[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]




 
 THE MINERALS MANAGEMENT SERVICE'S PROPOSED FIVE-YEAR PROGRAM FOR OIL 
            AND GAS LEASING ON THE OUTER CONTINENTAL SHELF

=======================================================================

                           OVERSIGHT HEARING

                               before the

                       SUBCOMMITTEE ON ENERGY AND
                           MINERAL RESOURCES

                                 of the

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                        Thursday, June 28, 2007

                               __________

                           Serial No. 110-32

                               __________

       Printed for the use of the Committee on Natural Resources



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                     COMMITTEE ON NATURAL RESOURCES

               NICK J. RAHALL II, West Virginia, Chairman
              DON YOUNG, Alaska, Ranking Republican Member

Dale E. Kildee, Michigan             Jim Saxton, New Jersey
Eni F.H. Faleomavaega, American      Elton Gallegly, California
    Samoa                            John J. Duncan, Jr., Tennessee
Neil Abercrombie, Hawaii             Wayne T. Gilchrest, Maryland
Solomon P. Ortiz, Texas              Chris Cannon, Utah
Frank Pallone, Jr., New Jersey       Thomas G. Tancredo, Colorado
Donna M. Christensen, Virgin         Jeff Flake, Arizona
    Islands                          Stevan Pearce, New Mexico
Grace F. Napolitano, California      Henry E. Brown, Jr., South 
Rush D. Holt, New Jersey                 Carolina
Raul M. Grijalva, Arizona            Luis G. Fortuno, Puerto Rico
Madeleine Z. Bordallo, Guam          Cathy McMorris Rodgers, Washington
Jim Costa, California                Bobby Jindal, Louisiana
Dan Boren, Oklahoma                  Louie Gohmert, Texas
John P. Sarbanes, Maryland           Tom Cole, Oklahoma
George Miller, California            Rob Bishop, Utah
Edward J. Markey, Massachusetts      Bill Shuster, Pennsylvania
Peter A. DeFazio, Oregon             Dean Heller, Nevada
Maurice D. Hinchey, New York         Bill Sali, Idaho
Patrick J. Kennedy, Rhode Island     Doug Lamborn, Colorado
Ron Kind, Wisconsin                  Mary Fallin, Oklahoma
Lois Capps, California               Kevin McCarthy, California
Jay Inslee, Washington
Mark Udall, Colorado
Joe Baca, California
Hilda L. Solis, California
Stephanie Herseth Sandlin, South 
    Dakota
Heath Shuler, North Carolina

                     James H. Zoia, Chief of Staff
                   Jeffrey P. Petrich, Chief Counsel
                 Lloyd Jones, Republican Staff Director
                 Lisa Pittman, Republican Chief Counsel
                                 ------                                

              SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES

                    JIM COSTA, California, Chairman
          STEVAN PEARCE, New Mexico, Ranking Republican Member

Eni F.H. Faleomavaega, American      Bobby Jindal, Louisiana
    Samoa                            Louie Gohmert, Texas
Solomon P. Ortiz, Texas              Bill Shuster, Pennsylvania
Rush D. Holt, New Jersey             Dean Heller, Nevada
Dan Boren, Oklahoma                  Bill Sali, Idaho
Maurice D. Hinchey, New York         Don Young, Alaska ex officio
Patrick J. Kennedy, Rhode Island
Hilda L. Solis, California
Nick J. Rahall II, West Virginia, 
    ex officio
                                 ------                                


                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Thursday, June 28, 2007..........................     1

Statement of Members:
    Costa, Hon. Jim, a Representative in Congress from the State 
      of California..............................................     1
    Pearce, Hon. Stevan, a Representative in Congress from the 
      State of New Mexico........................................     4

Statement of Witnesses:
    Cruickshank, Walter D., Acting Director, Minerals Management 
      Service, U.S. Department of the Interior...................    12
        Prepared statement of....................................    14
        Response to questions submitted for the record...........    90
    Drake, Hon. Thelma, a Representative in Congress from the 
      State of Virginia..........................................     9
        Prepared statement of....................................    10
    Juettner, Bob, Borough Administrator, Aleutians East Borough, 
      Alaska.....................................................    44
        Prepared statement of....................................    45
    Moran, Hon. James P. a Representative in Congress from the 
      State of Virginia..........................................    29
        Prepared statement of....................................    31
    Pollard, Hon. Albert C., Former Member, Virginia House of 
      Delegates, Mollusk, Virginia...............................    38
        Prepared statement of....................................    40
    Sheard, Whit, Alaska Program Director, Pacific Environment, 
      Anchorage, Alaska..........................................    48
        Prepared statement of....................................    50
        Response to questions submitted for the record...........   100
    Thompson, Hon. Mike, a Representative in Congress from the 
      State of California........................................     6
        Prepared statement of....................................     8
    Wagner, Hon. Frank, Virginia State Senator, Virginia Beach, 
      Virginia...................................................    33
        Prepared statement of....................................    35
        Response to questions submitted for the record...........    36

Additional materials supplied:
    Alaska Independent Fishermen's Marketing Association, Letter 
      submitted for the record...................................    58
    Alaska Marine Conservation Council, Letter submitted for the 
      record.....................................................    59
        Open letter to President George W. Bush submitted for the 
          record by the Alaska Independent Fishermen's Marketing 
          Association, Alaska Center for the Environment, Alaska 
          Longline Fishermen's Association, et al................    62
        ``Alaskans Urge Congress to Support HR 1957 and S 1311 - 
          the Bristol Bay Protection Act''.......................    63
        ``Ten Reasons to Protect Alaska's Bristol Bay'' from 
          Offshore Oil and Gas Drilling..........................    65
        ``Economic Value of Bristol Bay and Southeastern Bering 
          Sea Fisheries''........................................    66
        Maps and charts..........................................    67
    Bristol Bay Native Association, Bering Sea Fishermen's 
      Association, Bristol Bay Economic Development Corporation, 
      et al., Letter submitted for the record....................    84
    Gemmill, Faith, Resisting Environmental Destruction on 
      Indigenous Lands (REDOIL), Statement submitted for the 
      record.....................................................    75
    Odum, Marvin, Executive Vice President, EP Americas, Shell 
      Energy Resources Company, Statement submitted for the 
      record.....................................................    86
    Schaefer, Jack, Vice President, Native Village of Point Hope, 
      Letter and Resolution submitted for the record.............    87


OVERSIGHT HEARING ON ``THE MINERALS MANAGEMENT SERVICE'S PROPOSED FIVE-
 YEAR PROGRAM FOR OIL AND GAS LEASING ON THE OUTER CONTINENTAL SHELF.''

                              ----------                              


                        Thursday, June 28, 2007

                     U.S. House of Representatives

              Subcommittee on Energy and Mineral Resources

                     Committee on Natural Resources

                            Washington, D.C.

                              ----------                              

    The Subcommittee met, pursuant to call, at 10:07 a.m. in 
Room 1324, Longworth House Office Building, Hon. Jim Costa 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Costa, Pearce, Holt, Kennedy, 
Jindal, and Gohmert.

   STATEMENT OF THE HONORABLE JIM COSTA, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Costa. The Subcommittee of Energy and Mineral Resources 
will now come to order.
    The Subcommittee is meeting today to hear the testimony on 
the Minerals Management Service's proposed five-year plan for 
oil and gas leasing.
    Preliminary ground rules, as we always do before the 
beginning of every meeting, under Rule 4[g], the Chairman and 
the Ranking Member may make opening statements, which I suspect 
we will. They may be included in the record under unanimous 
consent, and we do that on a pro forma basis.
    Additionally, under Committee Rule 4[h], any additional 
material for the record should be submitted by Members or 
witnesses within 10 days after the hearing. That includes our 
distinguished colleagues who are going to testify before our 
first panel. And we would appreciate the witnesses' 
cooperation, as I say, at every hearing by responding to any 
questions submitted in writing, and obviously we like to try to 
expedite that to the degree that that is possible. It works out 
better that way.
    We hopefully will be able to have the opportunity to get 
through our panels this morning at a reasonable time. And we 
always provide the courtesy for Members to testify. And we are 
very honored to have two of our distinguished colleagues here 
this morning who have asked to testify before the Subcommittee.
    Let me first begin with my opening statement. The 
Subcommittee, as we know, meets to review the Minerals 
Management Service's 2007 to 2012 plan for leasing oil and gas 
in the Outer Continental Shelf. Obviously, this has been a very 
important and sometimes hotly debated issue throughout our 
country in recent years.
    We all know that the Outer Continental Shelf consists of 
submerged lands beyond coastal states' waters, beginning 
roughly three nautical miles from our shores, to 200 miles off 
our coasts throughout the country.
    Therefore, the Outer Continental Shelf is an important 
resource to America and Americans' interests from a standpoint 
of marine fisheries, as well as from a standpoint of domestic 
supplies of oil and natural gas.
    In 2004, the Outer Continental Shelf provided 29 percent of 
domestically produced oil, and over 20 percent of domestically 
produced natural gas. Therefore, an important resource. Some of 
that production is occurring off the coast of California. And I 
can tell you from, I have been a Member and a representative, 
and we have one of my colleagues here today, that it has been 
an issue that has been debated at great length over the last 
three decades.
    Nonetheless, we still have 44 platforms off the California 
coast, and some people don't realize that they exist. As a 
matter of fact, as a part of the five-year plan, the California 
Outer Continental Shelf provided 30 million barrels of oil and 
60 billion cubic feet of natural gas each year. That is 
significant, although compared to the Gulf of Mexico, it is a 
smaller number.
    Environmental record of oil and gas production off the 
coast, I think, of California and other parts of the country 
has improved in recent decades. Since 1970, there have been 
only four significant spills, totaling 350 barrels. There have 
been no reported major spills in the last 10 years.
    We know that during the Hurricane Katrina incidences, 
notwithstanding the fact that many of those platforms were 
closed, it was done in a safe and responsible way. It 
demonstrates that if you plan properly and you meet the 
environmental requirements, that it can be done with little 
impact to the environment. But yet, the controversy still 
continues.
    From 2007 to 2012, the five-year Outer Continental Shelf 
Leasing Program could provide access to up to 50 million new 
acres of Outer Continental Shelf--while being appropriately 
cautious in those regions because there are environmental 
concerns. It is, I think, very important to note, in my 
opinion, and I think many others, that very little vision has 
been established in the Minerals Management document outlining 
their plans for the 2007 to 2012 development. And I think we 
will have a lot of discussion about that this morning because 
in every part of those areas, there are environmental concerns.
    So I think it is important that when we talk about that in 
comparison to the 1.7 billion acres--1.7 billion acres, imagine 
that. They are considering 50 million in the next five years, 
but there is 1.7 billion acres that is under the jurisdiction 
of the Minerals Management Service.
    So therefore, the 2007-2012 plan in essence only examines 
1.2 percent of the entire Atlantic Seaboard, and four of the 15 
planning areas off the coast of Alaska. We have to do better 
than that, I think.
    Section 18 of the Outer Continental Shelf Lands Act states 
very clearly that the purpose of these five-year plans is to 
help meet the national energy needs. If a plan fails in many 
respects to provide a full analysis of the oil and gas 
resources in the Outer Continental Shelf, which is critical if 
we are going to talk about balancing our energy needs as we 
look toward addressing new opportunities for renewable 
resources, as well as for cellulosic fuels and conservation, as 
we balance our nation's energy portfolio, which is the struggle 
that we have been dealing with really for several decades now 
in America, as we try to look at the long term, and yet 
reducing our dependency on foreign sources of energy, the 
Minerals Management Service and the opponents to drilling on 
the Outer Continental Shelf will argue in different ways that 
it is impossible or unnecessary to fully assess the oil and gas 
resources of the Outer Continental Shelf because the Outer 
Continental Shelf is closed to leasing under Congressional or 
Presidential moratorium.
    Many friends and colleagues of mine from across the 
country, including a gentleman I have great respect for, 
Congressman Thompson, believe that we should place some areas 
permanently off limits. The fact is that we need to examine all 
of these cases. But unless we have the necessary data to make 
informed decisions, we in the Minerals Management Service, I 
think, are falling short of our responsibilities.
    As Chairman of this subcommittee, I intend to try to do 
everything possible, working on a bipartisan basis, to try to 
get that information made available, and to do the appropriate 
due diligence. Simply put, ladies and gentlemen, we do not know 
the extent nor the value of the oil and gas resources out in 
America's Outer Continental Shelf. We believe it is 
significant, but we don't know enough about the extent of its 
value.
    Opponents to the Outer Continental Shelf drilling argue 
that we have heard this week--there was a debate on the House 
Floor--that 80 percent of the oil and gas on the Outer 
Continental Shelf is already accessible to drilling. That is 
according to the Minerals Management Service.
    I believe that statistic is accurate, but it is based on 
very old data. The Minerals Management Service has not done any 
estimates outside the Gulf of Mexico in decades. Without 
adequate and current information on Outer Continental Shelf oil 
and gas resources, therefore it is difficult, frankly, to make 
informed judgments about the risks, as well as about the 
benefits associated with developing these areas. And we know 
there are benefits, and we know there are risks.
    The Minerals Management Service, I think, needs to begin 
undertaking this task. And I hope it will be the Subcommittee's 
direction to work with the Minerals Management Service to 
undertake this task in a thoughtful and reflective way.
    In this plan, the Minerals Management Service, for example, 
studied the area off the coast of Virginia. And we have a 
colleague of ours here who I suspect will give us her thoughts: 
Congresswoman Drake. It is still under moratorium. It can't be 
leased until the moratorium is lifted. Yet we have other areas 
that are not under moratorium.
    The same could be said for every part of the Outer 
Continental Shelf, whether we are leasing under moratorium or 
not. And therefore, I think there needs to be some development 
of priorities.
    Too much of the debate on both sides I believe have been 
focused on ambiguity, assumptions, and vigorously debated 
arguments. Ambiguity because we are basing important energy 
policy decisions on outdated information. Assumptions that 
something terrible will happen if we find out what the 
information is. And I think a false argument that we could 
issue leases for natural gas drilling only. And my good friend 
from Hawaii and I disagree on that point, Congressman 
Abercrombie. But I think the industry experts acknowledge that 
you can't provide natural-gas-only leases. It is just not 
realistic when you are drilling.
    Obviously we are not going to resolve those issues on that 
debate this morning. This will continue year after year. But I 
think if this subcommittee makes a significant effort, and we 
begin today working with Minerals Management Service, we can 
have a more robust level of discussion with more accurate up-
to-date information. And certainly the best information allows 
us to make better decisions.
    So the plan that is being developed between 2007 and 2012 
doesn't provide, I believe, the new information that I think we 
need to have. But we need to ask for that information, and we 
need to work with them.
    So I ask the witnesses to focus on your assessment of that 
plan. We are going to be looking to hear your thoughts on how 
we can do better. And certainly we are very interested in 
hearing from our first two witnesses who are our colleagues, 
who represent both coasts of this great nation: the Eastern 
Seaboard, parts of it, and the West Coast, both tremendous 
resources to America.
    So before we begin with our colleagues, I will defer to the 
Ranking Member for an opening statement.

   STATEMENT OF THE HON. STEVAN PEARCE, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF NEW MEXICO

    Mr. Pearce. Thank you, Mr. Chairman. I want to thank you 
for holding this hearing. I know that our schedule has been 
intense the last few weeks, and everyone is busy, including 
yourself. And so the fact that you can work this hearing into 
our schedule is significant, indeed.
    I think it is important to talk about the Minerals 
Management Service's five-year plan. It is an important topic. 
It is a source of great revenue for the United States, but also 
it is a source of great energy, and we should be talking about 
what we are doing. So thank you very much.
    I also appreciate the process. This hearing was pretty well 
set up; witnesses and the topics were set up in a bipartisan 
fashion. It is a testament to your leadership and 
statesmanship, and it is a pleasure to serve with you on the 
committee.
    I would like to welcome our witnesses, Mr. Thompson and Mr. 
Moran, and especially Congresswoman Drake. She used to be a 
member of the committee before she moved up, or on, or 
sideways, or wherever she moved. But she used to be here 
slugging it out on this committee with us, and still continues 
to be a strong and graceful advocate for your constituents and 
energy development in Virginia's Outer Continental Shelf. It is 
wonderful to have you back in this committee room again.
    I would also like to welcome Walter Cruickshank. He is here 
in the audience today; he is newly Acting Director of MMS. His 
knowledge of the Minerals Management Service, his 
administration of the OCS Oil and Gas Leasing Program is deep, 
and his service is appreciated. I have confidence that he will 
be a great steward of our offshore leasing program.
    Mr. Cruickshank is going to have to fill fairly large 
shoes, in my opinion. His predecessor, Ms. Johnnie Burton, was 
the longest-serving Director of MMS in history. She retired 
from government service last month. She is highly regarded by 
many of us, and we wish her well. And we wish you well in 
trying to fill those shoes, Mr. Cruickshank.
    Last, I would like to welcome the two witnesses from Alaska 
who have traveled great distances to be with us today. Onshore, 
Alaska is the second-ranked oil-producing state; however, its 
Outer Continental Shelf remains untested, and a new frontier.
    I especially welcome Bob Juettner, who represents the area 
of Alaska adjacent to one of the newest prospects for energy 
development in Alaska, the North Aleutian Basin. Fishing has 
been the primary economic activity of the Bristol Bay Region. 
Bristol Bay's fisheries are spectacular by any measure, and 
should not be minimized. This is an area where the local people 
want to determine, through their process, whether both energy 
development and current commercial fishing can take place in 
harmony, and I welcome to that task.
    The Gulf of Mexico is a wonderful example of where fishing 
and commercial oil production has worked well together. In the 
Continental U.S., 34 percent of our nation's seafood comes from 
the Gulf of Mexico. At the same time, the Gulf of Mexico is the 
source of 20 percent of our nation's domestic natural gas, and 
30 percent of our nation's oil. So the harmony between the 
industries has worked well in that region. And we can assume 
that those who say that it is not possible for the two to work 
together is simply a myth, proposed by those who want to 
exclude one activity or the other.
    However, I believe that local people should have the most 
to say, and so I look forward to Mr. Juettner's testimony.
    We are all here today to talk about the importance of the 
Outer Continental Shelf Leasing Program. One of the few silver 
linings that we experienced during Hurricanes Katrina and Rita 
was the incredible environmental safety record that we 
experienced. Not one drop of oil spilled during those two 
hurricanes. There were no major spills. It is a testament to 
our engineering and our safety managers in the oil and gas 
business.
    However, a painful lesson was taught in the aftermath of 
the two hurricanes. We temporarily lost 20 percent of our 
domestic natural gas and 30 percent of our domestic oil. Prices 
of gasoline at the pumps skyrocketed, and constituents 
suffered.
    One thing that makes me uncomfortable about the hearing 
today is an action that we took earlier in this Congress, 
during Speaker Pelosi's first 100 hours. H.R. 6 will have 
significant impact on our Outer Continental Shelf Leasing 
Program, so in fact the whole hearing today is possibly 
undermined by that bill that we passed that could trigger, 
according to testimony that we heard in the royalties-at-risk 
hearing in this subcommittee. We heard the testimony during 
that hearing that injunctions and lawsuits could stop all 
leasing for a period of three years. And so I worry that our 
whole five-year program could simply be moot while we allow the 
trial lawyers to fight it out in court.
    This legislation was passed by the House 264-163. It is not 
good for our government's resources, not good for our 
government's income, and it is not good energy policy, and 
undermines the entire intent of the five-year program.
    Again, I look forward to the testimony and discussion. I 
just ask that things be put in perspective, and welcome you 
all.
    Thanks again, Mr. Chairman, for the events leading up to 
this hearing.
    Mr. Costa. Thank you very much, gentleman from New Mexico.
    We would now like to recognize our first panel of 
witnesses, which is our colleagues. I understand that 
Representative Moran is on his way, and hopefully he will get 
here before his two colleagues complete their testimony. We 
certainly want to be able to accommodate Representative Moran.
    But our first witness is a gentleman who I have had the 
pleasure to work with and to know for going on three decades 
now, back to our old California days, who has done a terrific 
job in representing the people of the northern coast of 
California, one of the crown jewels of California's tremendous 
natural resources. And as he will tell you, he represents some 
of the best parts of California.
    Congressman Mike Thompson.

 STATEMENT OF THE HONORABLE MIKE THOMPSON, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Thompson. Thank you, Mr. Chairman and Mr. Pearce, for 
holding the hearing and giving me the opportunity to come in 
and testify on behalf of legislation that I have introduced, 
that would, in fact, protect a good portion of California's 
coast. I am fortunate enough to represent over a third of 
California's coastline, the biggest stretch of coastline in any 
Congressional district in the continental United States. And 
Mr. Chairman, thank you for recognizing the beauty and the 
significance of that area.
    And I also appreciate, Mr. Chairman, your comments, that as 
this process unfolds, it is going to provide a thoughtful and 
honest review of not only our resource availability, but our 
energy needs. I agree with you; I think that is important to 
do.
    And Mr. Pearce, I appreciate the fact that you mentioned 
the importance of local input on these issues. And I say that 
in part because the provisions of my bill have historically 
been supported by over 85 percent of the people that live not 
only along the coast of my district, but throughout my entire 
district.
    And I also recognize that none of the plans to date propose 
to let any new leases off the coast in my district. But as we 
saw just Tuesday of this week, there is always discussion about 
and attempts to lift or to reverse the moratorium. And every 
year since I have been here I believe that that has happened, 
and every year it provides tremendous heartburn for the people 
that I represent.
    And I also understand the argument that is made--and Mr. 
Chairman, you and I have had this discussion in person a number 
of times--with the argument that is made not only by you, but 
by a number of people that may, in fact, be impractical, to 
permanently protect the entire OCS from any type of 
exploration. But as you point out, I strongly believe that 
there should be some exceptions to this thought. And I believe 
I represent one of those exceptions on the north coast.
    And in my district on the north coast, it is a pretty 
unique area. We have one of four upwelling regions found in the 
entire world. And an upwelling region is an area, which because 
of marine and climatic effects, produces an abundance of food 
for marine life. These areas, because of the way the currents 
work and the way the ocean bottom is configured, enhance 
seaweed and phytoplankton growth in the area, which translates 
into a very productive ecosystem and a very important fishery 
in the area that I represent.
    And upwelling regions make up only 1 percent of all of the 
oceans. But about half of the fish catch worldwide comes from 
these upwelling regions. And you can imagine the impact, 
notwithstanding the tremendous success that the oil industry 
has had in recent years from preventing and avoiding any type 
of spills. But you can imagine the impact that a spill would 
have on a fishing industry. And in my area, it is the biggest 
salmon area outside of Alaska in the country. So it is very, 
very important to the folks who live there.
    And my district is also very rich in tourism. It has 
generated a tremendous amount of income, which is important for 
local governments, for the state government, and nationally. 
And those tourist businesses that operate up there, they 
operate under the premise that they are going to have 
beautiful, clean beaches, and unobstructed, spectacular views. 
And that is something that concerns them, when you put them at 
risk at all.
    I also want to point out that this is the committee that 
last year, under the chairmanship of former Chairman Richard 
Pombo, passed a bill that I had that protected, put into 
permanent wilderness area, a good portion of this same district 
whose coasts we are trying to protect. Signed into law by the 
President, and specifically I want to point out the Lost Coast 
area.
    Mr. Chairman, you know it well. And it was described not by 
you, not by me, but the Bush Administration, as the crown jewel 
of all wilderness areas throughout the entire United States of 
America. It is not only beautiful, but it is very, very rugged. 
And if there were to be any type of mishap in that area, it 
would be nearly impossible to provide a quick response to get 
in there and contain that spill, and to be able to clean it up. 
We don't have the access, we don't have the resources to do it.
    So while all areas maybe shouldn't be protected in 
perpetuity, there are some that should. And I believe that this 
area is one of those. And the bill that I have before the 
committee, H.R. 2758, would provide that protection.
    I appreciate the opportunity for you to hear my testimony. 
And I would like to be able to provide my written testimony to 
the committee.
    [The prepared statement of Mr. Thompson follows:]

Statement of The Honorable Mike Thompson, a Representative in Congress 
                      from the State of California

    Chairman Costa, Ranking Member Pearce and Members of the committee, 
thank you for the opportunity to provide testimony on H.R. 2758, the 
Northern California Ocean and Coastal Protection Act. I appreciate the 
committee's invitation to speak here today about my bill that would 
permanently prohibit oil and gas drilling off the coasts of Mendocino, 
Humboldt and Del Norte Counties in my district.
    Mister Chairman, I understand the proposed Mineral Management 
Service's leasing program does not include any new leasing in the 
Pacific Region, and that the Presidential withdrawal and Congressional 
moratorium on oil and gas leasing are still in place. However, as we 
saw on the House floor Tuesday, every year there are attacks against 
the Congressional moratorium and I am concerned that one day it might 
be lifted. While I understand the argument made by many of my 
colleagues that currently it may not be practical to provide permanent 
protection from offshore drilling for the entire Outer Continental 
Shelf, there are some areas of the OCS where permanent protection is 
sensible and absolutely necessary. My district, which comprises the 
longest coastline of any Congressional district in the continental U.S. 
and one third of the California coast, is an area that deserves such 
protection.
    Northern California's coast is part of a unique upwelling region 
found along the West Coast, which is one of only four upwelling regions 
in the world. Upwelling regions are coastal areas that support 
extremely abundant and productive marine life. Upwelling brings cold, 
nutrient-rich waters up from the ocean depths that, when combined with 
sunlight, enhance seaweed and phytoplankton growth. The abundant 
seaweed and phytoplankton that upwelling zones support provide energy 
for some of the most productive ecosystems in the world, including many 
of our nation's more important fisheries. It supports some of the 
largest populations of salmon south of Alaska--all the more notable 
since these stocks are at the very southern end of the Pacific salmon 
range. Rich Dungeness crab fishing grounds, along with rockfish, sole 
and urchin also support fishing communities tucked along this rugged 
coast. According to the National Oceanic and Atmospheric 
Administration, while upwelling regions make up only one percent of the 
world's oceans, they contribute to approximately half of the world's 
fish catch. In 2006, California's North Coast experienced a commercial 
fishery failure that virtually shut down salmon fishing along 700 miles 
of coast, costing our local and state economies more than $35 million. 
Imagine the cost if an oil spill were to occur that devastated all of 
the North Coast fishing industries.
    My district also supports a large tourism industry vital to our 
local and state economies. For instance, over 2.7 million people 
visited Mendocino County Coastal State Parks in 2006, and bed tax 
revenues for the Mendocino coast alone totaled more than $3.5 million 
in the same year. In 2005, combined travel spending and travel-related 
earnings in Mendocino, Humboldt and Del Norte counties totaled more 
than $672 million and $233 million dollars, respectively. The thriving 
tourism industry in my district is dependent upon the spectacular views 
and pristine coves and beaches along the North Coast, all of which 
would be threatened if an oil spill occurred off the coast. In 
addition, given the rural and rugged nature of my district, the effects 
of a spill would be particularly disastrous given limited accessibility 
and the resources readily available for clean up. Indeed, part of my 
district includes the only roadless coastal area in the continental 
U.S.--the ``Lost Coast''--whose unspoiled wilderness is treasured by 
hikers. Containing and cleaning up a spill in this area would be 
extremely difficult, if not impossible under most conditions. Even 
assuming no accidents would occur--a highly unlikely scenario--just the 
shoreside support and infrastructure needed to maintain offshore oil 
operations in this area would cause significant damage to this rugged, 
but fragile, environment.
    It is also important to recognize that no offshore oil and gas 
leasing has occurred off the Northern California coast since 1964, and 
that all of those leases were relinquished by 1968 due to the 
negligible quantity and quality of hydrocarbons thought to be present 
off the North Coast. Before 1964, offshore drilling off the North Coast 
was nonexistent. In areas like California's North Coast where 
ecological and current-use economic benefits are high and the value to 
our nation's energy resources low, permanent protection from offshore 
drilling makes good sense.
    In closing, I would like to reiterate that as a result of the 
unique and incredibly productive ecosystem found within its waters and 
its renowned natural beauty, Northern California's coast brings 
biological and economic benefits to our entire country--benefits that 
warrant protection. An oil spill off our beautiful North Coast would be 
economically and ecologically disastrous. My bill will ensure that 
never happens.
    I want to thank you for your time and consideration of this 
important piece of legislation. I look forward to working with the 
committee to provide permanent protection from offshore oil and gas 
drilling for California's North Coast.
                                 ______
                                 
    Mr. Costa. Without objection, that would be the order of 
the day.
    And Congressman Thompson, you did leave out two of what I 
think are the wonderful richness of your district, and that is 
the redwoods and the wine. So I think we----
    Mr. Thompson. If I could have another five minutes, Mr. 
Chairman, I will be happy to get into those.
    [Laughter.]
    Mr. Costa. No, it has been said.
    Another distinguished colleague who we are very pleased to 
have here this morning, who represents Virginia's Second 
District, a very wonderful part of America, a wonderful part of 
Virginia, Thelma Drake. And we are glad to have you here this 
morning.

 STATEMENT OF THE HONORABLE THELMA DRAKE, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF VIRGINIA

    Ms. Drake. Good morning, Chairman Costa, Ranking Member 
Pearce, and Congressman Gohmert. It truly is a great honor for 
me to be back with you today, and to speak about an issue of 
such importance to the Commonwealth of Virginia.
    Americans are paying too much to heat their homes, fuel 
their cars, and run their businesses. Energy costs in the 
United States have skyrocketed, and our dependence on foreign 
sources of energy is placing our economy and national security 
at risk.
    The increased global demand for energy by emerging 
countries, such as China and India, will only further drive up 
the cost for American businesses and families in the future. In 
fact, Dow Chemical Company, a company founded in Michigan in 
1897, has had to reduce its employee head count by 7,000 since 
2002, and is currently planning on moving 10,000 American jobs 
overseas, to countries like Malaysia, Kuwait, Saudi Arabia. 
This is just one example of how the cost of energy is driving 
away our manufacturing base, which in turn adversely impacts 
our labor market and our overall economy.
    Many steps need to be taken today to stabilize energy 
prices and liberate our nation's dependence on volatile oil- 
and gas-rich nations.
    One such step is tapping our vast domestic resources, such 
as those lying in the Outer Continental Shelf. The Minerals 
Management Service five-year plan for the OCS provides such a 
step forward. For far too long, the OCS in the Atlantic has 
been locked up. While our oil and gas prices have seen a steady 
increase, our options in providing a solution to our citizens 
have been limited.
    However, the new MMS five-year plan has broken these 
chains, and has given back hope to a nation that remains 
hostage to foreign sources of energy. Including Virginia in the 
five-year plan will provide valuable answers to such questions 
as how much of a resource is off the coast, where these energy 
resources are located, and the challenges of harvesting these 
resources. It would be short-sighted not to seek these answers, 
as I believe the majority of Americans would agree that these 
are much-needed steps if we are to achieve true energy 
independence.
    I believe MMS's five-year plan will provide the insight 
that the Federal government and the Commonwealth of Virginia 
are seeking, as both entities explore real solutions to our 
ever-increasing energy problems. It is noteworthy that the 
inclusion of Virginia in the five-year plan was a result of the 
expressed intent of the people of the Commonwealth.
    In 2006, the Virginia General Assembly, under the 
leadership of Senator Frank Wagner, passed a comprehensive 
energy plan that included the desire to explore what resources 
lie off the coast of Virginia. More recently, this past year 
Governor Tim Kaine expressed his interest to MMS for this to 
occur, as well.
    I must stress that the support of the Commonwealth of 
Virginia came only after the conclusion was drawn that there 
were appropriate environmental safeguards and distance from 
shore.
    While I am pleased to see Virginia's inclusion in the five-
year plan, I must admit that I am dismayed by the map that MMS 
is forced to use to establish Federal OCS offshore 
administrative boundaries which determine OCS state-adjacent 
administrative zones. These boundaries, as they are currently 
drawn, do not accurately reflect the relative boundaries of 
states; and furthermore, penalize states such as Virginia with 
concave coastlines, and result in grossly unfair zoning.
    This inequity affects all of the Commonwealth's activities 
in the ocean, including sand and gravel dredging, agriculture, 
and offshore renewable energy projects, including wind, waves, 
and currents, in which Old Dominion University in Norfolk is 
actively engaged.
    Before I conclude, I must say that I support the increased 
use of renewable energy projects in this country. The energy 
policy of the 21st century cannot rely solely on traditional 
sources of energy; therefore, renewable energy sources must 
play a key role in any long-term solution to our nation's 
energy needs.
    That being said, the reality is that all of the renewable 
energy we produce today would not solely keep the lights 
running, our homes heated and cooled, and our cars functioning. 
As a result, we must allow MMS to research and thoroughly 
investigate what domestic assets of natural gas are contained 
off the coast of Virginia, while continuing to approve policies 
that look to renewable energy to meet the needs of the future.
    Mr. Chairman, I thank you for this opportunity. I thank you 
for the work that you are doing. I am delighted to be able to 
speak here to you today on such an important issue, both for 
our nation and for the Commonwealth of Virginia.
    [The prepared statement of Ms. Drake follows:]

 Statement of The Honorable Thelma Drake, a Representative in Congress 
                       from the State of Virginia

    Good Morning Chairman Costa, Ranking Member Pearce and other 
Members of the Subcommittee.
    As a former member of this Subcommittee, it is a great honor for me 
to be sitting here on the other side of the dais to speak about an 
issue of great importance to the Commonwealth of Virginia.
    Americans are paying too much to heat their homes, fuel their cars, 
and run their businesses. Energy costs in the United States have 
skyrocketed and our dependence on foreign sources of energy is placing 
our economy and national security at risk. The increased global demand 
for energy by emerging economies such as China and India will only 
further drive up the cost for American businesses and families in the 
future. As a result, many steps need to be taken today to stabilize 
energy prices and liberate our nation's dependence on volatile oil- and 
gas-rich nations. One such step is tapping our vast domestic 
resources--such as those lying in the Outer Continent Shelf (OCS).
    The Minerals Management Service's 5-year plan for the OCS provides 
such a step forward. For far too long, the OCS in the Atlantic has been 
locked up. While our oil and gas prices have seen a steady increase, 
our options in providing a solution to our citizens have been limited. 
However, the new MMS 5-year plan has broken those chains and has given 
back hope to a nation that remains hostage to foreign sources of 
energy.
    Including Virginia in the 5-year plan will provide valuable answers 
to such questions as how much of a resource is off the coast, where 
these energy resources are located, and the challenges of harvesting 
these resources. It would be short-sighted not to seek these answers as 
I believe the majority of Americans would agree that these are much 
needed steps if we are to achieve true energy independence. I believe 
the MMS 5-year plan will provide the insight that the federal 
government and the Commonwealth of Virginia are seeking as both 
entities explore real solutions to our ever-increasing energy problems.
    It is noteworthy that the inclusion of Virginia in the 5-year plan 
was a result of the expressed intent of the people of the Commonwealth. 
In 2006, the Virginia General Assembly, under the leadership of Senator 
Frank Wagner, passed a comprehensive energy plan that included the 
desire to drill off the coast of Virginia. More recently, this past 
year Governor Tim Kaine expressed his interest to MMS for this to occur 
as well. I must stress that the support of the Commonwealth of Virginia 
came only after the conclusion was drawn that there were appropriate 
environmental safeguards and distance from shore.
    While I am pleased to see Virginia's inclusion in the 5-year plan, 
I must admit that I am dismayed by the map the MMS has adopted to 
establish the federal OCS offshore administrative boundaries which 
determine OCS state adjacent administrative zones. These boundaries, as 
they are currently drawn, do not accurately reflect the relative 
boundaries of states and furthermore penalize states, such as Virginia, 
with concave coastlines and result in grossly unfair zoning. This 
inequity affects all of the Commonwealth's activities in the ocean 
including sand and gravel dredging, mariculture, and offshore renewable 
energy projects involving wind, waves and currents.
    Before I conclude, I must say that I support the increased use of 
renewable energy projects in this country. The energy policy of the 
21st century cannot rely solely on traditional sources of energy; 
therefore, renewable energy sources must play a key role in any long-
term solution to our nation's energy needs. That being said, the 
reality is that all of the renewable energy we produce today would not 
solely keep the lights running, our homes heated and cooled and our 
cars functioning. As a result, we must allow MMS to research and 
thoroughly investigate what domestic assets of natural gas are 
contained off the coast of Virginia while continuing to approve 
policies that look to renewable energy to help meet the needs of the 
future.
    Mr. Chairman, thank you for the opportunity to be here today to 
speak about such an important issue for our nation and for the 
Commonwealth of Virginia.
                                 ______
                                 
    Mr. Costa. Thank you very much, Congresswoman Drake. We do 
appreciate your testimony. It was thoughtful and reflective, 
and gives a perspective for I think all of us to weigh in, and 
we hope you will continue to be a part of this effort as we do 
our due diligence to determine how we develop a balanced policy 
that focuses on our energy resources in an environmentally 
sound and constructive way.
    So this subcommittee, as you know because you served 
previously, has difficult balances to try to perform, and we 
are trying to do that in a way that makes sense. So we 
appreciate your testimony very much.
    Ms. Drake. Thank you, Mr. Chairman.
    Mr. Costa. All right. Do we have any report on Congress 
Member Moran? Do we have any sense? Because otherwise I would--
OK. Well, we are going to have to begin with the second panel. 
And what we will try to do is squeeze Mr. Moran in after that, 
depending upon when he arrives, after whichever panel has 
completed its testimony.
    All right. That brings us to our next witness. And that 
witness is Walter Cruickshank.
    And you have already gotten a very positive buildup from my 
colleague, the Ranking Member. And we look forward to your 
testimony.
    You are a distinguished panel of one, so you have a lot of 
responsibility this morning. You are the new Acting Director of 
the Minerals Management Service. We will now recognize you for 
five minutes. And of course, the Chairperson as well as the 
other members appreciate all witnesses following the five-
minute rule. And you are very familiar with the lighting system 
here, so we would appreciate that. If you have greater length 
to your testimony, we will submit that for the record in a 
written statement. And then concluding that, we will begin the 
questioning.
    Mr. Cruickshank.

