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Vol. 12, No. 30 Week of July 29, 2007
Providing coverage of Alaska and northern Canada's oil and gas industry

Energy groups act to protect consumers

National Petroleum Council, regulatory commissioners seek policy safeguards for taxpayers, nation’s future energy security

Rose Ragsdale

For Petroleum News

Growing concern over the impact of high energy prices on consumers prompted two national groups to take action July 18 that could affect oil and gas development in Alaska.

The National Petroleum Council delivered a 422-page report to the Secretary of Energy on an 18-month study of global energy to 2030, while the National Association of Regulatory Utility Commissioners adopted a series of resolutions, including ones on energy development moratoria on federal lands and climate change policy.

The NPC study, “Facing the Hard Truths about Energy: A Comprehensive View to 2030 of Global Oil and Natural Gas,” concluded that accumulating risks to the supply of reliable, affordable energy require an integrated national strategy. The study, unique in its scope, involved more than 350 experts from diverse backgrounds and organizations — the majority of them from outside the oil and gas industry.

Global energy resources plentiful

“The world is not running out of energy resources,” NPC said in its report, “but many complex challenges could keep the world’s diverse energy resources from becoming the sufficient, reliable, and economic energy supplies upon which people depend. These challenges are compounded by emerging uncertainties: geopolitical influences on energy development, trade, and security; and increasing constraints on carbon dioxide emissions that could impose changes in future energy use. While risks have always typified the energy business, they are now accumulating and converging in new ways.”

The report identified a half-dozen core strategies for meeting future energy challenges, including — increasing energy efficiency; expanding and diversifying energy production from clean coal, nuclear, biomass, other renewables, and unconventional oil and natural gas sources; moderating declines in conventional domestic oil and gas production; and increasing access for development of new resources.

“Facing the Hard Truths about Energy is not a forecast of supply, demand, or price,” said Alan Kelly, chair of the study’s coordinating subcommittee. “Rather, it is a forewarning that we need to balance actions to meet long-term economic, environmental, and energy security goals — moreover, we need to start now and stay committed for decades.

The study is available on the NPC Web site: www.npc.org.

Federal lands moratoria need study

NARUC, meanwhile, approved resolutions that set national policy for the nation’s state public utility commissioners.

One resolution that could have a significant impact on Alaska calls for NARUC to coordinate and participate with interested government, consumer, public policy, business and industry organizations to fashion for the president, Congress and state policy makers a factual and useful study of the social, economic and environmental effects on America’s citizens of maintaining moratoria on domestic energy exploration and production on and beneath federal lands.

“This resolution encourages policy makers to consider the costs to citizens of continuing to enforce moratoria against oil and gas exploration on federal land,” said Dave Harbour, one of five members of the Regulatory Commission of Alaska. Harbour represented the RCA at NARUC’s summer meeting and co-authored the resolution.

“Government sources estimate that we could have many decades of additional supplies of clean burning natural gas under restricted federal lands,” Harbour said. “Policy makers should seriously consider the cost to our citizens of importing foreign energy when deciding to continue energy restrictions at home.”

He also said “costs of moratoria” could include outsourcing hundreds of thousands of domestic energy and associated manufacturing jobs and foregoing hundreds of billions of dollars in federal and state taxes and royalty payments, while increasing our balance of payments deficit to pay foreign countries for our own energy shortfalls.

“Things need to be done nationally to raise awareness of the issue and the repercussions of the blanket moratoria on oil and gas development on federal lands, said Patrick Galvin, Alaska Commissioner of Revenue.

Galvin, who formerly worked with Alaska’s oil and gas leasing program, attended the NARUC summer meeting to speak on the Alaska gas pipeline project.

He said a detrimental effect of the moratoria is our heavy reliance on energy resources in countries that pose a security risk to America and federal offshore areas where oil and gas drilling is currently prohibited could potentially be a huge source of domestic energy supplies.

“One alternative would be to have a reasoned discussion to evaluate those resources for possible development, rather than continue blanket moratoria on those areas,” he said.

Tread carefully with climate-change laws

NARUC also approved a measure urging Congress to protect ratepayers and existing state regulatory authorities as it considers potential climate-change legislation.

Any climate-change legislation must be economy-wide, transparent and flexible, and it should not pre-empt any existing state programs. Also, it should not adversely impact electric and natural gas system reliability nor impose undue cost burdens on ratepayers, NARUC said.

“This resolution is certainly not the last word NARUC will have on this issue,” said NARUC President Jim Kerr of North Carolina, “but it is a crucial and important first step. By passing this resolution, we have ensured that our nation’s regulators and the ratepayers we serve are well-represented as the debate moves forward.”

Access all of the resolutions at http://www.naruc.org/associations/1773/files/resolutions/summer07/Resolutions_July18_2007.pdf.



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