harvesting America's best tasting wild organic salmon, and that standard is we do development right.
By that, I mean development must be based on three principles: sound science and technology, enlightened stewardship, and a thorough, open public process. Using that standard, we have in Alaska supplied up to a quarter of America's domestic oil production from the nation's two largest oil fields. We have done so while protecting the nation's most pristine environment inhabited by more caribou, grizzlies, bald eagles, and mosquitoes than the rest of the country combined.
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Nationally, the vast majority of our energy resources are on public lands. The U.S. Geological Survey estimated that 67 percent of the nation's undiscovered oil and 40 percent of its undiscovered natural gas resources lie beneath onshore public lands. And along our coastlines, only 2 percent of total Federal offshore acreage, including that in Alaska, has been leased for energy development. At the same time, the amount of public lands available for oil drilling has shrunk from 73 to 17 percent in the past 25 years.
The best promise for new natural gas development, which we know is the clean-burning fuel of the 21st century, is on the public lands in the Gulf of Mexico, the Rocky Mountains, and Alaska's Arctic Slope. As we seek to develop these energy resources on public lands, I believe those of us from Western public lands States have a special obligation to adhere to the ''doing it right'' standard, and we are doing exactly that in Alaska.
During my roughnecking days on the North Slope in the 1960's, a drill pad could be as big as 65 acres. Today, they are a tenth that size. In using new technology, up to 50 wells can be drilled from the same smaller pad and tap into oil identified by 3-D seismic technology into oil 20,000 feet deep and 5 miles away, under sensitive areas such as ice-choked ocean or sensitive wildlife habitat. That is like running a well through this Committee room floor to Ronald Reagan National Airport and we could determine which gate the drill bit would emerge from.
With this ''doing it right'' approach to development, we successfully convinced the Clinton administration to permit exploration and development in a portion of the 23-million-acre National Petroleum Reserve (NPRA), a promising Indiana-sized area to the west of Prudhoe Bay. We did so by imposing the strictest environmental constraints of any oil and gas lease in America or the world.
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These 79 conditions are specifically designed to protect caribou, polar bears, and birds particularly during sensitive periods of calving, migration, molting, denning, and hibernation. They were the result of a collaboration of world-class experts in science and engineering from all levels of government and industry. This is the only acceptable way to combine the needs for jobs and energy development with the protection of the land and wildlife we love.
To continue meeting this nation's energy needs, we urge the Congress to permit exploration in America's best prospect for a major oil and gas discovery in the Arctic National Wildlife Refuge (ANWR). Just a small portion of this South Carolina-sized refuge is believed to contain up to 16 billion barrels of oil, enough to produce 2 million barrels a day for at least 25 years, about a third of the current domestic production. In addition, it is believed to hold substantial new discoveries of natural gas.
Environmentally-responsible development in the Arctic Refuge would be good for America, producing thousands of jobs, lessening our dependence on imported oil, reducing prices at the pump, providing environmentally-friendly natural gas to produce our nation's electric supply, improving our nation's trade deficit, and a host of other reasons.
As enlightened stewards, we must and can take special precautions to protect caribou, musk ox, geese, polar bear, and other wildlife that inhabit the Arctic Refuge. As we did in the NPRA, we will work with the industry to mitigate impacts such as limited activity during the 6 to 8 weeks when the Porcupine caribou herd often uses the coastal plain for calving. We must be sensitive to the subsistence needs of Native people on both sides of the border whose culture, nutrition and economy are dependent on the area's healthy wildlife.
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To bring oil from ANWR and other North Slope development to American consumers, we are working with the Bush administration to reauthorize the right-of-way lease for the 800-mile trans-Alaska oil pipeline. The Federal right-of-way administered by the Bureau of Land Management expires in 2004, but the environmental review and renewal process is projected to take at least 2 years. I welcome this Committee's oversight and encouragement of that process.
Alaskans are working to continue as the nation's energy storehouse by delivering our enormous natural gas reserve to thirsty American markets. Alaska's North Slope has 35 trillion cubic feet of discovered natural gas, most of which is being reinjected to increase Prudhoe Bay oil production. Yet, geologists estimate we are sitting on perhaps triple what we have already discovered, more than 100 trillion cubic feet.
The most viable way to get that gas to market is through a 1,800-mile pipeline from Alaska's North Slope through Fairbanks and along the Alaska Highway into the North American gas distribution system. This route has already been approved by Congress in 1977 and international agreement. This development would be one of America's largest privately-funded construction projects, creating jobs and delivering environmentally-friendly energy for a generation or more. I am pleased that the nation's governors unanimously endorsed the Alaska Highway natural gas pipeline project at last month's National Governors' Association conference.
In closing, Mr. Chairman, let me note that conservation must be a cornerstone of America's energy policy. It is not purpose here today to describe this critical component in detail, but I note that conservation alone cannot address the challenge before us. We must increase our supply to stabilize prices and prevent shortages. America's energy security depends on access to public lands.
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With new technology and strengthening our resolve to protect the environment, we can go beyond the old approach of either development or the environment to the 21st century paradigm of recognizing the necessity and interdependence of both.
On behalf of the IOGCC, I recommend several steps to improve responsible access to our public lands: complete the inventory of oil and gas resources on public lands, as required in last year's Energy Policy Conservation Act; expedite processing of applications to drill and offers to lease; conduct extensive research on the technologies of extraction and alternative energy; repeal roadless plans and new roadless initiatives that should already be a part of comprehensive land use management plans; and streamline the National Environmental Protection Act process.
Mr. Chairman and Committee members, Alaska, my administration, and the IOGCC stand ready to assist you and our national administration in crafting a sensible national energy policy that provides greater access to public land for domestic oil production and natural gas, that encourages conservation and recognizes the important partnership with our private oil and gas industry to get the job done.
Thank you.
[The prepared statement of Governor Knowles follows:]
Statement of The Honorable Tony Knowles, Governor, State of Alaska
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Good morning, Chairman Hansen and distinguished members of the Committee. For the record, I am Tony Knowles, Governor of Alaska.
I welcome this opportunity to testify on the vital issue of developing a self-reliant national energy policy and the central role America's public lands play in that effort. I applaud you and the national administration for focusing on this issue so important to American jobs and families.
I address you today in two capacities: First, as governor of a state which serves as America's energy storehouse. Since completion of the trans-Alaska oil pipeline nearly 25 years ago, Alaska has been supplying a significant portion of this nation's domestic oil production. And now with development of our natural gas—North America's largest proven reserves—we'll continue to help meet America's energy needs.
Second, I represent my fellow governors of oil and gas producing states as chairman of the Interstate Oil and Gas Compact Commission. These 37 states produce more than 99 percent of the oil and natural gas produced on-shore in the United States and are committed to the conservation and maximum utilization of American oil and gas resources.
This time of year as the snow continues to fall across most of my state, I have a personal policy to try to stay within about a 10-degree temperature variation from the bulk of my constituents. I was looking forward to a real Alaska-style snowstorm, but am honored nonetheless to join you here in our nation's temperate capital.
My message today is simple: to continue America's prosperity which I believe is threatened by a looming energy crisis, we must meet our nation's energy needs through a combination of conservation and increased supply.
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The key to increased energy supply is the environmentally responsible development of this nation's enormous energy resources, most of which lie beneath our public lands. Our access to those lands carries with it the responsibility for sound stewardship. That access can never be considered a green light for the irresponsible destruction of those lands.
As this Committee knows well, this country is suffering from a combination of high energy prices and energy shortages. We need look no further than news video of senior citizens being pried from stopped elevators during California's rolling black-outs to know that.
New energy supplies will come from many sources, but our obligation for the jobs and families of Americans is to look at home first. America's public lands hold the vast majority of those new energy resources.
In my own state of 375 million acres, public lands constitute 88 percent of our land mass, with 40 percent of our state in Federal forests, wildlife refuges and national parks. Development of the resources on public lands in Alaska is a critical part of our economic future.