  STATEMENT OF WALTER CRUICKSHANK, ACTING DIRECTOR, MINERALS 
      MANAGEMENT SERVICE, U.S. DEPARTMENT OF THE INTERIOR

    Mr. Cruickshank. Thank you, Mr. Chairman and Mr. Pearce, 
for bringing----
    Mr. Costa. Bring the microphone a little closer. We want to 
make sure we can hear you.
    Mr. Cruickshank. I appreciate the opportunity to discuss 
the Department of Interior's Outer Continental Shelf five-year 
oil and gas leasing program today.
    The Department serves the public through careful 
stewardship of our nation's natural resources, and we also play 
an important role in supplying energy to the country. About one 
third of all the energy produced in the United States comes 
from resources managed by the Department of the Interior.
    Since the Minerals Management Service was created in 1982, 
the OCS has produced about 11 billion barrels of oil, and over 
116 trillion cubic feet of natural gas. This has been 
accomplished with a remarkable environmental record. Over the 
last 20 years, less than 1/1000 of 1 percent of oil produced 
offshore has been spilled.
    Oil and natural gas will continue to be vital to the 
American economy. According to the Energy Information 
Administration, over the next 20 years Americans' demand for 
energy is expected to grow by 25 percent, with oil and natural 
gas accounting for the majority of energy use through the year 
2030. EIA's projections show that OCS oil and gas will remain a 
vital part of domestic energy portfolio.
    Within the next five years, offshore production will likely 
account for more than 40 percent of domestic oil production, 
and 25 percent of domestic natural gas production.
    Last year, MMS completed an assessment of undiscovered 
recoverable resources that may exist on the OCS. Our mean 
estimate is that the OCS contains about 86 billion barrels of 
oil, and 420 trillion cubic feet of natural gas. This 
represents about 60 percent of the nation's remaining 
undiscovered oil, and 40 percent of its remaining natural gas. 
And this is why the OCS is so critical to the nation's energy 
future.
    Access to these resources is determined by the five-year 
OCS oil and gas leasing program. The OCS Lands Act requires the 
Department to prepare a program that specifies the size, 
timing, and location of areas to be considered for leasing.
    It takes over two years to complete the process of 
preparing a program, and along the way at multiple steps, we 
solicit comments from coastal states, Federal agencies, 
stakeholders, other interested parties, and the general public. 
No area in the OCS can be offered for leasing unless it is 
included in the final five-year program.
    On April 30 the Secretary transmitted to Congress and the 
President the proposed final five-year OCS oil and gas leasing 
program for 2007 to 2012. As required by the OCS Lands Act, the 
Secretary may not approve the final program until 60 days after 
transmittal. The 60th day is tomorrow, at which point the 
Secretary may approve the program that would take effect July 
1, and govern our OCS program for the next five years.
    In developing the program, MMS held public meetings 
throughout the areas that were under consideration for leasing, 
and solicited comments nationwide. We received almost 125,000 
comments throughout the preparation of the program, about three 
quarters of which supported expanding the amount of acreage 
that would be offered for oil and gas leasing consideration.
    The proposed final program includes 21 lease sales and 
eight planning areas. Twelve sales are proposed for the Gulf of 
Mexico, eight offshore Alaska, and one in the mid-Atlantic 
planning area off the coast of Virginia. Our analysis indicates 
that this program could result in an estimated production of an 
additional 10 billion barrels of oil, and 45 trillion cubic 
feet of natural gas, generating over $170 billion in today's 
dollars of net benefits for the nation.
    We know that there has been particular concern over 
proposed sales in portions of the mid-Atlantic and North 
Aleutian Basin planning areas. As you noted, Mr. Chairman, the 
mid-Atlantic remains under Presidential withdrawal and 
Congressional moratorium, and no leasing will occur unless the 
moratorium is discontinued and the withdrawal modified.
    The North Aleutian Basin is included in the program, which 
would support of the State of Alaska and the local communities 
closest to the proposed sale area. MMS will work closely and 
cooperatively with the State of Alaska, the Aleutian's East 
Borough, and others in the area, and provide ample opportunity 
for public input during a planning process that will lead to a 
decision on whether or not to hold the lease sale.
    To help make this a meaningful process, MMS convened a 
meeting of stakeholders, scientists, and state and local 
government administrators with particular knowledge of the 
resources in this area to help us identify the most critical 
information needs and plan new environmental studies for the 
North Aleutian Basin.
    As an example, on Tuesday of this week we announced the 
partnership with NOAA's National Marine Mammal Laboratory to 
conduct a $5 million, 3.5-year study on the North Pacific White 
Whale. Additional studies on other issues will be conducted in 
2008 and beyond. And this is just an example of our approach to 
understanding the issues and decision-making in all areas of 
the OCS.
    The Department of MMS remains committed to doing our part 
to provide access to both traditional and alternative energy 
resources on Federal lands as a critical component of a 
balanced, comprehensive energy policy.
    Mr. Chairman, this concludes my statement, and I would be 
happy to answer any questions that you or other members of the 
Subcommittee may have.
    [The prepared statement of Mr. Cruickshank follows:]

         Statement of Walter D. Cruickshank, Acting Director, 
      Minerals Management Service, U.S. Department of the Interior

    Thank you for the opportunity to appear before the Subcommittee 
today to discuss with you the Department of the Interior's Minerals 
Management Service (MMS) Outer Continental Shelf (OCS) oil and gas 
leasing program. This Subcommittee has played an important role in 
shaping the Nation's domestic energy program, particularly with regard 
to encouraging environmentally sound development of our domestic oil 
and gas resources on the OCS.
    The Department and its bureaus, including the MMS, serve the public 
through careful stewardship of our nation's natural resources. The 
Department also plays an important role in domestic energy development. 
One third of all energy produced in the United States comes from 
resources managed by the Interior Department.
    The MMS has two significant missions: managing access to offshore 
Federal energy and mineral resources and managing revenues generated by 
Federal and Indian mineral leases, on and offshore.
    Managing access has resulted in OCS production of almost 11 billion 
barrels of oil and more than 116 trillion cubic feet of natural gas 
since MMS's creation in 1982. To date since 1982, the number of active 
OCS leases has increased by 172 percent and oil production is about 59 
percent greater, in spite of the drop in production from the 2004-2005 
hurricane seasons.
Nation's Energy Outlook
    The United States continues to face an energy challenge with high 
prices and increasing dependence on foreign supplies. Our security, 
economy, and our quality of life are dependent on energy. As this 
Committee knows well, there is no single solution. Achieving energy 
security will require diligence on both the supply and demand sides of 
the energy equation.
    Oil will continue to be vital to the American economy. According to 
the Energy Information Administration (EIA), over the next 20 years 
Americans' demand for energy is expected to grow 25 percent. [See 
figure A: EIA projection of U.S. energy consumption] Even with more 
renewable energy production expected, oil and natural gas are projected 
to account for a majority of energy use through 2030. This projection 
incorporates continued gains in energy efficiency and movement away 
from energy-intensive manufacturing to less energy intensive service 
industries. Offshore oil and gas production will continue to be a vital 
part of our Nation's domestic energy resource portfolio. [See Figure B: 
EIA projection of U.S. energy resource production]
    Continued reliance on oil and natural gas coupled with the need to 
reduce our dependence on foreign energy supplies causes us to look 
increasingly at the potential oil, natural gas and other energy 
resources from Federal waters on the Outer Continental Shelf (OCS) to 
enhance environmentally safe domestic energy production.
    Today, MMS administers about 7,800 leases and oversees nearly 4,000 
facilities on the OCS. Based on EIA's reports on imports by country of 
origin, if the Federal OCS were treated as a separate country, it would 
rank among the top five nations in the world in terms of the amount of 
crude oil and second in natural gas it supplies for annual U.S. 
consumption. According to MMS's calculations, within the next 5 years, 
offshore production will likely account for more than 40 percent of 
domestic oil and 25 percent of U.S. natural gas production, owing 
primarily to deep water discoveries in the Gulf of Mexico.
OCS Role in Nation's Energy Portfolio
    Much of the future United States oil and gas demand will have to be 
met by OCS production, especially from new areas in the Gulf of Mexico 
and Alaska.
    The Gulf of Mexico continues to represent a major domestic energy 
source for the United States. There is intense interest in oil and gas 
potential in the deep and ultra-deep water areas. Exploratory drilling 
in the deep water increased in 2005 despite the disruptions caused by 
hurricanes; and 12 new deep water discoveries were announced in 2006. 
Recent discoveries in the ultra-deep waters of the Gulf of Mexico 
represent a significant increase in oil and gas supplies for decades to 
come. The large volume of active deep water leases, the steady drilling 
program, and the significant, ongoing investment in deep water 
infrastructure indicate that the deep water Gulf of Mexico will 
continue to be an integral part of the Nation's energy supply.
    The EIA data 1 shows a trend of increasing oil 
production from the OCS to about 750 million barrels per year by 2011. 
EIA projects natural gas production to increase to 4 trillion cubic 
feet by 2012 and sustain that level through approximately 2019. 
Significant additional oil and natural gas production is expected when 
new projects, like Atlantis, Thunder Horse, and Independence Hub, come 
on line in 2007 and 2008. However, new deep water natural gas 
production may not keep pace with the expected declines in production 
from the shallow waters of the Gulf of Mexico, and we anticipate 
natural gas production in the near term to be somewhat lower.
---------------------------------------------------------------------------
    \1\ Energy Information Administration, Annual Energy Outlook 2007 
Data (National Energy Modeling System run AEO2007.D112106A).
---------------------------------------------------------------------------
    To encourage energy development from Federal offshore lands, MMS 
provides an orderly and predictable schedule of competitive oil and gas 
lease sales. Production from leases issued as a result of these sales 
will contribute substantially to future domestic oil and gas production 
and will provide bonuses, rentals and royalties to the U.S. Treasury 
and adjacent coastal states.
2006 Resource Assessment
    Last year, as part of the OCS inventory requirements of the Energy 
Policy Act of 2005, MMS completed an assessment of the potential 
quantities of undiscovered technically recoverable oil and gas 
resources that may be present on the OCS 2. According to 
this assessment, we estimate (at the mean level) that the OCS contains 
86 billion barrels of oil (as oil and natural gas liquids/condensate) 
and 420 trillion cubic feet of natural gas. For comparison, the most 
recent resource estimates from the United States Geological Survey 
National Oil and Gas Assessment indicate that the total mean, 
undiscovered technically recoverable resources for onshore and State 
owned waters offshore are approximately 57 billion barrels of oil (as 
oil and natural gas liquids/condensate) and 627 trillion cubic feet of 
natural gas. Thus, the OCS contains about 60 percent of the Nation's 
remaining undiscovered technically recoverable oil (as oil and natural 
gas liquids/condensate) and 40 percent of its natural gas. [See Figure 
C: Resource Assessment Map]
---------------------------------------------------------------------------
    \2\ Report to Congress: Comprehensive Inventory of U.S. OCS Oil and 
Natural Gas Resources. http://www.mms.gov/revaldiv/PDFs/
FinalInvRptToCongress050106.pdf
---------------------------------------------------------------------------
    Of the 1.76 billion acres of Federal offshore lands on the OCS, 
about 600 million acres are not available for oil and gas leasing. When 
the 2006 resource assessment was completed, areas under congressional 
moratoria or Presidential withdrawal included the North Aleutian Basin 
off Alaska, the Pacific, the Eastern Gulf of Mexico, and the Atlantic. 
The potential resource in these areas is estimated to be approximately 
18 billion barrels and 76 trillion cubic feet of gas, or approximately 
20 percent of the undiscovered technically recoverable resources in the 
OCS. There is great uncertainty regarding the resource potential in 
areas where leasing has been prohibited and where the last geophysical 
surveys and drilling exploration occurred more than 25 years ago.
Five-Year OCS Oil and Gas Leasing Program
    The Outer Continental Shelf Lands Act (OCSLA) requires the 
Secretary to develop a 5-year schedule of oil and natural gas lease 
sales in specific offshore areas. These specific areas are to be 
selected after an analysis comparing oil and gas bearing regions of the 
OCS and receipt of public comments, including comments from each 
coastal state governor. Our current program runs through June 30, 2007. 
MMS has recently completed work on the next five year program, which 
will cover July 1, 2007 through June 30, 2012.
    The OCSLA requires the Secretary to determine size, timing, and 
location of sales proposed in a 5-year program. Section 18 of the OCSLA 
requires an analysis of the economic, social, and environmental values 
of all of the resources of the OCS and the potential impact of oil and 
gas exploration on the environment. Specific factors which must be 
analyzed and considered in deciding where and when to lease include:
      existing information on the geographical, geological, and 
ecological characteristics of such regions;
      equitable sharing of developmental benefits and 
environmental risks among the various regions;
      location of such regions with respect to regional and 
national energy markets;
      location with respect to other current and anticipated 
uses of the sea and seabed;
      expressed industry interest;
      laws, goals, and policies of affected states specifically 
identified by governors;
      relative environmental sensitivity and marine 
productivity of different areas of the OCS; and
      environmental and predictive information for different 
areas of the OCS.
    The Act requires the Secretary to obtain a proper balance between 
the potentials for environmental damage, the discovery of oil and gas, 
and adverse impact on the coastal zone, using cost-benefit analysis.
    It takes over two years to complete the Section 18 process. Major 
steps in developing a 5-Year Program include:
      Request for Information (RFI) (this is only a request for 
information--not a specific proposal)
      Draft Proposed Program (all areas identified in the RFI 
that are not proposed for leasing consideration are excluded at this 
stage)
      Proposed Program/Draft Environmental Impact Statement 
(EIS)
      Proposed Final Program/Final EIS
      Approval
      New Program in Effect (for next 5 years)
    Public meetings were held throughout the areas that were considered 
for future leasing and comments solicited, analyzed, and incorporated 
where appropriate. This 5-Year Program had a significant outpouring of 
comment, especially from the general public. Over 73,600 comments were 
received on the Proposed Program. Out of these comments, over 73,400 
were from the general public. A majority of the commenters, almost 75 
percent, supported a 5-year plan that offers increased acreage for 
offshore oil and gas development planning. These comments focus on the 
instability in the Middle East, American military operations in Iraq, 
and high energy prices in the United States. Approximately 25 percent 
of the private citizens who wrote letters oppose development of the 
domestic OCS, viewing the environmental hazards as too great a risk for 
limited energy resources.
Proposed Final OCS Oil and Gas Leasing Program for 2007-2012.
    On April 30, the Secretary of the Interior transmitted to Congress 
and the President the Proposed Final 5-Year Outer Continental Shelf Oil 
and Gas Leasing Program. This Program will guide the Department's 
decisions on domestic energy leasing on the OCS from 2007 to 2012. As 
required by section 18 of the OCSLA, the Secretary may not approve the 
final program until at least 60 days following submission to Congress 
and the President. Therefore, the Secretary may approve this new 
program tomorrow, June 29. The program would then take effect on July 
1.
    The 2007-2012 Program proposes 21 lease sales in eight planning 
areas. Twelve sales are proposed for the Gulf of Mexico, eight off of 
Alaska and one in the Mid-Atlantic Planning Area, off the coast of 
Virginia. Our analysis indicates that implementing the new 5-Year 
Program for 2007-2012, would result in a mean estimate of an additional 
10 billion barrels of oil, 45 trillion cubic feet of gas, and $170 
billion, in today's dollars, in net benefits for the nation, over a 40-
year time span.
    The Program proposes to continue annual lease sales in the Central 
and Western Gulf of Mexico. The Program proposes to offer new areas of 
the ``Sale 181 Area'' in the Central Gulf in October 2007. In 
accordance with the Gulf of Mexico Energy Security Act, signed by 
President George W. Bush on December 20, 2006, new acreage will be 
offered in portions of the Sale 181 Area in the Eastern Gulf in March 
2008, as well as the ``181 South Area'' in the Central Gulf, which is 
scheduled to be offered in 2009, following completion of the 
supplemental environmental impact statement. The total acreage of new 
areas in the Gulf offered under the proposed program is 8,337,443 
acres.
    The leasing program proposes a schedule of eight sales in Alaska: 
two in the Beaufort Sea; three in the Chukchi Sea; up to two in Cook 
Inlet; and one in the North Aleutian Basin. These areas would be 
subject to environmental reviews, including public comment, and 
extensive consultation with state and local governments and tribal 
organizations before any lease sale decisions are made.
    The Program also includes a proposed sale in the Mid-Atlantic 
Planning Area, beyond 50 miles of the coastline of Virginia, in late 
2011. This area was included in the Program at the request of the 
Commonwealth of Virginia. This proposed sale area excludes a 50-mile 
coastal buffer from leasing consideration as requested by the 
Commonwealth of Virginia, as well as a No-Obstruction Zone at the 
entrance to the Chesapeake Bay where no leasing would take place. A 
decision to hold a lease sale will not be made without additional 
consultation and more site-specific analysis of its environmental 
effects under the National Environmental Policy Act (NEPA).
    We at MMS know that there has been particular concern over the 
proposed sales in the Mid-Atlantic and North Aleutian Basin. The Mid-
Atlantic area remains under Presidential withdrawal and Congressional 
moratorium; therefore no leasing can occur unless the congressional 
moratorium is discontinued and the presidential withdrawal is modified 
for this area.
    The situation is different in the North Aleutian Basin (NAB). 
Congress placed the NAB under congressional moratorium from FY 1990 
through FY 2003, after which Congress no longer included a rider to 
prohibit development in NAB. In 1998, President Clinton withdrew the 
NAB and other areas from leasing consideration through 2012. On January 
9, 2007, the President modified the 1998 withdrawal in order to allow 
leasing in two areas previously closed--the 181 South Area in the 
Central Gulf of Mexico and the NAB.
    Modification of the withdrawal with regard to NAB was supported by 
the State of Alaska, the Alaska delegation, and the local communities 
closest to the proposed sale area, including the Aleutians East and 
Aleutians West Boroughs, Bristol Bay Native Corporation, and cities of 
Cold Bay, Sand Point, and False Pass. The MMS will prepare an 
environmental impact statement, with opportunity for public comment, 
and consult with the State of Alaska under the Coastal Zone Management 
Act before any decision is made to hold a lease sale in this area. The 
Secretary and MMS are committed to continuing the extensive 
consultation and cooperation with the State and local governments and 
tribal organizations which began during the preparation of the new 5-
Year Program. The Proposed Final Program includes only one lease sale 
in this area in 2011, a change from the two sales originally proposed 
in the two earlier proposed schedules. The decision to change the 
proposed schedule from two sales to one sale was made in order to have 
time to develop the information that MMS considers necessary for an 
informed decision.
    The only sale held to date in the NAB was Sale 92 in 1988 which 
resulted in 23 leases being issued. In 1995, all 23 leases were 
relinquished for compensation in a settlement of litigation. Therefore, 
there are no existing leases currently in the NAB.
    In anticipation of possible leasing in the NAB under the new 
Program for 2007-2012, MMS began conducting environmental studies 
within the NAB Planning Area and is actively working with other 
federal, state, and local agencies to understand and address area 
concerns. The MMS takes very seriously the environmental protection 
expectations of stakeholders and the public and ensures compliance with 
laws such as the National Environmental Policy Act (NEPA), Outer 
Continental Shelf Lands Act (OCSLA), Coastal Zone Management Act 
(CZMA), Endangered Species Act (ESA), Marine Mammal Protection Act 
(MMPA), Magnuson Fishery Conservation and Management Act, Oil Pollution 
Act (OPA), Clean Air Act (CAA), and Clean Water Act (CWA).
    Before making a decision to proceed with the proposed NAB sale, MMS 
would complete an anticipated 2 1/2 to 3 year pre-sale and NEPA 
process, which would include preparation of an environmental impact 
statement based on the most current and best scientific information. 
The MMS will use new information obtained through its Environmental 
Studies Program and other available information acquired from other 
research programs and studies in that region. The MMS Environmental 
Studies Program has a long history of appropriately identifying and 
obtaining needed mission-relevant environmental research. This work is 
a key strength of MMS's pre- and post-lease environmental assessment 
and monitoring efforts.
    The first major step to plan new environmental studies in the NAB 
area occurred with the MMS-sponsored NAB Information Status and 
Research Planning Meeting held in Anchorage November 28--December 1, 
2006. The four-day meeting gathered input from stakeholders, 
scientists, and government administrators with particular knowledge and 
expertise on resource use in the area. Of the 111 meeting participants, 
MMS directly funded the travel expenses of 16 local stakeholder 
delegates to ensure strong representation from the local residents of 
each regional borough.
    Speakers and meeting participants emphasized the critical 
importance of resources in the NAB, including human subsistence 
resources, commercial fisheries, and internationally important bird and 
marine mammal populations and habitats. Study profiles for new research 
efforts were developed at the meeting, representing the information 
priorities identified by the working groups. As a start, beginning this 
year MMS and National Marine Mammal Laboratory of the National Oceanic 
and Atmospheric Administration (NOAA) are co-funding a $5 million, 
three and a-half year study of the North Pacific right whale. 
Additional studies will be considered for fieldwork in 2008 and beyond. 
MMS will coordinate studies with other federal and state agencies and 
groups such as the North Pacific Research Board.
    As part of our NEPA scoping process, MMS will seek information from 
local communities and stakeholders early in the EIS process. As a 
commitment to Alaska Governor Palin, Secretary Kempthorne has directed 
MMS to work closely and cooperatively with the State of Alaska, the 
Aleutians East Borough (AEB), and others in the area during the 
planning process for the lease sale. This includes having the AEB 
participate in the preparation of the EIS, assessing mitigation needs, 
and developing stipulations to protect social and environmental 
concerns, especially the valuable fisheries and subsistence uses of the 
area.
    MMS will seek and consider the advice from expert agencies, such as 
NOAA's National Marine Fisheries Service, the Fish and Wildlife Service 
(FWS), National Park Service (NPS), U.S. Coast Guard, U.S. 
Environmental Protection Agency, State of Alaska agencies, local 
government, and federally recognized tribes. Further, during the pre-
sale process, MMS will conduct related consultation including 
consultation with NOAA and FWS under Section 7 of the Endangered 
Species Act, essential fish habitat consultation with NOAA under the 
Magnuson-Stevens Fishery Conservation and Management Act, consultation 
with NOAA under the Marine Mammal Protection Act, and Section 106 
consultation with the State Historic Preservation Office as required by 
the National Historic Preservation Act of 1966. MMS will also conduct 
Government-to-Government consultation with potentially affected tribes.
Conclusion
    The Department of the Interior and the MMS remain committed to 
doing their part to provide access to both traditional energy resources 
and alternative and renewable sources on Federal lands as a critical 
component of a balanced, comprehensive energy policy. For this reason, 
the Department has ensured that the OCS remains a solid contributor to 
the Nation's energy needs. The relative contribution from Federal 
offshore areas will increase in the coming years due to increased 
access and increased activity in the deep waters of the Gulf of Mexico.
    Mr. Chairman, this concludes my statement. I appreciate the 
continued support and interest of this Committee in MMS's programs. It 
would be my pleasure to answer any questions you or other members of 
the Committee may have at this time.
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    .epsMr. Costa. Thank you very much. I suspect we have a 
number of questions. We will take this opportunity and begin.
    As I have been attempting to, from a layperson's 
standpoint, become more familiar and knowledgeable about this 
process, I understand that a lot of the review that comes under 
the Minerals Management Service when you are publishing your 
inventory on U.S. oil and natural gas resources as it relates 
to the Outer Continental Shelf, that you compile data from 
various means.
    But one of those ways is by the collection of seismic data, 
is that not correct?
    Mr. Cruickshank. We do not collect, we do not generate our 
own seismic data. We acquire seismic data. The company is----
    Mr. Costa. But you incorporate that.
    Mr. Cruickshank. Yes.
    Mr. Costa. That is the latest state-of-the-art, 3D 
technology that is allowed in determining the best information 
possible.
    Mr. Cruickshank. In areas where that sort of seismic has 
been shot, we do acquire it, yes.
    Mr. Costa. Yes. And so, I mean, I think it is important. Is 
there a problem that you--I mean, you use that resource that is 
available to you, but you are not able to generate it on your 
own.
    Mr. Cruickshank. We don't simply have the resources to go 
out and generate our own seismic data in areas. To do so for 
any given planning area would probably take $50 to $85 million, 
and several years of processing just to get a good picture of 
what is in a single planning area.
    Mr. Costa. Well, you heard my opening statement, my concern 
about the lack of real information based upon new technologies 
to understand clearly what the resource is out there.
    Correct me if I am wrong. On your studies that you compiled 
for 2006 along the Atlantic and Pacific, our Alaskan coasts, 
were any of the seismic studies conducted along those areas?
    Mr. Cruickshank. We had, off the shore of the Atlantic we 
had seismic data that was shot back in the 1970s and early 
eighties, so we had some old data. We also acquired data from 
adjacent areas: offshore of the Canadian Atlantic, offshore of 
the Bahamas, where companies are active more recently. And we 
try and use that information to better our interpretation of 
the old data we have for U.S. waters.
    Mr. Costa. And so how does that information go into the 
assessments for the moratorium areas?
    Mr. Cruickshank. We simply look at that information and 
give our best guess on what it is telling us for the potential 
resource that may exist in that area, recognizing that until 
there is work done out there, that it is really not very good 
information.
    Mr. Costa. Yes, that was the frustration that I indicated 
in my opening statement.
    So am I correct to understand, because you referenced 1970 
or in that decade, that that is the last time we got first-hand 
data on what the resources are? I mean, we are basing the 
information on that?
    Mr. Cruickshank. Yes, 1970s. And I believe beginning of the 
1980s was the last time there was seismic shock in the 
Atlantic, offshore of the U.S.
    Mr. Costa. Yes. I think we have to figure out a way to do 
better.
    Let me ask you, you threw out a number there, $58 million I 
think. What would it take to provide a full seismic inventory 
for all the regions? And how much would it cost? Do you have an 
idea? Can you give us an approximation?
    Mr. Cruickshank. Well, we have taken a look at that, and 
our general approach would be to try and update the general 2-D 
seismic for an area, and then focus in on specific hot spots, 
if you will, for a 3-D seismic to get a better picture of what 
may exist.
    Mr. Costa. And I think you would want to prioritize----
    Mr. Cruickshank. Absolutely.
    Mr. Costa.--since obviously you couldn't do it all at once.
    Mr. Cruickshank. And our estimates are that it would take 
between $50 and $85 million to do a single area.
    Mr. Costa. A single area?
    Mr. Cruickshank. A single planning area, that is correct. 
And we have 26 planning areas, though obviously in the Gulf and 
portions of Alaska we have current information from industry 
activities.
    Mr. Costa. OK. Let us move to some local efforts quickly, 
because my time--I cited the California experience, because 
with the strong opposition that exists there in California, 
some people believe there is no drilling. Of course, there are 
44 platforms, and it is significant.
    But was I correct in terms of talking about the issue of 
any spills? Have they been de minimis?
    Mr. Cruickshank. They have. As I noted in my oral 
statement, over the last 20 years there has been less than 1/
1000 of 1 percent of the oil produced.
    Mr. Costa. You were talking nationwide.
    Mr. Cruickshank. I was talking nationwide.
    Mr. Costa. Right. So in California, it is----
    Mr. Cruickshank. I don't have the comparable number for 
California, but there has not been a major spill from OCS 
production since 1969.
    Mr. Costa. My time has expired, but if I get another round 
I want to get--maybe some of my colleagues will cover it--but 
the issue of weather conditions comparable to, you know, the 
North Sea, as we look at challenges on U.S. coastal waters, and 
the issues on coexistence with fisheries and environmental 
issues. But I will now defer to the Ranking Member of the 
committee, the gentleman from New Mexico.
    Mr. Pearce. I thank the Chairman, and would make the, just 
the opening statement that I am fascinated with the question on 
seismic, and would be more than willing to work in a bipartisan 
fashion to do whatever we can to update those studies. Because 
I think that access to reasonably recent and qualified data is 
extraordinarily important.
    And I know from my experience in the oil field that the 
seismic data has tremendously changed since the seventies. In 
the seventies, you were getting kind of a one-dimensional 
display of what might be down when you drill, and so you are 
just kind of drilling blind. Today it is 3-D, and you can 
almost place a pocket of oil so that sometimes you have to come 
around and come to that pocket. But you can just hit exactly 
what you are trying to do. And it has caused some of the 
greatest environmental improvement in the industry because of 
our tremendous knowledge. So we would work with you on that.
    The $50 to $85 million, Mr. Cruickshank, that you referred 
to, is that paid by the government, or is that paid by the 
companies?
    Mr. Cruickshank. Well, that is what we think it would cost 
if we were asked to collect the data ourselves.
    Mr. Pearce. If you were to collect it.
    Mr. Cruickshank. Yes.
    Mr. Pearce. Do you have any areas where you all collect 
data? Do you all typically do seismic, or do the oil companies 
do the seismic?
    Mr. Cruickshank. We do not. The oil and natural gas 
companies do the seismic, and we acquire it. But obviously 
those companies aren't acquiring seismic data in areas where 
they don't have, where they don't see a potential for leasing.
    Mr. Pearce. And so in your estimation, that is a business-
wise decision that you all would invest in the seismic in order 
to lease? Or what would it take? What has stopped, I guess the 
question is, what has stopped the oil companies from doing 
that? That there is no future to lease, that the moratorium 
exists?
    Mr. Cruickshank. I believe that is the case. That if they 
don't see a prospect for leasing in an area, they don't view it 
as a wise investment of their money to go out and collect the 
data.
    Mr. Pearce. No, I would understand that. But say, even in 
piecemeal, let us say that we decided, because Virginia has 
voted in their legislature, the local process that we referred 
to earlier said, you know, let us have that. And so if we 
declared the moratorium over for the Virginia coastline, then 
is it reasonable to assume that companies would come in and 
spend that money, and save the government the $50 to $85 
million per leasing parcel?
    Mr. Cruickshank. Yes, absolutely.
    Mr. Pearce. That is a reasonable assumption. And there 
would be no difference in the data. In other words, you would 
use the same sources, seismic sources.
    Mr. Cruickshank. It might even be the same companies, as we 
would contract that with folks if we were to----
    Mr. Pearce. So no difference on the data. Going into the 
safety, I have heard concerns from people in New Jersey that if 
we allowed production in Virginia, that we possibly risk the 
coastline of New Jersey.
    Can you tell me the greater risk from the tankers that go 
in and offload oil in the northern part of the U.S. along that 
coastline. Is there a great risk from that, or a greater from 
the production that occurs out in the gulf in an offshore 
region?
    Mr. Cruickshank. We believe there is a greater risk from 
the tanker traffic. If leasing would occur offshore Virginia, 
currents there generally are southerly near shore, and offshore 
they tend to push farther out to sea. So we think the chances, 
if there were an incident offshore Virginia, anything getting 
up to New Jersey is pretty small.
    Beyond that, the National Academy of Sciences has looked at 
the sources of oil that gets into the ocean, and offshore 
production counts for about 2 percent of the oil that gets into 
the ocean in North America; marine transportation, about 3 
percent.
    Mr. Pearce. Where are the greatest percentages of oil that 
get into the ocean?
    Mr. Cruickshank. The single largest source is natural 
seepage, and that is followed by municipal runoff.
    Mr. Pearce. Do you know the size, the percent of the chance 
of natural seepage? In other words, 2 percent comes from 
production activities.
    Mr. Cruickshank. For natural seepage, it is about 63 
percent of all the oil going into the North American----
    Mr. Pearce. So we have a 63 percent chance that nature is 
going to spoil the beaches of New Jersey, and a 2 percent 
chance that man's activities will. Is that correct? Is that a 
fair way to look at it?
    Mr. Cruickshank. Well, these are numbers that are averaged 
over the nation.
    Mr. Pearce. No, I understand.
    Mr. Cruickshank. I don't think there----
    Mr. Pearce. I am just trying to keep it in perspective and 
not to overplay it one way or another, just to understand what 
the facts are telling us.
    What about minerals leasing cooperation with defense 
agencies? Does offshore leasing present a problem for that?
    Mr. Cruickshank. We have a longstanding memorandum of 
understanding with the Department of Defense, where we work 
cooperatively with them to plan activities in areas where there 
are Department of Defense activities. We have had a very 
successful relationship in the Gulf of Mexico that has allowed 
us to proceed with leasing in areas of importance through the 
Department of Defense. We are able to work out measures that 
allow both activities to occur jointly.
    We would expect, as does the Department of Defense, that if 
the moratorium were to be lifted in Virginia, that we would 
talk about similar accommodations in that area. But from our 
perspective, we would never allow any leasing activity to occur 
that would jeopardize national security.
    Mr. Pearce. Mr. Chairman, I see my time has elapsed, but if 
you have a second round, I would ask then. Thank you.
    Mr. Costa. Thank you. You actually had an opportunity to 
have a little more time.
    Our next member of the committee is the gentleman from 
Rhode Island, I should say, our colleague, Congressman Kennedy.
    Let me just note before he begins his questioning that 
obviously Congressman Moran has arrived. I have indicated for 
an orderly process that we will complete our questions of this 
witness with two rounds, and then following this witness we 
will insert Congressman Moran for his statement.
    So he has asked if he could have the courtesy of being here 
with us on the podium, and I said fine.
    So the gentleman from Rhode Island, Mr. Kennedy.
    Mr. Kennedy. Thank you, Mr. Chairman. I want to follow up 
with the Ranking Member's question with regard to working with 
the Department of Defense, because as I understand it, the Navy 
submitted comments to your agency regarding the five-year draft 
proposed program on April 10, 2006, saying that because they 
conduct significant activity in the Virginia Cape's area 
operations, which overlaps the Virginia program area in the 
five-year plan, they oppose the oil and gas development 
activity in that region.
    And on November 27, 2006, they submitted comments for the 
proposed program saying that, ``The special interest sale 
proposed for the mid-Atlantic region is not acceptable to the 
Department because of its incompatibility with the military 
training and testing conducted in this area.'' As opposed to 
what you had just responded to Mr. Pearce in regards to.
    The Navy goes on to say that they are willing to discuss 
possible alternatives to provide opportunities for exploration 
of potential joint use of the mid-Atlantic area, but they say, 
``MMS acknowledged that the Navy opposes the mid-Atlantic sale, 
but makes no response.''
    So I am sure you are familiar with these objections. But 
why is it that they have given them no response, and gone ahead 
and opened this thing up without giving them that response? I 
mean, you do acknowledge in the Gulf of Mexico you draw a line 
for military missions, the line to accommodate Department of 
Defense, but you are not willing to do that in this case. Why 
is that?
    Mr. Cruickshank. We did provide for the Department of 
Defense, we met with them on several occasions. As you noted, 
they have said they are willing to discuss alternatives that 
will provide for joint use of the mid-Atlantic area. And as 
they also note in the letter you were quoting from, the 
Department of Defense notes that they and we have worked 
closely together over the years to ensure a successful leasing 
program with manageable impacts on defense operations.
    We have a very strong, longstanding relationship with them 
in the Gulf of Mexico. We have set areas aside. In other areas 
we do leasing and activities where there are military 
operations, but we put special conditions on those leases as to 
what sorts of activities can occur, and when they can occur, 
and a sort of notification that has to be given to the 
Department of Defense to make sure that there is no 
unacceptable impact on defense operations.
    So if this area were to become available, one of the first 
things we would do is sit down with the Defense Department and 
work with them to see if there are reasonable accommodations 
that can be made. If not, that is certainly something that 
would weigh very heavily in any decisions as to whether or not 
to hold the lease sale.
    Mr. Kennedy. Obviously, I think that should be detailed in 
the five-year plan. Those are big issues that are at stake 
here, and I would hope that that is or is not just left as kind 
of details in the weeds. These are enormous issues that I think 
need to be considered before we even think of moving forward. 
These are not issues that are subtext to our discussions after 
decisions are made here at our level.
    We need to have these questions brought up before us before 
we even consider these issues. They are not for bureaucrats to 
decide after we consider legislation like this. We need to be 
privy to these decisions well before, you know, you get to 
negotiate out, because we might, as a Congress, might not deem 
these appropriate compromises to national security.
    I mean, we are considering a lot of moving parts here with 
respect to training grounds with BRAC and the like. I know that 
because we are in the midst of sharing a lot of these testing 
grounds between my state of Rhode Island in undersea warfare, 
and this area that is in the potential testing zone off 
Virginia. There are enormous impacts here, and we can't have 
this kind of decision being made in a vacuum here. And I just 
really can't stress strongly enough that these decisions can't 
be made ex post facto, whenever this bill that we are deciding 
on here is considered.
    So I would just bring that to the attention of the 
committee and say that I have great concerns about that. And 
then in another line of questioning, we will come back to the 
issues of oil spills and my concerns about those.
    Mr. Costa. You may want to highlight them. I am trying to, 
because of the timing situation, keep this to one round.
    Mr. Kennedy. OK. Well, I will submit those for the record, 
then.
    Mr. Costa. All right. I know the gentleman from Rhode 
Island, as I do, shares a fondness for the sea and for sailing, 
and speaks with great conviction. So we will be looking forward 
to submitting those questions. I have some additional 
questions, as well, that I will submit.
    The gentleman from Texas, Mr. Gohmert, I believe is next.
    Mr. Gohmert. Thank you, Mr. Chairman. And we sure do 
appreciate your time and your testimony and your expertise.
    I am curious. I have understood from Don Young that the 
closest groups to ANWR, local groups, do not have objection; 
that the groups that actually object to production, drilling 
production in ANWR, are those that are farther away. Do you 
know?
    Mr. Cruickshank. I don't know the answer to that off the 
top of my head. Minerals Management Service deals with the 
offshore resources, and ANWR is handled by another part of the 
Department.
    Mr. Gohmert. OK. When you had testified about one third of 
our energy sources come from within your-all's jurisdiction, I 
didn't know if you were testifying just specifically Minerals 
Management Service, or the entire Department of Interior.
    Mr. Cruickshank. The one third refers to the entire 
Department of Interior: on-shore, offshore, hydro-electric, 
all----
    Mr. Gohmert. But that is the extent of your expertise, is 
one third. And you can't go more specific beyond that.
    Mr. Cruickshank. I know bits and pieces, but I can't answer 
the specific question you asked about ANWR. But we can get an 
answer for you.
    Mr. Gohmert. OK. ANWR is not one of those bits or pieces, 
then.
    Mr. Cruickshank. Not in terms of the location of 
communities, no.
    Mr. Gohmert. All right. Well, to follow up on my colleague 
from Rhode Island's questioning, obviously we don't want to 
jeopardize national security, and obviously the Navy has some 
concerns, as well they should, if they have obstacles out in 
the sea that they would have to avoid that might pose problems.
    And I know that the Navy has submarines that are nuclear-
powered, and perhaps aircraft carriers. I am not on Armed 
Forces, but I was under the impression that most of our ships 
use carbon-based fuel.
    Do you know what--I don't know if this is one of your bits 
and pieces or not. But do you know what percentage of America's 
carbon-based energy comes from foreign countries?
    Mr. Cruickshank. Not carbon-based overall. About 65 percent 
of our oil comes from foreign countries, and about 15 percent 
of our natural gas.
    Mr. Gohmert. Because I am curious. I am very concerned 
about problems for the Navy in training. I am also concerned 
about if we get into a war, is the Navy better off dodging a 
platform and not getting oil from the enemy we are fighting? Or 
are we better off getting our own oil, and not having to rely 
on the enemy to supply our Navy with fuel, so that our ships 
can go fight them? Just, the question arises.
    You had mentioned that of all the oil contaminating the 
coast, as I understand, 63 percent is from natural seepage, is 
that correct?
    Mr. Cruickshank. That is correct.
    Mr. Gohmert. And I need you to help me understand. When you 
say natural seepage, is that naturally occurring seepage? Or is 
that natural seepage from around production areas? Could you be 
more specific on that?
    Mr. Cruickshank. Well, oil occurs, as you know, in 
sediments, many of which are under the sea. And its natural 
tendency is to rise toward the surface. And where there is some 
sort of cap rock or structure that blocks it, that is where you 
get the big pools of oil that you drill for and try and 
produce.
    Where there is no cap rock or structure, it just keeps 
rising up and bubbles to the surface, and seeps out.
    Mr. Gohmert. Without any man intervening or causing that at 
all, correct?
    Mr. Cruickshank. That is correct.
    Mr. Gohmert. All right. Well, and as I understand, you are 
currently working with the military off the coast of my state, 
Texas, correct?
    Mr. Cruickshank. We are. There are military operation areas 
off the coast of Texas. And prior to every lease sale we talk 
with them, and we design special stipulations on the leases to 
meet their concerns.
    Mr. Gohmert. Going back just for one question, to the 
seepage. It is my understanding that production by the United 
States off our coast actually relieves some of the natural 
seepage, and allows us to take advantage of it and provide that 
to people like the Navy, so they don't have to rely on 65 
percent of their oil products coming from our enemies. Is that 
your understanding?
    Mr. Cruickshank. That is correct. In areas where we 
produce, we are pulling the oil out of reservoirs and producing 
it, so it is not escaping and seeping to the surface in those 
cases.
    Mr. Gohmert. I do have to express my appreciation for the 
Navy's optimism that in a time of war, our enemies will provide 
us with 65 percent to keep our Navy afloat. But I appreciate 
that my time has expired.
    Mr. Costa. I thank the gentleman from Texas. Our next 
witness in the order alternating time would be myself. But for 
the purpose of trying to allow both our colleague to have his 
testimony, I indicated that I was going to forgo that.
    I do want to suggest to Mr. Cruickshank that I will send 
you questions as it relates to the alternative leasing schemes 
that have been discussed in Louisiana and other places. Of 
course, we have our colleague here from Louisiana who may ask 
that question.
    I do want to talk to you about changings and planning area 
boundaries, and will submit that question, as well as 
administrative area boundaries, definition of large spills, the 
North Aleutian Basin proposal mitigation measures, and some of 
the issues that you folks have raised with regard to buffer 
zones and the inner engagement with National Marine Fishery 
Services. That will have to be received in written statements.
    The gentleman from Louisiana is here, and has not had an 
opportunity to have his five minutes. Mr. Jindal, it is good to 
have you here.
    Mr. Jindal. Thank you, Mr. Chairman, for conducting this 
hearing. I want to thank our witness, as well.
    I have really got just two categories of questions. I will 
predicate it by reminding us, last year I introduced the Deep 
Ocean Energy Resources Act of 2006, a version of which--that 
bill actually passed the House--a version of which was enacted 
in the law. That bill recognized the important need to expand 
domestic offshore oil and natural gas production. It gave 
coastal states the power to opt out of restrictions on drilling 
if they wanted. And as a result, it was a strong step toward 
more affordable and stable energy supplies.
    It also, importantly for Louisiana, required revenue from 
offshore leases to be shared with the coastal states, so that 
we would have funding for vital needs, such as restoring our 
coasts, building protection from hurricanes, and other critical 
infrastructure needs.
    The compromise version of that bill ended a 57-year wait 
for my state to finally receive a share of revenues from the 
drilling off of our coast. Therefore, this hearing today is of 
particular interest to those of us from Louisiana.
    To the people of my state, the next five-year leasing 
program means more affordable energy, means more high-paying 
jobs, means significant revenues. And for the first time, it 
means we will have money from drilling in the Federal waters 
off our coast, which is critical to our future.
    My two sets of questions. First, the Gulf of Mexico Energy 
Security Act mandated that the states of Louisiana, Texas, 
Alabama, and Mississippi would share 37.5 percent of the 
revenue from all lease sales in the Eastern Gulf of Mexico area 
and the 181 South area regions, a combined 6.5 million acres.
    My first group of questions are, can you tell me when the 
lease sales for these particular areas are proposed? And an 
estimate of when the states will be able to receive their share 
of these revenues?
    Mr. Cruickshank. Since these are areas that have not been 
available for quite some time, we are in the process of doing 
supplemental environmental impact statements and the other work 
necessary to hold the lease sales. We expect that the area in 
the Eastern Gulf of Mexico will be offered in March of 2008, 
and the 181 South area will be offered in March of 2009.
    Mr. Jindal. And do you have an estimate of when you expect 
production based on you-all's previous experiences?
    Mr. Cruickshank. Based on previous experience, depending on 
the nature of what they find in the Eastern Gulf, we could see 
production within three to five years. In the 181 South I 
expect it will take a little bit longer because of the greater 
distance from existing infrastructure.
    Mr. Jindal. Now, the dates you just shared with the 
committee, are those the original dates? Or do those reflect a 
delay from you-all's original timelines?
    Mr. Cruickshank. Those are our original timelines. But we 
do recognize, for the area in the Eastern Gulf, the Act asked 
us to hold the sale by December of 2007, but we simply didn't 
have sufficient time to complete the necessary steps for NEPA 
and other compliance by that time. So we pushed it back to 
March.
    Mr. Jindal. That brings me to my second question. The 
states such as Louisiana are counting on this revenue sharing 
for restoration, hurricane protection, and flood control 
projects. Therefore, it is critical to us that the sales 
proceed on a timely fashion, and also it is critical that there 
is accuracy when it comes to the amount of money collected from 
the companies and distributed to the states.
    Earlier this year there were questions as to whether your 
agency had the procedures in place and the staff required to do 
this both accurately and in a timely fashion. Can you give us 
assurances today that you have the resources you need to do 
this in a timely fashion, and in an accurate fashion?
    Mr. Cruickshank. We believe we do. We are always open to 
suggestions from folks on how to improve our processes, but we 
think our processes are good and will continue to improve them 
to provide you that assurance.
    Mr. Jindal. I will conclude, for the sake of time, with 
just a couple final thoughts.
    One, certainly we are concerned. We would have hoped that 
there wouldn't have been a delay, but obviously this is very 
important to our state, I will certainly echo some of the 
comments made from my colleagues that the offshore Louisiana, 
Texas, and other coastal states have been happy to host this 
production to produce energy for the rest of the country. We 
simply are just looking for an opportunity to repair some of 
the damage from previous activities, especially when it comes 
to protecting our coasts.
    And I think my colleague is doing a good job of 
highlighting the need for us to have a domestic reliable source 
of energy.
    I thank the witness, and I thank the Chairman, as well.
    Mr. Costa. I thank the gentleman from Louisiana. And 
because of today's schedule, I believe it is important that we 
allow our colleagues an opportunity to testify. We will honor 
all the members of the Subcommittee's desire to have the 
responses to written questions, both Congressman Kennedy and I 
and others have indicated. So we would hope that you would 
respond to our written questions in a timely fashion.
    Mr. Cruickshank. I would be happy to.
    Mr. Costa. And, Mr. Cruickshank, I suspect we will be 
having further interaction with you and the Minerals Management 
Service. And we hope that we can be more constructive in some 
of the criticisms that I echoed in figuring out how we might 
solve some of these issues, to get a more accurate view of the 
challenges you face, and our nation has faced, as we deal with 
this very important issue.
    Mr. Cruickshank. Thank you, Mr. Chairman. I look forward to 
working with you.
    Mr. Costa. And congratulations on your new appointment.
    Mr. Cruickshank. Thank you.
    Mr. Costa. All right. We are going to deviate a little bit 
from our agenda. Congressman Moran was to be scheduled with our 
earlier two Members, and unfortunately had a commitment that 
delayed him. So we are looking forward to hearing his comments 
and thoughts as it relates to this important issue. And we 
thank you for your patience.
    He represents, I think as many of us know, an important 
part of northern Virginia. Actually, he represents many Members 
of Congress and staffpeople who either live full time or list 
part time in his district.
    And it is good to have you here, Congressman Moran.

