October 7, 2008

Domenici Emphasizes Drilling in Talk


Energy industry conference also draws Pearce, Udall, Bingaman

By Staci Matlock

The New Mexican

New Mexico's Republican Sen. Pete Domenici quieted a sustained standing ovation from several hundred energy-industry representatives Monday with a raised hand.

Then, for the last time as a senator after 36 years, Domenici proved why he's been the industry's champion. Slapping a hand repeatedly down on the podium in the El Dorado Hotel ballroom to emphasize his frustration, Domenici said it was unbelievable America hadn't been able to tap into its own off-shore oil reserves for more than 20 years because of a moratorium. Now that Congress has let the moratorium lapse, maybe American companies can finally start using more of its own resources, Domenici told the packed crowd of 1,200 oil and gas company executives, well drillers and other industry professionals. "Ask any of the candidates if they support off-shore drilling," Domenici urged. "If they tell you 'maybe,' or 'if,' or 'but,' then you know where they stand. Don't vote for them."

Domenici and the two congressmen now battling for his Senate seat -- Reps. Steve Pearce, R-N.M. and Tom Udall, D-N.M. -- and Sen. Jeff Bingaman, D-N.M., all spoke at the 80th annual gathering of the New Mexico Oil and Gas Association.

Domenici said it was unfortunate that many New Mexicans didn't understand how crucial the oil and gas industry is to filling the state's coffers for public schools and other programs. Others echoed his sentiments, saying the state was imposing measures that made it increasingly expensive and bureaucratic to drill in the state.

Santa Fe attorney William Carr, with Holland & Hart, said the strong reaction by Santa Fe County to proposed drilling in the Galisteo Basin, and a subsequent moratorium, were examples of the "not in my backyard" attitudes seen increasingly around the nation. Yet at the same time, Americans are upset about rising fuel prices and the dependence on foreign oil, he said. The state Oil Conservation Division is supposed to protect the environment, but also not allow the waste of oil or gas, he said.

A new draft oil and gas ordinance in Santa Fe County, which greatly limits drilling in the Galisteo Basin, risks crossing into areas already regulated by the state, Carr contended. "This ordinance is not directed at public safety and health," Carr told the crowd. "It is aimed at preventing drilling in their backyard."

"The notion that there's not going to be a (legal) fight over this is false," Carr said.

Climate change and energy were inextricably linked at the conference.

Marvin Odum, president of Houston-based Shell Oil Co., took a conciliatory tone, saying environmentalists and the oil and gas industry have common ground when it comes to climate change. He said the industry needs to meet the increasing energy needs of the nation while figuring out ways to reduce greenhouse-gas emissions linked by scientists to climate change.

Odum said the recent economic crisis has pushed the energy and climate-change issues off of Congress' front burner. He said both need to be back at the front of the congressional agenda in the next session. And Odum outlined the steps Shell is taking to reduce its own greenhouse-gas emissions.

But Shell's efforts to address climate change is the very thing that will get the oil and gas industry in trouble, according to Michael J. Mazzone, a Houston lawyer who's represented energy companies including in New Mexico.

"If you and your technical advisers believe carbon dioxide emissions are causing global warming, then do something about it," Mazzone advised the group. "But if you and your advisers don't believe it, then don't create programs to address it or pander to environmentalists."

That increases the risks of litigation, he said, mentioning a recent case in which an Alaska Native village filed a lawsuit against several major oil companies and electric utilities, claiming they are causing global warming that harms the village. That lawsuit uses some of the energy company's own advertising quotes about climate change against them, Mazzone said.

The New Mexico Oil and Gas Association's annual conference continues today.

Contact Staci Matlock at 470-9843 or [email protected]

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