Mr. Chairman, I submit we need look no further than the 49th state for a national model on how to find and produce energy resources on public lands, while protecting the wildlife and environment.
We in Alaska apply a simple standard to development issues, whether producing oil from a newly discovered reserve or harvesting America's best-tasting, organic wild salmon. That standard is—we do development right.
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By that, I mean development must be based on three principles: sound science, good stewardship and a thorough, open public process.
Using that standard, we in Alaska have supplied up to a quarter of America's domestic oil production from the nation's largest oil fields. We've done so while protecting the nation's most pristine environment inhabited by more caribou, grizzly bears, bald eagles and mosquitoes than the rest of the country combined.
Nationally, the vast majority of our energy resources are on public lands. The U.S. Geological Survey estimates that 67 percent of the nation's undiscovered oil and 40 percent of its undiscovered natural gas resources lie beneath on-shore public lands. And along our coastlines, only 2 percent of total Federal offshore acreage, including that in Alaska, has been leased for energy development.
At the same time, the amount of public lands available for oil drilling has shrunk from 73 to 17 percent in the past 25 years. It's worse for natural gas development, which we know is the clean-burning fuel of the 21st century.
A recent report by the National Petroleum Council showed that the most promising regions for future gas production in the Rocky Mountains and Gulf of Mexico are either closed to exploration or have significant access restrictions. And even if we can obtain access to these resources, public lands must be crossed by pipelines or other methods to deliver the energy to homes, power plants and factories.
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As we seek to develop these energy resources on public lands, I believe those of us from western public lands states have a special obligation to adhere to the ''doing it right'' standard.
We're doing exactly that in Alaska. During my rough-necking days on the North Slope in the 1960s, a drill pad could be as big as 65 acres. Today, they're a tenth that size.
And using new technology, up to 50 wells can be drilled from the same, smaller pad and tap into oil identified by 3–D seismic technology into oil 20,000 feet deep and five miles away, under sensitive areas, such as an ice-choked ocean or sensitive wildlife habitat. That's like running a well through this Committee room floor to Ronald Reagan National Airport and we could determine which gate the drill bit would emerge from.
With this ''doing it right'' approach to development, we successfully convinced the Clinton administration to permit exploration and development in a portion of the 4-million-acre National Petroleum Reserve, a promising Indiana-sized area to the west of Prudhoe Bay.
We did so by imposing the strictest environmental constraints of any oil and gas lease in America. These 79 conditions are specifically designed to protect caribou, polar bears and birds, particularly during sensitive periods of calving, migration, molting, denning and hibernation.
They were the result of collaboration of world-class experts in science and engineering from all levels of government and industry. This is the only acceptable way to combine the need for jobs and energy development with protection of the land and wildlife we love.
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To continue meeting this nation's energy needs, we urge the Congress to permit exploration in America's best prospect for a major oil and gas discovery—in the Arctic National Wildlife Refuge. Just a small portion of this South Carolina-sized refuge is believed to contain up to 16 billion barrels of oil, enough to produce 2 million barrels a day for at least 25 years, about a third of the current daily domestic production. In addition it is believed to hold substantial new discoveries of natural gas.
Environmentally responsible development in the Arctic Refuge would be good for America—producing thousands of jobs, lessening our dependence on imported oil, reducing prices at the pump, providing environmental friendly natural gas to produce our nation's electrical supply, improving our nation's trade deficit, and a host of other reasons.
I believe we must, and can, take special precautions to protect the caribou, musk ox, geese, polar bear and other wildlife that inhabit the Arctic Refuge. As we did in the NPRA, we will work with the industry to mitigate impacts, such as limiting activity during the six to eight weeks when the Porcupine caribou herd often uses the coastal plain for calving.
We must be sensitive to the subsistence needs of Native people on both sides of the border whose culture, nutrition, and economy are dependent on the area's healthy wildlife.
To bring oil from ANWR and other North Slope development to American consumers, we are working with the Bush administration to reauthorize the right of way lease for the 800-mile trans-Alaska oil pipeline.
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The Federal right of way administered by the Bureau of Land Management expires in 2004, but the environmental review and renewal process is projected to take two years. I welcome this Committee's oversight and encouragement of that process.
Alaskans are working to continue as the nation's energy storehouse by delivering our enormous natural gas reserves to thirsty American markets.
Alaska's North Slope has 35 trillion cubic feet of discovered natural gas, most of which today is being re-injected to increase Prudhoe Bay oil production. Yet geologists estimate we're sitting on perhaps triple what we're already discovered—more than 100 trillion cubic feet.
The most viable way to get that gas to market is through an 1,800-mile pipeline from Alaska's North Slope, through Fairbanks and along the Alaska Highway into the North American gas distribution system.
This development would be America's largest privately funded construction project, creating jobs and delivering environmentally friendly energy for a generation or more. I'm pleased the nation's governors unanimously endorsed the Alaska Highway natural gas pipeline project at last month's National Governors' Association conference.
In closing, Mr. Chairman, let me address two issues: conservation and access.
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Conservation must be a cornerstone of America's energy policy. Improved mileage for vehicles, efficiencies in manufacturing and electricity use can substantially expand the efficiency in using our energy supply.
Yet conservation alone cannot address the challenge before us. We must increase our supply to stabilize prices and prevent shortages. America's energy security depends on access to public lands.
With new technology and strengthening our resolve to protect the environment, we can go beyond the old approach of either development or the environment, to the 21st century paradigm of recognizing the necessity and interdependence of both.
On behalf of the IOGCC, I recommend three steps to improve access to our public lands which hold the key to our future energy independence.
First, let's complete the inventory of oil and natural gas resources on public lands required in last year's Energy Policy Conservation Act. The BLM must have adequate resources to complete this study in a timely manner.
Second, let's expedite action in the agency processes that will lead directly to exploration for energy resources, such as applications to drill and offers to lease.
Third, let's better share with independent energy producers and others the results of state and Federal research so that resources developed on public lands are maximized. The Federal government could make a strong commitment to research by reinvesting a part of the revenue received from royalties on gas production.
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Mr. Chairman and Committee members: Alaska, my administration and the IOGCC stand ready to assist you and our national administration in crafting a sensible national energy policy that provides greater access to public land for domestic production of oil and natural gas; that encourages conservation; and that recognizes the important partnership with our private oil and gas industry to get the job done.
The CHAIRMAN. Thank you, Governor Knowles. We appreciate your testimony.
I recognize the gentlelady from Wyoming to introduce Governor Geringer.
Mrs. CUBIN. Thank you very much, Mr. Chairman. It is truly an honor for me to represent Governor Geringer. Governor Geringer has excelled nationwide in many, many areas since he has been Governor. He has led the country in many areas, as well, as far as taking his State forward is concerned—telecommunications, the deployment of the infrastructure required for connecting every single school to computers. He has been in the forefront suggesting that we had an energy crisis long before other people recognized that we had an energy crisis.
Governor Geringer represents the least-populated State in the country, but he also represents the only State in the country that has three Senators—they are all men; the Governor is a man—and one Congressman, a woman, but it really only takes one woman to do the work of those three guys.
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The Governor has always been on my side, so it is truly an honor to represent a man that I think has been one of the best governors that Wyoming has ever had, Governor Jim Geringer.
STATEMENT OF HON. JIM GERINGER, GOVERNOR, STATE OF
WYOMING
Governor GERINGER. Thank you, Congresswoman Cubin, and thank you, Mr. Chairman, Ranking Member, and other members of the Committee for your invitation to address you today.
Mr. Chairman, I ask that my written testimony that has been presented and the attachments that are included be made a part of the record.
The CHAIRMAN. Without objection.
Governor GERINGER. I thank you for that. I will not provide all the testimony that is included there, but I ask that it be considered.
As Congresswoman Cubin mentioned, Wyoming has the least population of all States. We are here as Western governors, and we particularly appreciate your invitation that the Western governors join you because of the mineral resource that is in the West and because so much of the public lands that will be debated and considered during this testimony are in the West. And you have heard a very vivid example of that in Alaska.
