[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



 
                          OFFSHORE DRILLING:


                          STATE PERSPECTIVES

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


                           OVERSIGHT HEARING

                               before the

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                       Tuesday, February 24, 2009

                               __________

                            Serial No. 111-3

                               __________

       Printed for the use of the Committee on Natural Resources



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                     COMMITTEE ON NATURAL RESOURCES

              NICK J. RAHALL, II, West Virginia, Chairman
          DOC HASTINGS, Washington, Ranking Republican Member

Dale E. Kildee, Michigan             Don Young, Alaska
Eni F.H. Faleomavaega, American      Elton Gallegly, California
    Samoa                            John J. Duncan, Jr., Tennessee
Neil Abercrombie, Hawaii             Jeff Flake, Arizona
Frank Pallone, Jr., New Jersey       Henry E. Brown, Jr., South 
Grace F. Napolitano, California          Carolina
Rush D. Holt, New Jersey             Cathy McMorris Rodgers, Washington
Raul M. Grijalva, Arizona            Louie Gohmert, Texas
Madeleine Z. Bordallo, Guam          Rob Bishop, Utah
Jim Costa, California                Bill Shuster, Pennsylvania
Dan Boren, Oklahoma                  Doug Lamborn, Colorado
Gregorio Sablan, Northern Marianas   Adrian Smith, Nebraska
Martin T. Heinrich, New Mexico       Robert J. Wittman, Virginia
George Miller, California            Paul C. Broun, Georgia
Edward J. Markey, Massachusetts      John Fleming, Louisiana
Peter A. DeFazio, Oregon             Mike Coffman, Colorado
Maurice D. Hinchey, New York         Jason Chaffetz, Utah
Donna M. Christensen, Virgin         Cynthia M. Lummis, Wyoming
    Islands                          Tom McClintock, California
Diana DeGette, Colorado              Bill Cassidy, Louisiana
Ron Kind, Wisconsin
Lois Capps, California
Jay Inslee, Washington
Joe Baca, California
Stephanie Herseth Sandlin, South 
    Dakota
John P. Sarbanes, Maryland
Carol Shea-Porter, New Hampshire
Niki Tsongas, Massachusetts
Frank Kratovil, Jr., Maryland
Pedro R. Pierluisi, Puerto Rico

                     James H. Zoia, Chief of Staff
                       Rick Healy, Chief Counsel
                 Todd Young, Republican Chief of Staff
                 Lisa Pittman, Republican Chief Counsel
                                 ------                                

                                CONTENTS

                              ----------                              
                                                                   Page

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

Statement of Members:
    Capps, Hon. Lois, a Representative in Congress from the State 
      of California..............................................    32
        Prepared statement of....................................    34
    Hastings, Hon. Doc, a Representative in Congress from the 
      State of Washington........................................     2
        Prepared statement of....................................     4
    Rahall, Hon. Nick J., II, a Representative in Congress from 
      the State of West Virginia.................................     1
        Prepared statement of....................................     2

Statement of Witnesses:
    Chrisman, Hon. Mike, Secretary for Natural Resources, 
      California Natural Resources Agency........................    48
        Prepared statement of....................................    50
        Response to questions submitted for the record...........    95
    Diers, Ted, Manager, New Hampshire Coastal Program, New 
      Hampshire Department of Environmental Services, on behalf 
      of the Coastal States Organization.........................    52
        Prepared statement of....................................    54
        Response to questions submitted for the record...........    99
    Farr, Hon. Sam, a Representative in Congress from the State 
      of California..............................................     5
        Prepared statement of....................................     7
    Graves, Garret, Director, Office of Coastal Activities, State 
      of Louisiana...............................................    66
        Prepared statement of....................................    69
    Marvinney, Robert G., Ph.D., State Geologist and Director, 
      Maine Geological Survey....................................    57
        Prepared statement of....................................    58
        Response to questions submitted for the record...........   102
    Rohrabacher, Hon. Dana, a Representative in Congress from the 
      State of California........................................     8
        Prepared statement of....................................    10
    Wagner, Hon. Frank W., State Senator, Commonwealth of 
      Virginia...................................................    62
        Prepared statement of....................................    65
        Response to questions submitted for the record...........   105

Additional materials supplied:
    Kaine, Hon. Timothy M., Governor, Commonwealth of Virginia, 
      Letters submitted for the record by Chairman Rahall........    74


     OVERSIGHT HEARING ON ``OFFSHORE DRILLING: STATE PERSPECTIVES''

                              ----------                              


                       Tuesday, February 24, 2009

                     U.S. House of Representatives

                     Committee on Natural Resources

                            Washington, D.C.

                              ----------                              

    The Committee met, pursuant to call, at 10:05 a.m. in Room 
1324, Longworth House Office Building, Hon. Nick J. Rahall, II, 
[Chairman] presiding.
    Present: Representatives Rahall, Hastings, Abercrombie, 
Grijalva, Costa, Heinrich, Capps, Inslee, Tsongas, Kratovil, 
Brown of South Carolina, Gohmert, Smith, Wittman, Broun of 
Georgia, Fleming, Coffman, Chaffetz, and Lummis.
    The Chairman. The Committee on Natural Resources will come 
to order, please. The Chair, at the very outset, is going to 
recognize the Ranking Minority Member, Mr. Hastings.
    Mr. Hastings. Thank you very much, Mr. Chairman. It is with 
great regret that I inform the Committee of an absence today.
    One of our newest Members, Mr. Cassidy from Louisiana, lost 
his father, James Cassidy, on Sunday. I know that I speak for 
all of the Committee Members when I say that our thoughts and 
prayers are with Congressman Cassidy and his mother, Betty, and 
his entire family at this difficult time, and thank you for 
your indulgence, Mr. Chairman.

   STATEMENT OF HON. NICK J. RAHALL, II, A REPRESENTATIVE IN 
            CONGRESS FROM THE STATE OF WEST VIRGINIA

    The Chairman. The Chair thanks its Ranking Member and 
wishes to express his condolences to Mr. Cassidy as well.
    The Committee is meeting today for the second in a three-
part series of oversight hearings designed to examine our 
nation's current offshore drilling policy and help to determine 
the course of that policy in the future.
    Two weeks ago, on February 11th, we heard from 
representatives of environmental organizations, tourism boards, 
and the fishing industry. Today, we will hear from 
representatives of coastal state governments from around the 
country, and, tomorrow, we will hear from the oil and gas 
industry representatives.
    As I said two weeks ago, these hearings are intended to 
afford all sides an opportunity to weigh in as we begin work to 
determine the best way to accommodate drilling while also 
ensuring that our offshore resources are managed in an 
environmentally and physically responsible manner.
    Our coastal states are critical to this discussion. They 
are literally on the front lines of the offshore drilling 
debate, and their needs and challenges are vitally important 
considerations for us all.
    As I stressed at our hearing last time, I am not opposed to 
drilling. I understand the benefits of domestic oil and gas 
production, but I also am aware of the risks.
    The ongoing discussion is designed to examine the trade-
offs that would be involved in expanding offshore oil and gas 
drilling, and I look forward to working with Members on both 
sides of the aisle as we determine the best way to move 
forward. I thank our witnesses for being with us today, and we 
will be led off by our colleagues in this body. I now recognize 
the Ranking Member, Mr. Hastings.
    [The prepared statement of Mr. Rahall follows:]

       Statement of The Honorable Nick J. Rahall, II, Chairman, 
                     Committee on Natural Resources

    The Committee is meeting today for the second in a three-part 
series of oversight hearings designed to examine our Nation's current 
offshore drilling policy and help to determine the course of that 
policy in the future.
    Two weeks ago, on February 11th, we heard from representatives of 
environmental organizations, tourism boards, and the fishing industry. 
Today we will hear from representatives of coastal state governments 
from around the country. And tomorrow we will hear from oil and gas 
industry representatives.
    As I said two weeks ago, these hearings are intended to afford all 
sides an opportunity to weigh in as we begin work to determine the best 
way to accommodate drilling while also ensuring that our offshore 
resources are managed in an environmentally and fiscally responsible 
manner.
    Our coastal states are critical to this discussion. They are 
literally on the front lines of the offshore drilling debate and their 
needs and challenges are vitally important considerations for us all.
    As I stressed at our last hearing, I am not opposed to drilling. I 
understand the benefits of domestic oil and gas production. But I am 
also aware of the risks. This ongoing discussion is designed to examine 
the trade-offs that would be involved in expanding offshore oil and gas 
drilling, and I look forward to working with Members on both sides of 
the aisle as we determine the best way to move forward.
    I thank the witnesses for agreeing to appear today, and I now 
recognize our Ranking Member, Mr. Hastings, for his opening remarks.
                                 ______
                                 

 STATEMENT OF HON. DOC HASTINGS, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF WASHINGTON

    Mr. Hastings. Thank you, Mr. Chairman. Today, we are to 
hear from various states on their perspectives on OCS 
development.
    Studies have shown that offshore drilling will create 
substantial economic benefits for the Federal government, as 
well as for the states. These benefits include job creation, 
tax revenue, and possible revenue sharing for the states.
    Before the recess, Congress passed the largest spending 
bill ever, directing billions of Federal dollars to states to 
avert their budget crisis.
    Today's hearing will focus on one of the largest sources of 
Federal revenue: oil and gas bonus bids, rents and royalties.
    In addition, we will focus on one of the best opportunities 
we have to assist state governments, by sharing OCS revenue, 
like we do with onshore mineral receipts.
    A very conservative CRS report estimated that OCS 
development off California would generate more than $120 
billion in revenue sharing for the State of California, money 
that I am sure the State of California could desperately use. 
The same report suggests that the Atlantic Ocean could generate 
more than $76 billion in shared revenue from what are even more 
conservative estimates of the potential resources.
    At a time when the Federal government is borrowing record 
sums of money to fund its programs and transferring money to 
the states, it seems reasonable and responsible that we should 
use the OCS resources available in order to help states balance 
their budgets.
    Last year, the Democrat majority passed energy legislation 
that locked up 88 percent of our OCS resources and had no 
revenue-sharing provision for coastal states. Thankfully, this 
legislation died in the Senate, but, fortunately, Congress did 
pass legislation, or, rather, I should say, let lapse, that 
ended a decades' long ban on OCS development.
    First, a no-revenue-sharing approach is simply not 
acceptable. Congress needs to establish a fair revenue-sharing 
program for all coastal states, expanding this common-sense 
policy beyond the several states along the Gulf of Mexico. This 
must be a priority for this Committee and Congress.
    Second, many of the states testifying before us today have 
unemployment rates that are higher than the national average. 
Knowing that OCS development is not just about energy--it is 
also about creating new American manufacturing jobs and 
building the infrastructure to harness this energy--I have to 
wonder the extent to which these states have examined the job 
impacts of expanded oil and gas development and what it would 
mean to their states.
    An American Energy Alliance study published yesterday 
calculated that opening the OCS would create between tens of 
thousands and hundreds of thousands of jobs in the states 
testifying before us today. Over the life of production, it 
would create over 1.2 million annual jobs across the country.
    So, finally, Mr. Chairman, I hope today's hearing will 
address our nation's growing dependence on imported natural gas 
pipelines. Each of the witnesses before us today represents a 
state where there is either an existing or a proposed liquefied 
natural gas (LNG) terminal. From Callus, Maine, to Long Beach, 
California, terminals to import natural gas are popping up all 
across our coasts. Everyone believes that America has become 
too dependent on foreign energy.
    I hope that the witnesses before us will explain their 
views on which is preferable: building LNG terminals that make 
their states dependent on foreign natural gas, or the 
responsible development of America's own natural gas resources 
in the OCS that will create new jobs and bring revenue to their 
states?
    In closing, this issue is of major national significance. 
America is too dependent on foreign nations for our energy 
supplies. We can, and should, determine the most responsible 
way to develop our OCS resources. I believe that we can free 
America from our dependence on foreign oil, free America from 
imported foreign natural gas, and invigorate America's economy 
by harnessing the resources of America's OCS to create more 
energy with the skill and knowledge of the American worker.
    So, with that, Mr. Chairman, I look forward with you to 
hearing from today's witnesses.
    [The prepared statement of Mr. Hastings follows:]

       Statement of The Honorable Doc Hastings, Ranking Member, 
                     Committee on Natural Resources

    Mr. Chairman, today we are to hear from various states on their 
perspectives on OCS development. Studies have shown that offshore 
drilling will create substantial economic benefits for the federal 
government as well as for states. These benefits include job creation, 
tax revenues and possible revenue sharing.
Revenue Sharing
    Before the Recess, Congress passed the largest spending bill ever, 
directing billions of federal dollars to states to avert their budget 
crises.
    Today's hearing will focus on one of the largest sources of federal 
revenue: oil and gas bonus bids, rents and royalties. In addition, we 
will focus on one of the best opportunities we have to assist state 
governments--by sharing OCS revenue like we do with onshore mineral 
receipts.
    A very conservative CRS report estimated that OCS development off 
California could generate more than $120 Billion in revenue sharing for 
the State of California. Money that I am sure the State of California 
could desperately use. The same report suggested that the Atlantic 
Ocean could generate more than $76 billion in shared revenues from what 
are even more conservative estimates of the resources.
    At a time when the federal government is borrowing record sums of 
money to transfer to the states, it seems reasonable and responsible 
that we should use the OCS resources available in order to help states 
balance their own budgets.
    Last year, the Democrat Majority passed legislation that locked up 
88 percent of our OCS resources and had NO revenue sharing provision 
for coastal states. Thankfully this legislation died in the Senate and 
instead Congress passed legislation that ended the decades long ban on 
OCS development.
    A ``no revenue sharing'' approach is simply not acceptable. 
Congress needs to establish a fair revenue sharing program for all 
coastal states, expanding this commonsense policy beyond the several 
states along the Gulf of Mexico. This must be a priority for the 
Committee and Congress.
JOBS
    Second, many of the states testifying before us today have 
unemployment rates that are higher than the national average. Knowing 
that OCS development isn't just about energy, it is also about creating 
new American manufacturing jobs and building the infrastructure to 
harness this energy, I wonder the extent to which these states have 
examined the job impacts of expanded oil and gas development and what 
it would mean to their states.
    An American Energy Alliance study published yesterday calculated 
that opening the OCS would create between tens of thousands and 
hundreds of thousands of jobs in the states testifying before us today. 
Over the life of production, it would create over 1.2 million annual 
jobs across the country.
LNG vs Offshore Gas
    Finally, Mr. Chairman, I hope today's hearing will address our 
nation's growing dependence on imported natural gas supplies. Each of 
the witnesses before us today represents a state where there is either 
an existing or proposed liquefied natural gas terminal.
    From Calais, Maine...to Long Beach, California...terminals to 
import natural gas are popping up all across our coasts. Everyone 
believes that America has become too dependent on foreign energy. I 
hope that the witnesses before us will explain their views on which is 
preferable: building LNG terminals to make their states dependent on 
foreign natural gas OR the responsible development of America's own 
natural gas resources in the OCS that will create new job and bring 
revenue to their states?
CLOSING
    In closing, this issue is of major national significance. America 
is too dependent on foreign nations for our energy supplies. We can and 
should determine the most responsible way to develop our OCS resources.
    Mr. Chairman, I believe that we can free America from our 
dependence on foreign oil, free America from imported foreign natural 
gas, and invigorate America's economy, by harnessing the resources of 
America's OCS to create more energy with the skill and knowledge of the 
American worker.
    I look forward to hearing from today's witnesses.
                                 ______
                                 
    The Chairman. I thank the gentleman.
    Do any other Members wish opening statements? If not, we 
will go to our colleagues, and we are very happy to have two of 
them with us today comprising Panel Number 1. First, is 
Representative Sam Farr from California's 17th District, to be 
followed by Representative Dana Rohrabacher from California's 
46th District.
    Gentlemen and Dear Colleagues, we welcome you. We do have 
your prepared testimonies, and, of course, they will be made 
part of the record as if actually read, and you may proceed as 
you wish.

 STATEMENT OF HON. SAM FARR, A REPRESENTATIVE IN CONGRESS FROM 
            THE STATE OF CALIFORNIA [17th DISTRICT]

    Mr. Farr. Thank you very much, Mr. Chairman and Ranking 
Member Mr. Hastings and Members of my old Committee. I really 
appreciate this opportunity to testify before you today, and I 
feel it is quite an honor to be here.
    It is interesting you are introducing us because, in 
California, if you introduced both of us, you would introduce 
me as from Northern California and Mr. Rohrabacher from 
Southern California. We still have this territorial distinction 
in our great state.
    I am a coastal legislator and have been involved in these 
issues for a long time, and one thing that I have learned for 
sure is that our oceans are sick, and you have heard that 
testimony in this Committee over and over again.
    I would like to voice my opinion strongly in favor of 
reinstating the moratorium. Let me explain.
    I represent a district that has the fifth-largest, onshore 
oil deposits in California. We have a vigorous oil drilling 
program onshore.
    Offshore, we have put the entire ocean and coastal area 
into the largest marine sanctuary in the United States, and, in 
that statutory law, we prohibited oil drilling in the ocean.
    I am here today to advocate on behalf of the smart use of 
oceans, first, on expanded oil drilling operations in the Outer 
Continental Shelf, it is clear that these activities are not 
without risk. The OCS drilling process offers numerous 
opportunities for environmental risks, exploration risks, 
extraction risks, and transportation risks.
    In 1969, the Santa Barbara spill was the type of 
environmental disaster that must be prevented. Another spill 
would be an enormous insult to the coastal economies, the 
industries and ecosystems, and an embarrassment to the 
government that leased the land for such purposes.
    The potential threat they pose is intolerable, and the 
proposed minimal benefits from new drilling operations do not 
outweigh the potential risk. In political terms, it is high 
risk, low gain.
    Further, the debate on oil drilling seems archaic, given 
our understanding of the adverse effects of oil consumption on 
our atmosphere. Our economy seems to be oil addicted, and we 
have been talking a lot about how we must be less so.
    If renewable energy sources receive the same level of 
investment as fossil-fuel-based sources, we would make 
substantial strides in ending our oil dependency. If the goal 
is to reduce carbon emissions, we might as well get used to the 
fact that drilling is not the solution, especially when clean, 
renewable energy sources are within our grasp, many of which 
come from the use of the ocean. The development of ocean tide 
flows, current flows, thermal energy, wave motion, and wind 
energy are all in the energy plans and near production.
    I have long been an advocate for ocean conservation. I am 
not alone in holding this view that healthy oceans mean healthy 
economies and healthy people. I believe, from your previous 
hearings, you have seen fishermen, environmental NGO's, and 
President Bush's own Commission on Ocean Policy all agree. No 
discipline of the Outer Continental Shelf resources should 
proceed without recognizing that a type of ocean zoning is 
essential in the first step. Look before you leap. Plan before 
you develop.
    The OCS is the host to many different regions ideally 
suited for different purposes. There are fishing regions, there 
are aquaculture regions, and there is wind farming. There are 
other regions that unique to critical habitats and must be 
conserved.
    Sometimes these purposes can occur together, but not 
always. A process must be put in place to, first, assess and 
then allocate areas of OCS so that the ocean, the industries, 
and economies all benefit in a sustainable fashion, and that is 
the key word: ``sustainable.''
    Finally, both the Pew Oceans Commission and the U.S. 
Commission on Ocean Policy highlight urgent need for a 
permanent ocean conservation trust fund. The reinvestment of 
OCS revenue sources into this fund would represent a durable 
source of funding the state and Federal ocean conservation 
programs. We have put no money into creating health in the 
oceans.
    Currently, only 25 percent of the OCS drilling is 
statutorily allocated. Seventy-five percent of the revenue is 
lost in the general fund. It is an income just going in and 
getting lost. Only if a quarter of the 74 percent were 
redirected to the Ocean Trust Fund, you would find a huge 
investment in ocean health. Reinvestment of revenues generated 
from the ocean to put back in the ocean is a smart thing to do.
    For too long, we have reaped the fullness of the ocean's 
bounty. This bounty is neither inexhaustible or unlimited, and 
we cannot expect to take forever without needing to give back.
    I ask this Committee to do two things. First, I urge this 
Committee to move to reinstate the moratorium on drilling lease 
expansion. It has been here through many administrations and 
only expired last fall.
    I urge this Committee to consider any use of Outer 
Continental Shelf money as conditional on both good planning 
for ocean resource use and the establishment of a permanent 
Ocean Trust Fund.
    I would be glad to answer any questions you might have. 
Thank you.
    [The prepared statement of Mr. Farr follows:]

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

    Chairman Rahall, Ranking Member Hastings, and Members of the 
Committee: Thank you for this opportunity to testify before you.
    Today, you are taking up the issue of drilling on the outer 
continental shelf (OCS), as the moratorium was allowed to expire in 
September of last year. I would first like to voice my opinion strongly 
in favor of reinstating the moratorium. I will then expand on several 
other corollary issues that this drilling debate has raised. The state 
waters of my district, California's 17th, are entirely protected by the 
Monterey Bay National Marine Sanctuary and thus my presence here today 
is not motivated by my desire to protect my own coastline from fossil 
fuel exploitation. Rather, I am here to advocate on behalf the oceans: 
perhaps the greatest natural resource on earth and one which we all 
share.
    First, on the issue of expanded drilling operations in the OCS, it 
is clear that these activities are not without risk. The OCS fossil 
fuel extraction process offers numerous opportunities for environmental 
risk, from exploration, to extraction, to transport. True, the oil 
spilled from these sources represents a small contribution to the total 
oil spilled into the oceans, but that fact does not negate its impacts. 
My own district on California's central coast may not be subjected to 
drilling, but we are not immune from the effects of oil exploitation. A 
recent small spill within San Francisco Bay injured birds from my 
district and in some cases prevented our fishermen from working their 
normal waters. On a larger scale, the 1969 spill from Platform A in 
Santa Barbara is precisely the type of environmental disaster that must 
be prevented. A repeat of this event would represent an enormous insult 
to coastal economies, industries and ecosystems. Granted, such spills 
are rare, but the potential threat they pose is intolerable. The 
proposed minimal benefits of new drilling operations do not outweigh 
the potential risks.
    Further, the debate on fossil fuel extraction seems almost archaic 
given our understanding of the adverse effects of their consumption on 
our atmosphere. Granted, our economy is still oil-addicted, but if 
alternative, renewable energy sources received the same level of 
investment as fossil-fuel based sources, surely we could make more 
substantial strides in weaning our oil dependency? If the U.S. goal of 
reducing carbon emissions is to be realized, we might as well acquaint 
ourselves with the idea that drilling is not the solution, especially 
when clean, renewable energy sources are within our grasp. Re-opening 
the OCS for fossil fuel exploitation is simply illogical given present 
concerns over the use of fossil fuels and emission reduction targets.
    There was concern in last week's hearing that decreasing U.S. 
fossil fuel exploitation would result in increased foreign fossil fuel 
exploitation with an associated greater environmental cost. I disagree 
with this logic for two reasons. First, as the number one energy 
consuming nation, if the U.S. can reduce its own demand, there will be 
less production incentive in other nations. Second, as a global leader, 
U.S. progress towards independence from non-renewable fuels will 
certainly have a positive, long term, global effect.
    As you know, I have long been an advocate for ocean conservation. I 
am not alone in holding the view that healthy oceans mean healthy 
economies and healthy people. The debate we are having at present 
brings to the forefront several other key issues that warrant further 
discussion: marine spatial planning and ocean conservation funding.
    Unlike terrestrial regions opened for development, there is no 
comprehensive spatial planning system for the oceans. This is 
problematic because, like terrestrial regions, the oceans are comprised 
by a staggering diversity of different habitats and resources. It is 
imperative that a system is developed whereby the layout of these 
different resources can be assessed and their uses coordinated. The OCS 
is host to many regions, some of which will be ideally suited for 
fishing, or aquaculture, or wind farming, or wave energy generation. 
There will be other regions that are unique or critical habitats, which 
must be conserved. In some cases, these multiple uses can occur 
simultaneously, but in other cases, they are mutually exclusive. A 
process must be put in place to first assess and then allocate areas of 
the OCS so that the ocean, industries and economies all benefit.
    This process is termed marine spatial planning and should begin 
with a comprehensive review of resources in the OCS conducted in 
coordination by appropriate state and federal agencies. Then, 
determinations can be made based on the best available science as to 
which resources can be utilized in which places. I believe that we are 
on the brink of large-scale development of alternative, renewable 
energy resources, and it is essential that this development occurs in 
the most scientific, orderly and effective way possible.
    Finally, in their assessments of the state of ocean policy in the 
U.S., both the Pew Oceans Commission and the U.S. Commission on Ocean 
Policy underscored the urgent need for a permanent ocean conservation 
trust fund. In its 2006 Ocean Policy Report Card, the Joint Ocean 
Commission Initiative gave the U.S. an F in the ``new funding for ocean 
policy and programs'' category. In 2007, the grade was a D+. Clearly, 
more effort and investment is necessary to address this deficiency.
    Given the expected utilization of OCS resources for renewable 
energy and other uses, I would urge you to consider the following fact: 
the oceans are a common resource, they belong to everyone. It is 
incumbent upon current OCS users, who are extracting billions in 
revenues from the oceans, as well as future users, to reinvest a 
portion of their revenue back into its source, the oceans themselves. I 
have personally proposed the creation of such an Ocean Trust fund in my 
bill, HR21, which has been introduced and referred to your committee. 
This fund would satisfy the recommendations of the Ocean Commissions. 
Reinvestment of OCS resource revenue into this fund would represent a 
durable source of funding for state and federal ocean conservation 
programs and is a logical reinvestment of revenues generated from the 
ocean back to the ocean. This fund would support the focused efforts of 
coastal states, territories and agencies in addressing the critical 
ocean and coastal science, management and protection needs of our 
nation and is essential to implement the many other recommendations of 
the national ocean commissions.
    For too long, we have reaped the fullness of the oceans' bounty. 
This bounty, however, is neither inexhaustible nor unlimited and we 
cannot expect to take forever without giving back. I urge you to move 
to reinstate the moratorium on drilling lease expansion. I further urge 
you to consider any resource exploitation activities conducted in the 
oceans over the Outer Continental Shelf as conditional on both the 
merits of good planning and the establishment of an ocean trust fund 
and reinvestment in it.
    Thank you very much for this opportunity to speak to you today.
                                 ______
                                 
    The Chairman. Thank you, Sam. Dana?

