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Tuesday, June 28, 2011

Expanding Domestic Energy Production

The U.S. House of Representatives approved Jobs and Energy Permitting Act (H.R. 2021) by a vote of 253-166 on June 22. This was a vote in favor of domestic energy production, and it deserves approval by the Senate and the signature of President Obama.

The legislation would clarify, streamline and provide certainty for obtaining air quality permits for oil and gas exploration and drilling in the nation's Outer Continental Shelf (OCS).

Specifically, HR 2021 would requite that Environmental Protection Agency (EPA) approve or deny applications for drilling on the OCS within six months. In addition, the bill would remove the EPA's Environmental Appeals Board from the permitting process.

As Reuters reported, "That appeals board scuttled Royal Dutch Shell's plans to drill in the Beaufort Sea this year, when it revoked a key air permit. The board's decision was the latest in a series of setbacks Shell has encountered since it began picking up significant offshore Alaska leases in 2005."

On June 17, Senator Lisa Murkowski (R-AK) announced the introduction of a companion bill in the Senate. Murkowski observed: "We need to end the practice of outside groups using the appeals board to veto offshore energy development in Alaska and elsewhere. The EPA plays an important role in protecting the environment. It must be allowed to fulfill that role without having its decisions second guessed through a flawed appeals process... We have companies that have spent more than five years and billions of dollars attempting to conduct offshore exploration and production in Alaska, but have been unable to secure the necessary permits from EPA. It's clear that this process is not just overly costly and time-consuming, but simply does not work."

According to release from Murkowski's office, the bipartisan Offshore Energy and Jobs Permitting Act "is cosponsored by Sens. James Inhofe, R-OK; John Barrasso, R-WY; Rob Portman, R-OH; John Hoeven, R-ND; John Cornyn, R-TX; Roy Blunt, R-MO; Dan Coats, R-IN; Kay Bailey Hutchison, R-TX; Bob Corker, R-TN; John Thune, R-SD; Richard Lugar, R-IN; Mark Begich, D-AK; and Mary Landrieu, D-LA."

OCS areas like the Chukchi and Beaufort Seas north of Alaska have been estimated by the U.S. Geological Survey to contain up to 27 billion barrels of oil and 132 trillion cubic feet of natural gas.

Unfortunately, the Senate measure faces an uphill climb, and the Obama White House has declared its opposition. Again, the Obama administration continues to push an energy policy agenda that seems specifically designed to raise costs for U.S. consumers and businesses, to make U.S. industry and our economy less competitive, and to diminish domestic energy production and thereby increase reliance on foreign sources of energy.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

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