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47-607 PDF 2009

OFFSHORE DRILLING: 

STATE PERSPECTIVES 

OVERSIGHT HEARING 

BEFORE THE

COMMITTEE ON NATURAL RESOURCES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

Tuesday, February 24, 2009 

Serial No. 111-3 

Printed for the use of the Committee on Natural Resources 

( 

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html 

or 

Committee address: http://resourcescommittee.house.gov 

(II) 

COMMITTEE ON NATURAL RESOURCES 

NICK J. RAHALL, II, West Virginia, Chairman 

DOC HASTINGS, Washington, Ranking Republican Member 

Dale E. Kildee, Michigan 

Eni F.H. Faleomavaega, American Samoa 

Neil Abercrombie, Hawaii 

Frank Pallone, Jr., New Jersey 

Grace F. Napolitano, California 

Rush D. Holt, New Jersey 

Rau ́l M. Grijalva, Arizona 

Madeleine Z. Bordallo, Guam 

Jim Costa, California 

Dan Boren, Oklahoma 

Gregorio Sablan, Northern Marianas 

Martin T. Heinrich, New Mexico 

George Miller, California 

Edward J. Markey, Massachusetts 

Peter A. DeFazio, Oregon 

Maurice D. Hinchey, New York 

Donna M. Christensen, Virgin Islands 

Diana DeGette, Colorado 

Ron Kind, Wisconsin 

Lois Capps, California 

Jay Inslee, Washington 

Joe Baca, California 

Stephanie Herseth Sandlin, South Dakota 

John P. Sarbanes, Maryland 

Carol Shea-Porter, New Hampshire 

Niki Tsongas, Massachusetts 

Frank Kratovil, Jr., Maryland 

Pedro R. Pierluisi, Puerto Rico 

Don Young, Alaska 

Elton Gallegly, California 

John J. Duncan, Jr., Tennessee 

Jeff Flake, Arizona 

Henry E. Brown, Jr., South Carolina 

Cathy McMorris Rodgers, Washington 

Louie Gohmert, Texas 

Rob Bishop, Utah 

Bill Shuster, Pennsylvania 

Doug Lamborn, Colorado 

Adrian Smith, Nebraska 

Robert J. Wittman, Virginia 

Paul C. Broun, Georgia 

John Fleming, Louisiana 

Mike Coffman, Colorado 

Jason Chaffetz, Utah 

Cynthia M. Lummis, Wyoming 

Tom McClintock, California 

Bill Cassidy, Louisiana 

James H. Zoia, Chief of Staff 

Rick Healy, Chief Counsel 

Todd Young, Republican Chief of Staff 

Lisa Pittman, Republican Chief Counsel 

(III) 

CONTENTS 

Page 

Hearing held on Tuesday, February 24, 2009 ....................................................... 1 

Statement of Members: 

Capps, Hon. Lois, a Representative in Congress from the State of 

California ....................................................................................................... 32 

Prepared statement of ............................................................................... 34 

Hastings, Hon. Doc, a Representative in Congress from the State of 

Washington .................................................................................................... 2 

Prepared statement of ............................................................................... 4 

Rahall, Hon. Nick J., II, a Representative in Congress from the State 

of West Virginia ............................................................................................ 1 

Prepared statement of ............................................................................... 2 

Statement of Witnesses: 

Chrisman, Hon. Mike, Secretary for Natural Resources, California 

Natural Resources Agency ........................................................................... 48 

Prepared statement of ............................................................................... 50 

Response to questions submitted for the record ..................................... 95 

Diers, Ted, Manager, New Hampshire Coastal Program, New Hampshire 

Department of Environmental Services, on behalf of the Coastal States 

Organization .................................................................................................. 52 

Prepared statement of ............................................................................... 54 

Response to questions submitted for the record ..................................... 99 

Farr, Hon. Sam, a Representative in Congress from the State of 

California ....................................................................................................... 5 

Prepared statement of ............................................................................... 7 

Graves, Garret, Director, Office of Coastal Activities, State of Louisiana .. 66 

Prepared statement of ............................................................................... 69 

Marvinney, Robert G., Ph.D., State Geologist and Director, Maine 

Geological Survey .......................................................................................... 57 

Prepared statement of ............................................................................... 58 

Response to questions submitted for the record ..................................... 102 

Rohrabacher, Hon. Dana, a Representative in Congress from the State 

of California ................................................................................................... 8 

Prepared statement of ............................................................................... 10 

Wagner, Hon. Frank W., State Senator, Commonwealth of Virginia .......... 62 

Prepared statement of ............................................................................... 65 

Response to questions submitted for the record ..................................... 105 

Additional materials supplied: 

Kaine, Hon. Timothy M., Governor, Commonwealth of Virginia, Letters 

submitted for the record by Chairman Rahall ........................................... 74 

(1) 

OVERSIGHT HEARING ON ‘‘OFFSHORE 

DRILLING: STATE PERSPECTIVES’’ 

Tuesday, February 24, 2009 

U.S. House of Representatives 

Committee on Natural Resources 

Washington, D.C. 

The Committee met, pursuant to call, at 10:05 a.m. in Room 

1324, Longworth House Office Building, Hon. Nick J. Rahall, II, 

[Chairman] presiding. 

Present: Representatives Rahall, Hastings, Abercrombie, 

Grijalva, Costa, Heinrich, Capps, Inslee, Tsongas, Kratovil, Brown 

of South Carolina, Gohmert, Smith, Wittman, Broun of Georgia, 

Fleming, Coffman, Chaffetz, and Lummis. 

The CHAIRMAN. The Committee on Natural Resources will come 

to order, please. The Chair, at the very outset, is going to recognize 

the Ranking Minority Member, Mr. Hastings. 

Mr. HASTINGS. Thank you very much, Mr. Chairman. It is with 

great regret that I inform the Committee of an absence today. 

One of our newest Members, Mr. Cassidy from Louisiana, lost his 

father, James Cassidy, on Sunday. I know that I speak for all of 

the Committee Members when I say that our thoughts and prayers 

are with Congressman Cassidy and his mother, Betty, and his entire family at this difficult time, and thank you for your indulgence, 

Mr. Chairman. 

STATEMENT OF HON. NICK J. RAHALL, II, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF WEST VIRGINIA 

The CHAIRMAN. The Chair thanks its Ranking Member and 

wishes to express his condolences to Mr. Cassidy as well. 

The Committee is meeting today for the second in a three-part 

series of oversight hearings designed to examine our nation’s current offshore drilling policy and help to determine the course of 

that policy in the future. 

Two weeks ago, on February 11th, we heard from representatives 

of environmental organizations, tourism boards, and the fishing industry. Today, we will hear from representatives of coastal state 

governments from around the country, and, tomorrow, we will hear 

from the oil and gas industry representatives. 

As I said two weeks ago, these hearings are intended to afford 

all sides an opportunity to weigh in as we begin work to determine 

the best way to accommodate drilling while also ensuring that our 

2 

offshore resources are managed in an environmentally and 

physically responsible manner. 

Our coastal states are critical to this discussion. They are 

literally on the front lines of the offshore drilling debate, and their 

needs and challenges are vitally important considerations for us 

all. 

As I stressed at our hearing last time, I am not opposed to drilling. I understand the benefits of domestic oil and gas production, 

but I also am aware of the risks. 

The ongoing discussion is designed to examine the trade-offs that 

would be involved in expanding offshore oil and gas drilling, and 

I look forward to working with Members on both sides of the aisle 

as we determine the best way to move forward. I thank our 

witnesses for being with us today, and we will be led off by our 

colleagues in this body. I now recognize the Ranking Member, Mr. 

Hastings. 

[The prepared statement of Mr. Rahall follows:] 

Statement of The Honorable Nick J. Rahall, II, Chairman, 

Committee on Natural Resources 

The Committee is meeting today for the second in a three-part series of oversight 

hearings designed to examine our Nation’s current offshore drilling policy and help 

to determine the course of that policy in the future. 

Two weeks ago, on February 11th, we heard from representatives of environmental organizations, tourism boards, and the fishing industry. Today we will hear 

from representatives of coastal state governments from around the country. And tomorrow we will hear from oil and gas industry representatives. 

As I said two weeks ago, these hearings are intended to afford all sides an opportunity to weigh in as we begin work to determine the best way to accommodate 

drilling while also ensuring that our offshore resources are managed in an environmentally and fiscally responsible manner. 

Our coastal states are critical to this discussion. They are literally on the front 

lines of the offshore drilling debate and their needs and challenges are vitally important considerations for us all. 

As I stressed at our last hearing, I am not opposed to drilling. I understand the 

benefits of domestic oil and gas production. But I am also aware of the risks. This 

ongoing discussion is designed to examine the trade-offs that would be involved in 

expanding offshore oil and gas drilling, and I look forward to working with Members 

on both sides of the aisle as we determine the best way to move forward. 

I thank the witnesses for agreeing to appear today, and I now recognize our Ranking Member, Mr. Hastings, for his opening remarks. 

STATEMENT OF HON. DOC HASTINGS, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF WASHINGTON 

Mr. HASTINGS. Thank you, Mr. Chairman. Today, we are to hear 

from various states on their perspectives on OCS development. 

Studies have shown that offshore drilling will create substantial 

economic benefits for the Federal government, as well as for the 

states. These benefits include job creation, tax revenue, and possible revenue sharing for the states. 

Before the recess, Congress passed the largest spending bill ever, 

directing billions of Federal dollars to states to avert their budget 

crisis. 

Today’s hearing will focus on one of the largest sources of Federal revenue: oil and gas bonus bids, rents and royalties. 

In addition, we will focus on one of the best opportunities we 

have to assist state governments, by sharing OCS revenue, like we 

do with onshore mineral receipts. 

3 

A very conservative CRS report estimated that OCS development off California would generate more than $120 billion in revenue 

sharing for the State of California, money that I am sure the State 

of California could desperately use. The same report suggests that 

the Atlantic Ocean could generate more than $76 billion in shared 

revenue from what are even more conservative estimates of the potential resources. 

At a time when the Federal government is borrowing record 

sums of money to fund its programs and transferring money to the 

states, it seems reasonable and responsible that we should use the 

OCS resources available in order to help states balance their budgets. 

Last year, the Democrat majority passed energy legislation that 

locked up 88 percent of our OCS resources and had no revenuesharing provision for coastal states. Thankfully, this legislation 

died in the Senate, but, fortunately, Congress did pass legislation, 

or, rather, I should say, let lapse, that ended a decades’ long ban 

on OCS development. 

First, a no-revenue-sharing approach is simply not acceptable. 

Congress needs to establish a fair revenue-sharing program for all 

coastal states, expanding this common-sense policy beyond the several states along the Gulf of Mexico. This must be a priority for 

this Committee and Congress. 

Second, many of the states testifying before us today have unemployment rates that are higher than the national average. Knowing 

that OCS development is not just about energy—it is also about 

creating new American manufacturing jobs and building the infrastructure to harness this energy—I have to wonder the extent to 

which these states have examined the job impacts of expanded oil 

and gas development and what it would mean to their states. 

An American Energy Alliance study published yesterday calculated that opening the OCS would create between tens of thousands and hundreds of thousands of jobs in the states testifying before us today. Over the life of production, it would create over 1.2 

million annual jobs across the country. 

So, finally, Mr. Chairman, I hope today’s hearing will address 

our nation’s growing dependence on imported natural gas pipelines. 

Each of the witnesses before us today represents a state where 

there is either an existing or a proposed liquefied natural gas 

(LNG) terminal. From Callus, Maine, to Long Beach, California, 

terminals to import natural gas are popping up all across our 

coasts. Everyone believes that America has become too dependent 

on foreign energy. 

I hope that the witnesses before us will explain their views on 

which is preferable: building LNG terminals that make their states 

dependent on foreign natural gas, or the responsible development 

of America’s own natural gas resources in the OCS that will create 

new jobs and bring revenue to their states? 

In closing, this issue is of major national significance. America is 

too dependent on foreign nations for our energy supplies. We can, 

and should, determine the most responsible way to develop our 

OCS resources. I believe that we can free America from our dependence on foreign oil, free America from imported foreign natural 

gas, and invigorate America’s economy by harnessing the resources 

4 

of America’s OCS to create more energy with the skill and knowledge of the American worker. 

So, with that, Mr. Chairman, I look forward with you to hearing 

from today’s witnesses. 

[The prepared statement of Mr. Hastings follows:] 

Statement of The Honorable Doc Hastings, Ranking Member, 

Committee on Natural Resources 

Mr. Chairman, today we are to hear from various states on their perspectives on 

OCS development. Studies have shown that offshore drilling will create substantial 

economic benefits for the federal government as well as for states. These benefits 

include job creation, tax revenues and possible revenue sharing. 

Revenue Sharing 

Before the Recess, Congress passed the largest spending bill ever, directing billions of federal dollars to states to avert their budget crises. 

Today’s hearing will focus on one of the largest sources of federal revenue: oil and 

gas bonus bids, rents and royalties. In addition, we will focus on one of the best 

opportunities we have to assist state governments—by sharing OCS revenue like we 

do with onshore mineral receipts. 

A very conservative CRS report estimated that OCS development off California could generate more than $120 Billion in revenue sharing for the State of California. Money that I am sure the State of California could desperately use. The 

same report suggested that the Atlantic Ocean could generate more than $76 billion 

in shared revenues from what are even more conservative estimates of the resources. At a time when the federal government is borrowing record sums of money to 

transfer to the states, it seems reasonable and responsible that we should use the 

OCS resources available in order to help states balance their own budgets. 

Last year, the Democrat Majority passed legislation that locked up 88 percent of 

our OCS resources and had NO revenue sharing provision for coastal states. Thankfully this legislation died in the Senate and instead Congress passed legislation that 

ended the decades long ban on OCS development. 

A ‘‘no revenue sharing’’ approach is simply not acceptable. Congress needs to establish a fair revenue sharing program for all coastal states, expanding this commonsense policy beyond the several states along the Gulf of Mexico. This must be 

a priority for the Committee and Congress. 

JOBS 

Second, many of the states testifying before us today have unemployment rates 

that are higher than the national average. Knowing that OCS development isn’t just 

about energy, it is also about creating new American manufacturing jobs and building the infrastructure to harness this energy, I wonder the extent to which these 

states have examined the job impacts of expanded oil and gas development and 

what it would mean to their states. 

An American Energy Alliance study published yesterday calculated that opening 

the OCS would create between tens of thousands and hundreds of thousands of jobs 

in the states testifying before us today. Over the life of production, it would create 

over 1.2 million annual jobs across the country. 

LNG vs Offshore Gas 

Finally, Mr. Chairman, I hope today’s hearing will address our nation’s growing 

dependence on imported natural gas supplies. Each of the witnesses before us today 

represents a state where there is either an existing or proposed liquefied natural 

gas terminal. 

From Calais, Maine...to Long Beach, California...terminals to import natural gas 

are popping up all across our coasts. Everyone believes that America has become 

too dependent on foreign energy. I hope that the witnesses before us will explain 

their views on which is preferable: building LNG terminals to make their states dependent on foreign natural gas OR the responsible development of America’s own 

natural gas resources in the OCS that will create new job and bring revenue to their 

states? 

CLOSING 

In closing, this issue is of major national significance. America is too dependent 

on foreign nations for our energy supplies. We can and should determine the most 

responsible way to develop our OCS resources. 

5 

Mr. Chairman, I believe that we can free America from our dependence on foreign 

oil, free America from imported foreign natural gas, and invigorate America’s economy, by harnessing the resources of America’s OCS to create more energy with the 

skill and knowledge of the American worker. 

I look forward to hearing from today’s witnesses. 

The CHAIRMAN. I thank the gentleman. 

Do any other Members wish opening statements? If not, we will 

go to our colleagues, and we are very happy to have two of them 

with us today comprising Panel Number 1. First, is Representative 

Sam Farr from California’s 17th District, to be followed by Representative Dana Rohrabacher from California’s 46th District. 

Gentlemen and Dear Colleagues, we welcome you. We do have 

your prepared testimonies, and, of course, they will be made part 

of the record as if actually read, and you may proceed as you wish. 

STATEMENT OF HON. SAM FARR, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF CALIFORNIA [17th DISTRICT] 

Mr. FARR. Thank you very much, Mr. Chairman and Ranking 

Member Mr. Hastings and Members of my old Committee. I really 

appreciate this opportunity to testify before you today, and I feel 

it is quite an honor to be here. 

It is interesting you are introducing us because, in California, if 

you introduced both of us, you would introduce me as from Northern California and Mr. Rohrabacher from Southern California. We 

still have this territorial distinction in our great state. 

I am a coastal legislator and have been involved in these issues 

for a long time, and one thing that I have learned for sure is that 

our oceans are sick, and you have heard that testimony in this 

Committee over and over again. 

I would like to voice my opinion strongly in favor of reinstating 

the moratorium. Let me explain. 

I represent a district that has the fifth-largest, onshore oil deposits in California. We have a vigorous oil drilling program onshore. 

Offshore, we have put the entire ocean and coastal area into the 

largest marine sanctuary in the United States, and, in that statutory law, we prohibited oil drilling in the ocean. 

I am here today to advocate on behalf of the smart use of oceans, 

first, on expanded oil drilling operations in the Outer Continental 

Shelf, it is clear that these activities are not without risk. The OCS 

drilling process offers numerous opportunities for environmental 

risks, exploration risks, extraction risks, and transportation risks. 

In 1969, the Santa Barbara spill was the type of environmental 

disaster that must be prevented. Another spill would be an enormous insult to the coastal economies, the industries and ecosystems, and an embarrassment to the government that leased the 

land for such purposes. 

The potential threat they pose is intolerable, and the proposed 

minimal benefits from new drilling operations do not outweigh the 

potential risk. In political terms, it is high risk, low gain. 

Further, the debate on oil drilling seems archaic, given our understanding of the adverse effects of oil consumption on our atmosphere. Our economy seems to be oil addicted, and we have been 

talking a lot about how we must be less so. 

6 

If renewable energy sources receive the same level of investment 

as fossil-fuel-based sources, we would make substantial strides in 

ending our oil dependency. If the goal is to reduce carbon emissions, we might as well get used to the fact that drilling is not the 

solution, especially when clean, renewable energy sources are within our grasp, many of which come from the use of the ocean. The 

development of ocean tide flows, current flows, thermal energy, 

wave motion, and wind energy are all in the energy plans and near 

production. 

I have long been an advocate for ocean conservation. I am not 

alone in holding this view that healthy oceans mean healthy economies and healthy people. I believe, from your previous hearings, 

you have seen fishermen, environmental NGO’s, and President 

Bush’s own Commission on Ocean Policy all agree. No discipline of 

the Outer Continental Shelf resources should proceed without recognizing that a type of ocean zoning is essential in the first step. 

Look before you leap. Plan before you develop. 

The OCS is the host to many different regions ideally suited for 

different purposes. There are fishing regions, there are aquaculture 

regions, and there is wind farming. There are other regions that 

unique to critical habitats and must be conserved. 

Sometimes these purposes can occur together, but not always. A 

process must be put in place to, first, assess and then allocate 

areas of OCS so that the ocean, the industries, and economies all 

benefit in a sustainable fashion, and that is the key word: ‘‘sustainable.’’ 

Finally, both the Pew Oceans Commission and the U.S. Commission on Ocean Policy highlight urgent need for a permanent ocean 

conservation trust fund. The reinvestment of OCS revenue sources 

into this fund would represent a durable source of funding the 

state and Federal ocean conservation programs. We have put no 

money into creating health in the oceans. 

Currently, only 25 percent of the OCS drilling is statutorily allocated. Seventy-five percent of the revenue is lost in the general 

fund. It is an income just going in and getting lost. Only if a quarter of the 74 percent were redirected to the Ocean Trust Fund, you 

would find a huge investment in ocean health. Reinvestment of revenues generated from the ocean to put back in the ocean is a smart 

thing to do. 

For too long, we have reaped the fullness of the ocean’s bounty. 

This bounty is neither inexhaustible or unlimited, and we cannot 

expect to take forever without needing to give back. 

I ask this Committee to do two things. First, I urge this Committee to move to reinstate the moratorium on drilling lease expansion. It has been here through many administrations and only expired last fall. 

I urge this Committee to consider any use of Outer Continental 

Shelf money as conditional on both good planning for ocean resource use and the establishment of a permanent Ocean Trust 

Fund. 

I would be glad to answer any questions you might have. Thank 

you. 

[The prepared statement of Mr. Farr follows:] 

7 

Statement of The Honorable Sam Farr, a Representative in Congress from 

the State of California 

Chairman Rahall, Ranking Member Hastings, and Members of the Committee: 

Thank you for this opportunity to testify before you. 

Today, you are taking up the issue of drilling on the outer continental shelf 

(OCS), as the moratorium was allowed to expire in September of last year. I would 

first like to voice my opinion strongly in favor of reinstating the moratorium. I will 

then expand on several other corollary issues that this drilling debate has raised. 

The state waters of my district, California’s 17th, are entirely protected by the Monterey Bay National Marine Sanctuary and thus my presence here today is not motivated by my desire to protect my own coastline from fossil fuel exploitation. Rather, 

I am here to advocate on behalf the oceans: perhaps the greatest natural resource 

on earth and one which we all share. 

First, on the issue of expanded drilling operations in the OCS, it is clear that 

these activities are not without risk. The OCS fossil fuel extraction process offers 

numerous opportunities for environmental risk, from exploration, to extraction, to 

transport. True, the oil spilled from these sources represents a small contribution 

to the total oil spilled into the oceans, but that fact does not negate its impacts. My 

own district on California’s central coast may not be subjected to drilling, but we 

are not immune from the effects of oil exploitation. A recent small spill within San 

Francisco Bay injured birds from my district and in some cases prevented our fishermen from working their normal waters. On a larger scale, the 1969 spill from 

Platform A in Santa Barbara is precisely the type of environmental disaster that 

must be prevented. A repeat of this event would represent an enormous insult to 

coastal economies, industries and ecosystems. Granted, such spills are rare, but the 

potential threat they pose is intolerable. The proposed minimal benefits of new drilling operations do not outweigh the potential risks. 

Further, the debate on fossil fuel extraction seems almost archaic given our understanding of the adverse effects of their consumption on our atmosphere. Granted, 

our economy is still oil-addicted, but if alternative, renewable energy sources received the same level of investment as fossil-fuel based sources, surely we could 

make more substantial strides in weaning our oil dependency? If the U.S. goal of 

reducing carbon emissions is to be realized, we might as well acquaint ourselves 

with the idea that drilling is not the solution, especially when clean, renewable 

energy sources are within our grasp. Re-opening the OCS for fossil fuel exploitation 

is simply illogical given present concerns over the use of fossil fuels and emission 

reduction targets. 

There was concern in last week’s hearing that decreasing U.S. fossil fuel exploitation would result in increased foreign fossil fuel exploitation with an associated 

greater environmental cost. I disagree with this logic for two reasons. First, as the 

number one energy consuming nation, if the U.S. can reduce its own demand, there 

will be less production incentive in other nations. Second, as a global leader, U.S. 

progress towards independence from non-renewable fuels will certainly have a positive, long term, global effect. 

As you know, I have long been an advocate for ocean conservation. I am not alone 

in holding the view that healthy oceans mean healthy economies and healthy people. The debate we are having at present brings to the forefront several other key 

issues that warrant further discussion: marine spatial planning and ocean conservation funding. 

Unlike terrestrial regions opened for development, there is no comprehensive spatial planning system for the oceans. This is problematic because, like terrestrial regions, the oceans are comprised by a staggering diversity of different habitats and 

resources. It is imperative that a system is developed whereby the layout of these 

different resources can be assessed and their uses coordinated. The OCS is host to 

many regions, some of which will be ideally suited for fishing, or aquaculture, or 

wind farming, or wave energy generation. There will be other regions that are 

unique or critical habitats, which must be conserved. In some cases, these multiple 

uses can occur simultaneously, but in other cases, they are mutually exclusive. A 

process must be put in place to first assess and then allocate areas of the OCS so 

that the ocean, industries and economies all benefit. 

This process is termed marine spatial planning and should begin with a comprehensive review of resources in the OCS conducted in coordination by appropriate 

state and federal agencies. Then, determinations can be made based on the best 

available science as to which resources can be utilized in which places. I believe that 

we are on the brink of large-scale development of alternative, renewable energy resources, and it is essential that this development occurs in the most scientific, orderly and effective way possible. 

8 

Finally, in their assessments of the state of ocean policy in the U.S., both the Pew 

Oceans Commission and the U.S. Commission on Ocean Policy underscored the urgent need for a permanent ocean conservation trust fund. In its 2006 Ocean Policy 

Report Card, the Joint Ocean Commission Initiative gave the U.S. an F in the ‘‘new 

funding for ocean policy and programs’’ category. In 2007, the grade was a D+. 

Clearly, more effort and investment is necessary to address this deficiency. 

Given the expected utilization of OCS resources for renewable energy and other 

uses, I would urge you to consider the following fact: the oceans are a common resource, they belong to everyone. It is incumbent upon current OCS users, who are 

extracting billions in revenues from the oceans, as well as future users, to reinvest 

a portion of their revenue back into its source, the oceans themselves. I have personally proposed the creation of such an Ocean Trust fund in my bill, HR21, which has 

been introduced and referred to your committee. This fund would satisfy the recommendations of the Ocean Commissions. Reinvestment of OCS resource revenue 

into this fund would represent a durable source of funding for state and federal 

ocean conservation programs and is a logical reinvestment of revenues generated 

from the ocean back to the ocean. This fund would support the focused efforts of 

coastal states, territories and agencies in addressing the critical ocean and coastal 

science, management and protection needs of our nation and is essential to implement the many other recommendations of the national ocean commissions. 

For too long, we have reaped the fullness of the oceans’ bounty. This bounty, however, is neither inexhaustible nor unlimited and we cannot expect to take forever 

without giving back. I urge you to move to reinstate the moratorium on drilling 

lease expansion. I further urge you to consider any resource exploitation activities 

conducted in the oceans over the Outer Continental Shelf as conditional on both the 

merits of good planning and the establishment of an ocean trust fund and reinvestment in it. 

Thank you very much for this opportunity to speak to you today. 

The CHAIRMAN. Thank you, Sam. Dana? 

STATEMENT OF HON. DANA ROHRABACHER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA [46th 

DISTRICT] 

Mr. ROHRABACHER. Thank you very much, Mr. Chairman and 

fellow Members. I appreciate this opportunity to testify on an issue 

that deserves a much more serious discussion than it has been 

given for these last four decades. 

Let me preface my remarks by noting that I am a surfer. I was 

proud to be the best surfer in Congress until another one was elected—that is Brian Bilbray—and now that Duncan Hunter, yet another surfer, has been elected, I am, rightfully, the third-best surfer 

in Congress; however, it has been agreed to that I am now the 

Chairman of the unofficial, yet powerful, Surfers’ Caucus. 

The CHAIRMAN. Is this the ocean? 

Mr. ROHRABACHER. With that said, I love the ocean, and preserving it is a high priority for me. I am also a scuba diver, and 

if I thought that offshore drilling imperiled the ocean, I would oppose offshore oil drilling, but that is simply not true. 

Decades ago, there were a few well-published accidents that led 

to oil spills. 1969 is a long time ago. We should not be basing our 

judgments on what is important for our people, or what is good for 

the economy, based on what was done with technology that was 

put to use in 1969. That was probably technology that was developed long before 1969. 

The technology since those days has dramatically improved. Hurricanes can go right through our offshore oil operations in the Gulf 

of Mexico without one drop being spilled. But even with the old 

technology, the chances of an oil spill are much more ominous by 

9 

tanker-delivered oil than by that oil that is provided by offshore 

rigs. 

In my own district, which has had offshore drilling for more than 

30 years, there has been no significant problem with these offshore 

rigs, yet, shortly after I was elected, there was a major oil spill 

from a tanker, and, remember, the more you say you cannot drill, 

the more the environmental radicals have prevented us from doing 

that offshore oil drilling, the more oil we have had to deliver by 

tanker. They, ironically, have made it more likely to have oil spills 

off California and off my district. 

So those who claim the mantle of environmental champion and 

aggressively oppose offshore oil drilling have, ironically, made oil 

spills more likely. 

Furthermore, by making us more dependent on foreign production, which is not encumbered in many of these countries by the 

same safety and environmental standards which I support, the 

overall pollution, then, because when we are getting our oil from 

overseas, it often does not have these same standards, the overall 

pollution and environmental outcome has been a total disservice to 

environmental concerns, again, turning everything on its side and 

upside down. The environmentalists are ending up arguing for 

something that hurts the environment when looked at in a rational 

discussion. 

So the environmental consequences of restricting offshore oil and 

gas development have been exactly opposite to the approach that 

we were led to believe. Having scuba dived, which I have, below 

and around offshore rigs along California’s southern coast, I can assure you, the local fish are healthy and plentiful. 

Their natural instincts, which would drive them away from 

something that had something that was going wrong with their 

body, their natural instincts, I believe, are better than the political 

instincts of those who have been in the forefront of the fight 

against offshore oil drilling. But the economic consequences of banning new offshore oil and gas drilling also need to be addressed. 

One of the reasons our economy, I believe, has been faltering is 

that it has been weakened, in part, by the transfer of wealth that 

comes from buying oil and gas from overseas when we could 

produce that same energy domestically from our own offshore oil 

reserves. Just off the coast of California, there are enormous untapped oil and gas reserves. The low estimate, and, again, they 

made estimates like this, which were low estimates, in the Gulf of 

Mexico and found it to be much more oil than what the low estimate was; the low estimate is nine billion barrels of oil, as well as 

vast deposits of clean-burning natural gas. 

At $40 to $50 a barrel, which, I believe, is what we are going to 

come down to, if not $60 a barrel when things all balance out in 

the marketplace, at $40 to $50 a barrel, that represents a value offshore of California at perhaps $500 billion, $500 billion of wealth, 

and, again, that is a low estimate. 

Why are the American people being denied this wealth when, of 

course, not developing this energy puts it at greater environmental 

risk? Why are we denying this to our people at a time of hardship? 

The Federal government, as well as state and local governments, 

especially in California, sorely need new sources of revenue. It is 

10 

right there. Denying America the benefits of our own country’s oil 

and gas deposits is a sin against our people, and it is bad environmental policy, to boot. 

Most disconcerting, the real issue, I believe, that has been the 

driving force all of these decades and that has led to the restriction 

of offshore oil and gas deposits and, again, certainly has not really 

been the environment, as I just stated—it certainly has not been 

the economy. What has been the driving force that has prevented 

our people from having this wealth, to build schools, to provide 

healthcare, to make sure that we did not have to ruin our economy 

by buying this oil and fuel overseas? What has been the driving 

force? The view. It is the view. 

I am sorry. Maybe the view is important. That may be might be 

environmentally sensitive, to really be concerned about the view. 

We have some more serious things to be concerned about. However, 

even with that issue, let me suggest that perhaps we could require 

a better-looking facade on the part of offshore oil rigs. 

In Long Beach, they have beautiful facades, and no one complains. I will tell you right now, if we would not be developing our 

offshore oil rigs off of Long Beach, that city would go belly up economically. 

So, let us require the facades look beautiful. Let us paint them 

in green trees, or whatever would make environmentalists happy. 

No. I would suggest that we require better-looking offshore oil 

rigs, and let me also note, we can put wellheads under the water 

now. Again, I am a scuba diver. A lot can be done that was not 

done in 1969, with technology that had been developed in the forties. 

The fact is that we can have underwater wellheads that have almost no chance of spilling, even in the middle of a hurricane in the 

middle of the Gulf. 

So, it is time for us to quite worrying about the view, start standing up for the economy and the environment, but also stand up for 

our people, who have a right to the benefit of this vast wealth that 

is offshore, and especially that is true in this time of economic 

hardship. 

Thank you, Mr. Chairman, for letting me present my case. 

[The prepared statement of Mr. Rohrabacher follows:] 

Statement of The Honorable Dana Rohrabacher, a Representative in 

Congress from the State of California 

Mr. Chairman, members of the Committee, I appreciate this opportunity to testify 

on an issue that deserves a much more serious discussion than it has been given 

for these last four decades. 

Let me preface my remarks by noting that I am a surfer. I was proud to be the 

best surfer in Congress until another one was elected, Brian Bilbray. And now that 

Duncan Hunter, yet another surfer, has been elected, I am rightfully the third best 

surfer in Congress. However, it has been agreed to that I am now chairman of the 

unofficial yet powerful Surfers Caucus. With that said, I love the ocean, and preserving it is a high priority for me. I am also a scuba diver, and if I thought offshore 

drilling imperiled the ocean, I would oppose offshore drilling. But that is simply not 

true. 

Decades ago there were a few well-published accidents that led to oil spills. 1969 

was a long time ago. We shouldn’t be basing our judgments on what is important 

for our people or what is good for the environment based on what was done with 

technology that was put to use in 1969. That was probably technology that was developed long before 1969. The technology since those days has dramatically improved. Hurricanes can go right through our offshore operations and the Gulf of 

11 

Mexico without one drop of oil being spilled. But even with the old technology, the 

chances of an oil spill are much more ominous by tanker-delivered oil than that 

which is extrapolated by offshore rigs. In my own district, which has had offshore 

drilling for more than 30 years, there have been no significant problems with these 

offshore rigs. Yet, shortly after I was elected, there was a major oil spill—from a 

tanker! And remember, the more you say you can’t drill, and the more the environmental radicals prevent us from doing that offshore oil drilling, the more oil we 

have had to deliver by tanker! They ironically made it more likely to have oil spills 

off California and off my district. So those who claim the mantle of environmental 

champion and aggressively oppose offshore oil drilling have ironically made oil spills 

more likely. 

Furthermore, by making us more dependent on foreign production, which is not 

encumbered in many of these countries by the same safety and environmental 

standards, which I support, we essentially increase the overall pollution of the planet. Again turning everything on its head, the environmentalists are ending up arguing for something that hurts the environment when looked at in a rational discussion. So the environmental consequences of restricting offshore oil drilling and gas 

development have been exactly opposite to the approach that we were lead to believe. Having scuba dived, which I have below and around offshore rigs California’s 

southern coast, I can assure you the local fish are healthy and plentiful. Their natural instincts, which would drive them away if something was going wrong with 

their body, their natural instincts I believe are better than the political instincts of 

those who have been in the forefront of the fight against offshore oil drilling. But 

the economic consequences of banning new offshore oil and gas drilling also need 

to be addressed. 

One of the reasons our economy, I believe, has been faltering is that it has been 

weakened in part by the transfer of wealth that comes from buying oil and gas from 

overseas, when we could produce that same energy domestically from our own offshore oil reserves. Just off the coast of California, there are enormous untapped oil 

and gas reserves. The low estimate—and again, they have made estimates like this 

which were low estimates in the Gulf of Mexico and found it to be much more oil 

than what the low estimate was—the low estimates is 9 billion barrels of oil as well 

as vast deposits of clean burning natural gas. At forty to fifty dollars a barrel— 

which I believe is what we are going to come down to, when things all balance out 

in the market place—at forty to fifty dollars a barrel, that represents a value offshore of California, at perhaps five hundred billion dollars! Five hundred billion dollars of wealth and again, that is a low estimate. Why are the American people being 

denied this wealth when of course, not developing this energy of course put us at 

greater environmental risk? Why are we denying this to our people at a time of 

hardship? 

The federal government—as well as state and local governments—sorely needs 

new sources of revenue. It’s right there! Denying America the benefits of our own 

country’s oil and gas deposits is a sin against our people and it’s bad environmental 

policy to boot. The real issue I believe that has been the driving force all these decades, that has led to the restriction of offshore oil and gas deposits and again, certainly not the driving force certainly hasn’t really been the environment as I have 

just stated, it certainly hasn’t been the economy. What has been the driving force 

that has prevented our people from having this wealth to build schools, to provide 

healthcare, to make sure that we didn’t have to ruin our economy by buying this 

oil and fuel overseas. What has been the driving force? The view. It’s the view. I’m 

sorry, maybe the view is important. That might be environmentally sensitive. But 

to be really concerned about the view, we have got some more serious things to be 

concerned about. However, even with that issue, let me suggest, that perhaps we 

could, require a better looking fac ̧ade on the part of offshore rigs. 

In Long Beach they have beautiful facades and no one complains, and I will tell 

you right now if we would not be developing our offshore oil rigs off of city of Long 

Beach, that city would go belly up economically! So let’s require the facades look 

beautiful, lets paint them in green trees and or whatever would be make environmentalists happy. No, I would suggest that we require better looking offshore oil 

drilling rigs and let me also note we can put well heads on under the water now. 

Again, I am a scuba diver, a lot can be done that wasn’t done in 1969 with technology that had been developed in the forties. The fact is that we can have underwater well heads that have almost no chance of spilling even in the middle of a Hurricane and even in the middle of the Gulf. So it is time for us to quit worrying about 

the view, start standing up for the economy and the environment but also stand up 

for our people who have a right to the benefit of this vast wealth that is off shore 

and especially that’s true in this time of economic hardship. Thank you Mr. Chairman for letting me present my case. 

12 

The CHAIRMAN. I thank both of you. This is normally the time 

we allow Members of the Committee to ask the panel questions, 

but perhaps I will allow the panelists to ask each other questions. 

[Laughter.] 

Mr. FARR. We would be delighted. 

Mr. BROUN. Do you need a motion, Mr. Chairman? 

The CHAIRMAN. Well, before recognizing my colleagues, let me remind them that we do have a State of the Union tonight, and we 

have to be out of here by some reasonable hour. I recognize the 

Ranking Minority Member, Mr. Hastings. 

Mr. HASTINGS. Thank you, Mr. Chairman, and thank both of you 

for your testimony. I think anybody listening today probably got 

the arguments on both sides right here, and this is what the issue 

is all about. 

I just want to ask, I guess, both of you, in a broad way. Mr. Farr, 

you are concerned about the pollution of the oceans. The data that 

I have looked at, the largest contributor to oil in the oceans is natural seepage, and the second-largest contributor is runoff from 

urban areas. By far, way down, is the extraction process. 