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In the Western Governors' Association, we have the least populated State in Wyoming; the most populated State is California; the largest States, Alaska and Texas. And as we consider the resources there and the huge numbers that are involved with the oil, gas, coal, hydroelectric power, wind energy, all the variety of renewable and non-renewable resources, we are first to point out that Wyoming had the first National Park in Yellowstone; the first National Monument, Devil's Tower; the first National Forest, the Shoshone.
So we understand the environment and we understand the economy, and we are here to tell you that as we discuss the effect of becoming self-reliant in energy for America, we also understand the balance among environment, the economy, and community, because we as a community cannot ignore the impact that energy may or may not have on our States.
Some of the discussion, I am sure, will center on whether or not something is broken. If it ain't broke, don't fix it, is the common term that is out there. But we ought to recognize that you ought to avoid breaking it. If you do preventive maintenance, you can avoid breaking it and you don't have to recover from a disaster.
The model that we have developed in the West among our Western States is that we work together to prevent the crisis from happening rather than having to deal with recovering from a crisis. We almost didn't make it last year when the fires almost overwhelmed the West, and could possibly again this summer. But we developed a model among ourselves, Republican and Democrat. We don't even use the terms ''bipartisan'' or ''nonpartisan.'' We just get the job done, as Governor Knowles said, because it is far better to have avoided the problem than to have been engaged in the recovery of a disastrous situation.
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Chairman Greenspan has addressed various members of congressional Committees over the last couple of weeks, and even the governors, as to what is happening with our national economy. Our national economy seems to have flattened out and the productivity gains seem to be declining. They don't have to.
One of the things that can dramatically impact that is the availability on time of energy, because energy drives the economy today. The economy in America is referred to as the new economy, and the new economy with its technology base needs the electricity in a reliable, high-quality manner or it will not be able to sustain itself, nor will the productivity gains be able to sustain themselves.
If there is one thing that we very vividly understand, whether you are a Member across the table in your position or a governor in our position, it is that our citizens want economic security. They want jobs, they want opportunity for their children. Their views are intergenerational, so as we debate energy, environment, and community, we deliberate that from an intergenerational perspective. And if we don't have the jobs in the economy, there will be far less that matters to our public.
We learned from the current crisis that energy solutions involve diverse sources and technologies, varying from fossil fuels to solar, from wind energy to biomass, and that we can work on the demand side as well as the production side. But the new economy needs more energy in order to make it.
On page 2 of my hand-out, there is a graphic that illustrates what is happening today in terms of California and how, because California has roughly 12 percent of the entire population pretty much represented by that graphic, the electricity crisis that began in California just recently has spread and has drained literally the entire Western power grid in many ways because the demand created in California has rippled through the rest of our States.
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We need to balance that out with supply, and ironically most of the supply is there. While it is not lying dormant, much of it could if we don't take steps today. The underlying imbalance of supply and demand has been exacerbated by the fact that California did not have a long-term contract approach to their electricity supply. But that is only on electric deregulation; natural gas, of course, has gone through the ceiling.
As Congressman Tauzin said earlier today, with the high energy prices that have come about in natural gas, we are starting to see a rippling through our agricultural economy as well. The very people who put food on the table are going to pay extraordinarily high prices for nitrogen fertilizers this year, or may just choose not to even raise the crops at all, because in the Northwest, in States such as Washington, Oregon and Idaho, it is actually cheaper and more profitable for agriculture to take money to not use electricity to irrigate, to pump their sprinklers and wells, than it is to raise crops because of the high input costs. The same applies to the aluminum manufacturing industry, where selling already committed long-term energy commitments is far more profitable to aluminum manufacturers than it is to produce the aluminum.
But what about the lady in Buffalo, Wyoming, who called her county commissioner who said, ''I don't know how to pay my gas bill. It is $500 this month and I only have $600 a month income.'' This isn't just about the economy and the environment. This is about people in our neighborhoods who don't understand why this developed as it did in the energy crisis.
The Western Governors have worked long and hard to raise citizen awareness to how serious this problem is. We had several meetings, culminating in our Western Governors winter meeting last December where we adopted a call for an energy policy for the Americas. Much will be said about how much of America's energy is imported from other countries, but much of that is viewed as being from the Middle East.
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In fact, of the 4 primary countries who supply the United States with energy, 3 of them are in the Western Hemisphere—Canada, Mexico, and Venezuela. We ought to be working with our neighbors rather than somebody so far away that we don't even know who they are or why they exist. With regard to oil from the Middle East, instead of sending our military men and women to die, send them into the wide-open spaces of the West so that we all might live.
The Western Governors' Association hosted an energy policy roundtable in Portland, Oregon. We had participants from the Department of Energy, from the Federal Energy Regulatory Commission (FERC), from a variety of Federal and State agencies to discuss what we could bring to Vice President Cheney and President Bush to discuss what to do for Federal action. We have attached some of our recommendations to my testimony for your review.
Mr. Chairman, just as you acknowledged in your opening remarks, our neighbors want to know who is in charge. Why didn't somebody wake up sooner so we wouldn't have this uncertainty? Who should be in charge, particularly as it relates to our Federal public lands and how they dominate in the West?
In reality, no one person and no one agency should be in complete charge of production, of access, of distribution or consumption of our nation's energy supply. We are in this together. Partnerships are vital and beneficial. Mr. Chairman, your letter of invitation to me for my testimony asks for my perspective on the role that State governments would have in interacting with Federal land managers. Well, the key word is ''interaction.'' In our view, interaction must be a full, participating partner.
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While partnerships in the legal sense may be limited partners or they may be general partners, we are asking for full general partner status. We have common interests, but we also have shared jurisdictions and shared responsibilities. If State government has a committed partnership with Federal agencies, we will produce the domestic supplies of energy in an environmentally safe manner. It is as simple as that.
The history of energy policy in America has been fragmented, at best. The 25-year history of attempting to write an energy policy has been confused. It has been fragmented. Six attempts have been made formally in 25 years. None of them are comprehensive, particularly as it affects public land management, and not just the resource to be extracted but the other resources there as well for recreation, for wildlife, for clean air and clean water, and the amenities that the next generation ought to benefit from as well.
In the past, policy has been more by paranoia than by purpose. We need to develop better management directives that foster cooperation instead of polarization. Much of the debate today will be over who is in favor of the environment and who is in favor of development. That is not the issue, Mr. Chairman. The issue is how will we assure the future not only of today's generation but the next generation.
Over the last decade, management by litigation and intimidation has prevailed over management based on policy goals, and that has had far more impact on our national energy policy than it should have. The previous Chair of the Council on Environmental Quality, Katie McGinty, put in her 25th anniversary report, ''Our common ground, the environment, has become a battle ground. Somehow, nearly half of the Environmental Protection Agency's (EPA) work is not the product of our collective will on the environment, but rather it is the product of a judicial decree. Somehow, we have become a country in receivership, with the courts managing our forests, our rivers, and our rangelands.''
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It goes back even further. The former Chief of the Forest Service, Jack Ward Thomas, said in a speech in Wyoming 5 years ago that he took his appointment as Chief of the Forest Service believing that he was the chief resource manager of the nation's forests. But he said to us, ''I have the least control of anyone over resource management and allocation.''
So who should manage the land and who does manage the land? If I talk first about the public lands, nearly 75 percent of all Bureau of Land Management (BLM) and Forest Service lands in the United States in total are located in the Western States. Our energy self-reliance through public lands will focus, then, on much of those public lands.
But we, the States, have primary jurisdiction over many of the activities that take place on all lands, Federal, State and private. We have to work together because of those legal obligations, but we should work together because it is for the good of our people. So whether it be wildlife habitat, resource use, mineral extraction, water supplies, flood protection, hunting, fishing, ascetic values, tourism, or whatever, we should be partners. When you tinker with Federal land issues in the West, you affect the economy of all of America, but you particularly affect the livelihood of those people in our communities.