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

    Mr. Rohrabacher. Thank you very much, Mr. Chairman and 
fellow Members. I appreciate this opportunity to testify on an 
issue that deserves a much more serious discussion than it has 
been given for these last four decades.
    Let me preface my remarks by noting that I am a surfer. I 
was proud to be the best surfer in Congress until another one 
was elected--that is Brian Bilbray--and now that Duncan Hunter, 
yet another surfer, has been elected, I am, rightfully, the 
third-best surfer in Congress; however, it has been agreed to 
that I am now the Chairman of the unofficial, yet powerful, 
Surfers' Caucus.
    The Chairman. Is this the ocean?
    Mr. Rohrabacher. With that said, I love the ocean, and 
preserving it is a high priority for me. I am also a scuba 
diver, and if I thought that offshore drilling imperiled the 
ocean, I would oppose offshore oil drilling, but that is simply 
not true.
    Decades ago, there were a few well-published accidents that 
led to oil spills. 1969 is a long time ago. We should not be 
basing our judgments on what is important for our people, or 
what is good for the economy, based on what was done with 
technology that was put to use in 1969. That was probably 
technology that was developed long before 1969.
    The technology since those days has dramatically improved. 
Hurricanes can go right through our offshore oil operations in 
the Gulf of Mexico without one drop being spilled. But even 
with the old technology, the chances of an oil spill are much 
more ominous by tanker-delivered oil than by that oil that is 
provided by offshore rigs.
    In my own district, which has had offshore drilling for 
more than 30 years, there has been no significant problem with 
these offshore rigs, yet, shortly after I was elected, there 
was a major oil spill from a tanker, and, remember, the more 
you say you cannot drill, the more the environmental radicals 
have prevented us from doing that offshore oil drilling, the 
more oil we have had to deliver by tanker. They, ironically, 
have made it more likely to have oil spills off California and 
off my district.
    So those who claim the mantle of environmental champion and 
aggressively oppose offshore oil drilling have, ironically, 
made oil spills more likely.
    Furthermore, by making us more dependent on foreign 
production, which is not encumbered in many of these countries 
by the same safety and environmental standards which I support, 
the overall pollution, then, because when we are getting our 
oil from overseas, it often does not have these same standards, 
the overall pollution and environmental outcome has been a 
total disservice to environmental concerns, again, turning 
everything on its side and upside down. The environmentalists 
are ending up arguing for something that hurts the environment 
when looked at in a rational discussion.
    So the environmental consequences of restricting offshore 
oil and gas development have been exactly opposite to the 
approach that we were led to believe. Having scuba dived, which 
I have, below and around offshore rigs along California's 
southern coast, I can assure you, the local fish are healthy 
and plentiful.
    Their natural instincts, which would drive them away from 
something that had something that was going wrong with their 
body, their natural instincts, I believe, are better than the 
political instincts of those who have been in the forefront of 
the fight against offshore oil drilling. But the economic 
consequences of banning new offshore oil and gas drilling also 
need to be addressed.
    One of the reasons our economy, I believe, has been 
faltering is that it has been weakened, in part, by the 
transfer of wealth that comes from buying oil and gas from 
overseas when we could produce that same energy domestically 
from our own offshore oil reserves. Just off the coast of 
California, there are enormous untapped oil and gas reserves. 
The low estimate, and, again, they made estimates like this, 
which were low estimates, in the Gulf of Mexico and found it to 
be much more oil than what the low estimate was; the low 
estimate is nine billion barrels of oil, as well as vast 
deposits of clean-burning natural gas.
    At $40 to $50 a barrel, which, I believe, is what we are 
going to come down to, if not $60 a barrel when things all 
balance out in the marketplace, at $40 to $50 a barrel, that 
represents a value offshore of California at perhaps $500 
billion, $500 billion of wealth, and, again, that is a low 
estimate.
    Why are the American people being denied this wealth when, 
of course, not developing this energy puts it at greater 
environmental risk? Why are we denying this to our people at a 
time of hardship?
    The Federal government, as well as state and local 
governments, especially in California, sorely need new sources 
of revenue. It is right there. Denying America the benefits of 
our own country's oil and gas deposits is a sin against our 
people, and it is bad environmental policy, to boot.
    Most disconcerting, the real issue, I believe, that has 
been the driving force all of these decades and that has led to 
the restriction of offshore oil and gas deposits and, again, 
certainly has not really been the environment, as I just 
stated--it certainly has not been the economy. What has been 
the driving force that has prevented our people from having 
this wealth, to build schools, to provide healthcare, to make 
sure that we did not have to ruin our economy by buying this 
oil and fuel overseas? What has been the driving force? The 
view. It is the view.
    I am sorry. Maybe the view is important. That may be might 
be environmentally sensitive, to really be concerned about the 
view. We have some more serious things to be concerned about. 
However, even with that issue, let me suggest that perhaps we 
could require a better-looking facade on the part of offshore 
oil rigs.
    In Long Beach, they have beautiful facades, and no one 
complains. I will tell you right now, if we would not be 
developing our offshore oil rigs off of Long Beach, that city 
would go belly up economically.
    So, let us require the facades look beautiful. Let us paint 
them in green trees, or whatever would make environmentalists 
happy.
    No. I would suggest that we require better-looking offshore 
oil rigs, and let me also note, we can put wellheads under the 
water now. Again, I am a scuba diver. A lot can be done that 
was not done in 1969, with technology that had been developed 
in the forties.
    The fact is that we can have underwater wellheads that have 
almost no chance of spilling, even in the middle of a hurricane 
in the middle of the Gulf.
    So, it is time for us to quite worrying about the view, 
start standing up for the economy and the environment, but also 
stand up for our people, who have a right to the benefit of 
this vast wealth that is offshore, and especially that is true 
in this time of economic hardship.
    Thank you, Mr. Chairman, for letting me present my case.
    [The prepared statement of Mr. Rohrabacher follows:]

   Statement of The Honorable Dana Rohrabacher, a Representative in 
                 Congress from the State of California

    Mr. Chairman, members of the Committee, I appreciate this 
opportunity to testify on an issue that deserves a much more serious 
discussion than it has been given for these last four decades.
    Let me preface my remarks by noting that I am a surfer. I was proud 
to be the best surfer in Congress until another one was elected, Brian 
Bilbray. And now that Duncan Hunter, yet another surfer, has been 
elected, I am rightfully the third best surfer in Congress. However, it 
has been agreed to that I am now chairman of the unofficial yet 
powerful Surfers Caucus. With that said, I love the ocean, and 
preserving it is a high priority for me. I am also a scuba diver, and 
if I thought offshore drilling imperiled the ocean, I would oppose 
offshore drilling. But that is simply not true.
    Decades ago there were a few well-published accidents that led to 
oil spills. 1969 was a long time ago. We shouldn't be basing our 
judgments on what is important for our people or what is good for the 
environment based on what was done with technology that was put to use 
in 1969. That was probably technology that was developed long before 
1969. The technology since those days has dramatically improved. 
Hurricanes can go right through our offshore operations and the Gulf of 
Mexico without one drop of oil being spilled. But even with the old 
technology, the chances of an oil spill are much more ominous by 
tanker-delivered oil than that which is extrapolated by offshore rigs. 
In my own district, which has had offshore drilling for more than 30 
years, there have been no significant problems with these offshore 
rigs. Yet, shortly after I was elected, there was a major oil spill--
from a tanker! And remember, the more you say you can't drill, and the 
more the environmental radicals prevent us from doing that offshore oil 
drilling, the more oil we have had to deliver by tanker! They 
ironically made it more likely to have oil spills off California and 
off my district. So those who claim the mantle of environmental 
champion and aggressively oppose offshore oil drilling have ironically 
made oil spills more likely.
    Furthermore, by making us more dependent on foreign production, 
which is not encumbered in many of these countries by the same safety 
and environmental standards, which I support, we essentially increase 
the overall pollution of the planet. Again turning everything on its 
head, the environmentalists are ending up arguing for something that 
hurts the environment when looked at in a rational discussion. So the 
environmental consequences of restricting offshore oil drilling and gas 
development have been exactly opposite to the approach that we were 
lead to believe. Having scuba dived, which I have below and around 
offshore rigs California's southern coast, I can assure you the local 
fish are healthy and plentiful. Their natural instincts, which would 
drive them away if something was going wrong with their body, their 
natural instincts I believe are better than the political instincts of 
those who have been in the forefront of the fight against offshore oil 
drilling. But the economic consequences of banning new offshore oil and 
gas drilling also need to be addressed.
    One of the reasons our economy, I believe, has been faltering is 
that it has been weakened in part by the transfer of wealth that comes 
from buying oil and gas from overseas, when we could produce that same 
energy domestically from our own offshore oil reserves. Just off the 
coast of California, there are enormous untapped oil and gas reserves. 
The low estimate--and again, they have made estimates like this which 
were low estimates in the Gulf of Mexico and found it to be much more 
oil than what the low estimate was--the low estimates is 9 billion 
barrels of oil as well as vast deposits of clean burning natural gas. 
At forty to fifty dollars a barrel--which I believe is what we are 
going to come down to, when things all balance out in the market 
place--at forty to fifty dollars a barrel, that represents a value 
offshore of California, at perhaps five hundred billion dollars! Five 
hundred billion dollars of wealth and again, that is a low estimate. 
Why are the American people being denied this wealth when of course, 
not developing this energy of course put us at greater environmental 
risk? Why are we denying this to our people at a time of hardship?
    The federal government--as well as state and local governments--
sorely needs new sources of revenue. It's right there! Denying America 
the benefits of our own country's oil and gas deposits is a sin against 
our people and it's bad environmental policy to boot. The real issue I 
believe that has been the driving force all these decades, that has led 
to the restriction of offshore oil and gas deposits and again, 
certainly not the driving force certainly hasn't really been the 
environment as I have just stated, it certainly hasn't been the 
economy. What has been the driving force that has prevented our people 
from having this wealth to build schools, to provide healthcare, to 
make sure that we didn't have to ruin our economy by buying this oil 
and fuel overseas. What has been the driving force? The view. It's the 
view. I'm sorry, maybe the view is important. That might be 
environmentally sensitive. But to be really concerned about the view, 
we have got some more serious things to be concerned about. However, 
even with that issue, let me suggest, that perhaps we could, require a 
better looking facade on the part of offshore rigs.
    In Long Beach they have beautiful facades and no one complains, and 
I will tell you right now if we would not be developing our offshore 
oil rigs off of city of Long Beach, that city would go belly up 
economically! So let's require the facades look beautiful, lets paint 
them in green trees and or whatever would be make environmentalists 
happy. No, I would suggest that we require better looking offshore oil 
drilling rigs and let me also note we can put well heads on under the 
water now. Again, I am a scuba diver, a lot can be done that wasn't 
done in 1969 with technology that had been developed in the forties. 
The fact is that we can have underwater well heads that have almost no 
chance of spilling even in the middle of a Hurricane and even in the 
middle of the Gulf. So it is time for us to quit worrying about the 
view, start standing up for the economy and the environment but also 
stand up for our people who have a right to the benefit of this vast 
wealth that is off shore and especially that's true in this time of 
economic hardship. Thank you Mr. Chairman for letting me present my 
case.
                                 ______
                                 