What is your comment on that, observation on that, statistic, 

which is, by the way, well grounded? 

Mr. FARR. Well, two things. First of all, I think that this whole 

argument has to go to, how do we want to position ourselves in the 

future regarding our dependence on oil, and are we going to continue to be addicted and, therefore, do OCS when you have, I 

think, sort of high-risks/low gains. 

You know, the economy of California’s coastline is so much greater than all of the oil extraction, and that economy is based, like in 

a lot of the states, on the beauty and attraction of coast beaches. 

The number-one attraction in the United States of America, the 

number-one attraction in the whole country, for visitors is the Los 

Angeles beaches, and, on those beaches, you are not seeing them 

involved with oil spills. 

I think, in response to your question about runoff, because we 

are killing the oceans—we are dumping everything we do not like 

into the oceans that we do not know what to do with, and, at the 

same time, we are taking everything that we want out of it, not 

only in food supplies but mineral supplies as well. 

The oceans are paying a price for that, and we, in California, understand that urban runoff has a big ocean-pollution problem, and 

what we are doing, community by community, up the coast, is developing a tax base to essentially collect all rainwater runoff and 

pretreating it or ponding it before it goes into the ocean, essentially 

stopping the pollutants from getting in. 

Los Angeles was the first region in the state to do that, and it 

has done it extremely well, and I know our community just passed 

a bond measure last November to do the same in my district. 

So, the seepage has been a problem, but it gets exacerbated, I 

think, by the risk involved, as I said, by exploration risks, by transportation risks, and by extracting risks. I think those give you a 

higher degree of potential damage than actual seepage that occurs. 

Mr. HASTINGS. Dana? 

Mr. ROHRABACHER. Well, there is natural seepage, and, in fact, 

again—— 

13 

The CHAIRMAN. Have you seen it in your area? 

Mr. ROHRABACHER. Yes. I have surfed up in Santa Barbara, and 

it is all over my feet, and everybody knows that who surfs in Santa 

Barbara. The fact is that if you did not have any offshore oil wells, 

the seepage would be worse because the buildup would not be actually alleviated. 

Let me note that the argument that, ‘‘Well, we have to get ourselves off of dependence on oil, thus we are going to restrict the 

amount of oil that we produce,’’ is like saying, ‘‘You know, our people are eating too much. Let us start restricting farmers.’’ 

I mean, this does not correlate. It is not something that is going 

to lead to something good. Restricting the amount of food is not 

going to lead people to eat less. 

The fact is, restricting oil has done one thing: Restricting oil development has led us to buy oil from overseas, and then what happens? It a much greater risk to transport that oil to us via tanker. 

So, it has had just the opposite. 

In terms of urban runoff, my good friend, Sam, and I are in total 

agreement for those types of environmental controls and emphasis. 

I would actually suggest that if we really want to do it right, let 

us agree to offshore oil drilling and direct the revenue from the offshore oil wells to the communities along the coast who can then 

use those new financial resources to deal with the problem of urban 

runoff and some of the other major environmental issues that 

coastal communities have. 

Mr. FARR. Can I add one thing to that point? 

Mr. HASTINGS. Let me make this point because my time is running down here, and that is that if you had revenue sharing, presumably, states and municipalities along the coast could share in 

that revenue to do exactly what you are saying, Dana. Is that correct? Is that what you are suggesting? 

Mr. ROHRABACHER. It is, but I would actually go further than 

that. I would suggest that we codify that so a certain percentage 

of the funds are not just going to the state but go directly to those 

coastal communities opposite that offshore oil development. 

Mr. HASTINGS. Sam, and then I just want to make one more 

point, go ahead. 

Mr. FARR. Last year, we received $23 billion from OCS activity, 

and $17 billion of that just went into the general fund. So, you 

have a revenue source there that could do a lot of things, and my 

point in this was that this Committee, as the Resource Committee, 

ought to take a look at that revenue stream and direct it toward 

doing some beneficial things for the ocean because it is distributed 

back to the states. 

It is an awkward formula: The states get money from state lands 

oil drilling in the first few miles offshore. Then there is this buffer 

zone between the state and Federal lines, and if there is an oil rig 

out there, the deposits may be on underlying state lands or Federal 

lands, so there is a sharing process for the boundary, and then everything beyond that boundary just comes to the Federal government. Of that, as I said, $23 billion was raised last year, and $27 

billion just went into the general fund to go be spent on other 

things. I believe that that is the Resource Committee’s money and 

14 

that we ought to spend it on more than just the Land and Water 

Conservation Fund. 

Mr. ROHRABACHER. Let us have a compromise here, and all the 

new revenue should go to the coastal communities. 

Mr. HASTINGS. I was going to make precisely that argument, 

Dana. 

One last point, I want to make: If the issue is to protect the 

oceans, and natural seepage is the largest polluter in the oceans— 

that is well established—and the second is runoff from urban 

areas, there is the option—I say this facetiously—for people that 

live on the coast to move inland; therefore, they would not have 

their runoff into the ocean. Do you suppose that that is an option? 

Mr. ROHRABACHER. [Laughter.] 

Mr. HASTINGS. Thank you, Mr. Chairman. 

The CHAIRMAN. The gentlelady from Massachusetts, Ms. Tsongas. 

Ms. TSONGAS. Thank you very much for your testimony, and I 

agree with you, Congressman Farr, and we have heard testimony, 

that our oceans are sick. Living in Massachusetts, which is also a 

coastal state, we know that to be true, and there is much work to 

be done. 

An important part of the debate on the use of the Outer Continental Shelf, then, obviously, has to take into account its impact 

on our oceans, and I think that is as true as we begin to look to 

the oceans for sources of renewable energy. 

I am wondering what your thoughts are on a process that takes 

into account, as we look more and more to the oceans for that 

source, takes into account the potential impact of using them in 

that way, how your state has been working to do that, because it 

has been such a leader in looking at the ocean as a source of alternative energy. 

Mr. FARR. Well, in the past, we have always looked at the ocean 

as just out there, this big, flat plane, and treated it as one spot, 

but, as we get more and more information, we learn that, just like 

on land, there are natural habitats that are unique and that should 

be preserved, and there are unique fish-breeding areas and things 

like that, as we have done on land. 

When you think about San Ignacio Lagoon in Mexico, which the 

world opinion has preserved to allow breeding grounds for the gray 

whales, and that is, as we discover more of this, we are going to 

discover that there are wind zones, there are tidal zones, there are 

zones that can be tapped for energy production, and I think that 

is what is missing from this, that we have not thought about this 

as potential for all kinds of energy development, not just oil and 

gas, and we ought to look before we leap, and that is why I think 

the moratorium is important. Put it on now so that we can have 

a better understanding of what the potential developments for all 

kinds of energy uses are in the ocean, not just oil. 

Ms. TSONGAS. Do you think that should be a national strategy or 

a state-by-state process? 

Mr. FARR. Well, it ought to be a national strategy because the 

states only have out to three miles; we have out to 200 miles of our 

jurisdiction. 

15 

Ms. TSONGAS. Well, as you know, in Massachusetts, we have the 

Cape Wind Project, which is on Nantucket Sound, and the process 

of citing those wind turn bites has been as contentious as any discussion we have had about offshore drilling. 

I think, as we go forward, we are going to have to take into account the natural opposition to anything that changes the 

sightlines or capacity to use our oceans and our sounds in a recreational capacity, and I do not think just painting trees on anything quite solves the problem. 

It is a discussion we have to have, going forward, and yet we all 

know how we have to reduce our dependence on fossil fuels as we 

protect our natural resources, so thank you for your testimony. 

The CHAIRMAN. The gentleman from Colorado, Mr. Coffman. 

Mr. COFFMAN. Thank you, Mr. Chairman and both Mr. Farr and 

Mr. Rohrabacher. 

It is interesting, when we talk about the revenue issue and its 

potential for mitigating issues, I know, in Colorado, that we have 

a revenue source that is derived from royalty payments for oil and 

gas developments that goes to local governments to mitigate any 

economic impact that they have in their communities, whether it 

is having to build new roads or, because of increased population, 

to do the development, to build new schools, whatever the needs 

are for those local governments. 

I am wondering, what would be the impact if, instead of the Federal government deriving revenue from the offshore development, 

if we simply dedicated those revenues to those local communities 

that were impacted by that offshore development, or, certainly, visually impacted or potentially environmentally impacted, to develop 

their own programs to mitigate those effects, or even to use those 

dollars for other environmental programs in the marine environment? Would there be more acceptance of offshore drilling if there 

were a better system of dividing the revenue? 

Mr. FARR. I do not think you are going to buy off the local community by sharing the revenues, and I do not think you have the 

votes in this Congress because we are very parochial about Federal 

money and not wanting to give it to local governments to spend. 

In the OCS funds, there are eight statutorily derived funds from 

it—they are kind of locked box—and one is American Indian tribes 

and allottees, which get money from it, and I am sure your state 

receives from it: the Historic Preservation Fund, the Land and 

Water Conservation Fund, the Reclamation Fund. There is a thing 

called ‘‘state share,’’ which is that boundary-line money, and then 

the state share from onshore revenue that they get. 

Those are the only funds; 74 percent of the rest of the money 

coming in just goes into the general fund. 

I think you have to find a national purpose, if you are going to 

use Federal dollars, because I do not think the inland legislators 

just want the coastal states to get these monies, particularly to 

local governments, and that is why I am suggesting that we ought 

to earmark a fund, an Ocean Trust Fund, to deal with the aspects 

of governance of the ocean. 

I am carrying a bill, H.R. 21, and many of you are co-sponsors 

of that bill. It will be before this Committee later this year, and 

16 

that is the concept there, to pay for that governance structure with 

funding such as OCS. 

Mr. COFFMAN. If I could just go first, is not it a national purpose, 

and, Mr. Rohrabacher, if you could also reflect on this, is not there 

a national purpose right now, in terms of the economic and national security of this country, economic security, lessening our 

trade deficit, national security? 

I am an Iraq War veteran, and kind of tired of having our dollars 

go to regimes that do not necessarily like us. 

Mr. FARR. Well, I guess that is Mr. Rohrabacher’s argument, that 

we ought to drill in U.S. before we buy oil abroad, and that is certainly a great argument. I just think we ought to be smarter about 

how we develop energy systems. I think that is part of this whole 

economy, the green energy issue, which has really caught on in 

California—that is where the venture capital, private money is 

going—and we ought to be appreciative of that and support it. 

Look, offshore oil in California is about 10 percent of the entire 

California oil supply, the production. It is very little, and it is high 

cost to get out to the ocean. I think if you had a lot of oil companies 

here, and you asked them, ‘‘Would you rather grow onshore rather 

than offshore?’’ they would all tell you, onshore is a lot less expensive and probably safer. 

Mr. ROHRABACHER. Let me just suggest that restricting offshore 

oil development has not meant that we will be producing energy in 

another, more environmentally efficient manner. We, obviously, 

now bring it in from overseas, which has made it more likely to 

have an oil spill, as I mentioned, but just like our colleague from 

Massachusetts can tell you, they have tried to put not oil rigs offshore but windmills, and, even with that, you have had total opposition or enormous opposition. 

Solar installation. I have a bill that is asking the Bureau of Land 

Management to facilitate, rather than block, the request for permits to put solar energy facilities in our deserts. We have 190 of 

these that have been held up for five years because people are 

more concerned about the little insects and the lizards and their 

habitat than about producing clean energy. 

It does not mean, just because we are going to restrict offshore 

oil, that we are going to get that energy from someplace else. This 

same gang that is opposing offshore oil wells is generally opposing 

these other things as well. 

We need to do what is in the interest of our country, environmentally, economically, and every other way, and the best thing for 

us to do would be to take these revenues from the new offshore oil 

revenues, give it to these local communities along the beach to handle the runoff, which Sam and I agree on. 

In my own city, Surf City, USA—Huntington Beach—they had a 

horrible challenge about finding money to fix the sewer systems. 

Let us use that money from offshore oil rigs to fix the sewer systems in coastal communities. 

Now, these are things that would have tangible, positive results 

rather than all of the rhetoric we have been hearing for three decades about what happened in 1969 at the Santa Barbara oil spill. 

The CHAIRMAN. The gentleman’s time has expired. The gentleman from New Mexico, Mr. Heinrich. 

17 

Mr. HEINRICH. I wanted to return to this idea you brought up 

about more of a zoning approach. I am not an all-or-nothing person 

when it comes to OCS, and I do agree with Mr. Rohrabacher that 

we should start avoiding the rhetoric and actually move toward 

some places where we might have common ground. 

I am intrigued by this idea because, obviously, when it comes to 

how we manage our surface resources, for example, throughout the 

Intermountain West, we take a zoning approach. We do not drill 

in national parks and wildlife refuges, but we do drill on many 

places where we find that is the highest-and-best use. 

I am curious as to what you think some of the steps we need to 

take to have a more accurate, zoned approach to OCS resources 

would be. As you know, I have spent quite a bit of money in your 

district because of, basically, the diving resources that are there. 

That is a big part of the economy, and, with all due respect to Mr. 

Rohrabacher, I am not really interested in going to Monterey to 

dive on an oil rig. That said, there may well be places where that 

is the highest-and-best use. 

Mr. ROHRABACHER. The fish are pretty good off those oil rigs. 

Mr. COFFMAN. How do we move toward a more accurate way of 

looking at this, in a more nuanced way, instead of an all-or-nothing 

approach? 

Mr. FARR. That question is the problem for the U.S. Government 

because we have never had a comprehensive policy about the 

oceans. It has all been stovepipe, and we have 144 different statutory provisions relating to the ocean, and almost every single agency of the Federal government has a different administrative role. 

This bill that has actually come out of this Committee—I have 

been working on it for about six years—is this whole comprehensive policy that was given to us as recommendations by not only 

one oceans commission, but two, one created by Congress, and the 

other created by a nonprofit. Their recommendations are very similar, and they are into this bill. 

It is not zoning, per se, because what we do not do is create any 

new government. We work with the existing regional processes, but 

there is a lot more coordination of decision-making and information 

in this so that the right hand knows what the left hand is doing. 

I think you are going to hear, in the next panel, what California 

has done with its offshore own state lands. They have begun, way 

ahead of the Federal government, creating marine protected areas, 

essentially, the first part of kind of what are areas that have such 

significant biological significance that they need to be protected 

from fishing? 

There are ones that there are ‘‘no fish, no take,’’ and there are 

others where there is a limited take and limiting fishing. Different 

styles fit different environmental ecosystems, and you can hear 

from the next panel that it was done with a lot of controversy but, 

nonetheless, the states put them into place, and way ahead of the 

Federal government. 

President Clinton directed that we create, in the Federal system, 

marine protected areas, but we have not yet done that. 

I might add that one of the experts on this whole issue of offshore oil drilling, who represents it more than anybody in the country, is sitting here in this Committee. It is Lois Capps, who repVerDate Aug 31 2005 14:24 Apr 17, 2009 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6602 L:\DOCS\47607.TXT Hresour1 PsN: KATHY
18 

resents Santa Barbara, and she is certainly familiar with the pressures from both the environmental community and the drilling 

community, and that community has developed a lot of expertise in 

the risk issue and also the cost-benefit issue. 

Mr. COFFMAN. One more question for you real quick, Mr. Farr. 

Regarding the idea of the Ocean Trust Fund, I am very familiar 

with the Land and Water Conservation Fund. It has had an enormous positive benefit on the State of New Mexico. We have not always been good about making sure those dollars get spent where 

they were designed to be spent. Do you have any concern that we 

would create this Ocean Trust Fund but then, you know, fail to 

fund it? 

Mr. FARR. Well, of the OCS money, only 3.8 percent goes to the 

Land and Conservation Fund, and it is set in that fund, but Congress does not always appropriate all of the monies, something that 

this Chairman, Chairman Rahall, has been very concerned about. 

The money is there, and we have not been appropriating it. 

I do think we can put conditions on that Ocean Trust Fund, certainly, to manage it any way one would think necessary, but I do 

think it is important that this Committee create such a fund. We 

need a process. We have done that for exploring space, and yet that 

policy has not yet been developed for the ocean, and, you know, 

that is 73 percent of the planet. 

It is interesting that Google—you might have heard it from this 

Committee—has always had this site, ‘‘Google.earth,’’ and Sylvia 

Earl pointed out that if 73 percent of the earth is not even in your 

site, you cannot call it ‘‘Google.earth’’; you have to call it 

‘‘Google.dirt.’’ But just last month, Google opened up all of what is 

known in exploration of the oceans, and it is very, very small. 

There is a whole frontier out there, and I think that my point 

here is that Congress, in their wisdom—it is a huge resource-policy 

issue—is that we really need to look before we leap. We need to 

be a little bit smarter about how we are going to approach the 

oceans rather than just doing the same old, same old, because 

there is oil out there, we take it; there are fish out there, we take 

it; and we dump things. We just cannot do that anymore. We have 

to be smarter about this, and that is the point of this whole hearing. 

Mr. ROHRABACHER. I would suggest that if we are really going 

to do this smarter, and I agree with you on some of the challenges 

that you have outlined for us, in terms of oceans—again, I am a 

scuba diver and a surfer. I want to protect the oceans, setting up 

a fund here in Washington, D.C., being managed by who knows 

who, whatever special interests managed to get themselves appointed to head the fund, I think, is a lot less effective than giving 

the money to local communities, like Huntington Beach, to correct 

their sewer problem, and I think that that will be much better 

spent, and the people, locally, know. 

We care about the ocean locally. We are in the ocean, and we depend on it for tourists, but give that revenue to the local communities, not to some national fund, and it would be more wisely 

spent. But I agree with Sam that we should be spending much 

more money on the oceans. NOAA should have a budget that is 

much higher, and, in fact, I think NASA and NOAA should be basiVerDate Aug 31 2005 14:24 Apr 17, 2009 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6602 L:\DOCS\47607.TXT Hresour1 PsN: KATHY
19 

cally on par with each other because utilizing the oceans, like utilizing space, for the benefit of mankind makes all of the sense in 

the world, and investing in that makes all of the sense in the world 

as well. 

The CHAIRMAN. The gentleman from Virginia, Mr. Wittman. 

Mr. WITTMAN. Thank you, Mr. Chairman. 

Gentlemen, I think you have brought up some great points, specifically concerning onshore runoff into the oceans. I think we have 

all kinds of challenges there—ocean acidification—so I think those 

are obviously apart of an issue, and you speak of a comprehensive 

ocean policy. I think that is absolutely needed. 

If we go back, though, and we get to the energy issue, it seems 

like, to me, too, also going forward, that we need a comprehensive 

energy policy looking at all of the different sources of energy. I do 

not think anybody here does not believe that we should not be pursuing aggressively alternative and renewable sources of energy but 

also looking at the sources of energy that we have here in the 

United States as a bridge to that and, hopefully, getting away from 

some of those foreign sources. 

Let me ask this. I know both of you all have, what seems like 

to me, some things in common but also some differences, but what 

do you see as our development of a comprehensive energy policy 

and using our sources of energy while we can quickly get to these 

alternative and renewable sources that, hopefully, take us into the 

future because we all know we are at peak oil production right 

now. The world is not going to find any more oil, so that is a decreasing source, but we have to make sure we transition. 

Obviously, we want to do that safely. Having been an environmental health specialist for 27 years, and looking at the current 

technology, it does appear as though we can put proper controls in 

place for development of our own sources and minimize risk. Now, 

we will never get risk to zero, but I think we can manage it and 

minimize it, and I just want to get your thoughts and ideas about 

how that part of a comprehensive energy policy should take place. 

Mr. FARR. Well, as you know, from your professional background, 

that the best investment and fastest investment is conservation. 

Use less, and you have more resources to distribute. 

California, before you got elected, when I was here, we had the 

big energy crisis in California, and I think the joke around Congress was, ‘‘It is you, all you Californians out there, in your SUVs 

and hot tubs drinking your Merlot. You just deserve to have big 

energy costs.’’ 

Well, now, it is very interesting because what we have discovered 

is that California, per capita, is the lowest user of energy in the 

United States, and how did we do that? That is the answer to your 

question. We did it piece by piece. We did it in energy conservation 

in building materials. We did it in less water usage, less pumping 

charges, irrigation practices. It was just sort of all of these best 

management techniques, including business that led it and made 

money on it because you buy the equipment from the private sector. 

I think that that is a good lesson, that there is a great economy 

out there that has not yet been tapped, and it is doing things and 

just doing them smarter. 

20 

Now, that is my point, and there are a lot of green carrots out 

there in that stimulus package to get that investment and to get 

those things built. I tell you, it works, and, again, the experts on 

that for the state are sitting right behind me, and they are going 

to be on your next panel, and they can give you a great deal of detail and politics about it. 

Mr. ROHRABACHER. I would agree with my good friend, Sam, that 

we need a comprehensive approach to energy, and I believe that 

those people who are opposing offshore oil are just fencing off an 

area that should not be fenced off from a comprehensive approach, 

but I certainly am very supportive. 

For example, I think that we have invested in solar energy research. I have been in Congress over 20 years. We have been supporting it, the Science Committee, research into solar energy, all of 

these years, and that has been bipartisan support, and we have 

now reached a point where solar energy is very competitive with 

other sources of energy. I believe the comprehensive approach 

America should take—I know this is going to surprise a lot of people, but the electrification of our country. Transportation and other 

uses of electricity should be expanded, and then we should seek to 

find clean ways of producing electricity. 

We have nuclear power, which is an alternative. Again, some of 

those people who claim to be for the environment have opposed nuclear energy development, which, in and of itself, as we know, is 

a clean source of electricity. They have a thing called the ‘‘hightemperature, gas-cooled reactor,’’ which now solves the waste problem, and we should be moving forward in developing these new 

types of reactors that are safer and solve the waste problem. We 

should move to electrification of our railroads, electrification of 

cars. These are things that we should move forward, but we need 

to produce electricity then. 

The same people who are opposing offshore oil development calling themselves ‘‘environmentalists’’ are opposing windmills off of 

Nantucket, and they are also opposing solar energy installations in 

the desert because they are concerned about those lizards and ants 

and there habitat. 

We need a comprehensive and full commitment on producing and 

electrifying America. That is the clean source of energy that will 

make our air cleaner, keep our oceans cleaner, and, again, I agree 

with Sam that we ought to make sure we spend more money on 

ocean-related research and activities. Thank you. 

The CHAIRMAN. The gentleman’s time has expired. The gentleman from Arizona, Mr. Grijalva. 

Mr. GRIJALVA. Thank you, Mr. Chairman. Granted that, in Arizona, we are not as intimate with this issue of offshore drilling as 

some of the other states that are represented. 

If I may, just a reaction from my colleagues, and thank you both 

for your comments today. Recently, Secretary Salazar delayed the 

implementation of the previous administration’s five-year plan on 

leasing oil and gas exploration offshore. He extended the comment 

period for 180 days—that would take us into September 23rd; canceled the scoping meetings that were to be held in preparation for 

the implementation of the Bush proposal, and, instead, there are 

going to be four regional meetings. 

21 

He has instructed appropriate agencies to develop information 

about fossil and renewable resources offshore, with the strong suggestion that more information is needed, and how are we going to 

obtain that information: cost-benefit, environmental issues, economic issues, obviously. 

So, your reaction not only to the postponement but to this renewed longer process and the discussion of the five-year plan. Mr. 

Farr? 

Mr. FARR. Well, I support his effort because that was placing a 

moratorium, which, frankly, I think this Committee led the effort, 

long before I got here, through many different administrations. 

Bush I, I remember, was involved in supporting. In fact, the National Marine Sanctuary in my area was signed into law by Bush 

I. It is the largest marine sanctuary, and it prohibited oil and gas. 

I think that there is obviously a knowledge that we need to know 

more about the ocean and the impacts on the ocean before we just 

continue to do same old, same old policy that treats the oceans like 

land. I think that the issue here is probably best stated by T. 

Boone Pickens, who has made all of his money in oil, and he is 

here telling you, you cannot drill your way out of this problem, and 

he echoes Dana’s concerns more than anybody about the importation of foreign oil. 

So, how do we develop this policy? I think that is the big issue. 

There are so much smart things to do. Let us not just charge ahead 

doing things that we know are not going to be the final solution, 

that are not going to be high risk/low gain. So, the moratorium that 

he imposed, I think, makes good sense. 

Mr. ROHRABACHER. I would suggest that, at a time when our 

men and women—I just got back from Afghanistan—a time when 

our men and women are being sent overseas, and let us be fair 

about it—if we were not dependent on those energy resources overseas, we would not probably be sending, or have sent, our people 

to Iraq. But for us, then, to hesitate to develop our own resources, 

and knowing that when we buy oil from overseas, quite often it 

goes to finance governments that are hostile to America’s interests 

and, indeed, are financing people who are shooting at our own soldiers. 

At a time like this, especially, and at a time of vast economic 

hardship, when we could use the wealth here rather than sending 

it overseas, not only for national security but for our economy, it 

makes no sense for us to be delaying the development of our own 

energy resources. 

There needs to be a comprehensive approach. I am with Sam on 

that. We should not just say, ‘‘Oh, we are going to just do oil.’’ As 

I say, I think solar, right now, is competitive with oil in the production of electricity. We should be moving toward producing and electrifying our society. Thank you. 

Mr. GRIJALVA. Thank you, Mr. Chairman, and I agree. I think 

the information that is needed has to be comprehensive, and I really think it is an opportunity, and I applaud the Secretary, an opportunity to look at all consequences, intended and unintended, 

with the pursuit of the plan that Bush was proposing. So, let me 

thank the gentleman and you, Mr. Chairman. 

22 

The CHAIRMAN. Thank you. The gentleman from Georgia, Mr. 

Broun. 

Mr. BROUN. Thank you, Mr. Chairman. I would like to ask Congressman Farr a couple of questions to kind of clear some things 

up for me. 

Do you see a difference between—you used the words ‘‘conservation’’ and ‘‘moratorium on drilling’’—just overall, do you see any difference between conservation and total prohibition of development? 

Mr. FARR. I do not understand the question. 

Mr. BROUN. Well, as a word ‘‘conservation’’ to you, does that 

mean total prohibition of development, or does that mean responsible utilization of resources? What does the word ‘‘conservation’’ 

mean to you versus ‘‘prohibition’’? 

Mr. FARR. To me, personally? Well, my life experience is conservation has been best-management practices, being smart about 

it. We have national parks, but we do not put a fence around them; 

we open them up. We actually contract out to the private sector to 

run the parks, the concessionaires. We put roads in them. We put 

hotels in them. 

We put visitors serving accommodations, and part of that is to 

enjoy the incredible natural wonders, but it is also a great educational aspect for Americans, and it gets them out of doors. It is 

the same thing with National Forests, where we actually have oil 

and gas development and timber operations and other mining operations. 

It depends on where you are and what the issues, but conservation is essentially being a smart use of whatever it is. 

Mr. BROUN. We could, then, have responsible development of natural resources, wherever they may be, and still be good conservationists. Is that correct? 

Mr. FARR. Yes. 

Mr. BROUN. OK. 

Mr. FARR. Yes. 

Mr. BROUN. Well, then, would you agree to Outer Continental 

Shelf drilling if we could guarantee that there are no oil spills from 

that operation? 

Mr. FARR. Not necessarily. That is what I think the last question 

went to. You make a proposal. What I point out is, where are those 

oil and gas deposits? We know that from our research, from the 

Mineral Management Agency, and prioritizing those along with onshore capacity of being able to service offshore rigs, and we have 

not done that matchup. 

Communities have zoned what they want for the future of their 

community, and sometimes just a Federal decision to come in and 

plop down an oil rig. It was not a Federal decision up in the cape, 

but those are not necessarily in balance with the local economy. 

I do not think you have ever been to my district, the Monterey 

Peninsula—— 

Mr. BROUN. I have. 

Mr. FARR.—but, you know, that area is a small community but 

one of the highest tourist communities in the United States, and 

what we learned is we sell scenery here. We sell coastal scenery 

and mountain scenery and valley scenery, and that is what people 

come back over and over again for. 

23 

They like to see things in their natural settings, so the emphasis 

goes into local communities on how to plan and how to zone and 

how to protect and how to make sure that that scenic look, the 

quality of life, is protected in those areas, and I think that is the 

same kind of scrutiny that needs to be given to any kind of development. 

Mr. BROUN. Are you aware, then, how far out can people see, actually, if they are on the coast? For instance, if there is an offshore 

rig that is 50 miles out, can they see it from the shoreline, from 

California? 

Mr. FARR. I do not know. Lois Capps ought to answer that question because there have been proposals that the oil and gas companies can hide these rigs underwater and do not have to have anything above water, and I do not know whether that is possible, but 

I think there is technology out there that can allow for safe production of oil and gas. 

My point is that, before we just go back into that process—we 

have been out of it for a long time with this moratorium—that we 

ought to look at all of the aspects on the table and ask a lot more 

questions. This is sort of a question of investment, is, where is the 

smart use of our limited natural resources? 

I think that that is both the scenic resources, and I think that 

that is both the scenic resources and the extraction resources that 

benefit society, and I think all of these arguments are just do it 

with the best management practices that are available, known to 

mankind and that they are done wisely. These lease sales are 

based on a lot of old data and old information that can be challenged today, and I think that is why it is so controversial. 

Mr. BROUN. Well, I am a conservationist, and I agree that we 

need to have responsible development of resources, and I support 

an all-of-the-above energy policy that would help promote conservation and promote alternative sources. Would you support also an 

energy policy that is an all-of-the-above to go ahead and develop 

our resources that we have in a responsible manner but also look 

for alternatives and conservation, all of the other things, such as 

nuclear energy, wind, solar, tide, geothermal, et cetera? Would you 

support that kind of an energy policy? 

Mr. FARR. Well, I think that we have never developed that kind 

of an energy policy. That is the point of this Committee’s role in 

this discussion, is that we lack that comprehensive commitment. 

We have committed to what we know how to do best, which is historical oil and gas development, hydro development. 

A lot of people will question whether that is the best way to get 

the end result, and, as you know, in California, which is the most 

populous state in the union, we are tearing down dams because we 

find that there is a higher economic value to a natural system. A 

lot of people live off of that natural system, including private sector 

fishermen, and they need healthy streams. 

So, in every instance, there are trade-offs, and I think, without 

having a national policy of what we want to develop, whether it is 

going to be nuclear or oil or solar, wind, tidal, whatever it may be, 

that we have lacked all of these new alternatives in the mix and 

given them a fair opportunity to compete. 

Mr. BROUN. Mr. Rohrabacher? 

24 

Mr. ROHRABACHER. I will just note that Sam did not mention 

that certain groups have insisted that we tear down hydroelectric 

dams in California. You wonder why things are going screwball in 

California? I mean, we are going bankrupt. We cannot pay any of 

our bills. 

The CHAIRMAN. The gentleman’s time has expired. 

Mr. ROHRABACHER. That is the kind of logic—— 

The CHAIRMAN. The gentleman from Maryland, Mr. Kratovil. I 

am sorry. Going in order, I skipped Mr. Costa. The gentleman from 

California, Mr. Costa. 

Mr. COSTA. Thank you very much, Mr. Chairman. 

You know, in listening to the discussion here, I am reminded of 

the fact that we agree on some basic concepts: one, we ought to 

have a comprehensive energy policy. We agree on the fact that we 

generally need to figure out ways in which we reduce our dependency on foreign sources of energy. 

Where we, I think, get the disagreement is, how do we develop 

that comprehensive energy policy, and how do we do it in a way 

that is practical and cost-efficient that looks at the near term, the 

intermediate, and the long term? And no administration and no 

policy in Congress that I have been able to detect thus far has been 

able to develop a credible roadmap that uses all of the energy tools 

in our energy toolbox because we conveniently, for political or ideological reasons or whatever, put certain things that we do not want 

to put on the table, whether it is nuclear, whether it is expansion, 

in the near term, of Federal lands for oil and gas as a trade-off to 

take those revenues to further accelerate renewables, and it always 

becomes a zero-sum game where, instead of advancing a comprehensive energy policy in this country, more often than not, it 

seems to me, anyway, to become a political gamesmanship of 

‘‘gotcha’’ as we try to deal with this political constituency or that. 

Do either of you two gentlemen, who I know well and who know 

the political turf battles that we have in California, want to explain 

to me how we get past that? 

Mr. FARR. Well, Jim, you and I have known each other a long 

time. We served together in the California legislature. 

Mr. COSTA. Yes. 

Mr. FARR. I do not know if there is a magic way of doing that. 

Essentially, that is what politics is all about, and—— 

Mr. COSTA. But I am talking about the policy. You and I both 

understand the politics. I am talking about the policy. I mean, how 

do we get there from here? I think the American public is frustrated that we cannot seem to sit down, on a bipartisan basis, and 

develop a roadmap, using all of the energy tools in our energy toolbox, near term, mid term, long term, realizing that you have to 

crawl, and then you walk, and then you run. 

When we put a man on the moon, we did not start with the Apollo program; we started with the Mercury program, and then we 

started with the Gemini program, and then we advanced to a 

stage, eight years later, where we could go to the moon. I do not 

understand why we cannot be practical here. 

I think a lot of the practicality is going to require that we subsidize a lot of the old-fashioned energy development, and we have 

not subsidized, until recently, in the discussion, the alternatives 

25 

and the new ideas that are on the table. That is what science and 

technology is all about. 

I think, all things being equal, and you tried to do that somewhat in your energy policy in California, was to allow for consumers to buy green-generated power, to try to use market forces, 

that did not work very well. 

I just believe that it has not been a balanced—let everybody in 

on equal terms, and then allow the marketplaces to decide, but it 

has to be equal. We have not made the laws yet to make it equal. 

Mr. COSTA. Dana, do you want to take a try at it? 

Mr. ROHRABACHER. Well, I think the activists basically control 

policy in the United States of America. I mean, activists do, and 

we have had activists who were very sincere people who just are 

stuck in the sixties, frankly. Yes, OK, we do not live in the sixties 

anymore. 

Mr. COSTA. You had me until there. 

Mr. ROHRABACHER. The fact is, is we have technology now that 

is better than we had back in the 1960s, and we have not had one 

new hydroelectric dam, not one nuclear power plant, not one new 

refinery in 30 years. That has meant at least a trillion dollars out 

of our economy that would have been there otherwise. 

People should take some serious looks at the fundamentals, and 

the fundamentals are, and I agree with Sam on a lot of things he 

is talking about, in terms of using smart technology, but there are 

some things that are being written off that are now smart that 

used to be stupid. For example, nuclear power did have a big problem, but, right down in San Diego, General Atomics, has developed 

a thing called a ‘‘high-temperature, gas-cooled reactor’’ that gives 

us tremendous potential in dealing with the waste issue, which has 

been one of the main impediments to nuclear energy. 

We have new technologies that are going to make windmills— 

attachments that you can put on these windmills that will double 

the amount of electricity they generate, so they are becoming 

competitive. 

Solar energy is becoming competitive. 

What we need, I believe, is to make sure that we focus our resources on developing and maintaining an open-meter system so 

that anybody that puts electricity into the system is getting a credit for it, and maybe even paid for, by putting it in there, and thus 

you can do it from all of these various sources of energy. We do not 

need necessarily to subsidize people; just let them make a profit in 

utilizing the technology that is now coming online. 

I think that is the best comprehensive approach to energy that 

we could all agree on, and it would, again, make a very widespread 

area of the number of people who would be contributing to solve 

the problem from many different directions. 

Mr. COSTA. My time has expired, but I want to thank the Chairman and observe, with both of my colleagues who I enjoy working 

with, that I think that the answers to the questions I posed to both 

of you still reflect our difficulty in trying to figure out how we develop a process to use all of the energy tools in our energy toolbox 

that is near term, mid term, and long term. We just cannot wish 

our way from Point A to Point B, and I think that is the frustration 

and why we are stuck without an energy policy so far. 

26 

Let me just make a note. Sam, and you and I agree, and sometimes we agree to disagree, but we have removed some check dams 

and smaller dams, but, in a water-deficient state as California, we 

are not talking about removing Shasta, we are not talking about 

removing Folsom, and we are not talking about removing Friant 

Dam. We are not talking about removing any of these major, 

maybe two-million-acre-feet of water deficiency, in California. 

I do not want to mislead my colleagues from other states that 

somehow we have really lost our minds in the middle of a drought, 

that we are now removing all of the sources of surface supply water 

in the state. Nor are we removing what is my favorite dam, every 

time we get around this circular conversation, which is Hetch 

Hetchy, which is the primary source of water for the City and 

County of San Francisco, and which John Muir, the famous John 

Muir, who created the Sierra Club, had a stroke trying to save 

Hetch Hetchy, which he called the ‘‘Little Yosemite,’’ but it is now 

a big lake. We are not talking about removing that dam either. 

Mr. ROHRABACHER. Some people are. 

The CHAIRMAN. The gentleman’s time has expired. 

The gentleman from Texas, Mr. Gohmert. 

Mr. GOHMERT. Thank you, Mr. Chairman. I appreciate both of 

you all, and I appreciate the viewpoints, and, of course, Texas, 

where I am from, we have dealt with some of these issues, and we 

have heard Mr. Danson talking about 200 million people in the 

world rely on fishing, and, therefore, we should not have offshore 

production, but when it was pointed out that, actually, in Texas 

Gulf, adding the rigs has caused fishing to proliferate because they 

see it as an artificial reef and actually do quite well proliferation 

around those areas, and it has actually helped fishing. 

In fact, of the 100 rigs that are taken down each year, 10 of them 

are reconditioned and sunk in designated places for artificial reefs, 

and the rest of them are taken ashore. Some of them are reconditioned and then used again. 

I appreciate my friend, Mr. Costa, pointing out what he has, and 

I agree also with my friend, Mr. Farr, that we should have smart 

use of the oceans. There are critical habitats there, but man and 

energy production can go hand in hand, but what I have seen, from 

my district, as I have been all over East Texas and continue to go 

and talk to people, this transition to, like, solar power, which I 

think could end up being our best hope, and hydrogen and some 

of the other technologies are terrific, but it seems like solar may 

provide the best hope. But as I go around East Texas, the farmers 

tell me, ‘‘You know, we looked for a Prius tractor, and we could not 

find one. We are still having to buy diesel and gasoline, and that 

ends up affecting the price of food. It affects everything.’’ 

