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Oil, Natural Gas Remain Vital to National Energy Needs

Posted on: Tuesday, 30 August 2005, 12:00 CDT

Much has been said recently about the alleged need to decrease, if not eliminate, our nation's reliance on oil and natural gas. But if we are to meet our future energy and economic needs, we must recognize some energy realities facing both Virginia and the nation as a whole.

Above all else, we must understand that we live in a global economy, and that there is a strong link between energy and economic growth. If we are to continue to grow economically, both in Virginia and nationwide, we need all sources of energy. We do not have the luxury of limiting ourselves to one source to the exclusion of others. Nor can we afford to write off our leading source of energy before we have found a cost-competitive and readily available alternative.

Consider how oil and natural gas enhance our quality of life -- fueling growth and jobs in industry and commerce, warming and cooling our homes, and getting us where we need to go. Oil provides about 97 percent of U.S. transportation fuels, which power nearly all of the cars and trucks traveling on our nation's highways. More than 60 million American households are heated and/or cooled by natural gas.

The U.S. Energy Information Administration has projected that oil and natural gas will provide nearly two-thirds of U.S. energy consumption in the year 2025, even though energy efficiency and use of renewable forms of energy will grow faster than their historical rates. However, renewables, in particular, start from a very small base -- and the major shares provided by oil and natural gas in 2025 are projected to be nearly identical to those in 2003.

Virginia Has High Stake

This continued reliance on oil and natural gas is all the more true for Virginia and its growing economy. Virginia ranks 14th among the states in total energy consumption, 12th in total petroleum consumption, 12th in gasoline consumption, 15th in jet fuel consumption, and 10th in distillate fuel consumption. However, Virginia accounts for less than 1 percent of U.S. crude oil production and less than 1 percent of U.S. crude oil proved reserves. Given this profile, Virginia has an unusually high stake in the national energy situation.

Our nation cannot afford to leave the Age of Oil before a realistic substitute is fully in place. Yes, someday oil will be replaced, not because we have run out of it, but because we have found a substitute that is proven more reliable, more versatile, and more cost-competitive. Most experts agree that finding and transitioning to a substitute for oil such as ethanol, hydrogen, or solar power will require dramatic advances in technology and massive capital investments -- and that any such displacement will take many decades to accomplish.

The leading role that oil and natural gas will continue to play makes it all the more important for our government to adopt policies that do not prevent or delay oil and gas development before a substitute is ready to satisfy consumer needs and to meet the economic investment demands.

Broader U.S. Access Is Needed

U.S. government estimates are that approximately 60 percent of the oil and natural gas yet to be discovered in the United States is located on the Outer Continental Shelf. Yet, oil and natural gas leasing and production are occurring only on a small fraction of federal lands. Broader access to U.S. resources is urgently needed, and the industry fully understands that some especially sensitive and unique areas should be set aside.

Moreover, history provides overwhelming evidence that our industry can find and develop oil and natural gas resources safely and with full protection of the environment. For example, according to the U.S. Coast Guard, during 1980-99, 7.4 billion barrels of oil were produced in federal offshore waters, with less than 0.001 percent spilled. That's a 99.999 percent record for clean operations -- a statistic few others can likely match or best, and far less than the volumes of natural seeps occurring on ocean and gulf floors.

Using advanced technology and sound business practices, we have steadily reduced the impact of oil and gas development. Horizontal and directional drilling now enables our industry to drill multiple underground wells from a single site, sometimes reaching sites as far away as 10 miles from the drilling pad. For example, a drilling pad the size of Capitol Hill in Washington, D.C., is all that is needed to access any oil reserves that might exist in the entire 68.2- square-mile District of Columbia.

The United States is at a turning point in shaping its future energy policy. The energy legislation signed recently by the President signals a first step in a much-needed effort to meet future U.S. energy needs. But much more remains to be done. We need to remove obstacles to developing our oil and natural gas resources, both on land and offshore, and to providing consumers with the fuels they so heavily rely on. We have the ingenuity, the technology, and the environmental protections. What we need is a recognition of the energy realities we face and the commitment to shaping a secure energy future for all Americans.

Source: Richmond Times - Dispatch

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