Dept of Interior Offshore Drilling Hearing, New Orleans 4/8/09

Interior Secretary Ken Salazar’s road show made its New Orleans stop yesterday. The Secretary extended the public comment period on the Minerals Management Service’s Five Year Leasing Plan for the Outer Continental Shelf (OCS), a Plan that would potentially open areas outside the Central and Western Gulf of Mexico and Alaska to oil and gas exploration for the first time since 1981. A copy of the report, an assessment of available data for oil, gas and renewable energy in the OCS is available here.

My alter ego, Steve Maley, got a chance to make a statement toward the end of the morning session.

Webcast available here. Mr. Maley’s statement is at 02:34:00 of the webcast. “Speaking truth to power”, RedState style! Unfortunately, public speaking is not his forte. [Which reminds me of Mrs. Vladimir’s favorite joke: How can you tell if an engineer is an extrovert? He looks at your shoes when he’s talking to you!]

My impressions:

Sen. Mary Landrieu (D-LA) is a strong voice for the energy industry, and she understands the catastrophic impact that Obama’s proposed changes to tax policy would have, especially on the independent sector of the industry. Sen. Landrieu is at 00:34:00 of the webcast, and her full remarks are here. It will be interesting to see how much backbone Sen. Landrieu shows when the inevitable conflict arises between her avowed position and her party’s stated direction.

Salazar: “Global Warming is a reality”, citing the acquiescence of the major oil companies (BP, Shell, and Exxon who have rolled rather than fight the issue) as supporting evidence.

Salazar says he is interested in seeing that the taxpayer receives the highest value possible from development of the OCS. Translation: the Feds will be looking at higher royalties and other schemes to maximize revenue. He did not seem particularly sympathetic with cash flow concerns of operators.

To his credit, Salazar pushed back on some of the wild claims of the environmental community, some of whom would be happy to see the oil and gas industry shut down altogether.

Offshore wind energy dominated much of the discussion. Salazar commented that the potential wind energy available off the East Coast is 1,000 gigawatts. He would like to replace 100% of coal-fired electrical generation capacity for the East Coast with wind energy; I’m not sure he has put a pencil to paper to figure out how many turbines that would take (hundreds of thousands), or how much it costs to operate in a marine environment. Apparently,with alternative energy, cost, economics, logistics and practicalities are all problems that can be solved with buckets and buckets of Federal dollars.

My favorite speaker of the morning was Francis Touchet, Principal of Erath High School. Erath, a coastal community about 15 miles south of Lafayette, was devastated by Hurricane Rita. If you only watch one speaker, watch Mr. Touchet at 01:42:20.

Times-Picayune Story

From a podium on the auditorium stage, Salazar tried to assure oil and gas producers that President Barack Obama would not overlook traditional fuels in his quest to promote green energy.

“There are some who have said that we are at war with the oil and gas industry,” Salazar said. “And we beg to differ.”

On stage with Salazar were a cadre of Louisiana politicians, including U.S. Sen. Mary Landrieu and U.S. Reps. Charles Boustany [R-LA7 at 00:44:30 on the webcast], Bill Cassidy [R-LA6, 00:58:43], Joseph Cao [R-LA2, 00:54:27] and Charlie Melancon [D-LA3; Rep. Gene Taylor (D-MS) was also in attendance.].

The state delegation urged Salazar to consider the needs of the oil and gas sector, which has struggled in recent months after the national recession sent commodity prices on a downward spiral.

Landrieu, a Democrat, was particularly concerned about Obama’s proposed 2010 budget, which would repeal various tax breaks long enjoyed by oil and gas producers as well as institute several new fees.

“They employ a tremendous number of people,” Landrieu said of the state’s stable of independent producers of oil and natural gas. “They virtually reinvest 100 percent of their money right here in America.”

For what it’s worth, here is the text of Mr. Maley’s written statement, on behalf of Badger Oil Corporation.

The public comment period is still open. More information, and a process to submit your comments online are here. The road show continues, on April 14th in Anchorage and April 16th in San Francisco.