So, as my friend, Mr. Costa, was talking about, until we get to 

that comprehensive picture—and Mr. Farr, you were talking 

about—we are shooting ourselves in the foot. Boone Pickens is 

often quoted for saying, ‘‘We can’t drill our way out of our problem,’’ but not everybody knows, he added to that, ‘‘but you do not 

stop drilling. You drill what you got, and, in the meantime, you go 

after all of these other resources.’’ He is a big advocate for using 

what we have got. 

27 

I have been concerned about what this Committee has done in 

the last couple of years. We have taken huge amounts of coal, some 

of the largest deposits of coal in the world, and put them off limits. 

We recently voted to put off limits the second-best source of nuclear 

material that we have. We have put off limits most of the Outer 

Continental Shelf drilling. 

We have put off limits ANWR, and we had a report that if the 

U.S. was allowed to pursue the Alaskan resources that we put off 

limits, even though it would make a tiny footprint in areas where 

nothing grows and nothing lives, it would provide about two million-plus jobs around the country, and that, within a few years, it 

would have added 349,000 jobs in California as a result of pursuing 

Alaskan resources. 

I do not really have a question. I think it has all been said but 

not said by everybody, but I appreciate your perspective, but we do 

need a comprehensive plan, and it just seems like, if we were pursuing the offshore drilling and doing it responsibly, I would be all 

for using the proceeds that the Federal government got from that 

to help fund the future research for the solar and the other things 

to let us get to the next generation because, otherwise, we are 

going to so hurt our economy, like my friend, Congressman Rohrabacher was saying, that we are so economically dependent, we do 

not have the chance. 

Thank you all for your investment in this Committee hearing. 

The CHAIRMAN. There being no question from the gentleman 

from Texas, the gentleman from Maryland is recognized, Mr. 

Kratovil. 

Mr. KRATOVIL. Thank you. That is something that I am still trying to get used to, as a prosecutor, all of us, with our statements 

and then rather short questions, but let me say this. 

Similar to Mr. Heinrich, I am not an absolutist from New Mexico. I would never say never to opening up additional areas for 

drilling, assuming we could do it in a way that was environmentally safe and assuming we weighed the risks of doing so 

versus the benefits that we get from it. But having said that, and 

Mr. Costa and I actually had a discussion of this outside after a 

vote, my question is this: In all of these discussions that we have, 

and I asked this of the last panel, we talk about opening up additional areas, and yet we still have, of the 40 million acres that are 

available right now, less than 10 of those are producing. 

It seems to me that the question that we are consistently debating at these panels is the Question No. 2, whether we should be 

opening up additional areas when we really have not answered 

Question 1, which is, why are we not using the other acres that are 

available? 

So, my question is, what is your perspective, both of your perspectives, on why that is not happening? 

Two: Do we think that there is an effective way to utilize those 

areas that are already available, and, if there is, why are we not 

doing it, and, if not, what are the things that prohibit us from making use of those? 

Third: Is that factor, the fact that we are not using those, part 

of your basis for the arguments that you have of opening up additional ones or, in your case, continuing the moratorium? 

28 

Mr. FARR. I think that what is new to the whole discussion on 

this is global warming. We have kind of debated whether it was 

real or not real. 

Secretary Chu said something that really struck me, that, underneath the tundra is nothing but carbon, and on top and between 

the tundra is all of this bacteria that is frozen and that if, just like 

meat, if you take meat that you have had in your freezer and put 

it in your refrigerator and leave it there, after a few weeks, all of 

a sudden, you are going to see stuff growing on that meat. That 

is the bacteria that have been there that have been awakened by 

no longer being frozen and starting to do their job, and they could 

do this job on the carbon in the tundra in the North. 

That would be a natural release of carbon far greater than all 

of the man-made carbon releases on the planet, and it would be forever, and, certainly, life on this planet would be severely threatened. 

So, in essence, we are in a race to see whether we can stop global 

warming or hold it at a level before it really devastates, and we 

know that this carbon release is the problem. 

Why are we trying to spend a lot of money on figuring that out 

while, at the same time, saying, ‘‘Well, let us go out and just be 

more dependent on carbon fuels’’? 

See, I think that is the big argument, is, how do we get ourselves 

off, not just, the United States, but how do we get the world off, 

of dependence on this? You know, are we going to find something 

that is going to replace oil? I do not think so, but, certainly, we can 

cut down our dependence on it. I think that is the leadership role 

that this country has to play. 

Mr. ROHRABACHER. To answer your question directly, many of 

the people who have purchased the rights to drill in these areas 

have found themselves also thwarted by other maneuvers by activist groups, et cetera. You guys know more about that than I do. 

I am on the Science Committee, but I am not on this Committee, 

and my guess is that there have been, as we have seen for the development of other energy resources throughout the country, there 

have been activist groups that, even though someone has a right 

to build a solar facility, for example, have a right to build solar facilities in the desert, you have activist groups right now that have 

prevented 190 solar projects from being built in the desert, and 

these guys make themselves known to the Bureau of Land Management, where they have their natural allies, and develop people 

inside the Bureau of Land Management, and, all of a sudden, you 

find roadblocks being placed in the way of people who have already 

purchased the fundamental right to do something. 

In terms of global warming—I am glad Sam mentioned that—I 

believe that that really is the motive of a lot of people who are just 

opposing any new development of oil or coal or gas. It is basically 

that they bought into the argument that carbon dioxide is going to 

change the climate off the planet. I would suggest that I know that, 

15 years ago, we were told that there would be a big jump in the 

temperature of the planet. Right now, it has not gotten any warmer 

for the last eight years. If their predictions on that were not accurate, I am certainly not going to let their judgments on global 

29 

warming prevent us from having the energy America needs to be 

prosperous. 

Mr. KRATOVIL. But in response to that, would you agree, then, 

before we are talking about opening up these additional areas, that 

we would want to address whatever those obstacles are that you 

are discussing and the acres that are available? 

Mr. ROHRABACHER. You know, there is reasonable opposition, 

and then there are people who just are obstructionists because they 

are out to save the world, and they are going to do anything, even 

if it is not reasonable, unless you agree with every one of their tenets of what is going to happen. 

Mr. KRATOVIL. I know, but my point is, if you open up additional 

acres, you are still going to be having those same obstacles, are you 

not? 

Mr. ROHRABACHER. You know what? I would suggest that we go 

to work on the problem of obstructionists, activists, obstructionists, 

as well as moving forward with trying to open up new areas for development. 

We need the energy. We are wasting hundreds of billions of dollars a year going overseas, sometimes to our enemies. It is ridiculous not to have that. Our activists apparently do not care about 

that. The activists who are putting the roadblocks in the way apparently do not care about that. 

Mr. KRATOVIL. But just a last comment on that. Again, I am saying that I am not someone that would automatically rule out opening up additional areas. 

Mr. ROHRABACHER. Right. 

Mr. KRATOVIL. But my point is, we are having that discussion, 

and, as far as I can tell, no one has really answered the first question, which is, ‘‘What are those obstacles? What are those problems?’’ and, one by one, addressing them in the 40 million acres 

that are already available before we start talking about—— 

Mr. ROHRABACHER. I would suggest that this would be a good 

subject for a hearing of this Committee of exactly why different 

energy projects, including offshore oil projects, have not gone forward, and I think that you will find, in most cases, that there have 

been very well-financed activists who have made it their job to obstruct and to put roadblocks up. As I say, they are even doing that 

with solar energy projects in the middle of the desert because they 

are worried about the habitat of insects and lizards. 

The CHAIRMAN. The gentleman’s time has expired. 

Mr. ROHRABACHER. All right. 

The CHAIRMAN. The Chair would advise the gentleman from 

California, Mr. Rohrabacher, if he wants an answer to that, to attend tomorrow’s hearing. We will be glad to welcome you. We will 

allow him to sit. 

Mr. ABERCROMBIE. Mr. Chairman, are we bringing the lizards in 

tomorrow? 

[Laughter.] 

The CHAIRMAN. The Chair recognizes the gentleman from Nebraska, Mr. Smith. 

Mr. SMITH. Thank you, Mr. Chairman and colleagues. I appreciate your testimony here today. I believe that, Mr. Farr, I first met 

you at your property at a wedding along the coast, and I certainly 

30 

think that it is a beautiful area, and, quite actually, I would be interested in preserving the beauty of that territory as well. 

I hope that we can arrive at an agreement, with this entire issue, 

that we can satisfy, at least a little bit, both sides. 

Now, I have been interested to learn about New Zealand and its 

development of hydropower. I believe, if my numbers are accurate, 

that 80 percent of New Zealand’s electricity comes from hydropower, including, I would say, diverse hydropower, which would include harnessing tidal pressures. 

If there is a problem with the apparatus of a drilling platform 

for petroleum, whether it is above water or below water or in between, you name it, wouldn’t we also have a problem, then, with 

the apparatus of harnessing the tidal pressures that would accomplish that as well? Can you speak to that? 

Mr. FARR. My whole point of my testimony, and I think that the 

hearings you are having in this Committee, is that we do not have 

a comprehensive energy policy in this country. You are the Resources Committee. You are responsible not only for the wise use 

of resources but also for the protection and health of all of the resources, and I do not think, without that, we can be smart about 

how we want to then harness energy and the risks involved. 

There is a macro argument, which I think Mr. Costa was bringing into, is the macro argument about developing that policy, and 

then there is the micro argument about each one of those developments, whether it is oil and gas, nuclear or wind or solar, whatever 

the controversy being, where and place, and I guess that is what 

leads me to the fact that we have to be smarter about where we 

want to do this and start developing an opportunity to do it smartly. 

I am not trying to endorse or suggest that one is better than the 

other. I just think that we need some time. We need a moratorium 

on just going over offshore well drilling. 

I am very protective of the oceans. They are sick. Everybody will 

come in here and tell you, the oceans are dying. If the oceans die, 

we die. 

Mr. SMITH. Right. But wouldn’t a moratorium impede our ability 

to have a comprehensive policy? 

Mr. FARR. No. It is a moratorium. It is not permanent. It gives 

you an ability to breathe, an ability to look at all of these other 

options. 

Mr. SMITH. But you are saying that would not remove OCS from 

the table. 

Mr. FARR. Oh, no. Moratorium, it is temporary. 

Mr. SMITH. But doesn’t the permitting process that would accompany—— 

Mr. FARR. The ban is permanent. Excuse me? 

Mr. SMITH. But doesn’t the permitting process effectively engage 

a moratorium? 

Mr. FARR. A moratorium stops the permitting process. 

Mr. SMITH. Right. So, isn’t the permitting process rather rigorous, as it stands right now, or is it not rigorous enough? 

Mr. FARR. I do not know. I have been through those lease/sale 

arguments on our coastline and got very involved in it, and, frankly, every time, regardless of administration, we have been able to 

31 

convince the administration that it was high risk/low gain, and 

they took it off the lease/sale charts, and then we created a National Marine Sanctuary, and, in that, statutorily prohibited oil 

and gas development. 

So, my backyard is protected, and I am here because I think 

that, as Congress, we need to commit ourselves to being responsible for the oceans. 

Mr. SMITH. Well, I appreciate that. When we look at the comprehensive approach that we absolutely must engage, I hope that 

we can keep everything on the table. That is what I would like to 

do. Mr. Rohrabacher? 

Mr. ROHRABACHER. Well, again, when we are talking about offshore drilling, which is, I guess, the subject that we are supposed 

to be focusing on today, it has nothing to do with the health of the 

ocean. 

I am a scuba diver. I am a surfer. I am in the water a lot, and 

I would challenge Sam to a surfing contest right now, but I think 

it would be unfair. But the fact is that this has nothing to do with 

the health of the ocean. It has everything to do with the view. The 

people up on Nantucket did not want their view disturbed by windmills, for Pete’s sakes. 

The CHAIRMAN. Have you had your triplets on surfboards as 

well? 

Mr. ROHRABACHER. Actually, I have had my kids out on boogie 

boards, at this point. 

The CHAIRMAN. Reclaiming my time. 

Mr. ROHRABACHER. They will be surfers soon. 

And, again, the view is important, and I think maybe we can do 

some things and require some things that would protect the view 

for those rigs that will be within sight of the coast. In Long Beach, 

we have facades on top of offshore oil wells that are very beautiful, 

and people like them. Also, wells can be underwater. But it has 

nothing to do with the health of the ocean. 

Mr. SMITH. Right. Now, Mr. Farr, did you say earlier that you 

would be agreeable to, like, a zoning type of approach? 

Mr. FARR. No. I do not want to get that controversial, at this 

point because that is debatable, but it seems to me that without 

comprehensive policy, and, look, I have another bill coming before 

this Committee, and it does not get into the micro details; it sets 

up sort of the governance structure so that all of these things can 

come to bear, so that we have one-stop discussions. 

Right now, we have just conflicts of the sea, where the Navy and 

Interior and Commerce and NOAA, they are different aspects of 

governance, and it is very complicated and, actually, not very 

smart. 

Mr. COSTA. Would the gentleman yield for a moment? 

Mr. SMITH. I do not know if I have any time, but, with the Chairman’s permission, I would. 

The CHAIRMAN. The gentleman’s time has expired. The Chair 

will recognize the gentlelady from California, Mrs. Capps. 

Mrs. CAPPS. Thank you, Mr. Chairman. I actually want to thank 

you for a series of hearings, this being the second one. Are you suggesting that I yield at the moment, because I will have a pretty 

packed five minutes? 

32 

The CHAIRMAN. It is your time. 

STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF CALIFORNIA 

Mrs. CAPPS. Thank you. I would like to use it, if I could. I hope 

there is more time later—a series of hearings on offshore drilling, 

and thanks to my neighbor colleague, Mr. Farr, acknowledging that 

I am the sole Member of this Committee, I believe, who represents 

a congressional district impacted by offshore and gas development. 

These are very useful hearings, and maybe yours is as well, Mr. 

Rohrabacher, but I appreciate the fact that, though you represent 

Huntington Beach, you still enjoy coming up to Santa Barbara once 

in a while to surf. Let that be part of the record as well. 

Today’s testimony on the state perspective, I believe, is really 

going to help guide us in drafting our legislation, but I do want to 

pick up on a couple of themes that came up in our last hearing, 

and I also want to say thank you to our colleagues. Usually, a 

Member of Congress comes to testify, gives five minutes’ worth, 

and gets up and leaves, and you are really spending an inordinate 

amount of time, and I think it is very valuable that we have this 

opportunity to share, particularly, I guess, as a Californian as well, 

in between the two districts that are represented here on the platform. 

Mr. Broun mentioned, and it has come up since then, about the 

distance from shore and the view. I submit that the view is not the 

issue. Routine toxic discharges from rigs is the issue, or, at least, 

one of the basic ones, and these spills impact our ecosystems and 

our fisheries and all that we value about our oceans. 

For example, just last week, Federal and state officials investigated an oil spill at Exxon-Mobil’s platform, ‘‘Harmony,’’ four 

miles from the shoreline in my district. This spill stretched for 

about a mile, but it was from lubricating oil for the platform and 

not oil pumped from the well, but, all the same, it is a reminder 

to all of us that this business of drilling is dirty, and it is often a 

very dangerous business. These spills happen regularly. Thankfully, our state’s Office of Emergency Services was on hand to deal 

with this spill. 

One other topic came up again today that was addressed, but it 

was at the last part of the hearing, the last time we met, and it 

has to do with natural seeps. The anecdotal evidence was submitted today. It was submitted before. 

I happen to be the representative of the constituent whose organization, ‘‘Save Our Seeps,’’ is promoting the notion that offshore 

drilling reduces the seeps because it is extracting the oil another 

way, and, actually, the whole thesis is based on a study done by 

a person from U.C.-Santa Barbara who, himself, submitted a letter, 

which I submitted to the testimony, disassociating himself from 

that movement because he states that the evidence is clearly not 

there, and, in fact, that it is impossible to distinguish the tar off 

your feet, which is the anecdotal evidence, as to where it comes 

from, that there is no way of determining that it is from a natural 

seep, whatever that is, or from a platform. 

In fact, the anecdotal evidence seems to be that the seeps are 

still there, but the offshore drilling apparently has not made a difVerDate Aug 31 2005 14:24 Apr 17, 2009 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6602 L:\DOCS\47607.TXT Hresour1 PsN: KATHY
33 

ference in all of these years that that has been happening, and I 

would suggest that, before this becomes a reason for continuing 

drilling, we ought to have a lot more studies of that fact. 

But I want to, rather, pivot to the future and the real basis for 

what these hearings are intended to do, and I want to associate 

myself with the remarks that are commending Secretary of the Interior Salazar for delaying the schedule for implementing the fiveyear plan but wanting to use this time to develop a comprehensive 

energy policy. 

While we are meeting here, and that is the reason I was late, 

there is another hearing going on in another committee having to 

do with efficiency in energy use as it relates to climate change. 

These are huge topics, and it is very worthwhile that we look at 

offshore oil drilling as once piece of what now we need to see as 

a major energy policy, and the truth is that environmental consequences are just one reason to oppose offshore drilling, and, in 

fact, we really do need, for a variety of reasons, many of which 

have been emphasized here today, we need to shift away from 

using fossil fuels. That has been one of our major sources of energy, 

and they are not going to be sustainable for the future and that 

that is one of the major reasons we are involved in this discussion, 

and that is why I commend the Secretary. 

But I also have to give a lot of credit to my neighbor, Sam Farr, 

for being a pioneer, really, in ‘‘Oceans 21’’ and acknowledging the 

fact that the two studies that have been conducted are only further 

evidence of the fact that we really desperately need a comprehensive oceans policy as well. 

In a way, they need to sit side by side, the oceans policy and then 

our energy policy, and they are directly related, one to the other, 

because until we understand more of what the ocean means to our 

very survival and also to our way of life, then we will not really 

understand how the pieces of how we want to deal with energy relate to that overall picture. 

Now, I want to ask you a particular question, Sam. We have 

been hearing a lot about oil drilling generating revenue for coastal 

communities. The fact is that these communities would likely see, 

is it not true, a fraction of the money that companies promise 

them, and, at the end of the day, we have to live with the projects 

for decades? The whole leasing apparatus that MMS conducts is 

based on studies that have been done that are a guesstimate, really, at best, of what is going to come to live with. 

A lot of the numbers are speculative, and many of them are all 

over the map, and if these projects are not successful, and we are 

living with some of those consequences, too, communities do not get 

any money, and they do live with the rig and the platform for years 

and years to come. Maybe you would like to comment on that piece 

of it, but also—the red light is already on—I hope you have been 

able, Mr. Farr, to give an overview of why it is that we need an 

Oceans 21 policy. 

Mr. FARR. Well, we need a comprehensive policy, and, in that 

policy, we need a trust fund that we need to have some money for, 

and that is the bill. One source could be this OCS fund, of which, 

I pointed out, 74 percent just goes into the general fund, and I 

think this Committee ought to be concerned about that. 

34 

Look, California is certainly not the leading, but it is up there 

in the major oil-producing states—we do not think of California so 

much as a big oil state, but it is. It also, because it is a coastal 

state, is a refining state, so oil comes from other places into California, and that is the shipping. We actually have reduced the 

amount of shipping because we got bigger ships, and a lot of our 

coastal-dependent energy development has switched to natural gas, 

which is shipped by pipeline and not by sea. 

But of all the oil and gas produced in California and the revenue 

thereon, only 10 percent comes from offshore, and I think it is important that the state, because OCS is more of a Federal decision 

than a state decision, but California, as a state, has taken a position that they have a moratorium on oil and gas development in 

their state waters and have strongly supported moratoriums here 

at the Federal level. 

I think that, again, being a state that is in the oil business, I 

think they are being away ahead of the Federal government in deciding to look before we leap, to look at the alternatives. California 

has developed hydropower, nuclear power, solar power, wind 

power, biomass power, geothermal power with our volcanic, in 

Northern California. We are probably more diversified in power 

production than any state in the union, and we are looking for even 

more, essentially, these ocean currents and things like that. 

Here is the point of the whole thing: One, to get a comprehensive 

policy about how we manage the oceans, which goes far beyond just 

the energy issue, and, in the meantime, as this hearing has been 

asking, is, do we reinstate the moratorium? And I think the answer 

is yes. 

Mrs. CAPPS. Thank you. 

[The prepared statement of Mrs. Capps follows:] 

Statement of The Honorable Lois Capps, a Representative in Congress from 

the State of California 

Thank you, Mr. Chairman. 

I’m pleased our second hearing on offshore oil and gas drilling before this Committee will focus on coastal state perspectives. 

As one of six states producing oil and gas off their coasts, my home state of California has done its part to provide energy to the nation. 

The 23 oil and gas platforms found off my congressional district, for example, 

have produced more than 2 billion barrels of oil over the years. 

But oil development off our coast has long been a thorny proposition—beginning 

in 1908 with the Santa Barbara Chamber of Commerce’s opposition to the construction of an oil pipeline on Stearns Wharf. 

And as was discussed at our last hearing—the devastation from the1969 Santa 

Barbara oil blowout was so great it galvanized Central Coast residents; indeed it 

galvanized virtually the whole state, against more offshore drilling. 

Clearly, Californians were outraged by the damage to the environment and wildlife. 

But we also realized that another blowout would wreak havoc on our economy as 

well, especially tourism, fishing, and the industries that rely on them. 

So Californians became committed to ensuring it wouldn’t happen again. 

Mr. Chairman, a little history might be in order here: 

Since 1969, 24 city and county governments, including both Santa Barbara and 

San Luis Obispo counties, have passed anti-oil measures. 

These laws usually require voter approval before any new onshore facilities to 

support offshore drilling could be built or they ban them outright. 

In 1994, the California Legislature passed, and then-Republican Governor Pete 

Wilson signed into law, a permanent ban on new offshore oil leasing in state waters. 

35 

Every year since 1999, the State Assembly has adopted a resolution requesting 

that the Federal Government enact a permanent ban on offshore drilling off the 

California coast. 

I’ve introduced a bill every Congress to enact such a ban. And I have been joined 

by a majority of my California colleagues in supporting this legislation. 

Our Governor has stood his ground on offshore drilling, too, stating recently ‘‘I 

am unwilling to put our environment at risk for the sake of new energy exploration 

on California’s coast.’’ 

In 2006 Governor Schwarzenegger signed the ‘‘West Coast Governors’ Agreement 

on Ocean Health’’ further representing his commitment to reduce offshore energy 

impacts. 

These actions have been met with widespread public acclaim. 

Most recently, 60% of the citizen comments from California opposed the Bush Administration’s new proposed 5 year oil and gas leasing program. 

The public knows ruining all of our coastal areas in an effort to drill our way to 

‘‘energy independence’’ isn’t going to work. 

And that’s why coastal communities continue to speak—in strong bipartisan 

voices—to protect their sensitive coastal resources and productive coastal economies. 

Mr. Chairman, I am dedicated to working with you and my colleagues on this 

Committee to develop positive solutions to our energy needs. 

It’s time to commit to alternative energy sources instead of increasing our dependence on fossil fuels to help meet the energy needs of the nation. 

Thank you again for your leadership in calling this hearing. 

The CHAIRMAN. The gentlelady’s time has expired. The 

gentlelady from Wyoming, Mrs. Lummis. 

Mrs. LUMMIS. Thank you, Mr. Chairman. I join Representative 

Capps in complimenting you for being here today and staying and 

involving yourselves in the discussion. I, further, want to compliment Representative Farr for his idea about creating a trust 

fund. 

Wyoming has a Permanent Mineral Trust Fund. We created it in 

1974, so we could take our nonrenewable resource, oil and gas and 

coal, and take the revenue off that, or a portion of the revenue off 

that, and convert it into a permanent resource, which is cash, interest income off state investments. 

As state treasurer, I managed Wyoming’s Permanent Mineral 

Trust Fund and the diversification of the permanent fund revenues 

into an income stream that, last year, was the largest source of income for the state’s general fund and, in normal price of oil and 

gas and coal years, is the second-largest source of income for the 

state’s general fund. 

I would encourage you to look at the Wyoming model, the Alaska 

model, the Alberta model, and, particularly, the Norway model, as 

great examples of taking these nonrenewable resources—oil, gas, 

coal, and other hydrocarbons—and converting them to this renewable resource. 

In fact, Norway Fund looked at the price of oil from the year 

1900 to the year 2000, and if you had left it in the ground versus 

invested it over time, the returns on the investment of producing 

it and converting it into income that can be used, of course, over 

and over—it regenerates itself by the country of Norway—created 

an enormous plus for the people who live there. 

The fact that you want to use this income off this fund, and I 

would encourage you to look at it as a permanent fund with a permanent corpus that is inviolate, the interest income of which could 

be used to conserve the oceans, or whatever renewable project you 

have in mind, is a great way to solve a number of problems—the 

36 

income problem, having a constant source of revenue to do it—and 

also to be part of the global sovereign wealth cast of characters. 

You know, the United States is the largest debtor nation in the 

world and does not itself have a sovereign wealth fund, so I am a 

big advocate of your idea. 

I also have a question for Representative Rohrabacher. I chose 

to schedule my mid-life crisis and went to a surfing school off the 

coast of your beautiful state and learned, at that time, that when 

it rained during the night, the surfing school was suspended the 

next morning because of the runoff into the ocean. That became a 

hazard to those of us who were trying to learn how to surf, particularly me because I was swallowing a lot more of the ocean water. 

Mr. ROHRABACHER. What city were you in? 

Mrs. LUMMIS. I was in LaJolla. 

Mr. ROHRABACHER. LaJolla? 

Mrs. LUMMIS. Yes. 

Mr. ROHRABACHER. All right. 

Mrs. LUMMIS. ‘‘Surf Divas’’ is the—— 

Mr. ROHRABACHER. There is a fine break in LaJolla called ‘‘Tourmaline,’’ and I have surfed there many times. 

Mrs. LUMMIS. Well, it was magnificent. As I said, I did swallow 

enough of the water to probably absorb the effects of global warming in the ocean, but it was wonderful. 

Mr. ROHRABACHER. You are absolutely right. After it rains, there 

is a major urban runoff problem in California and throughout the 

United States. Whenever it rains, all of the bird droppings and dog 

droppings and all of the other stuff that accumulates in an arid 

temperature is washed right into the ocean, and we surfers know 

very well that we should not be in the ocean the next day after a 

rain, sometimes two days after a rain. 

Mrs. LUMMIS. Yes. 

Mr. ROHRABACHER. And I would agree with Sam that we need 

to tackle that. I think resources from offshore oil drilling dedicated 

so that local communities can actually confront that challenge 

would be a very good use for the resources. I would say, however, 

the admonition is, that should not be controlled at the national 

level at some trust. 

If, in Wyoming, we decided that all of the oil revenue from 

around the United States would be in a national trust rather than 

a Wyoming trust, you would have been left out of the decision-making process of what to do with that money in Wyoming. 

We should get this money down to the local area, and, as you are 

pointing out, there are some very important needs to focus on in 

the coastal areas. 

Mr. COSTA. Will the gentlewoman yield for a moment? 

Mrs. LUMMIS. Indeed. 

Mr. COSTA. Just to underline the point, and I made it last 

week—— 

Mr. ROHRABACHER. Yes. 

Mr. COSTA.—and it is what frustrates me, in part, about this conversation, the National Academy of Sciences, in a study done in 

2002, the most recent, comprehensive examination, is the greatest 

source of pollution that impacts the oceans that Sam cares about, 

that Dana cares about, that we all care about, is nonpoint-source 

37 

pollution; it is a result of 85 percent of the pollution of the oceans 

around the world. 

We had a billion and a half people living on this planet 200 years 

ago. Today, we have six billion people living on it, and lots of people live around the oceans of the world. 

In California, Sam knows, we have tried, and water bonds that 

I have carried provided funding for point- and nonpoint-source pollution. You were the strongest advocate to make sure that there 

was a dedicated fund for the nonpoint-source pollutions. 

We are focused here on what is, at best, five percent or 10 percent of the problem, while 85 percent of the degradation of the 

oceans is a result of nonpoint-source pollution and overfishing. 

Mr. ROHRABACHER. I would suggest not even that. I would suggest that getting our oil from offshore oil rigs is a much cleaner 

and much safer, environmentally, way of getting oil than by tanker. 

Lois Capps said, in 1969, there was a big oil spill off Santa Barbara. We all remember that. That was 1969. The fact is, all of the 

major oil spills since 1969 have been from tankers. The Exxon 

VALDEZ accident up in Alaska, which was a catastrophe; that ship 

was headed for my district. It was headed for Long Beach. Now, 

the fact is, it could have had an accident closer to my beaches, and 

that is wrong, and the fact is, we have had offshore drilling for 30 

years with no significant problems. 

Now, yes, there is some oil that gets spilled in the water when 

they are greasing their equipment. OK. Let us try to regulate that, 

control that. I bet you that company is fined for what they did, but 

I will tell you, the risk of a major oil spill that is brought on us 

by a tanker is a so much greater threat to our environment than 

having some oil dripping off the rig as you are trying to grease the 

machinery on the rig. 

With that said, I agree with you, what you are saying, but I 

think that, even in that five percent-area, it is better to have offshore oil than to bring that oil in by tanker, which is what happens 

when we do not develop our offshore oil resources. 

The CHAIRMAN. The gentlelady’s time has expired. 

Mrs. LUMMIS. I applaud the discussion, and I thank you, Mr. 

Chairman. 

The CHAIRMAN. The gentleman from Hawaii is recognized, Mr. 

Abercrombie. 

Mr. ABERCROMBIE. Thank you, Mr. Chairman. 

I want to follow up, Mrs. Lummis, on your observations. As a 

new Member, I commend to you from last year what we call a 

‘‘nonpartisan bill’’ here, H.R. 6709, ‘‘The National Conservation, 

Environment, and Energy Independence Act,’’ that we put together, 

a group of Members—no lobbyists, no staff—just to prove, I suppose, that Members are not total dolts. 

It goes to precisely what you are talking about here: Can we use 

the existing carbon-based resources that we have as a bridge to an 

alternative-energy future by subsuming the royalties and the payments and the fees associated with it to invest in renewable energy, et cetera? 

Mr. Bishop worked with us on that, Mr. Costa, and our muchlamented retired friend from Pennsylvania, John Peterson, a real 

38 

genuine loss to this body, who was instrumental in putting us all 

together—in fact, alerting us all to this in a very, very positive and 

productive way—and we intend to carry through with that and invite, obviously, Mr. Farr and Mr. Rohrabacher to join with us to 

try and do the same thing this year. 

We are going to revise it. I know that Senator Reid and others 

are now proposing to put together a National Energy Grid and to 

modernize that, and this will become part of the bill. 

Mr. Rahall has been very, very sympathetic and empathetic to 

this process of trying to put together something. In fact, he just put 

out an editorial today which was sufficiently ambiguous to encourage me, so I am going to proceed further with that. 

I would welcome your participation in that as well. The whole 

idea, I think, of the offset if very, very important. 

Mr. Chairman, I have really no questions for the two witnesses, 

other than to put on the record that we intend to move forward 

with this. We are working on it right now, the staff, so anybody 

who is listening now, if you want to participate in this, get in touch 

with our staffs, Mr. Costa, myself, and Mr. Murphy in Pennsylvania, and others. We will be putting together a group. 

We consciously submitted it with three or four Republican and 

Democratic sponsors from the beginning, and then I think we had 

a list of about 20 Republicans and 20 Democrats, and we just cut 

it off arbitrarily, not capriciously, I assure you, but cut it off, at 

that point, just to introduce it to show that we had no intention 

of letting this devolve into a partisan rhetorical contest, but, rather, could we deal with offshore and onshore leasing of resources— 

natural gas was the impetus to all of this—could we get at the natural gas resources? 

We think it is more important now than ever to be able to do 

that, precisely because of the price of oil dropping. We want to get 

past this spiking and dipping of carbon-based resources to be able 

to do this. 

One last thing, Mr. Chairman. I met with the counsel general of 

Norway in Hawaii just recently, somewhat dumbfounded that he 

would have a particular interest in us, but it is because Norway 

is in the advance of many other places in the world, in terms of 

its environmental consciousness, as embodied in law and legislation, and its understanding of how to apply the most modern technological means to ensure safety with regard to the exploration and 

extraction of carbon-based resources, and he saw Hawaii as a template, as a demonstration place, for alternative energy resources, so 

we are going to be working together on that. 

I do believe this is not just a national question for us but an 

international question as well, particularly in light of global warming and what that might do to the oceans. Thank you, Mr. Chairman. 

The CHAIRMAN. The Chair will respond to the gentleman from 

Hawaii. If he thinks my article was ambiguous, it is in order to entice him to read it a second, third, and fourth time. 

Mr. ABERCROMBIE. My thoughts exactly. 

The CHAIRMAN. The gentleman from Louisiana, Mr. Fleming, is 

recognized. 

39 

Mr. FLEMING. Thank you, Mr. Chairman, and also thank you to 

the gentlemen, our witnesses today, for their hard work. 

First of all, before I get to my question, I want to respond to a 

comment from my colleague, Mrs. Capps, and that is from this 

paper, Derek Quigley, et al., which is an environmentalist researcher, and, just very briefly, part of the conclusion. 

It says: ‘‘A spacial coincidence between offshore oil production at 

Platform Holly and the observed decrease in seepage around Holly 

are probably related and attributable to the impact of oil production on reservoir pressure.’’ This goes back to comments made by 

Mr. Rohrabacher. ‘‘Oil production from the Monterey formation oil 

and gas reservoirs caused subsequent declines in reservoir pressure, thus removing the primary driving mechanism of the seepage. 

This finding implies that worldwide oil production may lead to declines in natural emissions of hydrocarbons on a global scale.’’ 

I think that is a very powerful conclusion, Mr. Chairman, but let 

me get to my question. 

I want to get to the end-game question here on a lot of this. I 

have heard testimony—this is our second set of testimony—that 

addresses this issue about offshore drilling, and when we are able 

to show things like, well, there is much less oil spillage. We have 

gone far beyond that. We have the technology that is much better 

today. 

Then somehow the argument turns to, well, it is all about the hydrocarbons, the CO2 that is in the air. 

Then when we talk about, well, alternative forms of energy, we 

get into windmill, but then we hear Ted Danson, who says he does 

not want it in his backyard. 

We talk about solar, and we hear about, I guess, lizards and 

bugs. They do not like that. 

Nobody seems to want nuclear these days. So, my question is, is 

the end game, from an environmental standpoint, and, trust me, I 

believe in being good stewards with our environment—I am not at 

all promoting anything other than that, but is the end game that 

we return to the Stone Age? Is the end game that we go to horse 

and buggy? 

I sort of picture in my mind movie stars coming to the Emmy 

Awards or the Academy Awards in chariots instead of limousines. 

So, my question for both of our witnesses today is, this seems to 

be a very sinuous, and sometimes circuitous, argument, that as 

soon as we begin to trap it down to one or two items, somehow it 

is a moving target, and we are going to something else. 

The question is, really, what is the end game in all of this discussion? 

Mr. FARR. I do not think we have an end game because we do 

not have a policy, and so what happens, if you just sort of same 

old, same old, you are going to end up, I think, causing—you may 

have an end of lots of things. 

Look, Mr. Rohrabacher and others have talked about the fact 

that there are permitting problems with some things, but let us 

look at the record. California has probably more solar houses than 

anyplace in the world, more use of reclaimed water for reclamation 

for agriculture, and my own district has the largest reclaimed agriculture use of water in the United States. 

40 

It is these alternatives that have come along that are smart and 

are better, and I think that is what we are asking for in this. Let 

us give us time to be smarter about the end game, and not all of 

the alternatives are given an equal opportunity to compete. 

Developing resources are also wanting to be dealt with fairly; 

that is, if there are subsidiary, or if there is tax policy, they want 

to be treated equally so that they can compete equally, and if you 

can compete equally, then the market can determine price, but if 

your competitor has all kinds of advantages that you do not have, 

then you cannot compete fairly, and the common business practice 

is a level playing field. 

I think what the discussion here is, what is it going to take for 

the United States of America to develop a level playing field for all 

kinds of fascinating ideas that can produce energy? And I do not 

think there is ever going to be one. I think it is going to be all of 

these. 

I think we are going to continue to drill for oil and gas in the 

United States, but we have to have an awful lot of other opportunities because of just the discussion about distribution networks. We 

spent a lot of money on the stimulus to make sure they work. You 

can produce the energy out in the middle of South Dakota, but how 

do you get it from the wind farms there to places that use it? 

The moratorium is a time-out, and that is what this discussion 

is about. 

Mr. ROHRABACHER. Sam and I, you know, look, we both want a 

clean environment, and we both are concerned about the health of 

our people, and water reclamation in California is something I 

have been a long supporter of. 

In Orange County, we have a major, cutting-edge, water-reclamation project that I have been very honored to support over the 

years, but let me just note that the standard of living that we have 

in California and elsewhere, we are coasting on things that were 

done years ago. 

There have been no hydroelectric dams built in California, or 

anywhere else in the United States, for 30 years. Yes, we do have 

people in California that are tearing down hydroelectric dams, even 

though they are smaller, but they are also opposing building new 

hydroelectric dams, which would take care of our people’s needs. 

We have not had any new nuclear powerplants built in this country for 30 years. We have not had any new refineries built for 30 

years. Yes, we have had a national policy, all right. The national 

policy has been not to develop our energy resources, and we have 

had activists with very high-sounding, you know, goals and rhetoric, but the fact is, that rhetoric has led us to a situation where 

billions, hundreds of billions of dollars, have been sent overseas 

now to buy energy that we could have produced at home. 

I agree with Sam that we should be developing these new energy 

resources. I think we have come to the point now, as I say, where 

solar will be competitive. That is why I think that the national policy should be an open-meter system. If we are going to spend 

money, let us subsidize an open-meter system so that anybody putting energy into that grid will get credit for it, and it is going to 

require us to subsidize it to do that because, right now, people are 

paying money to get into the grid and take the energy out. We 

41 

need this to be give and take with a national grid system, and, by 

doing that, we will open up the possibilities for solar and for wind. 