    The Chairman. I thank both of you. This is normally the 
time we allow Members of the Committee to ask the panel 
questions, but perhaps I will allow the panelists to ask each 
other questions.
    [Laughter.]
    Mr. Farr. We would be delighted.
    Mr. Broun. Do you need a motion, Mr. Chairman?
    The Chairman. Well, before recognizing my colleagues, let 
me remind them that we do have a State of the Union tonight, 
and we have to be out of here by some reasonable hour. I 
recognize the Ranking Minority Member, Mr. Hastings.
    Mr. Hastings. Thank you, Mr. Chairman, and thank both of 
you for your testimony. I think anybody listening today 
probably got the arguments on both sides right here, and this 
is what the issue is all about.
    I just want to ask, I guess, both of you, in a broad way. 
Mr. Farr, you are concerned about the pollution of the oceans. 
The data that I have looked at, the largest contributor to oil 
in the oceans is natural seepage, and the second-largest 
contributor is runoff from urban areas. By far, way down, is 
the extraction process.
    What is your comment on that, observation on that, 
statistic, which is, by the way, well grounded?
    Mr. Farr. Well, two things. First of all, I think that this 
whole argument has to go to, how do we want to position 
ourselves in the future regarding our dependence on oil, and 
are we going to continue to be addicted and, therefore, do OCS 
when you have, I think, sort of high-risks/low gains.
    You know, the economy of California's coastline is so much 
greater than all of the oil extraction, and that economy is 
based, like in a lot of the states, on the beauty and 
attraction of coast beaches. The number-one attraction in the 
United States of America, the number-one attraction in the 
whole country, for visitors is the Los Angeles beaches, and, on 
those beaches, you are not seeing them involved with oil 
spills.
    I think, in response to your question about runoff, because 
we are killing the oceans--we are dumping everything we do not 
like into the oceans that we do not know what to do with, and, 
at the same time, we are taking everything that we want out of 
it, not only in food supplies but mineral supplies as well.
    The oceans are paying a price for that, and we, in 
California, understand that urban runoff has a big ocean-
pollution problem, and what we are doing, community by 
community, up the coast, is developing a tax base to 
essentially collect all rainwater runoff and pretreating it or 
ponding it before it goes into the ocean, essentially stopping 
the pollutants from getting in.
    Los Angeles was the first region in the state to do that, 
and it has done it extremely well, and I know our community 
just passed a bond measure last November to do the same in my 
district.
    So, the seepage has been a problem, but it gets 
exacerbated, I think, by the risk involved, as I said, by 
exploration risks, by transportation risks, and by extracting 
risks. I think those give you a higher degree of potential 
damage than actual seepage that occurs.
    Mr. Hastings. Dana?
    Mr. Rohrabacher. Well, there is natural seepage, and, in 
fact, again----
    The Chairman. Have you seen it in your area?
    Mr. Rohrabacher. Yes. I have surfed up in Santa Barbara, 
and it is all over my feet, and everybody knows that who surfs 
in Santa Barbara. The fact is that if you did not have any 
offshore oil wells, the seepage would be worse because the 
buildup would not be actually alleviated.
    Let me note that the argument that, ``Well, we have to get 
ourselves off of dependence on oil, thus we are going to 
restrict the amount of oil that we produce,'' is like saying, 
``You know, our people are eating too much. Let us start 
restricting farmers.''
    I mean, this does not correlate. It is not something that 
is going to lead to something good. Restricting the amount of 
food is not going to lead people to eat less.
    The fact is, restricting oil has done one thing: 
Restricting oil development has led us to buy oil from 
overseas, and then what happens? It a much greater risk to 
transport that oil to us via tanker. So, it has had just the 
opposite.
    In terms of urban runoff, my good friend, Sam, and I are in 
total agreement for those types of environmental controls and 
emphasis. I would actually suggest that if we really want to do 
it right, let us agree to offshore oil drilling and direct the 
revenue from the offshore oil wells to the communities along 
the coast who can then use those new financial resources to 
deal with the problem of urban runoff and some of the other 
major environmental issues that coastal communities have.
    Mr. Farr. Can I add one thing to that point?
    Mr. Hastings. Let me make this point because my time is 
running down here, and that is that if you had revenue sharing, 
presumably, states and municipalities along the coast could 
share in that revenue to do exactly what you are saying, Dana. 
Is that correct? Is that what you are suggesting?
    Mr. Rohrabacher. It is, but I would actually go further 
than that. I would suggest that we codify that so a certain 
percentage of the funds are not just going to the state but go 
directly to those coastal communities opposite that offshore 
oil development.
    Mr. Hastings. Sam, and then I just want to make one more 
point, go ahead.
    Mr. Farr. Last year, we received $23 billion from OCS 
activity, and $17 billion of that just went into the general 
fund. So, you have a revenue source there that could do a lot 
of things, and my point in this was that this Committee, as the 
Resource Committee, ought to take a look at that revenue stream 
and direct it toward doing some beneficial things for the ocean 
because it is distributed back to the states.
    It is an awkward formula: The states get money from state 
lands oil drilling in the first few miles offshore. Then there 
is this buffer zone between the state and Federal lines, and if 
there is an oil rig out there, the deposits may be on 
underlying state lands or Federal lands, so there is a sharing 
process for the boundary, and then everything beyond that 
boundary just comes to the Federal government. Of that, as I 
said, $23 billion was raised last year, and $27 billion just 
went into the general fund to go be spent on other things. I 
believe that that is the Resource Committee's money and that we 
ought to spend it on more than just the Land and Water 
Conservation Fund.
    Mr. Rohrabacher. Let us have a compromise here, and all the 
new revenue should go to the coastal communities.
    Mr. Hastings. I was going to make precisely that argument, 
Dana.
    One last point, I want to make: If the issue is to protect 
the oceans, and natural seepage is the largest polluter in the 
oceans--that is well established--and the second is runoff from 
urban areas, there is the option--I say this facetiously--for 
people that live on the coast to move inland; therefore, they 
would not have their runoff into the ocean. Do you suppose that 
that is an option?
    Mr. Rohrabacher. [Laughter.]
    Mr. Hastings. Thank you, Mr. Chairman.
    The Chairman. The gentlelady from Massachusetts, Ms. 
Tsongas.
    Ms. Tsongas. Thank you very much for your testimony, and I 
agree with you, Congressman Farr, and we have heard testimony, 
that our oceans are sick. Living in Massachusetts, which is 
also a coastal state, we know that to be true, and there is 
much work to be done.
    An important part of the debate on the use of the Outer 
Continental Shelf, then, obviously, has to take into account 
its impact on our oceans, and I think that is as true as we 
begin to look to the oceans for sources of renewable energy.
    I am wondering what your thoughts are on a process that 
takes into account, as we look more and more to the oceans for 
that source, takes into account the potential impact of using 
them in that way, how your state has been working to do that, 
because it has been such a leader in looking at the ocean as a 
source of alternative energy.
    Mr. Farr. Well, in the past, we have always looked at the 
ocean as just out there, this big, flat plane, and treated it 
as one spot, but, as we get more and more information, we learn 
that, just like on land, there are natural habitats that are 
unique and that should be preserved, and there are unique fish-
breeding areas and things like that, as we have done on land.
    When you think about San Ignacio Lagoon in Mexico, which 
the world opinion has preserved to allow breeding grounds for 
the gray whales, and that is, as we discover more of this, we 
are going to discover that there are wind zones, there are 
tidal zones, there are zones that can be tapped for energy 
production, and I think that is what is missing from this, that 
we have not thought about this as potential for all kinds of 
energy development, not just oil and gas, and we ought to look 
before we leap, and that is why I think the moratorium is 
important. Put it on now so that we can have a better 
understanding of what the potential developments for all kinds 
of energy uses are in the ocean, not just oil.
    Ms. Tsongas. Do you think that should be a national 
strategy or a state-by-state process?
    Mr. Farr. Well, it ought to be a national strategy because 
the states only have out to three miles; we have out to 200 
miles of our jurisdiction.
    Ms. Tsongas. Well, as you know, in Massachusetts, we have 
the Cape Wind Project, which is on Nantucket Sound, and the 
process of citing those wind turn bites has been as contentious 
as any discussion we have had about offshore drilling.
    I think, as we go forward, we are going to have to take 
into account the natural opposition to anything that changes 
the sightlines or capacity to use our oceans and our sounds in 
a recreational capacity, and I do not think just painting trees 
on anything quite solves the problem.
    It is a discussion we have to have, going forward, and yet 
we all know how we have to reduce our dependence on fossil 
fuels as we protect our natural resources, so thank you for 
your testimony.
    The Chairman. The gentleman from Colorado, Mr. Coffman.
    Mr. Coffman. Thank you, Mr. Chairman and both Mr. Farr and 
Mr. Rohrabacher.
    It is interesting, when we talk about the revenue issue and 
its potential for mitigating issues, I know, in Colorado, that 
we have a revenue source that is derived from royalty payments 
for oil and gas developments that goes to local governments to 
mitigate any economic impact that they have in their 
communities, whether it is having to build new roads or, 
because of increased population, to do the development, to 
build new schools, whatever the needs are for those local 
governments.
    I am wondering, what would be the impact if, instead of the 
Federal government deriving revenue from the offshore 
development, if we simply dedicated those revenues to those 
local communities that were impacted by that offshore 
development, or, certainly, visually impacted or potentially 
environmentally impacted, to develop their own programs to 
mitigate those effects, or even to use those dollars for other 
environmental programs in the marine environment? Would there 
be more acceptance of offshore drilling if there were a better 
system of dividing the revenue?
    Mr. Farr. I do not think you are going to buy off the local 
community by sharing the revenues, and I do not think you have 
the votes in this Congress because we are very parochial about 
Federal money and not wanting to give it to local governments 
to spend.
    In the OCS funds, there are eight statutorily derived funds 
from it--they are kind of locked box--and one is American 
Indian tribes and allottees, which get money from it, and I am 
sure your state receives from it: the Historic Preservation 
Fund, the Land and Water Conservation Fund, the Reclamation 
Fund. There is a thing called ``state share,'' which is that 
boundary-line money, and then the state share from onshore 
revenue that they get.
    Those are the only funds; 74 percent of the rest of the 
money coming in just goes into the general fund.
    I think you have to find a national purpose, if you are 
going to use Federal dollars, because I do not think the inland 
legislators just want the coastal states to get these monies, 
particularly to local governments, and that is why I am 
suggesting that we ought to earmark a fund, an Ocean Trust 
Fund, to deal with the aspects of governance of the ocean.
    I am carrying a bill, H.R. 21, and many of you are co-
sponsors of that bill. It will be before this Committee later 
this year, and that is the concept there, to pay for that 
governance structure with funding such as OCS.
    Mr. Coffman. If I could just go first, is not it a national 
purpose, and, Mr. Rohrabacher, if you could also reflect on 
this, is not there a national purpose right now, in terms of 
the economic and national security of this country, economic 
security, lessening our trade deficit, national security?
    I am an Iraq War veteran, and kind of tired of having our 
dollars go to regimes that do not necessarily like us.
    Mr. Farr. Well, I guess that is Mr. Rohrabacher's argument, 
that we ought to drill in U.S. before we buy oil abroad, and 
that is certainly a great argument. I just think we ought to be 
smarter about how we develop energy systems. I think that is 
part of this whole economy, the green energy issue, which has 
really caught on in California--that is where the venture 
capital, private money is going--and we ought to be 
appreciative of that and support it.
    Look, offshore oil in California is about 10 percent of the 
entire California oil supply, the production. It is very 
little, and it is high cost to get out to the ocean. I think if 
you had a lot of oil companies here, and you asked them, 
``Would you rather grow onshore rather than offshore?'' they 
would all tell you, onshore is a lot less expensive and 
probably safer.
    Mr. Rohrabacher. Let me just suggest that restricting 
offshore oil development has not meant that we will be 
producing energy in another, more environmentally efficient 
manner. We, obviously, now bring it in from overseas, which has 
made it more likely to have an oil spill, as I mentioned, but 
just like our colleague from Massachusetts can tell you, they 
have tried to put not oil rigs offshore but windmills, and, 
even with that, you have had total opposition or enormous 
opposition.
    Solar installation. I have a bill that is asking the Bureau 
of Land Management to facilitate, rather than block, the 
request for permits to put solar energy facilities in our 
deserts. We have 190 of these that have been held up for five 
years because people are more concerned about the little 
insects and the lizards and their habitat than about producing 
clean energy.
    It does not mean, just because we are going to restrict 
offshore oil, that we are going to get that energy from 
someplace else. This same gang that is opposing offshore oil 
wells is generally opposing these other things as well.
    We need to do what is in the interest of our country, 
environmentally, economically, and every other way, and the 
best thing for us to do would be to take these revenues from 
the new offshore oil revenues, give it to these local 
communities along the beach to handle the runoff, which Sam and 
I agree on.
    In my own city, Surf City, USA--Huntington Beach--they had 
a horrible challenge about finding money to fix the sewer 
systems. Let us use that money from offshore oil rigs to fix 
the sewer systems in coastal communities.
    Now, these are things that would have tangible, positive 
results rather than all of the rhetoric we have been hearing 
for three decades about what happened in 1969 at the Santa 
Barbara oil spill.
    The Chairman. The gentleman's time has expired. The 
gentleman from New Mexico, Mr. Heinrich.
    Mr. Heinrich. I wanted to return to this idea you brought 
up about more of a zoning approach. I am not an all-or-nothing 
person when it comes to OCS, and I do agree with Mr. 
Rohrabacher that we should start avoiding the rhetoric and 
actually move toward some places where we might have common 
ground.
    I am intrigued by this idea because, obviously, when it 
comes to how we manage our surface resources, for example, 
throughout the Intermountain West, we take a zoning approach. 
We do not drill in national parks and wildlife refuges, but we 
do drill on many places where we find that is the highest-and-
best use.
    I am curious as to what you think some of the steps we need 
to take to have a more accurate, zoned approach to OCS 
resources would be. As you know, I have spent quite a bit of 
money in your district because of, basically, the diving 
resources that are there. That is a big part of the economy, 
and, with all due respect to Mr. Rohrabacher, I am not really 
interested in going to Monterey to dive on an oil rig. That 
said, there may well be places where that is the highest-and-
best use.
    Mr. Rohrabacher. The fish are pretty good off those oil 
rigs.
    Mr. Coffman. How do we move toward a more accurate way of 
looking at this, in a more nuanced way, instead of an all-or-
nothing approach?
    Mr. Farr. That question is the problem for the U.S. 
Government because we have never had a comprehensive policy 
about the oceans. It has all been stovepipe, and we have 144 
different statutory provisions relating to the ocean, and 
almost every single agency of the Federal government has a 
different administrative role.
    This bill that has actually come out of this Committee--I 
have been working on it for about six years--is this whole 
comprehensive policy that was given to us as recommendations by 
not only one oceans commission, but two, one created by 
Congress, and the other created by a nonprofit. Their 
recommendations are very similar, and they are into this bill.
    It is not zoning, per se, because what we do not do is 
create any new government. We work with the existing regional 
processes, but there is a lot more coordination of decision-
making and information in this so that the right hand knows 
what the left hand is doing.
    I think you are going to hear, in the next panel, what 
California has done with its offshore own state lands. They 
have begun, way ahead of the Federal government, creating 
marine protected areas, essentially, the first part of kind of 
what are areas that have such significant biological 
significance that they need to be protected from fishing?
    There are ones that there are ``no fish, no take,'' and 
there are others where there is a limited take and limiting 
fishing. Different styles fit different environmental 
ecosystems, and you can hear from the next panel that it was 
done with a lot of controversy but, nonetheless, the states put 
them into place, and way ahead of the Federal government.
    President Clinton directed that we create, in the Federal 
system, marine protected areas, but we have not yet done that.
    I might add that one of the experts on this whole issue of 
offshore oil drilling, who represents it more than anybody in 
the country, is sitting here in this Committee. It is Lois 
Capps, who represents Santa Barbara, and she is certainly 
familiar with the pressures from both the environmental 
community and the drilling community, and that community has 
developed a lot of expertise in the risk issue and also the 
cost-benefit issue.
    Mr. Coffman. One more question for you real quick, Mr. 
Farr. Regarding the idea of the Ocean Trust Fund, I am very 
familiar with the Land and Water Conservation Fund. It has had 
an enormous positive benefit on the State of New Mexico. We 
have not always been good about making sure those dollars get 
spent where they were designed to be spent. Do you have any 
concern that we would create this Ocean Trust Fund but then, 
you know, fail to fund it?
    Mr. Farr. Well, of the OCS money, only 3.8 percent goes to 
the Land and Conservation Fund, and it is set in that fund, but 
Congress does not always appropriate all of the monies, 
something that this Chairman, Chairman Rahall, has been very 
concerned about. The money is there, and we have not been 
appropriating it.
    I do think we can put conditions on that Ocean Trust Fund, 
certainly, to manage it any way one would think necessary, but 
I do think it is important that this Committee create such a 
fund. We need a process. We have done that for exploring space, 
and yet that policy has not yet been developed for the ocean, 
and, you know, that is 73 percent of the planet.
    It is interesting that Google--you might have heard it from 
this Committee--has always had this site, ``Google.earth,'' and 
Sylvia Earl pointed out that if 73 percent of the earth is not 
even in your site, you cannot call it ``Google.earth''; you 
have to call it ``Google.dirt.'' But just last month, Google 
opened up all of what is known in exploration of the oceans, 
and it is very, very small.
    There is a whole frontier out there, and I think that my 
point here is that Congress, in their wisdom--it is a huge 
resource-policy issue--is that we really need to look before we 
leap. We need to be a little bit smarter about how we are going 
to approach the oceans rather than just doing the same old, 
same old, because there is oil out there, we take it; there are 
fish out there, we take it; and we dump things. We just cannot 
do that anymore. We have to be smarter about this, and that is 
the point of this whole hearing.
    Mr. Rohrabacher. I would suggest that if we are really 
going to do this smarter, and I agree with you on some of the 
challenges that you have outlined for us, in terms of oceans--
again, I am a scuba diver and a surfer. I want to protect the 
oceans, setting up a fund here in Washington, D.C., being 
managed by who knows who, whatever special interests managed to 
get themselves appointed to head the fund, I think, is a lot 
less effective than giving the money to local communities, like 
Huntington Beach, to correct their sewer problem, and I think 
that that will be much better spent, and the people, locally, 
know.
    We care about the ocean locally. We are in the ocean, and 
we depend on it for tourists, but give that revenue to the 
local communities, not to some national fund, and it would be 
more wisely spent. But I agree with Sam that we should be 
spending much more money on the oceans. NOAA should have a 
budget that is much higher, and, in fact, I think NASA and NOAA 
should be basically on par with each other because utilizing 
the oceans, like utilizing space, for the benefit of mankind 
makes all of the sense in the world, and investing in that 
makes all of the sense in the world as well.
    The Chairman. The gentleman from Virginia, Mr. Wittman.
    Mr. Wittman. Thank you, Mr. Chairman.
    Gentlemen, I think you have brought up some great points, 
specifically concerning onshore runoff into the oceans. I think 
we have all kinds of challenges there--ocean acidification--so 
I think those are obviously apart of an issue, and you speak of 
a comprehensive ocean policy. I think that is absolutely 
needed.
    If we go back, though, and we get to the energy issue, it 
seems like, to me, too, also going forward, that we need a 
comprehensive energy policy looking at all of the different 
sources of energy. I do not think anybody here does not believe 
that we should not be pursuing aggressively alternative and 
renewable sources of energy but also looking at the sources of 
energy that we have here in the United States as a bridge to 
that and, hopefully, getting away from some of those foreign 
sources.
    Let me ask this. I know both of you all have, what seems 
like to me, some things in common but also some differences, 
but what do you see as our development of a comprehensive 
energy policy and using our sources of energy while we can 
quickly get to these alternative and renewable sources that, 
hopefully, take us into the future because we all know we are 
at peak oil production right now. The world is not going to 
find any more oil, so that is a decreasing source, but we have 
to make sure we transition.
    Obviously, we want to do that safely. Having been an 
environmental health specialist for 27 years, and looking at 
the current technology, it does appear as though we can put 
proper controls in place for development of our own sources and 
minimize risk. Now, we will never get risk to zero, but I think 
we can manage it and minimize it, and I just want to get your 
thoughts and ideas about how that part of a comprehensive 
energy policy should take place.
    Mr. Farr. Well, as you know, from your professional 
background, that the best investment and fastest investment is 
conservation. Use less, and you have more resources to 
distribute.
    California, before you got elected, when I was here, we had 
the big energy crisis in California, and I think the joke 
around Congress was, ``It is you, all you Californians out 
there, in your SUVs and hot tubs drinking your Merlot. You just 
deserve to have big energy costs.''
    Well, now, it is very interesting because what we have 
discovered is that California, per capita, is the lowest user 
of energy in the United States, and how did we do that? That is 
the answer to your question. We did it piece by piece. We did 
it in energy conservation in building materials. We did it in 
less water usage, less pumping charges, irrigation practices. 
It was just sort of all of these best management techniques, 
including business that led it and made money on it because you 
buy the equipment from the private sector.
    I think that that is a good lesson, that there is a great 
economy out there that has not yet been tapped, and it is doing 
things and just doing them smarter.
    Now, that is my point, and there are a lot of green carrots 
out there in that stimulus package to get that investment and 
to get those things built. I tell you, it works, and, again, 
the experts on that for the state are sitting right behind me, 
and they are going to be on your next panel, and they can give 
you a great deal of detail and politics about it.
    Mr. Rohrabacher. I would agree with my good friend, Sam, 
that we need a comprehensive approach to energy, and I believe 
that those people who are opposing offshore oil are just 
fencing off an area that should not be fenced off from a 
comprehensive approach, but I certainly am very supportive.
    For example, I think that we have invested in solar energy 
research. I have been in Congress over 20 years. We have been 
supporting it, the Science Committee, research into solar 
energy, all of these years, and that has been bipartisan 
support, and we have now reached a point where solar energy is 
very competitive with other sources of energy. I believe the 
comprehensive approach America should take--I know this is 
going to surprise a lot of people, but the electrification of 
our country. Transportation and other uses of electricity 
should be expanded, and then we should seek to find clean ways 
of producing electricity.
    We have nuclear power, which is an alternative. Again, some 
of those people who claim to be for the environment have 
opposed nuclear energy development, which, in and of itself, as 
we know, is a clean source of electricity. They have a thing 
called the ``high-temperature, gas-cooled reactor,'' which now 
solves the waste problem, and we should be moving forward in 
developing these new types of reactors that are safer and solve 
the waste problem. We should move to electrification of our 
railroads, electrification of cars. These are things that we 
should move forward, but we need to produce electricity then.
    The same people who are opposing offshore oil development 
calling themselves ``environmentalists'' are opposing windmills 
off of Nantucket, and they are also opposing solar energy 
installations in the desert because they are concerned about 
those lizards and ants and there habitat.
    We need a comprehensive and full commitment on producing 
and electrifying America. That is the clean source of energy 
that will make our air cleaner, keep our oceans cleaner, and, 
again, I agree with Sam that we ought to make sure we spend 
more money on ocean-related research and activities. Thank you.
    The Chairman. The gentleman's time has expired. The 
gentleman from Arizona, Mr. Grijalva.
    Mr. Grijalva. Thank you, Mr. Chairman. Granted that, in 
Arizona, we are not as intimate with this issue of offshore 
drilling as some of the other states that are represented.
    If I may, just a reaction from my colleagues, and thank you 
both for your comments today. Recently, Secretary Salazar 
delayed the implementation of the previous administration's 
five-year plan on leasing oil and gas exploration offshore. He 
extended the comment period for 180 days--that would take us 
into September 23rd; canceled the scoping meetings that were to 
be held in preparation for the implementation of the Bush 
proposal, and, instead, there are going to be four regional 
meetings.
    He has instructed appropriate agencies to develop 
information about fossil and renewable resources offshore, with 
the strong suggestion that more information is needed, and how 
are we going to obtain that information: cost-benefit, 
environmental issues, economic issues, obviously.
    So, your reaction not only to the postponement but to this 
renewed longer process and the discussion of the five-year 
plan. Mr. Farr?
    Mr. Farr. Well, I support his effort because that was 
placing a moratorium, which, frankly, I think this Committee 
led the effort, long before I got here, through many different 
administrations. Bush I, I remember, was involved in 
supporting. In fact, the National Marine Sanctuary in my area 
was signed into law by Bush I. It is the largest marine 
sanctuary, and it prohibited oil and gas.
    I think that there is obviously a knowledge that we need to 
know more about the ocean and the impacts on the ocean before 
we just continue to do same old, same old policy that treats 
the oceans like land. I think that the issue here is probably 
best stated by T. Boone Pickens, who has made all of his money 
in oil, and he is here telling you, you cannot drill your way 
out of this problem, and he echoes Dana's concerns more than 
anybody about the importation of foreign oil.
    So, how do we develop this policy? I think that is the big 
issue. There are so much smart things to do. Let us not just 
charge ahead doing things that we know are not going to be the 
final solution, that are not going to be high risk/low gain. 
So, the moratorium that he imposed, I think, makes good sense.
    Mr. Rohrabacher. I would suggest that, at a time when our 
men and women--I just got back from Afghanistan--a time when 
our men and women are being sent overseas, and let us be fair 
about it--if we were not dependent on those energy resources 
overseas, we would not probably be sending, or have sent, our 
people to Iraq. But for us, then, to hesitate to develop our 
own resources, and knowing that when we buy oil from overseas, 
quite often it goes to finance governments that are hostile to 
America's interests and, indeed, are financing people who are 
shooting at our own soldiers.
    At a time like this, especially, and at a time of vast 
economic hardship, when we could use the wealth here rather 
than sending it overseas, not only for national security but 
for our economy, it makes no sense for us to be delaying the 
development of our own energy resources.
    There needs to be a comprehensive approach. I am with Sam 
on that. We should not just say, ``Oh, we are going to just do 
oil.'' As I say, I think solar, right now, is competitive with 
oil in the production of electricity. We should be moving 
toward producing and electrifying our society. Thank you.