 STATEMENT OF JIM MORAN, A REPRESENTATIVE IN CONGRESS FROM THE 
                       STATE OF VIRGINIA

    Mr. Moran. Thank you very much, Mr. Chairman. I do 
appreciate the opportunity to testify today. And of course, I 
appreciate the overall objective of reducing our dependency on 
foreign, unstable sources of energy. I think we all support 
that objective.
    But I do not think that we will get there by lifting the 
moratorium on drilling off the Atlantic and Pacific coasts. 
Lifting the moratorium, however, will invite great harm to 
established fishing and tourism industries, as well as the 
environment. And off the coast of Virginia, as has already been 
mentioned, it will interfere with the U.S. Navy's Virginia Cape 
operation area.
    The Chesapeake Bay and Virginia's coastal communities 
generate billions of dollars in economic activity. Just one 
city, Virginia Beach, whose Mayor strongly opposes lifting the 
moratorium, hosts more than 3 million visitors each year, and 
generates more than $1.4 billion in economic activity. 
Fishermen haul more than 824 million in saltwater catches 
annually. And in fact, most of the income from communities 
along the Chesapeake Bay and eastern shore are tied to their 
coast.
    Bristol Bay in Alaska is the ecological wonder that 
sustains a $2 billion commercial fishing industry, and is home 
to the world's largest wild sockeye salmon run, as well as a 
vital fishery for halibut, red king crab, and pollock. The 
Chukchi and Beaufort Seas on the North Slope are known as 
America's polar bear seas, and they provide essential habitat 
for a fifth to a sixth of the world's remaining wild polar 
bears. These communities and their economic livelihood are also 
at risk from oil and gas drilling.
    The suggestion is that the drilling off Virginia's coast be 
for gas only. But the drilling procedure is the same, and 
involves massive amounts of waste mud that contains toxic 
metals, such as mercury, lead, and cadmium. Waste mud is 
thought to be the leading source of mercury poisoning in the 
Gulf Coast. Drilling operations also discharge hundreds of 
thousands of gallons of what is called produced water that 
contain a variety of toxic pollutants, including benzine, 
arsenic, lead, naphthalene, zinc, and toluene. They can also 
contain varying amounts of radioactive material.
    Just a few more environmental statistics, since my staff 
has come up with so many of them I hate not to use them. There 
are tons of air pollutants that are generated by these 
operations, as well. A typical exploration well generates some 
50 tons of nitrogen oxide, 13 tons of carbon monoxide, six tons 
of sulphur dioxide, and five tons of carbon monoxide. In 
addition, drilling can trigger the uncontrolled release of 
methane hydrates, which is a greenhouse gas that is 20 times 
more potent than carbon dioxide.
    I have several pages of statistics. I am not going to 
report any more of them, or take any more time to share them 
with you, and I suspect the panel is aware of it. But there is 
good reason why people are very much concerned about opening 
new oil and gas areas.
    There were 73 incidents in the last 20 years that resulted 
in more than 3 million gallons of oil spilled from Outer 
Continental Shelf oil and gas operations.
    The main thing I want to emphasize is that we don't think 
that more offshore drilling will solve our energy problems. In 
other words, it won't accomplish the objective that we share.
    It has been estimated by the experts that the amount of 
natural gas and oil recoverable from the Outer Continental 
Shelf will not reduce our prices materially. For one thing, it 
takes too long to develop a natural gas field to affect prices 
in the short term, because it takes one to three years to 
develop a field. But there isn't enough oil and gas in the 
areas that we are talking about to appreciably influence 
production and consumption.
    The Department of Energy said that the price difference if 
we were to drill in all of the areas under the moratorium would 
lower natural gas prices by about four cents per thousand cubic 
feet by the year 2020. A study found that exercising existing 
leases offshore, where drilling is already allowed, completing 
a gas pipeline from the North Slope in Alaska and siting more 
liquified natural gas terminals will do much more to increase 
supply and lower prices than anything that is recoverable from 
the currently restricted areas.
    The vast majority, 80 percent of the nation's undiscovered 
but technically recoverable Outer Continental Shelf oil and 
natural gas is located in areas that are already open to 
drilling. According to the Interior Department, there are 479 
trillion cubic feet of reserves that are already available, and 
we are only talking about 86 trillion that are considered 
within this moratoria area.
    I need to conclude this. But the point is that we are 
talking about 19 billion barrels of oil, compared to 101 
billion barrels of oil already available. And, as I say, it is 
86 versus 479 trillion cubic feet, in terms of what we would be 
making available versus what is already available, if we choose 
to drill for it.
    Let me conclude with the other thing that is particularly 
specific to the Virginia beach, and I think rather compelling.
    Mr. Costa. Please.
    Mr. Moran. The fact that the Navy has said unequivocally 
that they cannot support the proposed lease sale areas within 
the mid-Atlantic planning area off the coast of Virginia. There 
are very sensitive operations, very essential operations that 
take place here. And so they did write that letter that I think 
made it very clear they would oppose this, and that is one more 
reason I would oppose it as well.
    Thank you.
    [The prepared statement of Mr. Moran follows:]

Statement of The Honorable James P. Moran, a Representative in Congress 
                       from the State of Virginia

    Good morning and thank you for the opportunity to testify at 
today's hearing on the Minerals Management Service's Five Year Program 
for Oil and Gas Leasing on the Outer Continental Shelf.
    I appreciate and support the overall objective of reducing our 
dependency on foreign unstable sources of energy. We will not get there 
by lifting the moratorium on drilling off the Atlantic and Pacific 
coasts.
    Lifting the moratorium, however, invite great harm to established 
fishing and tourist industries and the environment. And, off the coast 
of Virginia, it will interfere with the U.S. Navy's Virginia Capes 
Operations Area.
    The Chesapeake Bay and Virginia's coastal communities generate 
billions of dollars in economic activity. Just one city, Virginia 
Beach, hosts more than 3 million visitors each year and generates more 
than $1.4 billion in economic activity. Fisher-men haul more than $824 
million in saltwater catches annually.
    And, upwards of half of the income of communities along the 
Chesapeake Bay and Eastern Shore are tied to their coasts.
    Bristol Bay is the ecological wonder that sustains a $2 billion 
commercial fishing industry and is home to the world's largest wild 
sockeye salmon run as well as a vital fishery for halibut, red king 
crab, and Pollock.
    The Chukchi and Beaufort Seas are known as America's ``Polar Bear 
Seas,'' and provide essential habitat for one-fifth to one-sixth of the 
world's remaining wild polar bears. These communities and their 
economic livelihood are at risk from oil and gas drilling.
Environmental Harm
    It doesn't matter if its oil or gas, the drilling procedure is the 
same and involves massive amounts of waste mud that contains toxic 
metals, such as mercury, lead and cadmium. Waste mud is thought to be 
the leading source of mercury poisoning in the Gulf coast.
    Drilling operations also discharge hundreds of thousands of gallons 
of ``produced water'' that contain a variety of toxic pollutants 
including benzene, arsenic, lead naphthalene, zinc and toluene. They 
can also contain varying amounts of radioactive material.
    Tons of air pollutants are also generated by these operations. A 
typical exploration well generates some 50 tons of nitrogen oxides, 13 
tons of carbon monoxide, 6 tons of sulfur dioxide and 5 tons of carbon 
monoxide. In addition, drilling can trigger the uncontrolled release of 
methane hydrates, a greenhouse gas that is 20 times more potent than 
carbon dioxide.
    More harm is caused by the infrastructure needed to support a 
drilling operation. Miles of pipeline and onshore processing and 
refinery plants are responsible for destroying hundreds of miles of 
wetlands and sensitive coastal habitat along the Gulf coast. And, I 
have not even mentioned the potential harm caused by oil spills.
    According to the Interior Department between 1980 and 1999 there 
were 73 incidents that resulted in more than 3 million gallons of oil 
spilled from OCS oil and gas operations. Minor spills occur all the 
time, a major spill would be a catastrophe that would permanently 
injure productive fisheries and wreak havoc on the tourist industry.
More Offshore Drilling Won't Solve our Energy Problems
    The natural gas and oil estimated to be recoverable from the Outer 
Continental Shelf will not solve our high natural oil and gas prices. 
It simply takes too long to develop a natural gas field to affect 
prices in the short term (1-3 years).
    Natural gas from areas currently off limits to drilling will not 
reduce prices in the long term either, since there is not enough gas 
there compared to either annual U.S. production or consumption.
    A 2001 Energy Information Agency study: U.S. Natural Gas Markets: 
Mid-Term Prospects for Natural Gas Supply (SR/OIAF/2001-06) compared 
the price of natural gas with the OCS moratoria areas kept out of 
production and the price of natural gas if all the moratoria areas were 
opened for drilling in the 2007-2012 MMS 5 Year Plan. In this study 
DOE's National Energy Modeling System (NEMS) predicted that the price 
difference for drilling in all moratoria areas would lower natural gas 
prices by about 4 cents per thousand cubic feet in 2020.
    The study found that exercising existing leases offshore where 
drilling is allowed, completing a gas pipeline from the North Slope in 
Alaska and siting more Liquefied Natural Gas (LNG) terminals will do 
more to increase supply and lower prices than anything recovered from 
currently restricted areas.
    The vast majority (80 percent) of the nation's undiscovered but 
technically recoverable OCS oil and natural gas is located in areas 
that are already open to drilling. According to the Interior 
Department's 2006 Report to Congress: Comprehensive Inventory of U.S. 
OCS Oil and Natural Gas Resources, there are an estimated 86 trillion 
cubic feet (TCF) of undiscovered technically recoverable natural gas 
resources in all OCS areas withdrawn from leasing compared to 479 TCF 
of reserves, reserve appreciation and undiscovered technically 
recoverable resources within the total OCS belonging to the U.S.
    For oil, there are an estimated 19 billion barrels of undiscovered 
technically recoverable oil in all OCS areas withdrawn from leasing 
compared to 101 billion barrels of oil reserves, reserve appreciation 
and undiscovered technically recoverable resources within the total OCS 
belonging to the U.S. In other words, the potential gas and oil now off 
limits constitutes about 20 percent of all recoverable oil and gas 
thought to exist in the OCS.
    The question has to be asked, why are we opening up new areas when 
trillions of cubic feet of natural gas and billions of barrels of oil 
can be found in proven reserves that are available but have not yet 
been brought into production?
There are cheaper, cleaner alternatives
    Over the past 33 years there have been at least five large energy 
price shocks. Each shock has triggered a policy debate on measures to 
mitigate the economic effects of future shocks and reduce our 
dependency on foreign sources.
    Unfortunately, time and other priorities have eroded past 
commitments and resolves. In terms of investment, this nation has gone 
backwards, investing only 20 percent of what we did in total energy and 
conservation research during the early 1980s. Boosting domestic 
production of fossil fuels is not the way to go.
    We are 5 percent of the world's population and consume close to 25 
percent of the world's energy. We are also long past peak production of 
our fossil fuel resources.
    The only realistic way to close the gap between domestic production 
and consumption is through the aggressive pursuit of conservation, 
alternative technologies and cleaner renewable fuels.
    Improving energy efficiency is the key to minimizing the impact of 
energy shocks on the overall economy.
    The federal government can play a critical role by setting 
standards that reduce consumption and supporting research that yields 
greater energy efficiencies and cleaner alternative sources of energy.
    Unfortunately, opening up our last reserves and revisiting past 
energy production policies will fail to improve our situation and are 
self-defeating over the long term.
National Security Concerns
    Finally, let me stress a concern that the U.S. Navy has raised with 
the Interior Department's draft Oil and Gas leasing program off the 
coast of Virginia. The Navy has, ``consideration concern, however, with 
the proposed lease sale areas within the Mid-Atlantic Planning Area of 
the cost of Virginia.''
    To quote further, ``the proposed area lies within the Virginia 
Capes (VACAPES) Operation Areas where the Navy's training and test and 
evaluation community conducts significant activity.''
    Bottom line, this proposal invites significant economic and 
environmental injury to our coastal regions, and in Virginia's case 
compromises Naval operations but yields less potential natural gas than 
is now available but not yet in production.
    I urge my colleagues to support legislation to maintain the 
moratorium and continue to protect our coastal waters.
    Thank you.
                                 ______
                                 
    Mr. Costa. Well, thank you very much, the gentleman from 
northern Virginia. And we appreciate your patience. And we will 
move on now with our final panel of witnesses, and see you on 
the Floor.
    Mr. Moran. Good. Thank you, Mr. Chairman.
    Mr. Costa. Our next panel is one current and one former 
legislator, also from Virginia. This must be a Virginia 
morning. The Honorable Frank Wagner, a Virginia State Senator, 
representing I guess, among other areas, Virginia Beach. The 
Honorable Albert Pollard, former Member of the Virginia House 
of Delegates. Having been a former state legislator, I am 
always pleased to see members from state legislatures come to 
Washington, and to testify.
    In addition to that, we have a Mr. Bob Juettner, who is a 
Borough Administrator for the Aleutians East Borough of Alaska. 
And Mr. Whit Sheard, the Alaskan Program Director for the 
Pacific Environment.
    So do we have all of our witnesses here? Good. Why don't we 
begin with State Senator Frank Wagner, representing, I guess in 
parts, Virginia Beach. And I look forward to your testimony.
    As I have suggested to the other witnesses, we like to keep 
within the five-minute rule. That is why those lights are there 
in front of you. Green begins, and then when the yellow light 
comes on, you have about a minute to wind up.
    So we look forward to your testimony, Mr. Frank Wagner.

              STATEMENT OF THE HON. FRANK WAGNER, 
                STATE SENATOR, STATE OF VIRGINIA

    Mr. Wagner. Thank you, Mr. Chairman, and Congressman 
Pearce, and members of the committee. I appreciate this 
opportunity to testify in front of you today.
    First of all, I want to thank or congratulate the U.S. 
Department of Interior MMS for the inclusion of Virginia into 
the initial five-year plan; and after two years of fairly 
exhaustive public hearings and comments from citizens of 
Virginia, as well as all over the nation, the overwhelming 
positive response that they have received in support of 
maintaining Virginia into the five-year plan, and ultimately 
the decision that is before you today, that keeps Virginia 
within the current five-year plan under the MMS program.
    We in Virginia truly appreciate that as a result of the 
actions of the General Assembly over 2005/2006, and indeed in 
the Senate of Virginia into 2007, the indication that we would 
like the opportunity to find out what is off the coast of 
Virginia, and perhaps enhance Virginia's position in there.
    And I can tell you, Mr. Chairman, this is the result of an 
exhaustive study of a program that I chaired: a committee that 
studied the needs of manufacturers in Virginia was the ultimate 
genesis of this particular program. And we had lost 70,000 jobs 
in Virginia, manufacturing jobs, over the last 10 years or so, 
and became very, very concerned, because we think that is an 
important and instrumental part of Virginia's overall economy.
    And so we started to look at things we can do in Virginia. 
And we very much pride the fact in Virginia that Forbes 
Magazine has re-ranked us again the number-one state in the 
Nation to do business in. We recently received the number-one 
ranking to locate a business in; and from another organization, 
the number-one state in the Nation to raise a family in. And so 
we think we are doing some things right in Virginia. But we are 
concerned. We recognize there are 49 other states that would 
love to be where Virginia is ranked by these magazines, and we 
understand that if we are going to maintain its competitive 
posture that we think it is a great state, we are going to need 
to continue to do everything that we can within the confines of 
Virginia to do that.
    Certainly one of the areas that we looked at in the genesis 
of the original bill that asked that we lift the moratorium or 
let Virginia go offshore was the needs of manufacturers. 
Natural gas, supply of natural gas, is absolutely instrumental 
to many of the manufacturing businesses in Virginia today. We 
became very concerned about the skyrocketing cost. We saw 
basically a constant supply. As other sources were discovered, 
new sources were diminishing.
    But we saw a huge increase in demand, primarily from the 
electric generation capability that has resulted in driving the 
cost up of natural gas, not just in Virginia, but indeed all 
over the nation, and its necessary fallout.
    One of the largest users of natural gas, Mr. Chairman, is 
the Honeywell plant down in Hopewell, Virginia. They use, I 
believe they are one of the largest users east of the 
Mississippi, 50 million cubic feet a day. Their primary product 
out of that plant is fertilizer, so we came to understand the 
tie-in between natural gas and agricultural commodities. And we 
are very, very much concerned with the skyrocketing costs 
there.
    So we went ahead and proceeded, and went forward with this 
bill. It ultimately showed up on the Governor's desk. He took 
that opportunity to veto it, because he additionally wanted to 
study that issue. And that study was released early in 2006.
    As a result of that, we in Virginia went back and said 
really, the offshore component is a very, very important piece 
of the puzzle, but not the total solution to the energy 
problems that we look forward to in Virginia. And so we moved 
forward with a comprehensive energy plan during the 2006 
session of the General Assembly that was ultimately enacted 
into legislation. That encompasses a broad variety of things. 
But it generates on the premise that, in the best interest of 
Virginia, that Virginians produce energy for Virginian industry 
and Virginian homeowners to the maximum extent possible.
    We believe that is probably a good policy for this country 
to follow, and the whole premise of the plan was built on that. 
And it encompassed both conservation, as well as supply.
    But as we went forward and looked at it, Hurricane Katrina 
happened, and all of a sudden we found ourselves in a position 
where natural gas was just not available at any price in the 
Commonwealth, or certainly at the prices it was available made 
it such a cost that the various manufacturing facilities either 
had to shut down or severely curtain their operations until we 
got through this.
    And so we came to understand the lack of redundancy in our 
natural gas supply system in Virginia, and we also felt that 
that offshore component would provide a key additional source 
of natural gas that is so vital to our economy. And actually, 
not coming from the Gulf of Mexico, but again, generating off 
the shores of Virginia. We felt that was very, very important 
to move forward with.
    I also want to echo some of the comments you heard from 
Congresswoman Drake. As we move forward, as you move forward, I 
would ask you to look at one component of that, which is the 
concave drawing of MMS that really severely has restricted 
those lands available to Virginia. And the second part of that 
is to genuinely look forward to the revenue-sharing aspect of 
many of the bills that were passed here recently. We think that 
is an important component as you move forward to consider 
additional lands for Outer Continental Shelf leasing, that you 
move forward also with this plan.
    And with that, Mr. Chairman, I realize I probably went off 
script. Those comments are in the record, but I would be 
delighted to answer any questions you may have.
    [The prepared statement of Mr. Wagner follows:]

              Statement of The Honorable Frank W. Wagner, 
                      Senator, Senate of Virginia

    Thank you, Chairman Costa, Congressman Pearce, for inviting me to 
testify before you today regarding the Mineral Management Service's 
Five Year Program for Oil and Gas Leasing for the Years 2007-2012, 
specifically the decision to include Virginia as a possible site for 
offshore exploration and recovery of natural resources. Since Virginia 
remains a possible offshore site in the program, two key points of 
interest to the Commonwealth are a correction to the mapping of 
Virginia's offshore boundaries and the development of a revenue-sharing 
plan as the program is implemented.
    In my vision, the recovery of offshore natural resources is just 
one component of a broad-based energy plan that emphasizes conservation 
measures as we increase energy supplies to meet demand. The best energy 
policy for the nation is, to the maximum extent possible, Americans 
producing energy from American resources for use by American industries 
and in American homes. While I had hoped Congress would put forth this 
policy that has not yet happened. Thus, we in Virginia took it upon 
ourselves, through the newly created Virginia Energy Plan, to ensure 
that Virginians will produce our energy from Virginia resources for use 
by Virginia's industries and citizens. Virginia's approach is two-fold. 
We will take the lead in conservation efforts and in developing clean, 
cutting-edge energy sources for Virginia's future energy needs.
    To that end, Virginia has adopted Renewable Portfolio Standards and 
we will continue to move aggressively in our conservation efforts, 
which include constructing green buildings and mandating that a 
percentage of energy used by state government come from renewable 
resources. Unfortunately, many of the very same environmental groups 
that demand the development of non-fossil fuel energy sources use every 
opportunity to block renewable energy projects in Virginia.
    In my position as an elected official in Virginia, I pledge to do 
all in my power to position the state as the nation's leader in energy 
development, given the access and supply of natural resources available 
in the Commonwealth. Our offshore resources are a key component in 
Virginia's energy future. A reliable and affordable source of clean-
burning, environmentally friendly natural gas will assist in the near 
term as we develop alternative energy sources for future use.
    Hurricane Katrina illustrated--in stark relief--the extreme 
vulnerability of Virginia's energy supply, because we have only one 
natural gas pipeline supplying the entire economic structure in the 
Commonwealth. We as policy makers now know that the supply of natural 
gas, which is absolutely essential to the economy, is so fragile that 
it can be totally compromised by an act of nature or perhaps by an act 
of terrorism. To leave our citizens in such an exposed posture is 
inexcusable. As long as I am fortunate enough to serve the 
Commonwealth, I will work to ensure that our citizens are not at risk 
of losing their jobs or the well-being of their families because we are 
unable to guarantee an available energy supply.
    Mr. Chairman, as you may know, the largest single consumer of 
natural gas east of the Mississippi River is located in Hopewell, 
Virginia. Honeywell produces the necessary ingredients for fertilizer 
and many plastics--the basics for agriculture and manufacturing. I have 
spent the last two years touring manufacturing plants in Virginia. We 
have hard-working, union employees who are producing paper, wood 
products, trucks, pharmaceuticals, fertilizer, and plastics--products 
essential to a vibrant economy in Virginia. One common link in all of 
these plants is the need for reliable and affordable natural gas, which 
powers industry but also serves as a key component in many of the 
manufacturing processes.
    Mr. Chairman, I have fought, and will continue to fight, to put 
infrastructure in place for Virginia to tie in to the liquid natural 
gas terminal in Cove Point Maryland. I have fought, and will continue 
to fight, to add an additional LNG terminal in Virginia. I have fought, 
and will continue to fight, to open up the waters off Virginia's coast 
for exploration and recovery of natural gas. All of these efforts are 
to ensure reliable, affordable energy resources, which in turn support 
business and industry in Virginia so that any Virginian who wants a job 
will be able to work and contribute to our nation's economy.
    I applaud the Department of the Interior's Minerals Management 
Service for listening to Virginia over the last three years, during 
which the Virginia General Assembly, in a bipartisan effort, 
overwhelmingly supported legislation to open our coast. Keeping 
Virginia in the five year program is consistent with the desire of the 
Virginia General Assembly and over 70% of the people in Tidewater, 
Virginia, who have voiced firm support for offshore exploration and 
drilling off Virginia's coast in polls conducted by several elected 
officials. 75% of Americans, in polling done by MMS during the 
development of the five-year program, also supported offshore efforts.
    Mr. Chairman, I hope Congress will respect the will of the General 
Assembly and the people of Virginia and allow Virginia to continue in 
the Department of the Interior's Minerals Management Service's 2007-
2012 program.
    In closing, Mr. Chairman, I believe of all the problems facing our 
nation, energy represents the biggest challenges, potential crises and 
threats to our economy, foreign policy and national security. But, Mr. 
Chairman, energy also represents the greatest opportunities to put 
Americans to work and reinvigorate the economy. Unlocking untapped 
resources, expanding proven technology and empowering the brain trust 
in our research facilities will move us to the next generation of 
energy resources. There must be a paradigm shift in the way our nation 
operates. Congress can, and must, seize this opportunity to move the 
nation forward to true energy independence.
    Mr. Chairman, Mr. Pearce and members of the subcommittee, thank you 
for allowing me to speak today on behalf of the citizens of the 
Commonwealth of Virginia.
                                 ______
                                 

 Response to questions from Chairman Costa submitted for the record by 
The Honorable Frank W. Wagner, Senator, 7th District, Senate 
                              of Virginia

 Why does Virginia object to the administrative boundaries drawn in the 
        ocean by MMS?
    As related to me, the Department of Interior MMS used a computer 
program to define the states' boundaries beyond the existing three-mile 
limit currently established by law. This computer program looks at the 
curvature of the coastlines. When data on the coastline curvature is 
plugged into the program, those states that have coastlines pushing out 
into the ocean (convex mold) continue with boundaries at angles 
sometimes 20-30 degrees north and south of a true east-west boundary. 
Conversely, those states with a depression-type coastline (concave 
mold) have diminished angles. Virginia is one of the states with a 
concave coastline. Consequently, Virginia's area of potential resources 
does not even come close to the outer limits of the continental shelf. 
(See attached diagrams).
    Interestingly, these resources include not just potential revenue 
sharing for any possible oil/natural gas deposits, but offshore 
renewables, aquaculture, minerals and other natural resources.
    The existing three-mile Virginian ocean waters extends directly due 
east of our coast on both our northern and southern borders. These 
waters and their ocean bottoms are part of Virginia. Beyond three 
miles, both Maryland and North Carolina have those rights extended by 
the federal government to start at our northern and southern borders 
all the way to the outer continental shelf. We have effectively lost 
thousands of square miles of resource rights in waters directly off 
Virginia's coast (as close as three miles) to our neighboring states.
    This is clearly objectionable to Virginia.
 Specifically, how would Virginia be affected by these boundaries?
    1.  Virginia's universities have been developing plans to produce a 
wind farm off the coast of Virginia (in a Class 6 Wind Zone) that could 
potentially produce 20% of all power used in Virginia. Under the 
existing administrative boundaries, much of this wind farm would be in 
North Carolina waters. New regulations (including revenue sharing) are 
currently being drafted at MMS for royalties from these properties and 
North Carolina would be a major beneficiary of Virginia's efforts.
    2.  If existing moratoria are lifted for development of offshore 
under seabed fossil resources (i.e. oil and natural gas) and if revenue 
sharing with states was part of the program (as is the case in the most 
recent Congressional action), then Virginia stands to lose tens of 
millions of dollars in potential revenue, even though onshore receiving 
and processing plants would, in all likelihood, be located in Virginia.
    3.  Huge strides are being made in harnessing potential energy from 
offshore waves and currents. Once again, Virginians would find 
themselves in North Carolina or Maryland waters, even though they are 
directly off Virginia's coast.
    4.  These boundaries also affect all other natural resources 
including aquaculture, sand, methane hydrates, fish and crustaceans. To 
exclude Virginia's input into activities as close as three miles of our 
coast is reprehensible.
 Does Virginia have a position on how these lines should be drawn?
    Most definitely. I can only speak as a senator from Virginia Beach 
as to Virginia's position, however I have asked both Governor Kaine and 
Attorney General McDonnell to provide you with the official Virginia 
position.
    I believe these lines should extend due east, directly to the edge 
of the Continental Shelf. Virginia does not seek control over waters 
directly off the coast of Maryland or North Carolina, nor do we want 
these states to have control over the waters directly off our coast. In 
fact, the U.S. House of Representatives passed legislation last year 
that, among other issues, corrected these boundaries in the manner 
described above. Unfortunately, the Senate did not act on this 
legislation.
    There is ample precedent for Virginia's position. The existing 
coastal waters (out to three nautical miles) extend directly east of 
Virginia's borders with our neighboring states. The Founding Fathers 
drew direct east-west borders between Virginia and North Carolina and 
the Virginia-Maryland Eastern Shore. Extending these lines out to the 
edge of the continental shelf is the only fair and logical method to 
follow.
    The Department of the Interior has stated that the department is 
bound by their administrative procedures and Congress must direct any 
change to these boundaries.
    It is my sincere hope that, regardless of how you act on other 
issues relating to the outer continental shelf, Congress acts 
decisively to correct the current administrative boundaries.
    Chairman Costa, thank you for allowing me to provide additional 
information to the subcommittee.
                                 ______
                                 
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    Mr. Costa. Thank you very much, State Senator Frank 
Wagner. And when we get to the question round, I will have an 
opportunity to ask those questions. And we certainly will take 
your written statement and submit it for the record.
    The next witness is a former member of the Virginia House 
of Delegates, Mr. Albert Pollard.