By the way, there is a fellow in my district who has developed 

a paint to paint on houses [off microphone] and, in fact, we turned 

that off, and 20 and 30 years ago, offshore oil development and all 

of these other sources, we are paying a bad price for that now. Our 

economy is suffering, our people are suffering, and I think it has 

a lot to do with our negative energy policy for the last 30 years. 

The CHAIRMAN. The gentleman’s time has expired. The gentleman from Washington, Mr. Inslee. 

Mr. INSLEE. Thank you. I just want to make a couple of points. 

First off, I want to applaud the great State of California. There 

are actually some great things they have done. I know Congressman Rohrabacher is proud of his state, but I want to express some 

admiration of what California has done in energy. 

While the rest of the country has increased its per capita usage 

of electricity by 40 percent over the last 20 years, California has 

kept it flat, on a per-capita basis, and that is because, instead of 

spending more money on some of the very expensive generating capacity, it has decided to spend less money on efficiency, and it has 

been very, very effective. So, we want to laud California for its 

leadership in that regard. 

The second point I want to make: When it comes to offshore drilling, there is a lot of discussion about spilling and the possibilities 

of spillage, and I want to make the point that there is a 100-percent certainty of oil spillage on every single offshore oil drilling 

that has ever been drilled, or will ever be drilled, and the reason 

that every single, and I hope I am scientifically accurate on this, 

but I believe it is true, every single carbon atom that comes out of 

those wells ends back in the ocean or on land. 

When we burn the oil coming out of these offshore wells, it goes 

into the atmosphere’s carbon dioxide. It lingers in the atmosphere 

for sometimes in a hundred years, but it eventually comes back 

down to the ground and goes into solution into the ocean, which is 

now acidifying the ocean. 

I just want to make that point because when we adopt our national policy, we ought to adopt it with the knowledge that 100 percent of the pollution, or potential pollution, that comes out of wells 

ends up back in the ocean, or, at least, 70 percent of it because 70 

percent of the world’s surface is oceans. Right now, the oceans are 

becoming acidified. They are now 30 percent more acidic than they 

were in pre-industrial times, and they are becoming more acidic 

three to five times faster than the scientists thought just a few 

years ago. Research off Tatoosh Island, where I live in Washington, 

shows horrendous acidification going on. 

I just want to make that point that when we decide what to do 

in offshore drilling, we should not blind ourselves to the fact that 

every single offshore oil drill ends up with a spill into the ocean 

via the atmosphere, and I just want to make those comments, and 

either one of my colleagues would be happy to hear your comments 

about that. 

Mr. FARR. Mr. Chairman, is Mr. Inslee your last questioning? 

42 

The CHAIRMAN. On the majority. There are three left on the minority side, unless the panel would like to stay for a second round 

of questions. 

Mr. FARR. I think the second panel is going to be better than the 

first. 

The big picture here: When I was on this Committee, what I was 

awed about is that you have the responsibility for natural resources in the United States of America, and the awesome responsibility of that is that you have created, by recognizing that certain 

areas require certain kinds of management, and out of that create 

a National Park System. You deal with the National Forest Service, even though it is in the Agriculture Committee, but a lot of the 

policies come out of this Committee. 

You determine that certain resources in America need to be labeled as rivers that are wild and rivers that are scenic. You have 

created this ability to look at land onshore and think about how to 

manage it. The largest resource in your jurisdiction is the ocean, 

and nobody has ever done that. Nobody has ever looked at the 

ocean and said, ‘‘Hey, why do not we create these kinds of management policies?’’ 

Your hearing today is about whether you ought to continue drilling in the ocean. The ocean is sick. Every witness up here will tell 

you that. For those of us that are coastal-dependent economies, 

that means that the food we take out of the ocean is at risk and 

that other local economies are at risk, and all we are asking is just 

put a moratorium on more oil and gas drilling until we get this 

right, until the Committee has been able to use its jurisdiction as 

a responsible resource management to look at the big picture of the 

oceans. 

So, in answer to your question, we get off target in arguing nuclear, oil, this, that, wind, and all of these other things. It is really 

about the jurisdiction and responsibility of that jurisdiction and 

leadership, and I applaud you on having these hearings, and I applaud you, hopefully, for having the hearing on my bill and passing 

it, which many of you are co-sponsors, because that kind of leads 

us in the direction of being able to answer, what is America and 

the United States of America going to do about addressing the biggest resource of all, its ocean resource? 

Mr. ROHRABACHER. I would hope that people also see that my 

friend, Sam, has pitched his bill. I hope you could all co-sponsor my 

bill, which directs the Bureau of Land Management to facilitate not 

only the granting of permits to actually start installing solar 

projects out in the desert. There have been 190 of these solar 

projects that have been held up by bureaucratic roadblocks that 

you could all sign under my bill to help create those solar projects. 

The argument that we have just heard from our colleague, not 

from Sam, but our friend here, but let me just note that that argument that any oil is going to get back into the ocean; that is not 

just offshore oil; that is all oil. So, you would have to oppose any 

development of any new oil resources anywhere in the United 

States, which is under our jurisdiction. 

I would have to suggest that there is along argument as to 

whether what the effect of CO2 is all about and whether or not it 

causes global climate change, et cetera, that could go on for hours 

43 

on that hearing. There are many notable scientists who disagree 

with that proposition that you just outlined. 

If you will just indulge me on one thing, before I became a congressman, I was a journalist, and I guess one of the greatest slogans I was able to use when I first ran for office was, ‘‘Vote for 

Dana. At least, he is not a lawyer.’’ But, as a journalist, I got to 

meet all kinds of people, and I covered all kinds of events in Los 

Angeles. I was a reporter down there, and I remember I was called 

out to interview Jacques Cousteau, who happened to have been one 

of my heroes. Jacques Cousteau was a hero of mine, and because 

I am a scuba diver, I am a man of the ocean. 

I went there to hear him at UCLA, and he was talking to some 

students, and he was going on about how the oceans are dying: 

‘‘Within 10 years, all of the oceans will be dead.’’ Now, this is 1973. 

OK? ‘‘The oceans will be dead.’’ I kind of felt, even then, that 

maybe we could try to find something positive we could focus on 

rather than to focus on the negative. 

When I went up to him after his meeting with the students. I 

told him I was a reporter, and I would like to ask a few questions. 

I said, ‘‘Isn’t it possible that we are going to be able, in the future, 

to harness the oceans for farming and other things like that that 

would be beneficial to mankind?’’ and he got right into my face— 

I will never forget it because there was a bunch of students watching—and he goes, right in my face, he goes, ‘‘Didn’t you hear me? 

The oceans, 10 years from now, will be dead, black goo.’’ I will 

never forget that, ‘‘black goo.’’ 

Now, that was 10 years ago, and I was contemplating that about 

two weeks ago when I was on my surfboard, and I sat out there 

and watched the porpoises come by and fish jumping out of the 

water and the pelicans jumping into water right next to me. 

Now, I will tell you something: The oceans are not black goo, and 

Jacques Cousteau is not around with us anymore, but there are a 

lot of people, even with the stature of Jacques Cousteau, who overstate challenges. Maybe they do it in order to try to motivate us 

to act in a certain way that is positive, but they create a false impression that could lead us to bad policies that would affect us 

badly in the long run. 

Mr. FARR. And we had a moratorium that entire time. 

The CHAIRMAN. The gentleman’s time has expired. 

The colleagues have been so kind with their time today that the 

Chair did indulge them for a couple of advertisements, which we 

heard during that last conversation. 

The gentleman from Utah is recognized, Mr. Chaffetz. 

Mr. CHAFFETZ. Thank you. I appreciate it. The renewable energy 

that I need, at this point, starts with chicken strips down in the 

cafeteria, so I will be very brief. Renewable energy; who is going 

to fight against that? Of course, naturally, I would love to do it. 

I wish we did not have to go through the process of extracting 

the resources that we do, but, Mr. Farr, from your advantage point, 

and your expertise, renewables, the so-called ‘‘wind farms’’ and all 

these types of things that, in their very best-case scenario, very 

best-case scenario, over the next five years, maybe even 10 years, 

what percentage of our energy do we really think we can extract 

44 

from them, and what percentage do we see now, and where do we 

think we can actually get to? 

I want to be as optimistic as I can, but I do not see anything that 

can overtake the propulsion of our automobiles and our homes and 

everything else, especially if we are not willing to advance nuclear 

and some of these other things that I consider to be clean. Everything has its drawbacks, but we have, you are right, no national 

energy policy. I would like to see us get to one, but where in the 

world do you think we can be, based on what we know today? 

Mr. FARR. The California Secretary of Natural Resources is on 

the next panel. The State of California is supposed to have 33 percent by 2020. 

Mr. CHAFFETZ. OK. So, then if we look at the trajectory, and you 

can go back over the last 30 years and where we are going in the 

future, our demand is going to increase, undoubtedly. Do we concur 

with that idea that demand is not going to diminish over the course 

of time. Right? We are going to have more people, more demand. 

Mr. FARR. Yes, but the demand is also proportional to what kinds 

of effectiveness and technology you have in using the fuel, and 

whether you get 10 miles a gallon or 33 miles a gallon has a lot 

to do with that. 

Mr. CHAFFETZ. I guess what I am trying to get at is, what do we 

have that works today? What actually works today, and what percentage? It is difficult. I am not trying to pin you down to specifics 

on each individual one, but that is a burning question for me because I think the American people, myself included, my kids, my 

family, we all have a desire to be conservationists. I am a conservative. I like to conserve things, but I do not see viable alternatives 

that I can go and plug in and that are actually on the market that 

I could actually do. 

You know, I saw one of my colleagues driving a million-dollar hydrogen vehicle. It is probably not very practical. 

Mr. FARR. Not yet. 

Mr. CHAFFETZ. By the way, I want to leave some time for Dana 

here. 

Mr. FARR. Every single source of alternative energy is utilized in 

California that has been developed. As I said, we have hydro, geothermal—— 

Mr. CHAFFETZ. What percentage is it today, the goal being 30- 

something percent? Twenty percent of all of the energy used is renewable. 

Mr. FARR. In California, the biggest energy-using state in the 

United States. 

Mr. CHAFFETZ. Mr. Rohrabacher? 

Mr. ROHRABACHER. Well, I would suggest that when people focus 

basically just on conservation, I think that that is helpful, the conservation is helpful, but we also have to focus to have a balanced 

approach on production of more energy. Had we had the same obstructionists at play when we were building our hydroelectric dam 

system or our current nuclear power systems, California would be 

in a total catastrophe now for energy. 

One of the reasons why we have had conservation of energy in 

California, by the way, is the price has been permitted to go up, 

and thus people naturally conserve. But I am totally supportive of 

45 

the efforts of the Governor and other people in California to push 

these renewables. 

For example, I am proposing that we have an aqueduct system 

from Northern California, Sam’s area, to take his water and bring 

it south to my area, which, of course, I support totally, but I would 

see no reason why that aqueduct system, if running the length of 

the state, why do not we cover that aqueduct system with solar collectors so it shields the water from evaporation and can produce 

the electricity at the same time? Those are the kinds of creative 

ideas that will happen if you have an open-meter approach. 

So, in other words, we subsidize a lot of things today. Let us subsidize basically the open-meter system. That will not work unless 

we do subsidize it, but because, right now, people have to pay to 

take the electricity out, but if we end up paying them to put it in, 

how are the electric companies going to function? 

We can subsidize that and open up the avenue for all of these 

new, across-the-board advances in energy technology, and I am 

very optimistic. I am for electrification of our country. In California, Elan Musk has invested in Tesla Motors. The Governor has 

been very supportive of that, and I just think that we have a great 

new tomorrow. Not only are the oceans not going to be black goo, 

but our cities are not going to be desolate and overwhelmed with 

pollution. We are going to solve these problems by moving forward 

with more production and cleaner production. 

Mr. CHAFFETZ. Thank you, and thank you, Mr. Chair. 

The CHAIRMAN. The gentleman’s time has expired. The gentleman from South Carolina, Mr. Brown. 

Mr. BROWN. Thank you, Mr. Chairman, and thank you, gentlemen, for being a part of this discussion. This is a very major concern of mine. I live on the coast of South Carolina, and we are certainly concerned about our beautiful beaches, which are our number-one tourist attraction, I guess, almost in the country; probably 

number two or number three in the whole country. So, we are very 

sensitive to any impact that offshore drilling might have. 

We are also concerned about, not only just in America but, as a 

worldwide perspective, Mr. Chairman, and I would hope that, as 

we look at generating a new energy policy, that it will be done in 

a worldwide perspective, not just in the American perspective because we are just not isolated on this planet. We are a part of it, 

and sometimes we talk about it as though America is just a standalone unit. We are actually extracting some 70 percent of our 

energy from offshore, and it comes from some places that we feel 

are not environmentally sound like America. 

So, as we talked about, Mr. Farr, about the moratorium, and I 

noticed you said that you would be in favor of continuing the moratorium, and I would hope, Mr. Chairman, that everything we had 

in the energy bill would be on the table, and the all-of-the-above 

solution that my good friend from Hawaii talked about, we tried to 

come up with something, I guess, in the last Congress to try to 

meet out energy needs in an environmentally sensitive way, but I 

think the all-of-the-above solution has got to be a part of it. 

Is Yucca Mountain going to be expanded? Are we going to open 

Yucca Mountain? Is nuclear power going to be a part of the 21st 

Century solution? All of these things have to be included. 

46 

I know I have traveled to some of the countries. We are talking 

about drilling up in ANWR, and maybe the carbon is being emitted 

there, but isn’t it true, Mr. Farr, that some 97 percent of our carbons actually come from nature, not from some man-made source? 

It is 97 percent. 

Mr. FARR. Of what? 

Mr. BROWN. Of the carbons. 

Mr. FARR. That we release on the planet? 

Mr. BROWN. Yes, sir. 

Mr. FARR. I do not know the answer to that question. 

Mr. ROHRABACHER. I can let you know. As a Member of the 

Science Committee, I have been through many hearings on this. I 

have never heard a witness claim that, of the CO2 production and 

other supposed greenhouse gases, no one has ever estimated that 

more than 10 percent of it—most people guesstimate more like five 

percent of that—is actually produced by human beings. The rest is 

produced by nature. These great fires that we just had down in 

Australia; I mean, that is putting stuff into the air, a huge amount. 

Let me just add that sometimes, in our state, the fire people in 

our state have told me they have been denied the right to have controlled burns during the time when it is wet so the fires would not 

get out of control. Environmentalists/activists have prevented them 

from having controlled burns in the name of stopping air pollution, 

and then what happens? We end up in the dry times with massive 

fires that put ten times as much pollution into the air. 

Now, these are well-intended people, but they have horrible consequence, even for the environment, in the long run. 

Mr. BROWN. Let me ask you another question on that same note. 

They are trying to suppress any development in the United States 

of all of our energy, the oil shales, offshore drilling, or whatever 

else that is available, but yet we import 70 percent of our energy 

from countries that are mining it however way they can. Are we 

helping the planet by saying that we do not want to do it, but it 

is OK; you can treat the environment any way you want to, and 

we are going to still buy your products. Mr. Farr, what do you 

think? 

Mr. FARR. Well, two things. First of all, I think it is very smart. 

We are complaining about the fact that we have to import Middle 

Eastern oil to run our automobiles in the United States because we 

get so little efficiency out of our automobiles, and I think that there 

are arguments that this Committee has heard that if you just improve the automobile efficiency, you will not have to be so dependent on foreign oil. 

It seems to me that if we do not invest in this brain trust of people creating alternative energies, that we are going to allow that 

brain trust to be somewhere else. People are using the examples 

of Norway. The wind energy came from the Scandinavian countries. In California, because we were the first state to develop wind 

farming in the past, in Norway and the Scandinavian countries, 

there has just been a solar, modern windmill to replace the old 

ones. We did it in a farming style of orchards, wind orchards. 

We required that the company, in order to get this huge market 

in California, move their development and build these wind turbine 

machines in our state. 

47 

I think that if we are not smart about these alternative energies, 

we are going to lose that brain trust and manufacturing capacity 

to another country. So, part of the world leadership, we need to be 

ahead of them because we need to sell them our technology, and 

I think that that technology will be readily marketable because it 

will be an alternative to the carbon amounts that we are putting 

into the air. 

The only question here, and I keep getting back to it, is the question before this Committee is, should we continue to have the moratorium on offshore oil drilling as we have had for the last 10, 20 

years? And I think, from all of the evidence that has been brought 

today, is, yes, we should. 

Mr. BROWN. You know for a fact that when we had an oil embargo back in, I guess, the seventies, some 35 percent of our energy 

was coming from offshore. Because we had the moratoriums, now 

it is 70 percent. Can you imagine the number of jobs we could create? I know, when the price of oil was $150 a barrel, it was, like, 

$700 billion a year we were spending as a balance of trade just for 

energy. It is probably less than that now since the price has decreased, but it is still a tremendous amount of funds. 

Look at all of the jobs that we could create here in this country 

that we are now exporting to these foreign countries. 

Mr. ROHRABACHER. And the point you made earlier was very important, and that is, yes, so we have not gotten our oil from our 

own offshore oil development, and what do we do? We are importing it now from overseas, and the point you made was many of 

those countries that provide us oil overseas do not have the same 

environmental controls and safety controls that we have here. 

Thus, those people who are supporting the moratorium have actually set up a situation where more pollution is coming into the 

air globally than would be done if we would have taken those same 

oil resources domestically from offshore. 

Mr. BROWN. And I appreciate that remark, that comment, there, 

too, because we are on a planet. Not just America is focused on the 

atmosphere, but whatever happens in China, whatever happens in 

India, is going to impact our quality of life here in America. Thank 

you. 

Mr. FARR. Yes, but that ocean right off your coast, which is a 

huge economic asset to your state; the health of that ocean is really 

dependent on the health of the economy of your state. 

If that ocean were acidic, and everything was dying in it, and the 

beaches were polluted, the real estate values would drop, people 

would not use the coastal zone for development, and it would be 

a disaster, and we know that the oceans are headed that way unless we take better care of them. So, why would we want to continue to drill for oil and gas? Why do not we just buy some time? 

Mr. ROHRABACHER. We certainly do not want our oceans to become black goo. 

Mr. BROWN. Well, just to answer that, Mr. Farr—Mr. Chairman, 

I know my time has expired, but, in Dubai, you go there today, and 

some of those other countries over there, the immigrants there, 

they have filled in the ocean. That impact is not going to impact 

my ocean off Myrtle Beach? 

48 

Mr. FARR. It is going to have some impact on the global oceans’ 

health, yes, but because of currents and everything like that, I 

doubt that it is going to affect Myrtle Beach. 

The CHAIRMAN. Gentlemen, just one quick observation by the 

Chairman. I have been in this body over three decades and have 

seen a lot of our colleagues testify before committees. It is usually 

a perfunctory five minutes each, and very few, if any, questions 

from members of the Committee. 

This morning has been drastically different. Just two of our colleagues, Sam Farr and Dana Rohrabacher, have been here for two 

and a half hours now answering questions from our colleagues, 

large numbers of Members attending on both sides of the aisle, for 

which I am deeply appreciative. But also I am deeply appreciative 

of your time. 

It shows the amount of interest in this issue, it shows the importance of this issue to our nation’s energy and national security, and 

this particular Chairman is deeply appreciative of your time and 

spending two and a half hours before us, and that, I might add, 

without a single question from the Chairman. Thank you, gentlemen. 

[Pause.] 

The CHAIRMAN. The Chair will call our second panel composed of 

the following individuals: The Hon. Mike Chrisman, Secretary, 

California Natural Resources Agency; Mr. Ted Diers, Chairman, 

Coastal States Organization; Robert G. Marvinney, Ph.D., State 

Geologist and Director, Maine Geological Survey; the Hon. Frank 

W. Wagner, State Senator, Senate of Virginia; and the Hon. Garret 

Graves, Director, Louisiana Governor’s Office of Coastal Activities. 

Gentlemen, we welcome you to the Committee on Natural Resources. We appreciate your being with us all morning, as you 

have, and traveling long distances to be with us, in some cases. 

We do have all of your prepared testimony. As with all witnesses, 

it will be made a part of the record, as if actually read, and you 

each are recognized for five minutes to proceed as you desire, and 

we will start in the order in which I introduced the panel. 

STATEMENT OF HON. MIKE CHRISMAN, SECRETARY, 

CALIFORNIA NATURAL RESOURCES AGENCY 

Mr. CHRISMAN. Thank you, Mr. Chairman. It is nice to be here. 

Thank you for the opportunity to testify today. I join you in saying 

that the last two and a half hours was quite illuminating. It was 

interesting to listen to the questions the Members have asked and 

how you have teed up the issues. I think it was very informative 

for all of us. 

It is, indeed, a pleasure for me to appear today. As I think all 

of you know, and you have heard numerous times today, we have, 

in California, a long history of offshore oil and gas development 

that dates back to 1896, and you also heard Congressman Rohrabacher refer, a number of times, to the year of 1969, the devastating oil spill off of Santa Barbara, in the Santa Barbara Channel. 

I need to put a context to that because that particular oil spill 

released more than three million gallons into the Pacific Ocean and 

49 

killed thousands of birds and other marine mammals along 35 

miles of our coastline in California. 

While the risk of such an event today is reduced because of the 

new technologies and improved response procedures that we have 

all developed, we continue to believe that the adverse environmental and economic impacts of new oil and gas leasing and development off our shore far outweigh the benefits generated from 

these activities. 

The majority of Californians, nearly 38 million of them now, reside and live within our coastal zone in California. 

The National Ocean Economic Program has determined that California’s ocean-dependent industries contribute more than $46 

billion annually to the state’s economy each year. As you can see, 

our economy thrives on tourism, particularly in our coastal areas. 

We have consistently opposed new leasing off of California’s 

shores for oil and gas exploration. Governor Schwarzenegger continues that opposition. He has held this position before taking office and has not wavered since that. His position was reaffirmed 

in our 2004 Ocean Action Plan that we also released. His position 

has been repeated in correspondence to Congress, to this Committee, to both the former and current president, and to the U.S. 

Department of the Interior. 

Last year, Governor Schwarzenegger opposed the lifting of a congressional moratorium on leasing the Outer Continental Shelf, a 

position consistent with over 25 years of state policy embraced by 

Governors of both parties. 

We have the California Coastal Sanctuary Act that has precluded 

leasing in state tidelands, that being lands from zero to three miles 

out, for oil and gas development since 1994. 

The California State Legislature has repeatedly passed measures 

opposing new offshore oil and gas development in the waters offshore our protected state waters. 

Governor Schwarzenegger has also joined with Governor Ted 

Kulongoski from Oregon and Governor Chris Gregoire from the 

State of Washington to oppose any new offshore oil and gas leasing, 

exploration, and development off our Pacific Coast, up and down 

the Pacific Coast of California and the West Coast. 

So, again, there should be no ambiguity on where we are, where 

the States of Oregon and Washington are, on the Pacific Coast. 

However, as we look to a new long-term energy picture, and 

there was a lot of discussion here today about that, we do see OCS 

alternatives worth pursuing. California is coordinating with the 

Minerals Management Service and the Federal Energy Regulatory 

Commission to evaluate options for sustainable offshore energy production, such as wave and ocean current technology. The energyproduction potential and environmental impacts of these technologies are being evaluated now. 

We, in California, have been recognized as a leader in energy efficiency and development of renewable energy. You heard it responded to and answered many times in the conversation today. 

Our per capita use of electricity has been flat over the last 30 years 

while the rest of the country has increased 50 percent. 

Despite these successes, of course, we continue to set these very 

aggressive goals. You heard a question coming to Congressman 

50 

Farr. Again, pursuant to the Governor’s executive order, we have 

increased our state’s renewable energy standard to 33 percent renewable power by the year 2020 in California. This effort is the 

most aggressive in the United States. 

To assure that this goal is attainable, the directive also calls for 

a streamlined review and approval process for renewable energy 

sites, making it easier for wind, solar, and geothermal projects to 

be developed in California. 

We encourage the Obama administration and Congress to support a national energy policy that increases the efficiency of our 

energy use. We applaud Secretary Salazar in his pronouncement, 

on February 10th, to create a new and open process to develop a 

comprehensive national energy strategy. We applaud the 

Secretary’s commitment, and California will commit to work with 

all of you to increase energy efficiency across the country. 

Let me conclude by saying that California stands ready to work 

with this body, this Committee, this Congress, and the Obama administration to help craft a comprehensive, science-based, national 

energy strategy for a Five-year Oil and Gas Leasing program here 

in the United States. Thank you again for the opportunity to be 

here. 

[The prepared statement of Mr. Chrisman follows:] 

Statement of The Honorable Mike Chrisman, Secretary for Natural 

Resources, California Natural Resources Agency, State of California 

Chairman Rahall and members of the Committee, thank you for the opportunity 

to appear today to discuss our experience with energy development off the California 

coast. California has a long history of offshore oil and gas development, which dates 

back to some of the earliest offshore production anywhere in the United States, 

starting off the Ventura County coast in 1896. California is also home of the 1969 

Santa Barbara oil spill, which originated in the federal Outer Continental Shelf. It 

was an accident 40 years ago that had major ramifications for environmental protection in both California and for our nation. While the risk of such an event can be 

reduced today because of new technologies, for California, the adverse environmental and economic impacts of new oil and gas leasing and development off our 

coast (from oil spills, air quality, water quality, and visual impacts) far outweigh 

the benefits generated from these activities. 

A state of approximately 38 million people, the majority of Californians live within the coastal zone. California’s economy thrives on tourism, even with the current 

downturn in the national economy. People are drawn to our Southern California 

beaches, our rugged north coast, and many spectacular coastal destinations in-between. We have many federal, state, and local parks, three National Estuarine Research Reserves, three sites within the National Estuary Program and four National 

Marine Sanctuaries along and offshore our coast. The National Ocean Economic Program has determined that California’s ocean dependent industries contribute over 

$46 billion dollars to the state’s economy annually. People journey to California to 

enjoy the outdoors, to swim, to surf, to scuba dive, and to fish among other ocean 

sports. Others come to patronize seaside resorts and restaurants. The impact of another 1969 caliber oil spill anywhere along California’s coast would have a devastating impact on our population, recreation, our natural resources, and our coastal 

dependent economy. 

California Position on Offshore Oil and Gas Drilling 

Governor Schwarzenegger has long opposed new leasing off the California coast 

for oil and gas exploration, development, and production. He held this position before taking office and has not wavered from it. This consistent position was included 

in the Governor’s 2004 ocean action plan titled, ‘‘Protecting Our Ocean, California’s 

Action Strategy.’’ Since that time his position has been repeated in correspondence 

to Congress, to this Committee, to the President, and to the U.S. Department of the 

Interior. Last year, Governor Schwarzenegger also opposed the lifting of the congressional moratorium on leasing on the Outer Continental Shelf. This position is 

consistent with over 25 years of state policy embraced by governors of both parties. 

51 

The California Coastal Sanctuary Act has precluded the leasing of our state tidelands (0-3 miles offshore) for oil and gas development since 1994. The California 

State Legislature has repeatedly passed measures opposing new offshore oil and gas 

development in the waters offshore our protected state waters. In addition, the California Ocean Protection Council, the State Lands Commission, and the California 

Coastal Commission all oppose new offshore oil and gas leasing off the coast. Governor Schwarzenegger joined Governors Kulongski (Oregon) and Gregoire (Washington) opposing any new offshore oil and gas leasing, exploration, and development 

off the coasts of California, Oregon, and Washington. There should be no ambiguity 

about where California stands on the issue of new offshore oil and gas leasing off 

California—we oppose it. 

Looking at the long term energy picture, we do see OCS alternatives worth pursuing. California is coordinating with the Minerals Management Service and the 

Federal Energy Regulatory Commission to evaluate options for sustainable offshore 

energy production, such as wave and ocean current technology. The energy production potential and environmental impacts, of these technologies are being evaluated 

now. We have been working closely with the federal government to explore these 

possibilities, and look forward to continue working on these prospects with the 

Obama Administration. Additionally, California is a leader in setting energy efficiency standards that we believe are a model for the nation. Our recent experience 

with fluctuating gasoline prices has demonstrated that we all need to find ways to 

increase energy efficiency, and California has been a leader on that front for years. 

We applaud the February 10, 2009 announcement by Interior Secretary Salazar 

to create a new, open-, process to develop a comprehensive energy strategy for this 

nation. The Secretary’s four point plan provides a reasonable approach for states to 

provide input into the development of this energy policy. We applaud the Secretary’s 

commitment to provide a fair and science based process and look forward to working 

with the Administration as this comprehensive plan is developed. 

Offshore Oil and Gas Development off California 

I want to dispel the myth that California only consumes oil and gas and does not 

produce it. This is simply not true. California has a long history of production of 

both onshore and offshore oil and gas. Currently, 27 oil and gas platforms are in 

production off the California coast. Of those, four are in state waters (within 3 miles 

of shore) and 23 lie within the federal waters on the Outer Continental Shelf (beyond 3 miles from shore). California also has substantial onshore oil and gas facilities currently in operation. Figures for 2007 indicate that California produced over 

200 million barrels of oil at onshore facilities. Offshore production was 14.8 million 

barrels in state offshore waters and 24 million in federal waters. Onshore production of natural gas provided 269.9 billion cubic feet in 2007. Production in state waters was 7.2 billion cubic feet and 35.2 billion cubic feet was produced in federal 

waters that same year. 

Alternative/Renewable Energy 

California is recognized as a leader in energy efficiency and the development of 

renewable energy. We support congressional action to aggressively support national 

policies that increase the efficiency of our energy use. Our policies have proven to 

be extremely successful, from an economic and environmental standpoint. California 

uses less electricity per person then any other state in the nation. Indeed, over the 

last 25 years, California’s per capita electricity use has remained nearly flat, while 

nationwide demand has increased 50 percent. This has occurred despite the fact 

that homes are bigger and our population tends to have more appliances, televisions, and other electronic equipment. Whether we are talking about electricity, 

natural gas, or transportation fuels, gains in energy efficiency can temper energy 

demand, hold down consumer prices, and reduce the environmental impact associated with traditional energy sources. 

Although California has been leading on renewable and efficient energy production for years, we continue to set aggressive, yet achievable goals. On November 17, 

2008 Governor Schwarzenegger signed an Executive Order (S-14-08), which re-establishes California’s already ambitious Renewable Portfolio Standard (RPS) at a 

new nation-leading level and calls for a restructuring of the process of developing 

renewable energy sites to make it easier to achieve our renewable goals. Under the 

current standard, California utilities must obtain 20 percent of their electricity load 

from renewable energy sources by 2010; the Governor’s Executive Order increases 

that goal to 33 percent by 2020. To ensure that goal is attainable, the directive also 

calls for a streamlined review and approval process for renewable energy sites—directing state agencies to sign a Memorandum of Understanding (MOU) with each 

other and with federal agencies (US Fish and Wildlife Service and Bureau of Land 

52 

Management) to create a streamlined process making it easier for wind, solar and 

geothermal sites to be built in California. 

These policies have proven to be extremely successful in California, from both an 

economic and environmental standpoint. We would encourage the Obama Administration and Congress to support a national energy policy that would increase the 

efficiency of our energy use throughout the nation. We would be happy to work with 

the Congress to help craft a new energy strategy that builds on California’s experience with energy efficiency. 

Regulation of Offshore Oil and Gas Activities 

California has regulatory jurisdiction over all aspects of oil and gas development 

from the onshore components of processing facilities and pipelines, to all aspects of 

offshore production which would include exploratory rigs, production platforms, 

pipelines, marine terminals, or other facilities associated with the offshore oil and 

gas development. 

On land, our state and local governments have primary permit jurisdiction over 

the siting and construction of facilities. In state waters our California Coastal Commission and State Lands Commission have authority over the issuance of permits 

or authorizations to drill within state tidelands. On the Outer Continental Shelf (beyond state waters) several federal agencies such as the Minerals Management Service, the U.S. Environmental Protection Agency, and the U.S. Army Corps of Engineers have direct regulatory jurisdiction. However, California like other coastal 

states has a unique jurisdiction over activities on the Outer Continental Shelf that 

can ‘‘affect’’ resources within California’s Coastal Zone, including our state tidelands. This jurisdiction is provided by the ‘‘federal consistency’’ provisions of the federal Coastal Zone Management Act. Essentially, no permits for new offshore oil and 

gas operations can be issued absent a finding that the activity is ‘‘consistent’’ with 

California’s federally approved Coastal Zone Management Act, which is administered in California by the California Coastal Commission. Such decisions can be appealed to the Secretary of Commerce in cases where an applicant disagrees with the 

findings of the Commission. 

As mentioned previously, all of the state tidelands off California are off limits for 

the extraction of oil, except under a few extraordinary circumstances. The position 

of the Governor, the state legislature, and our key agencies of jurisdiction maintain 

opposition to new leasing and development of oil and gas resources from the Outer 

Continental Shelf consistent with our statutory prohibition for such development in 

State Tidelands. 

Conclusion 

Let me conclude by saying that California stands ready to work with Congress 

and the Obama Administration to help craft a comprehensive and science based national energy strategy and a Five Year Oil and Gas Leasing Program. We believe 

such an approach should be developed with a look toward all of our energy options 

including energy efficiency, alternative renewable energy sources, and of course the 

development of oil and gas resources in locations where local and state governments 

support it, and where the environmental impacts can be mitigated. 

The CHAIRMAN. Thank you. Mr. Diers? 

STATEMENT OF TED DIERS, CHAIRMAN, 

COASTAL STATES ORGANIZATION 

Mr. DIERS. Good afternoon. My name is Ted Diers. In my day 

job, I am the manager of the New Hampshire Coastal program 

within our Department of Environmental Services, but, today, I am 

here as the Chair of the Coastal States Organization, representing 

the Governors of the 35 coastal states, commonwealths, and territories, and to talk to you a little bit about some of our concerns, 

interests, and maybe a way forward as you start to work out some 

of these issues. 

Our 35 coastal states, territories, and commonwealths are at the 

forefront of ocean and coastal management. Whether it is addressing sea level rise or hazards or renewable energy proposals, coral 

bleaching, coastal states, we are sort of at this nexus of all of these 

53 

different issues and where they come together in the most populous 

parts of our country. 

The coasts and oceans represent an important source of energy 

for the United States, including oil, natural gas, and renewable 

energy in the form of tidal, wave, wind energy, and probably things 

we have not even imagined yet. So the states, as we have members 

who certainly have production and those that do not, certain ones 

that want it and do not, but there are some things that we do come 

together around, and especially that we do need a comprehensive 

energy policy, and, within that, the states have certain great consensus around three things, and that is what I would like to talk 

about for just a couple of more minutes here. 

The first is that we need to retain state sovereignty and Federal 

consistency authority. 

The second is that planning out into the ocean needs to include 

both traditional and renewable energy development, and really be 

science based around the resources that are out there. 

Third, we need the establishment of a permanent trust fund because it is through that that we will have the money to do the 

science and the management and the planning to be able to have 

a sustainable resource. 

Quickly, about state sovereignty, Section 307 of the Coastal Zone 

Management Act, known as the ‘‘Federal consistency provision,’’ 

grants states authority to review Federal activities, licenses, and 

permits that have a foreseeable impact on our land or water resources. These activities that are Federal activities must be consistent, to the maximum extent practicable, with the enforceable 

state policies. Those state policies which are created by the states 

are approved by the Federal government. 

Consistency applies before a permit is issued, and this is really 

important to recognize, from the state perspective, because, from 

my perspective, as a coastal manager, consistency is our ticket to 

the dance. This is how we interact between the Federal agencies 

and those people who are applying for projects. It allows you to 

have a dialogue that happens before an impact, before a permit, is 

in place. Countless numbers of projects have been approved 

through this project over the years. 

Furthermore, I just want to note one thing that has not come up 

today, and that is that the resources that are out in the Outer Continental Shelf and those resources which are within our coastal 

zone; it is very hard to differentiate them sometimes. Fish, currents, wave, wind; they do not really care about a line that sits 

three nautical miles off our shoreline. 

I want to talk a little bit about, again, planning out into the 

ocean and our offshore resources. There is another point that has 

not really been made too much today, which is that there is significant ‘‘regionality’’ in how we need to think about our offshore resources. We do have some great regional efforts that are coming together in this state, largely led by the states, and I think this is 

a really interesting movement that is going in regional ocean partnerships, from the Gulf of Mexico Alliance to our West Coast Governors Agreement to, in my own backyard, the Northeast Regional 

Ocean Council. 

54 

We are working together. We are willing to work with our Federal partners and also with the Minerals Management Service as 

they plan for offshore activities. Just a point there is that while 

MMS does look at offshore drilling, no one is really looking at those 

renewable resources yet, and that is something that we need to 

come together around. 

Finally, a permanent trust fund. Chairman Rahall, you noted, in 

the first hearing, that money from the ocean appears to go everywhere but the ocean, so I think that we need to solve some of that, 

and the revenues do need to be used for science and management 

in the future. 

It has been said by Robert Ballard that we know more about the 

surface of Mars than we do about the bottom of the ocean. The only 

problem in that is that we are not trying to manage the surface of 

Mars yet, and so this is a real challenge. 

I just want to conclude briefly, again, by stating that there are 

three things that we really want to make sure are looked at and 

maintained in a comprehensive energy policy: one, that state sovereignty and Federal consistency are maintained; two, that we do 

planning that looks at both renewable and traditional sources of 

energy; and, three, that we have the dollars to do great science and 

management in our offshore areas. Thank you very much. 

[The prepared statement of Mr. Diers follows:] 

Statement of Ted Diers, Manager, New Hampshire Coastal Program, New 

Hampshire Department of Environmental Services, on behalf of the 

Coastal States Organization 

Introduction 

Good morning, Mr. Chairman and Members of the Committee. My name is Ted 

Diers and I am the Manager of the New Hampshire Coastal Program of the New 

Hampshire Department of Environmental Services. I also serve as Chair of the 

Coastal States Organization which represents the Governors of the nation’s thirtyfive coastal states on the sustainable management of the nation’s ocean, Great 

Lakes and coastal resources. Thank you for holding this important hearing this 

afternoon and for inviting me to testify on behalf of the coastal states. 