    Mr. Grijalva. Thank you, Mr. Chairman, and I agree. I think 
the information that is needed has to be comprehensive, and I 
really think it is an opportunity, and I applaud the Secretary, 
an opportunity to look at all consequences, intended and 
unintended, with the pursuit of the plan that Bush was 
proposing. So, let me thank the gentleman and you, Mr. 
Chairman.
    The Chairman. Thank you. The gentleman from Georgia, Mr. 
Broun.
    Mr. Broun. Thank you, Mr. Chairman. I would like to ask 
Congressman Farr a couple of questions to kind of clear some 
things up for me.
    Do you see a difference between--you used the words 
``conservation'' and ``moratorium on drilling''--just overall, 
do you see any difference between conservation and total 
prohibition of development?
    Mr. Farr. I do not understand the question.
    Mr. Broun. Well, as a word ``conservation'' to you, does 
that mean total prohibition of development, or does that mean 
responsible utilization of resources? What does the word 
``conservation'' mean to you versus ``prohibition''?
    Mr. Farr. To me, personally? Well, my life experience is 
conservation has been best-management practices, being smart 
about it. We have national parks, but we do not put a fence 
around them; we open them up. We actually contract out to the 
private sector to run the parks, the concessionaires. We put 
roads in them. We put hotels in them.
    We put visitors serving accommodations, and part of that is 
to enjoy the incredible natural wonders, but it is also a great 
educational aspect for Americans, and it gets them out of 
doors. It is the same thing with National Forests, where we 
actually have oil and gas development and timber operations and 
other mining operations.
    It depends on where you are and what the issues, but 
conservation is essentially being a smart use of whatever it 
is.
    Mr. Broun. We could, then, have responsible development of 
natural resources, wherever they may be, and still be good 
conservationists. Is that correct?
    Mr. Farr. Yes.
    Mr. Broun. OK.
    Mr. Farr. Yes.
    Mr. Broun. Well, then, would you agree to Outer Continental 
Shelf drilling if we could guarantee that there are no oil 
spills from that operation?
    Mr. Farr. Not necessarily. That is what I think the last 
question went to. You make a proposal. What I point out is, 
where are those oil and gas deposits? We know that from our 
research, from the Mineral Management Agency, and prioritizing 
those along with onshore capacity of being able to service 
offshore rigs, and we have not done that matchup.
    Communities have zoned what they want for the future of 
their community, and sometimes just a Federal decision to come 
in and plop down an oil rig. It was not a Federal decision up 
in the cape, but those are not necessarily in balance with the 
local economy.
    I do not think you have ever been to my district, the 
Monterey Peninsula----
    Mr. Broun. I have.
    Mr. Farr.--but, you know, that area is a small community 
but one of the highest tourist communities in the United 
States, and what we learned is we sell scenery here. We sell 
coastal scenery and mountain scenery and valley scenery, and 
that is what people come back over and over again for.
    They like to see things in their natural settings, so the 
emphasis goes into local communities on how to plan and how to 
zone and how to protect and how to make sure that that scenic 
look, the quality of life, is protected in those areas, and I 
think that is the same kind of scrutiny that needs to be given 
to any kind of development.
    Mr. Broun. Are you aware, then, how far out can people see, 
actually, if they are on the coast? For instance, if there is 
an offshore rig that is 50 miles out, can they see it from the 
shoreline, from California?
    Mr. Farr. I do not know. Lois Capps ought to answer that 
question because there have been proposals that the oil and gas 
companies can hide these rigs underwater and do not have to 
have anything above water, and I do not know whether that is 
possible, but I think there is technology out there that can 
allow for safe production of oil and gas.
    My point is that, before we just go back into that 
process--we have been out of it for a long time with this 
moratorium--that we ought to look at all of the aspects on the 
table and ask a lot more questions. This is sort of a question 
of investment, is, where is the smart use of our limited 
natural resources?
    I think that that is both the scenic resources, and I think 
that that is both the scenic resources and the extraction 
resources that benefit society, and I think all of these 
arguments are just do it with the best management practices 
that are available, known to mankind and that they are done 
wisely. These lease sales are based on a lot of old data and 
old information that can be challenged today, and I think that 
is why it is so controversial.
    Mr. Broun. Well, I am a conservationist, and I agree that 
we need to have responsible development of resources, and I 
support an all-of-the-above energy policy that would help 
promote conservation and promote alternative sources. Would you 
support also an energy policy that is an all-of-the-above to go 
ahead and develop our resources that we have in a responsible 
manner but also look for alternatives and conservation, all of 
the other things, such as nuclear energy, wind, solar, tide, 
geothermal, et cetera? Would you support that kind of an energy 
policy?
    Mr. Farr. Well, I think that we have never developed that 
kind of an energy policy. That is the point of this Committee's 
role in this discussion, is that we lack that comprehensive 
commitment. We have committed to what we know how to do best, 
which is historical oil and gas development, hydro development.
    A lot of people will question whether that is the best way 
to get the end result, and, as you know, in California, which 
is the most populous state in the union, we are tearing down 
dams because we find that there is a higher economic value to a 
natural system. A lot of people live off of that natural 
system, including private sector fishermen, and they need 
healthy streams.
    So, in every instance, there are trade-offs, and I think, 
without having a national policy of what we want to develop, 
whether it is going to be nuclear or oil or solar, wind, tidal, 
whatever it may be, that we have lacked all of these new 
alternatives in the mix and given them a fair opportunity to 
compete.
    Mr. Broun. Mr. Rohrabacher?
    Mr. Rohrabacher. I will just note that Sam did not mention 
that certain groups have insisted that we tear down 
hydroelectric dams in California. You wonder why things are 
going screwball in California? I mean, we are going bankrupt. 
We cannot pay any of our bills.
    The Chairman. The gentleman's time has expired.
    Mr. Rohrabacher. That is the kind of logic----
    The Chairman. The gentleman from Maryland, Mr. Kratovil. I 
am sorry. Going in order, I skipped Mr. Costa. The gentleman 
from California, Mr. Costa.
    Mr. Costa. Thank you very much, Mr. Chairman.
    You know, in listening to the discussion here, I am 
reminded of the fact that we agree on some basic concepts: one, 
we ought to have a comprehensive energy policy. We agree on the 
fact that we generally need to figure out ways in which we 
reduce our dependency on foreign sources of energy.
    Where we, I think, get the disagreement is, how do we 
develop that comprehensive energy policy, and how do we do it 
in a way that is practical and cost-efficient that looks at the 
near term, the intermediate, and the long term? And no 
administration and no policy in Congress that I have been able 
to detect thus far has been able to develop a credible roadmap 
that uses all of the energy tools in our energy toolbox because 
we conveniently, for political or ideological reasons or 
whatever, put certain things that we do not want to put on the 
table, whether it is nuclear, whether it is expansion, in the 
near term, of Federal lands for oil and gas as a trade-off to 
take those revenues to further accelerate renewables, and it 
always becomes a zero-sum game where, instead of advancing a 
comprehensive energy policy in this country, more often than 
not, it seems to me, anyway, to become a political gamesmanship 
of ``gotcha'' as we try to deal with this political 
constituency or that.
    Do either of you two gentlemen, who I know well and who 
know the political turf battles that we have in California, 
want to explain to me how we get past that?
    Mr. Farr. Well, Jim, you and I have known each other a long 
time. We served together in the California legislature.
    Mr. Costa. Yes.
    Mr. Farr. I do not know if there is a magic way of doing 
that. Essentially, that is what politics is all about, and----
    Mr. Costa. But I am talking about the policy. You and I 
both understand the politics. I am talking about the policy. I 
mean, how do we get there from here? I think the American 
public is frustrated that we cannot seem to sit down, on a 
bipartisan basis, and develop a roadmap, using all of the 
energy tools in our energy toolbox, near term, mid term, long 
term, realizing that you have to crawl, and then you walk, and 
then you run.
    When we put a man on the moon, we did not start with the 
Apollo program; we started with the Mercury program, and then 
we started with the Gemini program, and then we advanced to a 
stage, eight years later, where we could go to the moon. I do 
not understand why we cannot be practical here.
    I think a lot of the practicality is going to require that 
we subsidize a lot of the old-fashioned energy development, and 
we have not subsidized, until recently, in the discussion, the 
alternatives and the new ideas that are on the table. That is 
what science and technology is all about.
    I think, all things being equal, and you tried to do that 
somewhat in your energy policy in California, was to allow for 
consumers to buy green-generated power, to try to use market 
forces, that did not work very well.
    I just believe that it has not been a balanced--let 
everybody in on equal terms, and then allow the marketplaces to 
decide, but it has to be equal. We have not made the laws yet 
to make it equal.
    Mr. Costa. Dana, do you want to take a try at it?
    Mr. Rohrabacher. Well, I think the activists basically 
control policy in the United States of America. I mean, 
activists do, and we have had activists who were very sincere 
people who just are stuck in the sixties, frankly. Yes, OK, we 
do not live in the sixties anymore.
    Mr. Costa. You had me until there.
    Mr. Rohrabacher. The fact is, is we have technology now 
that is better than we had back in the 1960s, and we have not 
had one new hydroelectric dam, not one nuclear power plant, not 
one new refinery in 30 years. That has meant at least a 
trillion dollars out of our economy that would have been there 
otherwise.
    People should take some serious looks at the fundamentals, 
and the fundamentals are, and I agree with Sam on a lot of 
things he is talking about, in terms of using smart technology, 
but there are some things that are being written off that are 
now smart that used to be stupid. For example, nuclear power 
did have a big problem, but, right down in San Diego, General 
Atomics, has developed a thing called a ``high-temperature, 
gas-cooled reactor'' that gives us tremendous potential in 
dealing with the waste issue, which has been one of the main 
impediments to nuclear energy.
    We have new technologies that are going to make windmills--
attachments that you can put on these windmills that will 
double the amount of electricity they generate, so they are 
becoming competitive.
    Solar energy is becoming competitive.
    What we need, I believe, is to make sure that we focus our 
resources on developing and maintaining an open-meter system so 
that anybody that puts electricity into the system is getting a 
credit for it, and maybe even paid for, by putting it in there, 
and thus you can do it from all of these various sources of 
energy. We do not need necessarily to subsidize people; just 
let them make a profit in utilizing the technology that is now 
coming online.
    I think that is the best comprehensive approach to energy 
that we could all agree on, and it would, again, make a very 
widespread area of the number of people who would be 
contributing to solve the problem from many different 
directions.
    Mr. Costa. My time has expired, but I want to thank the 
Chairman and observe, with both of my colleagues who I enjoy 
working with, that I think that the answers to the questions I 
posed to both of you still reflect our difficulty in trying to 
figure out how we develop a process to use all of the energy 
tools in our energy toolbox that is near term, mid term, and 
long term. We just cannot wish our way from Point A to Point B, 
and I think that is the frustration and why we are stuck 
without an energy policy so far.
    Let me just make a note. Sam, and you and I agree, and 
sometimes we agree to disagree, but we have removed some check 
dams and smaller dams, but, in a water-deficient state as 
California, we are not talking about removing Shasta, we are 
not talking about removing Folsom, and we are not talking about 
removing Friant Dam. We are not talking about removing any of 
these major, maybe two-million-acre-feet of water deficiency, 
in California.
    I do not want to mislead my colleagues from other states 
that somehow we have really lost our minds in the middle of a 
drought, that we are now removing all of the sources of surface 
supply water in the state. Nor are we removing what is my 
favorite dam, every time we get around this circular 
conversation, which is Hetch Hetchy, which is the primary 
source of water for the City and County of San Francisco, and 
which John Muir, the famous John Muir, who created the Sierra 
Club, had a stroke trying to save Hetch Hetchy, which he called 
the ``Little Yosemite,'' but it is now a big lake. We are not 
talking about removing that dam either.
    Mr. Rohrabacher. Some people are.
    The Chairman. The gentleman's time has expired.
    The gentleman from Texas, Mr. Gohmert.
    Mr. Gohmert. Thank you, Mr. Chairman. I appreciate both of 
you all, and I appreciate the viewpoints, and, of course, 
Texas, where I am from, we have dealt with some of these 
issues, and we have heard Mr. Danson talking about 200 million 
people in the world rely on fishing, and, therefore, we should 
not have offshore production, but when it was pointed out that, 
actually, in Texas Gulf, adding the rigs has caused fishing to 
proliferate because they see it as an artificial reef and 
actually do quite well proliferation around those areas, and it 
has actually helped fishing.
    In fact, of the 100 rigs that are taken down each year, 10 
of them are reconditioned and sunk in designated places for 
artificial reefs, and the rest of them are taken ashore. Some 
of them are reconditioned and then used again.
    I appreciate my friend, Mr. Costa, pointing out what he 
has, and I agree also with my friend, Mr. Farr, that we should 
have smart use of the oceans. There are critical habitats 
there, but man and energy production can go hand in hand, but 
what I have seen, from my district, as I have been all over 
East Texas and continue to go and talk to people, this 
transition to, like, solar power, which I think could end up 
being our best hope, and hydrogen and some of the other 
technologies are terrific, but it seems like solar may provide 
the best hope. But as I go around East Texas, the farmers tell 
me, ``You know, we looked for a Prius tractor, and we could not 
find one. We are still having to buy diesel and gasoline, and 
that ends up affecting the price of food. It affects 
everything.''
    So, as my friend, Mr. Costa, was talking about, until we 
get to that comprehensive picture--and Mr. Farr, you were 
talking about--we are shooting ourselves in the foot. Boone 
Pickens is often quoted for saying, ``We can't drill our way 
out of our problem,'' but not everybody knows, he added to 
that, ``but you do not stop drilling. You drill what you got, 
and, in the meantime, you go after all of these other 
resources.'' He is a big advocate for using what we have got.
    I have been concerned about what this Committee has done in 
the last couple of years. We have taken huge amounts of coal, 
some of the largest deposits of coal in the world, and put them 
off limits. We recently voted to put off limits the second-best 
source of nuclear material that we have. We have put off limits 
most of the Outer Continental Shelf drilling.
    We have put off limits ANWR, and we had a report that if 
the U.S. was allowed to pursue the Alaskan resources that we 
put off limits, even though it would make a tiny footprint in 
areas where nothing grows and nothing lives, it would provide 
about two million-plus jobs around the country, and that, 
within a few years, it would have added 349,000 jobs in 
California as a result of pursuing Alaskan resources.
    I do not really have a question. I think it has all been 
said but not said by everybody, but I appreciate your 
perspective, but we do need a comprehensive plan, and it just 
seems like, if we were pursuing the offshore drilling and doing 
it responsibly, I would be all for using the proceeds that the 
Federal government got from that to help fund the future 
research for the solar and the other things to let us get to 
the next generation because, otherwise, we are going to so hurt 
our economy, like my friend, Congressman Rohrabacher was 
saying, that we are so economically dependent, we do not have 
the chance.
    Thank you all for your investment in this Committee 
hearing.
    The Chairman. There being no question from the gentleman 
from Texas, the gentleman from Maryland is recognized, Mr. 
Kratovil.
    Mr. Kratovil. Thank you. That is something that I am still 
trying to get used to, as a prosecutor, all of us, with our 
statements and then rather short questions, but let me say 
this.
    Similar to Mr. Heinrich, I am not an absolutist from New 
Mexico. I would never say never to opening up additional areas 
for drilling, assuming we could do it in a way that was 
environmentally safe and assuming we weighed the risks of doing 
so versus the benefits that we get from it. But having said 
that, and Mr. Costa and I actually had a discussion of this 
outside after a vote, my question is this: In all of these 
discussions that we have, and I asked this of the last panel, 
we talk about opening up additional areas, and yet we still 
have, of the 40 million acres that are available right now, 
less than 10 of those are producing.
    It seems to me that the question that we are consistently 
debating at these panels is the Question No. 2, whether we 
should be opening up additional areas when we really have not 
answered Question 1, which is, why are we not using the other 
acres that are available?
    So, my question is, what is your perspective, both of your 
perspectives, on why that is not happening?
    Two: Do we think that there is an effective way to utilize 
those areas that are already available, and, if there is, why 
are we not doing it, and, if not, what are the things that 
prohibit us from making use of those?
    Third: Is that factor, the fact that we are not using 
those, part of your basis for the arguments that you have of 
opening up additional ones or, in your case, continuing the 
moratorium?
    Mr. Farr. I think that what is new to the whole discussion 
on this is global warming. We have kind of debated whether it 
was real or not real.
    Secretary Chu said something that really struck me, that, 
underneath the tundra is nothing but carbon, and on top and 
between the tundra is all of this bacteria that is frozen and 
that if, just like meat, if you take meat that you have had in 
your freezer and put it in your refrigerator and leave it 
there, after a few weeks, all of a sudden, you are going to see 
stuff growing on that meat. That is the bacteria that have been 
there that have been awakened by no longer being frozen and 
starting to do their job, and they could do this job on the 
carbon in the tundra in the North.
    That would be a natural release of carbon far greater than 
all of the man-made carbon releases on the planet, and it would 
be forever, and, certainly, life on this planet would be 
severely threatened.
    So, in essence, we are in a race to see whether we can stop 
global warming or hold it at a level before it really 
devastates, and we know that this carbon release is the 
problem.
    Why are we trying to spend a lot of money on figuring that 
out while, at the same time, saying, ``Well, let us go out and 
just be more dependent on carbon fuels''?
    See, I think that is the big argument, is, how do we get 
ourselves off, not just, the United States, but how do we get 
the world off, of dependence on this? You know, are we going to 
find something that is going to replace oil? I do not think so, 
but, certainly, we can cut down our dependence on it. I think 
that is the leadership role that this country has to play.
    Mr. Rohrabacher. To answer your question directly, many of 
the people who have purchased the rights to drill in these 
areas have found themselves also thwarted by other maneuvers by 
activist groups, et cetera. You guys know more about that than 
I do.
    I am on the Science Committee, but I am not on this 
Committee, and my guess is that there have been, as we have 
seen for the development of other energy resources throughout 
the country, there have been activist groups that, even though 
someone has a right to build a solar facility, for example, 
have a right to build solar facilities in the desert, you have 
activist groups right now that have prevented 190 solar 
projects from being built in the desert, and these guys make 
themselves known to the Bureau of Land Management, where they 
have their natural allies, and develop people inside the Bureau 
of Land Management, and, all of a sudden, you find roadblocks 
being placed in the way of people who have already purchased 
the fundamental right to do something.
    In terms of global warming--I am glad Sam mentioned that--I 
believe that that really is the motive of a lot of people who 
are just opposing any new development of oil or coal or gas. It 
is basically that they bought into the argument that carbon 
dioxide is going to change the climate off the planet. I would 
suggest that I know that, 15 years ago, we were told that there 
would be a big jump in the temperature of the planet. Right 
now, it has not gotten any warmer for the last eight years. If 
their predictions on that were not accurate, I am certainly not 
going to let their judgments on global warming prevent us from 
having the energy America needs to be prosperous.
    Mr. Kratovil. But in response to that, would you agree, 
then, before we are talking about opening up these additional 
areas, that we would want to address whatever those obstacles 
are that you are discussing and the acres that are available?
    Mr. Rohrabacher. You know, there is reasonable opposition, 
and then there are people who just are obstructionists because 
they are out to save the world, and they are going to do 
anything, even if it is not reasonable, unless you agree with 
every one of their tenets of what is going to happen.
    Mr. Kratovil. I know, but my point is, if you open up 
additional acres, you are still going to be having those same 
obstacles, are you not?
    Mr. Rohrabacher. You know what? I would suggest that we go 
to work on the problem of obstructionists, activists, 
obstructionists, as well as moving forward with trying to open 
up new areas for development.
    We need the energy. We are wasting hundreds of billions of 
dollars a year going overseas, sometimes to our enemies. It is 
ridiculous not to have that. Our activists apparently do not 
care about that. The activists who are putting the roadblocks 
in the way apparently do not care about that.
    Mr. Kratovil. But just a last comment on that. Again, I am 
saying that I am not someone that would automatically rule out 
opening up additional areas.
    Mr. Rohrabacher. Right.
    Mr. Kratovil. But my point is, we are having that 
discussion, and, as far as I can tell, no one has really 
answered the first question, which is, ``What are those 
obstacles? What are those problems?'' and, one by one, 
addressing them in the 40 million acres that are already 
available before we start talking about----
    Mr. Rohrabacher. I would suggest that this would be a good 
subject for a hearing of this Committee of exactly why 
different energy projects, including offshore oil projects, 
have not gone forward, and I think that you will find, in most 
cases, that there have been very well-financed activists who 
have made it their job to obstruct and to put roadblocks up. As 
I say, they are even doing that with solar energy projects in 
the middle of the desert because they are worried about the 
habitat of insects and lizards.
    The Chairman. The gentleman's time has expired.
    Mr. Rohrabacher. All right.
    The Chairman. The Chair would advise the gentleman from 
California, Mr. Rohrabacher, if he wants an answer to that, to 
attend tomorrow's hearing. We will be glad to welcome you. We 
will allow him to sit.
    Mr. Abercrombie. Mr. Chairman, are we bringing the lizards 
in tomorrow?
    [Laughter.]
    The Chairman. The Chair recognizes the gentleman from 
Nebraska, Mr. Smith.
    Mr. Smith. Thank you, Mr. Chairman and colleagues. I 
appreciate your testimony here today. I believe that, Mr. Farr, 
I first met you at your property at a wedding along the coast, 
and I certainly think that it is a beautiful area, and, quite 
actually, I would be interested in preserving the beauty of 
that territory as well.
    I hope that we can arrive at an agreement, with this entire 
issue, that we can satisfy, at least a little bit, both sides.
    Now, I have been interested to learn about New Zealand and 
its development of hydropower. I believe, if my numbers are 
accurate, that 80 percent of New Zealand's electricity comes 
from hydropower, including, I would say, diverse hydropower, 
which would include harnessing tidal pressures.
    If there is a problem with the apparatus of a drilling 
platform for petroleum, whether it is above water or below 
water or in between, you name it, wouldn't we also have a 
problem, then, with the apparatus of harnessing the tidal 
pressures that would accomplish that as well? Can you speak to 
that?
    Mr. Farr. My whole point of my testimony, and I think that 
the hearings you are having in this Committee, is that we do 
not have a comprehensive energy policy in this country. You are 
the Resources Committee. You are responsible not only for the 
wise use of resources but also for the protection and health of 
all of the resources, and I do not think, without that, we can 
be smart about how we want to then harness energy and the risks 
involved.
    There is a macro argument, which I think Mr. Costa was 
bringing into, is the macro argument about developing that 
policy, and then there is the micro argument about each one of 
those developments, whether it is oil and gas, nuclear or wind 
or solar, whatever the controversy being, where and place, and 
I guess that is what leads me to the fact that we have to be 
smarter about where we want to do this and start developing an 
opportunity to do it smartly.
    I am not trying to endorse or suggest that one is better 
than the other. I just think that we need some time. We need a 
moratorium on just going over offshore well drilling.
    I am very protective of the oceans. They are sick. 
Everybody will come in here and tell you, the oceans are dying. 
If the oceans die, we die.
    Mr. Smith. Right. But wouldn't a moratorium impede our 
ability to have a comprehensive policy?
    Mr. Farr. No. It is a moratorium. It is not permanent. It 
gives you an ability to breathe, an ability to look at all of 
these other options.
    Mr. Smith. But you are saying that would not remove OCS 
from the table.
    Mr. Farr. Oh, no. Moratorium, it is temporary.
    Mr. Smith. But doesn't the permitting process that would 
accompany----
    Mr. Farr. The ban is permanent. Excuse me?
    Mr. Smith. But doesn't the permitting process effectively 
engage a moratorium?
    Mr. Farr. A moratorium stops the permitting process.
    Mr. Smith. Right. So, isn't the permitting process rather 
rigorous, as it stands right now, or is it not rigorous enough?
    Mr. Farr. I do not know. I have been through those lease/
sale arguments on our coastline and got very involved in it, 
and, frankly, every time, regardless of administration, we have 
been able to convince the administration that it was high risk/
low gain, and they took it off the lease/sale charts, and then 
we created a National Marine Sanctuary, and, in that, 
statutorily prohibited oil and gas development.
    So, my backyard is protected, and I am here because I think 
that, as Congress, we need to commit ourselves to being 
responsible for the oceans.
    Mr. Smith. Well, I appreciate that. When we look at the 
comprehensive approach that we absolutely must engage, I hope 
that we can keep everything on the table. That is what I would 
like to do. Mr. Rohrabacher?
    Mr. Rohrabacher. Well, again, when we are talking about 
offshore drilling, which is, I guess, the subject that we are 
supposed to be focusing on today, it has nothing to do with the 
health of the ocean.
    I am a scuba diver. I am a surfer. I am in the water a lot, 
and I would challenge Sam to a surfing contest right now, but I 
think it would be unfair. But the fact is that this has nothing 
to do with the health of the ocean. It has everything to do 
with the view. The people up on Nantucket did not want their 
view disturbed by windmills, for Pete's sakes.
    The Chairman. Have you had your triplets on surfboards as 
well?
    Mr. Rohrabacher. Actually, I have had my kids out on boogie 
boards, at this point.
    The Chairman. Reclaiming my time.
    Mr. Rohrabacher. They will be surfers soon.
    And, again, the view is important, and I think maybe we can 
do some things and require some things that would protect the 
view for those rigs that will be within sight of the coast. In 
Long Beach, we have facades on top of offshore oil wells that 
are very beautiful, and people like them. Also, wells can be 
underwater. But it has nothing to do with the health of the 
ocean.
    Mr. Smith. Right. Now, Mr. Farr, did you say earlier that 
you would be agreeable to, like, a zoning type of approach?
    Mr. Farr. No. I do not want to get that controversial, at 
this point because that is debatable, but it seems to me that 
without comprehensive policy, and, look, I have another bill 
coming before this Committee, and it does not get into the 
micro details; it sets up sort of the governance structure so 
that all of these things can come to bear, so that we have one-
stop discussions.
    Right now, we have just conflicts of the sea, where the 
Navy and Interior and Commerce and NOAA, they are different 
aspects of governance, and it is very complicated and, 
actually, not very smart.
    Mr. Costa. Would the gentleman yield for a moment?
    Mr. Smith. I do not know if I have any time, but, with the 
Chairman's permission, I would.
    The Chairman. The gentleman's time has expired. The Chair 
will recognize the gentlelady from California, Mrs. Capps.
    Mrs. Capps. Thank you, Mr. Chairman. I actually want to 
thank you for a series of hearings, this being the second one. 
Are you suggesting that I yield at the moment, because I will 
have a pretty packed five minutes?
    The Chairman. It is your time.

STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN CONGRESS FROM 
                    THE STATE OF CALIFORNIA

    Mrs. Capps. Thank you. I would like to use it, if I could. 
I hope there is more time later--a series of hearings on 
offshore drilling, and thanks to my neighbor colleague, Mr. 
Farr, acknowledging that I am the sole Member of this 
Committee, I believe, who represents a congressional district 
impacted by offshore and gas development.
    These are very useful hearings, and maybe yours is as well, 
Mr. Rohrabacher, but I appreciate the fact that, though you 
represent Huntington Beach, you still enjoy coming up to Santa 
Barbara once in a while to surf. Let that be part of the record 
as well.
    Today's testimony on the state perspective, I believe, is 
really going to help guide us in drafting our legislation, but 
I do want to pick up on a couple of themes that came up in our 
last hearing, and I also want to say thank you to our 
colleagues. Usually, a Member of Congress comes to testify, 
gives five minutes' worth, and gets up and leaves, and you are 
really spending an inordinate amount of time, and I think it is 
very valuable that we have this opportunity to share, 
particularly, I guess, as a Californian as well, in between the 
two districts that are represented here on the platform.
    Mr. Broun mentioned, and it has come up since then, about 
the distance from shore and the view. I submit that the view is 
not the issue. Routine toxic discharges from rigs is the issue, 
or, at least, one of the basic ones, and these spills impact 
our ecosystems and our fisheries and all that we value about 
our oceans.
    For example, just last week, Federal and state officials 
investigated an oil spill at Exxon-Mobil's platform, 
``Harmony,'' four miles from the shoreline in my district. This 
spill stretched for about a mile, but it was from lubricating 
oil for the platform and not oil pumped from the well, but, all 
the same, it is a reminder to all of us that this business of 
drilling is dirty, and it is often a very dangerous business. 
These spills happen regularly. Thankfully, our state's Office 
of Emergency Services was on hand to deal with this spill.
    One other topic came up again today that was addressed, but 
it was at the last part of the hearing, the last time we met, 
and it has to do with natural seeps. The anecdotal evidence was 
submitted today. It was submitted before.
    I happen to be the representative of the constituent whose 
organization, ``Save Our Seeps,'' is promoting the notion that 
offshore drilling reduces the seeps because it is extracting 
the oil another way, and, actually, the whole thesis is based 
on a study done by a person from U.C.-Santa Barbara who, 
himself, submitted a letter, which I submitted to the 
testimony, disassociating himself from that movement because he 
states that the evidence is clearly not there, and, in fact, 
that it is impossible to distinguish the tar off your feet, 
which is the anecdotal evidence, as to where it comes from, 
that there is no way of determining that it is from a natural 
seep, whatever that is, or from a platform.
    In fact, the anecdotal evidence seems to be that the seeps 
are still there, but the offshore drilling apparently has not 
made a difference in all of these years that that has been 
happening, and I would suggest that, before this becomes a 
reason for continuing drilling, we ought to have a lot more 
studies of that fact.
    But I want to, rather, pivot to the future and the real 
basis for what these hearings are intended to do, and I want to 
associate myself with the remarks that are commending Secretary 
of the Interior Salazar for delaying the schedule for 
implementing the five-year plan but wanting to use this time to 
develop a comprehensive energy policy.
    While we are meeting here, and that is the reason I was 
late, there is another hearing going on in another committee 
having to do with efficiency in energy use as it relates to 
climate change. These are huge topics, and it is very 
worthwhile that we look at offshore oil drilling as once piece 
of what now we need to see as a major energy policy, and the 
truth is that environmental consequences are just one reason to 
oppose offshore drilling, and, in fact, we really do need, for 
a variety of reasons, many of which have been emphasized here 
today, we need to shift away from using fossil fuels. That has 
been one of our major sources of energy, and they are not going 
to be sustainable for the future and that that is one of the 
major reasons we are involved in this discussion, and that is 
why I commend the Secretary.
    But I also have to give a lot of credit to my neighbor, Sam 
Farr, for being a pioneer, really, in ``Oceans 21'' and 
acknowledging the fact that the two studies that have been 
conducted are only further evidence of the fact that we really 
desperately need a comprehensive oceans policy as well.
    In a way, they need to sit side by side, the oceans policy 
and then our energy policy, and they are directly related, one 
to the other, because until we understand more of what the 
ocean means to our very survival and also to our way of life, 
then we will not really understand how the pieces of how we 
want to deal with energy relate to that overall picture.
    Now, I want to ask you a particular question, Sam. We have 
been hearing a lot about oil drilling generating revenue for 
coastal communities. The fact is that these communities would 
likely see, is it not true, a fraction of the money that 
companies promise them, and, at the end of the day, we have to 
live with the projects for decades? The whole leasing apparatus 
that MMS conducts is based on studies that have been done that 
are a guesstimate, really, at best, of what is going to come to 
live with.
    A lot of the numbers are speculative, and many of them are 
all over the map, and if these projects are not successful, and 
we are living with some of those consequences, too, communities 
do not get any money, and they do live with the rig and the 
platform for years and years to come. Maybe you would like to 
comment on that piece of it, but also--the red light is already 
on--I hope you have been able, Mr. Farr, to give an overview of 
why it is that we need an Oceans 21 policy.
    Mr. Farr. Well, we need a comprehensive policy, and, in 
that policy, we need a trust fund that we need to have some 
money for, and that is the bill. One source could be this OCS 
fund, of which, I pointed out, 74 percent just goes into the 
general fund, and I think this Committee ought to be concerned 
about that.
    Look, California is certainly not the leading, but it is up 
there in the major oil-producing states--we do not think of 
California so much as a big oil state, but it is. It also, 
because it is a coastal state, is a refining state, so oil 
comes from other places into California, and that is the 
shipping. We actually have reduced the amount of shipping 
because we got bigger ships, and a lot of our coastal-dependent 
energy development has switched to natural gas, which is 
shipped by pipeline and not by sea.
    But of all the oil and gas produced in California and the 
revenue thereon, only 10 percent comes from offshore, and I 
think it is important that the state, because OCS is more of a 
Federal decision than a state decision, but California, as a 
state, has taken a position that they have a moratorium on oil 
and gas development in their state waters and have strongly 
supported moratoriums here at the Federal level.
    I think that, again, being a state that is in the oil 
business, I think they are being away ahead of the Federal 
government in deciding to look before we leap, to look at the 
alternatives. California has developed hydropower, nuclear 
power, solar power, wind power, biomass power, geothermal power 
with our volcanic, in Northern California. We are probably more 
diversified in power production than any state in the union, 
and we are looking for even more, essentially, these ocean 
currents and things like that.
    Here is the point of the whole thing: One, to get a 
comprehensive policy about how we manage the oceans, which goes 
far beyond just the energy issue, and, in the meantime, as this 
hearing has been asking, is, do we reinstate the moratorium? 
And I think the answer is yes.
    Mrs. Capps. Thank you.
    [The prepared statement of Mrs. Capps follows:]

  Statement of The Honorable Lois Capps, a Representative in Congress 
                      from the State of California

    Thank you, Mr. Chairman.
    I'm pleased our second hearing on offshore oil and gas drilling 
before this Committee will focus on coastal state perspectives.
    As one of six states producing oil and gas off their coasts, my 
home state of California has done its part to provide energy to the 
nation.
    The 23 oil and gas platforms found off my congressional district, 
for example, have produced more than 2 billion barrels of oil over the 
years.
    But oil development off our coast has long been a thorny 
proposition--beginning in 1908 with the Santa Barbara Chamber of 
Commerce's opposition to the construction of an oil pipeline on Stearns 
Wharf.
    And as was discussed at our last hearing--the devastation from 
the1969 Santa Barbara oil blowout was so great it galvanized Central 
Coast residents; indeed it galvanized virtually the whole state, 
against more offshore drilling.
    Clearly, Californians were outraged by the damage to the 
environment and wildlife.
    But we also realized that another blowout would wreak havoc on our 
economy as well, especially tourism, fishing, and the industries that 
rely on them.
    So Californians became committed to ensuring it wouldn't happen 
again.
    Mr. Chairman, a little history might be in order here:
    Since 1969, 24 city and county governments, including both Santa 
Barbara and San Luis Obispo counties, have passed anti-oil measures.
    These laws usually require voter approval before any new onshore 
facilities to support offshore drilling could be built or they ban them 
outright.
    In 1994, the California Legislature passed, and then-Republican 
Governor Pete Wilson signed into law, a permanent ban on new offshore 
oil leasing in state waters.
    Every year since 1999, the State Assembly has adopted a resolution 
requesting that the Federal Government enact a permanent ban on 
offshore drilling off the California coast.
    I've introduced a bill every Congress to enact such a ban. And I 
have been joined by a majority of my California colleagues in 
supporting this legislation.
    Our Governor has stood his ground on offshore drilling, too, 
stating recently ``I am unwilling to put our environment at risk for 
the sake of new energy exploration on California's coast.''
    In 2006 Governor Schwarzenegger signed the ``West Coast Governors' 
Agreement on Ocean Health'' further representing his commitment to 
reduce offshore energy impacts.
    These actions have been met with widespread public acclaim.
    Most recently, 60% of the citizen comments from California opposed 
the Bush Administration's new proposed 5 year oil and gas leasing 
program.
    The public knows ruining all of our coastal areas in an effort to 
drill our way to ``energy independence'' isn't going to work.
    And that's why coastal communities continue to speak--in strong 
bipartisan voices--to protect their sensitive coastal resources and 
productive coastal economies.
    Mr. Chairman, I am dedicated to working with you and my colleagues 
on this Committee to develop positive solutions to our energy needs.
    It's time to commit to alternative energy sources instead of 
increasing our dependence on fossil fuels to help meet the energy needs 
of the nation.
    Thank you again for your leadership in calling this hearing.
                                 ______
                                 
    The Chairman. The gentlelady's time has expired. The 
gentlelady from Wyoming, Mrs. Lummis.
    Mrs. Lummis. Thank you, Mr. Chairman. I join Representative 
Capps in complimenting you for being here today and staying and 
involving yourselves in the discussion. I, further, want to 
compliment Representative Farr for his idea about creating a 
trust fund.
    Wyoming has a Permanent Mineral Trust Fund. We created it 
in 1974, so we could take our nonrenewable resource, oil and 
gas and coal, and take the revenue off that, or a portion of 
the revenue off that, and convert it into a permanent resource, 
which is cash, interest income off state investments.
    As state treasurer, I managed Wyoming's Permanent Mineral 
Trust Fund and the diversification of the permanent fund 
revenues into an income stream that, last year, was the largest 
source of income for the state's general fund and, in normal 
price of oil and gas and coal years, is the second-largest 
source of income for the state's general fund.
    I would encourage you to look at the Wyoming model, the 
Alaska model, the Alberta model, and, particularly, the Norway 
model, as great examples of taking these nonrenewable 
resources--oil, gas, coal, and other hydrocarbons--and 
converting them to this renewable resource.
    In fact, Norway Fund looked at the price of oil from the 
year 1900 to the year 2000, and if you had left it in the 
ground versus invested it over time, the returns on the 
investment of producing it and converting it into income that 
can be used, of course, over and over--it regenerates itself by 
the country of Norway--created an enormous plus for the people 
who live there.
    The fact that you want to use this income off this fund, 
and I would encourage you to look at it as a permanent fund 
with a permanent corpus that is inviolate, the interest income 
of which could be used to conserve the oceans, or whatever 
renewable project you have in mind, is a great way to solve a 
number of problems--the income problem, having a constant 
source of revenue to do it--and also to be part of the global 
sovereign wealth cast of characters. You know, the United 
States is the largest debtor nation in the world and does not 
itself have a sovereign wealth fund, so I am a big advocate of 
your idea.
    I also have a question for Representative Rohrabacher. I 
chose to schedule my mid-life crisis and went to a surfing 
school off the coast of your beautiful state and learned, at 
that time, that when it rained during the night, the surfing 
school was suspended the next morning because of the runoff 
into the ocean. That became a hazard to those of us who were 
trying to learn how to surf, particularly me because I was 
swallowing a lot more of the ocean water.
    Mr. Rohrabacher. What city were you in?
    Mrs. Lummis. I was in LaJolla.
    Mr. Rohrabacher. LaJolla?
    Mrs. Lummis. Yes.
    Mr. Rohrabacher. All right.
    Mrs. Lummis. ``Surf Divas'' is the----
    Mr. Rohrabacher. There is a fine break in LaJolla called 
``Tourmaline,'' and I have surfed there many times.
    Mrs. Lummis. Well, it was magnificent. As I said, I did 
swallow enough of the water to probably absorb the effects of 
global warming in the ocean, but it was wonderful.
    Mr. Rohrabacher. You are absolutely right. After it rains, 
there is a major urban runoff problem in California and 
throughout the United States. Whenever it rains, all of the 
bird droppings and dog droppings and all of the other stuff 
that accumulates in an arid temperature is washed right into 
the ocean, and we surfers know very well that we should not be 
in the ocean the next day after a rain, sometimes two days 
after a rain.
    Mrs. Lummis. Yes.
    Mr. Rohrabacher. And I would agree with Sam that we need to 
tackle that. I think resources from offshore oil drilling 
dedicated so that local communities can actually confront that 
challenge would be a very good use for the resources. I would 
say, however, the admonition is, that should not be controlled 
at the national level at some trust.
    If, in Wyoming, we decided that all of the oil revenue from 
around the United States would be in a national trust rather 
than a Wyoming trust, you would have been left out of the 
decision-making process of what to do with that money in 
Wyoming.
    We should get this money down to the local area, and, as 
you are pointing out, there are some very important needs to 
focus on in the coastal areas.
    Mr. Costa. Will the gentlewoman yield for a moment?
    Mrs. Lummis. Indeed.
    Mr. Costa. Just to underline the point, and I made it last 
week----
    Mr. Rohrabacher. Yes.
    Mr. Costa.--and it is what frustrates me, in part, about 
this conversation, the National Academy of Sciences, in a study 
done in 2002, the most recent, comprehensive examination, is 
the greatest source of pollution that impacts the oceans that 
Sam cares about, that Dana cares about, that we all care about, 
is nonpoint-source pollution; it is a result of 85 percent of 
the pollution of the oceans around the world.
    We had a billion and a half people living on this planet 
200 years ago. Today, we have six billion people living on it, 
and lots of people live around the oceans of the world.
    In California, Sam knows, we have tried, and water bonds 
that I have carried provided funding for point- and nonpoint-
source pollution. You were the strongest advocate to make sure 
that there was a dedicated fund for the nonpoint-source 
pollutions.
    We are focused here on what is, at best, five percent or 10 
percent of the problem, while 85 percent of the degradation of 
the oceans is a result of nonpoint-source pollution and 
overfishing.
    Mr. Rohrabacher. I would suggest not even that. I would 
suggest that getting our oil from offshore oil rigs is a much 
cleaner and much safer, environmentally, way of getting oil 
than by tanker.
    Lois Capps said, in 1969, there was a big oil spill off 
Santa Barbara. We all remember that. That was 1969. The fact 
is, all of the major oil spills since 1969 have been from 
tankers. The Exxon VALDEZ accident up in Alaska, which was a 
catastrophe; that ship was headed for my district. It was 
headed for Long Beach. Now, the fact is, it could have had an 
accident closer to my beaches, and that is wrong, and the fact 
is, we have had offshore drilling for 30 years with no 
significant problems.
    Now, yes, there is some oil that gets spilled in the water 
when they are greasing their equipment. OK. Let us try to 
regulate that, control that. I bet you that company is fined 
for what they did, but I will tell you, the risk of a major oil 
spill that is brought on us by a tanker is a so much greater 
threat to our environment than having some oil dripping off the 
rig as you are trying to grease the machinery on the rig.
    With that said, I agree with you, what you are saying, but 
I think that, even in that five percent-area, it is better to 
have offshore oil than to bring that oil in by tanker, which is 
what happens when we do not develop our offshore oil resources.
    The Chairman. The gentlelady's time has expired.
    Mrs. Lummis. I applaud the discussion, and I thank you, Mr. 
Chairman.
    The Chairman. The gentleman from Hawaii is recognized, Mr. 
Abercrombie.
    Mr. Abercrombie. Thank you, Mr. Chairman.
    I want to follow up, Mrs. Lummis, on your observations. As 
a new Member, I commend to you from last year what we call a 
``nonpartisan bill'' here, H.R. 6709, ``The National 
Conservation, Environment, and Energy Independence Act,'' that 
we put together, a group of Members--no lobbyists, no staff--
just to prove, I suppose, that Members are not total dolts.
    It goes to precisely what you are talking about here: Can 
we use the existing carbon-based resources that we have as a 
bridge to an alternative-energy future by subsuming the 
royalties and the payments and the fees associated with it to 
invest in renewable energy, et cetera?
    Mr. Bishop worked with us on that, Mr. Costa, and our much-
lamented retired friend from Pennsylvania, John Peterson, a 
real genuine loss to this body, who was instrumental in putting 
us all together--in fact, alerting us all to this in a very, 
very positive and productive way--and we intend to carry 
through with that and invite, obviously, Mr. Farr and Mr. 
Rohrabacher to join with us to try and do the same thing this 
year.
    We are going to revise it. I know that Senator Reid and 
others are now proposing to put together a National Energy Grid 
and to modernize that, and this will become part of the bill.
    Mr. Rahall has been very, very sympathetic and empathetic 
to this process of trying to put together something. In fact, 
he just put out an editorial today which was sufficiently 
ambiguous to encourage me, so I am going to proceed further 
with that.
    I would welcome your participation in that as well. The 
whole idea, I think, of the offset if very, very important.
    Mr. Chairman, I have really no questions for the two 
witnesses, other than to put on the record that we intend to 
move forward with this. We are working on it right now, the 
staff, so anybody who is listening now, if you want to 
participate in this, get in touch with our staffs, Mr. Costa, 
myself, and Mr. Murphy in Pennsylvania, and others. We will be 
putting together a group.
    We consciously submitted it with three or four Republican 
and Democratic sponsors from the beginning, and then I think we 
had a list of about 20 Republicans and 20 Democrats, and we 
just cut it off arbitrarily, not capriciously, I assure you, 
but cut it off, at that point, just to introduce it to show 
that we had no intention of letting this devolve into a 
partisan rhetorical contest, but, rather, could we deal with 
offshore and onshore leasing of resources--natural gas was the 
impetus to all of this--could we get at the natural gas 
resources?
    We think it is more important now than ever to be able to 
do that, precisely because of the price of oil dropping. We 
want to get past this spiking and dipping of carbon-based 
resources to be able to do this.
    One last thing, Mr. Chairman. I met with the counsel 
general of Norway in Hawaii just recently, somewhat dumbfounded 
that he would have a particular interest in us, but it is 
because Norway is in the advance of many other places in the 
world, in terms of its environmental consciousness, as embodied 
in law and legislation, and its understanding of how to apply 
the most modern technological means to ensure safety with 
regard to the exploration and extraction of carbon-based 
resources, and he saw Hawaii as a template, as a demonstration 
place, for alternative energy resources, so we are going to be 
working together on that.
    I do believe this is not just a national question for us 
but an international question as well, particularly in light of 
global warming and what that might do to the oceans. Thank you, 
Mr. Chairman.
    The Chairman. The Chair will respond to the gentleman from 
Hawaii. If he thinks my article was ambiguous, it is in order 
to entice him to read it a second, third, and fourth time.
    Mr. Abercrombie. My thoughts exactly.
    The Chairman. The gentleman from Louisiana, Mr. Fleming, is 
recognized.
    Mr. Fleming. Thank you, Mr. Chairman, and also thank you to 
the gentlemen, our witnesses today, for their hard work.
    First of all, before I get to my question, I want to 
respond to a comment from my colleague, Mrs. Capps, and that is 
from this paper, Derek Quigley, et al., which is an 
environmentalist researcher, and, just very briefly, part of 
the conclusion.
    It says: ``A spacial coincidence between offshore oil 
production at Platform Holly and the observed decrease in 
seepage around Holly are probably related and attributable to 
the impact of oil production on reservoir pressure.'' This goes 
back to comments made by Mr. Rohrabacher. ``Oil production from 
the Monterey formation oil and gas reservoirs caused subsequent 
declines in reservoir pressure, thus removing the primary 
driving mechanism of the seepage. This finding implies that 
worldwide oil production may lead to declines in natural 
emissions of hydrocarbons on a global scale.''
    I think that is a very powerful conclusion, Mr. Chairman, 
but let me get to my question.
    I want to get to the end-game question here on a lot of 
this. I have heard testimony--this is our second set of 
testimony--that addresses this issue about offshore drilling, 
and when we are able to show things like, well, there is much 
less oil spillage. We have gone far beyond that. We have the 
technology that is much better today.
    Then somehow the argument turns to, well, it is all about 
the hydrocarbons, the CO2 that is in the air.
    Then when we talk about, well, alternative forms of energy, 
we get into windmill, but then we hear Ted Danson, who says he 
does not want it in his backyard.
    We talk about solar, and we hear about, I guess, lizards 
and bugs. They do not like that.
    Nobody seems to want nuclear these days. So, my question 
is, is the end game, from an environmental standpoint, and, 
trust me, I believe in being good stewards with our 
environment--I am not at all promoting anything other than 
that, but is the end game that we return to the Stone Age? Is 
the end game that we go to horse and buggy?
    I sort of picture in my mind movie stars coming to the Emmy 
Awards or the Academy Awards in chariots instead of limousines.
    So, my question for both of our witnesses today is, this 
seems to be a very sinuous, and sometimes circuitous, argument, 
that as soon as we begin to trap it down to one or two items, 
somehow it is a moving target, and we are going to something 
else.
    The question is, really, what is the end game in all of 
this discussion?
    Mr. Farr. I do not think we have an end game because we do 
not have a policy, and so what happens, if you just sort of 
same old, same old, you are going to end up, I think, causing--
you may have an end of lots of things.
    Look, Mr. Rohrabacher and others have talked about the fact 
that there are permitting problems with some things, but let us 
look at the record. California has probably more solar houses 
than anyplace in the world, more use of reclaimed water for 
reclamation for agriculture, and my own district has the 
largest reclaimed agriculture use of water in the United 
States.
    It is these alternatives that have come along that are 
smart and are better, and I think that is what we are asking 
for in this. Let us give us time to be smarter about the end 
game, and not all of the alternatives are given an equal 
opportunity to compete.
    Developing resources are also wanting to be dealt with 
fairly; that is, if there are subsidiary, or if there is tax 
policy, they want to be treated equally so that they can 
compete equally, and if you can compete equally, then the 
market can determine price, but if your competitor has all 
kinds of advantages that you do not have, then you cannot 
compete fairly, and the common business practice is a level 
playing field.
    I think what the discussion here is, what is it going to 
take for the United States of America to develop a level 
playing field for all kinds of fascinating ideas that can 
produce energy? And I do not think there is ever going to be 
one. I think it is going to be all of these.
    I think we are going to continue to drill for oil and gas 
in the United States, but we have to have an awful lot of other 
opportunities because of just the discussion about distribution 
networks. We spent a lot of money on the stimulus to make sure 
they work. You can produce the energy out in the middle of 
South Dakota, but how do you get it from the wind farms there 
to places that use it?
    The moratorium is a time-out, and that is what this 
discussion is about.
    Mr. Rohrabacher. Sam and I, you know, look, we both want a 
clean environment, and we both are concerned about the health 
of our people, and water reclamation in California is something 
I have been a long supporter of.
    In Orange County, we have a major, cutting-edge, water-
reclamation project that I have been very honored to support 
over the years, but let me just note that the standard of 
living that we have in California and elsewhere, we are 
coasting on things that were done years ago.
    There have been no hydroelectric dams built in California, 
or anywhere else in the United States, for 30 years. Yes, we do 
have people in California that are tearing down hydroelectric 
dams, even though they are smaller, but they are also opposing 
building new hydroelectric dams, which would take care of our 
people's needs.
    We have not had any new nuclear powerplants built in this 
country for 30 years. We have not had any new refineries built 
for 30 years. Yes, we have had a national policy, all right. 
The national policy has been not to develop our energy 
resources, and we have had activists with very high-sounding, 
you know, goals and rhetoric, but the fact is, that rhetoric 
has led us to a situation where billions, hundreds of billions 
of dollars, have been sent overseas now to buy energy that we 
could have produced at home.
    I agree with Sam that we should be developing these new 
energy resources. I think we have come to the point now, as I 
say, where solar will be competitive. That is why I think that 
the national policy should be an open-meter system. If we are 
going to spend money, let us subsidize an open-meter system so 
that anybody putting energy into that grid will get credit for 
it, and it is going to require us to subsidize it to do that 
because, right now, people are paying money to get into the 
grid and take the energy out. We need this to be give and take 
with a national grid system, and, by doing that, we will open 
up the possibilities for solar and for wind.
    By the way, there is a fellow in my district who has 
developed a paint to paint on houses [off microphone] and, in 
fact, we turned that off, and 20 and 30 years ago, offshore oil 
development and all of these other sources, we are paying a bad 
price for that now. Our economy is suffering, our people are 
suffering, and I think it has a lot to do with our negative 
energy policy for the last 30 years.
    The Chairman. The gentleman's time has expired. The 
gentleman from Washington, Mr. Inslee.
    Mr. Inslee. Thank you. I just want to make a couple of 
points.
    First off, I want to applaud the great State of California. 
There are actually some great things they have done. I know 
Congressman Rohrabacher is proud of his state, but I want to 
express some admiration of what California has done in energy.
    While the rest of the country has increased its per capita 
usage of electricity by 40 percent over the last 20 years, 
California has kept it flat, on a per-capita basis, and that is 
because, instead of spending more money on some of the very 
expensive generating capacity, it has decided to spend less 
money on efficiency, and it has been very, very effective. So, 
we want to laud California for its leadership in that regard.
    The second point I want to make: When it comes to offshore 
drilling, there is a lot of discussion about spilling and the 
possibilities of spillage, and I want to make the point that 
there is a 100-percent certainty of oil spillage on every 
single offshore oil drilling that has ever been drilled, or 
will ever be drilled, and the reason that every single, and I 
hope I am scientifically accurate on this, but I believe it is 
true, every single carbon atom that comes out of those wells 
ends back in the ocean or on land.
    When we burn the oil coming out of these offshore wells, it 
goes into the atmosphere's carbon dioxide. It lingers in the 
atmosphere for sometimes in a hundred years, but it eventually 
comes back down to the ground and goes into solution into the 
ocean, which is now acidifying the ocean.
    I just want to make that point because when we adopt our 
national policy, we ought to adopt it with the knowledge that 
100 percent of the pollution, or potential pollution, that 
comes out of wells ends up back in the ocean, or, at least, 70 
percent of it because 70 percent of the world's surface is 
oceans. Right now, the oceans are becoming acidified. They are 
now 30 percent more acidic than they were in pre-industrial 
times, and they are becoming more acidic three to five times 
faster than the scientists thought just a few years ago. 
Research off Tatoosh Island, where I live in Washington, shows 
horrendous acidification going on.
    I just want to make that point that when we decide what to 
do in offshore drilling, we should not blind ourselves to the 
fact that every single offshore oil drill ends up with a spill 
into the ocean via the atmosphere, and I just want to make 
those comments, and either one of my colleagues would be happy 
to hear your comments about that.
    Mr. Farr. Mr. Chairman, is Mr. Inslee your last 
questioning?
    The Chairman. On the majority. There are three left on the 
minority side, unless the panel would like to stay for a second 
round of questions.
    Mr. Farr. I think the second panel is going to be better 
than the first.
    The big picture here: When I was on this Committee, what I 
was awed about is that you have the responsibility for natural 
resources in the United States of America, and the awesome 
responsibility of that is that you have created, by recognizing 
that certain areas require certain kinds of management, and out 
of that create a National Park System. You deal with the 
National Forest Service, even though it is in the Agriculture 
Committee, but a lot of the policies come out of this 
Committee.
    You determine that certain resources in America need to be 
labeled as rivers that are wild and rivers that are scenic. You 
have created this ability to look at land onshore and think 
about how to manage it. The largest resource in your 
jurisdiction is the ocean, and nobody has ever done that. 
Nobody has ever looked at the ocean and said, ``Hey, why do not 
we create these kinds of management policies?''
    Your hearing today is about whether you ought to continue 
drilling in the ocean. The ocean is sick. Every witness up here 
will tell you that. For those of us that are coastal-dependent 
economies, that means that the food we take out of the ocean is 
at risk and that other local economies are at risk, and all we 
are asking is just put a moratorium on more oil and gas 
drilling until we get this right, until the Committee has been 
able to use its jurisdiction as a responsible resource 
management to look at the big picture of the oceans.
    So, in answer to your question, we get off target in 
arguing nuclear, oil, this, that, wind, and all of these other 
things. It is really about the jurisdiction and responsibility 
of that jurisdiction and leadership, and I applaud you on 
having these hearings, and I applaud you, hopefully, for having 
the hearing on my bill and passing it, which many of you are 
co-sponsors, because that kind of leads us in the direction of 
being able to answer, what is America and the United States of 
America going to do about addressing the biggest resource of 
all, its ocean resource?
    Mr. Rohrabacher. I would hope that people also see that my 
friend, Sam, has pitched his bill. I hope you could all co-
sponsor my bill, which directs the Bureau of Land Management to 
facilitate not only the granting of permits to actually start 
installing solar projects out in the desert. There have been 
190 of these solar projects that have been held up by 
bureaucratic roadblocks that you could all sign under my bill 
to help create those solar projects.
    The argument that we have just heard from our colleague, 
not from Sam, but our friend here, but let me just note that 
that argument that any oil is going to get back into the ocean; 
that is not just offshore oil; that is all oil. So, you would 
have to oppose any development of any new oil resources 
anywhere in the United States, which is under our jurisdiction.
    I would have to suggest that there is along argument as to 
whether what the effect of CO2 is all about and 
whether or not it causes global climate change, et cetera, that 
could go on for hours on that hearing. There are many notable 
scientists who disagree with that proposition that you just 
outlined.
    If you will just indulge me on one thing, before I became a 
congressman, I was a journalist, and I guess one of the 
greatest slogans I was able to use when I first ran for office 
was, ``Vote for Dana. At least, he is not a lawyer.'' But, as a 
journalist, I got to meet all kinds of people, and I covered 
all kinds of events in Los Angeles. I was a reporter down 
there, and I remember I was called out to interview Jacques 
Cousteau, who happened to have been one of my heroes. Jacques 
Cousteau was a hero of mine, and because I am a scuba diver, I 
am a man of the ocean.
    I went there to hear him at UCLA, and he was talking to 
some students, and he was going on about how the oceans are 
dying: ``Within 10 years, all of the oceans will be dead.'' 
Now, this is 1973. OK? ``The oceans will be dead.'' I kind of 
felt, even then, that maybe we could try to find something 
positive we could focus on rather than to focus on the 
negative.
    When I went up to him after his meeting with the students. 
I told him I was a reporter, and I would like to ask a few 
questions. I said, ``Isn't it possible that we are going to be 
able, in the future, to harness the oceans for farming and 
other things like that that would be beneficial to mankind?'' 
and he got right into my face--I will never forget it because 
there was a bunch of students watching--and he goes, right in 
my face, he goes, ``Didn't you hear me? The oceans, 10 years 
from now, will be dead, black goo.'' I will never forget that, 
``black goo.''
    Now, that was 10 years ago, and I was contemplating that 
about two weeks ago when I was on my surfboard, and I sat out 
there and watched the porpoises come by and fish jumping out of 
the water and the pelicans jumping into water right next to me.
    Now, I will tell you something: The oceans are not black 
goo, and Jacques Cousteau is not around with us anymore, but 
there are a lot of people, even with the stature of Jacques 
Cousteau, who overstate challenges. Maybe they do it in order 
to try to motivate us to act in a certain way that is positive, 
but they create a false impression that could lead us to bad 
policies that would affect us badly in the long run.
    Mr. Farr. And we had a moratorium that entire time.
    The Chairman. The gentleman's time has expired.
    The colleagues have been so kind with their time today that 
the Chair did indulge them for a couple of advertisements, 
which we heard during that last conversation.
    The gentleman from Utah is recognized, Mr. Chaffetz.
    Mr. Chaffetz. Thank you. I appreciate it. The renewable 
energy that I need, at this point, starts with chicken strips 
down in the cafeteria, so I will be very brief. Renewable 
energy; who is going to fight against that? Of course, 
naturally, I would love to do it.
    I wish we did not have to go through the process of 
extracting the resources that we do, but, Mr. Farr, from your 
advantage point, and your expertise, renewables, the so-called 
``wind farms'' and all these types of things that, in their 
very best-case scenario, very best-case scenario, over the next 
five years, maybe even 10 years, what percentage of our energy 
do we really think we can extract from them, and what 
percentage do we see now, and where do we think we can actually 
get to?
    I want to be as optimistic as I can, but I do not see 
anything that can overtake the propulsion of our automobiles 
and our homes and everything else, especially if we are not 
willing to advance nuclear and some of these other things that 
I consider to be clean. Everything has its drawbacks, but we 
have, you are right, no national energy policy. I would like to 
see us get to one, but where in the world do you think we can 
be, based on what we know today?
    Mr. Farr. The California Secretary of Natural Resources is 
on the next panel. The State of California is supposed to have 
33 percent by 2020.
    Mr. Chaffetz. OK. So, then if we look at the trajectory, 
and you can go back over the last 30 years and where we are 
going in the future, our demand is going to increase, 
undoubtedly. Do we concur with that idea that demand is not 
going to diminish over the course of time. Right? We are going 
to have more people, more demand.
    Mr. Farr. Yes, but the demand is also proportional to what 
kinds of effectiveness and technology you have in using the 
fuel, and whether you get 10 miles a gallon or 33 miles a 
gallon has a lot to do with that.
    Mr. Chaffetz. I guess what I am trying to get at is, what 
do we have that works today? What actually works today, and 
what percentage? It is difficult. I am not trying to pin you 
down to specifics on each individual one, but that is a burning 
question for me because I think the American people, myself 
included, my kids, my family, we all have a desire to be 
conservationists. I am a conservative. I like to conserve 
things, but I do not see viable alternatives that I can go and 
plug in and that are actually on the market that I could 
actually do.
    You know, I saw one of my colleagues driving a million-
dollar hydrogen vehicle. It is probably not very practical.
    Mr. Farr. Not yet.
    Mr. Chaffetz. By the way, I want to leave some time for 
Dana here.
    Mr. Farr. Every single source of alternative energy is 
utilized in California that has been developed. As I said, we 
have hydro, geothermal----
    Mr. Chaffetz. What percentage is it today, the goal being 
30-something percent? Twenty percent of all of the energy used 
is renewable.
    Mr. Farr. In California, the biggest energy-using state in 
the United States.
    Mr. Chaffetz. Mr. Rohrabacher?
    Mr. Rohrabacher. Well, I would suggest that when people 
focus basically just on conservation, I think that that is 
helpful, the conservation is helpful, but we also have to focus 
to have a balanced approach on production of more energy. Had 
we had the same obstructionists at play when we were building 
our hydroelectric dam system or our current nuclear power 
systems, California would be in a total catastrophe now for 
energy.
    One of the reasons why we have had conservation of energy 
in California, by the way, is the price has been permitted to 
go up, and thus people naturally conserve. But I am totally 
supportive of the efforts of the Governor and other people in 
California to push these renewables.
    For example, I am proposing that we have an aqueduct system 
from Northern California, Sam's area, to take his water and 
bring it south to my area, which, of course, I support totally, 
but I would see no reason why that aqueduct system, if running 
the length of the state, why do not we cover that aqueduct 
system with solar collectors so it shields the water from 
evaporation and can produce the electricity at the same time? 
Those are the kinds of creative ideas that will happen if you 
have an open-meter approach.
    So, in other words, we subsidize a lot of things today. Let 
us subsidize basically the open-meter system. That will not 
work unless we do subsidize it, but because, right now, people 
have to pay to take the electricity out, but if we end up 
paying them to put it in, how are the electric companies going 
to function?
    We can subsidize that and open up the avenue for all of 
these new, across-the-board advances in energy technology, and 
I am very optimistic. I am for electrification of our country. 
In California, Elan Musk has invested in Tesla Motors. The 
Governor has been very supportive of that, and I just think 
that we have a great new tomorrow. Not only are the oceans not 
going to be black goo, but our cities are not going to be 
desolate and overwhelmed with pollution. We are going to solve 
these problems by moving forward with more production and 
cleaner production.
    Mr. Chaffetz. Thank you, and thank you, Mr. Chair.
    The Chairman. The gentleman's time has expired. The 
gentleman from South Carolina, Mr. Brown.
    Mr. Brown. Thank you, Mr. Chairman, and thank you, 
gentlemen, for being a part of this discussion. This is a very 
major concern of mine. I live on the coast of South Carolina, 
and we are certainly concerned about our beautiful beaches, 
which are our number-one tourist attraction, I guess, almost in 
the country; probably number two or number three in the whole 
country. So, we are very sensitive to any impact that offshore 
drilling might have.
    We are also concerned about, not only just in America but, 
as a worldwide perspective, Mr. Chairman, and I would hope 
that, as we look at generating a new energy policy, that it 
will be done in a worldwide perspective, not just in the 
American perspective because we are just not isolated on this 
planet. We are a part of it, and sometimes we talk about it as 
though America is just a standalone unit. We are actually 
extracting some 70 percent of our energy from offshore, and it 
comes from some places that we feel are not environmentally 
sound like America.
    So, as we talked about, Mr. Farr, about the moratorium, and 
I noticed you said that you would be in favor of continuing the 
moratorium, and I would hope, Mr. Chairman, that everything we 
had in the energy bill would be on the table, and the all-of-
the-above solution that my good friend from Hawaii talked 
about, we tried to come up with something, I guess, in the last 
Congress to try to meet out energy needs in an environmentally 
sensitive way, but I think the all-of-the-above solution has 
got to be a part of it.
    Is Yucca Mountain going to be expanded? Are we going to 
open Yucca Mountain? Is nuclear power going to be a part of the 
21st Century solution? All of these things have to be included.
    I know I have traveled to some of the countries. We are 
talking about drilling up in ANWR, and maybe the carbon is 
being emitted there, but isn't it true, Mr. Farr, that some 97 
percent of our carbons actually come from nature, not from some 
man-made source? It is 97 percent.
    Mr. Farr. Of what?
    Mr. Brown. Of the carbons.
    Mr. Farr. That we release on the planet?
    Mr. Brown. Yes, sir.
    Mr. Farr. I do not know the answer to that question.
    Mr. Rohrabacher. I can let you know. As a Member of the 
Science Committee, I have been through many hearings on this. I 
have never heard a witness claim that, of the CO2 
production and other supposed greenhouse gases, no one has ever 
estimated that more than 10 percent of it--most people 
guesstimate more like five percent of that--is actually 
produced by human beings. The rest is produced by nature. These 
great fires that we just had down in Australia; I mean, that is 
putting stuff into the air, a huge amount.
    Let me just add that sometimes, in our state, the fire 
people in our state have told me they have been denied the 
right to have controlled burns during the time when it is wet 
so the fires would not get out of control. Environmentalists/
activists have prevented them from having controlled burns in 
the name of stopping air pollution, and then what happens? We 
end up in the dry times with massive fires that put ten times 
as much pollution into the air.
    Now, these are well-intended people, but they have horrible 
consequence, even for the environment, in the long run.
    Mr. Brown. Let me ask you another question on that same 
note. They are trying to suppress any development in the United 
States of all of our energy, the oil shales, offshore drilling, 
or whatever else that is available, but yet we import 70 
percent of our energy from countries that are mining it however 
way they can. Are we helping the planet by saying that we do 
not want to do it, but it is OK; you can treat the environment 
any way you want to, and we are going to still buy your 
products. Mr. Farr, what do you think?
    Mr. Farr. Well, two things. First of all, I think it is 
very smart. We are complaining about the fact that we have to 
import Middle Eastern oil to run our automobiles in the United 
States because we get so little efficiency out of our 
automobiles, and I think that there are arguments that this 
Committee has heard that if you just improve the automobile 
efficiency, you will not have to be so dependent on foreign 
oil.
    It seems to me that if we do not invest in this brain trust 
of people creating alternative energies, that we are going to 
allow that brain trust to be somewhere else. People are using 
the examples of Norway. The wind energy came from the 
Scandinavian countries. In California, because we were the 
first state to develop wind farming in the past, in Norway and 
the Scandinavian countries, there has just been a solar, modern 
windmill to replace the old ones. We did it in a farming style 
of orchards, wind orchards.
    We required that the company, in order to get this huge 
market in California, move their development and build these 
wind turbine machines in our state.
    I think that if we are not smart about these alternative 
energies, we are going to lose that brain trust and 
manufacturing capacity to another country. So, part of the 
world leadership, we need to be ahead of them because we need 
to sell them our technology, and I think that that technology 
will be readily marketable because it will be an alternative to 
the carbon amounts that we are putting into the air.
    The only question here, and I keep getting back to it, is 
the question before this Committee is, should we continue to 
have the moratorium on offshore oil drilling as we have had for 
the last 10, 20 years? And I think, from all of the evidence 
that has been brought today, is, yes, we should.
    Mr. Brown. You know for a fact that when we had an oil 
embargo back in, I guess, the seventies, some 35 percent of our 
energy was coming from offshore. Because we had the 
moratoriums, now it is 70 percent. Can you imagine the number 
of jobs we could create? I know, when the price of oil was $150 
a barrel, it was, like, $700 billion a year we were spending as 
a balance of trade just for energy. It is probably less than 
that now since the price has decreased, but it is still a 
tremendous amount of funds.
    Look at all of the jobs that we could create here in this 
country that we are now exporting to these foreign countries.
    Mr. Rohrabacher. And the point you made earlier was very 
important, and that is, yes, so we have not gotten our oil from 
our own offshore oil development, and what do we do? We are 
importing it now from overseas, and the point you made was many 
of those countries that provide us oil overseas do not have the 
same environmental controls and safety controls that we have 
here.
    Thus, those people who are supporting the moratorium have 
actually set up a situation where more pollution is coming into 
the air globally than would be done if we would have taken 
those same oil resources domestically from offshore.
    Mr. Brown. And I appreciate that remark, that comment, 
there, too, because we are on a planet. Not just America is 
focused on the atmosphere, but whatever happens in China, 
whatever happens in India, is going to impact our quality of 
life here in America. Thank you.
    Mr. Farr. Yes, but that ocean right off your coast, which 
is a huge economic asset to your state; the health of that 
ocean is really dependent on the health of the economy of your 
state.
    If that ocean were acidic, and everything was dying in it, 
and the beaches were polluted, the real estate values would 
drop, people would not use the coastal zone for development, 
and it would be a disaster, and we know that the oceans are 
headed that way unless we take better care of them. So, why 
would we want to continue to drill for oil and gas? Why do not 
we just buy some time?
    Mr. Rohrabacher. We certainly do not want our oceans to 
become black goo.
    Mr. Brown. Well, just to answer that, Mr. Farr--Mr. 
Chairman, I know my time has expired, but, in Dubai, you go 
there today, and some of those other countries over there, the 
immigrants there, they have filled in the ocean. That impact is 
not going to impact my ocean off Myrtle Beach?
    Mr. Farr. It is going to have some impact on the global 
oceans' health, yes, but because of currents and everything 
like that, I doubt that it is going to affect Myrtle Beach.
    The Chairman. Gentlemen, just one quick observation by the 
Chairman. I have been in this body over three decades and have 
seen a lot of our colleagues testify before committees. It is 
usually a perfunctory five minutes each, and very few, if any, 
questions from members of the Committee.
    This morning has been drastically different. Just two of 
our colleagues, Sam Farr and Dana Rohrabacher, have been here 
for two and a half hours now answering questions from our 
colleagues, large numbers of Members attending on both sides of 
the aisle, for which I am deeply appreciative. But also I am 
deeply appreciative of your time.
    It shows the amount of interest in this issue, it shows the 
importance of this issue to our nation's energy and national 
security, and this particular Chairman is deeply appreciative 
of your time and spending two and a half hours before us, and 
that, I might add, without a single question from the Chairman. 
Thank you, gentlemen.
    [Pause.]
    The Chairman. The Chair will call our second panel composed 
of the following individuals: The Hon. Mike Chrisman, 
Secretary, California Natural Resources Agency; Mr. Ted Diers, 
Chairman, Coastal States Organization; Robert G. Marvinney, 
Ph.D., State Geologist and Director, Maine Geological Survey; 
the Hon. Frank W. Wagner, State Senator, Senate of Virginia; 
and the Hon. Garret Graves, Director, Louisiana Governor's 
Office of Coastal Activities.
    Gentlemen, we welcome you to the Committee on Natural 
Resources. We appreciate your being with us all morning, as you 
have, and traveling long distances to be with us, in some 
cases.
    We do have all of your prepared testimony. As with all 
witnesses, it will be made a part of the record, as if actually 
read, and you each are recognized for five minutes to proceed 
as you desire, and we will start in the order in which I 
introduced the panel.

STATEMENT OF HON. MIKE CHRISMAN, SECRETARY, CALIFORNIA NATURAL 
                        RESOURCES AGENCY

    Mr. Chrisman. Thank you, Mr. Chairman. It is nice to be 
here. Thank you for the opportunity to testify today. I join 
you in saying that the last two and a half hours was quite 
illuminating. It was interesting to listen to the questions the 
Members have asked and how you have teed up the issues. I think 
it was very informative for all of us.
    It is, indeed, a pleasure for me to appear today. As I 
think all of you know, and you have heard numerous times today, 
we have, in California, a long history of offshore oil and gas 
development that dates back to 1896, and you also heard 
Congressman Rohrabacher refer, a number of times, to the year 
of 1969, the devastating oil spill off of Santa Barbara, in the 
Santa Barbara Channel.
    I need to put a context to that because that particular oil 
spill released more than three million gallons into the Pacific 
Ocean and killed thousands of birds and other marine mammals 
along 35 miles of our coastline in California.
    While the risk of such an event today is reduced because of 
the new technologies and improved response procedures that we 
have all developed, we continue to believe that the adverse 
environmental and economic impacts of new oil and gas leasing 
and development off our shore far outweigh the benefits 
generated from these activities.
    The majority of Californians, nearly 38 million of them 
now, reside and live within our coastal zone in California.
    The National Ocean Economic Program has determined that 
California's ocean-dependent industries contribute more than 
$46 billion annually to the state's economy each year. As you 
can see, our economy thrives on tourism, particularly in our 
coastal areas.
    We have consistently opposed new leasing off of 
California's shores for oil and gas exploration. Governor 
Schwarzenegger continues that opposition. He has held this 
position before taking office and has not wavered since that. 
His position was reaffirmed in our 2004 Ocean Action Plan that 
we also released. His position has been repeated in 
correspondence to Congress, to this Committee, to both the 
former and current president, and to the U.S. Department of the 
Interior.
    Last year, Governor Schwarzenegger opposed the lifting of a 
congressional moratorium on leasing the Outer Continental 
Shelf, a position consistent with over 25 years of state policy 
embraced by Governors of both parties.
    We have the California Coastal Sanctuary Act that has 
precluded leasing in state tidelands, that being lands from 
zero to three miles out, for oil and gas development since 
1994.
    The California State Legislature has repeatedly passed 
measures opposing new offshore oil and gas development in the 
waters offshore our protected state waters.
    Governor Schwarzenegger has also joined with Governor Ted 
Kulongoski from Oregon and Governor Chris Gregoire from the 
State of Washington to oppose any new offshore oil and gas 
leasing, exploration, and development off our Pacific Coast, up 
and down the Pacific Coast of California and the West Coast.
    So, again, there should be no ambiguity on where we are, 
where the States of Oregon and Washington are, on the Pacific 
Coast.
    However, as we look to a new long-term energy picture, and 
there was a lot of discussion here today about that, we do see 
OCS alternatives worth pursuing. California is coordinating 
with the Minerals Management Service and the Federal Energy 
Regulatory Commission to evaluate options for sustainable 
offshore energy production, such as wave and ocean current 
technology. The energy-production potential and environmental 
impacts of these technologies are being evaluated now.
    We, in California, have been recognized as a leader in 
energy efficiency and development of renewable energy. You 
heard it responded to and answered many times in the 
conversation today. Our per capita use of electricity has been 
flat over the last 30 years while the rest of the country has 
increased 50 percent.
    Despite these successes, of course, we continue to set 
these very aggressive goals. You heard a question coming to 
Congressman Farr. Again, pursuant to the Governor's executive 
order, we have increased our state's renewable energy standard 
to 33 percent renewable power by the year 2020 in California. 
This effort is the most aggressive in the United States.
    To assure that this goal is attainable, the directive also 
calls for a streamlined review and approval process for 
renewable energy sites, making it easier for wind, solar, and 
geothermal projects to be developed in California.
    We encourage the Obama administration and Congress to 
support a national energy policy that increases the efficiency 
of our energy use. We applaud Secretary Salazar in his 
pronouncement, on February 10th, to create a new and open 
process to develop a comprehensive national energy strategy. We 
applaud the Secretary's commitment, and California will commit 
to work with all of you to increase energy efficiency across 
the country.
    Let me conclude by saying that California stands ready to 
work with this body, this Committee, this Congress, and the 
Obama administration to help craft a comprehensive, science-
based, national energy strategy for a Five-year Oil and Gas 
Leasing program here in the United States. Thank you again for 
the opportunity to be here.
    [The prepared statement of Mr. Chrisman follows:]

    Statement of The Honorable Mike Chrisman, Secretary for Natural 
  Resources, California Natural Resources Agency, State of California

    Chairman Rahall and members of the Committee, thank you for the 
opportunity to appear today to discuss our experience with energy 
development off the California coast. California has a long history of 
offshore oil and gas development, which dates back to some of the 
earliest offshore production anywhere in the United States, starting 
off the Ventura County coast in 1896. California is also home of the 
1969 Santa Barbara oil spill, which originated in the federal Outer 
Continental Shelf. It was an accident 40 years ago that had major 
ramifications for environmental protection in both California and for 
our nation. While the risk of such an event can be reduced today 
because of new technologies, for California, the adverse environmental 
and economic impacts of new oil and gas leasing and development off our 
coast (from oil spills, air quality, water quality, and visual impacts) 
far outweigh the benefits generated from these activities.
    A state of approximately 38 million people, the majority of 
Californians live within the coastal zone. California's economy thrives 
on tourism, even with the current downturn in the national economy. 
People are drawn to our Southern California beaches, our rugged north 
coast, and many spectacular coastal destinations in-between. We have 
many federal, state, and local parks, three National Estuarine Research 
Reserves, three sites within the National Estuary Program and four 
National Marine Sanctuaries along and offshore our coast. The National 
Ocean Economic Program has determined that California's ocean dependent 
industries contribute over $46 billion dollars to the state's economy 
annually. People journey to California to enjoy the outdoors, to swim, 
to surf, to scuba dive, and to fish among other ocean sports. Others 
come to patronize seaside resorts and restaurants. The impact of 
another 1969 caliber oil spill anywhere along California's coast would 
have a devastating impact on our population, recreation, our natural 
resources, and our coastal dependent economy.
California Position on Offshore Oil and Gas Drilling
    Governor Schwarzenegger has long opposed new leasing off the 
California coast for oil and gas exploration, development, and 
production. He held this position before taking office and has not 
wavered from it. This consistent position was included in the 
Governor's 2004 ocean action plan titled, ``Protecting Our Ocean, 
California's Action Strategy.'' Since that time his position has been 
repeated in correspondence to Congress, to this Committee, to the 
President, and to the U.S. Department of the Interior. Last year, 
Governor Schwarzenegger also opposed the lifting of the congressional 
moratorium on leasing on the Outer Continental Shelf. This position is 
consistent with over 25 years of state policy embraced by governors of 
both parties. The California Coastal Sanctuary Act has precluded the 
leasing of our state tidelands (0-3 miles offshore) for oil and gas 
development since 1994. The California State Legislature has repeatedly 
passed measures opposing new offshore oil and gas development in the 
waters offshore our protected state waters. In addition, the California 
Ocean Protection Council, the State Lands Commission, and the 
California Coastal Commission all oppose new offshore oil and gas 
leasing off the coast. Governor Schwarzenegger joined Governors 
Kulongski (Oregon) and Gregoire (Washington) opposing any new offshore 
oil and gas leasing, exploration, and development off the coasts of 
California, Oregon, and Washington. There should be no ambiguity about 
where California stands on the issue of new offshore oil and gas 
leasing off California--we oppose it.
    Looking at the long term energy picture, we do see OCS alternatives 
worth pursuing. California is coordinating with the Minerals Management 
Service and the Federal Energy Regulatory Commission to evaluate 
options for sustainable offshore energy production, such as wave and 
ocean current technology. The energy production potential and 
environmental impacts, of these technologies are being evaluated now. 
We have been working closely with the federal government to explore 
these possibilities, and look forward to continue working on these 
prospects with the Obama Administration. Additionally, California is a 
leader in setting energy efficiency standards that we believe are a 
model for the nation. Our recent experience with fluctuating gasoline 
prices has demonstrated that we all need to find ways to increase 
energy efficiency, and California has been a leader on that front for 
years.
    We applaud the February 10, 2009 announcement by Interior Secretary 
Salazar to create a new, open-, process to develop a comprehensive 
energy strategy for this nation. The Secretary's four point plan 
provides a reasonable approach for states to provide input into the 
development of this energy policy. We applaud the Secretary's 
commitment to provide a fair and science based process and look forward 
to working with the Administration as this comprehensive plan is 
developed.
Offshore Oil and Gas Development off California
    I want to dispel the myth that California only consumes oil and gas 
and does not produce it. This is simply not true. California has a long 
history of production of both onshore and offshore oil and gas. 
Currently, 27 oil and gas platforms are in production off the 
California coast. Of those, four are in state waters (within 3 miles of 
shore) and 23 lie within the federal waters on the Outer Continental 
Shelf (beyond 3 miles from shore). California also has substantial 
onshore oil and gas facilities currently in operation. Figures for 2007 
indicate that California produced over 200 million barrels of oil at 
onshore facilities. Offshore production was 14.8 million barrels in 
state offshore waters and 24 million in federal waters. Onshore 
production of natural gas provided 269.9 billion cubic feet in 2007. 
Production in state waters was 7.2 billion cubic feet and 35.2 billion 
cubic feet was produced in federal waters that same year.
Alternative/Renewable Energy
    California is recognized as a leader in energy efficiency and the 
development of renewable energy. We support congressional action to 
aggressively support national policies that increase the efficiency of 
our energy use. Our policies have proven to be extremely successful, 
from an economic and environmental standpoint. California uses less 
electricity per person then any other state in the nation. Indeed, over 
the last 25 years, California's per capita electricity use has remained 
nearly flat, while nationwide demand has increased 50 percent. This has 
occurred despite the fact that homes are bigger and our population 
tends to have more appliances, televisions, and other electronic 
equipment. Whether we are talking about electricity, natural gas, or 
transportation fuels, gains in energy efficiency can temper energy 
demand, hold down consumer prices, and reduce the environmental impact 
associated with traditional energy sources.
    Although California has been leading on renewable and efficient 
energy production for years, we continue to set aggressive, yet 
achievable goals. On November 17, 2008 Governor Schwarzenegger signed 
an Executive Order (S-14-08), which re-establishes California's already 
ambitious Renewable Portfolio Standard (RPS) at a new nation-leading 
level and calls for a restructuring of the process of developing 
renewable energy sites to make it easier to achieve our renewable 
goals. Under the current standard, California utilities must obtain 20 
percent of their electricity load from renewable energy sources by 
2010; the Governor's Executive Order increases that goal to 33 percent 
by 2020. To ensure that goal is attainable, the directive also calls 
for a streamlined review and approval process for renewable energy 
sites--directing state agencies to sign a Memorandum of Understanding 
(MOU) with each other and with federal agencies (US Fish and Wildlife 
Service and Bureau of Land Management) to create a streamlined process 
making it easier for wind, solar and geothermal sites to be built in 
California.
    These policies have proven to be extremely successful in 
California, from both an economic and environmental standpoint. We 
would encourage the Obama Administration and Congress to support a 
national energy policy that would increase the efficiency of our energy 
use throughout the nation. We would be happy to work with the Congress 
to help craft a new energy strategy that builds on California's 
experience with energy efficiency.
Regulation of Offshore Oil and Gas Activities
    California has regulatory jurisdiction over all aspects of oil and 
gas development from the onshore components of processing facilities 
and pipelines, to all aspects of offshore production which would 
include exploratory rigs, production platforms, pipelines, marine 
terminals, or other facilities associated with the offshore oil and gas 
development.
    On land, our state and local governments have primary permit 
jurisdiction over the siting and construction of facilities. In state 
waters our California Coastal Commission and State Lands Commission 
have authority over the issuance of permits or authorizations to drill 
within state tidelands. On the Outer Continental Shelf (beyond state 
waters) several federal agencies such as the Minerals Management 
Service, the U.S. Environmental Protection Agency, and the U.S. Army 
Corps of Engineers have direct regulatory jurisdiction. However, 
California like other coastal states has a unique jurisdiction over 
activities on the Outer Continental Shelf that can ``affect'' resources 
within California's Coastal Zone, including our state tidelands. This 
jurisdiction is provided by the ``federal consistency'' provisions of 
the federal Coastal Zone Management Act. Essentially, no permits for 
new offshore oil and gas operations can be issued absent a finding that 
the activity is ``consistent'' with California's federally approved 
Coastal Zone Management Act, which is administered in California by the 
California Coastal Commission. Such decisions can be appealed to the 
Secretary of Commerce in cases where an applicant disagrees with the 
findings of the Commission.
    As mentioned previously, all of the state tidelands off California 
are off limits for the extraction of oil, except under a few 
extraordinary circumstances. The position of the Governor, the state 
legislature, and our key agencies of jurisdiction maintain opposition 
to new leasing and development of oil and gas resources from the Outer 
Continental Shelf consistent with our statutory prohibition for such 
development in State Tidelands.
Conclusion
    Let me conclude by saying that California stands ready to work with 
Congress and the Obama Administration to help craft a comprehensive and 
science based national energy strategy and a Five Year Oil and Gas 
Leasing Program. We believe such an approach should be developed with a 
look toward all of our energy options including energy efficiency, 
alternative renewable energy sources, and of course the development of 
oil and gas resources in locations where local and state governments 
support it, and where the environmental impacts can be mitigated.
                                 ______
                                 
    The Chairman. Thank you. Mr. Diers?

               STATEMENT OF TED DIERS, CHAIRMAN, 
                  COASTAL STATES ORGANIZATION

    Mr. Diers. Good afternoon. My name is Ted Diers. In my day 
job, I am the manager of the New Hampshire Coastal program 
within our Department of Environmental Services, but, today, I 
am here as the Chair of the Coastal States Organization, 
representing the Governors of the 35 coastal states, 
commonwealths, and territories, and to talk to you a little bit 
about some of our concerns, interests, and maybe a way forward 
as you start to work out some of these issues.
    Our 35 coastal states, territories, and commonwealths are 
at the forefront of ocean and coastal management. Whether it is 
addressing sea level rise or hazards or renewable energy 
proposals, coral bleaching, coastal states, we are sort of at 
this nexus of all of these different issues and where they come 
together in the most populous parts of our country.
    The coasts and oceans represent an important source of 
energy for the United States, including oil, natural gas, and 
renewable energy in the form of tidal, wave, wind energy, and 
probably things we have not even imagined yet. So the states, 
as we have members who certainly have production and those that 
do not, certain ones that want it and do not, but there are 
some things that we do come together around, and especially 
that we do need a comprehensive energy policy, and, within 
that, the states have certain great consensus around three 
things, and that is what I would like to talk about for just a 
couple of more minutes here.
    The first is that we need to retain state sovereignty and 
Federal consistency authority.
    The second is that planning out into the ocean needs to 
include both traditional and renewable energy development, and 
really be science based around the resources that are out 
there.
    Third, we need the establishment of a permanent trust fund 
because it is through that that we will have the money to do 
the science and the management and the planning to be able to 
have a sustainable resource.
    Quickly, about state sovereignty, Section 307 of the 
Coastal Zone Management Act, known as the ``Federal consistency 
provision,'' grants states authority to review Federal 
activities, licenses, and permits that have a foreseeable 
impact on our land or water resources. These activities that 
are Federal activities must be consistent, to the maximum 
extent practicable, with the enforceable state policies. Those 
state policies which are created by the states are approved by 
the Federal government.
    Consistency applies before a permit is issued, and this is 
really important to recognize, from the state perspective, 
because, from my perspective, as a coastal manager, consistency 
is our ticket to the dance. This is how we interact between the 
Federal agencies and those people who are applying for 
projects. It allows you to have a dialogue that happens before 
an impact, before a permit, is in place. Countless numbers of 
projects have been approved through this project over the 
years.
    Furthermore, I just want to note one thing that has not 
come up today, and that is that the resources that are out in 
the Outer Continental Shelf and those resources which are 
within our coastal zone; it is very hard to differentiate them 
sometimes. Fish, currents, wave, wind; they do not really care 
about a line that sits three nautical miles off our shoreline.
    I want to talk a little bit about, again, planning out into 
the ocean and our offshore resources. There is another point 
that has not really been made too much today, which is that 
there is significant ``regionality'' in how we need to think 
about our offshore resources. We do have some great regional 
efforts that are coming together in this state, largely led by 
the states, and I think this is a really interesting movement 
that is going in regional ocean partnerships, from the Gulf of 
Mexico Alliance to our West Coast Governors Agreement to, in my 
own backyard, the Northeast Regional Ocean Council.
    We are working together. We are willing to work with our 
Federal partners and also with the Minerals Management Service 
as they plan for offshore activities. Just a point there is 
that while MMS does look at offshore drilling, no one is really 
looking at those renewable resources yet, and that is something 
that we need to come together around.
    Finally, a permanent trust fund. Chairman Rahall, you 
noted, in the first hearing, that money from the ocean appears 
to go everywhere but the ocean, so I think that we need to 
solve some of that, and the revenues do need to be used for 
science and management in the future.
    It has been said by Robert Ballard that we know more about 
the surface of Mars than we do about the bottom of the ocean. 
The only problem in that is that we are not trying to manage 
the surface of Mars yet, and so this is a real challenge.
    I just want to conclude briefly, again, by stating that 
there are three things that we really want to make sure are 
looked at and maintained in a comprehensive energy policy: one, 
that state sovereignty and Federal consistency are maintained; 
two, that we do planning that looks at both renewable and 
traditional sources of energy; and, three, that we have the 
dollars to do great science and management in our offshore 
areas. Thank you very much.
    [The prepared statement of Mr. Diers follows:]

  Statement of Ted Diers, Manager, New Hampshire Coastal Program, New 
   Hampshire Department of Environmental Services, on behalf of the 
                      Coastal States Organization

Introduction
    Good morning, Mr. Chairman and Members of the Committee. My name is 
Ted Diers and I am the Manager of the New Hampshire Coastal Program of 
the New Hampshire Department of Environmental Services. I also serve as 
Chair of the Coastal States Organization which represents the Governors 
of the nation's thirty-five coastal states on the sustainable 
management of the nation's ocean, Great Lakes and coastal resources. 
Thank you for holding this important hearing this afternoon and for 
inviting me to testify on behalf of the coastal states.
    Let me start by saying that the 35 coastal states, territories, and 
commonwealths that are members of the Coastal States Organization are 
at the forefront of ocean and coastal management in this nation. 
Whether it's addressing sea level rise and hazards in the Gulf States, 
renewable energy proposals off the northeast coast, or coral bleaching 
in the pacific islands, coastal states are on the front lines of these 
issues. Our ocean and coastal resources are not only important to us at 
the state level, but to citizens throughout this nation.
    Coastal and ocean areas also represent an important source of 
energy for the U.S., including oil, natural gas, and renewable energy 
in the form of tidal, wave and wind energy. Use of the oceans for 
energy production requires a commitment to responsible development that 
promotes protection of living marine resources, seafloor habitats, and 
coastal communities. Such development must proceed from an 
understanding that our oceans are held in public trust for all 
citizens, and that multiple uses (including energy production) must be 
consistent with the long-term productivity of these resources.
    As the U.S. crafts a national energy policy, including coastal and 
offshore energy development, it is important to consider three key 
factors which I will address today: 1. the retention of state 
sovereignty and consistency authority; 2. the planning for the nation's 
Exclusive Economic Zone including traditional and renewable energy 
development; and, 3. the establishment of a permanent trust fund.
    Our position is simply stated--The development of offshore 
renewable and traditional energy must be part of a comprehensive plan 
in which the states are full partners, addresses regional needs and 
opportunities and uses the best science possible. And, that effective 
planning and good science has costs associated with it.
State Sovereignty and Consistency Authority
    While offshore energy production benefits the entire nation, the 
impacts from activities associated with exploration, development and 
production on state coastal lands and federal offshore lands are felt 
most in coastal states. Thus, it is vital for state authority and 
sovereignty to be maintained. CSO recommends that Congress and the 
Administration consult with coastal states in the development of any 
new leasing program or formula of revenue sharing. In the past, 
offshore moratoria have been the result of a fractured, exclusive and 
federally-driven energy policy. If indeed we are heading in direction 
of a ``post-moratorium'' world, the ability for a state to review 
actions related to offshore oil and gas drilling is essential.
    Section 307 of the Coastal Zone Management Act, known as the 
federal consistency provision, grants states authority to review 
federal activities, licenses and permits that have reasonably 
foreseeable effects on any land or water use or natural resource of the 
coastal zone. These activities must be consistent to the maximum extent 
practicable with the enforceable policies of a coastal state's 
federally approved coastal management program. This has been a primary 
method of ensuring more sustainable development of the nation's coasts.
    Consistency applies before a federal permit is issued; thus, it 
facilitates early consultation between states, federal agencies and 
permit applicants in order to avert disputes from arising after 
substantial commitments have been made by agencies and applicants. In 
practice, consistency is important as a ``ticket to the dance''--
allowing states to have a seat at the table in decisions related to the 
coasts. Without these early reviews, there would be much more 
uncertainty, litigation and calls for federal legislative intervention 
in actions in coastal communities. To increase efficiency for states, 
federal agencies and applicants, many states have created streamlined 
approaches to energy related activities.
    In granting states consistency authority, Congress recognized that 
federal interests and activities must be balanced with the sovereign 
interests of states in managing coastal resources. This is the 
underlying philosophy of the CZMA and the consistency provision. State 
coastal programs must receive federal approval for a state to exercise 
its consistency authority; likewise, each enforceable policy upon which 
it relies must also receive federal approval.
    Furthermore, the resources of the OCS and the coastal zone are many 
times difficult, if not impossible, to differentiate. Fish, currents, 
wind and wave care little about an imaginary line drawn 3 nautical 
miles from our shores. As the committee considers offshore energy, the 
retention of consistency under the CZMA must be a priority.
Planning for the Exclusive Economic Zone including Oil and Gas and 
        Renewable Energy Development
    Given the prices and impacts of oil consumption, offshore oil and 
gas development must be considered in the context of the development of 
renewable energy and both must be balanced with the care of oceans and 
coasts and the economic viability of coastal communities. The energy 
needs and even the offshore resources of any particular state do not 
occur in a vacuum. There is significant ``regionality'' to both 
offshore needs and opportunities. Thus, the regional scale is 
appropriate for science based planning. The states are moving to take 
on some of these regional needs through the development of regional 
ocean partnerships. From the Gulf of Mexico Alliance to the West Coast 
Governors Agreement, the Great Lakes Commission to by own back yard in 
the Northeast Regional Ocean Council, the state are working together to 
create the framework for large-scale problem solving. This regional 
ocean partnership movement is a distinct opportunity for the state and 
federal government to work together.
    Development of diverse and numerous sources of alternative 
renewable energy is critical to our nation's energy security and 
environmental well-being. The federal role is crucial because virtually 
every site where ocean renewable energy technology is likely to be 
tested or deployed is subject to federal jurisdiction. Unlike 
conventional wind and solar, ocean renewable energy technology cannot 
be tested or deployed on private land. The industry will emerge and 
mature in the United States only if the federal government uses its 
resources and authorities to plan for and encourage appropriate use of 
the marine areas it controls.
    While the Minerals Management Service plans for offshore oil and 
gas drilling, no federal or interstate body has taken on the task of 
planning for renewable energy development. Furthermore, there are 
myriad other coastal offshore uses and resources to consider when 
planning for energy development. CSO encourages the consideration of 
renewable energy in a national energy policy and legislation, including 
planning that addresses uses, resources, and impacts.
Establishment of a Permanent Trust Fund
    Great science and planning cost money. In the first OCS hearing in 
this series by the Committee on February 10, Chairman Rahall, you noted 
that ``money from the ocean appears to go to everything but the 
ocean.'' Indeed, even though coastal states are affected exponentially 
by the impacts of offshore energy development, receipts derived from 
sales, bonus bids and royalties under the mineral leasing laws are paid 
to the Treasury through the Minerals Management Service. But, these 
revenues are not directly applied to pay for Federal or State agencies' 
examination, monitoring and managing wildlife, fish, water and other 
natural resources related to energy and mineral exploration and 
development.
    The establishment of a Trust Fund provides a mechanism for 
reinvestment of the revenues generated from these public lands toward 
protection of coastal resources and communities. The Trust Fund can 
support the focused efforts of coastal states, territories and 
commonwealths, other appropriate coastal authorities, and federal 
agencies in addressing critical ocean and coastal management needs of 
our nation including restoration, protection, and enhancement of 
natural processes and habitats. This will help minimize the impacts of 
relative sea level rise, global warming, and ocean acidification and 
provide technical assistance and research to better anticipate and plan 
for the impacts of global warming and ocean acidification on ocean and 
coastal resources.
    In its Final Report, the U.S. Commission on Ocean Policy identified 
a myriad of challenges to improve the management of our nation's ocean 
and coastal resources. The Commission recognized that to meet these 
challenges additional investments would be necessary, and Outer 
Continental Shelf receipts were identified as the primary source of 
funding. Additionally, the Commission recommended that a portion of OCS 
revenues should be shared with coastal states (Recommendation 24-1). 
Revenues shared with the states should further the goals of improved 
coastal and ocean management.
    In 2006, the Coastal States Organization adopted a policy on 
revenue sharing which states that ``Because the coastal states face a 
number of challenges in conserving their coastal resources and 
protecting their coastal communities, OCS receipts should be used to 
further the goals of coastal and ocean restoration, conservation, 
preservation, mitigation, research, and education.'' While the coastal 
states may not agree on the presence of offshore oil and gas drilling 
off their shores, they do agree in the reinvestment of funds from these 
public resources. Furthermore, these funds should be provided over and 
above existing appropriations to meet the increasingly complex and 
unmet needs of ocean and coastal managers.
    It has been said that we know more about the surface of Mars that 
we do about the bottom of the ocean. The problem with that is we are 
not yet trying to manage use conflicts on Mars, but we are here on 
Earth.
Conclusion
    The oceans will continue to play an important role in access to 
sustainable and reliable energy. By retaining the state review 
authority, reinvesting a portion of public trust revenues on marine and 
coastal resources, and planning for both traditional and renewable 
energy development, new energy legislation will enhance our nation's 
ability to meet pressing ocean and coastal needs in an economical, 
efficient, and sustained manner.
    In legislation regarding OCS activities, CSO requests:
      Federal consistency authority under the Coastal Zone 
Management Act should be maintained and states' authority within their 
own jurisdictions should not be weakened in any way.
      Congress and the Administration should commit to planning 
for the EEZ that includes energy policy based on development of 
traditional and renewable energy sources, and is enhanced by state-led 
regional partnerships.
      Revenues should be shared with coastal states and used to 
further the goals of coastal and ocean management, restoration, 
conservation, preservation, mitigation, and research.
    Thank you again for the opportunity to address the Committee and 
for holding this important series of hearings. The Coastal States 
Organization stands ready to work with you to continue this progress of 
making important improvements to energy policy and coastal and ocean 
management. We look forward to the advancements that we can make in the 
coming year.
                                 ______
                                 
    The Chairman. Thank you. Dr. Marvinney?

 STATEMENT OF ROBERT G. MARVINNEY, PH.D., STATE GEOLOGIST AND 
               DIRECTOR, MAINE GEOLOGICAL SURVEY

    Mr. Marvinney. Thank you very much, Chairman Rahall and 
Members of the Committee, for this opportunity. I am Robert 
Marvinney. I am the Maine State Geologist, and I am speaking 
here on behalf of Maine Governor John Baldacci. I will 
summarize some of the key points from my written testimony, 
focusing on, first, Maine's focus on renewable energy 
resources; a brief discussion of the past exploration for oil 
and gas off the New England Coast and what opportunities that 
may come from offshore oil and gas for Maine; and a bit on the 
fisheries at Georges Bank.
    Currently, Maine has the highest per capita dependence on 
No. 2 heating oil of any state in the nation, and this is a 
critical concern for us, particularly with the severe winters 
we have experienced over the last several years. That makes--
for low- and middle-income people--very difficult choices 
between vital expenses and home heating, and those energy costs 
have risen dramatically in the last 10 years.
    The Governor has focused several efforts on renewable 
resources in the state. We have a Wood To Energy Task Force 
that looks at using the vast forest resources of the state--we 
are the most heavily forested state in the Nation--and using 
those to meet some portion of our energy needs. We are working 
on wood pellet systems, and the University of Maine is also 
looking at ethanol from wood and other areas.
    We have also had a Wind Power Development Task Force that 
looked at onshore opportunities for wind power development and 
have moved considerably forward on that, and, most recently, 
the Governor established an Ocean Energy Task Force to look at 
the indigenous and renewable resources, potential offshore, 
that address our energy needs and increasing our state's energy 
independence, reducing greenhouse gas emissions, and limiting 
our vulnerability to unpredictable foreign fuel supplies. But 
we are not ignoring any potential offshore, and, certainly, we 
recognize that wind has a huge potential off the coast of 
Maine.
    The past efforts at oil and gas exploration were in the 
1970s and 1980s, mostly in the Georges Bank area. The remainder 
of the Gulf of Maine really does not have the kind of geology 
that would be suitable for the development of the existence of 
oil and gas. It is really an extension of our rock-bound coast 
well offshore.
    We are talking primarily about the Georges Bank, where, in 
the seventies and eighties, there were 10 exploration wells and 
associated exploration work, and, in the MMS, their summary 
reports show that these wells did not make any discoveries, nor 
did they generally find the kinds of geologic conditions that 
were conducive to the development of oil and gas resources 
there.
    Of course, there has been exploration and development on 
the shelf off of Nova Scotia, and there is at least one 
significant discovery at Sable Island, with a gas resource. 
That was discovered 30 years ago, and, in the following time, 
some smaller discoveries have been made but nothing 
substantial.
    There is certainly a potential for offshore resources 
there, and MMS has made some assessments that the entire North 
Atlantic planning area, extending from New Jersey through the 
coast of Maine, might have two billion barrels of oil and 18 
trillion cubic feet of natural gas. I just want to point out 
that, for comparison, that same assessment suggests that the 
Gulf of Mexico might have 45 billion barrels of oil and 230 
trillion cubic feet of gas, much larger numbers than the North 
Atlantic.
    There is certainly potential for oil and gas offshore, and 
there is some potential for economic opportunities for the 
Northeast. I think, though, if I were standing on the coast of 
Maine, looking offshore across most of the Gulf, which does not 
have the potential, out to the Georges Bank, I think we are 
mostly concerned about the potential costs of oil and gas 
development because just the proximity of the greatest 
potential for oil and gas is closer to other New England 
states.
    So, from a strictly provincial viewpoint of the State of 
Maine, we do not see a tremendous amount of benefit coming from 
that activity in that area. However, Georges Bank is a huge 
fishery resource for the State of Maine, and the largest dollar 
value of our fishery resource comes from that Georges Bank, 
where the situation of nutrients and currents makes it a highly 
productive spawning ground and growth area for many kinds of 
commercial species.
    I am not saying that there are not problems with fisheries, 
but we certainly feel that the effort should focus on 
rebuilding those fisheries.
    So, in summary, we are not opposed to offshore oil and gas 
drilling, but we think it ought to be focused in the areas with 
the greatest potential and preserve other areas for their 
greatest potential of other resources. I think we agree with 
other states that there ought to be revenue sharing with these 
offshore resources, and also our concern about the Georges Bank 
fisheries is our greatest concern, and we want to make sure 
every effort is put in place to protect those resources. Thank 
you.
    [The prepared statement of Mr. Marvinney follows:]

Statement of Robert G. Marvinney, Ph.D., State Geologist and Director, 
                        Maine Geological Survey

    Chairman Rahall and members of the House Committee on Natural 
Resources, thank you for this opportunity to provide Maine's 
perspective on offshore drilling and our nation's energy future. I am 
Robert Marvinney, State Geologist and Director of the Maine Geological 
Survey, speaking on behalf of Maine Governor John Baldacci.
    My testimony today will focus on these main topics:
      Maine's focus on renewable energy resources. The Governor 
and Legislature are considering all options in a comprehensive energy 
plan that focuses on efficiency, renewability, reduction of greenhouse 
gas emissions, and energy independence. In these areas the Gulf of 
Maine holds high potential as a source of renewable wind and tidal 
power.
      Past exploration on the outer continental shelf of the 
New England states did not discover optimum conditions for hydrocarbon 
generation and accumulation. Recent assessments by the Minerals 
Management Service indicate some potential for undiscovered reserves in 
the North Atlantic Planning Area, but these are small when compared to 
other parts of the OCS with more favorable conditions.
      Exploitation of hydrocarbons on the OCS may bring 
economic benefits, but due to the proximity of potential reserves to 
other parts of the coast, Maine is not likely to be a significant 
recipient of these benefits.
      The Georges Bank is among the most significant fisheries 
in the northeastern United States, and supports a significant part of 
the economy in New England coastal communities. We are concerned about 
additional stress to this resource.
Renewable Energy Resources
    Currently, Maine has the highest per capita dependence on #2 
heating oil of any state in the nation. The past several winters have 
been particularly difficult for low- and middle-income and elderly 
Mainers who are making very difficult choices between home heating and 
other vital expenditures. Energy costs have grown from 5% to 20% of a 
Maine family's budget in just the past 10 years1.
    In response to this crisis and his commitment to a state energy 
policy focused on efficiency, renewability, greenhouse gas reduction 
and energy independence, Governor Baldacci established several 
important groups to focus on segments of the energy market. Maine is 
the nation's most heavily forested state, and the Governor's Wood to 
Energy Task Force focused on harnessing the wood supply to meet a 
significant portion of our energy needs. Maine people use the State's 
forest resources for cordwood and pellets to heat homes and businesses 
and as biomass to generate electricity. University of Maine researchers 
are advancing the process to make cellulosic ethanol from wood.
    In 2007, the Governor established a Task Force on Wind Power 
Development, the recommendations of which have been instrumental in 
advancing the implementation of onshore wind power in Maine.
    In November 2008, Governor Baldacci established the Ocean Energy 
Task Force2 to focus primarily on Maine's indigenous and 
renewable offshore energy potential and its promise to address state 
and regional energy needs, including increasing our state's energy 
independence, reducing greenhouse gas emissions, and limiting our 
vulnerability to the unpredictable costs and supplies of fossil fuels. 
While ignoring no potential energy option in Maine's offshore 
environment, this effort will focus in particular on the enormous 
potential of tides and wind. Tidal power is quickly achieving 
commercial viability, and one developer has been working with a 
community and testing its in-stream tidal energy device. It is 
estimated that the Gulf of Maine holds as much as 150 gigawatts of wind 
potential in both shallow and deep state and federal 
waters3.
Petroleum Exploration History and Oil and Gas Potential of the Georges 
        Bank
    The Ocean Energy Task Force will also consider the potential for 
offshore oil and gas reserves in its comprehensive review of the ocean 
energy resources of the Gulf of Maine. Most of the Gulf of Maine is 
underlain with geology that is not suitable to the generation of oil or 
natural gas. The rocks are basically an extension of the high-grade 
metamorphic rocks and granite intrusions that characterize the 
rockbound coast of New England and have been heated well beyond the 
optimal conditions for hydrocarbon generation.
    The area with the highest potential for oil and gas reserves is the 
Georges Bank, a relatively shallow plateau situated more than 100 miles 
southeastward from the Maine coast. The oval shaped Bank is 
approximately 150 miles long, 75 miles wide, and with waters as shallow 
as 30 meters along its northwest edge, forms a barrier to the deeper 
Gulf of Maine waters to the north (Figure 1). The northeastern most 
portion of the Georges Bank falls within Canada's territorial waters.
[GRAPHIC] [TIFF OMITTED] 47607.001

    .epsThe only oil and gas exploration activity on the Georges Bank 
was conducted during the 1970s and early 1980s when 10 wells were 
drilled in the most promising areas identified through the best 
exploration methods then available. In a summary report, the Minerals 
Management Service indicated that hydrocarbons were not discovered in 
these wells, that thermally mature source rocks are lean in the organic 
material necessary to generate hydrocarbons, and that other units 
lacked adequate porosity to be considered good reservoir 
rocks5. As this Committee is aware, the Georges Bank was 
under annual congressional moratoria on oil and gas leasing from 1982 
to 2008. No wells have been drilled on the Canadian portion of the 
Georges Bank and a leasing moratorium has also been in effect there 
since 1988.
    Our colleagues in neighboring Nova Scotia, however, have 
demonstrated that geology similar to that of the Georges Bank can be 
productive. Since exploration began on the Scotian shelf in the 1950s, 
24 significant hydrocarbon discoveries have been made in this part of 
Canada's outer continental shelf6. These have been mostly 
natural gas discoveries. The most notable, Sable Island, may eventually 
produce a total of 2 trillion cubic feet (Tcf) of gas, although 
estimates vary widely. Since the Sable Island discovery over 30 years 
ago, a very active exploration program has brought little additional 
reserve forward. With improved technologies, exploration is advancing 
toward deeper waters, which may hold the best potential for significant 
new reserves.
    The government of Nova Scotia is actively supporting exploration 
activities on the Scotian Shelf due, in part, to the revenue sharing 
agreement with Canada's national government that brings to the province 
$500 million in royalties annually6. In 2010, the governments of Canada 
and Nova Scotia will decide whether or not to extend the moratorium on 
Georges Bank leasing which is set to expire at the end of 2012.
    While past exploration has not uncovered notable reserves, nor 
found conditions generally favorable for hydrocarbon accumulation, 
there is some potential for petroleum discoveries on Georges Bank and 
elsewhere in the North Atlantic. The Minerals Management Service 
periodically conducts assessments of undiscovered hydrocarbon reserves 
of the outer continental shelf nationwide, most recently in 20067. 
These assessments take into account past exploration data and 
information for new discoveries in areas with analogous geology, which 
for the Georges Bank include the Scotian Shelf. The assessment of 
undiscovered, technically recoverable reserves for the entire North 
Atlantic Planning Area, which extends from the border with Nova Scotia 
in the Gulf of Maine to the Delaware border, is a mean of 2 billion 
barrels of oil and 18 Tcf natural gas (Table 1). The greater proportion 
of this potential is probably in the southern part of this region near 
New Jersey where earlier exploration wells discovered gas. For 
comparison purposes, this same assessment indicates that the Gulf of 
Mexico area contains undiscovered reserves of 45 billion barrels of oil 
and 230 Tcf of gas--over 20 times more oil and 12 times more gas than 
the entire North Atlantic Planning Area. Additionally, Gulf of Mexico 
states already have in place the infrastructure necessary to support 
exploration and development activities.
    Oil and gas exploration and development techniques have improved 
dramatically in the past 30 years, and if applied to the Georges Bank 
could possibly generate new discoveries, but these would likely be 
small compared to other areas of the Outer Continental Shelf.
[GRAPHIC] [TIFF OMITTED] 47607.002

.epsPotential benefits of oil and gas development at Georges Bank
    Georges Bank oil and gas development could provide benefits to the 
state of Maine, the Northeast region, and the U.S. Although a 
substantial period of time is necessary for exploration and development 
activities, eventually, new hydrocarbon resources could be brought on 
line that, in small measure, reduce dependence on unstable foreign 
sources. In addition to the exploration and development jobs 
themselves, such activities would generate on-shore support jobs. 
However, I think we need to be clear about the limited extent to which 
such development has potential to directly benefit Maine. The proximity 
of the Georges Bank is such that any support base for exploration and 
development activities there would likely be situated in Massachusetts 
or Rhode Island. That said, Maine has a track record of benefiting from 
petroleum exploration. One Maine corporation recently constructed two 
semi-submersible platforms for petroleum development; their work would 
certainly be enhanced by Georges Bank development. However, this 
corporation has also demonstrated that they can compete globally since 
those two rigs were deployed in waters off Brazil.
Georges Bank Fisheries8
    Georges Bank is the most westward of the great Atlantic fishing 
banks--those now-submerged portions of the North American mainland that 
extend from the Grand Banks of Newfoundland to Georges Bank. They rank 
among the world's most productive fisheries. Lying adjacent to New 
England's famous seaports, Georges Bank is single-handedly responsible 
for the development of coastal fisheries in towns such as Gloucester, 
Massachusetts and Portland, Maine. The varied nature of sedimentary 
environments on Georges Bank is a key element in the development of the 
biological community. Seafloor sediment originally was transported to 
the bank by glaciers. During and after glacial retreat, the rise of sea 
level and the action of tidal and storm currents marked the start of an 
erosional episode on the bank that continues today. Gravel formed 
through this process is an important habitat for the spawning and 
survival of several fishery species9. For instance, 
distribution patterns of juvenile cod indicate that the gravel habitat 
is where they are best able to avoid predators and to find food 
sources. The topography and position of the bank result in upwelling of 
nutrient-rich waters circulating in the Gulf of Maine. These nutrients, 
introduced into the sunlit waters over the bank, and interaction with 
warm Gulf Stream currents on the southern edge of the Banks, support 
exceptional rates of productivity, including many species of commercial 
importance. These are important spawning, juvenile and feeding grounds 
for cod, haddock, herring, and other commercial species. The scallop 
resource on Georges Bank is also very productive and valuable. In 
Maine, a substantial portion of the fishing fleet is dependent on the 
Georges Bank, and the largest dollar value of the commercial catch 
brought to Maine ports comes from this location.
    Certainly, there are issues with over-fishing the Georges Bank, but 
government efforts focus on managing the fishery to rebuild stocks. 
Under current conditions, the fishery resources of Georges Bank are 
important to the economy of Maine and New England. With rebuilding of 
these resources, their economic value will be increased very 
significantly.
Summary
    1.  We are not opposed to offshore drilling in general and 
recognize that for the near term, the nation needs sources of oil and 
gas that are not vulnerable to foreign ownership and control. However, 
oil and gas development efforts should be focused in the areas with the 
greatest potential, and where infrastructure is already in place to 
support the activity.
    2.  Wherever additional areas of the Outer Continental Shelf are 
accessed for oil and gas development, states should benefit directly 
through revenue sharing, as occurs with states around the Gulf of 
Mexico and in Canada.
    3.  The Georges Bank has great economic value as a fishery. In 
spite of the troubled nature of the fishery, it supports a substantial 
portion of the New England economy. We are concerned about potential 
negative impacts of oil and gas development on the fishery.
    4.  Oil and gas development could bring additional jobs to the 
region, but these would most likely be in southern New England.
    5.  We believe the resources of the Gulf of Maine are most suitable 
to renewable energy development, with tidal and offshore wind power 
being the primary resources. Renewable wind power may provide 
manufacturing and support employment and contribute to a sustainable, 
secure energy future.
Notes
    1.  Daghar, H., as presented to Ocean Energy Task Force: http://
www.maine.gov/spo/specialprojects/OETF/Documents/
Dagher%2012%2017%2008.pdf
    2.  Ocean Energy Task Force website: http://www.maine.gov/spo/
specialprojects/OETF/index.htm
    3.  Dagher, H., Director, University of Maine Advanced Structures 
and Composites Center: http://www.aewc.umaine.edu/072208Dagher.pdf
    4.  Gulf of Maine times, 2000, Vol. 4, No. 1, map copyright 
MapWorks 2000.
    5.  Edson, G.M., Olson, D.L., and Petty, A.J., 2000, Georges Bank 
Petroleum Exploration: Minerals Management Service OCS Report 2000-031, 
20 p.
    6.  Canada-Nova Scotia Offshore Petroleum Board: http://
www.cnsopb.ns.ca/
    7.  Minerals Management Service, 2006, Planning Area Resources 
Addendum to Assessment of Undiscovered Technically Recoverable Oil and 
Gas Resources of the Nation's Outer Continental Shelf, 2006
    8.  Fisheries information in this section compiled from discussions 
with George Lapointe, Commissioner, Maine Department of Marine 
Resources.
    9.  USGS Fact Sheet, Geology and the fishery of Georges Bank, 
http://pubs.usgs.gov/fs/georges-bank/
                                 ______
                                 
    The Chairman. Thank you. Senator Wagner?

              STATEMENT OF HON. FRANK W. WAGNER, 
               STATE SENATOR, SENATE OF VIRGINIA

    Mr. Wagner. Thank you, Chairman Rahall, Congressman 
Hastings. I am glad I do not have to follow Congressman 
Rohrabacher or Congressman Abercrombie. They are certainly 
tough acts to follow.
    As you know, Mr. Chairman, Virginia has taken a leadership 
role in asking the Federal government to open up the Atlantic 
Outer Continental Shelf for exploration of hydrocarbons. The 
official policy of Virginia is to request that the Federal 
government allow for exploration for natural gas only and no 
closer than 50 miles from our own coastline.
    However, there are many in Virginia, including myself, 
that, consistent with Navy training requirements and 
environmental review, would take a much broader approach.
    We, in Virginia, were pushing this policy long before $4-a-
gallon gasoline and prior to the current large-scale recession 
in which we find ourselves.
    During peak energy prices last summer, it was estimated 
that this nation was spending nearly $700 billion a year 
importing hydrocarbon energy from outside the borders of this 
country. This dollar figure is surprisingly similar to the TARP 
package and the economic stimulus package that this Congress 
passed within the last few months.
    Mr. Chairman, imagine for a minute, if those hundreds of 
billions of dollars we currently spend outside the borders of 
this country buying energy were spent inside this country, 
developing our own natural resources, employing Americans to 
produce American energy for American industry.
    At a time when job creation and economic stimulus is 
absolutely critical, putting Americans back to work developing 
our own natural resources will go a long way toward restoring 
America's economic vitality.
    Mr. Chairman, I need not tell you that states are 
struggling. I just drove up from Richmond, where Virginia is 
attempting to close a nearly $4 billion deficit. This Congress 
has authorized revenue sharing with coastal states, in some 
instances, as part of opening up more areas of the Outer 
Continental Shelf. We sincerely hope that you continue the 
program.
    Mr. Chairman, I ask you to only look north to our friends 
in Canada. They are already in the Atlantic Outer Continental 
Shelf, recovering some 500 million cubic feet of natural gas a 
day off of Nova Scotia in the Sable Island area. It is also my 
understanding that they have opened up significant oil deposits 
off of Newfoundland farther out in the Atlantic Basin.
    To our south, Cuba is already entertaining leasing 
structures and putting together programs just within 50 to 70 
miles off the coastline of Florida, yet we continue to restrict 
access to potential reserves of an unknown amount because this 
nation has chosen to restrict even the basics of exploration to 
make this determination. In this instance, ignorance is not 
bliss.
    Mr. Chairman, because of Virginia's actions, we are 
currently in the MMS Five-year Leasing Plan with a potential 
lease sale occurring as early as 2012. We would encourage you 
to work with Secretary Salazar to keep Virginia on schedule.
    We, in Virginia, recognize there is no one silver bullet 
for this nation's energy problems. The solution must be thought 
of as a silver shotgun shell where each pellet is equally 
important as the others. Opening additional OCS is one of those 
pellets. Expansion of nuclear power and revisiting prior 
decisions on breeder reactors is another. Conservation, energy 
efficiency, development of renewables, and alternative energies 
are all pellets that go in that shotgun shell.
    Three years ago, in Virginia, we passed a comprehensive 
energy plan, which I have authored and with bipartisan support. 
The Virginia energy plan includes all forms of energy I just 
mentioned, as well as expansion of energy research and 
development, expansion of conservation, and moving forward.
    However, we do not hold the keys, Mr. Chairman. You, in 
Washington, do. Please unlock these doors. Once we have opened 
up the MMS action to date with regard to Virginia's OCS, open 
that door for other states that want to follow Virginia. 
Facilitate the expansion of our nuclear industry. Open up more 
areas for energy development. Continue to expand the good work 
to date on funding R&D. Expand our efforts to use existing 
energy more wisely.
    We, as a nation, are at a critical juncture where the 
health of our economy and the health of our economy and the 
health of our planet are intertwined. We look to you, our 
Federal representatives, to make the right decisions for the 
future of our country. Please hear my plea to allow us 
Americans to take advantage of our domestic resources so that 
we may secure America's energy independence while putting 
Americans back to work.
    Thank you for allowing me this minute, Mr. Chairman, and I 
will take the last minute just to kind of go off script a 
little bit and talk.
    We have heard a lot of talk about what we are doing here. 
What we are doing is we are restricting ourselves from our own 
national energy resources, yet, at the same time, buying the 
same hydrocarbon resources from outside our border.
    I can tell you, Mr. Chairman, I know you know this, and I 
know all of the Members of the Committee, Americans out there 
are nervous. They are afraid. They are very concerned about 
their jobs. They are very concerned about the economic future. 
We start talking about renewables, and MMS is still trying to 
put a five-year plan together for offshore leasing for 
renewables.
    The obstacles that are up as part of the permitting 
processes mean there is no quick solution as equally as 
important as opening up these areas and doing these other 
things. We need to look at the process of getting these things.
    We talk a lot about green jobs; I spent weeks, years, 
trying to get one small renewable project permitted in 
Virginia, and we are still no closer than we were before.
    I think we really need to look at this in the context of 
not just what we do but also how we get there from where we are 
today. I think it is a very serious problem. I think it is a 
core problem for this economy and this nation, and I hope that 
you all can make the right decisions here and move forward in a 
bipartisan manner but recognize that it is all of our resources 
for all ourselves. Thank you, Mr. Chairman.
    [The prepared statement of Mr. Wagner follows:]

         Statement of The Honorable Frank W. