Date: 2011-05-11
Speaker: JACKSON LEE (democrat)
Chamber: H
State: Texas

Mr. Chair. I rise today in support of H.R. 1231. I had offered amendments because I believe in responsible increase in offshore drilling. I offered amendments to improve upon this bill that would have provided for revenue sharing with coastal states and a study and report back to Congress to ensure that the Department of Interior has proper funding for staffing and training and technical engineers and such other personnel as is necessary to responsibly increase offshore drilling. As a Representative from an oil and gas producing District and state. I am aware that offshore drilling is an important component of the nations energy supply and provides many Gulf communities with significant jobs and income. My state supplies 20 percent of the nations oil production. onethird of the nations natural gas production. a quarter of the nations refining capacity and nearly 60 percent of the nations chemical manufacturing. The Texas energy and petrochemical clusters employ 600.000 people. which represent 70 percent and 15 percent. respectively. of the total U.S. workforce in those industries. Houston is home to some of the worlds largest oil. gas. and petrochemical facilities. As the fourth most populous city in the United States. and the greater Houston area remains a diversified regional economy. with the energy industry contributing 50 percent of our economic base for employment. Even so there is no denying the importance of the energy industry for creating jobs in Houston and across our Nation. We have consistently led the nation in petroleum production since the early 10th century and we have onefourth of total U.S. oil reserves. As a coastal state we provide the resources and the mechanisms to support the offshore drilling industry and we also bare the highest risk to our natural resources. Its stands to reason that we should also have access to revenue generated from Offshore leases. Federal Revenues from offshore leases were estimated at $18.0 billion in FY 2008 by the Department of the Interior. During the previous 10 years (19982007). revenues from federal OCS leases reached as high as $7.6 billion in FY 2006. Higher prices for oil and gas are the most significant factors in the revenue swings. Of the $18.0 billion offshore revenue in FY 2008. $8.3 billion was from royalties and $9.5 billion came from bonus bids. Coastal states can use that money to further support the industry that utilizes our highways and waterways. A significant portion of oil and gas produced from Gulf Outer Continental Shelf leases is transported to those refineries for processing via offshore pipeline through state waters. Providing coastal states with additional access to revenue will enable these states to protect their natural resources and advance the transport of oil. gas. and petrochemicals across the United States. Coastal States like Texas with energy development off their shores in federal waters have been seeking additional federal revenues generated off our shores. We particularly want more assistance for coastal areas that may be most affected by onshore and nearshore activities that support offshore energy development. Currently. the affected states receive revenue indirectly from offshore oil and gas leases in federal waters. This is in contrast to the direct revenues to states that have onshore federal leases within their boundaries. Coastal states bear the greatest risks if there is a disaster. Because of the current and wind patterns in the Gulf of Mexico. Texas coastal natural resources are most at risk for environmental damage in the event of an oil spill from an offshore production platform or pipeline. In addition. a substantial portion of federal Outer Continental Shelf production is refined in Texas and then transported via state highways or pipeline located in the state. A significant amount of the infrastructure that will be used to explore and develop the resources in these new lease sales will be constructed in Texas and transported through state waters. The same might be said for other coastal states whose shores and resources are dedicated to offshore drilling. Annual rental rates are $5-$9.50 per acre. with lease sizes generally ranging from 2.5005.760 acres. However. annual rental rates for the March 2009 sale in the Central Gulf of Mexico begins at $11.00 per acre for lease in water depths over 200 meters. Initial lease terms of 510 years are standard. and leases continue as long as commercial quantities of hydrocarbons are being produced. Demand for petroleum products in the U.S. remains strong. In 2005. each of the estimated 296 million people in the U.S. used an average of almost three gallons of petroleum every day. In 1978. the average American used 3.5 gallons per day. In 2006. crude oil imports totaled 10.1 million barrels per day (MBD). twothirds of the total U.S. supply of 15.2 MBD. according to the Energy Information Administration (EIA) of the U.S. Department of Energy (DOE). After several additions of other petroleum products by refiners and fuel blenders. total petroleum consumption came to 20.6 MBD for 2006. The oil and gas industry supports job growth in my state of Texas and across our nation. In Texas. the oil and gas industry supports 1.7 million jobs and approximately 25 percent of the states economy. whereas nationwide the industry supports 9.2 million jobs and 7.5 percent of our nations economy. We should focus our attention on providing the Department of Interior with funding and resources it needs to provide for training and staffing of technical engineers and other such necessary personnel to review drilling permit applications and determine future offshore lease sale areas. The Department of Interior must be properly funded and staffed with technical engineers to review permits. examine lease sales. and ensure that each application is afforded proper consideration For these reasons. I urge the Members as they vote on this important measure which certainly relates to job creation and national energy independence. that they consider a fair and balance approach as we aim to protect the environment and determine the most responsible measures to provide for the energy our nation requires.