Let me start by saying that the 35 coastal states, territories, and commonwealths 

that are members of the Coastal States Organization are at the forefront of ocean 

and coastal management in this nation. Whether it’s addressing sea level rise and 

hazards in the Gulf States, renewable energy proposals off the northeast coast, or 

coral bleaching in the pacific islands, coastal states are on the front lines of these 

issues. Our ocean and coastal resources are not only important to us at the state 

level, but to citizens throughout this nation. 

Coastal and ocean areas also represent an important source of energy for the U.S., 

including oil, natural gas, and renewable energy in the form of tidal, wave and wind 

energy. Use of the oceans for energy production requires a commitment to responsible development that promotes protection of living marine resources, seafloor habitats, and coastal communities. Such development must proceed from an understanding that our oceans are held in public trust for all citizens, and that multiple 

uses (including energy production) must be consistent with the long-term productivity of these resources. 

As the U.S. crafts a national energy policy, including coastal and offshore energy 

development, it is important to consider three key factors which I will address 

today: 1. the retention of state sovereignty and consistency authority; 2. the planning for the nation’s Exclusive Economic Zone including traditional and renewable 

energy development; and, 3. the establishment of a permanent trust fund. 

Our position is simply stated—The development of offshore renewable and traditional energy must be part of a comprehensive plan in which the states are full 

partners, addresses regional needs and opportunities and uses the best science possible. And, that effective planning and good science has costs associated with it. 

55 

State Sovereignty and Consistency Authority 

While offshore energy production benefits the entire nation, the impacts from activities associated with exploration, development and production on state coastal 

lands and federal offshore lands are felt most in coastal states. Thus, it is vital for 

state authority and sovereignty to be maintained. CSO recommends that Congress 

and the Administration consult with coastal states in the development of any new 

leasing program or formula of revenue sharing. In the past, offshore moratoria have 

been the result of a fractured, exclusive and federally-driven energy policy. If indeed 

we are heading in direction of a ‘‘post-moratorium’’ world, the ability for a state to 

review actions related to offshore oil and gas drilling is essential. 

Section 307 of the Coastal Zone Management Act, known as the federal consistency provision, grants states authority to review federal activities, licenses and permits that have reasonably foreseeable effects on any land or water use or natural 

resource of the coastal zone. These activities must be consistent to the maximum 

extent practicable with the enforceable policies of a coastal state’s federally approved coastal management program. This has been a primary method of ensuring 

more sustainable development of the nation’s coasts. 

Consistency applies before a federal permit is issued; thus, it facilitates early consultation between states, federal agencies and permit applicants in order to avert 

disputes from arising after substantial commitments have been made by agencies 

and applicants. In practice, consistency is important as a ‘‘ticket to the dance’’—allowing states to have a seat at the table in decisions related to the coasts. Without 

these early reviews, there would be much more uncertainty, litigation and calls for 

federal legislative intervention in actions in coastal communities. To increase efficiency for states, federal agencies and applicants, many states have created streamlined approaches to energy related activities. 

In granting states consistency authority, Congress recognized that federal interests and activities must be balanced with the sovereign interests of states in managing coastal resources. This is the underlying philosophy of the CZMA and the consistency provision. State coastal programs must receive federal approval for a state 

to exercise its consistency authority; likewise, each enforceable policy upon which 

it relies must also receive federal approval. 

Furthermore, the resources of the OCS and the coastal zone are many times difficult, if not impossible, to differentiate. Fish, currents, wind and wave care little 

about an imaginary line drawn 3 nautical miles from our shores. As the committee 

considers offshore energy, the retention of consistency under the CZMA must be a 

priority. 

Planning for the Exclusive Economic Zone including Oil and Gas and 

Renewable Energy Development 

Given the prices and impacts of oil consumption, offshore oil and gas development 

must be considered in the context of the development of renewable energy and both 

must be balanced with the care of oceans and coasts and the economic viability of 

coastal communities. The energy needs and even the offshore resources of any particular state do not occur in a vacuum. There is significant ‘‘regionality’’ to both offshore needs and opportunities. Thus, the regional scale is appropriate for science 

based planning. The states are moving to take on some of these regional needs 

through the development of regional ocean partnerships. From the Gulf of Mexico 

Alliance to the West Coast Governors Agreement, the Great Lakes Commission to 

by own back yard in the Northeast Regional Ocean Council, the state are working 

together to create the framework for large-scale problem solving. This regional 

ocean partnership movement is a distinct opportunity for the state and federal government to work together. 

Development of diverse and numerous sources of alternative renewable energy is 

critical to our nation’s energy security and environmental well-being. The federal 

role is crucial because virtually every site where ocean renewable energy technology 

is likely to be tested or deployed is subject to federal jurisdiction. Unlike conventional wind and solar, ocean renewable energy technology cannot be tested or deployed on private land. The industry will emerge and mature in the United States 

only if the federal government uses its resources and authorities to plan for and encourage appropriate use of the marine areas it controls. 

While the Minerals Management Service plans for offshore oil and gas drilling, 

no federal or interstate body has taken on the task of planning for renewable energy 

development. Furthermore, there are myriad other coastal offshore uses and resources to consider when planning for energy development. CSO encourages the consideration of renewable energy in a national energy policy and legislation, including 

planning that addresses uses, resources, and impacts. 

56 

Establishment of a Permanent Trust Fund 

Great science and planning cost money. In the first OCS hearing in this series 

by the Committee on February 10, Chairman Rahall, you noted that ‘‘money from 

the ocean appears to go to everything but the ocean.’’ Indeed, even though coastal 

states are affected exponentially by the impacts of offshore energy development, receipts derived from sales, bonus bids and royalties under the mineral leasing laws 

are paid to the Treasury through the Minerals Management Service. But, these revenues are not directly applied to pay for Federal or State agencies’ examination, 

monitoring and managing wildlife, fish, water and other natural resources related 

to energy and mineral exploration and development. 

The establishment of a Trust Fund provides a mechanism for reinvestment of the 

revenues generated from these public lands toward protection of coastal resources 

and communities. The Trust Fund can support the focused efforts of coastal states, 

territories and commonwealths, other appropriate coastal authorities, and federal 

agencies in addressing critical ocean and coastal management needs of our nation 

including restoration, protection, and enhancement of natural processes and habitats. This will help minimize the impacts of relative sea level rise, global warming, 

and ocean acidification and provide technical assistance and research to better anticipate and plan for the impacts of global warming and ocean acidification on ocean 

and coastal resources. 

In its Final Report, the U.S. Commission on Ocean Policy identified a myriad of 

challenges to improve the management of our nation’s ocean and coastal resources. 

The Commission recognized that to meet these challenges additional investments 

would be necessary, and Outer Continental Shelf receipts were identified as the primary source of funding. Additionally, the Commission recommended that a portion 

of OCS revenues should be shared with coastal states (Recommendation 24-1). Revenues shared with the states should further the goals of improved coastal and ocean 

management. 

In 2006, the Coastal States Organization adopted a policy on revenue sharing 

which states that ‘‘Because the coastal states face a number of challenges in conserving their coastal resources and protecting their coastal communities, OCS receipts should be used to further the goals of coastal and ocean restoration, conservation, preservation, mitigation, research, and education.’’ While the coastal states 

may not agree on the presence of offshore oil and gas drilling off their shores, they 

do agree in the reinvestment of funds from these public resources. Furthermore, 

these funds should be provided over and above existing appropriations to meet the 

increasingly complex and unmet needs of ocean and coastal managers. 

It has been said that we know more about the surface of Mars that we do about 

the bottom of the ocean. The problem with that is we are not yet trying to manage 

use conflicts on Mars, but we are here on Earth. 

Conclusion 

The oceans will continue to play an important role in access to sustainable and 

reliable energy. By retaining the state review authority, reinvesting a portion of 

public trust revenues on marine and coastal resources, and planning for both traditional and renewable energy development, new energy legislation will enhance our 

nation’s ability to meet pressing ocean and coastal needs in an economical, efficient, 

and sustained manner. 

In legislation regarding OCS activities, CSO requests: 

• Federal consistency authority under the Coastal Zone Management Act should 

be maintained and states’ authority within their own jurisdictions should not 

be weakened in any way. 

• Congress and the Administration should commit to planning for the EEZ that 

includes energy policy based on development of traditional and renewable 

energy sources, and is enhanced by state-led regional partnerships. 

• Revenues should be shared with coastal states and used to further the goals of 

coastal and ocean management, restoration, conservation, preservation, mitigation, and research. 

Thank you again for the opportunity to address the Committee and for holding 

this important series of hearings. The Coastal States Organization stands ready to 

work with you to continue this progress of making important improvements to 

energy policy and coastal and ocean management. We look forward to the advancements that we can make in the coming year. 

The CHAIRMAN. Thank you. Dr. Marvinney? 

57 

STATEMENT OF ROBERT G. MARVINNEY, PH.D., STATE 

GEOLOGIST AND DIRECTOR, MAINE GEOLOGICAL SURVEY 

Mr. MARVINNEY. Thank you very much, Chairman Rahall and 

Members of the Committee, for this opportunity. I am Robert 

Marvinney. I am the Maine State Geologist, and I am speaking 

here on behalf of Maine Governor John Baldacci. I will summarize 

some of the key points from my written testimony, focusing on, 

first, Maine’s focus on renewable energy resources; a brief discussion of the past exploration for oil and gas off the New England 

Coast and what opportunities that may come from offshore oil and 

gas for Maine; and a bit on the fisheries at Georges Bank. 

Currently, Maine has the highest per capita dependence on No. 

2 heating oil of any state in the nation, and this is a critical concern for us, particularly with the severe winters we have experienced over the last several years. That makes—for low- and middle-income people—very difficult choices between vital expenses 

and home heating, and those energy costs have risen dramatically 

in the last 10 years. 

The Governor has focused several efforts on renewable resources 

in the state. We have a Wood To Energy Task Force that looks at 

using the vast forest resources of the state—we are the most heavily forested state in the Nation—and using those to meet some portion of our energy needs. We are working on wood pellet systems, 

and the University of Maine is also looking at ethanol from wood 

and other areas. 

We have also had a Wind Power Development Task Force that 

looked at onshore opportunities for wind power development and 

have moved considerably forward on that, and, most recently, the 

Governor established an Ocean Energy Task Force to look at the 

indigenous and renewable resources, potential offshore, that address our energy needs and increasing our state’s energy independence, reducing greenhouse gas emissions, and limiting our vulnerability to unpredictable foreign fuel supplies. But we are not ignoring any potential offshore, and, certainly, we recognize that wind 

has a huge potential off the coast of Maine. 

The past efforts at oil and gas exploration were in the 1970s and 

1980s, mostly in the Georges Bank area. The remainder of the Gulf 

of Maine really does not have the kind of geology that would be 

suitable for the development of the existence of oil and gas. It is 

really an extension of our rock-bound coast well offshore. 

We are talking primarily about the Georges Bank, where, in the 

seventies and eighties, there were 10 exploration wells and associated exploration work, and, in the MMS, their summary reports 

show that these wells did not make any discoveries, nor did they 

generally find the kinds of geologic conditions that were conducive 

to the development of oil and gas resources there. 

Of course, there has been exploration and development on the 

shelf off of Nova Scotia, and there is at least one significant discovery at Sable Island, with a gas resource. That was discovered 

30 years ago, and, in the following time, some smaller discoveries 

have been made but nothing substantial. 

There is certainly a potential for offshore resources there, and 

MMS has made some assessments that the entire North Atlantic 

planning area, extending from New Jersey through the coast of 

58 

Maine, might have two billion barrels of oil and 18 trillion cubic 

feet of natural gas. I just want to point out that, for comparison, 

that same assessment suggests that the Gulf of Mexico might have 

45 billion barrels of oil and 230 trillion cubic feet of gas, much larger numbers than the North Atlantic. 

There is certainly potential for oil and gas offshore, and there is 

some potential for economic opportunities for the Northeast. I 

think, though, if I were standing on the coast of Maine, looking offshore across most of the Gulf, which does not have the potential, 

out to the Georges Bank, I think we are mostly concerned about 

the potential costs of oil and gas development because just the 

proximity of the greatest potential for oil and gas is closer to other 

New England states. 

So, from a strictly provincial viewpoint of the State of Maine, we 

do not see a tremendous amount of benefit coming from that activity in that area. However, Georges Bank is a huge fishery resource 

for the State of Maine, and the largest dollar value of our fishery 

resource comes from that Georges Bank, where the situation of nutrients and currents makes it a highly productive spawning ground 

and growth area for many kinds of commercial species. 

I am not saying that there are not problems with fisheries, but 

we certainly feel that the effort should focus on rebuilding those 

fisheries. 

So, in summary, we are not opposed to offshore oil and gas drilling, but we think it ought to be focused in the areas with the greatest potential and preserve other areas for their greatest potential 

of other resources. I think we agree with other states that there 

ought to be revenue sharing with these offshore resources, and also 

our concern about the Georges Bank fisheries is our greatest concern, and we want to make sure every effort is put in place to protect those resources. Thank you. 

[The prepared statement of Mr. Marvinney follows:] 

Statement of Robert G. Marvinney, Ph.D., State Geologist and Director, 

Maine Geological Survey 

Chairman Rahall and members of the House Committee on Natural Resources, 

thank you for this opportunity to provide Maine’s perspective on offshore drilling 

and our nation’s energy future. I am Robert Marvinney, State Geologist and Director of the Maine Geological Survey, speaking on behalf of Maine Governor John 

Baldacci. 

My testimony today will focus on these main topics: 

• Maine’s focus on renewable energy resources. The Governor and Legislature are 

considering all options in a comprehensive energy plan that focuses on efficiency, renewability, reduction of greenhouse gas emissions, and energy independence. In these areas the Gulf of Maine holds high potential as a source of 

renewable wind and tidal power. 

• Past exploration on the outer continental shelf of the New England states did 

not discover optimum conditions for hydrocarbon generation and accumulation. 

Recent assessments by the Minerals Management Service indicate some potential for undiscovered reserves in the North Atlantic Planning Area, but these 

are small when compared to other parts of the OCS with more favorable conditions. 

• Exploitation of hydrocarbons on the OCS may bring economic benefits, but due 

to the proximity of potential reserves to other parts of the coast, Maine is not 

likely to be a significant recipient of these benefits. 

• The Georges Bank is among the most significant fisheries in the northeastern 

United States, and supports a significant part of the economy in New England 

coastal communities. We are concerned about additional stress to this resource. 

59 

Renewable Energy Resources 

Currently, Maine has the highest per capita dependence on #2 heating oil of any 

state in the nation. The past several winters have been particularly difficult for lowand middle-income and elderly Mainers who are making very difficult choices between home heating and other vital expenditures. Energy costs have grown from 5% 

to 20% of a Maine family’s budget in just the past 10 years1. 

In response to this crisis and his commitment to a state energy policy focused on 

efficiency, renewability, greenhouse gas reduction and energy independence, Governor Baldacci established several important groups to focus on segments of the 

energy market. Maine is the nation’s most heavily forested state, and the Governor’s 

Wood to Energy Task Force focused on harnessing the wood supply to meet a significant portion of our energy needs. Maine people use the State’s forest resources 

for cordwood and pellets to heat homes and businesses and as biomass to generate 

electricity. University of Maine researchers are advancing the process to make cellulosic ethanol from wood. 

In 2007, the Governor established a Task Force on Wind Power Development, the 

recommendations of which have been instrumental in advancing the implementation 

of onshore wind power in Maine. 

In November 2008, Governor Baldacci established the Ocean Energy Task Force2

to focus primarily on Maine’s indigenous and renewable offshore energy potential 

and its promise to address state and regional energy needs, including increasing our 

state’s energy independence, reducing greenhouse gas emissions, and limiting our 

vulnerability to the unpredictable costs and supplies of fossil fuels. While ignoring 

no potential energy option in Maine’s offshore environment, this effort will focus in 

particular on the enormous potential of tides and wind. Tidal power is quickly 

achieving commercial viability, and one developer has been working with a community and testing its in-stream tidal energy device. It is estimated that the Gulf of 

Maine holds as much as 150 gigawatts of wind potential in both shallow and deep 

state and federal waters3. 

Petroleum Exploration History and Oil and Gas Potential of the Georges 

Bank 

The Ocean Energy Task Force will also consider the potential for offshore oil and 

gas reserves in its comprehensive review of the ocean energy resources of the Gulf 

of Maine. Most of the Gulf of Maine is underlain with geology that is not suitable 

to the generation of oil or natural gas. The rocks are basically an extension of the 

high-grade metamorphic rocks and granite intrusions that characterize the rockbound coast of New England and have been heated well beyond the optimal conditions for hydrocarbon generation. 

The area with the highest potential for oil and gas reserves is the Georges Bank, 

a relatively shallow plateau situated more than 100 miles southeastward from the 

Maine coast. The oval shaped Bank is approximately 150 miles long, 75 miles wide, 

and with waters as shallow as 30 meters along its northwest edge, forms a barrier 

to the deeper Gulf of Maine waters to the north (Figure 1). The northeastern most 

portion of the Georges Bank falls within Canada’s territorial waters. 

60 

The only oil and gas exploration activity on the Georges Bank was conducted during the 1970s and early 1980s when 10 wells were drilled in the most promising 

areas identified through the best exploration methods then available. In a summary 

report, the Minerals Management Service indicated that hydrocarbons were not discovered in these wells, that thermally mature source rocks are lean in the organic 

material necessary to generate hydrocarbons, and that other units lacked adequate 

porosity to be considered good reservoir rocks5. As this Committee is aware, the 

Georges Bank was under annual congressional moratoria on oil and gas leasing 

from 1982 to 2008. No wells have been drilled on the Canadian portion of the 

Georges Bank and a leasing moratorium has also been in effect there since 1988. 

Our colleagues in neighboring Nova Scotia, however, have demonstrated that geology similar to that of the Georges Bank can be productive. Since exploration began 

on the Scotian shelf in the 1950s, 24 significant hydrocarbon discoveries have been 

made in this part of Canada’s outer continental shelf6. These have been mostly natural gas discoveries. The most notable, Sable Island, may eventually produce a total 

of 2 trillion cubic feet (Tcf) of gas, although estimates vary widely. Since the Sable 

Island discovery over 30 years ago, a very active exploration program has brought 

little additional reserve forward. With improved technologies, exploration is advancing toward deeper waters, which may hold the best potential for significant new 

reserves. 

The government of Nova Scotia is actively supporting exploration activities on the 

Scotian Shelf due, in part, to the revenue sharing agreement with Canada’s national 

government that brings to the province $500 million in royalties annually6. In 2010, 

the governments of Canada and Nova Scotia will decide whether or not to extend 

the moratorium on Georges Bank leasing which is set to expire at the end of 2012. 


47607.001.eps
61 

While past exploration has not uncovered notable reserves, nor found conditions 

generally favorable for hydrocarbon accumulation, there is some potential for petroleum discoveries on Georges Bank and elsewhere in the North Atlantic. The Minerals Management Service periodically conducts assessments of undiscovered hydrocarbon reserves of the outer continental shelf nationwide, most recently in 20067. 

These assessments take into account past exploration data and information for new 

discoveries in areas with analogous geology, which for the Georges Bank include the 

Scotian Shelf. The assessment of undiscovered, technically recoverable reserves for 

the entire North Atlantic Planning Area, which extends from the border with Nova 

Scotia in the Gulf of Maine to the Delaware border, is a mean of 2 billion barrels 

of oil and 18 Tcf natural gas (Table 1). The greater proportion of this potential is 

probably in the southern part of this region near New Jersey where earlier exploration wells discovered gas. For comparison purposes, this same assessment indicates that the Gulf of Mexico area contains undiscovered reserves of 45 billion barrels of oil and 230 Tcf of gas—over 20 times more oil and 12 times more gas than 

the entire North Atlantic Planning Area. Additionally, Gulf of Mexico states already 

have in place the infrastructure necessary to support exploration and development 

activities. 

Oil and gas exploration and development techniques have improved dramatically 

in the past 30 years, and if applied to the Georges Bank could possibly generate 

new discoveries, but these would likely be small compared to other areas of the 

Outer Continental Shelf. 

Potential benefits of oil and gas development at Georges Bank 

Georges Bank oil and gas development could provide benefits to the state of 

Maine, the Northeast region, and the U.S. Although a substantial period of time is 

necessary for exploration and development activities, eventually, new hydrocarbon 

resources could be brought on line that, in small measure, reduce dependence on 

unstable foreign sources. In addition to the exploration and development jobs themselves, such activities would generate on-shore support jobs. However, I think we 

need to be clear about the limited extent to which such development has potential 

to directly benefit Maine. The proximity of the Georges Bank is such that any support base for exploration and development activities there would likely be situated 

in Massachusetts or Rhode Island. That said, Maine has a track record of benefiting 

from petroleum exploration. One Maine corporation recently constructed two semisubmersible platforms for petroleum development; their work would certainly be enhanced by Georges Bank development. However, this corporation has also demonstrated that they can compete globally since those two rigs were deployed in waters off Brazil. 

Georges Bank Fisheries8

Georges Bank is the most westward of the great Atlantic fishing banks—those 

now-submerged portions of the North American mainland that extend from the 

Grand Banks of Newfoundland to Georges Bank. They rank among the world’s most 

productive fisheries. Lying adjacent to New England’s famous seaports, Georges 

Bank is single-handedly responsible for the development of coastal fisheries in 

towns such as Gloucester, Massachusetts and Portland, Maine. The varied nature 

of sedimentary environments on Georges Bank is a key element in the development 

of the biological community. Seafloor sediment originally was transported to the 

bank by glaciers. During and after glacial retreat, the rise of sea level and the acVerDate Aug 31 2005 14:24 Apr 17, 2009 Jkt 000000 PO 00000 Frm 00065 Fmt 6633 Sfmt 6621 L:\DOCS\47607.TXT Hresour1 PsN: KATHY

47607.002.eps
62 

tion of tidal and storm currents marked the start of an erosional episode on the 

bank that continues today. Gravel formed through this process is an important habitat for the spawning and survival of several fishery species9. For instance, distribution patterns of juvenile cod indicate that the gravel habitat is where they are best 

able to avoid predators and to find food sources. The topography and position of the 

bank result in upwelling of nutrient-rich waters circulating in the Gulf of Maine. 

These nutrients, introduced into the sunlit waters over the bank, and interaction 

with warm Gulf Stream currents on the southern edge of the Banks, support exceptional rates of productivity, including many species of commercial importance. These 

are important spawning, juvenile and feeding grounds for cod, haddock, herring, and 

other commercial species. The scallop resource on Georges Bank is also very productive and valuable. In Maine, a substantial portion of the fishing fleet is dependent 

on the Georges Bank, and the largest dollar value of the commercial catch brought 

to Maine ports comes from this location. 

Certainly, there are issues with over-fishing the Georges Bank, but government 

efforts focus on managing the fishery to rebuild stocks. Under current conditions, 

the fishery resources of Georges Bank are important to the economy of Maine and 

New England. With rebuilding of these resources, their economic value will be increased very significantly. 

Summary 

1. We are not opposed to offshore drilling in general and recognize that for the 

near term, the nation needs sources of oil and gas that are not vulnerable to 

foreign ownership and control. However, oil and gas development efforts should 

be focused in the areas with the greatest potential, and where infrastructure 

is already in place to support the activity. 

2. Wherever additional areas of the Outer Continental Shelf are accessed for oil 

and gas development, states should benefit directly through revenue sharing, 

as occurs with states around the Gulf of Mexico and in Canada. 

3. The Georges Bank has great economic value as a fishery. In spite of the troubled nature of the fishery, it supports a substantial portion of the New England 

economy. We are concerned about potential negative impacts of oil and gas development on the fishery. 

4. Oil and gas development could bring additional jobs to the region, but these 

would most likely be in southern New England. 

5. We believe the resources of the Gulf of Maine are most suitable to renewable 

energy development, with tidal and offshore wind power being the primary resources. Renewable wind power may provide manufacturing and support employment and contribute to a sustainable, secure energy future. 

Notes 

1. Daghar, H., as presented to Ocean Energy Task Force: http://www.maine.gov/ 

spo/specialprojects/OETF/Documents/Dagher%2012%2017%2008.pdf 

2. Ocean Energy Task Force website: http://www.maine.gov/spo/specialprojects/ 

OETF/index.htm 

3. Dagher, H., Director, University of Maine Advanced Structures and Composites 

Center: http://www.aewc.umaine.edu/072208Dagher.pdf 

4. Gulf of Maine times, 2000, Vol. 4, No. 1, map copyright MapWorks 2000. 

5. Edson, G.M., Olson, D.L., and Petty, A.J., 2000, Georges Bank Petroleum Exploration: Minerals Management Service OCS Report 2000-031, 20 p. 

6. Canada-Nova Scotia Offshore Petroleum Board: http://www.cnsopb.ns.ca/ 

7. Minerals Management Service, 2006, Planning Area Resources Addendum to 

Assessment of Undiscovered Technically Recoverable Oil and Gas Resources of 

the Nation’s Outer Continental Shelf, 2006 

8. Fisheries information in this section compiled from discussions with George 

Lapointe, Commissioner, Maine Department of Marine Resources. 

9. USGS Fact Sheet, Geology and the fishery of Georges Bank, http:// 

pubs.usgs.gov/fs/georges-bank/ 

The CHAIRMAN. Thank you. Senator Wagner? 

STATEMENT OF HON. FRANK W. WAGNER, 

STATE SENATOR, SENATE OF VIRGINIA 

Mr. WAGNER. Thank you, Chairman Rahall, Congressman 

Hastings. I am glad I do not have to follow Congressman RohrVerDate Aug 31 2005 14:24 Apr 17, 2009 Jkt 000000 PO 00000 Frm 00066 Fmt 6633 Sfmt 6602 L:\DOCS\47607.TXT Hresour1 PsN: KATHY
63 

abacher or Congressman Abercrombie. They are certainly tough 

acts to follow. 

As you know, Mr. Chairman, Virginia has taken a leadership role 

in asking the Federal government to open up the Atlantic Outer 

Continental Shelf for exploration of hydrocarbons. The official policy of Virginia is to request that the Federal government allow for 

exploration for natural gas only and no closer than 50 miles from 

our own coastline. 

However, there are many in Virginia, including myself, that, consistent with Navy training requirements and environmental review, would take a much broader approach. We, in Virginia, were pushing this policy long before $4-a-gallon 

gasoline and prior to the current large-scale recession in which we 

find ourselves. 

During peak energy prices last summer, it was estimated that this nation was spending nearly $700 billion a year importing hydrocarbon energy from outside the borders of this country. This dollar figure is surprisingly similar to the TARP package and the economic stimulus package that this Congress passed within the last 

few months. 

Mr. Chairman, imagine for a minute, if those hundreds of billions of dollars we currently spend outside the borders of this country buying energy were spent inside this country, developing our 

own natural resources, employing Americans to produce American 

energy for American industry. 

At a time when job creation and economic stimulus is absolutely 

critical, putting Americans back to work developing our own natural resources will go a long way toward restoring America’s economic vitality. 

Mr. Chairman, I need not tell you that states are struggling. I 

just drove up from Richmond, where Virginia is attempting to close 

a nearly $4 billion deficit. This Congress has authorized revenue 

sharing with coastal states, in some instances, as part of opening 

up more areas of the Outer Continental Shelf. We sincerely hope 

that you continue the program. 

Mr. Chairman, I ask you to only look north to our friends in Canada. They are already in the Atlantic Outer Continental Shelf, recovering some 500 million cubic feet of natural gas a day off of 

Nova Scotia in the Sable Island area. It is also my understanding 

that they have opened up significant oil deposits off of Newfoundland farther out in the Atlantic Basin. 

To our south, Cuba is already entertaining leasing structures 

and putting together programs just within 50 to 70 miles off the 

coastline of Florida, yet we continue to restrict access to potential 

reserves of an unknown amount because this nation has chosen to 

restrict even the basics of exploration to make this determination. 

In this instance, ignorance is not bliss. 

Mr. Chairman, because of Virginia’s actions, we are currently in 

the MMS Five-year Leasing Plan with a potential lease sale occurring as early as 2012. We would encourage you to work with Secretary Salazar to keep Virginia on schedule. 

We, in Virginia, recognize there is no one silver bullet for this 

nation’s energy problems. The solution must be thought of as a silver shotgun shell where each pellet is equally important as the othVerDate Aug 31 2005 14:24 Apr 17, 2009 Jkt 000000 PO 00000 Frm 00067 Fmt 6633 Sfmt 6602 L:\DOCS\47607.TXT Hresour1 PsN: KATHY
64 

ers. Opening additional OCS is one of those pellets. Expansion of 

nuclear power and revisiting prior decisions on breeder reactors is 

another. Conservation, energy efficiency, development of renewables, and alternative energies are all pellets that go in that shotgun shell. 

Three years ago, in Virginia, we passed a comprehensive energy 

plan, which I have authored and with bipartisan support. The Virginia energy plan includes all forms of energy I just mentioned, as 

well as expansion of energy research and development, expansion 

of conservation, and moving forward. 

However, we do not hold the keys, Mr. Chairman. You, in Washington, do. Please unlock these doors. Once we have opened up the 

MMS action to date with regard to Virginia’s OCS, open that door 

for other states that want to follow Virginia. Facilitate the expansion of our nuclear industry. Open up more areas for energy development. Continue to expand the good work to date on funding 

R&D. Expand our efforts to use existing energy more wisely. 

We, as a nation, are at a critical juncture where the health of our 

economy and the health of our economy and the health of our planet are intertwined. We look to you, our Federal representatives, to 

make the right decisions for the future of our country. Please hear 

my plea to allow us Americans to take advantage of our domestic 

resources so that we may secure America’s energy independence 

while putting Americans back to work. 

Thank you for allowing me this minute, Mr. Chairman, and I will 

take the last minute just to kind of go off script a little bit and 

talk. 

We have heard a lot of talk about what we are doing here. What 

we are doing is we are restricting ourselves from our own national 

energy resources, yet, at the same time, buying the same hydrocarbon resources from outside our border. 

I can tell you, Mr. Chairman, I know you know this, and I know 

all of the Members of the Committee, Americans out there are 

nervous. They are afraid. They are very concerned about their jobs. 

They are very concerned about the economic future. We start talking about renewables, and MMS is still trying to put a five-year 

plan together for offshore leasing for renewables. 

The obstacles that are up as part of the permitting processes 

mean there is no quick solution as equally as important as opening 

up these areas and doing these other things. We need to look at 

the process of getting these things. 

We talk a lot about green jobs; I spent weeks, years, trying to 

get one small renewable project permitted in Virginia, and we are 

still no closer than we were before. 

I think we really need to look at this in the context of not just 

what we do but also how we get there from where we are today. 

I think it is a very serious problem. I think it is a core problem 

for this economy and this nation, and I hope that you all can make 

the right decisions here and move forward in a bipartisan manner 

but recognize that it is all of our resources for all ourselves. Thank 

you, Mr. Chairman. 

[The prepared statement of Mr. Wagner follows:] 

65 

Statement of The Honorable Frank W. Wagner, Senator, 

Senate of Virginia, 7th District 

Thank you, Chairman Rahall, Congressman Hastings, for the opportunity to testify before you today. 

As you know, Mr. Chairman, Virginia has taken a leadership role in asking the 

federal government to open up the Atlantic Outer Continental Shelf for exploration 

of hydrocarbons. The official policy of Virginia is to request that the federal government allow for exploration for natural gas only no closer than fifty miles from our 

own coastline. 

However, there are many in Virginia, including myself, that consistent with Navy 

training requirements and environmental review, would take a much broader approach. 

We in Virginia were pushing this policy long before $4 a gallon gasoline and prior 

to the current large-scale recession in which we find ourselves. 

During peak energy prices last summer, it was estimated that this nation was 

spending nearly $700 billion a year importing hydrocarbon energy from outside the 

borders of this country. This dollar figure is surprisingly similar to the TARP package and the economic stimulus package that this Congress passed within the last 

few months. 

Mr. Chairman, imagine for a minute, if these hundreds of billions of dollars we 

currently spend outside the borders of this country buying energy were spent inside 

this country, developing our own natural resources, employing Americans to produce 

American Energy for American Industry. 

At a time when job creation and economic stimulus is absolutely critical, putting 

Americans back to work developing our own natural resources would go a long way 

towards restoring American economic viability. 

Mr. Chairman, I need not tell you that states are struggling. I just drove up from 

Richmond where Virginia is attempting to close a nearly $4 billion deficit. This Congress has authorized revenue sharing with the coastal states as part of opening 

more areas of the Outer Continental Shelf. We sincerely hope you continue the program. 

Mr. Chairman, I ask you to only look north to our friends in Canada. They are 

already in the Atlantic Outer Continental Shelf recovering 500 million cubic feet of 

natural gas a day off of Nova Scotia. Canada is also expanding hydrocarbon recovery 

in the Atlantic basin off Newfoundland. To our south, Cuba is moving forward with 

development of their offshore resources. Yet, we continue to restrict access to potential reserves of unknown amount because this nation has chosen to restrict event 

he basics of exploration to make this determination. Mr. Chairman, in this instance 

ignorance is not bliss. 

Mr. Chairman, because of Virginia’s actions, we are currently in the MMS fiveyear leasing plan with potential lease sales occurring as early as 2012. We would 

encourage you to work with Secretary Salazar to keep Virginia on schedule. 

We in Virginia recognize that there is no one silver bullet to solve our nation’s 

energy crisis. The solution must be thought of as a silver shotgun shell, with each 

pellet as important as the next. 

Opening additional OCS areas is one pellet. Expansion of nuclear power and revisiting prior decisions on breeder reactors is another. Conservation, energy efficiency, development of renewables and alternative energies are pellets, and the list 

goes on. 

Three years ago in Virginia we passed a comprehensive energy plan, which I authored, with bipartisan support. The Virginia Energy Plan includes all the forms of 

energy just mentioned as well as the expansion of energy research and development. 

However, we do not hold the keys, Mr. Chairman. You in Washington do. Please, 

Mr. Chairman, unlock the doors. One has been opened with MMS action to date 

with regards to Virginia’s OCS. Open that door for other states that want to follow 

Virginia. Facilitate the expansion of our nuclear industry. Open up more areas for 

energy development. Continue to expand the good work to date on funding energy 

R&D. Expand our efforts to use our existing energy more wisely. We as a nation 

are at a critical juncture where the health of our economy and the health of our 

planet are intertwined. We look to you, our federal representatives, to make the 

right decisions for the future of our country. Please hear my plea to allow us as 

Americans to take advantage of our domestic resources so we may secure America’s 

energy independence while putting Americans back to work. 

Thank you for allowing me to testify before you today. I would be happy to answer 

any questions at the appropriate time. 

66 

The CHAIRMAN. Thank you, Senator. Mr. Graves? 

STATEMENT OF HON. GARRET GRAVES, DIRECTOR, 

LOUISIANA GOVERNOR’S OFFICE OF COASTAL ACTIVITIES 

Mr. GRAVES. Thank you, Mr. Chairman. Happy Mardi Gras. It 

is a state holiday, but apparently nobody else got the headline. 

The CHAIRMAN. Happy Mardi Gras to you, too. 

Mr. GRAVES. I want to thank you very much for the opportunity 

to testify today. It is actually better, for both my health and marriage, that I am here versus there, I am sure. 

I want to show a quick satellite depiction from NOAA of North 

America. You can see, 60 million years ago, how the Mississippi 

River Delta was somewhere near Illinois perhaps. Over this 55-million-to-60-million-year period, you can see the evolution. The point 

here is that you have an extraordinarily dynamic coastal area in 

Louisiana, an extraordinarily dynamic delta in coastal Louisiana, 

that today is one of the most productive areas in the nation. 

An MMS report, years ago, determined that the evolution of the 

oil and gas industry has had profound impacts on the culture, geography, society, and the economy of the state in the 20th century. 

In reviewing the testimony in the hearing that was held by this 

Committee on February 11th, a number of issues were repeated, 

and they pertain to tourism, commercial fishing, recreational fishing, and the maritime industry. Those concerns that were brought 

up were hypothetical projections or estimates of what would happen if additional offshore production were established in states that 

currently do not host such production, or if production was expanded where states that are currently hosting. 

I can show you exactly what is happening in Louisiana rather 

than giving you theories or hypothetical suggestions of what is happening. This is really what we are facing and what we have seen 

in Louisiana after several decades of production. 

New Orleans is one of the top tourist destinations in the Nation 

and the world. We have 10 million visitors to New Orleans alone 

and over 20 million visitors to Louisiana last year, and it is one of 

the state’s largest economies, totaling $10 billion just last year. 

The commercial fishing industry; we have the top commercial 

fishing industry in the continental United States, the top producer 

of crabs, oysters, crawfish, and we were the top producer of shrimp 

until Katrina wiped out our infrastructure, but we will take that 

back from Texas. The commercial fishing industry represents 

50,000 jobs in the state and has a $2 billion economic impact. 

Here is some NOAA data showing, and confirming, again, the 

importance of the commercial fishing industry to Louisiana. The 

top fishing ports in the Nation are in Louisiana, with the exception 

of one in Dutch Harbor, Alaska. 

On the recreational fishing side, Louisiana is home to numerous 

national and world fishing records. There are 1.2 million saltwater 

anglers just in 2006, and recreational fishing in our coastal area 

represents a $3 billion annual impact, tens of thousands of jobs, 

and Louisiana has the fourth-best recreational fishing industry in 

the nation, measured by economic activity. 

In addition, in terms of the sustainability and the productivity of 

our ecosystem, many of you may remember that alligators were on 

67 

the brink of collapse several years ago. As a result of improvements 

to the ecosystem in coastal Louisiana, the alligator population has 

rebounded. Now, we actually have hunting seasons for alligator, in 

addition to a very active farm-raised alligator community and population: boots, belts, and other products I will be selling later. But, 

again, just showing the success of the ecosystem. 

On the maritime side, once again, there were concerns expressed 

in the previous hearing that oil and gas development would box out 

the maritime industry by requiring the use of the ports and limited 

slips, and things like that. Louisiana is home to five of the top 15 

ports in the nation, and that does not count the impact from oil 

and gas activity. It is not measured in these statistics. 