 STATEMENT OF THE HON. ALBERT POLLARD, FORMER MEMBER, VIRGINIA 
             HOUSE OF DELEGATES, MOLLUSK, VIRGINIA

    Mr. Pollard. Thank you so much, Mr. Chairman. It is good to 
be here.
    Mr. Chairman and honorable members of the committee, I 
appreciate the opportunity to speak on this important subject, 
to the removal of the ban on leases for oil and gas drilling 
off the Virginia coast.
    As was said, my name is Albert Pollard. For six years I was 
a Virginia legislator from the Chesapeake Bay area. The voters 
treated me very well. I went out on my own accord.
    I am also a former Chairman of the Board----
    Mr. Costa. That is preferable.
    Mr. Pollard. Yes, sir, always is. Never get carried out 
feet first.
    Chairman of the Board of a small industrial company with a 
heavy reliance on gas-fired industrial ovens. As a Virginian, I 
am going to refrain, keep my remarks to the Virginia portion of 
the plan.
    As a reasonable person, I can't sit here and tell you that 
opening up the Virginia coast for exploratory drilling 
immediately leads to an Exxon-Valdez-type disaster. However, it 
is clear to me that this proposal is misguided.
    This is because opening up the OCS to exploratory drilling 
will do almost nothing to resolve the energy crisis in this 
country, but could create significant environmental crises 
along the Virginia coast.
    According to the EIS, it will likely take two five-year 
leases before any leaseholder has a prospect of extraction. By 
that time, after the year 2020, the DOE predicts that the price 
of natural gas will level off anyway. Indeed, the DOE recently 
predicted that the price of natural gas will be $3.26 per 
thousand cubic feet in 2020 with the moratorium, and just four 
cents less with the moratoria areas opened. To the extent this 
is price related, it could easily be drowned out by activity in 
the Middle East, or even a good hurricane.
    Now, I have been in the manufacturing sector, and I realize 
we must find new solutions to rising energy costs before 2020, 
when new energy might, just might, come on line. I was in the 
glass imprinting business, where we used gas-fired ovens. But 
pretty soon, in that whole industry segment, we might not even 
have those, because of inks which are going to be cured by 
ultraviolet lights.
    Another industry which has just been getting hammered with 
high gas prices recently is the wood-drying, wood products 
industry, which is--and there is a locally owned wood products 
company which is having great pressure from rising energy 
costs. So they just brought on line two state-of-the-art wood-
chip-fired kilns which are now saving 1.2 million gallons of 
propane and 22,000 gallons of diesel fuel a year.
    And most impressively, they didn't wait for any 
governmental action solutions; they brought these on line in a 
little over a year, and now have a new renewable fuel, which is 
cutting edge, carbon-neutral, and environmentally friendly. In 
business, a dollar saved is a dollar earned; and the same is 
true with conservation. Energy saved is as good as, better 
really, than energy tapped.
    So compare these very safe alternatives, which have 
certainty, to the opening of drilling off the Virginia coast, 
which contains much uncertainty.
    Now, there is a general perception that the energy policy 
passed by the Virginia General Assembly encourages offshore 
exploration of gas. In fact, in Virginia's energy policy, there 
is actually ambiguity. Indeed, Section 67.102 of the Virginia 
Code specifically states that the policy shall ``ensure that 
energy generation and delivery systems be located so as to 
minimize impacts on pristine natural areas.''
    Now, it is also true that Virginia's energy plan, also 
adopted in 2006, does call for limited exploratory natural gas 
drilling; but the plan is incompatible with the stated goals of 
the policy of protecting pristine areas. And the Virginia coast 
is a pristine area. It is remarkably pristine. Outside of 
Senator Wagner's wonderful area of Virginia Beach, with its 
billions of tourism dollars, the Virginia coast, particularly 
the eastern shore, represents the largest, most intact coastal 
wilderness on the U.S. East Coast.
    My wife's people are from over there, and there are over 75 
miles of undeveloped coastline. And every one of the Barrier 
Islands is under conservation ownership, with over 60,000 acres 
in conservation ownership.
    The area supports the largest hard-clam aquaculture 
industry on the Atlantic coast, and, as was aforementioned by 
Congressman Moran, Virginia's tourism industry is huge.
    Having drilling, exploratory or otherwise, within one day's 
tide flow, the area is clearly in contrast with the Virginia 
energy policy--not the plan, but the policy--which was adopted 
at the same time. Spills, substantial mud plumes, underwater 
seismic activity, and drilling all contribute to the 
uncertainty of the area, and have been well documented in the 
past.
    Indeed, the EIS, associated with the five-year plan, 
assumes an eventual 1500-barrel--that is 75,000 gallons--spill 
from tanker or barge activity.
    So in conclusion, it is my view that the section of the 
Minerals Management Service's five-year plan that would open up 
coastal Virginia exploration, coastal exploration, is 
misguided, and I hope that the Subcommittee agrees.
    Thank you so much, Mr. Chairman.
    [The prepared statement of Mr. Pollard follows:]

          Statement of The Honorable Albert C. Pollard, Jr., 
     Former Member, Virginia House of Delegates, Mollusk, Virginia

    Mr. Chairman and Honorable Members of the Committee:
    Thank you for the opportunity to speak on the important subject of 
the removal of the ban on leases for oil and gas drilling on the Outer 
Continental Shelf (OCS) off of the Virginia Coast.
    My name is Albert Pollard and I am speaking to you with several 
different hats. I have been a former Virginia legislator, and was also, 
until recently, Chairman of the Board of a small glass imprinting 
business with heavy reliance on gas fired industrial ovens.
    As a formerly elected official, I subscribed to the common law 
theory of ``The Public Trust Doctrine''. The Public Trust Doctrine 
holds forth the idea that Natural Resources of this country are held in 
trust by the government for the use, maintenance and enjoyment of all 
the public. In this theory, you, the elected officials are trustees--
just as one is a trustee in a fiduciary sense--of the Natural 
Resources.
    As trustees, your job is to balance the competing interests and to 
do what is right for those natural resources.
    Now, I am a reasonable person and I realize that these are complex 
issues. As a reasonable person, I can't sit here and tell you that 
opening of the OCS for exploratory drilling leads to an immediate 
danger to the Virginia coast, and that an Exxon Valdez type scenario is 
as sure as the fact that the sun will rise in the morning.
    However, after having made an extensive study of the evidence, it 
is clear to me that this proposal to open up Virginia's coast to oil 
and gas exploration is misguided. In short, opening up the OCS off the 
Virginia coast for exploratory drilling will do almost nothing to 
resolve the energy crisis in this country but could create a 
significant environmental crisis along the Virginia coast.
    And, let's face, this proposal is not only about exploratory 
drilling for gas as Virginia Governor Kaine recently wrote in a 
February 2007 letter to MMS. Lifting this moratorium is about 
production scale drilling for oil and gas off the Virginia Coast. The 
reality is that there is no practical difference between oil and gas 
exploration, nor is there any significant likelihood that if oil is 
found, it will not be exploited.
    The reality also is that this proposal won't do anything at all to 
solve our near-term energy crisis because, based on the Environmental 
Impact Statement it is likely that, two five year leases will be 
required just for exploration before the lease-holder has any prospect 
of extraction. Thus, more than likely, Virginians are looking beyond 
the year 2020 before any possible benefit from this action could take 
place in terms of more product flow.
    In other words, price relief from this drilling, if any, would come 
at a time when natural gas prices are expected to level off anyway. As 
was stated recently by the USG Energy Information Administration
    ``Total U.S. natural gas consumption is forecasted to increase from 
22.2 trillion cubic feet in 2005 to 26.1 trillion cubic feet in 2030. 
Most of the increase is seen before 2020, when total U.S. natural gas 
consumption reaches 26.3 trillion cubic feet.''
    With all of its supply and demand information, DOE's National 
Energy Model Modeling System (NEMS) predicted that the price of natural 
gas would be $3.26 per thousand cubic feet in 2020 without the gas 
under moratorium and $3.22 per thousand, or four (4) cents less with 
access to the additional gas in moratoria areas. This is a predicted 
price drop of a 1.2 percent.
    This is hardly major or even significant price relief.
    To the extent this is price relief, it would certainly be drowned 
out by the marketplace, normal fluctuations, or catastrophic events 
such as Hurricane Katrina or a sustained violence in the Middle East. 
These events clearly have more effect on prices than an addition of 5 
trillion cubic feet of technically recoverable resources.
    As the former chairman of a small manufacturing company, I can say 
that industry in this country must retool and find new solutions to 
rising energy costs before the year 2020 when new energy might--just 
might--come on line from this proposal.
    Indeed, in my previous industry sector, the glass imprinting 
business, there might not even be any gas fired ovens soon--this is an 
idea unthinkable not too many years ago. Our industry has traditionally 
fired on wax based inks at around 1100 degrees to create a high quality 
product which is durable and permanent. In our business model after 
Costs of Goods Sold and labor, gas was the third highest expense.
    However, there is promising new technology which could save 
significant money. This technology is ink which is cured by exposure to 
ultra-violet light. Thus, one whole industry segment may soon remove 
gas from the expense side of its ledger.
    Another local company which isn't waiting around for government 
solutions is Potomac Supply, a local, privately owned wood products 
business located in my old legislative district. As all folks in the 
wood drying business, Potomac Supply was having great pressure from 
rising energy costs.
    This family owned company was a large user of liquid petroleum gas 
in its wood drying kilns. Potomac Supply's solution? This company just 
brought online two state of the art wood chip fired kilns which are now 
saving 1.2 million gallons of propane and over $1,000,000 per year.
    To me, however, the most significant part of the whole Potomac 
Supply experience is that whole idea was only conceived of at a 
conference in Stockholm Sweden some 16 months ago. In a mere 16 months, 
this company has implemented a new, renewable, fuel which is cutting 
edge, environmentally friendly and reliable.
    But, it is important to remember that new fuels aren't the only way 
to lower our dependence on non-renewable resources.
    In business, a dollar saved is a dollar earned. The same is true 
with conservation. Energy saved is as good as--better really--than 
energy tapped.
    It is estimated that an annual inspection of a home natural gas 
heating system--which costs $50-100--can help reduce natural gas use in 
that system by up to five percent.
    Another example of saving consumption? According to recent 
Congressional testimony from the Sierra Club, ``By 2017, the renewable 
energy standards already enacted by states such as New Mexico, 
California and Texas will produce as much renewable energy as would be 
produced by gas fired power plants using 0.6 trillion cubic feet of gas 
per year.''
    Compare these very safe alternatives which have certainty to the 
opening of drilling off the Virginia coast which contains much 
uncertainty and doesn't meet current Virginia law.
Doesn't Meet Law
    The Proposed Final Program Outer Continental Shelf Oil and Gas 
Leasing Program, released in April 2007 by the Department of Mineral 
Management Service makes a grievous error, which seems technical in 
nature, but is in fact very important
    On page 6 of the PFP, there is the mistaken notion that the 
Commonwealth ``as called for in Virginia's legislated energy policy'' 
requests a 50 mile buffer off the Virginia coasts. This is consistent 
with a general perception that the Energy Policy passed by the General 
Assembly of the Commonwealth of Virginia, of which I am a former 
member, encourages offshore exploration of oil and gas.
    In fact, no such request takes place in Virginia's energy policy 
and any drilling off the Virginia coast is contrary to Virginia's 
Energy Policy as passed by the General Assembly. This policy is 
enumerated in 12 points in Sub-section A of Sec. 67-102 of the Code of 
Virginia.
    The only mention of drilling is in point number 12 of the 
aforementioned section:
    12. [the policy shall] Ensure that energy generation and delivery 
systems that may be approved for development in the Commonwealth, 
including liquefied natural gas and related delivery and storage 
systems, should be located so as to minimize impacts to pristine 
natural areas and other significant onshore natural resources, and as 
near to compatible development as possible.
    In fact, subsection C of Section 67-102 states that ``All agencies 
and political subdivisions of the Commonwealth, in taking discretionary 
action with regard to energy issues, shall recognize the elements of 
the Commonwealth Energy Policy and where appropriate, shall act in a 
manner consistent therewith.''
    Clearly, inclusion of proposed lease sales off coastal Virginia 
cannot be justified on the basis of Virginia law.
    While it is true that Virginia's Energy Plan, adopted in 2006, does 
call for limited exploratory, natural gas drilling, this Plan is wholly 
incompatible with the stated goals in the Policy which precedes it in 
the Virginia Code and should not be used as the justification for the 
Mineral Management Service's proposal.
Uncertainty in a pristine area.
    The Virginia coast--particularly the islands off of Virginia's 
Eastern Shore--is a pristine area in which millions of private and 
governmental dollars have been spent as to preserve an area 
ecologically significant enough to be a part of the United Nations 
Bioreserve program.
    Let's look at the facts:
      Virginia's coast represents the largest, most intact 
coastal wilderness on the East Coast of the United States, with over 75 
miles of undeveloped coastline and thousands of acres of undeveloped 
barriers islands and tidal marshes.
      All of the coast's barrier islands are under conservation 
ownership and management and, they total well over 60,000 acres.
      The ecological significance of Virginia's coastline has 
brought a number of superior designations to this part of the eastern 
seaboard. Namely, Virginia's protected coastline is a:
        1.  United Nations International Man and the Biosphere Reserve.
        2.  U.S. Department of the Interior National Natural Landmark.
        3.  National Science Foundation Long Term Ecological Research 
        Site.
        4.  Western Hemisphere International Shorebird Reserve Network 
        Site.
      Biologically, Virginia's coast is best known for its 
great abundance and diversity of bird species, including several listed 
species and many species of concern or special interest. The federally 
endangered piping plover nests on the barrier islands.
      Barrier islands, along with the coastal estuarine lagoon 
system, provide globally important stopover habitat for up to 24 
species of migratory shorebirds during the spring, fall, and winter
      The coastal salt marshes and barrier islands provide 
nesting habitat for 90 percent of Virginia's colonial waterbirds, 
including skimmers, terns, and egrets.
      The barrier island and coastal lagoon tidal wetlands 
provide important and varied habitat for resident and migratory 
waterfowl, including key populations of American black duck, greater 
snow geese, and Atlantic brant.
      Nearshore and intertidal waters also provide important 
habitat for several species of threatened and endangered sea turtles.
      Last, but not least, this area supports the largest hard 
clam aquaculture industry on the Atlantic coast.
    As previously mentioned Virginia's energy policy specifically 
states that energy generation and delivery systems be ``located so as 
to minimize impacts to pristine natural areas and other significant 
onshore natural resources''.
    Having drilling--exploratory or otherwise--within one good tide 
flow of this area is clearly in contrast with Virginia law as stated 
forth in Virginia's Energy Policy. Spills, substantial mud plumes, 
underwater seismic activity and drilling all contribute to the 
uncertainty of the future of the area and have all been well documented 
in the past.
    Let me reassert the fact that there is no known instance in which 
one can look for natural gas and not look for oil. It is also 
impractical to think that if oil is found, it will not be exploited. 
The proposal that is before you, therefore, is about oil extraction, 
not just natural gas exploration. Oil extraction and transport leads to 
frequent small spills, and an occasional large one.
    Indeed, the Environmental Impact Statement associated with the 5-
year plan assumes an eventual 1,500 barrel spill from a tanker or 
barge. Depending on where the spill took place, it could have an 
enormous impact on Virginia's pristine natural coast. Even at the 
distance of 50 miles, which provides some degree of protection, 
oceanographers say that a persistent east or southeasterly wind could 
drive the spill from 50 miles offshore within 4 days for a wind of 20 
mph and within 8 days for a wind of 10 mph. Such winds are not unusual, 
especially in the early fall.
    Moreover, if oil spill degradation products sink, they then may be 
carried shoreward by the onshore flow along the bottom. If these 
degradation products reach the vicinity of Chesapeake Bay entrance, 
they will be drawn into the Bay with the lower-layer inflow. The area 
of influence of this inflow can reach 20 miles offshore of the Bay 
entrance. That means that a tanker or other spill within 20 miles could 
be drawn into the Bay, and enter the slow circulation pattern of Bay 
waters, with damage occurring along the Bay's beaches in addition to 
the coastal beaches.
    The potential damage to the pristine areas of the Virginia shore, 
the world-famous Virginia Beach, and the shores of the Chesapeake Bay 
is just too great a risk for the small amount of benefit that the 
proposal would bring.
    So in conclusion, let me say that: based on the Virginia Energy 
Policy as passed by the General Assembly; based on the minimal impact 
that gas and oil exploration would have on energy supply or energy 
prices; based on the lack of need for this action, and; based on the 
unacceptable risk to Virginia in case of a spill, it is my view that 
section of the Mineral Management Service's 5-year plan that would open 
up to Coastal Virginia to exploration is misguided.
    I urge Congress to continue the moratorium and ensure that the 
Virginia aspects of this plan are not enacted.
    Thank you.
                                 ______
                                 
    Mr. Costa. Well, thank you, Mr. Pollard. As we do our due 
diligence, we will certainly take your testimony into account. 
And we appreciate your making the time and the effort to be 
here this morning.
    Our next witness is Mr. Bob, is it Juettner? Am I 
pronouncing that correctly?
    Mr. Juettner. Juettner, please.
    Mr. Costa. Juettner, OK. I am sorry. Mr. Bob Juettner from 
Alaska. He is Administrator of the Aleutians East Borough, and 
that is a wonderful part of America. And we are pleased that 
you took all the time to come all that way, both you, as well 
as our next witness.
    You need to speak directly into the mic there, otherwise it 
is hard for us to hear. And you know the five-minute rule.

           STATEMENT OF BOB JUETTNER, ADMINISTRATOR, 
           ALEUTIANS EAST BOROUGH, ANCHORAGE, ALASKA

    Mr. Juettner. Thank you. Chairman Costa, Ranking Member 
Pearce, members of the Subcommittee.
    The Aleutians East Borough is a regional government of 
approximately 15,000 square miles at the end of the Alaska 
Peninsula, and encompassing the islands of the Eastern 
Aleutians. It is approximately half mountain, half ocean.
    People who live there lived through subsistence and 
commercial fishing. You access this area of Alaska only by 
aircraft or by vessel.
    In 2000, the census recorded an unemployment rate of 33 
percent in our borough, and a poverty rate much higher than 
that of the national average. We have very few economic 
opportunities. Those that exist, exist either directly or 
indirectly around fishing.
    Over the last 30 years, the Borough communities of Unga, 
Belikofsky, Squaw Harbor, and Sanak have disappeared. A 
community abandoned is not a theoretical construct for us, it 
is very real. Especially in light of the fact that we have 
fewer people living in the Aleutians East Borough in 2006 than 
we had in 1988.
    The five-year OCS plan currently proposed would permit oil 
and gas drilling in the North Aleutian Basin, pending the 
completion of an environmental impact statement.
    The borough supports the lease sale, but only in the 
context of a very rigorous EIS that builds in strong protective 
measures that safeguard our fisheries and subsistence 
lifestyle. The borough will be active in ensuring that proper 
mitigation measures and environmental protections are built 
into the final plan for the North Aleutian sale.
    I think it is important for people to realize that it is 
not only the Aleutians East Borough, but it is also the Lake 
and Peninsula Borough and the Bristol Bay Borough that are 
involved in this process.
    Congress did impose a moratorium in the past in response to 
the Exxon-Valdez oil spill. When that expired three years ago, 
we were supportive of the decision. Why? It is simple. Our 
communities are disappearing. There isn't much economic 
activity.
    Second, and you have heard a lot of testimony on this, the 
industry is considerably different today than it was in 1989, 
when the Exxon-Valdez went on the rocks.
    And last, I would like to point out that what we are 
looking for, or what we expect to find, is mostly natural gas, 
as opposed to oil.
    The Aleutians East opposes legislation introduced by 
Representatives Inslee and Gilchrest to reinstate the 
moratorium.
    We have statements and comments in the media that the bill 
is supported by Bristol Bay, as if the region is one singular 
body that speaks with one voice. That is not the case.
    In fact, the Bristol Bay Borough and the Lake and Peninsula 
Borough, the other two regional governments that exist on the 
Alaska Peninsula, have passed resolutions supporting the 
inclusion of the North Aleutian Basin in the five-year plan, 
with proper mitigation.
    The Bristol Bay Native Corporation and the Aleut 
Corporation, corporations formed under the Alaskan Native 
Claims Settlement Act, that represent all the Alaskan natives 
in the entire region, are also supportive of this proposed sale 
with mitigation.
    The borough, along with the other entities mentioned and 
many that are not mentioned, support the proposed five-year 
program, and are supportive of strong oversight by Congress to 
ensure the Interior Department complies with all aspects of 
NEPA.
    In my written testimony I have attached about two pages of 
what we feel are the threshold issues that need to be addressed 
by Minerals Management Service and other Federal agencies that 
would take this past our contingent approval to final approval.
    A rigorous EIS is a far better approach than to reinstate 
the moratorium legislatively.
    Thank you for your time.
    [The prepared statement of Mr. Juettner follows:]

           Statement of Bob Juettner, Borough Administrator, 
                     Aleutians East Borough, Alaska

    Chairman Costa, Ranking Member Pearce, Members of the Subcommittee, 
thank you for inviting me to testify to present the perspective of the 
Aleutians East Borough on the Department of Interior's 5 year plan for 
oil and gas lease sales on the Outer Continental Shelf.
    Before I present our perspective on the OCS issue, let me give you 
some background on the Borough and its resident communities. We are in 
an a remote area, even by Alaska standards, so it's important for you 
to understand some of the challenges that we face on a regular basis 
that do not present themselves to most other communities in the U.S.
    The Aleutians East Borough stretches over 300 miles along the 
eastern side of the Aleutian Islands and consists of the communities of 
Sand Point, Nelson Lagoon, King Cove, False Pass, Cold Bay, and Akutan, 
with a total number of residents just over 2,600. (However, the 
permanent population is only 1,224 according to the 2006 figures 
released by the State of Alaska's Demographer.)These communities are 
dependent on subsistence and commercial fishing, can only be accessed 
by plane or boat, and are situated among the most remote and rugged 
terrain in the United States. We deal with extreme weather events on a 
regular basis. A 100 mile per hour hurricane on the East Coast makes 
national news for a week. A similar-sized typhoon hits our coast and no 
one is aware of it but us and the National Weather Service. Yet we must 
address the same problems after such a storm--flooding, cleanup, 
repair--without access to an efficient transportation infrastructure 
that makes dealing with a storm's aftermath more manageable.
    A recent study by the State of Alaska's Department of Labor and 
Workforce Development labeled the Borough's residents among the most 
diverse in the state, consisting of a mix of Native Aleuts, Asian & 
Pacific Islander--primarily Filipinos who work in seafood processing 
plants--and Caucasians. The 2000 Census recorded unemployment rate of 
33 percent in the region, with a poverty rate higher than the national 
average. The economic opportunities for our people are extremely 
limited and are almost entirely dependent on commercial fishing, with 
salmon and cod as the most important fisheries. We don't have any 
tourism to speak of and there is no mining, timber or sport fishing 
industry.
    Our fisheries may be healthy from a sustainability standpoint, but 
economically is a different question. In the late 1980s and early 90s, 
ex-vessel prices for sockeye salmon, our most valuable salmon species, 
were well over $2.00 a pound. They now hover at around 60 cents a pound 
as result of increased competition from subsidized farmed fish from 
overseas. Fuel prices in our area at the same time have gone up by 
nearly a factor of 5 in that same period. The rationalization of the 
crab and Pollock fisheries have also hurt the economies of some of our 
communities. Our fishermen are hanging on but barely.
    As a result, we are losing many of our long-term residents that end 
up being replaced by transient fish processing workers. The population 
of school age children has plummeted. In Akutan, False Pass, and Cold 
Bay, the average school size--10 children--is less than half that of 
the average class size nationally. No Child Left Behind? We are facing 
No Child Left At All if the schools shrink any further. Over the last 
30 years, the Borough communities of Unga, Belikofsky, Squaw Harbor and 
Sanak, have become ghost towns. Community abandonment is a very real to 
us.
    These changing economic circumstances have forced the Borough to 
examine other economic opportunities and to be as creative as possible 
in seeking them out. For example, we have developed a cooperative to 
market fresh wild Alaskan salmon in addition to increasing funds for 
education and launching a vigorous capital improvement program. So that 
brings us to the 5 year OCS lease plan.
    The plan currently proposed by the Department of Interior would 
permit oil and gas drilling in the North Aleutian Basin, pending 
completion of an Environmental Impact Statement. The Borough supports 
the lease sale but only in the context of a rigorous EIS that builds in 
strong protective measures that safeguard our fisheries and subsistence 
lifestyle. We will be active in ensuring that proper mitigation 
measures and environmental protections are built into the final plan 
for the North Aleutian sale. (See the attached mitigation measures 
required to remove the Borough's conditional support.) Concurrently, we 
will be pressing prospective bidders on the leases to guarantee the 
hiring of local residents and businesses.
    Previously, Congress had imposed a legislative moratorium, which we 
supported when it first went into place, on OCS sales in the North 
Aleutian basin in response to the Exxon Valdez oil spill. That 
moratorium expired a few years ago and we were supportive of that 
decision.
    Why the change of heart? There are two answers, the first I've 
already given in terms of the bleak economic future now faced by the 
Borough. Secondly, almost 20 years have passed since the Exxon Valdez. 
The industry has revised its practices substantially since then. New 
technologies have been developed to prevent blowouts and to better 
direct drilling activities. The entire risk of spills or accidents has 
not gone away, but it is certainly less than at the time of the 1989 
spill. Lastly, I want to point out, most of the proposed development 
will be for natural gas, not oil. Natural gas development brings with 
it its own set of risks but in many cases they differ than those 
associated with oil drilling and transport. Therefore, the Exxon Valdez 
comparison isn't exactly apt.
    We oppose legislation introduced by Rep. Inslee to reinstate the 
moratorium. Proponents of the legislation have mislabeled it as 
``stopping drilling in Bristol Bay.'' Bristol Bay is some 200 miles 
away. We are the closest communities and would be most affected by any 
accident. Also, I hear statements and comments in the media from the 
bill's supporters that the bill is supported by ``Bristol Bay'' as if 
the region is one singular body that speaks with one voice. That is not 
the case. In fact, the Bristol Bay Borough and Lake and Peninsula 
Borough, the two area governments, have passed resolutions supporting 
inclusion of the North Aleutian Basin into the 5 year OCS Plan with 
proper mitigation. The Bristol Bay Native Corporation, representing 
many area Alaska natives, is also in favor as is the Aleut Corporation.
    The Borough, along with the other entities that support the 
proposed Five Year program, are supportive of strong oversight by 
Congress to ensure that the Interior Department complies with NEPA. 
That oversight is also necessary to ensure that the Department uses the 
latest and most accurate data. For example, the recent Beaufort Sea EIS 
published in 2003, underestimated greatly the value of oil and gas 
prices. This resulted in flawed development scenarios that do not 
represent the current level of exploration being undertaken in the 
Beaufort Sea.
    I've enclosed additional written comments on the specific NEPA 
issues the Borough supports being considered as part of the EIS. Report 
language added in the FY 2008 House Interior Appropriations puts the 
Department on notice that it needs to prepare a through EIS before 
development can go forward. That's a far better approach than to 
reinstate the moratorium legislatively. That would be a death blow to 
our economic future.
    Thank you again for inviting me to testify today and I look forward 
to any questions you might have.
                                 ______
                                 

  Proposed Mitigation Measures for OCS Leasing In the North Aleutian 
                     Basin\1\ Fisheries Protection
---------------------------------------------------------------------------

    \1\ The proposed mitigation measures are in addition to the lease 
stipulations listed in the OCS DEIS for the Alaska Region, and to 
replace the Fisheries Protection stipulation which AEB has determined 
to be inadequate.
---------------------------------------------------------------------------
    Lease related use will be restricted to prevent conflicts with 
local commercial, subsistence, and sport harvest activities. All OCS 
operations, both onshore and offshore, must be designed, sited and 
operated to ensure that: (a) adverse changes to the distribution or 
abundance of fish resources do not occur; (b) fish or shellfish catches 
are not adversely impacted by OCS activities; (c) all exploration, 
construction and operation activities will be coordinated with the 
fishing community to maximize communication, ensure public 
participation, and avoid conflicts; (d) ballast water treatment is 
required to remove or eliminate non indigenous species; (e) fishermen 
are not displaced or precluded from access to fishing areas, unless 
they are adequately compensated for the displacement; (f) fishermen are 
not precluded from participating in designated fishing seasons, unless 
they are adequately compensated for the lost season(s); and (g) 
fishermen will be compensated for damage to fishing equipment, vessels, 
gear and decreased harvest value from OCS operations in a timely 
manner. NOAA Fisheries must complete a baseline fisheries assessment 
prior to commencement of OCS exploration. NOAA Fisheries must review 
and approve all exploration and development activities under the leases 
issued in collaboration with local, state and federal agencies, and 
implement federal monitoring programs to ensure these fish resource 
standards are met.
Transportation, Utility Corridors and Infrastructure Siting
    Transportation routes, utility corridors and infrastructure must be 
carefully sited and constructed to allow for the free passage and 
movement of fish and wildlife, to avoid construction during critical 
migration periods for fish and wildlife. Pipelines should be buried 
wherever possible. The siting of facilities, other than docks, roads, 
utility or pipeline corridors, or terminal facilities, will be 
prohibited within one-half mile of the coast, barrier islands, reefs 
and lagoons, fish bearing waterbodies and 1500 feet from all surface 
water drinking sources.
Coastal Habitat Protection
    Offshore operations must use the best available oil spill 
prevention and response technologies to prevent oil spills from 
adversely impacting coastal habitat, and to rapidly respond to oil 
spills. Geographic response strategies must be used to protect 
environmentally and culturally sensitive sites.
Local Hire and Training
    OCS Operators will be required to submit a local hire and training 
program prior to any exploration, production or permitting activity, 
which provides a description of the operator's plans for partnering 
with local communities to recruit and hire local residents, local 
contractors, and local businesses and a training program to prepare 
local residents to be qualified for oil and gas jobs for exploration 
and development activities within their region.
Air Pollution
    Best available emission control technology will be required for all 
industrial sources of air pollution, including criteria air pollutants 
and hazardous air pollutants.
Water Pollution
    A zero water pollution discharge will be required for all 
industrial operations.
Marine Mammals and Essential Habitat
    All onshore and offshore facilities and OCS-support vessel and air 
craft routes must be carefully sited to avoid marine mammal and 
essential habitat impacts.
Social Systems
    All onshore and offshore facilities must be carefully sited, 
designed and operated to avoid adverse social system disruptions and 
impacts. OCS Operators must: (a) Minimize impacts on residential areas, 
privately-owned surface lands and native allotments; (b) Provide 
utilities, support services and expand other community infrastructure, 
and services as needed to support their OCS development and associated 
local population increases; and (c) Communicate with local residents, 
interested local community groups, and especially fishing 
organizations.
Good Neighbor Policy
    All OCS Operators, operating off the Aleutian East Borough 
coastline, should be required to adopt a Good Neighbor Policy that is 
appropriate for this region. AEB's Good Neighbor Policy requires OCS 
Operators to work with the AEB to provide cost effective fuel, power, 
transportation, medical services, emergency and other services to the 
local communities. AEB's Good Neighbor Policy also required OCS 
Operators to provide a compensation system to minimize disruptions to 
subsistence activities and provides resources to relocate subsistence 
hunters and fishermen to alternate areas or provide temporary supplies 
if a spill affects the taking of subsistence resources.
Cultural and Historic Site Protection
    OCS Operators must protect all existing cultural and historic sites 
and notify the local government as soon as possible about the discovery 
of prehistoric, historic and archaeological sites. The notification 
must describe what was discovered and how the area will be preserved. A 
final project report shall be submitted to the local government.
Seismic Design
    All onshore and offshore facilities must be designed to the Seismic 
Zone IV, Uniform Building Code design standard for the Aleutian Chain.
                                 ______
                                 
    Mr. Costa. Thank you for your testimony. And obviously 
complying within the five-minute rule. We usually give gold 
stars for that.
    We do appreciate your comments, and we look forward to the 
questioning portion.
    The last witness, but certainly an important part of the 
panel, is a gentleman, Mr. Whit Sheard, is that correct? 
Sheard, OK. I am always trying to make sure that I pronounce 
people's names properly. You are the Program Director for the 
Pacific Environment in Alaska, is that correct?
    Mr. Sheard. Yes, sir.
    Mr. Costa. Good. And it is good to have you here. And 
again, thanking both of the, as I said, the last two witnesses 
to travel the great distance that you did. And we are all 
obviously very pleased that you are here. So please begin on 
your opening statement.