I refer you now to the graphic on page 5 of my formal remarks because it gives a graphic display of the Federal and non-Federal land areas in the lower 48. For whatever reason, and with apologies to my fellow governor from Alaska, it didn't print Alaska's overlay. In Alaska, though, as Governor Knowles has indicated, 375 million acres total; 242 million are Federal. So picture in your mind much of the same pattern of integrated and interspersed and intertwined activities that you see on the rest of that map, but particularly as it affects the West.
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Let me illustrate even further the difficulty of management, and what your Committee can most enable all of us to do is graphically illustrated on page 6 of the hand-out, which is a map of the general area of Wyoming. It shows the 15 ownership categories, each of which has a unique set of management procedures when it comes to developing the resources of energy in the West.
I use Wyoming as an example because Wyoming is not as Federally dominated as some other lands, but yet is dominated enough by Federal agencies, many of whom don't even work together, that it will thwart any action that you might take as a Committee to understand how we might appropriately develop the land in the West. Even that band across southern Wyoming that shows rather hazily in the yellow portion—that is because every other section of land is private land originally developed when the Union Pacific Railroad was extended right-of-way across the Western States and offered alternating sections of land for 20 miles on either side of the railroad right-of-way. The message in that map and the message in the previous map is we have to work together.
As far as the environment goes, in Wyoming we produce, process, or transport all kinds of extracted minerals, but we also have renewable wind energy, hydroelectric power, and others as well. Our water is so clean that we are one of the few States without a fish advisory. We have the toughest clean air laws in the nation. We have proven that a clean environment and a robust energy sector are not at odds with each other because we as governors live where we govern.
As far as the potential, you have heard from Governor Knowles and you will hear from Governor Martz and others about it is not just a matter of the energy that is there; it is how we get from there to where the energy is needed. The huge amounts of coal, natural gas, oil, uranium, and other energy sources that are available in the West are challenged by some of these situations.
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For instance, while Wyoming has enough coal reserves that if we were a country we would be the number three country in the world in coal reserves—not a State, a country —92 percent of all coal produced in Wyoming comes from Federal leases. Seventy-five percent of all natural or methane gas produced in Wyoming is from Federal ownership, and 60 percent of our oil. In other words, the Federal resource is a very considerable resource, and as the Ranking Member mentioned, much of that is already being produced.
But today's energy production is not and will not be sufficient. America needs more energy. We are here to help that need be filled, and to produce it not just from our States but to distribute it where it is needed and consumed. Transmission lines, power lines, gas pipelines will be needed to connect supply with demand.
Governor Hull of Arizona is frustrated with the most recent presidential declaration of yet another national monument in Arizona that appears to have eliminated a long-approved power transmission line that was scheduled to connect energy generated in Arizona with consumers in California. Monumental decisions in Washington have created political misery in the West.
As far as the availability of products and energy in the West, we don't need Organization of Petroleum Exporting Countries (OPEC), we need each other. Just the Wyoming resource alone could totally supplant and replace the entire OPEC production for the next 41 years.
The CHAIRMAN. Governor, may I suspend briefly? You may notice on the clock we have got two lights on. We have to run for a vote, and I apologize. Could we quickly have a recess? I would ask all Members to hurry back and then we will conclude with Governor Geringer.
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Would that be all right, Governor? I apologize for that.
Let me ask unanimous consent that all opening statements be included in the record.
Is there objection?
Hearing none, so ordered.
[The statements of Mr. Gallegly, Mr. Calvert, Mr. Pallone, Mrs. Cubin, Mr. Radanovich, Mr. Udall of Colorado, Mr. McGovern, and Mr. Rehberg, follow:]
Statement of The Honorable Elton Gallegly, a Representative in Congress from the State of California
Mr. Chairman, I have concerns about the fairness of some of the studies that small hydro power plants have been asked to do in the midst of the current energy crisis.
In my district, the operators of the Santa Felicia Dam and hydroplant near Piru Creek, have been asked to do a number of studies by various Federal agencies, including the Forest Service, before they can relicensed. It is estimated that the costs of the studies outweigh the costs of the hydro facility—the hydro facility cost is $1.2 million, the studies are estimated to cost $2 million. Mr. Chairman, the dam currently provides clean hydro-electric power to an estimated 1,500 homes in my district and operates at a profit of only $6,000 a year.
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Although some of the studies are worthy, many are burdensome and unrelated to the hydro facility—a study of noxious weeds, road and trail studies, and an impact study on the Arroyo Frog who's habitat, according to University of California at Santa Barbara Biology Professor Sam Sweet, is located more than three miles upstream from the Dam.
Mr. Chairman, we ought to be aiding small hydro-electric power facilities, not putting them out of business with undue red tape. I urge the Committee to look into the fairness of the relicensing process on these small hydro-electric power plants that provide clean energy to communities throughout the United States.
Statement of The Honorable Ken Calvert, a Representative in Congress from the State of California
The Western States are currently faced with the challenge of striking a balance among the water needs of agriculture growers, urban and environmental communities, industry and hydroelectric power generation. As we have seen with the recent energy crisis in California, our energy and water systems, and therefore our economies, are interdependent.
While hydroelectric generation comprises only 13 percent of the nation's total electricity supply, it is a vitally important component of the Western energy grid. Hydroelectric power is clean, efficient and necessary for maintaining electric transmission reliability.
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This important resource is currently being underutilized. For example, Bonneville Power Administration has lost approximately 10 percent of its capacity due to environmental regulations. This is enough electricity to power 980,000 homes. Over the past years, the ability of non-Federal dams to generate power has been reduced by ambiguous mandatory conditions issued by Federal agencies for dam relicensing. Weather related factors have also decreased the Pacific coast hydro-system capacity. Reservoirs have been drawn down to dangerously low levels that may compromise fish flows and water deliveries.
To prevent further erosion of potential Federal power generation, we must assure that any further reductions be subject to good science and peer review. We need to protect state water rights while improving hydroelectric generation capacity and efficiency. We cannot afford to accentuate one need to the detriment of the others. Instead we must strive for a balance that will guarantee a reliable energy and water supply.
Statement of The Honorable Frank Pallone, Jr., a Representative in Congress from the State of New Jersey
Thank you, Mr. Chairman. Let's be responsive to America's energy needs but let's make sure we are responsible when we discuss self-reliant energy policy in the same sentence as public lands.
Our public lands are not our energy solution; our public lands are recreational opportunities for countless families, habitat protection areas for numerous endangered species, and preservation areas for national historic sites, to note only a few. We must not jeopardize the well being of our public lands from the many functions they serve in the hope of solving our long-term energy needs.
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As we reexamine our nation's energy resources, we should begin by examining public lands that have already been designated as lease areas. Federal public lands now produce 26.6 percent of total U.S. oil production, and 37 percent of our nation's natural gas production. In the past eight years energy production on public lands has exceeded production levels of both the Reagan and Bush years.
A realistic idea to explore—where we can work together for a common sense solution—is to expand production on Alaska's North Slope. Alaska's North Slope has been open for oil and gas exploration and drilling for years—to the tune of 23 million acres or more. 35 trillion cubic feet of natural gas exist in Alaska's North Slope already available for exploration and development. We should find a viable pipeline route for making these resources available.
Mr. Chairman, if we open new public lands for resource extraction, we run the risk of destroying our nation's greatest natural resources forever. The effects of improperly managed public land resources can be disastrous. We run the risk of surface and subsurface water pollution from toxic metals including mercury, lead and cadmium caused by drilling and mining operations. Contamination of this kind can continue for years without being discovered. Industry's improved drilling technology does not preclude the need for roads, drilling pads, housing, oil processing facilities and other infrastructure that inevitably impact the environment.
It's time to fund common sense programs to conserve energy and develop alternative energy sources to reduce our reliance on polluting fossil fuels and oil imports from foreign nations. Instead of discussing only methods of supplying more fossil fuel energy, we have to develop ways to encourage renewable energy use and energy conservation. In the past thirty years technology has helped us place a computer in the palm of our hand, surely we can find ways for technology to provide us with clean, renewable energy that does not place our open spaces, our environment, our nation's public lands in jeopardy.
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Unfortunately, it seems the Republican Leadership is incapable of introducing measures that would conserve energy, promote our long-term energy security, develop alternative energy resources, and protect our environment, without sacrificing our economic growth. Instead, the Republican Leadership wants to drill the Arctic Refuge. They have cut funding for energy efficiency, renewable energy, and alternative fuel programs during the past several years and now want to disrupt the only true wilderness in America.
We should support funding to advance our technological capabilities in the fields of energy efficiency and renewable energy and to advance our economic advantage in exporting these technologies abroad. If we undertake these proactive types of efforts, then we can tell our residents and our children that we're working to protect our nation's pristine resources for them their long-term enjoyment, not our short-term solution.
It's time to stop gutting our environment—time to stop destroying our forests, land, water and air quality. Most Americans want to know why we're not doing more to protect the environment. Most Americans indicate a willingness to pay more for energy efficient appliances and lighting. Most Americans don't want us to drill in ANWR.
I agree that we need to examine the prospect of a more self-reliant energy policy but drilling in the Arctic Refuge will do nothing to increase our energy self-reliance.
Statement of The Honorable Barbara Cubin, a Representative in Congress from the State of Wyoming
Thank you, Mr. Chairman, for holding this important hearing on the role of public lands in the development of a more self-reliant domestic energy policy. Over the past eight years we have seen what amounts to an ''anti-energy'' policy which has discouraged the exploration for and development of oil, gas, coal, and uranium on our public lands, and made coal-fired electricity generation anathema. At the same time, the past Administration was seeking to dramatically reduce hydroelectricity's function as the ''peaking power'' of choice.
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Collectively, it is a wonder the crisis we have seen in California, and to a lesser extent in the northwest, has not occurred sooner. Perhaps it is the ubiquitous ''on-line'' computer presence everyone seems to need these days that is the straw that broke the camel's back, but there simply is no doubt that domestic demand for electricity has risen significantly, despite ''energy star'' ratings on computers and other appliances. And, many experts suggest the real test will be when folks turn on the air conditioners this summer. Rolling black-outs may be back with a vengeance.
Yes, conservation goals are laudable, but efficiency gains alone are insufficient. Our nation must meet the rising demand for energy with new domestic exploration and production. We must produce and conserve all forms of energy in America. And, we can do so in and environmentally sensitive way. Fortunately, we now have an Administration that recognizes our national security depends upon energy security. The Bush Administration, with Vice President Cheney in a leadership role, is working to propose a comprehensive national energy policy for Congress to act upon, as well as to formulate plans for taking administrative action where Congress isn't needed.
My Subcommittee on Energy and Mineral Resources will be examining areas where public land reforms can make a difference in getting domestic energy supplies to market. We kick off this effort next week with an in-depth review of natural gas supplies and constraints. I look forward to working with the Administration and my colleagues here in Congress to begin the process of developing legislation which will help to set this country on a focused course, both increasing energy supply and increasing incentives for conservation.
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Again, Mr. Chairman, I truly thank you for convening this hearing today and look forward to hearing from our distinguished group of witnesses, especially the Governor of my home state of Wyoming, the Honorable Jim Geringer. Wyoming coal, oil, and natural gas (including coalbed methane) and uranium is a treasure trove of energy for our nation. I welcome Governor Geringer's remarks as to how to best utilize these resources.
Statement of The Honorable George Radanovich, a Representative in Congress from the State of California
Thank you Mr. Chairman for holding this hearing on the role of our natural resources in U.S. energy policy. Today, I will focus on two environmentally-friendly energy resources: biomass and hydropower, and discuss how we can better use them to provide more energy for consumers.
My district includes three national forests as well as three national parks, all of which I am proud to represent. Over the past eight years, the previous Administration's policy of closing-off land for roadless areas, designating nineteen new national monuments—comprising five million acres—and adding numerous wilderness areas has led to a decrease in the opportunities to utilize Federal lands to help meet our nation's energy needs.
The Clinton roadless policy to lock-up over 60 million acres of our national forests, for instance, has led to a logging moratorium in many areas of the Sierra Nevada Mountains in California. Such action, combined with the Forest Service's ill-conceived Sierra Nevada Framework plan amendment, has forced the closure of biomass plants in the region. It is true that biomass comprises only about two percent of all energy in California, but amidst our current crisis, every megawatt counts. Biomass is a clean-burning method of producing energy, and it extends the life of our landfills by burning forest waste. I encourage the new Administration to reexamine the roadless policy and the Sierra Nevada Framework plan to allow for extraction of underbrush from the forests to generate green-powered biomass energy.
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On the issue of hydropower, I want to work with the new Administration to streamline the cumbersome Federal regulatory process that is denying us of the full use of existing hydro facilities. In the Pacific Northwest, 10 percent in hydro capacity on Federally-owned facilities is consistently lost due to Federal regulations. Also, Glen Canyon dam has lost a 1/3 of its own capacity ''enough to supply 400,000 homes—because of strict regulations to protect fish. The Federal government last year released the Trinity River decision in California, which diverts 300,000 acre feet of water annually for environmental uses. This action is a great cause for concern since that water will be lost for hydro generation purposes.
My own congressional district is home to about 2,000 megawatts of hydropower. To give you an idea of what this means, 2,000 megawatts is enough to serve approximately 2.8 million people. Long-term licenses for these privately-owned facilities are so difficult and arduous to complete that some facilities have been operating on yearly permits for over a decade. The tremendous red tape involved in relicensing the hydro facilities in the U.S. results in about an eight percent loss in power each year. Such an amount could provide a safety-net during a Stage 3 emergency and be used to help prevent blackouts like those California experienced in January. I will work with the Administration to facilitate a licensing process that works to benefit both the environment and consumers.
As we all know, the U.S. is in dire need of a national energy policy, and our Federal resources must be managed in a manner to support a national energy policy. The Federal government's eight-year ''hands-off'' policy regarding Federal land management has led to an increase in the Federal land base and a decrease in opportunities to meet our nation's energy needs. Our Federal lands must be managed in a reasonable, environmentally-sensitive manner that operates in concert with a national energy strategy. Such consistency will prevent various Federal agencies from implementing far-fetched policies that conflict with a national energy plan. I believe we can achieve balanced, common-sense environmental goals as well as provide desperately needed energy for our nation's citizens.
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Mr. Chairman, thank you again for holding this important hearing. I look forward to working with you to further develop a role for natural resources in our national energy policy.
Statement of The Honorable Mark Udall, a Representative in Congress from the State of Colorado
Thank you, Mr. Chairman. I appreciate your scheduling this hearing on a most important topic. Unfortunately, the Science Committee is holding its organizational meeting this morning, so I will not be able to stay for the entire hearing.
However, I will review carefully the testimony of all the witnesses, and will be particularly interested in Mr. Judd's testimony regarding biomass, an energy source that is of particular interest to me.
I am not sure just what is meant by a ''self-reliant'' energy policy, Mr. Chairman, but I assume that it means a policy that would reduce our dependence on imported energy sources—particularly imported petroleum.
I share the goal of reducing our dependence of imported petroleum—in fact, I think we should reduce our dependence on petroleum, period.
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That is why, along with nearly 170 other members of the Renewable Energy and Energy Efficiency Caucus, I am working to promote development and use of alternative sources and to reduce inefficiencies and waste in the way we use energy.
So I hope that in the Committee's discussions today there will be a recognition of the importance of agreeing on a long-term energy policy—one that requires us to think beyond today's oil and gas prices.
I hope there will be discussion of the real crisis that will develop ten or twenty years from now when oil prices will probably go up permanently as a result of increasing global demand and of passing the peak in global petroleum production.
We haven't done enough to prepare for this eventuality. We very much need to do more, beginning with the recognition that even opening all the public lands to energy development would not provide a long-term solution—and, in areas that should remain offlimits, like the coastal plain of the Arctic National Wildlife Refuge, the costs would exceed the real benefits.
We cannot just drill our way to a sound energy policy. We need balance. And, in particular, we need to recognize that increased efficiency and increased use of renewable energy are vital if we are to make progress in addressing environmental challenges as well as in reducing our dependence on foreign energy sources.
In fact, by reducing air pollution and other environmental impacts from energy production and use, renewable energy and increased energy-efficiency are the single largest and most effective Federal pollution prevention programs.
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And increased development of renewable energy has the potential for creating hundreds of new domestic businesses, supporting thousands of American jobs, and opening new international markets for American goods and services.
We have already come a long way. Solar, wind, geothermal, and biomass technologies have together more than tripled their contribution to the nation's energy mix over the past two decades. But we need to do more, to build on this progress.
All these technologies are very important for our country. But development of biomass-energy through the conversion of cellulosic biomass, which consists of any plant or plant product, is particularly important to Colorado and other western states.
That is because the threat of extreme wildfires in the areas where our national forests are in close proximity to major population centers. To reduce and control this risk, there is a need to thin the fuel build-up. After it is cut, a good part of this underbrush and small-dimension material can and should be left to decompose on the lands. But some will have to be removed from the forests and there is now no effective use or market for much of it.
As you know, Mr. Chairman, last year's Interior appropriations bill established a program for such fuel-reduction projects, and provided funding for it to get underway. That was a substantial appropriation, but the funds could go further and much more could be accomplished if there is a commercial market for this material. The Colorado State Forest Service, the Forest Service Research Laboratory, and the National Renewable Energy Laboratory have all begun to study the possibilities of developing ethanol or other bioproducts economically from this wood fiber.
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We need to support those efforts, as well as other efforts to increase the availability and viability of other renewable energy sources and to increase our energy efficiency. That is the best way to go if our goal truly is a ''self-reliant'' energy policy in the long run.
Statement of The Honorable James P. McGovern, a Representative in Congress from the State of Massachusetts
Thank you, Mr. Chairman. I appreciate the opportunity to offer a statement at today's hearing on the ''Role of Public Lands in the Development of a Self Reliant Energy Policy''.
In the interest of time I would like to get right to the point and say that I think that the issue of increasing oil and gas production on Federal public lands is a red herring. I honestly do not think that we can have a serious discussion about increasing production without addressing the underlying issue of fossil fuel consumption.
According to the Department of Interior, the U.S. consumes over 19 million barrels of oil a day or 7 billion barrels of oil a year. The Natural Resources Defense Council, using Energy Information Administration data, projects that this figure will almost double over the next 50 years. And yet, the U.S. has less than 3 percent of the world's known oil reserves. It just does not seem likely that we could produce our way to energy independence.
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Like most Americans, I am concerned with our reliance on foreign oil. But at the rate we are going, I am frankly more concerned about our reliance on fossil fuels period. Consumption is the long-term issue that we need to address, and I am not yet convinced that increased drilling on Federal lands is anything more than a temporary fix.
The topic of drilling on Federal public lands should not lead the discussion of a long-term comprehensive energy policy. Eliminating the annual freeze on the Corporate Average Fuel Economy (CAFE) law should. If we are going to have tax cuts, lets have tax cuts that will provide incentives for commuters to use mass transit and tax credits to develop alternative energy sources.
The fact is that production levels on Federal government operated oil, gas and coal leasing programs have increased over last eight years. Overall domestic production of oil on Federal lands increased from 13 percent in 1993 to 26.6 percent of all U.S. production in 2000. And Federal lands account over 37 percent of domestic natural gas production. And during that same period, total U.S. petroleum consumption increased by over 2 million barrels a day. Opening up our Federal lands to even more drilling will not solve the long-term national security and environmental problems caused by our reliance on fossil fuels.
Statement of The Honorable Dennis R. Rehberg, a Representative in Congress from the State of Montana
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Thank you, Mr. Chairman. I also want to thank Montana Governor Judy Martz for being here this morning. Governor Martz has really taken a pro-active stance in dealing with the energy problems we are experiencing in Montana, and I thank her for her leadership on this issue.
Mr. Chairman, it is no secret to most of us in this room that the United States does not have a coherent energy policy, either long-term or short-term. Today we are more dependent on foreign oil than ever before. In fact, 56 percent of our oil supply comes from foreign sources, which is a 20 percent increase over the 1973 Arab oil embargo levels. And the Department of Energy predicts that in less than 20 years, America will rely on foreign countries for nearly 65 percent of our energy needs. This is not only a threat to our economy, it is a threat to our national security.
Unfortunately, our energy problems are not confined to oil production. Despite growing demand, our natural gas production has fallen 14 percent since 1973. Yet, nearly 40 percent of our gas resources in the Rocky Mountains are off-limits to production and most of the submerged lands under our Federal waters are off-limits to gas leasing until 2012.
The result: natural gas prices are 20 times higher in some parts of the country than they were just one year ago. This dramatic increase, while hitting all consumers, is hitting those of us in ag country particularly hard because higher natural gas prices mean increased fertilizer costs. So I think it's important that we all understand that this energy problem we are experiencing affects virtually every aspect of our nation's economy. We have got to get a handle on this problem.
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And, as if to add insult to injury, the water levels in the northwest are low—this frustrates our ability to generate hydropower, which provides enough electricity for 98 million homes. But our hydroelectric operations are facing more problems than just low water. Federal rules and regulations have made the process of relicensing these operations expensive and time-consuming, which in turn contributes to the rising cost of electricity in some areas.
These energy problems have real life consequences. In January, the Bonneville Power Administration announced that it is projecting an average 60 percent rate increase over the next five years. And high energy costs have caused a number of Montana businesses to either shut down or cut back operations, which is costing Montana much needed jobs.
And because of increased power costs, some Montana businesses have been forced to produce their own power in-house by using generators, which costs about 5 times the amount of what they used to pay for electricity, yet is still well below current prices on the open market.
Mr. Chairman, the California situation—which we are all so familiar with and which has sort of become the poster-child for our energy problems—combines a lack of generation and transmission capacity with low water levels, and should serve as a real wake-up call to all of us. Consider this, in California—over the last 10 years—generation capability decreased 2 percent while retail sales increased 11 percent. So the current problem California is experiencing should not come as any great surprise.
In short, Mr. Chairman, we must increase our power generation and transportation capabilities. And if we don't start developing some of our natural resources now, the California crisis of today will become the national crisis of tomorrow.
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America has the tools to confront our energy problems, and we must use them. While energy conservation is critical, the U.S. cannot conserve its way out of this energy crunch. It is vitally important that we take steps to increase domestic energy production through access to and exploration of oil and gas prospects such as ANWR, and through new and expanded energy delivery infrastructure, advanced coal technology, nuclear power, and solar and wind power. We also have to explore alternative renewable fuels, such as ethanol, which bums clean and supplies an important market for our agriculture products.
America has huge deposits of natural gas, coal and oil. In Montana alone we have several hundred years worth of natural gas and coal deposits—the eastern front of the Rocky Mountains is rich in natural gas and clean burning coal.
Any national energy policy must include the development of our domestic supplies of oil, such as our oil reserves in the Arctic National Wildlife Refuge, or ANWR. The vast oil reserves in ANWR could replace our Saudi Arabian imports, for example, for the next 30 years. That's why I am a cosponsor of Rep. Don Young's legislation to develop some of this domestic supply in ANWR.
America also has large coal deposits—enough to last us nearly 300 years. And Montana has more coal than any other state, holding approximately one-third of the total strip-mineable coal in the nation. Current estimates place coal resources for eastern Montana at about 50 billion short tons, 34.5 billion of which is low-sulfur, clean-burning coal.
Coal is America's largest and cheapest source of domestically produced energy accounting for nearly 60 percent of our nation's electricity and costing consumers about one-fifth the amount of oil and natural gas. And our abundance of coal includes coal bed methane, which is a source for natural gas. So clean burning coal and the development of coal bed methane as a natural gas resource must play a vital role in any national energy policy. This means we must invest in developing coal technology.
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It is also important to remember, Mr. Chairman, that while we need a national energy policy, we must also seek to include input from our state government officials at every step of the way—just like we are doing here today. This is especially important in Montana because of Montana's vast acreage of checkerboard ownership with the Federal government. So it is imperative the Federal government adopt a good neighbor policy that allows Montana to help solve the nation's energy shortage. Montana Governor Judy Martz has taken the bull by the horns at the state level by encouraging new energy production, streamlining regulations and building a better relationship with Federal land management agencies. Hopefully, today's hearing can allow us all to help improve this good neighbor policy so that we can work together with state governments to solve our current energy shortage.
I guess for me, Mr. Chairman, the bottom line is that we have the natural resources to head off this problem before it gets even worse. But that means we need to develop a national energy policy that encourages the development of our resources in an energy efficient and environmentally friendly manner. And with the technological advancements we've made, I believe we can do it. But it is up to us as elected officials to come up with a plan and get the job done, and I thank you, Chairman Hansen, for holding this hearing today, and for your leadership on this issue, because this is an important step in the right direction.
The CHAIRMAN. We will stand in recess.
[Recess.]
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The CHAIRMAN. The Committee will come to order.
Governor Geringer, we apologize for cutting you off, but we had no choice. Governor, we will turn to you again, sir.
Governor GERINGER. Let me just sum up with a few quick statements. First, to get our attention back to the issue at hand, much of the discussion today as we deal with energy self-reliance from public lands will depend a lot on the deadlock, the gridlock, if you will, or headlock that pits environmental interests against those who would have economic interests. We don't view them as mutually exclusive; they are not and should not be. The interests are compatible and complementary in every sense. Energy policy cuts across so many different jurisdictions, as we illustrated in the graphics that I pointed out to you in my testimony, and it is time to stop litigating and start cooperating.
The Western States have energy that America needs. As we were conversing during the break here, one of the members who is here from Wyoming made the comment, it is like we have an I.V. container. We have the transfusion that is necessary, but not the line to connect it when it comes to the transmission of the energy, whether it be in raw form or in converted form to electricity.
Just let me illustrate a little bit of the challenge that you will face that we already face in the Western States in trying to deal with access to the energy that is in our public lands.
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Back in 1969, the National Environmental Policy Act (NEPA) was enacted with the purpose that we needed to recognize the profound impact that man's activity has on the natural environment. But in the purpose clause in the NEPA, as it is called, the National Environmental Policy Act, it declares that the policy of the Federal Government is to cooperate with State and local governments to create and maintain conditions under which man and nature can exist in productive harmony and still fulfill the social, economic, and other requirements of present and future generations.
What has evolved from that Act, however, has been anything except that harmonious relationship. Implementation of what is a fairly short and relatively simple Act has resulted in such a myriad of regulations and processes that State and local authorities have little or no idea which way the whipsaw of Federal agencies will go next. There is tremendous inconsistency between and among Federal agencies as to how they implement this Act.
What that opens the door to do is allow people to litigate or protest or appeal almost without end an infinite number of methods to avoid or to thwart better planning and better opportunities for energy development. We recommend as Western Governors that streamlining start with the adoption of management principles that we have developed as Western Governors over the years, and that is included as part of the testimony called ''Policy Resolution from the Western Governors 99-13,'' sponsored by Governor Kitzhaber, of Oregon, a Democrat, Governor Leavitt, of Utah, a Republican, and endorsed in full not only by the Western Governors but by the national governors as well.
It lists eight principles of environmental management that can be very effective in resolving the conflict between and among the advocates of whatever side you might feel that you are on. They reflect a practical, common-sense approach to environmental decisions, much along the lines of our native son, Dr. W. Edwards Deming's principles that were established for quality management that enabled a quality revolution for America on the industrial side.
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We have used these principles successfully on several difficult environmental issues, and the call is even greater today because we are in an age of litigation, with the courts not just directly managing our resources, but indirectly managing because of the fear of litigation.
NEPA, in terms of the Act, is not the problem. It is the process. It takes too long; it costs too much; it spawns litigation; it is inconsistently implemented. Every Federal agency requires extra layers of management just for its own unique set of regulations. The difference just between the Bureau of Land Management (BLM) and the Forest Service is dramatic, and yet they are all part of one Government. If you would simply require the Federal Government to be consistent and speak with a unified voice, we would get a long way, and input the States in as partners.
I want to leave you with the message that the current energy crisis is an opportunity to break through the often unproductive deadlock that pits energy needs against environmental protection. They do not have to be mutually exclusive; they should not be.
The current electricity crisis in the West has awakened us as to how much we don't know about the energy resources of our nation and how little we have explored the opportunity to meet the energy needs of a growing economy and still yet protecting our environment. We can have both.
Mr. Chairman, I have included several recommendations. Rights-of-way and transmission lines ought to be looked at. We cannot get the energy out of our States if we don't have the rights-of-way to deliver it, whether it be the pipeline from Alaska or whether it be a transmission line that takes generation from Wyoming to California or to Chicago.
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I recommend that this Committee urge the establishment of cooperating agency status for all States that are affected under any environmental policy review as a routine and regular matter, not just on the occasional basis that it has been doled out in the past. We can even generate more through renewable resources. We have tremendous wind generation capacity in Wyoming. Much of that is on Federal lands.
One young lad from California dropped a note one day and said, ''You know, you don't have to have all those signs warning about high winds the next 5 miles if you would turn off those giant propellers up on the hillside.''
Wind generation, hydroelectric generation; the hydroelectric that we currently have needs to have equipment replaced, replacing 40- to 60-year-old generators with more efficient generation, increasing generation, and certain minimizing the impact on endangered fish when California needs more of Oregon's power. The Bonneville Power Administration, the Western Area Power Administration, the Bureau of Reclamation, and the Corps of Engineers all need to look at opportunities to enhance electrical production even with existing activities.
Ninety-two percent of all coal is taken from Wyoming lands. Wyoming is so good at reclamation that you are holding $3 million of our money. From energy it came, to energy it should return. We would like to develop more effective ways to deliver energy from the West.
Let me make one quick comment about the fires that occurred last year in the West. Those too, because of the lack of coordinated policy on forest health management, severely impacted, such as fires in New Mexico that knocked out a 500-kilovolt transmission line, to fires in Montana that shut down a similar line going from Montana to Seattle. The implication of additional events this summer, with the drought that is already imminent, could lead to even further shortages of electricity.
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Thomas Jefferson maintained the solid belief that the success of our democracy lies in the ordinary citizen being vested with a sense of deep civic responsibility and citizens who would engage each other directly in pursuit of the common good.
We in the American West believe that we should reject the last two decades of bitter debate among environmentalists and resource users that has so polarized us that we have gridlock rather than any public benefit from our public lands. As former EPA Director Bill Ruckelshaus said, ''Business, governments and citizens are frustrated by years of litigation and stalemate. It is time to turn to the common good, and we are turning to that not just out of desperation but more frequently out of hope; hope that our decisions will yield less controversial and more durable results. Jointly-designed decisions will be better and more informed, and the hope that through this process we can actually regenerate public confidence in our institutions, especially government.''
Mr. Chairman, thank you, and I would be happy to answer questions.
[The prepared statement of Governor Geringer follows:]
Statement of The Honorable Jim Geringer, Governor, State of Wyoming
Mr. Chairman and Committee Members, thank you for addressing the subject of how America might and should become energy self-reliant, and in particular what the role of Federal lands might be in that effort. Thank you also for asking for the views of Western Governors. The energy future of this nation is dramatically linked to the energy future of western states. More than that, we consider that the environment, the economy and community are a dynamic balance continually in the making.
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Self-reliance is more than energy
America's long term sustained growth in the economy has been jump started by increases in productivity fueled by innovation, risk and perseverance. We risk losing our economic momentum if we cannot literally provide the fuel for the new economy. Rising energy costs have been a major contributor to the recent slowdown in economic growth.
The future of our national economy depends upon our sustainable energy self-reliance. Public lands are at the forefront in providing the potential to provide much in the form of raw energy or access to produce and deliver that energy. The development of the New Economy in America is heavily inter-dependent upon technology and reliable, high quality electric power. Beyond the new economy, agricultural production and processing, manufacturing, renewable resources, protection of endangered species, recreational opportunities all affect our economy and our society and each of them is affected in part by what happens on the resource of our public lands. Our economic and social opportunities are directly linked to energy solutions. We have learned from the current crisis that energy solutions involve diverse sources and technologies ranging from fossil fuels to solar, from energy production to demand-side management and efficiency.
Energy is affecting everyone, not just California
The electricity crisis that began in California has spread throughout the western power grid, known as the Western Interconnection. See map.
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At its core, the crisis is a result of an imbalance of electricity demand and supply. Electricity demand has grown with the growth in population and a growing economy in the West. Few new powerplants have been built in the past decade in the West and energy conservation efforts declined. This underlying imbalance of supply and demand has been exacerbated by the structure of the electricity market in California that put extraordinary reliance on the spot market at the expense of more stable, long-term contracts. High natural gas prices and a drought in the Northwest are further exacerbating the crisis.
This crisis reaches well beyond California. The Bonneville Power Administration is considering a 100 percent rate increase. Many utilities, such as the City of Tacoma, and industries, such as Phelps Dodge, are reeling from extraordinary wholesale electricity prices. From Montana to Arizona, plants and mines have shut down because of the high cost of electricity. The crisis may deepen with summer peak demand and continuing drought in the Northwest.
The reality of the high energy prices was driven home last month when one of our county commissioners in northeast Wyoming received a phone call from an elderly lady who wanted to know how she was going to pay her $500 heating bill when her monthly income was just $600 per month.
Last December when the price of natural gas hit $10 per MMBTU, almost half of the nation's nitrogen industry shut down for several weeks, since natural gas is the feedstock for nitrogen fertilizer. With significantly reduced supply, farmers this spring will be paying unusually high prices for anhydrous ammonia and other nitrogen assuming not only that it is available but that in the event they can get it they can actually afford it. Much of the manufacture of nitrogen has shifted off-shore and America is paying other countries to produce as much as one third of all our nation's nitrogen. The security and affordability of our food supply will be affected.
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I need not spend much time recounting the difficulties experienced by California citizens with electricity. Our northwest states of Oregon, Idaho and Washington are experiencing one of the driest winters on record which will manifest itself in lower than usual runoff, less hydroelectric power and serious impacts to endangered fish. This will be further exacerbated by the compounding economic effects caused by the shortage of electricity. Farmers can make more money by being paid for not using electricity than by raising crops and livestock. The same is true in manufacturing aluminum.
Western Governors have worked long and hard to raise citizen awareness to the serious nature of the energy situation. On December 1, Western Governors adopted resolutions on energy policy, coal and natural gas. On December 20, Western Governors held an emergency meeting in Denver with and met with former DOE Secretary Bill Richardson and former FERC Chairman Jim Hoecker. By January 9, nine Western Governors approved a Short-term Energy Conservation Strategy aimed at coordinated action to dampen demand. On February 2, the Western Governors' Association hosted an Energy Policy Roundtable in Portland, Oregon. Joining us were Energy Secretary Abraham, all three FERC commissioners, and leaders from major utilities, natural gas and coal producers, environmental groups, academic experts, and small and large retail customers. We adopted several short- and long-term energy policy recommendations. On February 27, Western Governors met with Vice President Cheney to discuss the items requiring Federal action. We requested that an agreement be developed between Western States and the Cheney energy policy team to provide for collaboration on our mutual energy challenges. (See attached information given to the Vice President.)
Finally, energy policy has become a high priority nationally. I commend you and the rest of the Resources Committee for recognizing that management of and access to our Federal public lands will play a pivotal if not critical role in developing energy self-reliance.
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Who's in charge?
Today's power shortages in California may only portend the aftershocks of even greater shortages in other states this summer and compounded next winter. New energy supplies are being developed at only one to two percent per year while energy consumption is forecast to grow at two to three times that rate. Who's in charge of our nation's energy situation? Why didn't someone wake up sooner so that we wouldn't have this uncertainty? We need to increase supply and an infrastructure to transport that supply. Part of the answer is that we have energy policy by default, not by design, policy that is confused rather than coherent. Who should be in charge? In reality, no one person or entity is or should be in complete charge of managing the production, distribution or consumption of our nation's energy supply. We are in this together. Partnerships are vital and beneficial. Your letter of invitation to me for my testimony asked for my ''perspective on the role of state government interacting with Federal land and mineral managers in developing a more self-reliant energy policy for the nation through increased utilization of domestic supplies in an environmentally sound manner.'' The key phrase in your invitation is ''interaction with Federal land managers.'' Interaction must be as full partners progressing towards common goals. If state government has a committed partnership (or interaction) with Federal land managers we will produce domestic supplies of energy in an environmentally safe manner. It is as simple as that.
History of energy policy
Until 1973, the Federal interest in energy policy and production was centered on the primary principle that energy should be cheap and plentiful. The Arab oil embargo reinforced the notion that energy policy was synonymous with oil policy. Conservation of the resource to prevent waste and environmental protection was left to the states, as it should be. The Federal policy by default today is that Americans should be induced to reduce consumption, especially through higher prices brought on by restricted access to production and distribution. This equates to an internal embargo. The current discussion and research concerning global warming has fostered the policy tenet that we should get rid of any fuel that contains carbon. This approach is certainly disjointed and confusing.
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The Federal government in the mid-70's began a series of efforts to write a national energy policy. Six attempts were made in 25 years with none being comprehensive, particularly as it would affect public land management. Any successful new attempt must cut across all resource jurisdictions, public and private, state and Federal. Likewise, any new policy must recognize the balance needed among the economy, the environment and the community. Again, give the states full partnership or ''interaction'' and we will produce energy.
Policy by purpose, not by paranoia—Develop management directives that foster cooperation, not polarization
Over the past decade, management by litigation and intimidation has prevailed over management based on policy goals and has helped define our national energy policy. As one previous chair of the Council on Environmental Quality put it, ''our common ground, the environment, has become a battleground. Somehow, nearly half of the EPA's work is not the product of our collective will on the environment, but rather the product of judicial decree. Somehow, we have become a country in receivership, with the courts managing our forests, our rivers and our rangelands.'' CEQ Chair McGinty, 1997.
Former Chief of the Forest Service, Jack Ward Thomas, lamented during a speech in Wyoming five years ago, that he took his appointment believing that he was the chief resource manager of the nations' forests. But he said, ''I have the least control of anyone, over resource management and allocation. The Fish and Wildlife Service has more say over forest management and health than I, through the Endangered Species Act. Legal challenges consume the majority of my day.''
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Who should manage the land?—Shared responsibility, concurrent jurisdictions
Energy self-reliance through public lands will focus on the West, since nearly 75 percent of all BLM and Forest Service lands in the United States are located in our Western states, particularly those that are rich in environmental as well as energy values. These lands are managed for the general national public benefit, but the laws, policies and management decisions and judicial direction for public lands most directly impact, both socially and economically, the people who live in the West. Our residents and communities depend upon the total resource for recreation, wildlife habitat, resource use, mineral extraction, water supplies, flood protection, hunting, fishing, aesthetic values, tourism and monuments. When you tinker with Federal land issues in the West, you not only affect the economies of all Americans but also the livelihoods of those people and communities living near and relying on our public lands in the west.
As illustrated in the following figure, Federal land ownership in America is not collected all in one place. Much of it is intermingled with state and private ownership. Regardless of specific ownership, public or private, we must recognize that none of our natural resource decisions can be made exclusively and independently of other managers