We have the top tonnage port in the hemisphere, the largest port 

system in the world between Baton Rouge and New Orleans, and 

over 30 states today rely upon our port system for maritime commerce. 

In addition to those benefits, and, again, showing you exactly 

what is happening in Louisiana, where we produce more offshore 

oil than anywhere else in the nation, there are additional benefits. 

We produce up to 20 percent of domestically generated oil and gas. 

We have safe, stable, secure, and clean production. Since production began offshore in Louisiana, we have produced 14 billion barrels of crude oil and condensate and 135 trillion cubic feet of natural gas. 

Just from the production offshore of Louisiana, it is estimated 

that the U.S. Treasury has received direct benefits related to rents, 

bonus bids, and royalty payments totaling $150 billion, and, as 

many of you know, virtually no money has been returned to the 

state from that $150 billion. 

In addition, 320,000 jobs are sustained as a result of offshore oil and gas production. It has an annual economic impact of $65 billion, and that is the petrochemical industry, which includes onshore, offshore, and associated industrial activity, and the direct 

OCS impact is $6 billion annually. 

Louisiana is a laboratory. I am not going to sit here and tell you 

that we have not made mistakes and that there were no adverse 

impacts from oil and gas production in Louisiana, but one thing is, 

is that we have cleaned up the industry. We have changed our 

coastal management practices to make them more sustainable, but, 

again, there have been impacts from that production, but I think 

that showing the maritime, showing the fisheries, showing the 

healthy ecosystem, it shows that it is possible to have a sustainable 

oil and gas activity while having a sustainable ecosystem. 

In coastal Louisiana, the Corps of Engineers identified 9,300 

miles of pipelines. We have some of the most intense energy infrastructure in the world, and these all represent pipelines, these 

lines here in the Gulf of Mexico, again, the most intense energy infrastructure in the world. In the state, we have almost 40,000 miles 

of pipelines related to the energy industry. 

Another concern that was expressed at the previous hearing was 

from spills, and that is something that clearly is very important. 

After Hurricanes Katrina and Rita, we did experience some spills, 

but the majority of those spills were results of onshore activities 

that were not related necessarily to offshore production. 

68 

The third bullet down there identifies that an MMS study found 

that there were no spill contacts to the shoreline; there were no 

oiled-up marine mammals, birds, or other wildlife; there were no 

large volumes of oil on the ocean surface to be collected or cleaned 

up; and there were no environmental impacts from any spills from 

Hurricane Katrina or Rita. There were no major spills, and I want 

to clarify, the word ‘‘major’’ is a term of art defined by the Coast 

Guard, and it signifies, it represents, a spill in excess of 100,000 

gallons. But with over 120 offshore platforms destroyed as a result 

of those two hurricanes, again, no major spills. 

Again, we had approximately eight million gallons that were discharged or lost, the majority of that being onshore. That compares 

to 11 million from the VALDEZ spill. Natural seepage, as was discussed earlier, from oil and gas activity in the Gulf of Mexico represents a larger loss or discharge in the environment than anywhere, in any spill source or anything else in the United States, 

and there is up to an 800-percent greater chance of losing or discharging oil and gas into the atmosphere as a result of shipping 

rather than production. So, obviously, the closer to production the 

consumption of that product, the safer you are. 

I know I am out of time, so I am just going to very quickly run 

through a couple of slides here. 

This just depicts the subsidies that the Federal government is 

currently putting toward the various sources of energy production. 

You guys talked earlier about the need to use solar, use wind, and 

other types of alternative energy sources. Clearly, they are important, but, in looking at this, you have extraordinary subsidies that 

are being put toward those energy sources. It is simply not sustainable. It is not competitive, and especially when we are facing economic challenges, I think we need to continue to look at oil and gas 

as a source of energy. 

We are continuing to import in excess of 60 percent of our oil 

consumed in the United States, and that includes from volatile 

sources, like Nigeria and Venezuela. We have extraordinary reserves that are recoverable out in the OCS today—let me blaze 

through—showing the significant improvements in energy efficiency. I believe that continued investment in energy efficiency 

should be part of a package and could be funded from additional 

offshore revenue generated from new production. 

This shows the current projections, and it is commendable that 

California is attempting to achieve a 33-percent renewable portfolio, but, in many other states, it is simply unachievable, and, 

again, it is not economic. 

I would urge that the Committee continue to look at all of the 

tools that are available, to not say ‘‘no’’ to offshore drilling. I am 

not going to sit here and be a knuckle dragger and tell you that 

you can drill your way out of the energy challenge because that is 

not the case, but I do think that continued expansion and development of the offshore area should play a key role in the development 

of future comprehensive energy policy. 

[The prepared statement of Mr. Graves follows:] 

69 

Statement of Garret Graves, Director, Office of Coastal Activities, Member, 

Mineral Board, and Chair, Coastal Protection and Restoration Authority, 

State of Louisiana 

Happy Mardi Gras. Mr. Chairman, Ranking Member and Committee members, 

thank you for the opportunity to participate in today’s important hearing. I am Garret Graves, Director of the Louisiana Office of Coastal Activities, a member of the 

State’s Mineral Board and Chair of the Louisiana Coastal Protection and Restoration Authority. 

Louisiana’s coastal area is often referred to as a ‘‘working coast’’ and is home to 

the world’s best food, the unique Cajun culture, five of the nation’s top 15 ports, 

the top producer of fisheries in the continental United States, the largest source of 

domestic oil, number two domestic provider of natural gas, the second largest percentage of oil refining capability in the country, the nation’s highest capacity of Liquefied Natural Gas terminals capacity and the home of over two million people that 

rely upon a resilient, progressive, sustainable and productive coastal area. The Office of Coastal Activities was established to coordinate the various policies affecting 

activities in Louisiana’s coastal area. It operates similar to the Council on Environmental Quality in that the office is designed to function across all state agencies 

and advocate the consensus state coastal policy. 

I commend the Committee for taking on the extraordinary task of developing comprehensive national energy policy. It is a challenging effort that, while necessary, 

I would not wish upon anyone. Your approach to take a step back and fully evaluate 

all energy sources, their potential to meet energy demand in both the short and 

long-term, and to implement progressive, sustainable energy policy is exactly the 

recipe that is needed to reduce the volatility in energy prices, reduce the burden 

on consumers’ pocketbooks, increase employment opportunities and to improve our 

national, economic and environmental security—as President Obama has defined in 

his energy goals. 

Last month, the Department of the Interior’s Minerals Management Service released a draft plan for offshore oil and gas development that included the potential 

for additional production offshore California and new oil and gas production areas 

on the east coast. Released by the previous Administration, the plan would go into 

effect following the current 2007-2012 offshore plan. The release of the draft plan 

was the impetus for many thoughts and discussions on a comprehensive energy policy and evoked many strongly-held opinions from communities across the country. 

I believe this was the intent of the proposal. Secretary Salazar’s recent decision to 

provide for additional time to consider this draft plan was appropriate considering 

the significant change in policy that could result. 

In reviewing the Committee’s previous outer Continental Shelf hearing on February 11, and the response of a number of coastal states regarding the anticipated 

impact of the draft 2010-2015 plan, I believe it important to share and hope that 

the Committee considers the experiences of Louisiana related to offshore energy development. 

Offshore Louisiana has provided approximately 85 percent of the outer Continental Shelf (OCS) oil and an estimated 81 percent of OCS natural gas. This translates to over 14 billion barrels of crude oil and condensate and 135 trillion cubic feet 

of natural gas produced offshore our state. As you can see, we have had more offshore production of oil and gas than any other area of the nation. Rather than rely 

upon beliefs or feelings, I hope that some of our actual experiences will weigh heavy 

during this Committee’s deliberations. 

There are many experts that have predicted the collapse of tourism, fishing, maritime and other coastal activities with the introduction of offshore production. The 

facts in Louisiana prove otherwise: 

Tourism 

• New Orleans is one of the top national and world tourist destinations. 

• Before Hurricane Katrina tourists to New Orleans alone had over 10 million 

visitors per year. 

• Tourism, including this week’s Mardi Gras celebration, in the New Orleans area 

provides a $5 billion economic impact annually. 

• Replacing the revenue from tourist visits to New Orleans would require imposing a tax of $3000 per family statewide. 

• The State of Louisiana had over 24 million tourists visits last year. 

• Tourism is one of the largest economic sectors in the state and generates an 

estimated $10 billion annually. 

70 

Oil Spills 

• According to the Minerals Management Service, since 1980 over 4.7 billion barrels of oil have been produced and less than one-thousandth of one percent of 

that has spilled. • The MMS also found that there has not been a spill greater than 1000 barrels 

in the last 15 years from an offshore platform. • An MMS study determined that Hurricanes Katrina and Rita: 

Æ no spill contacts to the shoreline Æ no oiling of marine mammals, birds, or other wildlife Æ no large volumes of oil on the ocean surface to be collected or cleaned up Æ no identified environmental impacts from any OCS spills from Hurricanes 

Katrina or Rita Æ no major spills 

Fisheries 

• Louisiana is the top producer of seafood in the continental United States. 

Æ The state produces more oysters, crabs, crawfish than any other Æ More shrimp is harvested offshore Louisiana than any other state (preKatrina) • Louisiana is a top recreational fishing destination • In 2006, an estimated 1.2 million recreational anglers tested their saltwater 

fishing skills in Louisiana’s coastal waters • Numerous national and world fishing records have been set in Louisiana’s 

coastal area. • According to the National Oceanographic and Atmospheric Administration, Louisiana has the fourth best recreational fishing industry in the nation (measured 

by economic impact). • There is an estimated $3 billion annual economic impact from recreational saltwater fishing in Louisiana. • Tens of thousands of jobs in our state are dependent upon the recreational fishing industry. • The commercial fishing sector generates over $2 billion in sales annually and 

supports an additional 50,000 jobs. 

Maritime 

• Five of the nation’s top ports are located in Louisiana’s coastal area. • Louisiana is home to the top tonnage port in the hemisphere and the largest 

port complex in the world. • Over 30 states rely upon Louisiana’s port system for maritime commerce. 

I would like to reemphasize that these are realized not projected statistics. 

While Louisianans have benefited by the extraordinary economic activity associated with Louisiana’s tourism, fisheries and our maritime industries, the nation has 

been the true beneficiary of our hosting federal oil and gas activities: 

Energy 

• An estimated 17-20 percent of domestically-produced oil and gas comes from 

Louisiana. 

• 30 percent of the nation’s crude oil supply and 34 percent of the natural gas 

consumed in the U.S. is either produced in Louisiana, in the Louisiana OCS or 

requires Louisiana’s energy infrastructure for passage to market. 

Fiscal Impact to U.S. Treasury 

• In addition to indirect benefits to the economy and revenues generated by income taxes, OCS energy production provides one of the largest non-tax revenue 

streams to the U.S. Treasury. 

• In recent years, direct OCS revenues to the federal treasury were estimated to 

approach $10-12 billion annually. 

Jobs 

• A study performed for the Mid-Continent Oil and Gas Association determined 

that the energy industry (includes onshore and offshore production) has a $65 

billion annual economic impact on the state. 

• OCS production has an economic impact of nearly $6 billion annually and supports over 320,000 jobs in the state. 

I recognize that many believe that increasing oil and gas production will prolong 

America’s dependence upon fossil fuels and threaten the health of the environment. 

The State of Louisiana commends the Committee for its continued focus on promoting diverse alternative energy sources to meet our nation’s growing energy demands. We believe that wise investments of the nation’s resources include efforts 

71 

to improve the competitiveness and efficiency of wind, solar, geothermal, hydropower, nuclear, wave, tidal, biomass and many other energy sources. For countless 

reasons, it is an appropriate and laudable long-term goal to power our homes, cars, 

businesses and industrial activities with alternative sources of energy. Unfortunately, cost competitiveness issues and a lack of appropriate infrastructure prevent 

access to many alternative energy technologies for most Americans. With the current state of the economy, Congress should be very sensitive to any policies that 

would increase financial pressure in the form of higher utility and fuel costs on our 

already-struggling families. 

As we all know, it would be impossible to simply flip a switch to fulfill all energy 

demands with alternative sources overnight. It is difficult to predict any scenario 

whereby conventional fuels will not continue to play a major role in powering our 

economy as part of a near-term or transitionary energy strategy. This near-term 

strategy may take 15 years or it may take much longer, but significant thought 

must be given to how and where our conventional fuel demands will be met. 

The United State is currently importing nearly 60 percent of the oil we consume. 

This is up from 24 percent in 1970. In addition to increasing our trade debt, current 

supplies of oil are being met by increasingly volatile or threatening countries. The 

top five exporters of oil to the United States include the unstable regulatory environments of Venezuela and Nigeria. In addition, many of environmental standards 

related to oil production fail to compare to the stringent standards in the United 

States. It is often said that we should not expand OCS production in the United 

States because it would take up to ten years to get new production areas online. 

While we could quarrel over the timing of bringing production online, it is counterproductive to the larger issues before the Committee. We should focus on a comprehensive vision that plans for our long-term goals while providing for our immediate and transitional needs. 

I urge the Committee to keep in mind that oil imports have steadily increased 

since the 1970s and are projected to continue to increase for the next several years. 

The United States has one of the most stable regulatory climates in the world and 

we maintain some of the most stringent environmental standards. For those of us 

concerned about the environment, I would assume that this concern expands beyond 

the borders of the United States—the global environment. Would it not make more 

sense to meet our near-term demands for conventional fuels by expanding domestic 

production areas? If properly implemented, this will increase employment opportunities, reduce our trade deficit, prevent the transfer of billions of dollars per month 

to foreign governments and increase our energy security. 

Earlier this month, Secretary Salazar said, ‘‘We need a new, comprehensive 

energy plan that takes us to the new energy frontier and secures our energy independence’’. President Obama established a goal of eliminating our dependence on 

Middle Eastern oil within 10 years. While it would be premature to endorse the proposed 2010-2015 OCS plan, a responsible expansion of domestic production areas 

combined with increased energy efficiency, conservation and strategic investments 

in expanding alternative energy production and development are fundamental components of any solution. Oil and natural gas prices will increase again. We cannot 

drill ourselves out of our energy demand, but we can take responsible steps to transition ourselves onto a path of true energy independence. 

To summarize my initial recommendations to achieve the President’s energy 

goals: 

1. Recognize that any near-term or transitionary comprehensive energy strategy 

will continue to rely upon conventional fuels (including natural gas) beyond 

that which are currently produced domestically; 

2. Expand efforts to improve energy efficiency and the conservation of energy resources; 

3. Supplement the tens of billions of dollars previously-invested in alternative 

energy research, development and incentives to improve the competitiveness 

and infrastructure associated with alternative energy sources (including nuclear and hydropower); 

4. Make strategic investments in improving the efficiency of conventional fuels; 

5. Recognizing the stringent environmental standards in the United States, determine where significant reserves of accessible hydrocarbons can be safely produced domestically; 

6. Ensure that investments in this transitionary strategy will complement longerterm efforts to achieve energy independence and improve our energy security 

by meeting our energy demands with clean, safe, stable domestically-produced 

energy; and 

7. Energy revenues should be shared with host states as outlined below. 

72 

Our experiences in Louisiana demonstrate the ability to allow for the coexistence 

of multiple uses of coastal areas; however, I do not want to suggest that OCS activities are without impact or cost to states. 

As the nation’s top energy source and the ‘‘guinea pig’’ for many early oil and gas 

production practices, Louisiana has experienced adverse impacts from energy production. These cumulative impacts from decades of production include: 

• Stress upon our landside infrastructure to support offshore activities. 

• The loss of coastal wetlands as a result of early practices related to accessing 

hydrocarbons in the coastal area. 

• The intrusion of saltwater into freshwater ecosystems. 

Congress should accompany any new expansion or increase in domestic oil and 

gas production with a program to allow for the sharing of energy revenues. While 

Congress did provide for the limited sharing of offshore production revenues in the 

Gulf of Mexico Energy Security Act, pursuant to the act revenue sharing begins in 

2017. This program is too far in the future to address the current needs in coastal 

states like Louisiana and would prevent proactive steps to be taken by states initiating offshore production. 

Rather than reinventing the wheel, Congress should simply model any energy revenue sharing program after that which has been used for onshore production areas 

on federal land since 1920—the Mineral Leasing Act (MLA). Under this law, 50 percent of energy revenues from production of resources on federal lands are shared 

with states that host such production. In the case of the MLA, there are no strings 

attached to the use of these shared revenues. In recent years, the states of New 

Mexico and Wyoming have shared $1 billion annually from this program. 

In addition to the 50 percent going directly to states that host onshore energy production, an additional 40 percent goes into the Reclamation Fund to carry out water 

projects in these same states. In effect, 90 percent of the energy revenues from production on federal lands are returned to states while only 10 percent goes to the 

U.S. Treasury. In the case of offshore production today, virtually all revenues generated from production in the OCS goes to the Treasury. Quite simply, the disparity 

between onshore production and offshore production revenue sharing is illogical and 

contrary to the nation’s best interests. 

In the case of Louisiana, our citizens adopted a Constitutional amendment by an 

overwhelming margin that dedicates any OCS revenue sharing to a coastal trust 

fund to be used for coastal restoration and hurricane protection. 

Louisiana has lost up to 35 square miles of coastal lands and wetlands per year 

in recent years. Since the 1930s, we have lost over 2300 square miles. In 2005, the 

state lost over 200 square miles of land in just two days. Hurricanes Katrina and 

Rita had an extraordinary impact on our coastal ecosystem that exacerbated land 

loss. This may seem like a parochial issue or ‘‘Louisiana’s problem’’ to many of you. 

I would like to help you to understand why this is actually the nation’s challenge. 

Following the 2005 hurricanes every consumer in America was paying an average 

of 75 cents to one dollar a gallon in higher fuel prices. This was a result of the 

energy infrastructure damage in our state. A recent study found that if just one of 

Louisiana’s energy ports were shutdown for three weeks, the loss in revenues to 

U.S. firms would exceed $10 billion. 

In addition, responding to the 2005 hurricanes Congress has appropriated funds 

or established programs totaling nearly $150 billion—the key word here is ‘‘responding’’. Had revenue sharing provisions been in place, I estimate that nearly 80 percent of the 1800 lives that were lost and 80 percent of the funds appropriated by 

Congress could have been saved. Further, the fuel price spikes experienced by consumers nationwide would have been averted. Under the Louisiana Constitution, the 

state would have utilized its revenue sharing funds for measures to protect, restore 

and improve the resiliency of coastal Louisiana. 

Finally, we urge that Congress establish parity on state seaward boundaries. Currently, the states of Texas and Florida enjoy a state seaward boundary of three marine leagues, or roughly nine miles. Louisiana, Mississippi and Alabama have a seaward boundary of only three miles. The disparity dates back to when states were 

admitted to the union and its basis is simply irrelevant to sustainable coastal management. Providing consistent or expanded state boundaries would allow states to 

exert greater control over those areas which affect onshore and near shore activities. 

It will reduce conflicts related to coastal consistency determinations and result in 

improve management of coastal resources. 

Recommendations related to the expansion of offshore development: 

1. Identify those areas with significant recoverable hydrocarbon reserves; 

2. Evaluate the impact of the recovery of reserves with states; 

73 

3. Weighing state interests, consistency with ongoing coastal uses, energy independence goals and national security determine which new production areas 

should be developed; 

4. Establish an offshore revenue sharing program comparable to that under the 

Mineral Leasing Act for onshore energy production; 

5. Energy revenue sharing should have a historical component recognizing and 

addressing needs related to historical and cumulative impacts of multi-decadal 

production; 

6. Revenue sharing should provide sufficient resources to allow for proactive efforts to prevent adverse impacts from offshore development; 

7. A portion of offshore energy revenues should be dedicated to the development 

of onshore and offshore alternative energy resources; and 

8. As recommended by the Oceans Commission, an ocean and coastal trust fund 

should be established to address coastal and near-shore management efforts of 

all coastal states and territories. 

I appreciate this opportunity to share experiences from Louisiana’s long offshore 

development history and look forward to your questions. 

Mr. ABERCROMBIE. Mr. Chairman? 

The CHAIRMAN. Yes. 

Mr. ABERCROMBIE. Before we go to the questions, could Mr. 

Graves make available to us a document which incorporates his 

slides and commentary because I think your well-crafted commentary here is very good, that we have here, but it does not contain the slides? 

Mr. GRAVES. Sure. 

Mr. ABERCROMBIE. And I think it would be very valuable if we 

could have them. I learned a lot from them. I am a big fan of what 

you are doing down in Louisiana. I have seen it myself, when the 

speaker, the then-majority leader, took us down there in connection 

with Katrina. This is very, very valuable information for us to have 

as to with regard to a practical implementation of what we would 

like to do here. Could we do that? 

The CHAIRMAN. Mr. Graves, if you could do that, by unanimous 

consent, we will allow you to submit that at another time, a later 

time, for the record of today’s hearing. 

Mr. GRAVES. Yes, sir. 

The CHAIRMAN. And also, I would like to ask unanimous consent 

that a letter from Governor Tim Kaine, from the Commonwealth of 

Virginia, requesting that the letter he sent to Secretary Salazar, on 

February 19, 2009, be made a part of today’s hearing record as 

well. 

[The letters from Governor Kaine submitted for the record 

follow:] 

74 

§ 67-300. Offshore natural gas and wind resources. 

A. In recognition of the need for energy independence, it shall be the policy of the 

Commonwealth to support federal efforts to determine the extent of natural gas resources 50 miles or more off the Atlantic shoreline, including appropriate federal 

funding for such an investigation. The policy of the Commonwealth shall further 

support the inclusion of the Atlantic Planning Areas in the Minerals Management 

Service’s draft environmental impact statement with respect to natural gas exploration 50 miles or more off the Atlantic shoreline. Nothing in this Act shall be construed as a policy statement on the executive or Congressional moratoria on production and development of natural gas off the Atlantic shoreline. 

B. It shall be the policy of the Commonwealth to support federal efforts to examine the feasibility of offshore wind energy being utilized in an environmentally responsible fashion. 

(2006, c. 939.) 


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The CHAIRMAN.Gentlemen, thank you for your testimony. I would 

like to ask a question, I guess, to the entire panel. 

In recent days, of course, we have seen some activity and statements made here in Washington by some Governors of our states 

that they will not accept parts of the stimulus package, in particular, your Governor, Mr. Graves. And, by the way, Mr. Graves, 

we welcome you back to Capitol Hill. I understand you used to be 

on the staff of our former colleague and dear friend, Billy Tauzin, 

so we welcome you back. 

Anyway, your Governor, among some others, has said that—— 

Mr. ABERCROMBIE. Mr. Chairman, excuse me. Could Mr. Graves 

give us the information despite the fact that he worked for Billy 

Tauzin? 

The CHAIRMAN. Governor Jindal, in particular, has said that he 

will not accept parts of the stimulus package. He may accept some 

programs but not others, and some of the Governors are reserving 

the right not to be told by the Feds what to do. 

This is yet another example of the states wanting it their way. 

We have so often heard states saying they resent Federal mandates 

and Federal intrusions, et cetera, et cetera. We have this problem 

when it comes to OCS oil and gas drilling. We have the same problem. Some states fully support unlimited offshore drilling, some 

states support it with qualifications: drilling for natural gas only, 

drilling only if they ran the program, drilling if they get their half 

of the revenues, and on ad infinitum. 

However, these are Federal waters. These are Federal oil and 

gas resources, and we are a nation comprised of a union of states. 

These are lands that belong to all of our American people. The fact 

of the matter is that the states do not exist in a vacuum. We all 

have neighbors who may or may not support what your state wants 

to do on offshore oil and gas leasing. 

So, my generic question is, how do we address this situation? 

How do we reconcile the problem? Senator? 

Mr. WAGNER. Mr. Chairman, you make the statement, and, certainly, you have heard a lot of testimony that there will be some 

impact to those states where the activity occurs. I know you have 

entertained some revenue sharing in some of the most recent parcels that you have put out, but while we recognize that that is Federal land, we also recognize that that is Federal land in Wyoming, 

Federal land in Colorado. 

That is Federal land, yet the revenue sharing contemplated for 

those states with activity off their shore is far less than the current 

revenue sharing ongoing from that Federal property that is collectively owned by all of us around the nation, yet the revenue share 

back to these states is a much greater percentage, off the top of my 

head. I am sure someone on the Committee knows. 

Under that same concept, we would look to see that those lands 

adjacent to our state, from three miles out to the end of 200 miles, 

get that same consideration. In fact, I know of one plan recognizing 

that border states may also have consequential impacts if the revenue sharing spreads even up, you know, north and south, in the 

case of the Eastern Seaboard, with other states so that all states 

where the activity is constructing off their shore would probably 

enjoy some of those benefits also. 

77 

Clearly, I think you have heard a lot of statements today about— 

we all understand it is about money, who knows best how to spend 

that money, and we happen to feel that, in Virginia, that we had 

part of the bill—it is not currently part of it, but 40 percent would 

go to our efforts to clean up the Chesapeake Bay, 40 percent would 

go to transportation, statewide, so some of you folks can get back 

and forth, if you live in Virginia, a little easier than you can right 

now; 10 percent for energy tax credits to encourage conservation, 

and 10 percent to help fund research and development as matching 

money to use for Federal efforts. 

Those were our thoughts in Virginia with regards to the stimulus package. We were facing a $4 billion deficit. This will help plug 

that hole significantly for this year. What we are already talking 

about right now in Virginia is the ‘‘cliff effect,’’ that we are seeing 

significant revenue drop off. January was a shocker for us—we did 

not get the results until three weeks in—some 15-some percent in 

income tax collections. 

It very much concerns us, if this trend continues. We see that, 

while it is a one-time, in the absence of that, that the cliff could 

become much larger next year when we go back to contemplate our 

biannual budget next year. 

So, that is our concern now. We have kind of escaped for the next 

10 or 11 months, but it is not escaping us unless we see a significant economic turnaround, that we are going to be facing a very, 

very large cliff and a very large funding hole next year that, quite 

frankly, will be very, very difficult to patch up. 

Mr. CHRISMAN. Mr. Chairman, if I might, from California’s perspective, our Governor has said we are going to take the Federal 

stimulus dollars to California because we see the dollars, we think, 

being well spent, in terms of the partnership programs and our 

transportation infrastructure across the state in many other areas 

that we think are important. 

You asked specifically about in the context of OCS offshore drilling in Federal waters. What do we do next? How do we get through 

this conversation, this debate, that you have obviously had in Congress for a number of years and are obviously trying to tee up 

again, from a policy conversation? 

I would suggest you do exactly what you are doing and continue 

to do exactly what you are doing, and what the Obama administration is proposing to do, in terms of a national conversation and debate around a coherent, short-, medium-, and long-term energy policy for this nation that recognizes that we have conservation as an 

integral part of it, smart metering. You have heard a lot of the conversation today, really good ideas put forward today. They need to 

be a part of this continued conversation and debate, getting us, the 

states, involved in it as we move through this process because we 

all have a stake in it. 

In California, as you have heard, we have experienced a lot of 

this. Back in the mid-to-late seventies, as a result of the energy crisis, we decided, as a state, we were going to get more energy efficient. You heard the results of that today. 

We did it through appliance standards, water-reuse opportunities, and other activities that have essentially created some real 

good opportunities for us in California, in terms of our electricity 

78 

use. But, at the end of the day, in California, there are 38 million 

people. We have a growing population across this nation. We have 

all got to be a part of this growing debate, and what you have teed 

up here, I think, is the right approach. 

The CHAIRMAN. Does anybody else wish to address the question? 

Yes? 

Mr. GRAVES. Mr. Chairman, I think you addressed that question 

to me, to some degree, so I feel like I need to answer it. I just want 

to clarify, the Governor did express concern about the unemployment benefits and the strings that were attached to those funds. 

I need to be very careful with I say, or I will be applying for them. 

I believe that the Governor’s concern in this case was that the 

program established an unsustainable benefit program, whereby, 

after two to three years, when the Federal funds were no longer 

available, the state would be unable to sustain that level of benefit, 

and that was the concern that the Governor had, but we are continuing to evaluate all of the stimulus revenue streams, and we 

will continue to make determination on whether or not we would 

access those based upon the conditions associated with the funding. 

In regard to your second question on how to, I guess, strike that 

balance of the Federal resource, yet the impact perhaps upon the 

state, Mr. Chairman, I think that a sweet spot can be found in this 

case. 

For example, the State of Virginia is willing to produce, they 

have expressed an interest to produce—I know that Senator Warner pushed legislation in the Senate recently, last Congress, to try 

and open up some of the OCS areas offshore of Virginia. Associated 

with that, providing for revenue sharing, like is done under the 

Mineral Leasing Act since 1920, where the States of Wyoming and 

New Mexico receive in excess of a billion dollars a year, with no 

strings attached on those monies. 

So, again, there are impacts, but I think providing funds and 

sharing those revenues with the states, like is done for production 

on Federal lands onshore, you can address those impacts, and you 

can have healthy, sustainable, offshore energy production areas in 

the United States. 

The CHAIRMAN. OK. My time has expired, but I will ask a followup question on my second round. I now recognize the Ranking 

Member, Mr. Hastings. 

Mr. HASTINGS. Thank you very much, Mr. Chairman, and thank 

all of you for your very enlightening testimony. 

Mr. Chrisman, I would like to ask you a couple of questions. In 

your written testimony, you stated, and I want to quote you directly on your written statement, you ‘‘want to dispel that myth 

that California only consumes oil and gas and does not produce it.’’ 

However, according to ‘‘ca.gov,’’ which is, obviously, a government 

organization, California only produces about 37 percent of the petroleum that it uses and only produces a little over 13 percent of 

the natural gas that it uses. This is according to ‘‘ca.gov.’’ 

Don’t you think that a reasonable person would suggest that you 

could use the OCS resources, and it is estimated, by the way, to 

be about 10 million barrels of oil and about 16 trillion cubic feet 

of natural gas, to reduce its dependence on out-of-state energy? 

79 

And that is especially so since and overwhelming amount of your 

gas goes to producing electricity. 

Mr. CHRISMAN. It is a debate we continue to have. We have, in 

California, recognized that the trade-offs, as I said in my prepared 

comments to you and my comments here today, for offshore oil and 

gas development, for us, are not, at least at this stage of the game, 

are not worth the risk. 

We have opted to go the energy-efficiency route, to go the alternative route in all that we are doing in California. 

Mr. HASTINGS. But you are not dispelling the myth, then, are 

you? 

Mr. CHRISMAN. No, of course, not. 

Mr. HASTINGS. But you said that in your statement. I just wanted to make that point. 

So, in a way, you are correcting that you are not dispelling the 

myth that you do not produce oil and gas. 

Mr. CHRISMAN. The myth that we are talking about is that we 

do not produce any. We do some. 

Mr. HASTINGS. Right. 

Mr. CHRISMAN. I am not going to quibble with the numbers that 

you presented. I am sure they are correct, but, at the end of the 

day, as we look at the long-term growth of California, clearly, the 

alternatives that we are talking about—the transportation fuel, the 

low-carbon standards that we have put in place in our transportation fuels and others—we think, is the right approach. 

Will we continue to have the debate about the need to access 

that energy in the Outer Continental Shelf? Yes, we will. We will 

continue to have that, but, at this stage of the game, we are where 

we are and continue to be very strongly in that position. 

Mr. HASTINGS. You also stated in your testimony about what 

California has done, and you alluded to it just a moment ago, about 

your renewable. While I am sitting here listening to this testimony, 

there is an article that showed up in one of my large papers in my 

district, the Yakima Herald-Republic, and it reports that wind 

power from a wind farm in my district is being sold, lock, stock, 

and barrel, to Southern California Edison. It is a wind farm that 

produces enough electricity for 100,000 homes, which, by my math, 

equates to a city of about 400,000 to 500,000 people, which is a 

substantial part. 

I have to tell you that when I hear testimony from a state that 

does not want to utilize the resources it has and would rather by 

resources from my state on energy production, I find that sort of 

attitude somewhat disturbing, and I say that because wind turbines—listen, I am all in favor of alternative energy, but when a 

state puts in standards, like you do, and now you are going to import enough electricity from just only one company to electrify a 

city of up to 500,000 people, I find that disturbing. Any response 

to that? 

Mr. CHRISMAN. I mean, we are contributing to the economy of 

your state by doing that, and, at the end of the day, we are all on 

a west-wide grid in the United States. We all share power. We all 

depend on hydropower certain times of the year from Washington, 

from the Bonneville Power Project. At certain times of the year 

80 

when hydro is at a peak, we will ship a lot of the hydro north to 

other parts of the western grid. 

Mr. HASTINGS. Let me ask this question, then, in this regard, because you have a standard of so much renewable that has to be— 

our state does the same thing. 

Mr. CHRISMAN. Right. 

Mr. HASTINGS. So, what is the response to my constituents, 

where we build these wind farms in my district and ship it to California? When you testify here, you say, ‘‘Well, it may help our economy,’’ but you do not want to help yourself by going offshore. 

Mr. CHRISMAN. But we help ourselves by building our own wind 

farms, by having 21 percent of the nation’s available solar power 

that we are using for our own folks. That is exactly what we are 

doing. 

Mr. HASTINGS. According to Mr. Rohrabacher, there are some 

problems getting that decided because of lawsuits. 

Mr. CHRISMAN. Well, we are in the midst of making that happen. 

We are working on that right now, expanding upon that 21 percent 

available solar nationally. That is what our figures are. We are expanding them now. 

Are there challenges? Of course, there are challenges. We are 

working in partnership with the Bureau of Land Management out 

in the desert region to put these solar farms in place and, at the 

same time, get the environmental permits necessary not only to 

site them but to get the transmission lines in place to get them—— 

Mr. HASTINGS. One last question. I appreciate the indulgence, 

Mr. Chairman. 

Can you meet, within your own state, the standards that you put 

in place of renewable energy? 

Mr. CHRISMAN. We are convinced we can. We are just over 20 

percent right now—— 

Mr. HASTINGS. OK. 

Mr. CHRISMAN.—and we are setting at 33 by 2020. We are convinced we can. We will probably exceed that. 

Mr. HASTINGS. One last question to Senator Wagner. The Chairman put into the record a letter from Governor Kaine. Are you familiar with that letter? 

Mr. WAGNER. Yes, Mr. Chairman and Congressman Hastings. It 

was delivered to me while I was sitting in the Committee yesterday 

by the Deputy Secretary of natural resources, so the first I saw it 

was at about 2:00 yesterday. 

Mr. HASTINGS. What does it say, essentially? 

Mr. WAGNER. The letter basically says that he supports Secretary Salazar’s position to extend the delay, that since the existing 

regulations do not provide for natural gas only and do not provide 

for exploration only, that his position is that Virginia does not want 

to be in the program because of what has gone on. So, he supports 

the delay, and he asks for additional study and that type of thing, 

as near as I can recall. 

Mr. HASTINGS. Thank you very much, Mr. Chairman. 

The CHAIRMAN. Thank you. The gentlelady from New Hampshire, Ms. Carol Shea-Porter. 

Ms. SHEA-PORTER. Thank you, Mr. Chairman. I am sorry that I 

arrived a little late, but if you do not mind, I am going to say I 

81 

will brag about the person who is sitting here from New Hampshire. I am very happy to see you here today, Ted. Ted is the manager of the New Hampshire Coastal program, which is really critical for conservationists, and your wisdom and your experience contribute a lot, and we thank you for your work. 

I will start out by asking you some questions. In your testimony, 

you had talked about, and I am going to quote you exactly, ‘‘multiple uses must be considered with long-term productivity of these 

resources.’’ 

Can we do that? Can we really have long-term productivity if we 

have multiple uses of the oceans? 

You also talked about putting money into these programs. Will 

money fix these problems, or are these issues really the tension between the multiple use of a critical resource, for example, the fisheries, versus oil? Do they have to be in an adversarial position 

there? How do you think we would be able to solve that? 

Mr. DIERS. Thank you very much for having me here also. Usually, I am the only person from New Hampshire in the room in 

Washington, so it is great that there are two of us. 

Ms. SHEA-PORTER. That is the whole state now. We are here. 

Mr. DIERS. I think that the issue is, to some extent, we do not 

know because we have never really tried, and I think that that is 

one of the issues that was being raised by Mr. Farr this morning, 

and I think it has been raised by a number of the questions that 

have come up today, is that I do not know that we have ever given 

it the full college try, in doing some very large-scale, Federal-statepartnership kind of planning that would happen on a regional basis 

in which the states and the feds go together as full partners and 

have a great, scientific assessment of our resources, and what are 

the impacts of those. We can barely count the fish. 

I think it is really challenging that we need to put resources toward that kind of examination, and I think that that is what the 

states have largely been saying, is that, before we charge ahead in 

some direction, that we need to make sure that we have looked at 

these issues, and especially as it relates to, we do not want to preclude some sort of renewable energy source as we are developing 

some traditional energy source and then trying to protect some of 

the resources that, I think, Dr. Marvinney talked about in the Gulf 

of Maine, for instance. 

That all needs to come together in a rational and comprehensive 

energy policy, and so I think that that is really what we are talking 

about and what the states have been trying to put across. 

Ms. SHEA-PORTER. It is sort of like jumping off of a building, and 

they keep telling you there is a net there, but you are not entirely 

certain because we have not done enough research to know, at this 

point. We have not put enough money into these programs to really 

study the impact. 

Mr. DIERS. I think that the two Ocean Commission reports that 

came out made that very, very clear, that we have not, and I think 

the Chairman, in his comments last week, also said that we are not 

putting enough money into oceans, or the money that was coming 

in is going everywhere but oceans. 

These are serious, serious issues that we have not fully addressed, and I think that we are just now at the cusp of having the 

82 

kinds of technologies and the kinds of analytical tools that we can 

use to be able to do this. We are at the point where we finally, I 

think, can start to do this, but it is going to require some significant resources and some significant critical will to make that happen. 

Ms. SHEA-PORTER. I think they have to get it right when more 

than half of the world depends on the oceans for essential protein. 

If we make a mistake, and we cannot pull back from it, we are 

going to create a problem that is larger than any of us could ever 

imagine. I appreciate your warning that we have to really take a 

good, hard look at this. 

Dr. Marvinney, I wanted to ask you—you talked about the cost 

of development versus the return, and you were citing Georges 

Bank. Can you talk a little bit about why Georges Bank is so critical, tied in with the issues that we just brought up? 

Mr. MARVINNEY. Well, it is a hugely valuable fishery for the 

State of Maine and for the rest of New England, the other New 

England states, and, I am sure, New Hampshire as well, and I do 

not have numbers on what that economic value is, but it is a big 

reason why our coastal seaports are what they are today. It has 

been driven by that fishery and the economics that go with the 

fishery, and certainly there have been a lot of issues with these 

fisheries over the years, with overfishing, et cetera, and we are collectively trying to work on that. 

I think that the comments of Mr. Diers on working together, 

states and the Federal agencies, is a primary way to go because 

there are so many overlapping issues here, in terms of these resources, we need to be sure that one activity is not going to harm 

another activity that is already in place. 

Ms. SHEA-PORTER. Thank you. 

Mr. Graves, not to pick on you at all here, but I, too, was down 

in Louisiana during Katrina, and I read the papers every day, and 

the picture that you portrayed up there was quite different from 

what they were talking about in the papers, and I also had lived 

in Louisiana before, and I know that a lot of the land was degraded, and it was not necessarily the offshore drilling but the refineries and everything tied in with it. So, it adds to the sense of 

urgency that we need to really fully invest in our renewables so 

that we are not trapped like that. 

But I want to have you talk a moment, if you would, please, 

about all of the reasons that they thought that New Orleans suffered so greatly, for example, the loss of the land, the acres of the 

wetlands, and the fact that they built that channel in and how that 

allowed the surge for the water. 

I love your state. I have lived there, and I urge everybody to go 

and be a tourist there. It is a great place, but there is a problem, 

and there has been a problem for a long time. I know that the 

source of the water was the Mississippi when I lived there, and 

they would have problems and tell people, ‘‘You might have to 

worry about your drinking water today until they clean it out.’’ 

So, could you address what you realistically see as some of the 

problems with having oil and gas? I would like to say, up front, 

that I support drilling. I know that we need to do this right now. 

What I am trying to do here is say there are some problems and 

83 

that if we invested in renewables right now with the same sense 

of urgency that we have faced other problems in our history, that 

we would be able to switch over, at some point. 

Mr. GRAVES. Congresswoman, thank you for the opportunity to 

respond. I appreciate you going to Louisiana just after Katrina had 

happened. 

Ms. SHEA-PORTER. It is a great state. 

Mr. GRAVES. Since the early 1930s, the State of Louisiana has 

lost in excess of 2,300 square miles of land, the greatest land loss 

in the nation, by far. If we were the State of Rhode Island, we 

would no longer exist. If we were the State of Delaware, nearly 

three-quarters of the state would be gone. 

The primary cause of that land loss is not related to oil and gas 

production. I want to be clear. The early oil and gas production, in 

my opinion, was done in a manner that was not sustainable, but 

the major cause of land loss in Louisiana was the channelization 

of the rivers—the Mississippi River and the Atchafalaya River— 

that began in the 1800s and continued after the Great Flood of 

1927. 

It did achieve its goal of reducing flood losses in those areas, but 

it had an adverse impact of cutting off the sediment. The reason 

I showed a satellite depiction of the changes in North America 

landscape over 60 million years was to show that, was to show that 

the river caused the accretion of land. It was a delta-building process. Whenever the river was channelized, you cut off that sediment 

material from continuing to build the delta, and it now goes into 

the deep part of the OCS, where it has no beneficial use whatsoever. So, again, that is the primary cause. 

To be clear, going back to the 1940s and the 1950s and even 

1960s, there were access channels that were cut into our coastal 

area to get to hydrocarbons and produce those hydrocarbons. We 

now know that that also caused the intrusion of saltwater into 

freshwater estuaries, and that did have an adverse impact on the 

ecosystem. 

The channel you referred to is known as the ‘‘Mississippi River 

Gulf Outlet,’’ and, as you know, that channel was a man-made 

channel. It was not cut for oil and gas development; it was cut for 

maritime purposes to provide an alternative to the Mississippi 

River. 

You will be happy to know that, two months ago, I signed an 

agreement to close that channel, and construction is underway to 

close that channel. 

So, again, just to be clear, there are adverse impacts. I think, if 

the Mississippi River and the Atchafalaya River had not been 

channelized, I think that the sediment from the river likely would 

have refilled those cuts into our coastal area that caused the intrusion of saltwater. 

Last, if I could just respond to your water-quality issue, and I am 

glad you brought that up as well, in Louisiana, we do have waterquality problems, and the majority of those are actually represented or recognized in the Gulf of Mexico, where we had the 

largest dead zone, each spring, in the nation, and it grows to 

around 10,000 square miles, an oxygen-depleted zone that is virtually devoid of marine life. 

84 

But the important thing to know, in this case, is that the nutrients—the nitrogen and the phosphates and other chemicals—that 

cause that dead zone are not as a result of discharge from Louisiana. We drain 32 percent of the contiguous land mass of North 

America and two-thirds of the United States, and the runoff from 

the Midwest, the runoff from the rest of the nation, is what caused 

our dead zone, and you can see, where we are with a 10,000- 

square-mile dead zone and the largest producer of fisheries in the 

continental U.S.—no relationship to the oil and gas industry. 

The last point, if you do not mind, is that you talked about the 

structures, and you talked about the habitat in the coastal area. In 

Louisiana, I can tell you, from personal experience, that the structure that is established by oil and gas infrastructure is where the 

fish are. That is where you catch fish. So, there is a win-win situation there. 

Ms. SHEA-PORTER. OK. Thank you. I was thinking about this 

town, but I could not remember the name of it, but I know this is 

going to be familiar to you now, the Murphy oil spill. You know 

what happened there. I was there at the time, and we know that 

there was that terrible spill and that it ruined the community. I 

remember the heart-breaking stories there. 

Now, the point I am making again: I appreciate the fact that 

Louisiana is willing to be a center for gas and oil drilling, and, by 

the way, that water spill that I was referring to was not from the 

Midwest, but we will let that go; it was right from Louisiana. 

But the problem here is that anytime we do this kind of drilling, 

there is going to be some risk, whether it is in the offshore or 

whether it is the refineries or wherever. There is going to be some 

environmental pain there, and I appreciate the fact, again, that 

Louisiana absorbs so much of it, and I know that we need the gas 

and the oil. This is not to say that we can stop today; we cannot. 

But would you talk for a moment about what happened to the 

people of St. Bernard Parish and how you think that could have 

been avoided and still be heavily into this business, and what you 

see, in terms of the future, and do you have a basic belief in our 

ability to use renewables and eventually phase out some of this? 

The CHAIRMAN. Before the gentleman can answer, we have five 

votes. I do want to allow a response, but just as a way of housekeeping here, we have five votes on the Floor of the House, at the 

current time, and that is going to take, I would estimate, an hour. 

Would the panel be able to return, if we recess for one hour? 

Would the panel be able to return in one hour, for a half an hour? 

That should wrap it up. 

We do have three or four Members left to question. We should 

be able to wrap it up in a half-hour once we return in an hour. So, 

if you can hold that response, Mr. Graves, until we return in one 

hour. 

Mr. ABERCROMBIE. Mr. Chairman? 

The CHAIRMAN. Yes, Mr. Abercrombie. 

Mr. ABERCROMBIE. Before Mr. Marvinney leaves, Doctor, could 

you please let Governor Baldacci know that he still owes me spaghetti sauce that his mother makes that he said he was going to 

get to me, and I have yet to see it? 

The CHAIRMAN. And me, too. 

85 

Mr. MARVINNEY. I will be sure to pass that on. Thank you. 

The CHAIRMAN. The Committee will stand in recess for one hour. 

[Whereupon, at 1:36 p.m., a recess was taken.] 

The CHAIRMAN. The Committee on Natural Resources will resume sitting, and the next gentleman to be recognized is the gentleman from Virginia, Mr. Wittman. 

Mr. WITTMAN. Thank you, Mr. Chairman. I want to thank the 

panel members for your participation today. I appreciate your patience. I know today was a long affair, so we appreciate your patience there. 

I want to especially thank Senator Wagner for coming here. I especially appreciate your hard work there in Virginia on crafting an 

energy policy there that now stands as the state’s energy policy 

today, so we appreciate that. 

In order to follow up on that, you spoke, a little bit earlier, about 

Virginia’s energy policy and about how the current policy supports 

just natural gas exploration in the OCS, and I wanted to ask you 

if you think that that is a practical position, from a public policy 

standpoint, and whether that really lends itself to wise policy for 

the development of our hydrocarbons offshore in the OCS. 

Mr. WAGNER. Let me just start, Mr. Chairman and Congressman 

Wittman, by saying that, a year prior to the Energy Bill, we did 

pass a piece of legislation that called on our Virginia liaison office, 

who are lobbyists in Washington that represent the Commonwealth 

of Virginia, to lobby to lift the moratorium, which included oil and 

gas, and it passed in overwhelming numbers in the Senate and the 

House, and was conferred to then-Governor Warner, now Senator 

Warner, who vetoed the bill because he said he wanted to study it 

for an additional year. 

He did complete that study. Amazingly, it came out about a day 

after he left office, and the study determined that it would have 

been altogether appropriate to pursue that. 

So, as part of the comprehensive energy plan, that language was 

kept in the bill in its exact form that it passed. Somewhere after 

it passed the general assembly, in those same words, and while it 

was sitting on Governor Kaine’s desk, I got worried that perhaps 

all of that would be struck, and what you see, a product of negotiation between myself and the Governor’s Office, is that language, 

and, concurrent with that language going on, I was in conversations with him, and that is because they were considering, at the 

time, removing Virginia from the five-year plan, and that language, 

MMS conveyed to me, would be sufficient to keep Virginia in the 

five-year plan, which was really the goal. We do not have a whole 

lot of say with regards to our policy. 

Having said that, I think it is totally impractical. I think everyone in this room knows that the government does not have the facilities or the capabilities to actually do the exploration, the 4-D exploration, they do now. Those capabilities are controlled by those 

in the industry. Clearly, they are not going to expend the type of 

resources that they would need to actually go out and do the surveys to confirm whether or not, what type, and where it is without 

reasonable certainty that they could then develop it, should they so 

find it. 

86 

So, obviously, it is an impractical policy, from my standpoint. 

Again, the 50-mile negotiation that we negotiated in Virginia was 

determined by our geography, which indicates that there is not 

going to be much of interest within 50 miles. I know that may not 

be the area. There are other areas, particularly in North Carolina, 

where those deposits might be. 

I think it would be a bad step if this Committee would move forward with 50 miles as the limit barrier to go forward with. I think 

it is one of those areas that just, in terms of negotiating, was something that I was able to negotiate with the Governor’s Office and 

not really give away anything. 

So, as a practical step, I think that is an impractical position, 

and I think it is important that we move forward with and do that. 

Having said that, you know, I hope that there are substantial resources off the coast. 

Mr. WITTMAN. Thank you, Senator. As you well know, under the 

current Outer Continental Shelf Lands Act, exploration, by itself, 

of just natural gas resources is not something that is allowed as 

they go forward with the five-year plan to look at leasing off of Virginia. 

Based on that, do others in the general assembly agree with the 

Governor’s request in providing a limitation to just natural gas exploration in the OCS off Virginia? 

Mr. WAGNER. I would say the views vary as much, and I do not 

want to pin down any specific legislator on their particular views. 

Certainly, I think the vote that most legislators took, on behalf of 

my original bill, would be indicative that they are supportive of the 

entire measure. 

I think the Energy Bill got through with major equal proportions 

with that same language in. Obviously, the negotiated language 

was taken up during the veto session and accepted by everybody, 

but I think there are those that definitely want to move forward 

with it and move forward with it relatively rapidly. 

It is interesting that we talk about the tourism issues and that 

type of thing. I do represent half of the City of Virginia Beach. Obviously, tourism is a major component of our business triad right 

now, and an overwhelming percentage of people support the particular positions that a number of us have taken in that area in 

support of it. 

What we found actually impacted tourism, this last year, was $4- 

a-gallon gasoline, the lack of availability, and the state of the economy, at that point, and I think what you are going to see impacting 

tourism this particular summer, as the tourism season comes in, is 

going to be the economy itself, people taking less trips, people 

spending less money. 

That is what we saw in Virginia, significant reductions in tourism along the Shenandoah Valley. Our hotels were filled in Virginia Beach. What we found is that they were not spending the 

money that they would have normally spent out there, and so it 

was directly related, we felt, to fuel prices. 

Mr. WITTMAN. Let me ask one final question. I talked, a little bit 

earlier, about a comprehensive U.S. energy policy. Can you tell me, 

in that context of a national comprehensive energy policy, what do 

87 

you see as a reasonable policy for drilling in the OCS off of Virginia? 

Mr. WAGNER. I think that a reasonable policy would be that we 

do take advantage of those resources. Whether you subscribe to the 

greenhouse gas theories or do not subscribe to the greenhouse gas 

theories, the fact of the matter is, we import a substantial, 60-some 

percent of our hydrocarbon energy from outside our borders, to the 

extent that we produce it ourselves, as opposed to importing it, 

only improves this economy. 

I think our focus, Job One, ought to be Job One for America. 

That should be our focus right now, and, clearly, that is going to 

be a part of that issue. I think, equally important, as a part of our 

strategy, whether you subscribe to greenhouse gas or not, is clearly 

the expansion of the nuclear industry. That is an industry that we 

basically made practical in this country. 

We invented many of the things they use. We walked away from 

it; France did not. We could take a lesson off of what France has 

done, both with that and the use of the breeder reactor technology, 

to recycle their spent rods that we take out of our reactor that are 

now part of our storage problem. They are actually a significant resource, if we go back and revisit our decision to walk away from 

breeder technology and reuse those rods. Eighty percent of the 

energy in those nuclear rods is still available in that rod at the 

point where we can no longer use them in our reactors, at this 

point. 

I think a number of issues do that, and I think we can get here. 

Remember, the demands on natural gas and many of the policies 

that you have pushed forward in Washington here only serve to increase the demand on natural gas in this country, particularly, the 

clean air laws and number of those issues have really substantially—the large growth area we see in natural gas in Virginia and 

probably around the Nation is in the generation of electricity, 

where, more and more, it has become a part of the base load or, 

at least, more frequently coming online. 

The CHAIRMAN. Thank you. I want to continue where we left off 

before we broke for the votes on the House Floor, and Ms. Carol 

Shea-Porter was asking a question of Mr. Graves, and you may respond to it now, Mr. Graves. 

Mr. GRAVES. Thank you, Mr. Chairman. Congresswoman, thank 

you for your question. 

As I recall, there were approximately two million gallons that 

were spilled at the Murphy oil refinery in Chalmette, Louisiana, St. 

Bernard Parish. There was actually a larger spill that occurred on 

the west bank of the Mississippi River, Blackman’s Parish, the 

Bass facility. 

Both of those facilities, I think it is very important to keep in 

mind, were refining and storing facilities that were not necessarily 

related to the offshore production. I talked earlier about the MMS 

study that found that, in regard to the offshore production, there 

were no major spills, and there was no shoreline impacts, that natural processes absorbed the oil, and the oil evaporated. 

Those were storage facilities where we had a Category 5 hurricane with, at one point, wind gusts as high as 235 miles per hour, 

which took a huge tank battery and picked it up and moved it. 

88 

I do not know if it is even possible to design structures that are 

resilient enough to withstand the extraordinary beating that they 

took. 

One thing that is important to keep in mind, and you hit on this 

earlier, we have lost, as I said, 2,300 square miles of land in coastal Louisiana. That land, I do not think I drew this connection, and 

I need to, that land serves as a vital buffer between the Gulf of 

Mexico and some of the developed areas of coastal Louisiana. 

With the loss of those 2,300 square miles, there is a rough equation that the Corps of Engineers developed where they said that, 

for every 2.7 miles of healthy wetlands, you reduce storm surge by 

one foot. Well, these facilities, in many cases, had 10, 20, 30 miles 

of buffer between them and the Gulf of Mexico, and now, in many 

cases, like the Bass facility and, to some degree, the Chalmette facility, the Gulf of Mexico is lapping at their doors. 

So, again, just to recap, I think the wetlands buffer was a significant cause of that. 

Number two, these were facilities that were not necessarily related to offshore production. They were related to the petrochemical 

industry, that it would have come from somewhere but not definitely from the offshore. 

The other question that you asked, if I recall, is you asked if I 

thought there was a role for renewables in the future, and, if so, 

how to proceed. The answer, in my opinion, is, absolutely. I think 

that renewables have to play a major role as a future energy 

source, and I commend California, again, for their efforts to try and 

achieve a third, and I think that we should set goals to try to develop and produce a larger share of our energy from renewable 

sources over the long term. 

But it is vital to keep in mind that we have to develop a transition plan. We are not going to be able to, as I said in the testimony, 

flip a switch and, overnight, go toward renewable fuels. There is 

going to be a role in that transition plan for the continued production of oil and gas, and rather than us shutting down all production 

domestically, like I believe I have heard some propose, that demand for oil and gas production is going to have to be met. 

So, we can either produce it here and expand oil and gas production as part of that transition plan where we have the safest, most 

stringent environmental standards, where we have a stable regulatory environment, or we can produce it in Venezuela, we can 

produce it in the Middle East, we can produce it in Nigeria, where, 

by the way, last week, three Americans were taken captive, and 

where you have much less-stringent environmental standards. 

Ms. SHEA-PORTER. Let me just say, for the record, that I am not 

one to say stop because we cannot. My whole point here is that we 

need to start getting very, very active, and we cannot just have one 

way to provide energy and that this is the point where we make 

a decision about investing in our future. 

We know what our present is, and our present definitely has oil 

in it, and our near future has oil in it, but I also would want to 

point out that there is benzene in the sediment of that community, 

and that was Murphy Oil. I know that there was some damage 

done by the oil rigs, but the point is that, as long as we need to 

produce oil, we are going to have some of these unintended conVerDate Aug 31 2005 14:24 Apr 17, 2009 Jkt 000000 PO 00000 Frm 00092 Fmt 6633 Sfmt 6602 L:\DOCS\47607.TXT Hresour1 PsN: KATHY
89 

sequences. So, it is not simply what happens out in the ocean; it 

is what happens when we bring it in and where we have it along 

our coastline in our communities. 

But you are absolutely right, and I hope that we never frame the 

argument ‘‘either/or’’ because I do not think it is that. I think it is, 

both, everything we can do right now so that we can supply our 

energy needs with an eye to our future, and I think we have probably used up all of the time that we could reasonably expect to use 

right now, so I thank you very much for your testimony today, and 

I thank all of you. 

Mr. COSTA [presiding]. I thank the gentlewoman, and it appears 

that you got a second round, and since I did not get my first round 

on this panel, I will indulge the Committee, with everyone’s permission. 

Mr. Graves, could you explain to me, succinctly, very briefly, why 

somehow it is safe to drill off the coast of Louisiana, Texas, Mississippi, and, yes, California, and nowhere else in the country? 

Mr. GRAVES. Mr. Chairman, I do not agree with that statement. 

As I said before, I think that there were some impacts from the 

early production. I think we have refined the technology, we have 

refined the production techniques, and I think it is safe to produce. 

Mr. COSTA. It was somewhat, in all fairness, a rhetorical question because I do not agree with it either, but I think you made 

the point well in your statements and with your slide panel. 

Mr. Diers, the Chairman of the Coastal States, how many coastal 

states does that include? 

Mr. DIERS. We have 35 members, the Coastal States Commonwealth—— 

Mr. COSTA. Eastern coastal states? 

Mr. DIERS. All of them, including our territories and islands. 

Mr. COSTA. All of them, OK. Well, you are a real powerful guy. 

I remember a controversy that came up, but I noted your testimony, and your colleague from the Northeast as well, talking about 

utilizing the oceans and having a balanced approach, but on wind 

renewable and efforts to introduce and develop wind renewables, I 

believe it was off of Massachusetts that it was very controversial. 

What renewables should or should not be considered? I guess, is 

my question. I mean, I can understand why some people have problems with oil and gas, but answer the question, please. 

Mr. DIERS. Sure. I would say that our position, from a broader, 

coastal states perspective, is the same as it is on the offshore drilling. It is that we hope that the states will continue to have a key 

role to play in those decisions. 

Mr. COSTA. I understand, but there was controversy, particularly 

around wind power, on a project that I read a bit about. I am not 

an expert. What was the source of that controversy? 

Mr. DIERS. Well, I do not actually work in Massachusetts. I believe you are talking about the Cape Wind project, and my understanding is that there was a conflict in uses the people wanted 

there at that particular site and that that was the—— 

Mr. COSTA. Would it be fair for all of the panel members, and 

if any of you disagree, shake your head, that part of when we are 

balancing a renewable portfolio versus a traditional oil or gas, and 

I understand why, and we have that with other issues that are off 

90 

the coast, that are inland, but there is just a NIMBY syndrome. 

Some people do not want—I mean, isn’t there a percentage of that? 

Mr. Chrisman? 

Mr. CHRISMAN. There is a number of issues we have been discussing here today. One is an energy policy, a renewable portfolio 

that California has established that I actually voted for and supported. I want to commend you and the Governor, and I think it 

is a standard that we ought to try to obtain nationwide, and I also 

applaud myself since I voted for some of that effort over the years, 

in terms of a balanced energy package that was using all of the 

energy tools in our toolbox. 

But the other part of the discussion that has taken place here 

today is the impact on the oceans, and I would just like to try to 

put it in perspective. One of our colleagues, earlier today, made the 

comment that the moratorium was responsible for improvements, 

but I am trying to understand that because the fact is that, in four 

states, we have not had a moratorium. I am not so sure how we 

can credit the moratorium for helping improve the fisheries. 

What would you, as Natural Resources Agency Secretary in California, what impact would you say, in terms of not the energy portfolio—that is a separate discussion—but in terms of helping deal 

with the degradation of fisheries in the ocean? 

Mr. CHRISMAN. Congressman, as I understand it, the question is 

not so much the oil impact but other impacts. Is this what you are 

talking about, degradation of the oceans? 

Mr. COSTA. I made the comment, and if any of you have any new 

information, please, I am always trying to get the newest information. 

It was a 2002 National Academy of Sciences report that basically 

studied all of the various analyses on contributing sources of degradation to the oceans and fisheries, and it basically said that over 

85 percent of it was as a result of nonpoint-source pollution, runoffs 

and all the kinds of things, and I think they attributed, in North 

America, one percent was the result, and I do not know if these figures are accurate or not, was the result of oil and gas production, 

and three percent around the world. Do any of you have any newer 

figures on that? 

Mr. CHRISMAN. I get what you are asking, and I think, quite 

frankly, they are the figures that we keep using as we look at the 

work that we are doing in the California Ocean Protection Act, the 

recognition that what we really have to do is we have to take a 

look at the adverse water-quality impacts along the coast, pretty 

significant, up into our estuaries where our water supply projects 

come from. There is significant degradation there. 

But in the ocean, it is, in certain parts of our state, particularly 

in Southern California, where we have numerous sewer outfalls all 

up and down the coast in Southern California, we see significant 

degradation of the fisheries and the fisheries resource. 

Mr. COSTA. So, there are two discussions here, and I understand 

why people want to link them, but one is the degradation of the 

oceans and the fisheries, and the other is as to whether or not we 

should encourage additional oil and gas development, OCS, because 

that might somehow diminish our impacts to move to renewables. 

91 

I am one of those who do not believe that that is—some of my 

colleagues—— 

Mr. CHRISMAN. I do. 

Mr. COSTA. I mean, I think there is a short-term, an intermediate, and a long-term energy policy—— 

Mr. CHRISMAN. I agree. 

Mr. COSTA.—which continues to seem to miss us here, for whatever reasons that I cannot quite put my finger on. 

So, if you were trying to get your best bang for your buck for protection of the oceans, the impacts of the 27 platforms in California, 

would you say that is significant, or would you say that that is de 

minimis. 

Mr. CHRISMAN. It is de minimis. 

Mr. COSTA. And are we not doing a lot of slant drilling within 

that three-mile area along California and deriving literally hundreds of millions of dollars to the State Lands Commission that 

Californians enjoy spending for other environmental and park purposes? 

Mr. CHRISMAN. Are you referring to the PXP? 

Mr. COSTA. Well, there is that, and then there is the existing facilities. I think, out of the 27 platforms—— 

Mr. CHRISMAN. Historically, we have, yes. 

Mr. COSTA. Five of them are in the three-mile limit—— 

Mr. CHRISMAN. Right. 

Mr. COSTA.—and we do slant drilling off of Vandenberg and Ventura County—— 

Mr. CHRISMAN. Yes. 

Mr. COSTA.—and they seem to work OK. 

Mr. CHRISMAN. They work fine, off of existing platforms. 

Mr. COSTA. Right, right. Let me ask a final question because we 

have taken a lot of time, and I think it is just Doc Hastings and 

myself, and we probably ought to give you folks a break. 

I just think that, as we try to strive to, whether it is a 20-percent 

or 30-percent renewable portfolio, that we be careful about the 

issues. I mean, a lot of people have agendas around here, and California is no different, but it seems to me that trying to develop that 

policy, and I asked that question to our colleagues earlier, and I 

said I would ask it to you again, what is missing, as we develop 

a near-term, intermediate, and long-term, comprehensive, sustainable energy policy, that you think you are doing in California that 

we are not doing here? 

Mr. CHRISMAN. What is missing is, and I have said it in my answer to the question of the Chair, what is missing is the conversation that has begun here, with the president and others, about an 

integrated, national energy policy that recognizes all of the issues 

that we have been talking about today and gets us, at the states, 

engaged with you, at the national level, to bring this about because 

there are going to be significant regional differences with respect 

to the policy, significant regional differences in demands. There are 

going to be ocean issues and ocean-degradation issues that are not 

applicable to other parts of the nation. 

So, it is the work that gets done here, in the policy conversation, 

and focus, with the support of the president, with the support of 

the administration, and the support of the Congress, to carry forVerDate Aug 31 2005 14:24 Apr 17, 2009 Jkt 000000 PO 00000 Frm 00095 Fmt 6633 Sfmt 6602 L:\DOCS\47607.TXT Hresour1 PsN: KATHY
92 

ward and recognize that we have to get that short-term, mediumterm, and long-term energy policy in place. 

Mr. COSTA. All right. One final question, and then the Ranking 

Member has a few questions that he would like to ask. 

We know that, out of the 27 platforms in California—I like to remind my colleagues, especially my California colleagues, that we do 

drill in California—and while five of them are within the threemile limit, the 23 that are in the Federal-designated area, OCS, 

with the new technologies that I have been becoming more familiar 

with in the Gulf of Mexico, where they are able to actually go out 

in deep water and develop these pods on the ocean floor and develop multiple wells to further expand that resource, clearly, you 

made it clear about the Governor’s emphatic statement about his 

view about additional drilling. 

I am just wondering, in those 23 platforms that exist in California, if that new technology was implemented that would allow 

for additional development of that resource. Is that in that emphatic no and no but no, or would that be considered? 

Mr. CHRISMAN. It would be considered, but we have to be careful. 

We had a Plains Exploration Petroleum Company that it was actually a platform in Federal waters for the proposed slant drilling 

into state waters. We have the authority, in statute, the state lands 

commission has the authority, to regulate that, and so, with the 

Governor’s support, we took to the state lands commission the support to allow that additional slant drilling to take place. The state 

lands commission turned it down. 

Mr. COSTA. Yes. I think I remember that vote, two-to-one. All 

right. 

Mr. CHRISMAN. The Governor—we supported that move. 

Mr. COSTA. Well, I applaud the Governor for supporting that 

move. 

My questioning is completed at this time, and I will submit further questions, in written form, for the other witnesses. 

Thank you, all of you, for your good work. We will listen to my 

colleague, the gentleman from Washington, and then, when he is 

finished, we will conclude the hearing. I will ask for unanimous 

consent that our Members submit additional questions for the 

record. 

My good friend, Doc Hastings, will be the final word on today’s, 

I think, helpful and informative panel. It is good to see all of you, 

especially Mike. Thank you. 

Mr. HASTINGS. Thank you, Mr. Chairman. Let me thank you for 

coming here today and for staying through, which is a normal 

interruption for us, the necessary votes and staying for an extra 

hour and 15 minutes. 

This hearing is the second of three hearings, and we are talking 

about drilling in the Outer Continental Shelf, and we have characterized it a great deal about energy, which, of course, is true, but 

there are a lot of byproducts, for example, that come from petroleum and natural gas. You are all drinking water out of a container 

that is a byproduct of petroleum and natural gas, and I would suggest that probably, with the exception of Senator Wagner, all of you 

flew here. Am I right? The other four of you, except Senator Wagner, flew here. You drove, too? 

93 

Mr. MARVINNEY. I took a train. 

Mr. HASTINGS. You took a train? OK. 

Let me broaden this and get you all to say ‘‘yes,’’ in a way, by 

saying, have you flown in the past month or the past year, anybody, all of you, at one time? All right. 

The reason I bring that up is because the newer generation of 

airplanes, and I am from Washington State, even though Boeing 

does not have a plant in my district, but the new 787 is built entirely of carbon composites, entirely of carbon composites, and a lot 

of the airplanes that are being built today, different parts of them 

are carbon composites. 

So, if we look at offshore and the byproducts of all of this, we 

have to go beyond just what energy produces, as necessary as that 

is, and for us to wean our way from that is going to be a very long 

process. Now, ironically, one of the reasons that the 787 is so attractive is because its much lighter weight, which means it burns 

less fuel, so it is a win-win situation. 

I think that is worth talking about, although I certainly believe 

that we need to be energy independent, that we start with that 

basis. 

Mr. Chrisman, you and I had an exchange earlier. I want to ask 

you another question, and, Mr. Marvinney, I am going to ask you 

a similar question. Do you know how many LNG facilities, liquid 

natural gas facilities, are planned in California to be built? 

Mr. CHRISMAN. The last number, the possibility, being proposed 

was four, none of which have attained the necessary permits yet. 

Mr. HASTINGS. OK. Is this something that you support? 

Mr. CHRISMAN. Yes, we do. 

Mr. HASTINGS. You do. OK. Mr. Marvinney? 

Mr. MARVINNEY. I believe there are only two that are in the discussion phase, at this point. 

Mr. HASTINGS. OK. And do you support them? 

Mr. MARVINNEY. I think it is part of our transition from fossil 

fuels to other sources, so we need to find ways of increasing that. 

Mr. HASTINGS. So, it is part of the fossil fuel transition. 

Let me just ask this question. Since we know the Outer Continental Shelf has huge deposits of natural gas, don’t you really 

think that it might be more advantageous to open that up rather 

than to ship natural gas from, say, Saudi Arabia or Venezuela or 

Brazil? Doesn’t it seem to be more logical to utilize the resources 

we have rather than to bring that in, either one of you or both of 

you? Would you like to answer that? 

Mr. CHRISMAN. Yes, I would, because we debated this very question, and we opted, because so much of our electric generation 

comes from natural gas, in addition to hydro facilities, but natural 

gas is our predominant generating capacity, we opted to support 

liquefied natural gas because of the price of natural gas at the 

time; for us, it was more economical. 

We spent some time talking to the folks where we were actually 

talking about buying the gas, actually off of Australia. We actually 

visited some of their facilities, looked at it, and we essentially made 

an informed decision, on our part, to support the importation of 

LNG, the creation of those terminals. 

94 

Mr. HASTINGS. And you think that is a better option than having 

your own domestic supply of liquid natural gas? 

Mr. CHRISMAN. The option that we are looking at is a balance. 

Mr. HASTINGS. I understand that. That is why I asked the question. You said you made the decision to import natural gas. Do you 

think that is a better option rather than having our own? 

Mr. CHRISMAN. No. I think it adds to our balance, our balance 

of fuels that we are bringing into California. It adds an additional 

source of supply for us that we need for our population. 

Mr. HASTINGS. When will those plants be built? Do you know? 

Mr. CHRISMAN. I do not know. 

Mr. HASTINGS. Can you give me a rough—— 

Mr. CHRISMAN. They have met some significant opposition along 

the coast. We were hoping we would have one built now. Our best 

estimate is that our need in California, and, again, we have debated the need—there are those, in significant numbers, at home 

that disagree with the need, but, essentially, we are looking, we 

think, at maybe two LNG terminals in California will get done. 

Mr. HASTINGS. By when? 

Mr. CHRISMAN. We hope, over the next eight to 10 years. 

Mr. HASTINGS. Eight to 10 years. Now, couldn’t we develop the 

our Outer Continental Shelf resources and not have to worry about 

these LNG terminals? 

Mr. CHRISMAN. We could, yes. 

Mr. HASTINGS. Is that an option, too? 

Mr. CHRISMAN. No. 

Mr. HASTINGS. That is not an option. 

Mr. CHRISMAN. No. 

Mr. HASTINGS. OK. I wonder why, but go ahead, Mr. Marvinney. 

Mr. MARVINNEY. As I said in my testimony, we are not opposed 

to offshore oil and gas exploration and development. I just think it 

needs to be in the places where there is the greatest potential for 

those resources and consider the great potential of other resources 

in some of the other areas. 

So, certainly, where there are appropriate gas resources, I think 

that is an important part of the picture. 

Mr. HASTINGS. Well, I think everybody would agree that you do 

not want to drill where there is no product to drill. That makes 

sense, but, as I understand the industry, you do not know that 

until you drill, which makes it kind of difficult to find out. There 

are other tests, but you really do not know until you drill. 

Let me just conclude. I thank you. Mr. Chrisman, in due respect, 

I really feel that your response that it is better to import than utilize our own resources—— 

Mr. CHRISMAN. That is not what I said, Congressman. What I 

said was, it is part of our mix. 

Mr. HASTINGS. Right, but given the 10-year time period when 

you could probably go out to the Outer Continental Shelf and get 

natural gas, if we started today, that might be a shorter timeframe, 

and I thought you responded to me by saying, no, that was not an 

option. 

Mr. CHRISMAN. For us, it is not an option. We do not support 

going out in the Outer Continental Shelf. 

95 

Mr. HASTINGS. OK. Well, I think that maybe we are passing each 

other in the night, but I still interpret that as being a ‘‘no.’’ 

I mean, here we are. You know, your state has gone through 

some very tough fiscal times. Everybody in the country knows what 

you went through. Your unemployment rate is nearing 10 percent, 

and it just seems to me, part of becoming energy independent, part 

of getting product that can be used by a whole variety of other 

things, is a positive thing in order to help our economy, and we 

know, by testimony we heard on this panel and other panels, that 

you can do it in an environmentally safe way, why we would not 

do that. 

I just want to make that observation. Clearly, there is a divide 

in this country. Hopefully, the side that I think we ought to do it, 

knowing we can do it in an environmentally safe way, is the proper 

way to go. 

At any rate, once again, I want to thank you for your time here 

and for your testimony, and, Mr. Chairman, thank you very much. 

Mr. COSTA. Thank you very much. Yes? 

Mr. HASTINGS. I ask unanimous consent to submit for the record 

the UCSB study. 

Mr. COSTA. Without objection, and, once again, I will indicate, for 

staff and Members who are in their offices or in other committees, 

that unanimous consent be allowed to Members to submit additional questions for the record. As we always urge Committee 

Members, if they do have those additional questions, that 10-day 

period, we urge them to submit them earlier rather than later, and 

we will follow through with the distinguished panels that we had 

today and ask that the questions be answered in a timely fashion. 

So, without any further ado, I want to thank all of the Members 

who participated and both panels for a very good Committee 

hearing. 

The Natural Resources Committee hearing today is now 

adjourned. 

[Whereupon, at 3:10 p.m., the Committee was adjourned.] 

[Additional material submitted for the record follows:] 

Response to questions submitted for the record by Mike Chrisman, 

Secretary, California Natural Resources Agency 

(Question 2). To all panelists: A number of legislative proposals regarding 

the Outer Continental Shelf have proposed that any new revenues that accrue as a result of new offshore oil and gas activity be shared with the 

States, as is now the case with the Gulf of Mexico States. At the hearing, 

Congressman Farr suggested the formation of an Oceans Trust Fund, while 

Congressman Rohrabacher suggested giving revenues directly to coastal 

communities to allow them to address local needs, such as reducing urban 

runoff and repairing sewers, although it was not clear whether only communities that have drilling off their shores should be provided with funding to address those needs, or if all communities should have access to such 

funding, regardless of the proximity of offshore drilling. Please provide the 

positions of your state governments regarding the best use of any potentially shared offshore revenue: would you prefer an Oceans Trust Fund 

model that provided revenue nationally to address ocean issues, a revenue 

sharing model that only included states or communities that have offshore 

drilling off their shores, a revenue sharing model that provides shared revenues directly to states and coastal communities regardless of whether 

they have drilling off their shores, or another model entirely? Also, are 

there any analogous revenue sharing programs that Congress should look 

96 

at as good models for how to move forward, should we decide to increase 

the amount of OCS revenues shared with states and local communities? 

Response: 

In its Final Report, the U.S. Commission on Ocean Policy identified a myriad of 

challenges to improve the management of our nation’s ocean and coastal resources. 

The Commission recognized that to meet these challenges additional investments 

would be necessary, and Outer Continental Shelf (OCS) receipts were identified as 

the primary source of funding. Additionally, the Commission recommended that a 

portion of OCS revenues should be shared with coastal states (Recommendation 

24-1). 

California supports revenue sharing, but only if it does not provide incentives for 

new OCS oil and gas development. In addition, revenues shared with the states 

should further the goals of improved coastal and ocean management, restoration, 

conservation, preservation, mitigation, research and education and the Congress and 

the Obama Administration should consult with coastal states in the development of 

any new program or formula of revenue sharing. 

The California Ocean Protection Council, which I chair, supports the establishment of the ocean trust fund supported by the Coastal States Organization in its 

Call for Action and is included within H.R. 21 (Farr). California also has extensive 

experience with two Coastal Impact Assistance Programs (CIAP) that were established by the Commerce, Justice, State (H.R. 5344) Fiscal Year 2001 Appropriations 

Act and more recently the Energy Policy Act of 2005. These laws authorized funds 

to be distributed to Outer Continental Shelf (OCS) oil and gas producing states to 

mitigate the impacts of OCS oil and gas activities. Though this model only provides 

revenue to producing states, it could be adapted to include all coastal states. Under 

this model, states must submit a Coastal Impact Assistance Plan (Plan) that meets 

the federal government’s approval to be eligible for CIAP grant funds. A producing 

state or coastal political subdivision (CPS) may use the funds for a variety of 

projects to help mitigate the impacts of offshore energy development. 

Other models have been proposed, including H.R. 701, Conservation and Reinvestment Act (CARA) in the 106th Congress. CARA passed the House on May 11, 

2000, and was approved by the Senate Committee on Energy and Natural Resources 

on July 25, 2000, but did not progress further. This approach would have allocated 

revenues from OCS oil and gas activities for federal and state resource acquisition 

and protection, urban recreation, wildlife protection, and related purposes. It would 

have created and funded a new coastal energy impact assistance program, amended 

and funded the Land and Water Conservation Fund (LWCF), funded the Urban 

Park and Recreation Recovery program and the Historic Preservation Fund, increasing funding for wildlife conservation, and funded land restoration and easement programs. Another model, which should be evaluated, is the ‘‘Coastal and Ocean Protection Plan Implementation Act’’ that was introduced in June 2007 by former Sen. 

Stevens of Alaska. This bill would have established an ocean and coastal development impact assistance fund and grant program and an ocean policy trust fund and 

would have provided funding to federal agencies, coastal states, local governments, 

and non-governmental entities to address ocean and coastal protection. 

(Question 3). To all panelists: Do you believe that states have an adequate 

role in the current MMS offshore leasing planning process? Or is there any 

way that you would like to see the states roles strengthened? 

Response: 

We support any processes that will facilitate full state participation in all phases 

of the federal offshore energy policy and leasing processes. We are encouraged by 

the recent decision of the Department of the Interior to take a broader look at offshore energy production, be it oil and gas, wind, wave, ocean currents, or energy 

conservation. We also concur with the recent emphasis on folding offshore energy 

evaluations into this comprehensive energy policy approach. This type of comprehensive approach to energy policy has been lacking in the MMS process to date. 

We also want to underscore the importance of maintaining the federal consistency 

provisions within the Coastal Zone Management Act. These provisions are essential 

to the federal/state partnership envisioned by Congress. Our concern about maintaining this authority is paramount and any legislation that would weaken this authority would be unacceptable to California. 

97 

(Question 4). Secretary Chrisman, could you provide the Governor’s position on the Plains Exploration and Production (PXP) proposal to allow an 

existing federal platform to drill a new well into California state waters? 

Does the state believe that it has the authority to require a platform operating in federal waters to cease operations as of a certain date? Does the 

state believe that the PXP model proposed at this site could also be used 

to access additional oil fields under state or federal waters? 

Response: 

The following is an overview of the recent developments with PXP’s proposal. 

• On January 29, 2009, the California State Lands Commission considered PXP’s 

application for a permit. Despite much public testimony supporting the project 

and support from environmental stakeholders and the local community, the permit application was defeated 2 to 1. Commission decisions cannot be appealed. 

• Governor Schwarzenegger’s representative on the commission supported PXP’s 

application due to unique circumstances and benefits of the proposed project; 

e.g., drainage of oil from federal waters, agreements by the company to cease 

operations of this facility and the entire Tranquillon Ridge and Pt. Pedernales 

fields by a certain date, and property donations to the community. 

• The commission’s legal counsel in consultation with California Attorney General’s office has determined that PXP may reapply for a permit. It is our understanding that PXP is aware that may reapply and this it is currently weighing 

its options. If PXP decides to reapply it will have to develop a project proposal 

that addresses the concerns of the commission. 

The State Lands Commission does not believe that it has the authority to require 

a platform operating in federal waters to cease operation as of certain date. Note: 

California’s CZMA agency for the open coast, the California Coastal Commission, 

has not yet considered and voted on PXP’s proposal. This would not occur until an 

approval was achieved by the State Lands Commission. 

State Lands Commission engineering experts believe that is technically feasible 

to use the directional drilling technology that was incorporated into the PXP proposal at other sites in California to access additional oil fields under state or federal 

waters. However, the PXP proposal presented a unique set of circumstances (e.g., 

federal drainage, agreements by the company to cease offshore drilling operations, 

and property donations to the community) that are not likely to lend themselves to 

development of other sites. However, consistent with my testimony, the 

Schwarzenegger Administration remains opposed to new offshore oil and gas drilling 

off the California coast. 

(Question 5). Secretary Chrisman, at the committee hearing on 

February 11, 2009 a witness argues that additional oil drilling along the 

California coastline would help reduce natural oil seeps. Does the state 

agree with that argument? 

Response: 

According to the California State Lands Commission approximately 2,000 individual seeps are believed to exist in the Santa Barbara Channel and Santa Maria 

Basin. Our engineering experts with the State Lands Commission do not believe 

there is sufficient proof that additional oil drilling would be helpful in reducing natural oil seeps. They also note that there is very little data focusing on the relationship between natural seepage and production. For the following reasons we believe 

that a theory of significantly reducing seep activity through increased production is 

not realistic: 

• Most oil is not being produced from the same (probably shallow) geological 

structures as those from the seeps. Therefore there will be little or no impact, 

unless these geologic structures are somehow connected. 

• When pressures begin to subside with production, natural repressurization 

could occur through aquifer influx; or water or produced gas is commonly injected back into the structure to maintain high pressure for production. This is 

regular practice by the operators. 

98 

(Question 6). Secretary Chrisman, the committee has been told that 

California has more stringent environmental requirements for oil and gas 

production in state waters than the federal government has in other parts 

of the OCS. For example one of our witnesses at the February 11, 2009 

hearing described how California requires operators to treat and dispose 

of drilling muds onshore, rather than disposing of them on the sea bottom. 

Could you provide a list of environmental requirements imposed by 

California that are not regularly imposed by the federal government? 

Response: 

California has a long history of placing special requirements for offshore oil and 

gas operations. The precautions pertaining to drilling muds is just one example. 

Some others include: • Oil Spill Containment and Cleanup. California has placed special requirement 

for equipment to be placed at the site of operations and with special cleanup 

organizations (spill cooperatives and contractors) who can respond to larger 

spills. In addition, there is a $0.05 surcharge applied per barrel for the state 

Oil Spill Prevention and Response fund (collected monthly by the Board of 

Equalization) for preparedness and prevention activities of the state. For marine response to oil spills, the state maintains the Oil Spill Response Trust 

Fund. Currently, fees are generated at $.25 per barrel. The fund is capped at 

$58 million. Per statute, the fund is to be kept at 90% of this cap. • Safe Navigation. Prohibitions of the placement of any facilities in buffer zones 

of the vessel traffic lanes. • Air quality. Restrictions placed on emissions from drilling facilities, work and 

supply boats, and onshore facilities. • Habitat and Fisheries Protection. Reducing impacts from the placement of pipelines to bottom habitats such as eel grass, rocky bottoms, and placing equipment or operations that would interfere with commercial or sport fishing. 

(Question 14). Secretary Chrisman, could you provide the committee with 

an update on where California stands with the Coastal Impact Assistance 

Program—how close is the state to receiving funding through that program, and on what projects does the state expect to be using that funding 

on? Also, please describe the state’s experiences with the CIAP program, 

including any ways that the state believes it should be modified. 

Response: 

The California Natural Resources Agency, which I head, is Governor 

Schwarzenegger’s designated lead agency for implementing the Coastal Impact Assistance Program (CIAP) in California. As such, the Agency has developed and 

drafted with substantial public input a Coastal Impact Assistance Plan (Plan) for 

expenditure of $20.6 million in CIAP grant funds. The Plan includes 80 total project 

proposals from 17 eligible coastal counties and 9 state agencies. The Natural Resources Agency is finalizing the Plan so that it can be submitted to the MMS headquarters and the MMS’s Pacific OCS Regional Office by the end of March 2009. 

• These 80 projects fall under one of the following 15 categories: 

1. Climate Change 

2. Coastal Habitat Restoration 

3. Coastal Protection and Public Access 

4. Coastal Sediment Management 

5. Coastal Water Quality 

6. Coastal Wetlands 

7. Energy 

8. Invasive Species 

9 Mapping 

10. Marine Debris 

11. Marine Law Enforcement 

12. Marine Life Protection Act/Marine Life Management Act Implementation 

13. Public Education and Outreach 

14. Science and Research 

15. CIAP Administration 

• The Natural Resources Agency has enjoyed a close working relationship with 

MMS staff, especially staff at the Pacific OCS Regional office. However, development of the state Plan has not been without significant problems. Specifically, 

in June 2008, after completing a 30-day public comment period on a draft Plan, 

the Natural Resources Agency was informed by MMS headquarters that the 

funding level assumptions contained in the Plan would probably not come to 

99 

fruition. We were further directed by MMS headquarters to redraft our Plan 

based on lower funding expectations. The Natural Resources Agency followed 

this direction and redrafted the Plan. A revised draft Plan was circulated for 

public comment during October/November 2008. • One fundamental way that the CIAP could be modified to benefit the states is 

to change the requirement that each project contained within a state’s Plan 

have its own grant agreement. As with the NOAA CIAP, the Natural Resources 

Agency would prefer to execute one grant agreement with the MMS covering 

all projects with each state or local jurisdiction. This change would streamline 

the granting process and greatly reduce the administrative burden on the MMS, 

states, and local jurisdictions. It would also enable grant funds to flow to grant 

recipients much more quickly. 

• In drafting future CIAP type programs, Congress should consider allocating 

grant funds using a formula that uses currently available OCS revenue information and does not rely upon waiting for future revenue information. This 

change to the CIAP will provide states with more certain grant funding allocation information and thus enable them to develop CIAP plans not vulnerable 

to fluctuating OCS revenue. 

(Question 15). To all panelists: Last September the House passed a bill that 

would have created a 50-mile buffer zone where drilling was not allowed, 

and then a 50-mile zone where states would get to decide where drilling 

was allowed. What are your states’ opinions on the use of buffer zones, and 

do you believe that 50 miles, or some other distance, is appropriate? 

Response: 

Governor Schwarzenegger has a long standing policy of opposing new offshore oil 

and gas leases off the coast of California. In addition, the Governor has taken every 

opportunity to ensure that the (Congressional) moratorium on offshore oil and gas 

leasing is maintained. 

We do not believe that buffer zones would eliminate the impact of a major oil spill 

off our shores. This position is based on our experience with oil spills in California 

such as the 1969 Platform A spill in the Santa Barbara Channel and our observations of other spills (such as the Exxon Valdez in Alaska and the tanker vessel 

Puerto Rican off San Francisco Bay). These events demonstrate that a buffer zone 

of 50 or even 100 miles would not eliminate the impacts during a major oil spill. 

Oil spilled during a major accident can travel long distances (well over 1,200 or 

more miles in the case of the Exxon Valdez). 

Response to questions submitted for the record by Ted Diers, 

Chair, Coastal States Organization 

I very much appreciate the opportunity to offer testimony on state perspectives 

on offshore drilling and support the efforts of the Committee on Natural Resources 

to develop an energy policy for the U.S. that includes traditional and renewable 

energy development offshore while recognizing the importance of coastal ecosystems 

and communities. The responses on behalf of the Coastal States Organization to the 

questions forwarded on March 9, 2009, are below. 

1. One of the concerns raised by those who are not supportive of new offshore drilling, particularly along the East Coast, is what role neighboring states would have in drilling decisions. For example, hypothetically, if New Hampshire wanted to allow drilling off its coastline, 

what kind of say should Maine or Massachusetts have on that? Are existing Coastal Zone Management Act provisions adequate to protect coastal 

states interests? Or is there a need for a new regional approach on these 

decisions, similar to what Mr. Diers mentioned in his testimony? 

Through the federal consistency provision, the Coastal Zone Management Act 

(CZMA) provides states the ability to confer with a neighboring state on a consistency review. Thus, states have the ability, under the current statute, to review according to their own enforceable program. In addition, the current CZMA encourages coordination among states related to planning for such development. In the hypothetical above, Massachusetts would review what would be the direct impacts 

that New Hampshire’s activities might have on the Massachusetts coastline and resources. 

CSO does support an approach that incorporates regional coordination. It allows 

for more fluidity - energy production often implicates an entire region (the vast distances vessels go, the nature of oil spills/cleanups). The existing regional partnerVerDate Aug 31 2005 14:24 Apr 17, 2009 Jkt 000000 PO 00000 Frm 00103 Fmt 6633 Sfmt 6621 L:\DOCS\47607.TXT Hresour1 PsN: KATHY
100 

ships could provide an on-the-ground mechanism for such regional planning without 

creating a new governance scenario or governmental layer. 

2. A number of legislative proposals regarding the Outer Continental Shelf 

have proposed that any new revenues that accrue as a result of new offshore oil and gas activity be shared with the States, as is now the case 

with the Gulf of Mexico States. At the hearing, Congressman Farr suggested the formation of an Oceans Trust Fund, while Congressman Rohrabacher suggested giving revenues directly to coastal communities to 

allow them to address local needs, such as reducing urban runoff and 

repairing sewers, although it was not clear whether only communities 

that have drilling off their shores should be provided with funding to 

address those needs, or if all communities should have access to such 

funding, regardless of the proximity of offshore drilling. Please provide 

the positions of your state governments regarding the best use of any 

potentially shared offshore revenue: would you prefer an Oceans Trust 

Fund model that provided revenue nationally to address ocean issues, a 

revenue sharing model that only included states or communities that 

have offshore drilling off their shores, a revenue sharing model that provides shared revenues directly to states and coastal communities regardless of whether they have drilling off their shores, or another model entirely? Also, are there any analogous revenue sharing programs that 

Congress should look at as good models for how to move forward, should 

we decide to increase the amount of OCS revenues shared with states 

and local communities? 

In its Final Report, the U.S. Commission on Ocean Policy identified a myriad of 

challenges to improve the management of our nation’s ocean and coastal resources. 

The Commission recognized that to meet these challenges, additional investments 

would be necessary, and OCS receipts were identified as the primary source of funding. Additionally, the Commission recommended that a portion of OCS revenues 

should be shared with coastal states (Recommendation 24-1). CSO’s position is that 

revenues shared with the states should further the goals of improved coastal and 

ocean management, restoration, conservation, preservation, mitigation, research and 

education. In addition, Congress and the Administration should consult with coastal 

states in the development of any new program or formula of revenue sharing. 

CSO does not have a formal position on any particular revenue sharing model but 

notes that the Coastal Impact Assistance Program (CIAP) was established in 2005 

by the Energy Policy Act of 2005, authorizing funds to be distributed to Outer Continental Shelf (OCS) oil and gas producing states to mitigate the impacts of OCS oil 

and gas activities. Though this model only provides revenue to producing states, it 

could be adapted to include all coastal states. Under this model, states must submit 

a coastal impact assistance state plan (Plan) that meets Minerals Management 

Service approval to be eligible for CIAP funds. A producing state or coastal political 

subdivision may use the funds for: projects and activities for the conservation, protection, or restoration of coastal areas, including wetlands; mitigation of damage to 

fish, wildlife, or natural resources; planning assistance and the administrative costs 

of complying with this section; implementation of a federally-approved marine, 

coastal or comprehensive conservation management plan; and, mitigation of the impact of OCS activities through funding of onshore infrastructure projects and service 

needs. 

Other models have been proposed, including H.R. 701, Conservation and Reinvestment Act (CARA) in the 106th Congress. CARA passed the House on May 11, 

2000, and was approved by the Senate Committee on Energy and Natural Resources 

on July 25, 2000, but did not progress further. Both proposed bills allocated revenues from OCS oil and gas activities for federal and state resource acquisition and 

protection, urban recreation, wildlife protection, and related purposes. Both bills 

would have created and funded a new coastal energy impact assistance program, 

amended and funded the Land and Water Conservation Fund and funded the Urban 

Park and Recreation Recovery program, Historic Preservation Fund, land restoration and easement programs, and the Payment in Lieu of Taxes Program. These two 

models provide a valuable starting point for discussions of revenue sharing models. 

3. Do you believe that states have an adequate role in the current MMS offshore leasing planning process? Or is there any way that you would like 

to see the states roles strengthened? 

CSO does not have a position on the adequacy of the MMS offshore leasing planning process. However, in the planning process, consistency review must be maintained and respected. This review enables states to take part in planning and inVerDate Aug 31 2005 14:24 Apr 17, 2009 Jkt 000000 PO 00000 Frm 00104 Fmt 6633 Sfmt 6621 L:\DOCS\47607.TXT Hresour1 PsN: KATHY
101 

forms MMS of the potential impacts in the coastal zone. Early consultation through 

consistency review allows for a more predictable process for both the state and the 

applicant, and for changes to be made before significant financial resources are invested. 

4. Mr. Diers, you mention in your testimony that federal consistency 

authority under CZMA should be maintained, and states’ authority 

should not be weakened. Do you feel there is any need to strengthen 

state consistency requirements with respect to offshore drilling and 

other offshore energy development? 

No—it is CSO’s position that consistency is an effective tool as written in the current CZMA. In CSO’s efforts toward CZMA reauthorization, it advocates that the 

consistency provisions be left as status quo. Having said that, it is vital that consistency not be weakened as a result of energy legislation. Indeed, CSO encourages the 

explicit reference to CZMA consistency in any future energy legislation so that there 

is no doubt of Congress’ intent to maintain the states’ authority to review energyrelated actions affecting the coastal zone. 

Since the enactment of the CZMA, early consultation and consultation between 

states, the consistency provision has been primarily a tool to find common ground 

between federal projects and the needs of the nation’s coasts resulting in very few 

state consistency objections. In 2005/2006 alone, over 8,000 consistency reviews were 

conducted and only 60 objections were filed by the states: this is less than 1%. 

In addition, many states have found creative ways to use the consistency provision to form better partnerships and processes. These tend to help both the applicant and the review agency. For example, Alaska uses a memorandum of understanding with the Minerals Management Service to facilitate reviews of OCS activities. North Carolina’s coastal program facilitates review of energy projects by identifying information needs up front to avoid delays and increase predictability for industry. Texas developed a general concurrence for its review of OCS oil and gas exploration plans. 

5. Mr. Diers, in our February 25th hearing, Mr. Larry Nichols of the American Petroleum Institute states that the Coastal Zone Management Act 

‘‘allows a state to block offshore activities that are inconsistent with its 

coastal zone management plan. That block can be removed only by the 

federal government through an arduous appeals process, which can be 

followed by litigation if the state disagrees with the federal government’s decision.’’ The implication of his statement seems to be that 

states possess all the authority they need now to effectively block drilling from happening off their shores. Do you believe that states have 

enough authority under CZMA to effectively block offshore activities? Is 

it clear enough what constitutes an ‘‘affected state’’ for the purposes of 

making consistency determinations for offshore energy siting under the 

CZMA? 

It is important to note that framing consistency review as a method to ‘‘block activities’’ is not supported by the evidence. There have been fewer than 40 objections 

that have gone through the entire objection and appeals process. Louisiana, for example, has only had 1 objection in state history. Furthermore, the appeals process 

was designed to be streamlined with specific timeframes and clarity on the process 

of review. The consistency review itself is also time-limited and cannot drag out a 

process; rather, it is usually the other siting and permitting concerns which tend 

to extend the length of project review. 

The consistency review is not put in place to block activities—the purpose of the 

review is to determine consistency of the project with state law. In fact, both producing states, as well as neighboring states, that can show an impact to coastal zone 

resources have authority to review. Producing states are particularly reliant on consistency review in order to manage the myriad development processes and associated impacts that go along with offshore energy development. The consistency review incorporates many elements beyond environmental concerns. For example, in 

my own state of New Hampshire, of our sixteen enforceable policies, only a few are 

related to natural resources. Most are related to managing conflict with human 

uses. 

102 

6. Last September the House passed a bill that would have created a 50- 

mile buffer zone where drilling was not allowed, and then a 50-mile zone 

where states would get to decide where drilling was allowed. What are 

your states’ opinions on the use of buffer zones, and do you believe that 

50 miles, or some other distance, is appropriate? 

CSO does not have a position on 50-mile or any other ocean buffer. However, it 

is important to note that a 50-mile buffer may not represent an ecosystem-based approach. Through a regional ecological and economic analysis, one might find that 

a 50-mile buffer is adequate but to our knowledge, no one has done such an analysis. This is clearly an important area of research and the type of policy assessment 

that is best accomplished at the regional level, and in partnership between the state 

and federal government. 

Response to questions submitted for the record by Robert G. Marvinney, 

Maine Geological Survey, Augusta, Maine 

1. To Mr. Diers, Mr. Marvinney, and Mr. Wagner: One of the concerns 

raised by those who are not supportive of new offshore drilling, particularly along the East Coast, is what role neighboring states would have 

in drilling decisions. For example, hypothetically, if New Hampshire 

wanted to allow drilling off its coastline, what kind of say should Maine 

or Massachusetts have on that? Are existing Coastal Zone Management 

Act provisions adequate to protect coastal states interests? Or is there 

a need for a new regional approach on these decisions, similar to what 

Mr. Diers mentioned in his testimony? 

Response: Existing Coastal Zone Management Act provisions leave the question 

of the role of neighboring states in these types of situations open to interpretation. 

The more realistic probability is the potential for oil and gas leasing on the Georges 

Bank, a major fisheries resource for the fisherman of Maine and New England. The 

proximity of the Georges Bank to Massachusetts presents the possibility that Massachusetts’ interests might dictate more strongly than Maine’s in this situation, in 

spite of the critical nature of this resource to Maine’s economy. This can be addressed by directing the Minerals Management Service to engage in discussions 

early and often in the process with the most proximal state and neighboring states, 

and by weighting input from each equally. Maine is not opposed to the responsible 

development of oil and gas resources of the nation’s OCS. The regional approach 

should be this: we need to consider the entire potential energy endowment of the 

entire OCS, including traditional oil and gas and renewables, and then develop a 

strategy to exploit these where each potential is the greatest. For oil and gas, this 

is the Gulf of Mexico, where the highest potential exists for significant reserves and 

where the infrastructure is already in place to support these activities. For the Gulf 

of Maine, the greatest potential is wind, and work is already underway to support 

this effort. 

2. To all panelists: A number of legislative proposals regarding the Outer 

Continental Shelf have proposed that any new revenues that accrue as 

a result of new offshore oil and gas activity be shared with the States, 

as is now the case with the Gulf of Mexico States. At the hearing, Congressman Farr suggested the formation of an Oceans Trust Fund, while 

Congressman Rohrabacher suggested giving revenues directly to coastal 

communities to allow them to address local needs, such as reducing 

urban runoff and repairing sewers, although it was not clear whether 

only communities that have drilling off their shores should be provided 

with funding to address those needs, or if all communities should have 

access to such funding, regardless of the proximity of offshore drilling. 

Please provide the positions of your state governments regarding the 

best use of any potentially shared offshore revenue: would you prefer an 

Oceans Trust Fund model that provided revenue nationally to address 

ocean issues, a revenue sharing model that only included states or communities that have offshore drilling off their shores, a revenue sharing 

model that provides shared revenues directly to states and coastal communities regardless of whether they have drilling off their shores, or another model entirely? Also, are there any analogous revenue sharing 

programs that Congress should look at as good models for how to move 

forward, should we decide to increase the amount of OCS revenues 

shared with states and local communities? 

103 

Response: There should be some reinvestment of new revenues from OCS oil and 

gas activities into ocean issues and affected ocean communities, although Maine 

does not have a position on which approach would be preferred. 

3. To all panelists: Do you believe that states have an adequate role in the 

current MMS offshore leasing planning process? Or is there any way 

that you would like to see the states roles strengthened? 

Response: MMS is striving to engage states at an early stage in the discussions 

of potential offshore leasing. Past history, however, demonstrates that the views of 

the Department of Interior and MMS most often prevail when there are differences 

with the views of the states. There should be a strengthened role for states in the 

planning process to ensure that state’s views are given equal standing with federal 

views. 

4. Secretary Chrisman, could you provide the Governor’s position on the 

Plains Exploration and Production (PXP) proposal to allow an existing 

federal platform to drill a new well into California state waters? Does 

the state believe that it has the authority to require a platform operating in federal waters to cease operations as of a certain date? Does the 

state believe that the PXP model proposed at this site could also be used 

to access additional oil fields under state or federal waters? 

5. Secretary Chrisman, at the committee’s hearing on February 11th, a witness argues that additional oil drilling along the California coastline 

would help reduce natural oil seeps. Does the state agree with that argument? 

I oppose direct revenue sharing with states that is contingent on them opening 

their coastline to drilling, but I am in favor of using OCS revenue in a way that 

benefits all the states. How do your state governments feel about this issue? 

6. Secretary Chrisman, the committee has been told that California has 

more stringent environmental requirements for oil and gas production 

in state waters than the federal government has in other parts of the 

OCS. One of our witnesses at the February 11th hearing, for example, 

described how California requires operators to treat and dispose of drilling muds onshore, rather than disposing of them on the sea bottom. 

Could you provide a list of environmental requirements imposed by California that are not regularly imposed by the federal government? 

7. Mr. Diers, you mention in your testimony that federal consistency 

authority under CZMA should be maintained, and states’ authority 

should not be weakened. Do you feel there is any need to strengthen 

state consistency requirements with respect to offshore drilling and 

other offshore energy development? 

8. Dr. Marvinney, the American Petroleum Institute recently put out a 

report entitled ‘‘Untapped Oil and Gas Resources,’’ in which the authors 

develop what they call an ‘‘alternative resource case’’ by multiplying the 

amount of oil that MMS currently thinks is in the Atlantic Ocean—3.8 

billion barrels—by 4.8, reflecting the increase in our known Gulf of Mexico resources since 1975. In your opinion as a professional geologist, is 

that a valid estimation? 

Response: The API analysis is a useful statistical exercise that may help to define the broad range of potential resources in the Atlantic. However, it is strictly 

a statistical analysis that must be tempered with geological realities. There are profound differences in the geology of the Gulf of Mexico and the geology of the Atlantic, and the north Atlantic, in particular. The first difference is in the nature and 

duration of sedimentation in the Gulf of Mexico. The Mississippi delta system has 

been operational for 10s of millions of years, bringing enormous amounts of sediment into the Gulf that trapped prolific organic material. The burden of sediment 

further weighted the crust, bringing this organic-rich sediment into temperature 

zones conducive for the development of oil and gas. Along the Atlantic seaboard, and 

particular the north Atlantic, there are no analogous, large-scale, long-duration 

deltaic systems. The exploration work of the 1970s and 1980s confirmed the lean 

organic nature of the sediments and their thermal immaturity. 

The second major difference is in the nature of the mobile substrate beneath the 

oil-generating units in the Gulf of Mexico. Massive and thick salt sequences in the 

Gulf of Mexico beneath the oil-generating units have been mobilized by their buoyancy relative to the overburden materials, and have risen in salt diapers that have 

provided avenues and traps for oil migration and accumulation. While there is salt 

in the Atlantic OCS, it is far less extensive, thinner, and subsequently less mobile, 

providing fewer opportunities for hydrocarbon accumulations. 

104 

The API analysis is interesting, but it is far more instructive to consider the hydrocarbon development history of nearby analogous areas. The Scotia Shelf off Nova 

Scotia has seen considerable exploration with the latest tools available. Since the 

discovery of the Sable Island gas field more than 30 years ago, very little has been 

added to the proven reserves of the shelf, in spite of extensive exploration. This is 

far more relevant to the potential for oil and gas reserves in the north Atlantic than 

the API statistical analysis. 

9. Dr. Marvinney, in the table you include in your testimony, showing the 

MMS estimates of economically recoverable oil from the Atlantic and 

Gulf of Mexico regions, it appears that at $46 a barrel oil, about 80% of 

the undiscovered oil in the Gulf of Mexico is economically recoverable, 

while the figure in the Atlantic is only 58%. Is it accurate to say that not 

only is there more oil in the Gulf, but it’s also more economical to get 

to? 

Response: This is probably a reflection of the greater potential for larger fields 

in the Gulf of Mexico compared to the Atlantic and also perhaps that there is support and processing infrastructure already in place. 

10. Dr. Marvinney, your testimony mentions a Maine company that constructed two offshore drilling platforms that were used internationally. 

Has this company been involved in constructing platforms to be used 

in U.S. waters, and if so, could you provide additional details of who 

has contracted those platforms and where they are to be deployed. 

This company is Cianbro, and information about their Amethyst Project at this 

website: http://www.cianbro.com/CurrentProjects/PastHighProfileProjects/Amethyst 

SemisubmersibleDrillingRigs/tabid/343/Default.aspx 

The two semi-submersible rigs that this corporation completed in Portland, Maine 

were subsequently deployed in deep water off Brazil. Large portions of these rigs 

were originally constructed in shipyards in Gulf of Mexico states, but those corporations were unable to meet their contractual obligations. Cianbro transported the 

pontoon assemblies and deck boxes to Maine where they were mated, completed, 

and taken on sea trials. Cianbro is currently constructing large components for use 

in a refinery expansion project in a Gulf of Mexico state. I do not know if Cianbro 

has constructed platforms for use in U.S. waters. 

11. Mr. Graves, Louisiana is the first state to receive money under the 

Coastal Impact Assistance Program. Please list the projects, along with 

a short description, that Louisiana is funding with that money? Also, 

please describe the state’s experiences with the CIAP program, including any ways that the state believes it should be modified. 

12. Mr. Graves, you mention an Ocean and Coastal Trust Fund in your testimony—a fund that would benefit all coastal states. You also call for 

additional revenue sharing with Louisiana specifically. What do you 

think the breakdown should be between money that goes specifically to 

Louisiana, and money that goes to a Trust Fund that benefits all the 

states? 

13. Mr. Diers, in our February 25th hearing, Mr. Larry Nichols of the American Petroleum Institute states that the Coastal Zone Management Act 

‘‘allows a state to block offshore activities that are inconsistent with its 

coastal zone management plan. That block can be removed only by the 

federal government through an arduous appeals process, which can be 

followed by litigation if the state disagrees with the federal government’s decision.’’ The implication of his statement seems to be that 

states possess all the authority they need now to effectively block drilling from happening off their shores. Do you believe that states have 

enough authority under CZMA to effectively block offshore activities? 

Is it clear enough what constitutes an ‘‘affected state’’ for the purposes 

of making consistency determinations for offshore energy siting under 

the CZMA? 

14. Secretary Chrisman, could you provide the committee with an update 

on where California stands with the Coastal Impact Assistance Program—how close is the state to receiving funding through that program, and on what projects does the state expect to be using that funding on? Also, please describe the state’s experiences with the CIAP program, including any ways that the state believes it should be modified. 

15. To all panelists: Last September the House passed a bill that would 

have created a 50-mile buffer zone where drilling was not allowed, and 

then a 50-mile zone where states would get to decide where drilling 

105 

was allowed. What are your states’ opinions on the use of buffer zones, 

and do you believe that 50 miles, or some other distance, is appropriate? 

Response: Given the geographic location of the Georges Bank, more than 100 

miles from the coast of Maine, such buffer zones would do little to allay our concerns 

about fisheries impacts. 

16. To Dr. Marvinney, State Geologist, Maine: In your testimony, you state 

that ‘‘the resources of the Gulf of Maine are most suitable to renewable 

energy development, with tidal and offshore wind power being the primary resources. Renewable wind power may provide manufacturing 

and support employment and contribute to a sustainable, secure 

energy future.’’ To what extent is renewable energy production in conflict with oil and gas production? 

Response: In terms of geography, there would be little conflict between the likely 

footprint of oil and gas activities and the likely footprint of renewable energy activities. The only real potential for oil and gas in the Gulf of Maine is on the Georges 

Bank, more than 100 miles from the Maine coast. The likely locations for wind 

power projects and tidal power projects are all within 50 miles of the Maine coast. 

Response to questions submitted for the record by Hon. Frank W. Wagner, 

Senator, 7th District, Senate of Virginia 

1. To Mr. Diers, Mr. Marvinney, and Mr. Wagner: One of the concerns 

raised by those who are not supportive of new offshore drilling, particularly along the East Coast, is what role neighboring states would have 

in drilling decisions. For example, hypothetically, if New Hampshire 

wanted to allow drilling off its coastline, what kind of say should Maine 

or Massachusetts have on that? Are existing Coastal Zone Management 

Act provisions adequate to protect coastal states interests? Or is there 

a need for a new regional approach on these decisions, similar to what 

Mr. Diers mentioned in his testimony? 

Response to Question 1: 

I believe the Administrative Process for lease sales under the current structure 

allows more than ample opportunity for bordering states to address their concerns. 

I have been involved in actions to date regarding Virginia’s inclusion in the Department of the Interior’s MMS five-year plan. In the course of this very deliberate 

process, I have attended public hearings as far away as New Jersey. Comments and 

concerns were solicited and received not just from Virginia and bordering states, but 

indeed all over the nation. 

I will also bring to the Committee’s attention that Canada did not come to Ohio, 

Michigan or Pennsylvania for the 2,000 gas wells in Lake Erie; nor did they include 

Maine or any other New England states prior to the major offshore operation off 

of Nova Scotia and their major oil fields off the coast of Newfoundland. 

In a similar manner, Cuba is not seeking Florida’s position on their development 

of Gulf of Mexico hydrocarbon deposits. 

Look only to the Gulf of Mexico to see how thoroughly and effectively the existing 

Administrative Process is working for Texas, Louisiana, Alabama and Mississippi. 

2. To all panelists: A number of legislative proposals regarding the Outer 

Continental Shelf have proposed that any new revenues that accrue as 

a result of new offshore oil and gas activity be shared with the States, 

as is now the case with the Gulf of Mexico States. At the hearing, Congressman Farr suggested the formation of an Oceans Trust Fund, while 

Congressman Rohrabacher suggested giving revenues directly to coastal 

communities to allow them to address local needs, such as reducing 

urban runoff and repairing sewers, although it was not clear whether 

only communities that have drilling off their shores should be provided 

with funding to address those needs, or if all communities should have 

access to such funding, regardless of the proximity of offshore drilling. 

Please provide the positions of your state governments regarding the 

best use of any potentially shared offshore revenue: would you prefer an 

Oceans Trust Fund model that provided revenue nationally to address 

ocean issues, a revenue sharing model that only included states or communities that have offshore drilling off their shores, a revenue sharing 

model that provides shared revenues directly to states and coastal communities regardless of whether they have drilling off their shores, or 

another model entirely? Also, are there any analogous revenue sharing 

106 

programs that Congress should look at as good models for how to move 

forward, should we decide to increase the amount of OCS revenues 

shared with states and local communities? 

Response to Question 2: 

With regards to revenue sharing, I suggest that the best method is a direct appropriation back to the state and coastal communities. 

The Committee may also want to consider a hybrid where the states receive 

directly 50% of the revenue share and the two adjacent states split the other 50% 

of the revenue share. 

I believe the states and the local communities are in the best position, and need 

the flexibility, to apply the funding to their specific needs. 

For example, Louisiana has used the majority of their entire revenue share to restore the critical Mississippi delta habitat. That obviously is not a problem in Virginia. However, cleaning up and restoring the Chesapeake Bay is our number one 

environmental problem. We have pressing commitments (the majority of which are 

unfunded) to upgrade our sewage treatment plants, improve storm water run-off 

quality and act more aggressively to address our non-point source pollution problems. 

One piece of legislation considered by the General Assembly in anticipation of royalties would have allocated 40% of all funds to clean up the Chesapeake Bay, 40% 

to transportation (there is a direct correlation between congestion and pollution), 

10% for tax credits/deductions for improvements in energy efficiency and 10% for 

renewable energy research and development. 

3. To all panelists: Do you believe that states have an adequate role in the 

current MMS offshore leasing planning process? Or is there any way 

that you would like to see the states roles strengthened? 

Response to Question 3: 

Having been part of the Administrative Process for the Department of the Interior’s current five-year plan, it has been my observation that MMS has listened 

carefully and addressed many of Virginia’s concerns with regards to the planned 

lease sale. 

As an example, Virginia has asked for, and MMS has agreed to, a 50-mile restriction of any activity from our coastline. MMS has held public hearings to listen to 

the concerns of not just political leaders, but all interested parties and citizen 

groups. 

Furthermore, there is active state and local participation in all NEPA applications 

for exploratory and production drilling permits. Therefore, I believe the existing system more than adequately takes in the concerns of state and local governments. 

15. To all panelists: Last September the House passed a bill that would 

have created a 50-mile buffer zone where drilling was not allowed, and 

then a 50-mile zone where states would get to decide where drilling 

was allowed. What are your states’ opinions on the use of buffer zones, 

and do you believe that 50 miles, or some other distance, is appropriate? 

Response to Question 15: 

Throughout my involvement as a politician, most of the major objections to offshore drilling have come from waterfront residents, who have been given the impression that platforms will be built in their backyards. These residents and hotel 

guests do not want, naturally, giant platforms erected right off shore that spoil the 

view shed. If sightline becomes an issue, a 15-mile buffer would take care of this 

objection, as the eye’s view only extends approximately 7 miles. 

In Virginia, I negotiated with the Governor’s office on an appropriate buffer. Because there is nothing of geological significance within 50 miles of the shore, it was 

quite easy for me to cede this point in order to get other language in my bill creating the Virginia Energy Plan. 

However, this is not the case in all areas. Significant offshore deposits in California, Louisiana and Texas are within a few miles of the coast. But, thanks to new 

directional drilling techniques, these reserves could be tapped while keeping production platforms out of the view shed. 

Thus, it would be my recommendation that a 15-mile buffer be established for any 

production platform and further, no exploratory drilling ships should be sited within 

3 miles of the coast. These buffers will allow full access to all potential reserves 

while ensuring that no permanent structure is within the view shed of the coastline. 

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