          STATEMENT OF WHIT SHEARD, PROGRAM DIRECTOR, 
             PACIFIC ENVIRONMENT, ANCHORAGE, ALASKA

    Mr. Sheard. Thank you, sir. Mr. Chairman, honorable members 
of the committee, my name is Whit Sheard, and I am the Alaska 
Program Director for Pacific Environment, which is a non-
governmental organization dedicated to the protection of the 
living environment of the Pacific Rim.
    I am presenting these comments on behalf of myself and the 
Alaska Wilderness League. But I will note that we heavily 
consulted with other conservation organizations, native 
communities we work with, a fishing organization, and others 
who I believe have submitted comments for the committee.
    The majority of my comments will focus on the environmental 
impacts of the proposed leasing in the waters off of Alaska, 
but I will also touch on the deficiencies in public process and 
scientific review that occurred during the preparation of this 
five-year plan.
    We believe that this five-year plan is an overly aggressive 
expansion of oil and gas activity in America's Arctic waters. 
In the past years, the Minerals Management Service has focused 
its offshore oil and gas offerings in northern Alaska on just 
over 9 million acres in the Beaufort Sea, which I am sure some 
of you are aware is close to some of the on-shore facilities 
and structures, such as the Trans-Alaska Pipeline.
    This year the new proposed plan involves Minerals 
Management Service reprising its failed and costly 1980s 
attempts to permit oil development in the fisheries-rich 
Bristol Bay region, and expanding Beaufort Sea offerings to 
over 33 million acres, and opening 39 million acres in the 
remote Chukchi Sea.
    This aggressive expansion in the North Pacific and Arctic 
Ocean comes at a time when the Nation is facing important 
policy decisions concerning our over-reliance on fossil fuels, 
how to deal with the impacts of climate change on our northern 
lands, oceans, and communities, and how to best coordinate our 
uses of our various ocean resources.
    This plan, which will become official national policy, sets 
us on a course to continue our addiction to fossil fuels, 
accelerate the process of climate change, exacerbate current 
environmental impacts on our northern regions, and unilaterally 
zone the Arctic Ocean as an oil- and gas-drilling sacrifice 
area.
    I would like to note first that the Bering Sea region and 
the Arctic Ocean regions of the Chukchi and Beaufort are very 
different regions, and the facts specific to them are very 
different. And I try to touch on both of them briefly.
    The first, of course, is the Bering Sea, the North Aleutian 
Basin, which is the nation's largest fishing grounds; very 
important habitat for some of the most heavily fished 
commercial species in an area that was covered by long 
bipartisan moratoria on oil and gas drilling. We believe this 
should continue.
    Of concern especially is the critical habitat of the 
eastern stock of the North Pacific right whale, which is the 
most endangered whale population on the planet, numbering less 
than 100 individuals. In similar situations with proposed oil 
drilling in the habitat of endangered whales, we have had 
scientific panels convene, who have told us that the loss of 
one breeding female would lead to the extinction of those 
populations.
    As such, and considering the reluctance of the Federal 
government in recent years to designate critical habitat, we 
believe that this recent designation of critical habitat and 
the biological information we have on these species compels us 
to leave this area out of the five-year plan.
    In terms of the Chukchi and Beaufort Seas, as you are well 
aware, these areas are incredibly important to the Arctic 
communities along that coast, whose cultures have existed there 
for somewhere between 2,000 to 20,000 years. I had the good 
fortune of visiting the Hill a few weeks ago with several 
whaling captains from Point Hope, Alaska, who stand in heavy 
opposition to this plan, because they believe it is a direct 
threat to their longstanding culture.
    As such, I would also like to note for the record that the 
Environmental Protection Agency has pointed out the severe 
deficiencies in this plan in terms of process and in terms of 
respect for these native communities and their subsistence 
resources, as well as their cultural traditions.
    Furthermore, the Department of Commerce, National Marine 
Fisheries Service, Alaska Region, has recommended the deletion 
of the Bering Sea and Chukchi portions of the plan. I 
understand the need for energy development; we just believe it 
should be responsible. And if the Department of Commerce is 
recommending the deletion of these areas, I think we should 
listen.
    Finally, we have current development on Alaska's north 
slope, and I think we have a map. We have about 9 million acres 
that are already leased to the oil and gas industry. We have 
seen recent spills from the Prudhoe facility of 200,000 
gallons, and we have also seen a spill from the one offshore 
production--or not a spill. We have seen holes in pipelines of 
the offshore production facility, the Northstar facility, that 
has been there. And BP scientists have also told us that they 
have discovered a statistically significant deviation in the 
bowhead whale population that is migrating by this area.
    Considering the concern these communities of the North have 
raised about this plan, about these subsistence resources, I 
think it is important that we take a much harder look at this 
plan. And I will conclude there.
    Thank you.
    [The prepared statement of Mr. Sheard follows:]

          Statement of Whit Sheard, Alaska Program Director, 
                          Pacific Environment

    Chairman Costa, Ranking Minority Member Pearce, and members of the 
Subcommittee, good morning, my name is Whit Sheard and I am the Alaska 
Program Director for Pacific Environment. These comments are delivered 
on behalf of Pacific Environment and the Alaska Wilderness League.
    I am very appreciative of the opportunity to testify this morning 
regarding the Minerals Management Service's Proposed Five Year Program 
for Oil and Gas Leasing on the Outer Continental Shelf. The majority of 
my comments will focus on the environmental impacts of proposed leasing 
in the waters off Alaska, but I will also touch on the deficiencies in 
public process and scientific review that occurred during the 
preparation of this Five Year Plan.
Background
    The Minerals Management Service's new Five Year Plan, which becomes 
official July 1, 2007, is an overly aggressive expansion of oil and gas 
activities in America's Arctic waters. In past years MMS focused its 
oil and gas offerings in northern Alaska on just over 9 million acres 
in the Beaufort Sea. This year, with the new proposed Five Year Plan, 
MMS is reprising its failed and costly 1980s attempt to permit oil 
development in the fisheries-rich Bristol Bay region by offering 5.4 
million acres of the North Aleutian Basin, is expanding its Beaufort 
Sea offerings to over 33 million acres, and is opening 39 million acres 
in the remote Chukchi Sea.
    This aggressive expansion in the North Pacific and Arctic oceans 
comes at a time when the Nation is facing important policy decisions 
concerning our over-reliance on fossil fuels, how to deal with the 
impacts of climate change on our northern lands, oceans, and 
communities, and how to best coordinate our uses of our various ocean 
resources. This Five Year Plan, which becomes official policy in three 
days, sets us on a course to continue our addiction to fossil fuels, 
accelerate the process of climate change, exacerbate current 
environmental impacts on our northern regions, and unilaterally zone 
the Arctic Ocean as an oil and gas drilling sacrifice area.
    Specific concerns over the impacts of this plan include direct 
threats to the nation's richest fishing grounds, population level 
impacts to endangered North Pacific right whales and polar bears, 
disproportionate impacts to Alaska Native communities, and cumulative 
impacts to a region already facing ecological stress from both climate 
change and the current production of oil and gas on both the North 
Slope and in the Beaufort Sea.
The Bering Sea
    The Bering Sea is a semi-enclosed northern extension of the North 
Pacific Ocean and is one of the world's most productive marine 
ecosystems; the nutrient rich waters of the Bering support at least 450 
species of fish, crustaceans, and mollusks; 50 species of seabirds; and 
25 species of marine mammals. These waters area also home to America's 
largest fishing grounds, containing approximately 40% of our nation's 
seafood resources as well as the world's largest sockeye salmon run. 
The area proposed for leasing and development is also designated 
critical habitat for several species of wildlife, including the world's 
most endangered whale population, the eastern stock of the North 
Pacific right whale.
    Illustrative of the unreasonable proposed leasing in the Five Year 
Plan is Lease Sale 92, in the Bering Sea's Bristol Bay (designated by 
MMS as the North Aleutian Basin). This extremely productive fishing 
area is the heart of Alaska's salmon, pollock, King crab, and cod 
fisheries. According to the North Pacific Fishery Management Council, 
for the pollock fishery, which is the nation's largest single fishery, 
21% of all catch occurs within the statistical areas overlapping the 
proposed lease sale. These areas also are home to 40% of the Bering Sea 
Pacific cod trawl catch, 55% of the Bering Sea flathead sole trawl 
fishery, 28% of the Bering Sea Pacific cod pot fishery, and nearly the 
entire Bristol Bay Red king crab fishery.
    These fisheries resources, and the $2 billion/yr. renewable economy 
that they drive, are placed directly at risk from seismic exploration, 
oil spills, contaminated discharges, infrastructure construction, and 
increased vessel traffic. This is why fishing organizations such as the 
Bering Sea Fishermen's Association, the Bristol Bay Driftnetter's 
Association, the Bristol Bay Economic Development Council, the United 
Catcher Boats, and the Yukon River Drainage Fishermen's Association 
have opposed this proposed leasing.
    The North Aleutian Basin lease sale proposed in Bristol Bay also 
threatens protected areas and wildlife in the region. Bristol Bay's 
rich tapestry of habitat is home to staging areas and wintering grounds 
for tens of millions of seabirds and is a feeding ground and migration 
corridor for marine mammals, including five endangered species. 
Protected areas adjacent to the lease sale area include the Izembek 
National Wildlife Refuge, which contains globally important wetlands 
and some of the world's largest eelgrass beds.
    Of utmost biological concern is that the proposed lease sale 
overlaps extensively with the primary summer feeding grounds and 
designated critical habitat for the eastern stock of the North Pacific 
right whale, the world's most endangered whale population. As 
recognized by MMS in their Final Environmental Impact Statement on the 
Five Year Plan:
        any perturbation to this small remnant group is likely to 
        affect much of the North Pacific right whale population...(FEIS 
        IV-133)
    This point was driven home quite clearly during a North Aleutian 
Basin planning meeting in Anchorage where agency scientists indicated 
that their research on North Atlantic right whales led them to believe 
that the loss of a single breeding female from the eastern stock of the 
North Pacific right whale would potentially lead to the extinction of 
the species.
    In light of severe data gaps, critically endangered species, and 
rich renewable commercial and subsistence wild fishery economies, it is 
unclear how MMS can continue to propose leasing in the Bering Sea. The 
National Marine Fisheries Service, which is tasked both with managing 
commercial fisheries and ensuring the protection of endangered North 
Pacific right whales has specifically requested that this area be 
deleted from the 5 Year Plan.

The Beaufort and Chukchi Seas
    The Beaufort and Chukchi Seas are highly important habitat for 
polar bears, whales, walrus and a multitude of other wildlife. They are 
also crucial to subsistence hunting, whaling and fishing communities, 
and support a wide variety of wildlife, including several endangered 
and threatened species. While development of one large nearshore 
facility has been undertaken in the Beaufort Sea, the Chukchi Sea is 
currently devoid of any oil and gas development. This is currently 
changing, however, as MMS is encouraging seismic exploration of both 
seas and is planning on selling tracts in the remote Chukchi Sea early 
in 2008.
    Approximately one-sixth to one-fifth of the world's remaining polar 
bear population lives along, and depends on, the Chukchi and Beaufort 
Seas. Currently the USFWS is reviewing a petition to list the polar 
bear under the Endangered Species Act. Due to the rapid warming of 
America's Arctic and the concurrent retreat of sea ice that serves as 
important habitat for polar bears, we believe that this petition is 
warranted. Furthermore, we are concerned that current oil and gas 
exploration and development is impacting these species. The Minerals 
Management Service, however, continues to pay little attention to 
climate change and the protection of polar bears. The proposed Five 
Year Plan would not only continue this trend, but would rapidly and 
irresponsibly accelerate it.
    Endangered whale populations in the Beaufort and Chukchi are also 
of particular concern. The Chukchi Sea, for example, provides important 
habits for bowhead, fin, and humpback whales, while the Beaufort Sea is 
a key migratory corridor and feeding grounds for bowhead whales. Key 
biological information for these species is lacking, although BP 
scientists have determined that the routine operations of the Northstar 
drilling site alone has caused a statistically significant deviation of 
bowheads from traditional migratory pathways.
    As noted by the Environmental Protection Agency, the scientific 
data gaps that exist for these species render MMS unable to adequately 
guarantee mitigation of the impacts to these species. This is alarming 
both ecologically and culturally, as these species play important roles 
in the subsistence lifestyle of Alaska Natives living on the Arctic 
coast.

Oil Spills
    One major impact associated with this plan is the level of 
pollution that will be introduced into these productive marine 
environments. As demonstrated by the Exxon Valdez, oil spills have 
long-lasting impacts to ecosystems and can cause population level 
effects on wildlife. This is especially true for endangered 
populations, such as those facing stress from climate change. MMS 
expects there to be four large oil spills in Alaska's waters during the 
life of this plan. Unfortunately, industry has repeatedly demonstrated 
that no oil spill technology exists that can recover spilled oil among 
broken sea ice and under the ice sheet and that there is no way to 
detect or track these spills. This is simply an unacceptable level of 
risk.

Public Process
    MMS' public process under the National Environmental Policy Act has 
been wholly inadequate. First, MMS has produced environmental review 
documents that fail to disclose the actual impacts of this plan, that 
fail to discuss the significance of the lack of baseline data for these 
ecosystems and the resources that depend upon them, and that fail to 
foster informed decisionmaking. Furthermore, MMS failed to offer a 
legitimate opportunity for affected communities and other stakeholders 
to offer input on the plan's impacts. For example, a public meeting on 
the plan held in Dutch Harbor, Alaska, the nation's largest fishing 
port and home to commercial interests that will likely be heavily 
impacted by any development in Bristol Bay, was noticed in the Federal 
Register the day after the meeting occurred.
    Also of concern to both the conservation community and Alaska 
Native communities is the rapid pace of current exploration and 
development activities, recent lease sale offerings, and the new Five 
Year Plan. An oft repeated message for MMS at public meetings in these 
communities is that MMS is simply offering ``too much, too soon, too 
fast.'' Indeed MMS has recently authorized exploration and drilling 
along the coast of the Arctic National Wildlife Refuge, has leased a 
half million acres in the Beaufort Sea, has authorized multiple seismic 
operations throughout the entire Beaufort and Chukchi seas, and is now 
proposing to make approximately 72 million more acres of the Arctic 
Ocean available for leasing.

Conclusion
    The Minerals Management Service's proposed Five Year Plan for Oil 
and Gas Development on the Outer Continental Shelf, which is set to 
become national policy on July 1, 2007, is an overly aggressive 
expansion of oil and gas drilling in Alaskan waters. MMS has failed to 
fully inform the public of the extent of ecological damage that this 
plan will cause to our public resources and that will set the nation on 
a five year course to perpetuate climate change, adversely modify 
critical habitat for endangered and threatened species, damage 
renewable commercial and subsistence economies, and cause 
disproportionate impacts to Alaska Native communities. MMS has 
suppressed important science, has drawn conclusions that bear little 
relationship to the facts, has ignored the sound advice of other 
federal agencies, and has not offered an adequate public process for 
either this plan or the multitude of current activities already taking 
place in Alaskan waters. Considering that the nation is currently 
defining policies to address climate change, energy efficiency, and 
oceans management, the proposed plan bears little relation to rational 
planning and places America's Arctic at an unacceptable level of risk. 
In light of the inadequate planning process, lack of scientific data, 
and unacceptable impacts to the environment and communities, we simply 
do not believe it is prudent to proceed with the Alaska portions of the 
Five Year Plan.
                                 ______
                                 
    Mr. Costa. Thank you very much. Now we will move to the 
question phase of the panel.
    Senator Wagner, you briefly mentioned in your testimony two 
key points of interest to Virginia are the correction to the 
offshore boundaries and the development of a revenue-sharing 
plan.
    Could you be a little more specific on those points?
    Mr. Wagner. Mr. Chairman, I would be delighted. The map--
and Congresswoman Drake did point it out--is in the process of 
MMS, going through their computer programs they used to 
designate designating state boundaries that exist into the OCS.
    As I understand what they told me, they used some 
international treaty software program that designates, it looks 
at the curvature of the coastlines as they do that. And North 
Carolina, having an outward curve from the outer banks, they 
tend to take that curve and then run the lines out along those 
curves, as opposed to going due east, due west, or into the 
ocean, which one would normally think would be the way that 
boundaries are done.
    And because Virginia has a convex, or it dips in kind of 
coastline, it has a flattening effect on these curves in 
computer models, and----
    Mr. Costa. All right, I think we have got that.
    Mr. Wagner. OK. And then the second one is----
    Mr. Costa. And you like the revenue-sharing plan?
    Mr. Wagner. The revenue-sharing plan is excellent, Mr. 
Chairman. We think that the 30 percent there, and I know that 
Louisiana has made significant progress on how and----
    Mr. Costa. So they are your role model, huh?
    Mr. Wagner. Yes. Well, the original draft of the energy 
bill----
    Mr. Costa. No, I understand.
    Mr. Wagner.--designated those funds for various----
    Mr. Costa. Mr. Pollard, you mentioned that the Virginia 
Energy Plan is wholly incompatible with the stated goals of 
Virginia energy policy. What do you mean by that?
    Mr. Pollard. Thank you, Mr. Chairman. In 2006, the Virginia 
General Assembly--of which I was not a member at that time, I 
had just stepped down--painted just both the policy and the 
plan. And the policy contains 12 points. Those 12 points do not 
talk about drilling; and in fact, the closest one that you get 
to in the policy says that drilling shall be located so as to 
minimize impacts to pristine natural areas. And so those two 
things are contradictory, and it is not quite as clear-cut as 
some have represented it to be.
    Mr. Costa. All right. Mr. Juettner, you indicated that most 
of the development, I believe in the lease that you were 
discussing, is for gas, is that correct?
    Mr. Juettner. Yes, sir.
    Mr. Costa. Do you also support exploration for oil 
development, as well?
    Mr. Juettner. Yes. But again----
    Mr. Costa. If it were to be discovered?
    Mr. Juettner. Yes.
    Mr. Costa. And do you care to comment about the spills that 
were stated by your neighbor there from Alaska in recent years? 
It has gotten a great deal of attention, both on the pipeline 
spill and the others. What do you think, poor maintenance, 
management? What would you attribute to that?
    Mr. Juettner. My understanding, sir, is that as you go into 
production, the impetus of producing more oil and more profits 
falls very heavily upon the production crews.
    I think it is significant that one of our consultants was 
one of the primary whistle-blowers on the BP oil spill with 
their pipeline, so we are well in tune with what happened on 
the north slope.
    If you say there isn't going to be a spill, you are being 
naive. I think you always have to plan for the worst 
eventualities.
    Mr. Costa. Mr. Sheard, you talked about the right whale. 
And as you know, there has been an effort by the Minerals 
Management Service for three years to study the impacts. What 
is your opinion of that study?
    Mr. Sheard. Well, thank you, Mr. Chairman. We are always 
happy to see more studies and more biological information being 
developed on endangered species.
    Unfortunately, this being the most critically endangered 
whale population on the planet, what we know already does not 
bode well for this plan. For example, North Atlantic right 
whales, with a population of at least three times the Pacific 
right whales, we are talking about----
    Mr. Costa. No, I understand the numbers, but that wasn't my 
question.
    My question was whether or not you were familiar with the 
study. If you are not, that is fine.
    I do want to get one other last question in. Mr. Juettner, 
your seatmate adjacent to you talked about mitigation measures 
in his testimony. If those were enacted, would you support the 
efforts for the Aleutian Basin?
    Mr. Juettner. Unfortunately, we would not. I do not believe 
that mitigation is employed as readily as it is stated. We have 
seen in the North Slope development and the offshore 
development up there that mitigation quickly becomes 
monitoring, and we have also seen Conoco Philips litigate that 
monitoring and mitigation requirements. And they tend to be 
lessened.
    And from what we know from technology, you can't clean up 
oil spills and broken ice conditions.
    Mr. Costa. All right. My time has expired. I may have some 
additional questions, but the gentleman from New Mexico, the 
Ranking Member, is next.
    Mr. Pearce. Thank you, Mr. Chairman. Mr. Pollard, what was 
the renewable source on that kiln that you were talking about?
    Mr. Pollard. Wood chips.
    Mr. Pearce. OK. So you are in favor of logging?
    Mr. Pollard. Absolutely, sir.
    Mr. Pearce. Mr. Sheard, do you favor commercial, does your 
association favor commercial fishing?
    Mr. Sheard. We do not take a position for or against it. 
We, of course----
    Mr. Pearce. OK, that is fine.
    Mr. Sheard.--work in partnership with fishermen quite 
often.
    Mr. Pearce. OK. So you don't object to that.
    Mr. Sheard. No, sir.
    Mr. Pearce. Now, I have lost the connection. You were 
talking about oil and mortality of whales. But your position is 
that if there is an oil spill, that whales are going to die? Is 
that your position?
    Mr. Sheard. That is our understanding from the scientists, 
particularly with endangered populations such as bowheads and 
North Pacific right whales.
    Mr. Pearce. Now, you heard the testimony earlier that 63 
percent of all oil in the ocean comes from natural spills. How 
is it that these whales have been surviving this 63 percent 
source of inputs of oil for billions of years, and you have a 2 
percent chance that it is going to come from a platform? How do 
your scientists answer that? Did they answer? Did they deal 
with that 63 percent question?
    Mr. Sheard. Yes. As Mr. Cruickshank indicated, the devil is 
in the details there.
    For example, in the Arctic, when the ice recedes, leads 
open in the ice, and the bowheads are highly dependent on these 
leads. If there is heavy oil input into these leads, it will 
potentially oil the entire population of migrating bowheads and 
cause a population----
    Mr. Pearce. The oil doesn't know where it is leaking, it 
just leaks; 63 percent is going to come from natural seepage. 
And so I do find that curious.
    I find also curious Mr. Pollard's statement that we 
shouldn't exploit the gas because it would be 2020 before it is 
brought on anyway. To be honest, we had testimony that wind and 
solar and hydrogen and nuclear, all those power forms--wood 
chips alike--really won't be commercial for the next 30 to 40 
years. And so I am wondering if we should not produce any of 
those over the next period of time.
    Senator Wagner, we had a discussion from Mr. Pollard about 
the policy versus your vote. Now, tell me again, your vote was 
specifically about the drilling, right?
    Mr. Wagner. Yes, Mr. Chairman. The vote in 2005 was 
specifically on the issue of drilling. Within the 2006 energy 
bill, there was both policy, as well as programmatic 
requirements. The issue that originally came before the General 
Assembly had the original language of the drilling very clear. 
The Governor and us negotiated----
    Mr. Pearce. So you used the words exploration, you used the 
words oil and gas----
    Mr. Wagner. Right, right.
    Mr. Pearce. And the State Legislature didn't find any 
conflict with this policy that Mr. Pollard was wanting----
    Mr. Wagner. Right. We didn't. And in fact, it references, 
as a patron of the bill, I can assure you there is no conflict 
in my mind.
    Mr. Pearce. Mr. Juettner, the local government, the 
regional government that you represent, what tools do you all 
have to make sure that you are just not kind of herded along? 
What kind of work are you all doing to inform yourselves about 
the whole prospect of fishing, oil and gas, together? Stopping 
oil and gas if you don't want it? What have you all done?
    Mr. Juettner. Well, it is going to be a hard question to 
answer. We have about a 20-year history on this question, going 
back to as early as 1984, when a group of our fishermen met 
with three members from the Shetland Islands to discuss oil and 
gas development as we looked at the old lease sale 1992. Their 
first recommendation was a form of regional government, which 
we did in 1988.
    Since then, in the last three years we have been actively 
engaged in studying the industry, both on shore and offshore. 
We have enacted a new planning and zoning ordinance that gives 
us real teeth. We patterned the zoning ordinance after that of 
the North Slope Borough. We have traveled extensively, made 
familiarization trips to Cook Inlet to see how the RCAC 
interfaces with the industry. Oil spill response programs. We 
have been doing our homework for three years.
    Mr. Pearce. So you have been pretty good stewards, in your 
mind, of the potentials on both sides, both the risk and the 
reward.
    You had mentioned that the salmon harvest has declined. Why 
is that? And what effect has it had on your region?
    Mr. Juettner. It is not the salmon harvest, sir. It is the 
value of the salmon harvest.
    In 1988, when I first worked, one red salmon was worth $14. 
A barrel of oil was worth $12. Today that red salmon is worth 
$3.50; a barrel of crude is worth $62, $65 a barrel. The fish 
are still there. It is the value of the fishery that has 
deteriorated.
    Mr. Pearce. Why is the value going down? Is it people are 
demanding less?
    Mr. Juettner. Basically, farmed salmon has undercut the 
market for wild salmon.
    Mr. Pearce. So competition is up. Supply is there, demand 
is up, supply is up, so the price falls.
    Thank you, Mr. Chairman. I have more questions if you go a 
second round.
    Mr. Costa. All right. The next gentleman, a member of the 
Subcommittee, and I am always glad to hear from the gentleman 
from New Jersey, Mr. Holt.
    Mr. Holt. Thank you, Mr. Chairman. Let me first direct a 
question to both Mr. Pollard and Mr. Wagner.
    Do you think this is a matter--and same question. Do you 
think this is a matter for Virginia only?
    Mr. Pollard. Sir, clearly the MMS deals off the coasts of 
many states. So no, sir. Oh, and opening up the--I see where 
you are going--opening up the Virginia coast could potentially 
have effects on adjoining states, absolutely.
    Mr. Holt. Mr. Wagner?
    Mr. Wagner. Congressman, I would concur with you, yes, it 
would have impact. And I know that MMS took the time to have 
public hearings up in New Jersey. I have attended one of those, 
I don't know if they had any others.
    I will also say that the same activity that occurs in Nova 
Scotia adjacent to Maine would have similar potential impacts 
to the coast of Maine as indeed to entire New England.
    Mr. Holt. In an earlier version, you, I am sure, are aware 
that New Jersey and Virginia were in the same administrative 
region. The geography hasn't changed, only the lines for the 
administrative region. And so any physical and economic 
effects, I would imagine, are unchanged by the change in the 
regional lines.
    Would you say, Mr. Wagner, that when you advocate this, is 
it because you see a low environmental risk? Or because you see 
the economics great enough to make it worth taking an 
environmental risk?
    Mr. Wagner. Mr. Chairman, Congressman Holt, we studied that 
at length, and looked at both the actual data that came off the 
platforms, and then the empirical data that we see. We see the 
fjords in Norway just as pristine today as before they 
developed the North Sea oil fields. We see the active fields 
off the coast of Nova Scotia and their lack of any type of 
impact that I can see on the outer banks of the Grand Banks 
fishing areas; arguably, the most important.
    We took the time to study very carefully the activities in 
the Gulf of Mexico, and basically discovered a website, 
www.towersoflife, that tell you that each one of these 
platforms has become its own ecosystem down there. Where no 
coral would exist, it exists on the platforms. Endangered 
species have their entire life cycles on these platforms. On 
average, there are 30,000 to 50,000 fish that congregate on 
each platform.
    So we looked at all the data that was available. We looked 
at the remarkable track record that we have seen in the 
offshore industry. And we balanced that both with the economic 
needs, and determined that when you do a risk-reward variant, 
vis-a-vis tanker traffic, which has proven itself, it would be 
far more dangerous than----
    Mr. Holt. So you are saying that it is either a low risk, 
or perhaps economic--I mean, an environmental benefit.
    Let me ask Mr. Pollard to answer the same question.
    Mr. Pollard. Thank you, sir. I would, not surprisingly, 
look at it on the flip side. The DOE says that the price of 
natural gas with the moratorium lifted is going to be $3.26. 
Excuse me, with the moratorium in place it is going to be $3.26 
per thousand, and just four cents less with the moratoria areas 
opened. So therefore offering very little economic upside. But 
the pristine nature of the Virginia coast, not to mention, I am 
sure, off the coast of your state, leads to considerable 
downside risk.
    Mr. Holt. Looking at the information with regard to the 
North Aleutian Basin, the final environmental impact statement 
for the five-year program posits that there would be one large 
oil spill, two intermediate-sized spills, and numerous smaller 
spills.
    What do you think would be the comparable finding for 
Virginia area?
    Mr. Pollard. The EIS estimates a 1,500-barrel spill. I 
don't know with what percent certainty that is, because that is 
back in the notes of the EIS. But if it is, that is supposed to 
be either a tanker or barge spill, which means its likelihood 
of being in shore is much higher. Obviously, if it is onloading 
or offloading, it could be at the platform itself. That is 
75,000 gallons.
    Mr. Holt. And how broad geographically do you think the 
effect would be?
    Mr. Pollard. Well, I have operated outboard engines all my 
life. When I spill, you know, a cup of oil, it covers a pretty 
good area. So I wouldn't hesitate--I am not a specialist in 
that area, but it wouldn't be pretty, I can tell you that.
    Mr. Holt. Thank you. Thank you, Mr. Chairman.
    Mr. Costa. I thank the gentleman from New Jersey for your 
thoughtful questions, and for your involvement in this 
morning's hearing.
    I want to thank this panel for being here today. There are 
some additional questions that I believe members of the 
committee have that we will submit to you, that we will ask you 
to return in writing. And we appreciate that the timing with 
our appropriations measures on the Floor limits our ability to 
go at greater length. But we do value this effort. Because 
frankly, as I said on my opening statement, we really believe 
that a lot more work needs to be done as we try to thoughtfully 
construct both the risk management and the risk assessment as 
it relates to the important public resource that is there, and 
the balancing effort that this subcommittee and the full 
committee has to consider as we protect our public lands, and 
at the same time utilize those resources to the degree that 
makes sense, given the tremendous challenges our nation finds 
itself in with regards to our energy needs, as well as trying 
to at the same time be good stewards of the environment. Not an 
easy task, but nonetheless one that we are all committed to 
working on.
    So I want to thank both panel members, I want to thank the 
members, our colleagues who wanted to testify, for their words 
of wisdom. And we will look forward to continuing this effort 
in the months ahead.
    The Subcommittee hearing is now adjourned.
    [Whereupon, at 12:04 p.m., the Subcommittee was adjourned.]

    [Additional material submitted for the record follows:]

    [A letter submitted for the record by the Alaska 
Independent Fishermen's Marketing Association follows:]

                     Alaska Independent Fishermen's

                         Marketing Association

                             P.O. Box 60131

                           Seattle, WA 98160

                        Phone/Fax (206) 542-3930

                             June 25, 2007

Mr. Jim Costa, California, Chairman
Subcommittee on Energy and Mineral Resources
1626 Longworth House Office Building

Re:  Alaska Independent Fishermen's Marketing Association supports 
restoring protection for Bristol Bay from offshore drilling

Dear Mr. Costa,

    The Alaska Independent Fishermen's Marketing Association (AIFMA) is 
the largest salmon fishermen's association in Bristol Bay, Alaska. 
AIFMA's mission is to protect the renewable salmon resource and promote 
economic sustainability for commercial salmon fishermen in Bristol Bay. 
In keeping with our mission, AIFMA strongly supports restoring 
protection for Bristol Bay from offshore oil and gas drilling. The 
risks from offshore drilling to the salmon fishery and the families and 
livelihoods it supports are simply too great.
    Bristol Bay has the largest sockeye salmon run in the world and 
last year the value of the fishery was nearly $100 million. The Bristol 
Bay sockeye fishery is important economically, not only for Alaska, but 
also to other West Coast states. Nearly 3,000 salmon permit holders 
fish in Bristol Bay. These fishermen live in Alaska and up and down the 
West Coast. The value and vitality of the Bristol Bay salmon fishery is 
connected to the local economies of each of these states.
    Recently, AIFMA has been involved with collaborative efforts 
amongst permit holders to increase the value of Bristol Bay wild salmon 
by supporting the formation of the Bristol Bay Regional Seafood 
Development Association (BBRDSA). Fishermen are taking important steps 
to contribute to their livelihoods and to ensure the economic viability 
of the fishery into the future. Unfortunately, proposals for major 
industrial development activities, including offshore leasing, threaten 
to undermine this progress.
    AIFMA has been opposed to offshore drilling in the North Aleutian 
Basin planning area for many years. AIFMA was a part of the original 
coalition of fishing, conservation, community, and Native groups who 
fought hard to protect the region from offshore drilling in the 1980's 
and 90's. The risks posed to the salmon fishery and fishermen's 
livelihoods from offshore drilling remain the same today.
    The 5.6 million acre block proposed for leasing in 2011 by Minerals 
Management Service (MMS) overlaps vital marine habitat for salmon. 
Sockeye salmon utilize the area targeted for development for a number 
of key periods during their lifecycle including smolt migration, 
juvenile feeding grounds, and adult return migration. Offshore 
exploration, development, and production activities in these waters 
critical to the salmon life cycle are tremendously risky to the 
economically and culturally important salmon fishery.
    MMS has predicted that OCS development in the region will lead to 
at least one large oil spill of 1,000 barrels or more and numerous 
smaller spills (Final EIS 5-Year Proposed OCS Leasing Program). 
Summertime surface currents in the region would push spilled oil in a 
northeasterly direction, right towards where the salmon fishery takes 
place. Cleanup capabilities in the region are limited due to the 
extreme tides, currents, severe sea-ice conditions and hurricane-force 
winds that are common in the region.
    A spill could not only be biologically harmful to salmon by causing 
lethal and sublethal impacts and degradation of habitat, but could also 
have serious implications for the ability to market the fish. Indeed, 
one accident has the ability to stifle the progress being made by 
fishermen to increase the value of Bristol Bay salmon and could quickly 
undermine their investments in the fishery. Offshore drilling in this 
region could have a ripple of negative effects from Bristol Bay itself 
down through Washington, affecting fishermen and the economies where 
they reside.
    Other potential impacts of offshore drilling that present a danger 
to salmon include seismic surveys which research suggests could alter 
salmon migratory routes and can have lethal and sublethal impacts on 
small fish in the vicinity of airguns. The discharge of drilling muds 
and cuttings has been shown to degrade and alter zooplankton 
communities, a key food source for salmon.
    We must save our world-class, premier fisheries located in Bristol 
Bay from the inevitable negative impacts of oil and gas development. 
With zero benefit for fishermen and the potential for devastating 
impacts to our fishing industry, we strongly urge that there be no 
offshore leasing in Bristol Bay. We hope that you will be a strong 
voice for salmon fishermen in Washington and will work with other 
members of the House Appropriations committee to restore protection for 
Bristol Bay.

                               Sincerely,
[GRAPHIC] [TIFF OMITTED] T6476.035

                                 .eps__
                                 
    [A letter submitted for the record by the Alaska Marine 
Conservation Council follows:]

                             June 26, 2007

To:     Mr. Jim Costa, California, Chairman
       Subcommittee on Energy and Mineral Resources
       1626 Longworth House Office Building
       (202) 225-9297 Fax: (202) 225-5255

From:   Kelly Harrell, Friends of Bristol Bay Project Director
       Alaska Marine Conservation Council
       P.O. Box 101145
       Anchorage, AK 99510

Re:  Oversight Hearing on ``The Minerals Management Service's Proposed 
2007-2012 Program for Oil and Gas Leasing on the Outer Continental 
Shelf''

Dear Chairman Costa,

    The Alaska Marine Conservation Council (AMCC) appreciates this 
opportunity to provide written testimony for the House Natural 
Resources Committee hearing on the Minerals Management Service's 5-Year 
Outer Continental Shelf (OCS) Leasing Program for 2007-2012. On behalf 
of our board and over 700 members who include commercial fishermen, 
subsistence harvesters and others whose livelihoods depend on healthy 
marine ecosystems, we thank you for holding a hearing on proposed OCS 
leasing in Alaska, a topic very important to Alaska's coastal 
communities and fishing industry.
    AMCC is opposed to the inclusion of Bristol Bay and the 
southeastern Bering Sea (known as the North Aleutian Basin Planning 
Area) in the 2007-2012 OCS Leasing Program. This area, often referred 
to as the nation's ``fish basket,'' has a long history of bipartisan 
protection stretching back to the Exxon Valdez oil spill in 1989. This 
past January, President Bush lifted the executive ban on leasing in 
Bristol Bay, ending the legacy of protection for this rich and valuable 
marine ecosystem. The President took this action despite pleas not to 
do so from a diverse array of interests including commercial fishing 
organizations, Alaska Native Tribes and villages, and conservation 
groups (see attached letter). These groups stand united in their 
position that the potential benefits of offshore oil and gas drilling 
in Bristol Bay are not worth the great economic, ecological, and 
cultural risks.
    In this 5-year OCS program, MMS has scheduled a lease sale for in 
2011 in a 5.6 million acre block of the North Aleutian Basin Planning 
Area that lies at the center of the most important region for the 
commercial fishing industry in Alaska and the nation. More than 40% of 
our nation's total seafood harvest comes from the Bering Sea 
1 and the renewable fisheries resources potentially impacted 
by offshore drilling are worth more than $2 billion annually (see 
attachment). The area proposed for leasing overlaps fishing grounds 
and/or habitat for the world's largest sockeye (red) salmon fishery, 
the globally-important Bering Sea groundfish fishery, the famous 
Bristol Bay red king crab fishery, and high-valued Pacific halibut 
fishery. These fisheries resources are the economic and cultural 
foundation of the region's coastal communities and provide jobs for 
fishermen and fishing families throughout Alaska and the Pacific 
Northwest. Any impacts to these renewable fisheries resources would 
directly affect the vitality of the fishing industry here as well as 
the nation's supply and exports of seafood products. Furthermore, as 
fisheries continue to collapse and are overfished within the nation and 
around the world, the fisheries in the Bering Sea continue to stand as 
a model for successful and sustainable management of fisheries 
resources. Offshore drilling would compromise these accomplishments and 
Alaska's reputation as a leader in fisheries management.
---------------------------------------------------------------------------
    \1\ NOAA Fisheries. Fisheries of the United States 2005. February 
2007. Accessible online at: http://www.st.nmfs.gov/st1/fus/fus05/
index.html .
---------------------------------------------------------------------------
    The risk from oil spills is extremely high in the Bering Sea region 
known for its powerful storms and high frequency of volcanic and 
seismic activity. MMS predicts at least one large oil spill and 
numerous smaller spills will occur if offshore drilling takes place. 
2 Cleanup capabilities in rough weather and sea ice, which 
extends south into the North Aleutian Basin Planning Area in the winter 
months, are simply nonexistent. Even small spills have the potential to 
cause ecological harm to marine resources and could result in fisheries 
closures if there is the slightest perception that fish resources were 
affected. Also, due to the utilization of shallow shelf areas and 
adjacent coastal habitats by sensitive life forms of fish and crab, and 
by such species at various life stages (see attached maps), the 
potential for a pollution event to cause population-level impacts to an 
economically important fishery is high. For example, sockeye salmon 
utilize habitats within and surrounding the proposed lease sale area as 
outmigration routes as smolts, as juvenile feeding grounds, and as 
adult migration routes. This species, which supports a fishery worth 
nearly $100 million in 2006 (see attachment), would therefore be 
vulnerable to an oil spill throughout a number of important life 
stages.
---------------------------------------------------------------------------
    \2\ Minerals Management Service. Final Environmental Impact 
Statement, Outer Continental Shelf Leasing Program 2007-2012. April 
2007. Accessible online at: http://www.mms.gov/5-year/2007-
2012_FEIS.htm .
---------------------------------------------------------------------------
    The southeastern Bering Sea is a remote region only accessible by 
air and by boat. Industrial development is non-existent here with the 
exception of fishing-related activities. In addition to rich fisheries 
resources, the region also supports around 25 species of marine mammals 
including the world's most endangered whale--the North Pacific right 
whale. The area proposed for leasing substantially overlaps designated 
critical habitat for this species on the brink of extinction (see 
attached map). The southeastern Bering Sea is also a haven for 
migratory seabirds and waterfowl and contains the greatest 
concentration of seabird colonies on Earth. The continental shelf of 
the Bering Sea is truly one of the most productive in the world and 
contains species and habitats that are ecologically important on a 
global scale. This ``wet wilderness'' is a crown ocean jewel that our 
nation should take pride in and nurture; not put at risk for the short-
term development of relatively small amount of fossil fuel resources.
    OCS development in Bristol Bay would dramatically alter the 
pristine character of this awe-inspiring region that is home to five 
National Wildlife Refuges and eight state protected areas. The 
development scenario below for the North Aleutian Basin Planning Area 
laid out by MMS in the 5-Year Program Final Environmental Impact 
Statement (EIS) paints a vivid picture of the industrial-scale of 
activity that could be expected if leasing occurs:
      4-6 offshore platforms
      up to 20 exploration wells
      up to 200 production wells
      up to 150 miles of offshore pipeline--gas pipeline and 
condensate/light crude oil pipeline (impacting up to 555 acres of 
benthic habitat)
      up to 50 miles of new onshore pipeline
      2 pipeline landfalls
      1 waste facility
      1 processing facility
      1 shore base and a new dock or causeway for service 
vessels in onshore areas along the coast of the Alaska Peninsula, 
Unimak Island, or north of the Bristol Bay coast
      1 or more new access roads may be needed for each new 
facility and for pipeline maintenance activities. 3
---------------------------------------------------------------------------
    \3\ Minerals Management Service. Final Environmental Impact 
Statement, Outer Continental Shelf Leasing Program 2007-2012. April 
2007. Page IV-153; IV-136 Accessible online at: http://www.mms.gov/5-
year/2007-2012_FEIS.htm .
---------------------------------------------------------------------------
    This network of facilities, support bases, and oil and gas 
transportation infrastructure would impact hundreds of miles of habitat 
for fish, marine mammals, seabirds, waterfowl, and terrestrial mammals 
stretching from the seafloor and water column in the Bering Sea to 
coastal and inland areas along the north and south side of the Alaska 
Peninsula. Beyond oil spills and the sprawling footprint of 
infrastructure, the impacts from seismic surveys, and the discharge of 
drilling muds and cuttings pose additional risks to the fisheries 
resources and rich marine life in Bristol Bay and the southeastern 
Bering Sea. Given what's at stake in the region, the potential impacts 
of these activities are unacceptable.
    The ecological, economic, and cultural risks from offshore drilling 
in Bristol Bay are extremely high but the potential benefits are 
minimal. MMS estimates the net economic value of developing oil and gas 
resources in the North Aleutian Basin at $7.7 billion dollars over the 
entire 25-40 year lifespan of the project. 4 This figure 
pales in comparison to the $2 billion dollar annual renewable fisheries 
economy that offshore drilling would put at risk each year.
---------------------------------------------------------------------------
    \4\ Minerals Management Service. Final Proposed Leasing Outer 
Continental Shelf Leasing Program 2007-2012.
---------------------------------------------------------------------------
    The mean estimated technically recoverable resources for the North 
Aleutian Basin Planning Area are 8.62 trillion cubic feet of gas and 
0.75 billion barrels of oil. 5 This represents less than 1% 
of the total mean estimated technically recoverable oil in the U.S. OCS 
(85.88 Bbo) and around 2% of gas (419.88 Tcf). 6 Clearly, by 
protecting Bristol Bay, we would not be cutting off access to our 
nation's ocean energy resources, most of which are already open to 
exploration and development in the Gulf of Mexico. The relatively small 
amounts of oil and gas in Bristol Bay would do little to end our 
nation's reliance on foreign fossil fuels. MMS states in the Final 
Environmental Impact Statement for the 5-Year Program that, ``Most 
benefits (of the 5-Year Program) would be short-term and would delay 
the increase in the Nation's dependency on oil imports.'' 7 
It is simply not good energy policy, economic policy, or fisheries 
policy to allow offshore leasing amidst the productive waters of 
Bristol Bay and the southeastern Bering Sea.
---------------------------------------------------------------------------
    \5\ Minerals Management Service. Planning Area Resources Addendum 
to Assessment of Undiscovered Technically Recoverable Resources of the 
Nation's Outer Continental Shelf, 2006.
    \6\ Ibid.
    \7\ Minerals Management Service. Final Environmental Impact 
Statement, Outer Continental Shelf Leasing Program 2007-2012. April 
2007. Page IV-522. Accessible online at: http://www.mms.gov/5-year/
2007-2012_FEIS.htm .
---------------------------------------------------------------------------
    AMCC urges Members of Congress to request that MMS remove Bristol 
Bay from the 5-Year OCS Leasing Program and strongly hopes that members 
will work to restore protection for this unparalleled and extremely 
valuable marine ecosystem. We encourage other Members of Congress to 
support and cosponsor the Bristol Bay Protection Act (HR 1957) 
introduced by Representatives Inslee, Hinchey, and Gilchrest (see 
attached letter). This bill would provide permanent protection for the 
Bering Sea's renewable fisheries economy, the region's coastal 
communities, as well as the globally important marine wildlife in the 
region from the potentially devastating impacts of offshore oil and gas 
development.
    Again, thank you for this opportunity to comment. Please feel free 
to contact me with any questions or concerns.

Sincerely,

Kelly Harrell
Project Director, Friends of Bristol Bay

Enclosures
                                 ______
                                 
    [An Open Letter to President George W. Bush submitted for the 
record by the Alaska Independent Fishermen's Marketing Association, 
Alaska Center for the Environment, Alaska Longline Fishermen's 
Association, et al., follows:]
[GRAPHIC] [TIFF OMITTED] T6476.017

[GRAPHIC] [TIFF OMITTED] T6476.018

Alaskans Urge Congress to Support H.R. 1957 & S 1311--The 
        Bristol Bay Protection Act
    The Alaska Marine Conservation Council (AMCC), an Alaska-based 
organization whose more than 700 members include commercial fishermen, 
subsistence harvesters, and others whose livelihoods depend on healthy 
marine ecosystems, supports the Bristol Bay Protection Act introduced 
in the House by Representatives Inslee (D-WA), Gilchrest (R-MD), and 
Hinchey (D-NY) and the companion bill introduced in the Senate by John 
Kerry (D-MA). The Alaska Marine Conservation Council urges other 
Members of Congress to co-sponsor these important bills.
    AMCC has been working closely with communities and fishing 
interests to protect Bristol Bay from offshore drilling for over four 
years. More than 40 local and regional entities including fishing 
associations, Tribes, villages and other Native organizations have 
voiced opposition to offshore oil and gas drilling in Bristol Bay. The 
livelihoods of local residents, as well as commercial fishermen and 
subsistence harvesters, are directly tied to the health of the 
renewable marine resources in this region. These living, marine 
resources would be put at great risk from offshore oil and gas 
development. The federal government's own studies predict drilling in 
Bristol Bay and the southeastern Bering Sea (North Aleutian Basin 
Planning Area) would lead to at least one large oil spill, 2 medium-
sized spills, and numerous smaller spills. 8
---------------------------------------------------------------------------
    \8\ Minerals Management Service. Final Environmental Impact 
Statement, Outer Continental Shelf Leasing Program 2007-2012. April 
2007. Accessible online at: http://www.mms.gov/5-year/2007-
2012_FEIS.htm .
---------------------------------------------------------------------------
    By all accounts, Bristol Bay is one of the nation's crown ocean 
jewels. The bay is a large estuary of the Bering Sea and its broad, 
shallow continental shelf if one of the most productive in the world. 
Approximately 40% of the entire U.S. seafood catch comes from the 
Bering Sea, including the world's largest sockeye (red) salmon fishery, 
globally-important Bering Sea pollock, and Bristol Bay red king crab. 
9 The largest concentration of seabird colonies in North 
America occurs here. Numerous marine mammal species have important 
habitat in Bristol Bay--including threatened and endangered species 
such as the Northern fur seal, Steller sea lion, southwestern sea 
otter, fin whale, humpback whale, and the extremely imperiled North 
Pacific right whale.
---------------------------------------------------------------------------
    \9\ NOAA Fisheries. Fisheries of the United States 2005. February 
2007. Accessible online at: http://www.st.nmfs.gov/st1/fus/fus05/
index.html .
---------------------------------------------------------------------------
    Bristol Bay has a long history of bipartisan protection from OCS 
leasing that dates back to the Exxon Valdez oil spill in 1989. In 
January 2007, President Bush lifted a long-standing executive ban on 
offshore drilling in Bristol Bay removing the last layer of protection 
for the region.
    The Final 5-Year OCS Leasing Program recently transmitted to 
Congress for a 60-day review period proposes to hold a lease sale in 
Bristol Bay (North Aleutian Basin Planning Area) in 2011. Congress must 
act to protect Bristol Bay's ecologically, economically, and culturally 
important renewable resources from the short-term development of fossil 
fuels.
    By supporting the Bristol Bay Protection Act, you would be:
      Supporting the continued economic development of 
renewable fisheries resources of the southeastern Bering Sea that are 
worth more than $2 billion annually and are vital to local and state 
economies in Alaska and the Pacific Northwest (see attachment);
      Supporting sound economic policy that refuses to risk 
this fisheries economy for an estimated $7.7 billion dollar net 
economic value over the entire 25-40 year lifespan of fossil fuel 
development in Bristol Bay;
      Helping to protect the jobs of fishermen who have nothing 
to gain and everything to lose from proposed offshore oil and gas 
development;
      Ensuring that the four National Wildlife Refuges and 
eight Alaska state protected areas in the region are not subject to 
degradation from oil and gas activities and can continue to provide 
vital habitat to a range of seabird, waterfowl, marine mammal, and 
terrestrial species;
      Supporting an enlightened vision for our nation's energy 
policy that refuses to risk economically, ecologically, and culturally 
important renewable resources for short-term fossil fuel development 
that would benefit few and could be detrimental to many.
    Your support of the Bristol Bay Protection Act will help to 
safeguard globally important commercial fisheries, diverse marine life, 
and the economies and traditions that depend on their long term health. 
Please feel free to contact us for more information or with any 
questions or concerns.

Sincerely,

Kelly Harrell
Project Director, Friends of Bristol Bay
Alaska Marine Conservation Council
P.O. Box 101145
Anchorage, AK 99510
(907) 277-5357
[email protected]
www.akmarine.org
                                 ______
                                 
Ten Reasons to
Protect Alaska's Bristol Bay
from Offshore Oil and Gas Drilling
    Bristol Bay and southeastern Bering Sea waters support globally 
important commercial fisheries valued at more than $2 billion dollars 
annually. The area targeted for offshore oil and gas development 
overlaps with vital habitat and fishing grounds for salmon, red king 
crab, herring, halibut, pollock and cod. The region provides more than 
40% of total U.S. fish catch and supports fishermen and fishing 
families throughout Alaska and the Pacific Northwest.
    Bristol Bay is home to the world's largest wild run of sockeye 
salmon. The region's salmon are important not only ecologically, with 
Bristol Bay serving as one of the last global strongholds for Pacific 
salmon, but also economically and culturally. The area targeted for 
leasing falls directly within important migratory and feeding habitat 
for salmon from throughout western Alaska.
    Subsistence is the irreplaceable mainstay of Alaska Native 
tradition and culture. Salmon is the life-blood of village economies 
and ways of life. In addition to salmon, southwestern Alaskan 
communities rely on halibut, herring, marine mammals and other ocean 
and coastal resources for their livelihoods. Impacts from offshore 
drilling would threaten these rich subsistence traditions.
    The Bristol Bay region is of global ecological importance for fish, 
seabirds, waterfowl and marine mammals. The eastern Bering Sea is 
renowned for its enormous biological productivity and provides habitat 
for hundreds of fish species, dozens of marine mammal species and is 
home to one of the world's greatest concentrations of seabird colonies.
    Federal studies suggest offshore oil and gas production in Bristol 
Bay would result in one or more major oil spills of more than 1,000 
barrels and a number of smaller spills. Recovery of spilled oil in 
Bristol Bay is unfeasible as clean-up technology is inadequate in rough 
sea conditions, ice, and strong tides and currents.
    The Bering Sea ecosystem is already under stress from climate 
change. Scientists have demonstrated that warming temperatures have 
already had significant and unprecedented effects on the southeast 
Bering Sea and Bristol Bay ecosystem including sea bird die-offs, rare 
algal blooms, declines in marine mammals and altered fish distribution. 
Increased ocean acidification, warmer ocean temperatures, disrupted 
oceanic production cycles, and warmer stream temperatures are expected 
to cause declines in productivity in the region over the next 30 years. 
Any further stress, such as offshore oil and gas activities, will 
exacerbate these threats to the integrity and resilience of the 
ecosystem.
    Offshore drilling in Bristol Bay would further threaten a number of 
endangered species including the world's most endangered whale--the 
North Pacific right whale--whose population is estimated to number less 
than 100 individuals. More than half of the area proposed for offshore 
development is designated critical habitat for this species.
    There are four national wildlife refuges (NWRs) in the region that 
could be affected by offshore oil and gas development: Alaska Peninsula 
NWR, Alaska Maritime NWR, Izembek NWR, and Togiak NWR. The proposed 
transportation route for getting oil and gas to the market calls for a 
pipeline through the Alaska Peninsula NWR which provides habitat for 
salmon, waterfowl, wolf, wolverine, lynx, caribou, brown bears, and 
numerous other species. Izembek NWR, which contains some of the world's 
largest eelgrass beds and globally important wetlands that provide 
habitat for millions of migratory birds, is directly adjacent to the 
proposed lease sale area.
    We already determined that Bristol Bay is too sensitive to allow 
offshore oil and gas drilling. After the Exxon Valdez oil spill 
demonstrated the tremendous damage an oil spill in Alaskan waters can 
have on fish, wildlife, and communities, Congress placed the region 
under the nationwide offshore drilling moratorium and the American 
public paid more than $100 million dollars in 1995 to buy back
    The economic benefits of renewable fisheries resources far outweigh 
the potential economic value of nonrenewable offshore oil and gas 
resources. The Minerals Management Service has estimated the total net 
economic value of developing Bristol Bay's oil and gas resources at 
$7.7 billion dollars over the entire 25-40 year lifespan of the 
project. Every year of offshore drilling would pose risks to an 
estimated $2 billion dollar annual wild fisheries economy.
    A broad spectrum of conservation, community, and fishing interests 
are all opposed to offshore drilling n Bristol Bay. Join us in calling 
on Congress to restore protection for this unique marine ecosystem.

Contact Kelly Harrell at the Alaska Marine Conservation Council at 
(907) 277-5357,
e-mail [email protected], or got to www.akmarine.org to learn more 
about how you can help.
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    [A statement submitted for the record by Faith Gemmill, 
Resisting Environmental Destruction on Indigenous Lands 
(REDOIL), follows:]

                                 REDOIL

        Resisting Environmental Destruction on Indigenous Lands

           A Project of the Indigenous Environmental Network

_______________________________________________________________________

                             P.O Box 74667

                        Fairbanks, AK 99707-4667

                            PH: 907-456-2181

                           Fax: 907-456-2184

July 12, 2007

Mr. Jim Costa, California, Chairman
Subcommittee on Energy and Mineral Resources
1626 Longworth House Office Building
(202) 225-9297 Fax: (202) 225-5255
Via Email: [email protected]

RE:  Subcommittee on Energy and Mineral Resources: Written testimony 
for Oversight Hearing on ``The Minerals Management Service's Proposed 
2007-2012 Program for Oil and Gas Leasing on the Outer Continental 
Shelf'' held on June 28, 2007.

Mr. Chairman,
    On behalf of Resisting Environmental Destruction on Indigenous 
Lands (REDOIL) I submit these comments as written testimony for the 
Subcommittee on Energy and Mineral Resources: Oversight Hearing on 
``The Minerals Management Service's Proposed 2007-2012 Program for Oil 
and Gas Leasing on the Outer Continental Shelf'' held June 28, 2007
    REDOIL is a powerful movement of Alaska Natives who are challenging 
the oil industry and demanding their rights to a safe and healthy 
environment conducive to subsistence. The REDOIL network consists of 
grassroots Alaska Natives of the Inupiat, Yupik, Aleut, Tlingit, 
Gwich'in, Eyak and Denaiana Athabascan tribes. This Alaska-based 
network aims to address the human and ecological health impacts brought 
on by the unsustainable development practices of the fossil fuel 
industry. REDOIL strongly supports self-determination rights of tribes 
in Alaska, as well as a just transition from fossil fuel development to 
sustainable economies, and promotes the implementation of sustainable 
development on or near Alaska Native lands. REDOIL is part of the 
Indigenous Environmental Network. One of the most important guiding 
principles for REDOIL is:
    ``We are committed to a moratorium on all new exploration for oil, 
gas and coal as a first step toward the full phase-out of fossil fuels 
with a just transition to sustainable jobs, energy and environment. We 
take this position based on our concern over the disproportionate 
social cultural, spiritual, environmental, and climate impacts on 
Indigenous Peoples, particularly in Alaska.
The Alaska OCS:
    The Alaskan OCS provides an abundance of marine life, and is 
adjacent to some important terrestrial public resources in the United 
States. Alaska Native coastal communities have depended on marine 
subsistence resources since time immemorial. The Beaufort Sea, Chukchi 
Sea, Arctic Ocean, Bristol Bay, Cook Inlet and other offshore areas are 
critical to Alaska Natives subsistence. REDOIL is deeply concerned with 
the risks posed to sensitive marine and coastal environments from oil 
and gas activities in the Alaskan OCS. Vital subsistence resources that 
are intrinsic to the livelihood of coastal Alaska Native communities 
within the entire OCS area are at risk. Due to the serious risk posed 
to these ecological areas and the communities that are within these 
areas or in close proximity who rely upon coastal resources, REDOIL 
strongly recommends the entire Alaska OCS be excluded from the 2007-
2012 leasing program.
ANCSA, Oil and Alaska Native Subsistence:
    Since time immemorial, the title to land in Alaska belonged to the 
Indigenous Peoples of Alaska. Various acts of congress and laws put 
into effect a chain of pilfering of Native lands in Alaska. Though the 
question of title to land was not settled, on June 20, 1867 The Treaty 
of Cessions proclaimed Alaska as part of the United States after the 
U.S. bought Alaska from the Russians, for the sum of 2 cents an acre. 
When Alaska became the 49th State in 1959, there were approximately 
85,000 Alaska Natives throughout Alaska. The Prudhoe Bay oil field was 
discovered in 1968. The discovery of oil in Prudhoe Bay established an 
alliance of the federal government and multi-national oil companies to 
promote their combined interests. This alliance provoked an urgency to 
settle the land claims in Alaska to provide for a right of way for the 
800 mile Trans-Alaska pipeline to access the resources on the North 
Slope and to bring it to market. The Alaska Native Claims Settlement 
Act (ANCSA) was then enacted in 1971 by Congress. ANCSA was passed 
without a vote of Alaska's original inhabitants or the American public. 
ANCSA extinguished all aboriginal land claims in Alaska. Alaska Natives 
retained only 44 million acres of land (approximately 11% of 380 
million acres) and $962 million dollars. ANCSA created for profit 
Native regional and village corporations and also conveyed ancestral 
lands to the Native corporations instead of existing Tribal 
governments. Now, Alaska Natives have ownership to shares in ANCSA 
corporations that hold land title. Many ANCSA Native corporate entities 
now are in alliance or agreement with large multi-national companies. 
Thus, Alaska Natives are constantly defending their ancestral homelands 
from the onslaught of unsustainable economic development projects 
within their territories.
    Though Federal Policy of the U.S. set up Alaska Natives to 
assimilate themselves to the western value system of ``profit at all 
cost'' many Alaska Natives still maintain their cultural values and 
continue to maintain and practice a subsistence lifestyle. There is a 
growing number of Alaska Natives that view ANCSA as an illegitimate act 
that was designed to undermine Self-Determination and Sovereignty of 
Alaska Native Tribes. Many Alaska Natives would rather live in concert 
with the land and resources and not dominate over the natural world 
with the purpose of profit. ANCSA created a system to access the 
resources, assimilate Alaska Natives, divide and conquer to proceed 
with unsustainable economic development initiatives that further erode 
subsistence rights as the land is assaulted. Alaska Native traditional 
territories within the State of Alaska are now at threat by corporate 
multi-national interests. Unfortunately ANCSA created the situation 
where our own Native corporations are aligned with the oil companies 
and other multi national interests as well, and thus this is the legacy 
of ANCSA-massive destruction of our homelands.
    Alaska Natives are seeking protection for the last areas that are 
still intact and pristine, that continue to provide for essential 
physical, cultural, spiritual, social and economic means for the 
Indigenous Peoples of Alaska. The proposed new 5-year OCS Oil and Gas 
Leasing Program for 2007-2012 is a threat that will have profound and 
devastating effects on the Indigenous Peoples of Alaska that rely on 
the oceans to provide for their subsistence needs.
    Indigenous Peoples have always viewed human rights and a healthy 
environment as fundamentally linked. The careful management and 
protection of the Arctic environment is a requirement for the enjoyment 
of Alaska Native human rights, particularly as they relate to the 
``subsistence'' or ``traditional'' economy. Indigenous Peoples of 
Alaska have long fought for recognition of subsistence rights as a 
basic inherent fundamental human right.
    Existing international law already protects subsistence rights. 
This right is recognized and affirmed by civilized nations in the 
international covenants on human rights. Article I of both the 
International Covenant on Civil and Political Rights, and the 
International Covenant on Economic, Social and Cultural Rights read in 
part:
        ``...In no case may a people be deprived of its own means of 
        subsistence.''
    Alaska Native communities are constantly working toward basic 
survival. The term ``subsistence'' may not mean much to citizens of the 
United States, but to Alaska Natives the term ``subsistence'' is about 
their rights, livelihood and survival. Native communities are largely 
remote and usually only accessible by small plane. Some communities 
that are located along river ways may be accessed by boat in the 
summer. Few communities are located on the highway system. There are 
not large grocery stores in communities, and the cost of freight 
nowadays is so high, Alaska Natives are better off living the 
subsistence livelihood; it alleviates a financial burden on families as 
well. For communities, subsistence is more than hunting and fishing. It 
is their very life, it is their existence. One can easily say that 
without subsistence, Alaska Natives will not exist. The reality is; 
this is the hard truth.
Traditional Ecological Knowledge:
    Alaska Natives from coastal communities have serious concerns for 
their marine environment. They eloquently address their concerns about 
present oil and gas development and proposed future development:
        ``The concerns relating to the adverse effects of an air burst 
        of 190 decibels were not answered. It has never been 
        demonstrated that oil can be cleaned up in the Arctic Ocean. 
        Since then, I have learned a disturbing fact, it appears that 
        spills would not require extreme measures to be cleaned up. 
        Demonstrations have shown that oil cannot be successfully 
        cleaned up in the Arctic Ocean. If a spill were to happen, 
        clean up would only be required at demonstrated ability of 
        existing technology. This I believe is a very serious problem. 
        The demonstrated ability of clean up is not of an acceptable 
        quality. The accumulative effects relating to oil development 
        are not considered, if the offshore projects are allowed, what 
        adverse effects will be created getting the product to market? 
        The public should know that the offshore development is 
        directly related to onshore areas being made available for 
        exploitation, i.e. development of the 1002 area of the Arctic 
        National Wildlife Refuge.''
                                --Robert Thompson, Kaktovik

        ``The ocean can provide for many communities and families but 
        oil only gives a temporary paycheck that may not be there next 
        year and eventually will require our natural resource, the 
        people, to be away when teaching and communication is being 
        missed by the young.''
                           --Rosemary Ahtuanguruak, Nuiqsut

        ``During the MMS scoping meeting we expressed our opposition 
        and asked questions on when seismic studies were done by dates, 
        they did not know. We stated that we were unaware of the five 
        wells that were drilled in 1989-91 and noticed seals sinking 
        during winter (loss of fish) and a few whales washed up on the 
        beach between 1980-89, possibly from seismic work that took 
        place at that time. We stated we had passed a resolution 
        opposing oil & gas development offshore. They did not bring a 
        recorder. ConocoPhillips came a couple of weeks later where we 
        reiterated our concerns expressed at the MMS scoping meeting. 
        We also stated we learned that there were no nationally 
        accepted seismic study reports completed on the effects of 
        seismic work on fish and marine mammals. Other published 
        reports of harm was referred to during the meeting, such as a 
        reduction in fish caught by 30-70% to the lack of studies on 
        baleen whale .We request that no permits be issued until there 
        is a nationally accepted report completed that proves there are 
        no adverse effects of seismic work on fish and marine mammals. 
        We feel that there is nothing that can replace our food from 
        our sea.''
                                --Jack Scheafer, Point Hope

        ``The Beluga in the Cook Inlet are under the probability of 
        becoming extinct. We do not know what will be impacted next. To 
        open offshore leasing on the Outer Continental Shelf would 
        further endanger the Beluga, in part because of seismic testing 
        and because of additional environmental damage including Global 
        Warming. The National Marine Fisheries is not enforcing the 
        Marine Mammals Protection Act and has been unable to protect 
        the marine mammals. Contracting with the Tribes in Cook Inlet 
        to protect the mammals may be more effective.''
                                 --Mary Ann Mills, Kenaitze

        ``In Bristol Bay we were confronted by oil companies that bid 
        on the leases in the original lease sale 92 in the 80's, so we 
        brought this issue up before our Tribal Councils because we 
        always felt this would adversely affect our entire lifestyle. 
        Our subsistence resources would be completely depleted. Any 
        disruption in the flow of subsistence lifestyle would 
        negatively impact us as traditional users. Through long term 
        use and occupancy, we understand this ecosystem better than 
        most. All five species of salmon are the mainstay of the 
        economy of our communities. Within the last thirty years, the 
        herring fishery became a big business, along with the halibut 
        and king crab. Along the Alaska peninsula is an area called 
        ``cod alley'' that is used by CDQ's (community development 
        quotas) this area also supports Pollock, so the whole area will 
        be impacted. We are also concerned for surface and subsurface 
        clams and crabs. There is concern for the whales, their sensors 
        are so delicate. Seismic testing will devastate them, which has 
        been proven to harm their sense of direction. We depend on 
        migrating birds as well--Muir, geese, and seagull eggs are also 
        an important subsistence resource in the springtime. Oil and 
        exploration would devastate our subsistence lifestyle. Any 
        spill of any magnitude would destroy our way of life. The North 
        Aleutian basin is our store. Anything that jeopardizes the 
        purity of this area would detrimentally impact us.''
                                  --Norman Anderson, Naknek
Science:
    National Academy of Sciences 2003
    Cu mulative Environmental Effects of Oil and gas Development on 
Alaska's North Slope ``Effects on the Human Environment''
    Offshore, Subsistence and Human Health Impacts:
    ``Alterations to the North Slope physical environment have had 
aesthetic, cultural, and spiritual effects on human populations.'' 
(p.222)
    ``The committee heard repeatedly from North Slope Inupiat residents 
that the imposition of a huge industrial complex on the Arctic 
landscape was offensive to the people and an affront to the spirit of 
the land.'' (p.223)
    ``Hunting the bowhead [whale] has been the Inupiaq cultural anchor 
as change has come to the North Slope. The ongoing, accumulating 
effects posed by offshore development, in the form of perceived 
threats, would be diminished only by clear evidence that the technology 
exists to mitigate large oil spill in broken ice. There is no evidence 
to date that such cleanups are possible...the size of bowheads makes 
them an extremely important food source.'' (p. 135)
    ``Alaska Native residents told the committee that there are subtle 
changes in species harvested by subsistence hunters, who have 
identified changes in the color, texture, and taste of the flesh and 
skin of several species. (p. 136)
    ``North Slope residents also reported that traditional subsistence 
hunting areas have been reduced, the behavior and migratory patterns of 
key subsistence species have changed, and that there is increased 
incidence of cancer and diabetes and disruption of traditional social 
systems.'' (p.139)
    ``In addition to stress contributing to adverse health effects, oil 
development has increased the smog and haze near some villages, which 
residents believe is causing an increase in asthma. The stress of 
integrating a new way of life with generations of traditional teachings 
has increased alcoholism, drug abuse, and child abuse. Higher 
consumption of non-subsistence food...has increased the incidence of 
diabetes.'' (p. 225)
The Outer Continental Shelf:
    Each of Alaska's OCS regions contains important natural subsistence 
resources that would be threatened by oil and gas development. 
Subsistence use of fish and other marine animals is both an established 
economy of Native coastal communities and is absolutely central to the 
survival of Alaska's indigenous cultures. The nation's most productive 
and richest fishing grounds are found in Alaska, and the economies of 
coastal communities along the Gulf of Alaska, Cook Inlet, the Bering 
Sea, and the Beaufort and Chukchi Seas rely on commercial and 
subsistence fishing. Statewide, the fishing industry provides more 
private sector jobs than any other source. Unlike oil and gas 
resources, the marine resources of the Alaska OCS can last 
indefinitely, and should therefore not be jeopardized by non-renewable 
resource development.
    Beaufort Sea: The Arctic Ocean's Beaufort Sea is the primary marine 
subsistence use area for the Inupiat of the North Slope. The Beaufort 
provides critical habitat for polar bears, walruses, seals, migratory 
birds, threatened spectacled and Steller's eiders and the endangered 
bowhead whale. In this vulnerable and harsh environment, spilled oil 
will concentrate in restricted open water such as the leads and 
breathing holes where marine mammals surface and birds congregate, and 
along the sensitive coasts. The Arctic National Wildlife Refuge, with 
its incomparable wildlife and wilderness, adjoins the eastern portion 
of the Beaufort Sea in the United States. Critical bowhead whale spring 
migratory pathways in the lead zone are located east of Barrow, and 
fall migratory and feeding habitats are located offshore of the Arctic 
National Wildlife Refuge.
    The National Petroleum Reserve-Alaska lines much of the Beaufort 
Sea coast, an area of international environmental significance. This is 
an important area as a key subsistence use area. This region, 
especially the area north of Teshekpuk Lake, is particularly important 
to a number of bird species. For example, it includes a high percentage 
of the Alaskan breeding population of yellow-billed loons, is the 
center of the breeding distribution for Steller's eiders, and contains 
high concentrations of spectacled eider nests. The area also includes 
high breeding densities and highly populated colonies of black brants. 
The wetlands also provide seasonal habitat for many other species of 
waterfowl and shorebirds and for other fauna. The Dease Inlet and Smith 
Bay region is important to mammals, as well. For example, the offshore 
area contains the feeding area for bowhead whales during their fall 
migration and the late summer use area for beluga whales. Onshore, it 
provides the most consistently used wintering area for the Teshekpuk 
Lake Caribou Herd, and is part of the outer range of the Western Arctic 
Caribou Herd.
    These primary subsistence use areas are sensitive to disturbances 
caused by industrial activities and infrastructure as well as oil 
spills, and should therefore be excluded from development the next OCS 
5-year plan.
    Coast of the Arctic National Wildlife Refuge: Offshore lease sales 
jeopardize the integrity of the wildlife and coastal habitats of the 
Arctic National Wildlife Refuge as well as the marine ecosystem itself 
upon which subsistence activities depend. Development off the coast of 
the Arctic Refuge poses risks to the Porcupine Caribou Herd, bowhead 
whales, fish, and migratory birds using the Arctic Refuge coastline, 
lagoons, and barrier islands. Internationally important polar bear 
habitats are at risk, both within the refuge and off its coast. 
Protection of polar bears and their habitats is a specified purpose of 
the Arctic Refuge. The Arctic Refuge provides the most important 
onshore denning habitat for polar bears in the U.S. Offshore 
exploration and development would cause pollution, aircraft and vessel 
noise and related industrial activity, and potential oil spills would 
degrade the Refuge and threaten the integrity of this protected 
conservation unit, even if there were no construction of infrastructure 
within its boundaries. In the future, there would be intense pressure 
to construct sprawling onshore airports, pipelines, roads, docks, and 
other support facilities in the Refuge. The Gwich'in Nation of 
Northeast Alaska and Northwest Canada have longstanding opposition to 
oil development within the coastal plain of the Arctic National 
Wildlife Refuge, a growing number of Inupiat within the community of 
Kaktovik are opposed to oil development in the Arctic Refuge as well. 
The coastal plain of the Arctic National Wildlife Refuge represents the 
last 5% of coastal lands still protected, 95% of Alaska's coastal lands 
are open to development already.
    The Beaufort Sea Lease Sale 170 set a precedent of not leasing 
areas off the coast of the Arctic Refuge. MMS deferred the entire area, 
noting lack of information on cumulative impacts to the Refuge from 
development, insufficient information on emergency response plans, and 
the inability to make direct landfall with a sub-sea production 
pipeline. MMS also noted concerns related to bowhead whales and the 
potential for this area to be an important area for feeding during fall 
migration. These issues remain major concerns of the public. Therefore, 
at a minimum, we request that the entire OCS north of the Arctic 
National Wildlife Refuge (from its western boundary at the Staines/ 
Canning River to the Canadian border) be completely removed from any 
further consideration in the 5-year plan as the environmental risks are 
unavoidably too high in this sensitive area.
    Chukchi Sea: The Chukchi Sea is an important primary subsistence 
use area for Inupiat that live in coastal communities. Oil leasing in 
Arctic waters of the Chukchi Sea/Hope Basin threatens critical spring 
migration route for bowhead and beluga whales, important feeding areas 
for gray whales and Pacific walruses, staging and molting areas for 
migratory birds, polar bear and walrus habitats including in Russian 
waters, and Cape Krusenstern National Preserve. An offshore spill, as 
well as routine development, also risks harming Kasegaluk Lagoon, a 
significant beluga whale calving and migratory bird staging area. The 
Chukchi Sea and Hope Basin should therefore be excluded from 
development in the 5-year plan.
    Northern Aleutian Basin: The North Aleutian Basin is valuable to 
the local communities for its abundant subsistence resources that 
sustain traditional cultures and ways of life. The North Aleutian Basin 
is protected, and will continue to be protected, by the Executive OCS 
Deferrals through 2012, and these sensitive waters thus cannot be 
included in the Five-Year OCS Program for 2007-2012. The North Aleutian 
Basin (Bristol Bay) is one of the most productive areas of the U.S. 
OCS. Several endangered species depend on these waters including the 
northern right whale whose critical habitat is likely to be designated 
within or directly adjacent to the area of highest industry interest. 
The region is ringed by unparalleled estuaries critical to the region's 
ecological productivity and the lease sale area overlaps with fisheries 
of national significance including pollock, cod, red king crab, herring 
and the world's largest salmon run. Bristol Bay fisheries are the base 
of the economy and livelihood for residents of the region. Bristol Bay 
is extremely sensitive to potential seismic testing, oil spills, and 
chronic pollutants from offshore drilling operations associated with 
both oil and natural gas development.
    Cook Inlet: The Cook Inlet provides critical habitat for key 
subsistence species that the local Indigenous Native peoples rely upon. 
The Beluga Whale is now on the brink of extinction and Alaska Natives 
in the region feel that this is due to seismic disturbance among other 
factors. Oil companies operating offshore oil rigs in Alaska's Cook 
Inlet are exempt from U.S. laws against dumping toxic oil, grease, and 
wastewater directly into coastal waters. The Cook Inlet is the only 
offshore drilling area in the U.S. where platforms are allowed to dump 
oil and grease directly into the water. Beyond Toxic dumping, oil 
development in Cook Inlet poses oil spill and other risks to rich 
fisheries, declining populations of sea otters, depleted population of 
beluga whales, and critical habitat for endangered Steller sea lions, 
as well as the coastlines of Chugach National Forest, Lake Clark and 
Katmai National Park and Preserves, and the Becharoff, Alaska 
Peninsula, Kenai, and Alaska Maritime National Wildlife Refuges. Oil 
and gas infrastructure, along with its associated tanker traffic and 
pollution, are incompatible with the uses and plans established for 
many of these important areas and with the fisheries-based economies of 
the region. Additionally, the region's earthquake-prone nature and 
harsh operating conditions including extreme winds and tides make the 
likelihood of spills higher in this region than other OCS areas.
    Numerous communities of the Lower Kenai Peninsula and on Kodiak 
Island base their economies and way of life on the sensitive marine 
systems of Lower Cook Inlet and Shelikof Strait, and any damage to 
these systems will have major impacts on these communities. Cook Inlet 
should not be included in the 2007-2012 program.
Offshore Development endangers marine ecosystem:
    Oil and gas activities endanger the fragile marine environment off 
the coast of Alaska. Productive marine ecosystems, marine mammals, sea 
birds, and coastal communities are all at risk from potential blowouts 
and pipeline oil spills. The risks from unprecedented new technology of 
buried sub-sea oil and gas pipelines raise major questions about 
development throughout Alaskan OCS waters. We are also concerned about 
the chronic effects from smaller spills of dozens of toxic substances 
typical of North Slope oil field operations (not just spills of crude 
oil or spills greater than 100 bbl) and from disposal of drilling muds 
and cuttings in the ocean during exploratory drilling. Even small 
amounts of oil can negatively affect marine life. Oil pollution 
increases susceptibility to diseases in fish, inhibits phytoplankton 
productivity, and interferes with reproduction, development, growth, 
and behavior of many species throughout the food chain. Additionally, 
marine life is threatened by noise pollution generated by air and 
vessel traffic, drilling, platform work and seismic testing, the 
construction of causeways and docks, and the laying of miles of 
pipelines in or on the seafloor.
    All of these activities pose unacceptable threats to subsistence 
use areas, protected areas, fisheries and wildlife, and endangered and 
threatened species and they would dramatically put Alaskan Native 
subsistence based communities along Alaska's coast in peril. 
Furthermore, oil produced in the Alaska OCS would be transported via 
oil tankers that pose risks not only to Alaska's coastal resources, but 
also to those in the lower 48.
Global Warming:
    In 2001 at the request of the Administration, the National Academy 
of Sciences reviewed and declared global warming a real problem caused 
in part by human activities.
    The burning of coal, oil and gas and cutting down forests cause 
global climate change by releasing greenhouse gases into the 
atmosphere. This is causing global temperatures to rise as excessive 
amounts of greenhouse gases accumulate in the atmosphere. There are 
many noticeable impacts of Global Warming which is affecting the land, 
subsistence, health and well being of Indigenous peoples of Alaska.
    MMS should consider all the new information on the presence, rate 
and impacts of global warming. In particular, MMS should consider the 
technical feasibility of construction and maintenance of pipelines, as 
well as the economic feasibility and means of reducing risks associated 
with these pipelines from the effects of shoreline erosion, permafrost, 
and ice gouging. MMS should also consider impacts on the Arctic 
ecosystem of global climate change taken together with the impacts from 
oil and gas exploration and development.
Other factors and recommendations:
    Since the last 5-year planning process, new information about 
marine noise, cumulative impacts, the inability to clean up spilled oil 
in broken ice conditions, and traditional knowledge demands that the 
entire Alaska OCS should be excluded from development in the 5-year 
plan.
    Recent studies indicate seismic activities related to oil and gas 
exploration can have substantial impacts on fish. MMS should not avoid 
an analysis of impacts to fish merely because seismic activity is 
permitted before leases are issued. Energy legislation signed into law 
earlier this year sets the stage for a geologic ``inventory'' of 
potential drilling targets on the entire American OCS, including areas 
within sensitive coastal waters long protected by the bipartisan 
congressional OCS Moratorium and by the Executive OCS Deferrals first 
enacted by former president George H.W. Bush in 1991. No permits or 
contracts for seismic air gun ``inventory'' activities should be issued 
by the Department of Interior in any area prior to the completion and 
consideration of the now-pending National Academy of Sciences study on 
the impacts of sound in the marine environment, the evaluation of the 
new National Science Foundation study on the impacts of geophysical 
activities in scientific research, and the consideration of all recent 
peer-reviewed international studies on damage to fisheries and marine 
mammals caused by air gun impacts. A comprehensive National 
Environmental Policy Act (NEPA) process, with a full EIS and requisite 
public review, must be completed prior to the issuance of any permit or 
regulations pursuant to the proposed seismic ``inventory'' of the OCS 
or the 5-year leasing program.
    During the preparation of the 5-year program, MMS should also 
consider information about the difficulties faced by the oil industry 
in cleaning up oil spills during seasonal ice conditions. Across the 
arctic, fierce climatic conditions, high winds and seas, sea ice, and 
cold temperatures challenge offshore technologies and spill cleanup far 
beyond present capabilities. Recent oil-spill drills by oil companies 
and contractors have confirmed their inability to respond effectively 
to a spill in broken ice and open water conditions that prevail for 
most of the year in the Beaufort and Chukchi Seas, Hope Basin, Norton 
Sound and Cook Inlet. The Exxon Valdez oil spill of 1989 taught 
Alaskans and the world harsh lessons about the ability to clean up a 
significant oil spill. Scientific studies of the Exxon Valdez oil spill 
show long-lasting and significant damage to fish, wildlife, and 
subsistence cultures. MMS must paint a much more realistic picture of 
the impacts of oil spills so that the public can accurately judge the 
risks associated with oil leasing, exploration, and development.
    MMS should also consider the cumulative impacts in designating the 
next 5-year planning areas. Cumulative impacts are occurring from the 
many chronic impacts of ``routine'' oil and gas operations, and could 
seriously impact the productivity of coastal ecosystems. MMS should 
assess the cumulative impacts from various sources, such as increased 
turbidity, underwater noise, drilling mud/cuttings discharges, produced 
water discharges, habitat alteration, seabed pipelines and rigs and 
vessels, infrastructure, fresh water use for ice roads, seismic 
activities, minor spills and leaks, and air and marine vessel traffic.
    MMS should consider more carefully the traditional knowledge of the 
Inupiat concerning the dangers of broken ice, the changing climatic 
conditions, and the habits of the fish and wildlife of the Arctic 
Ocean. Too often, MMS states a piece of traditional wisdom and then 
concludes the opposite, without sufficient support to justify 
disregarding the Inupiat people's 4000 years of experience.
Renewable Energy:
    The U.S. must break its dependence on oil--be it foreign or 
domestic--if we are to achieve true energy independence and national 
security. Limiting leasing and development in the 5-year plan could 
have an even more profound impact on this country's energy landscape if 
coupled with a re-direction of billions of dollars in federal 
subsidies, tax breaks and incentives away from fossil fuels and toward 
renewable energy sources, energy efficiency and conservation.
    The United States generates about 25 percent of world petroleum 
demand. This fact alone indicates that Americans can have a much larger 
impact on global markets on the demand side than on the supply side. 
This conclusion is strengthened by the fact that there are large 
untapped energy efficiency resources, yet the United States government 
continues to focus almost exclusively on exploiting non-renewable oil 
and gas resources.
    Energy efficiency alternatives to opening up these sensitive areas 
are numerous. Using available technology, we could save an average of 
3.2 million barrels of oil per day within 10 years. This could be 
achieved by raising the fuel efficiency in new passenger vehicles, 
using fuel-efficient motor oil and replacement tires, improving 
efficiency standards in heavy-duty trucks, and encouraging growth of 
the biofuels industry, among other things. Through efficiency gains and 
fuel alternatives, U.S. oil consumption could be reduced almost 40 
percent by 2025.
    At a minimum, to avoid precluding renewable energy development in 
Alaska, MMS should not permit oil and gas activities in areas suitable 
for wind development. Areas offshore that contain the highest wind 
potential should not be developed for oil and gas. MMS should not 
hinder generation of renewable energy by displacing it with oil and gas 
development.
Conclusion:
    The Five-Year OCS Leasing Program should not incorporate so-called 
``natural-gas-only'' leasing. Exploration and development of gas 
resources produces routine discharges of spent drilling muds, produced 
waters, and highly-toxic metals and hydrocarbon compounds into the 
marine environment, in addition to creating a demand for onshore gas 
processing facilities in sensitive portions of the coastal zone. 
Further, legislative proposals for ``gas-only'' drilling have, to date, 
inappropriately incorporated provisions for the subsequent development 
of oil, should it be found in conjunction with gas on a ``gas-only'' 
OCS lease. Thus, ``gas-only'' leasing simply opens the door for oil 
drilling, with its attendant risk of oil spills.
    If MMS decides to include parts of Alaska in the next 5-year plan, 
MMS should include in the plan a commitment to prepare a separate EIS 
for each of the lease sales to address the problem of the huge scope of 
the area at stake and the difficulty of preparing an adequately site-
specific assessment of impacts for such large regions.
    Due to the high probability of subsistence loss and harm to the 
Alaska Native coastal communities, we strongly urge that as part of OCS 
site specific EIS, incorporating Environmental Justice concerns in the 
NEPA analysis, for example, the consequences and loss to subsistence is 
studied as well as the ensuing factors of irreparable harm to human and 
ecological health such as, the high rate of asthma, cancer, upper 
respiratory illnesses, and diabetes, and the social ills that follow 
oil and gas development. The social factors and disproportionately high 
and adverse effects and cumulative and indirect effects that ought to 
be part of a study of oil and gas development on subsistence 
communities is the rising rate of alcoholism, suicide, domestic abuse, 
incarceration and drug abuse. In the National Academy of Sciences 2003 
Cumulative Environmental Effects of Oil and Gas Development on Alaska's 
North Slope ``Effects on the Human Environment'' report, many of these 
statistics are documented. If all the environmental, subsistence and 
socio-economic consequences of OCS oil and gas leasing and development 
are studied and factored thoroughly, they would show that the cost of 
oil and gas development within Alaska Native coastal communities far 
outweigh the benefits and the damage is intergenerational and long-
term, while oil and gas development is short term.
    In accordance with NEPA, the EIS should discuss, in a transparent 
manner, opposing scientific viewpoints and rely on peer-reviewed 
information, comply with all applicable Executive Orders, examine the 
affect on all species and ecosystems, explain clearly how MMS 
conclusions are reached, and include easy to understand written and 
visual information about the risk of oil spills over time.
    To meet its ESA obligations, MMS should formally consult with the 
Fish and Wildlife Service on the 5-year plan, since Alaska is home to 
numerous listed species, including Steller's and spectacled eiders, the 
Northern Sea Otter, Steller's sea-lions, and the bowhead, finback, and 
humpback whales. Additionally, MMS should formally consult with the 
Fish and Wildlife Service before each lease sale offered under the 5-
year plan. In doing so, this process will also allow MMS to comply with 
the MMPA as well.
    Alaska's seas are too productive and sensitive to allow OCS oil and 
gas development. Alaska's seas and coasts are by far the most 
biologically productive and sensitive of any in the entire nation, and 
among the most productive in the world. Alaska has the most abundant 
populations of fish, shellfish, marine mammals, and seabirds in the 
nation. Alaska's seas are economically important, sustaining over 
100,000 jobs. Alaska is the only state in the nation where large 
portions of coastal residents depend on marine resources for 
subsistence. The fierce climatic conditions, high winds and seas, sea 
ice, and cold temperatures challenge offshore technologies far beyond 
their capabilities at present. These conditions make ecosystems more 
vulnerable and less resilient to disturbance and perturbations. Because 
of the inhospitable climate, challenging spill response and extreme 
productivity/sensitivity of the marine ecosystems off Alaska, this is 
an inappropriate area for OCS exploration and development.
    REDOIL strongly urges Alaska's entire OCS areas be removed from the 
five year plan, before any more activity ensues within these fragile 
ocean ecosystems and We further urge that Alaska OCS region be put off-
limits to any oil and gas development (including exploration) in the 
OCS 5-Year Plan for 2007-2012. Exclusion of Alaska's OCS from oil and 
gas development is the only option that will guarantee the preservation 
of Alaska's diverse marine ecosystems, as well as the subsistence 
cultures and local economies that rely on those ecosystems.
    Lastly and most importantly, REDOIL would also like to go on record 
supporting the testimony submitted by the Native Village of Point Hope, 
specifically the following points:
    Though REDOIL, and Alaska Native Coastal communities, including 
Federally Recognized tribes in Alaska have consistently objected to 
Alaska OCS development, we are simply being ignored within this 
process. This is unacceptable in the highest regards.
    In each hearing or public comment within Alaska Native coastal OCS 
impacted communities, there has been serious breaches of fiduciary 
trust responsibility. For instance, the consultations that have taken 
place within communities on the North Slope have been done with 
weighing only the interests of state created entities, and non profits, 
and the Federally recognized tribes are ignored. Community leaders were 
told by the oil companies that they only deal and work with the Alaska 
Eskimo Whaling Commission (AEWC) per direction given from the Minerals 
Management Service. Any sort of consultation should be done with the 
tribal governments and not with non-profit organizations (such as AEWC) 
that truly do not represent the view of the tribes. Therefore, we 
request that the Office of the Inspector General do a complete 
investigation on the MMS and its cooperating agencies for enforcement 
purposes along with correcting the inadequacies of these agencies.
    Coastal communities put in detriment by proposed Outer Continental 
Shelf development have consistently and strongly expressed opposition 
to any seismic activity and any other activity that relates to oil, gas 
and exploration and development to protect subsistence resources. On 
February 23rd, 2005 the Native Village of Point Hope passed Resolution 
05-06 to ``Strongly Oppose the Development of Oil and Gas in the 1002 
area of the ANWR and Offshore Waters of the Arctic Ocean, Chukchi Sea, 
and Beaufort Sea''.
    Seismic surveys have significant and potential harm to marine life, 
including fish and endangered whales. By allowing future seismic 
surveys to continue in the Chukchi and Beaufort seas, there can be and 
have been severe impacts to fish, marine life and the Native Villages 
within the region.
    In Point Hope, last year when seismic surveys started the walrus 
scattered straight to Russia bypassing Point Hope altogether preventing 
the community from harvesting any walrus last fall. There have been 
reports by some community members that cite dead fish and other marine 
life on the beaches there shortly after and during the seismic surveys 
last fall. We once again reiterate that Traditional Ecological 
Knowledge of the community members within the OCS communities must be 
given just as much weight in these matters as western science, and it 
is very obvious through testimony from Point Hope that seismic 
activities have severely harmed subsistence resources within the 
Chukchi Sea.
    As marine science and the courts have increasingly recognized, 
intense underwater sound can have a range of delirious effects on 
marine mammals and other marine life. e.g., National Parks and 
Conservation Association v. Babbitt, 241 F.3d 722 (9th Cir. 2001); NRDC 
v. 279 F. Supp. 2nd 1129 (N.D. Cal. 2003). Inupiat communities strongly 
advise that the offshore oil and gas activities also has dramatic and 
irreparable effects on marine life.
    The displacement and possible irreparable harm though declines in 
the availability and viability of prey species, such as fish and food 
that whales depend will be reduced dramatically causing undue hardship 
for communities. The Incidental Harassment authorizations that were 
issued last year should not have been made for the reasons stated above 
along with the ongoing litigation concerning how they were approved
    Finally, REDOIL supports the Alaska Native communities opposition 
and zero tolerance on any oil and gas activities that will threaten 
their renewable resources. Oil and gas activities offshore pose an 
imminent threat to their continued existence and subsistence way of 
life, and therefore we call for an immediate cease of all activity 
toward OCS development.

Sincerely,

Faith Gemmill, Outreach Coordinator
Resisting Environmental Destruction on Indigenous Lands
                                 ______
                                 
    [A letter submitted for the record by the Bristol Bay 
Native Association, Bering Sea Fishermen's Association, Bristol 
Bay Economic Development Corporation, et al., follows:]
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    [A statement submitted for the record by Marvin Odum, 
Executive Vice President, EP Americas, Shell Energy Resources 
Company, follows:]

          Statement submitted for the record by Marvin Odum, 
 Executive Vice President, EP Americas, Shell Energy Resources Company

    Mr. Chairman and members of the subcommittee,
    Thank you for the opportunity to submit testimony before the 
Committee on this important hearing regarding the future of the Federal 
offshore oil and gas program. On April 30, the Department of the 
Interior released its Proposed Final 2007--2012 Program for Oil and Gas 
Leasing on the Outer Continental Shelf. While we believe the plan falls 
short of what is needed for this nation to secure its energy future, we 
are pleased that additional acreage has been included.
    The nation can only hope to meet its future energy needs by 
exploring and developing new domestic energy resources, encouraging 
conservation and efficiency, and developing alternative energy sources. 
To accomplish this we need access to new areas.
    But, exploring and developing new areas of oil and natural gas 
takes a long time--years, in fact--which is why it is essential for us 
to act now. This is especially true for frontier areas. Recent 
discoveries in deepwater Gulf of Mexico reflect decisions on leasing 
and exploration taken over a decade ago. If a lease sale were to take 
place today in a new area, the region would not likely be ready to 
deliver oil and natural gas to market for 10 years or more.
    The devastating impact to Gulf of Mexico (GOM) energy operations by 
the 2005 hurricanes, declining production from mature domestic fields, 
growing global demand, and rising energy prices have captured the 
attention of the American public and policy decision makers.
    The nation now has the opportunity to engage in real dialogue about 
our energy future, and the critical need to explore for domestic 
offshore resources and many people are making their voices heard. 
During the three comment periods associated with the development of the 
Proposed Final Plan that sits before us today--75 percent of the 
comments gathered in the Final Comment Period support access to new 
offshore areas.
    The Proposed Final Plan consists of 21 lease sales--12 in the Gulf 
of Mexico, eight offshore Alaska and one in the Atlantic. Shell is 
pleased to see that sales in the plan are proposed for new acreage in 
three areas: the Central and Eastern Gulf of Mexico Planning Areas; the 
North Aleutian Basin offshore Alaska, and the Mid-Atlantic Planning 
Area offshore Virginia.
    MMS estimates that by including these new areas, production gains 
of 10 billion barrels of oil and 45 trillion cubic feet of natural gas 
over 40 years are possible, and the benefit to the nation would total 
about $170 billion. But the bottom line is that we will not know for 
sure how much natural gas or oil exists in any new area until 
exploration activities begin.
    Much of the focus of today's hearing is on the inclusion of the 
North Aleutian Basin in the MMS Five Year Plan. Shell believes that 
prior to entering a new area it is absolutely essential to hold 
extensive engagements with all interested to stakeholders to discuss 
and address concerns and questions. We are already doing this in 
communities near the North Aleutian Basin, and we would welcome the 
opportunity to work with Congress, the Administration, the 
environmental community and all stakeholders to have a frank and honest 
discussion about offshore oil and gas activities in these communities 
and around the nation.
    The three boroughs nearest the proposed lease sale area have been 
supporters of taking steps needed to enable an offshore oil and natural 
gas program in the North Aleutian Basin. However, the support of the 
community and civic leaders in the region is contingent on the 
existence of proper mitigation measures and environmental safeguards. 
Shell supports such safeguards and believes that oil and gas 
development should only take place in the North Aleutian Basin after 
detailed studies are completed, with participation and review by third 
parties, to assess impacts of proposed activity on the region's 
fisheries, culture and economy.
    MMS and NOAA just announced that they will conduct a $5 million, 
three-and-a-half year collaborative study on the North Pacific right 
whale, whose habitat coincides with part of the area proposed for 
leasing. Shell is strongly supportive of this effort, and stands ready 
to work with any interested stakeholder to determine what other studies 
are needed.
    Shell fully supports expanded research and development of state-of-
the-art oil spill response capabilities, including ocean monitoring. In 
fact, Shell has created one of the most comprehensive spill prevention 
and control plans ever developed for the Arctic environment. We also 
support extensive analyses on the probability of oil spills, current 
technologies available for oil spill prevention and response, and an 
assessment of the impact a spill could have on the region's fisheries.
    Shell believes that the success of the MMS Five Year Plan, with the 
inclusion of new areas, is critical to the future of U.S. domestic 
energy supply. We look forward to working with the federal government, 
states and local communities, environmental organizations and other 
stakeholders as we move forward in implementing the plan.
                                 ______
                                 
    [A letter and resolution submitted for the record by Jack 
Schaefer, Vice President, Native Village of Point Hope, 
follows:]
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                                ------                                


    [The response to questions submitted for the record by Mr. 
Cruickshank follows:]

  Response to questions submitted for the record by Walter Cruickshank

Questions submitted by Chairman Jim Costa
                        why didn't mms do more?
 1. Mr. Cruickshank, as I mentioned in my opening statement, I believe 
        that your agency could have been much more visionary with this 
        plan. Why didn't you look more broadly than Virginia?
    Answer: Since 1982, Congress has included language in the 
Department's annual appropriations bill preventing the expenditure of 
funds on pre-leasing activities in many of the Outer Continental Shelf 
(OCS) Planning areas. In addition to annual moratoria, on June 26, 
1990, President George H. W. Bush withdrew numerous and extensive areas 
of the OCS under the authority of section 12(a) of the OCS Lands Act, 
as amended. President Bill Clinton, on June 12, 1998, extended and 
expanded the administrative withdrawal until 2012. The annual 
legislative moratoria coupled with the presidential withdrawal are a 
significant constraint to MMS proposing a more expanded program. An 
area offshore Virginia was considered this year in spite of these 
historic constraints, in part due to requests made by the Commonwealth 
of Virginia in comments received during development of the 5-Year 
Program. Additionally, the Virginia State Legislature's passage of SB 
262 included express changes to the state policies, laws and stated 
goals with respect to exploration and development of the OCS. The 
Department and MMS are open to talking and working with states that are 
interested in considering the environmentally sound development of the 
Federal OCS energy resources needed by our nation.
 2. Does MMS ever conduct the type of analysis that you do here, the 
        Section 18 analysis, in the absence of a specific plan for a 
        lease sale? This analysis would be very helpful to help us 
        decide if other regions should be opened for leasing or not. 
        But if you have to wait until you propose a sale, we might 
        never get that analysis.
    Answer: Section 18 mandates the Secretary to prepare and maintain 
an oil and gas leasing program that lays out a schedule for proposed 
lease sales over a 5-year period. The program must be based on 
consideration and analysis of principles and factors specified by 
Section 18. This Section 18 analysis considers such factors including, 
among others, geologic and geographic characteristics; location of 
national and regional energy markets; industry interest; environmental 
and other information; and laws, goals, and policies of affected 
states. Analysis of information relating to those principles and 
factors produces results that MMS uses to develop reasonable options as 
to size, timing, and location of potential lease sales, not for the 
individual lease sales that are included in an approved final 5-Year 
Oil and Gas Leasing Program. The Section 18 analysis recognizes the 
constraints of the legislative moratoria and the presidential 
withdrawal that in large measure reflect the interests of the coastal 
states, in the process of balancing the many factors in determining if 
other regions would be opened for leasing or not. To begin the 5-year 
preparation process under section 18 of the OCS Lands Act, in August 
2005, MMS requested information on all 26 planning areas, without 
regard to whether the areas had been leased or were under restriction. 
As a result MMS did section 18 analyses on all 26 planning areas as 
laid out in Part IV of the Draft Proposed Program (DPP), using all 
available information. Individual sale areas are analyzed in more 
detail prior to a proposed sale, including NEPA, CZMA, Endangered 
Species Act, Marine Mammal Protection Act compliance and consultation 
with Governors. However, this detailed analysis can only be done for 
proposed sale areas that have been included in the 5-Year Program.
 3. If you were to conduct a Section 18-type analysis for all the 
        planning areas, how much time would that take and how much 
        would it cost?
    Answer: To begin the 5-year preparation process under section 18 of 
the OCS Lands Act in August 2005, MMS requested information on all 26 
planning areas, without regard to whether the areas had been leased or 
were under restriction. As a result MMS did section 18 analyses on all 
26 planning areas as laid out in Part IV of the Draft Proposed Program 
(DPP), using all available information. In many areas, particularly 
where there had either been no leasing activity or it had been many 
years, there was little information or the information was very dated. 
After the publication of the DPP, MMS properly limited the analysis to 
areas actually being proposed for leasing. Therefore, MMS can and did 
do section 18 analysis of the entire OCS. However, the usefulness of 
the analysis is limited by the quality of the information available for 
many areas. Furthermore, MMS does not collect geological and 
geophysical information needed for resource evaluation itself but 
utilizes the information gathered by industry. As such data gathering 
does not generally occur without some commercial purpose, i.e. a 
potential lease sale, there is little or no information for areas that 
have not been offered ever or for many years. Similarly, MMS focuses 
its environmental research on areas where there may be activity; to 
ensure current information is available for decision-making.

                  WEATHER CONDITIONS IN THE BERING SEA

 4. Mr. Cruickshank, I have heard some concern about the severe weather 
        conditions in the Bristol Bay, but I have also been told that 
        the conditions there are no different from the North Sea, which 
        has extensive oil and gas production. Is that correct? Could 
        you give us any additional detail on that?
    Answer: There are similarities. Oil and gas have been produced in 
the harsh conditions of the North Sea for more than 40 years. Norway, 
the UK, Denmark, Germany, and the Netherlands all produce oil and gas 
in the North Sea. Norway is the leading North Sea oil and gas producer, 
and is also the world's leading offshore oil producer. Current 
Norwegian oil production is about 2.5 million barrels per day or about 
double U.S. OCS production. Meteorological and oceanographic conditions 
in the Norwegian sector of the North Sea are comparable to those in 
Bristol Bay and the North Atlantic offshore Canada (Sable Island and 
the Grand Banks), where oil and gas are also produced. As an example, 
one measure for comparing weather conditions in the North Sea and North 
Aleutian Basin (NAB) is wave height. This measure integrates wind, 
other factors associated with storms, enhancement of waves from tidal 
action and shallow depths (<100 meters), and is a measure of the 
severity of the ocean environment. In the North Sea the average wave 
height of about 3 meters is exceeded for 10 percent of the time over 
the year. In the North Aleutian Basin the average wave height is about 
3.2 meters, and it is exceeded for 10 percent of the time over the 
year. Variations from these averages can be extreme in both areas and 
waves greater than 4 meters can predominate in winter months in both 
areas. Thus, on the basis of average wave heights and the similar 
frequency of exceeding the average wave height achieved in severe 
weather, it could be concluded that the two areas are very similar. 
Norway, a nation with a strong safety and environmental culture, has 
achieved an outstanding safety and pollution prevention record.

                       COEXISTENCE WITH FISHERIES

 5. Mr. Cruickshank, I know one of the big concerns in some of these 
        unopened areas is that there will be conflicts with the local 
        fishing industry. But aren't there locations throughout the 
        world where fishing coexists with oil and gas development? 
        Louisiana, for example, has the densest network of offshore oil 
        and gas development in the country, yet it also has the second 
        biggest commercial fishery in the country, right behind Alaska.
    Answer: Fishing activity, both commercial and recreational, often 
coexists with oil and gas development with minimal conflict. This has 
been demonstrated by years of experience in the Gulf of Mexico, 
particularly off the coasts of Louisiana and Texas. In fact, many 
fishermen actively seek out oil and gas structures as the fishing in 
the vicinity of these structures can be excellent. Fixed platforms 
offer excellent fishing for species such as snapper, grouper, and 
amberjack; floating production structures in deeper water offer 
excellent fishing for pelagic species such as tuna, wahoo, and marlin. 
Commercial landings in Louisiana and Texas are more than four times 
larger than before the onset of oil and gas development and represent 
over 34% of the commercial fish landings in the continental U.S. 
Through appropriate NEPA process, and various other avenues of 
consultation and coordination, MMS has been able in the past to develop 
mitigating measures that are designed to address any space-use 
conflicts with the fishing industry and other ocean users when they 
occurred.

                ACCESS TO GAS AND OIL IN THE CHUKCHI SEA
 
6. Mr. Cruickshank, the proposed final program states that the large 
        quantities of gas in the Chukchi are effectively stranded 
        because there's no transport system. Is that because of a need 
        for an Alaskan natural gas pipeline?
    Answer: All natural gas resources in Arctic Alaska, both on the 
North Slope and in the offshore Chukchi and Beaufort seas, are 
``stranded'' because there is no gas transportation system to market. 
The commercial aspects of different transportation systems have been 
studied over the years including a gas pipeline to the Lower 48 U.S. 
markets. However, there are other alternatives, including liquefied 
natural gas (LNG) shipments by sea. The Alaskan North Slope holds 
significant natural gas resources--about 35 trillion cubic feet of gas 
has been discovered and documented to date--with additional supplies 
likely elsewhere on the North Slope and Arctic OCS. Undiscovered 
Alaskan gas resources are expected to be huge--estimates of the total 
resource base in greater northern Alaska are 224 trillion cubic feet 
(Tcf) (onshore--119.2 Tcf; Chukchi Sea--76.8 Tcf; Beaufort Sea-- 27.6 
Tcf). Currently, natural gas in northern Alaska is mostly re-injected 
to support oil production because there is no pipeline to deliver it to 
the lower-48 states. Developing the initial pipeline system from Alaska 
to major North American markets remains a challenging undertaking. Gas 
discoveries in the Chukchi could play a key role in supporting the 
construction of any gas delivery system from northern Alaska because it 
would extend the life and/or increase the capacity of the project, thus 
increasing the commercial viability of the project.
 7. Will the lease sales in this 5-year program have any effect on 
        accelerating access to that gas? That is, if leasing of the 
        Chukchi is delayed from the schedule in this proposal, will 
        that push that 2025 date back at all?
    Answer: Yes, leasing is the first step in the exploration process, 
so delays in lease sales would delay subsequent activities. Because of 
remoteness and seasonal constraints, it typically could take 10 years 
or more from a lease sale to the start-up of production resulting from 
successful exploration. Even if leasing is not delayed, future gas 
production could still be delayed because there is no transportation 
system to deliver any discovered gas to market. Gas discoveries would 
be stranded in the Chukchi just as they are at the present time on the 
North Slope. However, a large gas discovery in the Chukchi could 
accelerate a gas project and possibly justify a larger capacity gas 
pipeline. Currently, about 35 trillion cubic feet (Tcf) of known gas 
reserves have been identified on State lands (onshore and nearshore) in 
northern Alaska. A gas discovery at the Burger prospect in 1990 
suggests that large gas pools are present in the Chukchi Sea OCS. There 
are currently no active leases in the Chukchi area and the Burger 
prospect will be available for leasing in the lease sale scheduled for 
February 2008. Additional drilling will be needed to define the size of 
the Burger prospect as well as other prospects in the area. Nearly 60 
Tcf of gas reserves need to be identified to support the planned 4.5 
billion-cubic-feet-per-day capacity to be carried by a North Slope gas 
pipeline during its 35 year project life. Undiscovered Alaskan gas 
resources are expected to be huge--estimates of the total resource base 
in greater northern Alaska are 224 Tcf (onshore--119.2 Tcf; Chukchi 
Sea--76.8 Tcf; Beaufort Sea--27.6 Tcf). Additional gas discoveries in 
the gas-prone Chukchi Sea could provide needed incentives (additional 
reserves) to support the gas pipeline project.
 8. The 5-year program predicts that 1 billion barrels of oil will be 
        produced from leases in the Chukchi Sea. Is that oil to be 
        produced in the next five years? If not, when do you expect it 
        to be produced?
    Answer: The 2007-2012 5-Year Programmatic EIS assumes that the 
activities associated with OCS leasing in Alaska would take place over 
a 40-year time period. The scenario for the analysis in the EIS begins 
with leases being issued during 2007-2012; continues through 
exploration, development, and production; and ends with decommissioning 
at the end of the 40-year period. The 2007-2012 5-Year Program EIS 
assumed that a total of 0.5 to 2.0 billion barrels of oil would be 
produced in the Arctic OCS of Alaska, from either the Chukchi Sea, the 
Beaufort Sea, or both combined.
    MMS believes that a huge oil discovery (possibly a 1-billion barrel 
oil discovery) would be necessary to justify the first stand-alone 
field in this frontier area. The 1 billion barrels of oil referenced in 
the question refers to the amount of oil assumed to be developed in the 
scenario for the analysis in the Chukchi Sea Sale 193 EIS. It does not 
represent a prediction of future production. Typically, it takes 10 
years or more between the important first step of leasing and 
production start-up in frontier areas of the OCS, like the Chukchi Sea, 
so Chukchi oil should not be expected in the next 5 years. The scenario 
analyzed in the EIS estimated that a lease sale in 2008 could be 
followed by a commercial discovery in 2010 and oil production starting 
in 2020. Oil production from this hypothetical field would last until 
2044.
    For the Chukchi Sea, our 2006 National Assessment estimated that 
technically recoverable oil amounts to about 15 billion barrels (mean), 
with a 5% chance of 40 billion barrels. Recoverable gas is estimated at 
77 trillion cubic feet (mean), with a 5% chance of 210 trillion cubic 
feet. These values give a picture of what may be there, but actual 
amounts that could be developed depend on future oil and gas prices and 
sufficient exploration to find commercial-size fields.

                      ALTERNATIVE LEASING SCHEMES

 9. Mr. Cruickshank, in the proposed final program, there are several 
        mentions to alternative leasing schemes that were suggested by 
        the State of Louisiana. But there are no details about what 
        those schemes are. Could you give us a little more detail on 
        that?
    Answer: The State of Louisiana commented on using alternative 
leasing schemes in several letters to MMS in 2006, addressing concerns 
regarding the currently used area-wide leasing scheme. Under current 
area-wide leasing, used by MMS since 1983, entire planning areas are 
made available for bidding in a given lease sale, subject to selected 
withdrawals mostly due to environmental and national defense 
considerations.
    The MMS has considered the State of Louisiana's comments on leasing 
schemes that could serve as alternatives to area-wide leasing. Such 
schemes could involve the design of smaller sale offerings; resulting 
in fewer tracts leased. These schemes could involve requests for 
nomination of a limited number of tracts from industry, the selection 
of tracts to be included in the sale by MMS, and revision of fiscal 
terms to target certain leasing goals related to size and location. The 
MMS has decided to conduct a detailed independent analysis of these 
alternative approaches which would identify their broad programmatic 
implications in comparison to MMS' responsibilities under the OCS Lands 
Act. It is anticipated that the design and conduct of this detailed 
analysis could take up to several years to complete. If it is 
determined that some alternative approaches to leasing are preferable 
after the completion of the analysis, the 5-year program for 2007-2012 
could be adjusted accordingly or the alternative approaches could be 
incorporated into the subsequent 5-year program for 2012-2017.
 10. Does the Minerals Management Service have any preliminary thoughts 
        on these schemes? Has industry provided any input on these?
    Answer: While considering ways to address the State's concerns, MMS 
must be cognizant of the effects any policy changes might have on the 
achievement of other statutory and implicit goals of the Federal OCS 
program. Among these are expeditious and orderly development of oil and 
gas resources and maintaining a diverse and competitive industry. Area-
wide leasing allows smaller independent companies to rapidly produce 
low-resource, low-risk fields, while larger companies push the edge of 
the technology envelope in deep water. It also encourages strong and 
innovative seismic exploration and geophysical contracting and 
processing industries. In addition, a sudden change in policy that 
restricts access to oil and gas resources, or that alters the 
timetables the offshore industry has come to depend on, may lead to 
undesirable socioeconomic disruptions in local coastal economies. We 
expect our upcoming, detailed analysis of alternatives to area-wide 
leasing to address such possible consequences. Therefore, pending 
completion of that analysis, MMS believes that it is appropriate to 
continue the area-wide approach in the Gulf of Mexico for the near 
future.
 11. Does the Minerals Management Service need any Congressional 
        authorization to change the way lease sales are conducted?
    Answer: The Secretary currently has discretionary latitude in 
determining the size, timing and location of lease sales, as well as 
the terms and conditions of those sales. With this discretion comes the 
responsibility to ensure that terms and conditions chosen for a lease 
sale provide a fair return to the American people for these national 
resources. An independent analysis is being conducted to look at 
possible alternative leasing schemes to see if we can improve the way 
that leases are offered.
         areas opened by the gulf of mexico energy security act
 12. Mr. Cruickshank, what sort of interest have you seen from industry 
        regarding the new areas opened up by the Gulf of Mexico Energy 
        Security Act? I notice that the sale in the Eastern Gulf is 
        scheduled for next year. Is the industry ready to start leasing 
        that region at this point?
    Answer: Industry interest for these new areas has always been high, 
especially in the areas to be offered in Sale 205 in October 2007, and 
for the area in the new Eastern Planning Area, Sale 224, which is 
scheduled for March 2008. Since most of the acreage available in Sale 
224 area is covered by 3D seismic data, we believe industry will bid 
aggressively.
 13. How about the so-called 181 South region, which is a bit further 
        out. Will that be part of the Central Gulf of Mexico sale being 
        conducted later this year? What sort of industry interest has 
        there been in this region?
    Answer: The 181 Area South is tentatively scheduled as part of 
Central Gulf of Mexico Sale 208 in March 2009. Due to the need to 
conduct environmental analyses for the area as well as the lack of 
seismic data coverage over this area, the sale could not reasonably be 
scheduled for an earlier date. Presently, there is one active seismic 
permit acquiring 2D seismic data over this area. Due to the seismic 
acquisition activity and the anticipated resource potential, we 
anticipate strong industry interest in the 181 South region, especially 
the northern portion which is closer to existing infrastructure. The 
Call for Information (Call) and the Notice of Intent to Prepare an EIS 
for this area was published in the Federal Register in on September 10, 
2007. Depending on any industry responses to the Call, we may gain more 
insight into industry interest in the area.

                          BRISTOL BAY BUYBACKS

 14. Mr. Cruickshank, I understand that the area currently being 
        proposed for leasing in the North Aleutian Basin previously had 
        leases on it, which were subsequently bought back by the 
        federal government. Could you describe why you think we can 
        explore that area properly now, when we couldn't in the recent 
        past?
    Answer: The State of Alaska and the local governments asked MMS to 
consider an offshore lease sale in the North Aleutian Basin because 
development with proper safeguards would provide a broader economic 
base for this area. The North Aleutian Basin is relatively shallow 
(100-300 ft) and lies south of the typical reach of the Bering Sea 
seasonal (winter-only) ice pack. A similar body of water, Alaska's Cook 
Inlet, has experienced oil and gas operations without significant 
incident for over 40 years (1.3 billion barrels of oil and 1.7 Tcf of 
gas produced to date). Recent petroleum assessments indicate that North 
Aleutian Basin is more likely to contain commercial gas resources, thus 
minimizing the risk of oil spills and coastal damage. Nearly 20 years 
of industry experience have continually improved the safety of offshore 
operations in difficult environments (e.g. the North Sea). The 
reliability of new technologies (e.g. subsea well completions) has been 
proven in similar settings. If decisions are made to move forward with 
the lease sale, MMS will work with the State of Alaska and the local 
Borough governments to design appropriate mitigation for oil and gas 
operations.

                  CHANGES IN PLANNING AREA BOUNDARIES

 15. Mr. Cruickshank, I notice that the Minerals Management Service 
        changed the boundaries of the planning regions in the Gulf of 
        Mexico and around the Mid-Atlantic. Could you tell me why that 
        was necessary?
    Answer: On January 3, 2006, MMS published a notice in the Federal 
Register of its development of offshore administrative lines from each 
adjoining coastal state, using the principle of equidistance often 
applied to international boundary disputes. These lines were developed 
in light of the increasing number and type of activities and uses of 
the OCS. Listed among the potential uses of these lines was to provide 
a basis for more accurate delineation of planning areas. In the Draft 
Proposed Program for 2007-2012 published February 2006, the Secretary 
announced that some of the planning area boundaries would be moved to 
correspond to the new lines. The final proposed program was approved on 
July 1, 2007, with some redrawn planning areas for the Gulf of Mexico 
and Atlantic. The use of planning areas is for the administrative 
convenience of MMS for planning purposes and does not effect any 
statutory rights or responsibilities.
 16. Does where you draw these lines have any impact on how you do your 
        analysis of the 5-year program, or how leasing proceeds?
    Answer: There was little if any impact on the actual 5-year 
analysis as the analysis was regional, not based on administrative 
boundaries. However, the redrawn planning area boundaries do affect the 
timing of when certain blocks might be leased. For example, those 
blocks that had been in the Western Gulf Planning Area and are now in 
the Central Gulf would be offered for lease at different times, but 
generally still at least once a year. The blocks that were in the 
Eastern Gulf and are now in the Central Gulf would probably be offered 
more often as Central sales are generally held once a year and Eastern 
sales have been less frequent. While leasing is more planning area 
focused, determining whether a state could be impacted under Coastal 
Zone Management Act is based on that statute's requirements and not on 
where an administrative planning area boundary occurs. The revenue 
sharing under the Gulf of Mexico Energy Security Act is based on 
distance from the project so these administrative and planning area 
lines do not have an impact with respect to revenue sharing.
 17. Why did the Governors of both Florida and Texas object to the 
        change in the Gulf of Mexico?
    Answer: Then-Governor Bush of Florida and Governor Perry of Texas 
objected to the reconfiguration of the planning area boundaries because 
the proposal would add acreage to the Central Gulf Planning Area and 
remove acreage from the Western and Eastern Gulf Planning Areas. The 
concern was that it wouldn't be an accurate reflection of the impacts 
of OCS development on the Gulf States and could have an adverse impact 
on Texas and Florida respectively. However, the creation and 
delineation of OCS planning areas are for the administrative expediency 
of the MMS. The environmental and economic impacts, positive or 
negative, are not affected by the location of administrative or 
planning area lines. If a state is ``affected'' under the OCS Lands Act 
or ``impacted'' under the Coastal Zone Management Act, the location of 
an administrative or planning area boundary is immaterial.

                     ADMINISTRATIVE AREA BOUNDARIES

 18. Mr. Cruickshank, I understand that both New Jersey and Virginia 
        were opposed to how the new state administrative boundaries 
        were drawn. How does MMS respond to those objections?
    Answer: MMS responded similarly to New Jersey and Virginia as to 
Texas and Florida, as noted in our response to Question 17. New Jersey 
was concerned that the movement of the planning area boundaries placed 
them in the North Atlantic Planning Area and not in the Mid-Atlantic as 
they had been and as would be any sale off Virginia. As discussed in 
Question 17 above, whether New Jersey is affected or impacted by any 
potential activity off the coast of Virginia is determined by applying 
the applicable statute, not the location of a boundary drawn for 
administrative convenience.
    The Commonwealth of Virginia's concern was related more to the 
actual drawing of the lines that resulted in the ``pinched off'' shape 
of the area proposed for a potential sale in the 5-Year Program. The 
boundaries were drawn using equidistance, a widely accepted and 
longstanding methodological tool. The equidistance principle has been 
endorsed internationally in the Law of the Sea Convention and by the 
U.S. Supreme Court to equitably establish boundaries between nations 
and between states.

                     DEFINITION OF ``LARGE SPILLS''

 19. Mr. Cruickshank, there's a table (Table IV-17) in the final 
        environmental impact statement about oil spill assumptions that 
        gives different definitions for large spills. A large pipeline 
        spill is defined as 4,600 barrels, a large platform spill is 
        1,500 barrels, and there are three different sizes for large 
        tanker spills for the Gulf of Mexico, Pacific Ocean, and 
        Atlantic Ocean. How could a spill that would be defined as 
        ``large'' in one region not be ``large'' in another region? How 
        do you come up with these numbers?
    Answer: For research modeling purposes, MMS evaluates potential 
offshore oil-spill risks using the Oil Spill Risk Analysis (OSRA) model 
developed by DOI. MMS standards define spills larger than 1000 barrels 
as ``large'' for modeling potential oil spills from OCS oil and gas 
activities. While the definition of a ``large'' spill is the same 
everywhere, for purposes of modeling the impacts of spills in different 
areas or from different sources, MMS postulates hypothetical spills 
based on median spill sizes over the historical record. Relative to 
these median spill sizes, a ``large'' spill from a platform is a 
different size than one from a pipeline or a tanker. The spill size may 
vary by region. As an example - the tankers vary depending on whether 
they used the Trans Alaska Pipeline System (TAPS) fleet (which was done 
for Alaska crude coming to the Pacific coast), or the data set for 
tanker spills in U.S. waters of the Gulf of Mexico. We analyze 
representative sized spills so that we can have a complete perspective 
of the range of possible impacts that could potentially occur even if 
these events are very unlikely.
 20. Is it correct to say that MMS assumes that as a result of the 5-
        year leasing program, there will be one spill of at least 4,600 
        barrels from a pipeline in the North Aleutian Basin?
    Answer: No. The most likely number of large spills is zero. In 
addition, based on the MMS 2006 National Assessment of Undiscovered OCS 
Oil and Gas, we consider that the North Aleutian Basin is natural gas 
prone, rather than oil prone. Regardless, we still analyzed the effects 
of a hypothetical oil spill in the 5-Year EIS.
    For modeling purposes, MMS assumed a hypothetical large spill 
occurs and analyzed the impacts of one such spill on environmental, 
social, and economic resources. A large spill is defined as greater 
than or equal to 1,000 barrels and a small spill is less than 1,000 
barrels. For modeling purposes, we assume the large spill is either a 
result of a pipeline spill of 4,600 barrels or a platform spill of 
1,500 barrels.

           NORTH ALEUTIAN BASIN PROPOSED MITIGATION MEASURES
 
21. Mr. Cruickshank, one of our witnesses in the final panel, Mr. 
        Juettner, the Administrator of the Aleutians East Borough, 
        attached a list of mitigation measures that they say need to be 
        enacted in order to win the borough's full support of the lease 
        sale. These include comprehensive protections for fisheries and 
        coastal habitat, requirements for local hiring and procurement, 
        a zero tolerance for water pollution discharge, and many 
        others. Have you seen these measures? If so, do you believe 
        that these requirements can be met?
    Answer: The MMS has been working closely with the Aleutians East 
Borough to address their concerns. The Aleutians East Borough provided 
proposed mitigation measures as part of its comments on the Draft EIS 
for the Outer Continental Shelf Oil and Gas Leasing Program: 2007-2012. 
We held a series of conference calls with the Borough and provided 
detailed written responses to their concerns. Much of that information 
was incorporated into the final EIS and we appreciate the Borough's 
assistance in improving the clarity and content of the EIS. However, 
some suggested measures are beyond the scope of MMS authority. For 
example, on-shore building standards are the responsibility of local or 
state governments.
    MMS develops lease-specific mitigation during the NEPA process for 
particular lease sales, because at that stage the scope and geography 
of the proposed action are better defined. We will continue to work 
with the local communities, including the Aleutians East Borough, and 
the State of Alaska as we develop the lease-specific proposal and 
environmental review for any potential sale.

                        CHUKCHI SEA BUFFER ZONE

 22. Mr. Cruickshank, are you familiar with a letter that was sent by 
        the National Marine Fisheries Service to the Regional Director 
        of the Minerals Management Service about the proposed Chukchi 
        lease sale on January of this year?
    Answer: We are familiar with this letter, dated January 30, 2007, 
from the Acting Administrator of the Alaska Region of the National 
Marine Fisheries Service (NMFS) to the Regional Director of the MMS 
Alaska Region. The letter provides comments on the draft EIS for the 
proposed Chukchi Sea Sale 193. NMFS was a cooperating agency on the EIS 
and MMS considered their comments during the development of the final 
EIS.
 23. In this letter, they say they ``remain very concerned about 
        potential impacts to living marine resources and their 
        habitats,'' and that the 1987 biological opinion used by the 
        Minerals Management Service to justify a 25-mile buffer -as you 
        have in the 5-year leasing program has been superseded. They 
        say they ``strongly endorse'' a 50-mile buffer as a way to 
        protect natural resources and subsistence hunters in the area. 
        Have you taken this letter into account?
    Answer: The letter provided comments on the draft EIS for proposed 
Chukchi Sea Sale 193. MMS evaluates alternatives in each sale EIS, such 
as the described ``buffers''. For Sale 193, we assessed two buffer zone 
options which vary in distance from shore from 25 to 60 miles.
    MMS regularly consults with NMFS for each sale regarding endangered 
species. The 2006 Arctic Region Biological Opinion from NMFS recommends 
deferral from leasing of areas within the spring whale migration route 
through nearshore open waters (i.e., through the Polynya) but does not 
specify a distance from shore. The Polynya Deferral under the 2002-2007 
5-Year Program (under which Sale 193 was originally scheduled) and the 
25-mile buffer zone under the 2007-2012 Program do just that. We will 
continue to consult with NMFS on any future activities.

                     NMFS LETTER ON ALASKA REGIONS

 24. Mr. Cruickshank, on April 11, 2006, the National Marine Fisheries 
        Service submitted detailed comments about the Draft EIS on the 
        5-year plan, in which they recommended that the North Aleutian 
        Basin and Chukchi sea sales be deleted and that a comprehensive 
        research program be initiated so that the areas can be included 
        in future sales. They say the proposed schedule is 
        unrealistically ambitious.'' In the response, MMS simply said, 
        ``Thank you for your comment; however, we disagree.'' Is that 
        an adequate response to the scientific opinion of the federal 
        government's fishery experts?
    Answer: MMS values the scientific expertise of NOAA and appreciated 
the thorough review they provided of the Draft EIS for the Proposed 
Outer Continental Shelf Oil and Gas Leasing Program. Their comments 
helped improve the final document.
    The April 11, 2006 comments from NOAA-Fisheries were on the 2007-
2012 Draft Proposed Outer Continental Shelf Oil and Gas Leasing 
Program. NOAA-Fisheries also provided two sets of comments on the Draft 
EIS on November 13, and November 22, 2006. We apologize if our response 
in the specific heading cited in the Final EIS, Section V.D, Issue 1d, 
``Not Enough Information to Do Adequate Analysis'', comes across as 
terse. However, these comments had been discussed in earlier responses 
and similar concerns were answered in more detail in other parts of the 
document. Also included in the response was a statement: ``Also 
discussed elsewhere, this EIS addresses information and analysis needs 
for program planning.'' We addressed these concerns under a number of 
headings including: ``Additional Studies'', ``Marine Mammals'', 
``Seafloor Habitats'', ``Impacts on Fisheries'', ``Seafloor Habitats'', 
and ``Oceanography''.
    For example, under ``Additional Studies'':
     Concern: The Alaska Center for the Environment; AMCC; 
Alaska Oil and Gas Association; Commonwealth of Virginia, Department of 
Environmental Quality; and others raised concerns about the need for 
baseline studies before leasing in frontier areas such as the North 
Aleutian Basin, the Chukchi Sea and the Atlantic Coast. The Bristol Bay 
Native Corporation requested ``that MMS, in concert with industry and 
the local communities, initiate and fund a series of studies of the 
Southwest Region of Alaska. We want these studies to evaluate both the 
positive and negative effects of exploration and production activities. 
These studies will furnish information essential in crafting mitigation 
measures that provide adequate protection without overly restricting 
necessary industry operations.'' Suggestions for studies included a 
basic understanding of the Alaskan environment; fisheries resources; 
unique biological communities; and marine mammals, sea turtles, and 
marine/coastal birds within the Virginia planning zone.
    Response: The MMS has an active Environmental Studies Program to 
address the information needs of the Agency. For frontier areas, 
existing knowledge about the areas will first be collected through 
workshops and literature searches. The MMS has already conducted two 
workshops, one to collect information about the Chukchi Sea in early 
November 2006 and the other to collect information about the North 
Aleutian Basin in late November 2006. These workshops will be used to 
identify data gaps and prioritize the studies for funding 
consideration.
    MMS agrees that research must be conducted for areas proposed for 
sale, but, due to the need to focus its resources on the agency's 
highest program priorities, it generally does not conduct such research 
in areas that are not included in the 5-Year Program. MMS supports a 
substantial studies program to accommodate the lease sales scheduled 
for 2008, 2010 and 2012 for the Chukchi Sea and the 2011 lease sale 
scheduled for the North Aleutians Basin. Considering the need for an 
orderly and environmentally safe process to help meet our Nation's 
energy needs, it is a challenging, but not an overly ambitious 
schedule. Alaskan studies are already in progress. A table of these 
ongoing studies can be viewed at http://www.mms.gov/alaska/ess.

                  BRISTOL BAY INTERIOR REPORT LANGUAGE

 25. Mr. Cruickshank, are you familiar with the language regarding 
        Bristol Bay in the Interior Appropriations bill report? Could 
        you share your thoughts on that with the committee?
    Answer: We are familiar with this language and believe we are 
addressing the concerns. With the request to include a sale in the 
North Aleutian Basin from the State of Alaska and local governments, 
MMS plans to conduct additional environmental studies in this area to 
supplement existing information available from other agencies and 
sources. In November 2006, MMS held a workshop to assess the available 
information in the area and to identify additional research that may be 
needed. A total of 111 scientists and representatives from other 
federal and state agencies, universities, local and tribal governments, 
and the public attended.
    As a result, in 2007, MMS and the NMFS began collaboration on a 
high-priority, multi-million dollar study of the North Pacific right 
whale. Another study is under procurement to develop oceanographic 
circulation modeling. MMS plans to begin other studies in FY 2008. We 
will continue to seek and consider the advice from experts and 
stakeholders, such as NMFS, the Fish and Wildlife Service, State of 
Alaska agencies, local governments, and federally recognized tribes as 
we implement future research.
 26. In addition to the studies that you mention in your testimony, is 
        there anything else that you will do in response to the report 
        language?
    Answer: The MMS has in place a process that has many opportunities 
for cooperation and input to ensure that we can consider all issues 
that may affect leasing. Early in our process, we issue a Notice of 
Intent to prepare an EIS. This step solicits input on the issues, 
alternatives, and mitigation measures to be evaluated in the EIS. The 
Notice of Intent also invites Federal, State, local governments, and 
Tribes to become cooperating agencies in the preparation of the EIS.
    The State, federally recognized tribes, and local communities will 
be invited to participate in the various public meetings, Government-
to-Government meetings, and hearings that are part of the NEPA process. 
Through the MMS Environmental Studies Program, they also have 
opportunity to review studies plans and reports and provide local input 
into the development and review of the scientific information gathered.
    We also have a number of other parallel coordination and 
consultation processes that will be underway. Concurrent with the NEPA 
and lease sale processes, MMS will complete required Endangered Species 
Act section 7 consultations, Essential Fish Habitat consultation, 
Section 106 consultation under National Historic Preservation Act, and 
coastal zone consistency determination.
    Thus, as it has for other OCS lease sales, MMS will conduct very 
thorough coordination with other Federal agencies, state, and local 
governments to ensure the appropriate protection of the North Aleutian 
Basin region.

                 SPILLS AS A RESULT OF 2005 HURRICANES

 27. Mr. Cruickshank, in his opening statement, Ranking Member Pearce 
        stated that ``not a single drop'' of oil was spilled as a 
        result of Hurricanes Katrina and Rita. Is that correct? If not, 
        could you provide a detail of exactly what was spilled as a 
        result of those two hurricanes?
    Answer: As of January 25, 2007, oil spill reports from Hurricanes 
Katrina and Rita in 2005, show that there were no spills due to loss of 
control of oil producing wells, due to the successful operation of the 
safety valves that are required to be installed on every well at least 
100 feet below the ocean floor. MMS has identified 125 spills of 
petroleum products totaling 16,302 barrels that were lost from 
platforms, rigs, and pipelines on the Federal OCS as a result of 
damages from Hurricanes Katrina and Rita in 2005. This is a relatively 
small amount compared to the daily OCS production in the Gulf of 
Mexico, and is equivalent to less than 2 weeks of natural oil seeps 
into the Gulf. The number of spills is based on reports received by the 
National Response Center as well as observations in the field by MMS 
inspectors.
    The estimation of oil lost is based on volume estimates of static 
oil volumes of damaged surface processing equipment (such as vessels, 
tanks, and associated piping) and damaged oil pipelines. This estimate 
represents an upper bound case. For example, if a 100 gallon capacity 
fuel tank was lost overboard from a platform, the tank was presumed to 
be full at the time it was lost in the storm. The tank may not have 
been full or leaked any product into the environment, but until the 
actual amount of product the tank contained can be verified, or the 
tank recovered, the 100 gallons is considered ``spilled''. It should be 
noted that no incidents of environmental damage were reported from 
spills that occurred on the OCS. It should be also noted that spills 
that originated on the OCS were in most cases rapidly dissipated by the 
storm wave action and evaporation. Additionally, industry moved quickly 
to alleviate any residual oil releases from the damaged equipment and 
pipelines. In other cases where small volumes of oil continued to be 
released from submerged process equipment, means of capturing and 
recovering oil were put into place until the equipment could be 
appropriately salvaged. Additional information is carried on the MMS 
website at http://www.mms.gov/SettingtheRecordStraight/
EstimatedOil%20SpillsAsaResultofHurricanesKatrinaandRita.htm.
Questions submitted by Congressman Patrick J. Kennedy
 1. Mr. Cruickshank, there is a table (Table IV-17) in the final 
        environmental impact statement about oil spill assumptions that 
        gives different definitions for large spills. A large pipeline 
        spill is defined as 4,600 barrels, a large platform spill is 
        1,500 barrels, and there are three different sizes for large 
        tanker spills for the Gulf of Mexico, Pacific Ocean, and 
        Atlantic Ocean. Could you clarify this?
    Answer: For research modeling purposes, MMS evaluates potential 
offshore oil-spill risks using the Oil Spill Risk Analysis (OSRA) model 
developed by DOI. MMS standards define spills larger than 1000 barrels 
as ``large'' for modeling potential oil spills from OCS oil and gas 
activities. While the definition of a ``large'' spill is the same 
everywhere, for purposes of modeling the impacts of spills in different 
areas or from different sources, MMS postulates hypothetical spills 
based on median spill sizes over the historical record. Relative to 
these median spill sizes, a ``large'' spill from a platform is a 
different size than one from a pipeline or a tanker. The spill size may 
vary by region. As an example - the tankers vary depending on whether 
they used the TAPS fleet (which was done for Alaska crude coming to the 
Pacific coast), or the data set for tanker spills in U.S. waters of the 
Gulf of Mexico. We analyze representative sized spills so that we can 
have a complete perspective of the range of possible impacts that could 
potentially occur even if these events are very unlikely.
 2. How do you respond to the fact that MMS predicts in the Final 
        Environmental Impact Statement for the 5-Year Program, that 
        leasing in the North Aleutian Basin Planning Area will lead to 
        at least one large oil spill, two intermediate sized spills, 
        and numerous smaller spills?
    Answer: The MMS does not predict that leasing in the North Aleutian 
Basin Planning Area will lead to one large (greater than or equal to 
1,000 barrels) oil spill or the smaller (less than 1,000 barrels) oil 
spills. The most likely number of large spills is zero. In addition, 
based on the MMS 2006 National Assessment of Undiscovered OCS Oil and 
Gas, we consider that the North Aleutian Basin is natural gas prone, 
rather than oil prone. Regardless, we still analyzed the effects of a 
hypothetical oil spill in the 5-Year EIS.
    For modeling purposes, MMS postulated a hypothetical spill of what 
is considered a ``large'' size to be either 1,500 or 4,600 barrels, 
based on median spill sizes respectively from platforms and pipelines 
over a long historical record. MMS then analyzed the impacts of one 
such hypothetical spill on environmental, social, and economic 
resources. We provided the analyses of large and small spills so that 
we can have a complete perspective of the range of possible impacts 
that could potentially occur, even if these events are unlikely.
                                 ______
                                 
    [The response to questions submitted for the record by Mr. 
Sheard follows:]

    Response to questions submitted for the record by Whit Sheard, 
              Alaska Program Director, Pacific Environment

Question from Rep. Patrick Kennedy:
 How does the 5-year plan interact with the recent recommendations of 
        the U.S. Commission on Ocean Policy?
    Response: The U.S. Commission on Ocean Policy, along with the 
companion Pew Oceans Commission, raised significant concerns 
surrounding U.S. policy as it relates to impacts to and governance of 
our nation's marine environment. Both commissions recognized the need 
for substantial reform of ocean policy and made recommendations germane 
to the 5 Year Plan for Oil and Gas Leasing on the Outer Continental 
Shelf Development for 2007-2012. Unfortunately it appears that the 
Minerals Management Service has not heeded the call for integrated 
ocean management and instead is continuing to press forward with a 
socially and ecologically irresponsible plan that perpetuates the 
inadequaciesof U.S. oceans policy. I will specifically address the 
Commission's recommendations as they relate to the 5 Year Plan's 
commitment of our nation's Arctic resources, including the Chukchi Sea, 
the Beaufort Sea, and Bristol Bay (North Aleutian Basin).
    The U.S. Commission on Ocean Policy delineated a comprehensive set 
of Guiding Principles which it recommended be applied to guide national 
policy. These Guiding Principles are:
      Sustainability: Ocean policy should be designed to meet 
the needs of the present generation without compromising the ability of 
future generations to meet their needs.
      Stewardship: The principle of stewardship applies both to 
the government and to every citizen. The U.S. government holds ocean 
and coastal resources in the public trust--a special responsibility 
that necessitates balancing different uses of those resources for the 
continued benefit of all Americans. Just as important, every member of 
the public should recognize the value of the oceans and coasts, 
supporting appropriate policies and acting responsibly while minimizing 
negative environmental impacts.
      Ocean--Land--Atmosphere Connections: Ocean policies 
should be based on the recognition that the oceans, land, and 
atmosphere are inextricably intertwined and that actions that affect 
one Earth system component are likely to affect another.
      Ecosystem-based Management: U.S. ocean and coastal 
resources should be managed to reflect the relationships among all 
ecosystem components, including humans and nonhuman species and the 
environments in which they live. Applying this principle will require 
defining relevant geographic management areas based on ecosystem, 
rather than political, boundaries.
      Multiple Use Management: The many potentially beneficial 
uses of ocean and coastal resources should be acknowledged and managed 
in a way that balances competing uses while preserving and protecting 
the overall integrity of the ocean and coastal environments.
      Preservation of Marine Biodiversity: Downward trends in 
marine biodiversity should be reversed where they exist, with a desired 
end of maintaining or recovering natural levels of biological diversity 
and ecosystem services.
      Best Available Science and Information: Ocean policy 
decisions should be based on the best available understanding of the 
natural, social, and economic processes that affect ocean and coastal 
environments. Decision makers should be able to obtain and understand 
quality science and information in a way that facilitates successful 
management of ocean and coastal resources.
      Adaptive Management: Ocean management programs should be 
designed to meet clear goals and provide new information to continually 
improve the scientific basis for future management. Periodic 
reevaluation of the goals and effectiveness of management measures, and 
incorporation of new information in implementing future management, are 
essential.
      Understandable Laws and Clear Decisions: Laws governing 
uses of ocean and coastal resources should be clear, coordinated, and 
accessible to the nation's citizens to facilitate compliance. Policy 
decisions and the reasoning behind them should also be clear and 
available to all interested parties.
      Participatory Governance: Governance of ocean uses should 
ensure widespread participation by all citizens on issues that affect 
them.
      Timeliness: Ocean governance systems should operate with 
as much efficiency and predictability as possible.
      Accountability: Decision makers and members of the public 
should be accountable for the actions they take that affect ocean and 
coastal resources.
      International Responsibility: The United States should 
act cooperatively with other nations in developing and implementing 
international ocean policy, reflecting the deep connections between 
U.S. interests and the global ocean.
(United States Commission on Ocean Policy (2004). An Ocean Blueprint 
for the 21st Century. Executive Summary, pg. 6)
    The 5 Year Plan for Oil and Gas Leasing on the Outer Continental 
Shelf for 2007-2012 facially violates all of these principles and 
renders the concept of achieving a sustainable ecosystem-based 
management regime in the Arctic meaningless. As the proposed 
development will occur in extremely sensitive areas where spills are 
virtually guaranteed and there is inadequate spill response technology, 
the U.S. is committing enormous areas of our Arctic seas to becoming an 
oil and gas sacrifice zone. Due to this egregious commitment of our 
Arctic resources in the face of reasonable recommendations from several 
Blue Ribbon commissions, I will address the 5 Year Plan as it relates 
to each Guiding Principle.
     (1)  Sustainability: The 5 Year Plan commits us to a short-sighted 
policy of increasing our dependency on hydrocarbon extraction and the 
concomitant environmental impacts of direct introduction of pollution 
into the marine environment and an increase in the anthropogenic causes 
of climate change. The 5 Year Plan as a policy does nothing to help 
future generations meet their needs. By disrupting our marine 
environment, exacerbating climate change, and impacting renewable 
resources such as the nation's largest fishery and the whaling 
communities of the Arctic, the 5 Year Plan commits the nation to 
unsustainable use of our resources.
     (2)  Stewardship: As discussed above and in previous testimony, 
the 5 Year Plan violates the federal trust responsibility and places 
responsibility for aggressive and unsustainable development of 
sensitive public resources in the hands of multinational oil 
corporations with recent histories of royalty scandals, worker safety 
violations, and inadequate maintenance of facilities and pipelines. For 
many, this 5 Year Plan represents the culmination of the secret Cheney 
Energy Task Force, and commits the nation to five more years of 
violating the public trust.
     (3)  Ocean-Land-Atmosphere Connection: This principle is extremely 
illustrative of how the 5 Year Plan ignores the U.S. Commission on 
Ocean Policy. Quite simply put: the 5 Year Plan represent one of the 
nation's largest commitments to both directly impacting our sensitive 
Arctic environment and increasing our greenhouse gas emissions. This is 
problematic as the Arctic is disproportionately sensitive to climate 
change and the ongoing reduction in sea ice acts as a feedback 
mechanism to increase climate change because darker areas of open 
ocean, which are expanding, absorb sunlight and thus increase 
temperatures (as opposed to sea ice, which reflects sunlight and has a 
cooling effect). Increasing climate change also leads to increasing 
impacts on the land, including coastal erosion, which is affecting 
traditional communities of the Arctic, and impacts to terrestrial 
wildlife species. Another example of the ocean-land-atmosphere 
connection is polar bears, which are currently being considered for 
protection under the Endangered Species Act due to the loss of 
essential sea ice habitat. These species are experiencing nutritional 
and reproductive stress, are moving from the ocean to land as their sea 
ice habitat and prey decrease, and are facing the cumulative impacts of 
terrestrial oil and gas development expansion into their habitat.
     (4)  Ecosystem-Based Management: This principle is another that 
best illustrates the aggressive and short-sighted nature of the 5 Year 
Plan. While there is global recognition of the need for rational 
planning and zoning as it relates to both the terrestrial and marine 
environment, the federal government has taken no steps whatsoever to 
look at the Arctic seas in an integrated manner. The 5 Year Plan, 
simply put, is a ``cart before the horse'' approach which predetermines 
the outcome of any future zoning process. The 5 Year Plan zones 
virtually the entire Arctic Ocean as an oil and gas development area 
and ignores the wealth of scientific literature on habitat protection, 
the impacts of oil and gas development, and the traditional knowledge 
of Arctic whaling communities. It also places areas such as Bristol 
Bay, one of the world's most productive fisheries, at direct risk from 
what is clearly an incompatible use of our marine resources. 
Illustrating the urgent need to address ocean zoning and ecosystem-
based management is that there are currently projects planned for next 
year in the Beaufort Sea's Stefansson Boulder Patch, an oasis of 
corals, anemones, sponges, kelp and fish species which are not known to 
exist anywhere else in the Beaufort Sea. Perpetuating this singularly 
focused management regime will irreparably harm our Arctic seas and 
preclude meaningful attempts to best define relevant geographic 
management areas--especially those that have unique ecological values.
     (5)  Multiple Use Management: As discussed above, the 5 Year Plan 
singularly focuses on producing oil and gas from areas where 
considerations of commercial fisheries, traditional subsistence 
economies, and ecological protection should be paramount. The 5 Year 
Plan unacceptably infringes on competing uses such as critical habitat 
for the world's most endangered whales (the eastern stock of the North 
Pacific right whale), the nation's largest fisheries, and subsistence 
areas used for millennia. Clearly the Minerals Management Service fails 
to even consider that oil and gas development is sometimes unwarranted 
and must yield to competing uses such as renewable economies, habitat 
needs for imperiled species, and cultural traditions that are 
unacceptably put at risk by oil spills, exploration, infrastructure 
development, and ongoing operations.
     (6)  Preservation of Marine Biodiversity: The 5 Year Plan will 
cause oil spills in areas in which there is a demonstrated lack of 
technological capacity to prevent impacts. These areas include the 
Bering Sea (Bristol Bay/North Aleutian Basin), which is likely the 
world's most productive marine ecosystem. It also includes the Chukchi 
Sea, considered by many to be the world's most productive high latitude 
sea. The 5 Year Plan does nothing to preserve marine biodiversity and 
instead subverts protection of these unique and productive areas to the 
short-term and ecologically irresponsible extraction of fossil fuels.
     (7)  Best Available Science and Information: Our knowledge of the 
Arctic marine ecosystems being placed at risk by the 5 Year Plan is 
extremely thin. What is known by scientists and Native communities who 
have studied the region for millennia, however, is that it is an 
incredibly complex ecosystem providing a rich tapestry of habitats for 
endangered marine mammals, commercially important fish species, and 
millions of seabirds. The dearth of scientific information has been 
repeatedly noted by the National Marine Fisheries Service (NMFS), who 
ultimately recommended deletion of the Bristol Bay (North Aleutian 
Basin) and Chukchi Sea sales. In comments on the 5 Year Plan, NMFS 
stated:
             The NMFS Alaska Region believes the proposed leasing 
            schedule is unrealistically ambitious and would not allow 
            for necessary environmental research...This is particularly 
            true for the North Aleutian Basin (Bristol Bay) and Chukchi 
            Sea proposed sales. The NMFS Alaska Region recommends 
            deletion of these areas and initiation of a comprehensive 
            research program to support future plans subsequent to the 
            2007-2012 plan...For instance, MMS states repeatedly that 
            little is known about the distribution, abundance, 
            behavior, and habitat use of marine mammals in the Chukchi 
            Sea, and the few existing studies are very dated. It is 
            extremely important to gain a better understanding of these 
            issues prior to any exploration, leasing, or development. 
            The need for baseline data on the distribution of marine 
            mammals in the Chukchi Sea is particularly urgent.
 (National Marine Fisheries Service Comments on Department of the 
Interior's Minerals Management Service's Draft Proposed Outer 
Continental Shelf Oil and Gas Leasing Program 2007-2012, dated April 
10, 2006.)
     (8)  Adaptive Management: Due to the above referenced deficiencies 
in scientific information and the unilateral zoning of our Arctic seas 
for oil and gas drilling, it is unclear if adaptive management is even 
possible under the 5 Year Plan.
     (9)  Understandable Laws and Clear Decisions: There continues to 
be a lack of coordinated and integrated ocean management. Furthermore, 
management measures seem to be based upon energy priorities that are 
developed behind closed doors and that are unresponsive to legitimate 
comments from the public and other federal agencies.
    (10)  Participatory Governance: Despite widespread opposition from 
native communities who stand to be most impacted by drilling in the 
Arctic seas, the Minerals Management Service is unwilling to consider 
scaling back the aggressive scope of the 5 Year Plan. Development of 
energy policies in concert with the energy industry behind closed doors 
further subvert any claims by MMS of legitimate public process. 
Although MMS should be applauded for having public meetings in remote 
communities most impacted by this program, there were no changes made 
to the plan that responded to overwhelming community concerns. 
Furthermore, meetings in other affected communities, such as Dutch 
Harbor, Alaska, the nation's busiest commercial fishing port, did not 
receive Federal Register notice of scheduled meetings until after the 
meetings had occurred. These concerns were magnified by recent 
rollbacks to Alaska's Coastal Zone Management Plan, which eliminated 
significant opportunities for affected communities to participate in 
reviewing the efficacy of proposed development.
    (11)  Timeliness: Although MMS has been rushing to ensure that the 
oil industry receives all necessary permits as quickly as possible, 
this has not led to increased efficiency. In fact, quite the opposite 
has occurred, with affected communities repeatedly requesting that MMS 
undertake a process that ensures responsible management and public 
participation. A common refrain in affected communities is that MMS is 
pushing ``too much, too soon, too fast.'' The U.S. Environmental 
Protection Agency has noted this in their comments and has suggested 
that there are serious environmental justice concerns related to the 5 
Year Plan. The result has been that communities and non-governmental 
organizations are forced to initiate litigation in order to ensure that 
legitimate economic, cultural, and ecological interests are not 
ignored.
    (12)  Accountability: Decision-makers seem to be heavily insulated 
from accountability for their actions. This is especially true as it 
relates to remote communities who pay the price for irresponsible 
management decisions.
    (13)  International Responsibility: It is unclear if MMS is willing 
to undertake any concerted effort to be a responsible international 
actor. While other countries, such as Norway, are developing their oil 
and gas resources in a manner that attempts to incorporate ecosystem-
based management, multiple use concerns, and socially responsible 
programs, the U.S. is continuing to ignore our disproportionate 
contribution to climate change and is adopting programs such as the 5 
Year Plan that do not promote sensible management and environmental 
responsibility. The U.S. is also encouraging international corporations 
such as Shell Oil, who have a history of environmental and social 
infractions in regions such as Russia's Sakhalin Island, into our 
waters. The U.S. has chosen instead to be a poor international role 
model by adopting a 5 Year Plan that increases climate change, 
disproportionately impacts indigenous communities, reward corporations 
with a history of poor environmental stewardship, and encourages risky 
development in ecologically sensitive regions already facing profound 
impacts from climate change.
    In sum, the 5 Year Plan for Oil and Gas Development on the Outer 
Continental Shelf, does very little to respond the well-researched and 
sensible guidance of the U.S. Commission on Ocean Policy, which 
recommended
             development of a coordinated offshore management regime 
            that would be comprehensive, transparent, and predictable, 
            bring a fair return to the public, and promote a balance 
            between economic and environmental considerations.
(United States Commission on Ocean Policy (2004). An Ocean Blueprint 
for the 21st Century. Chapter 24, Managing Offshore Energy and Other 
Mineral Resources, pg. 352.)
    Instead of heeding this guidance, MMS has promulgated an overly 
aggressive expansion of oil and gas drilling in U.S. waters. MMS has 
repeatedly failed to fully inform the public of the extent of 
ecological damage that this plan will cause to our public resources. 
The agency has set the nation on a five year course to perpetuate 
climate change, adversely modify critical habitat for endangered and 
threatened species, damage renewable commercial and subsistence 
economies, and cause disproportionate impacts to Alaska Native 
communities. MMS has suppressed important science, has drawn 
conclusions that bear little relationship to the facts, has ignored the 
sound advice of other federal agencies, and has not offered an adequate 
public process for either this plan or the multitude of current 
activities already taking place in federal waters. Considering that the 
nation is currently defining policies to address climate change, energy 
efficiency, and oceans management, the proposed plan bears little 
relation to rational planning and places important public resources at 
an unacceptable level of risk.

                                 
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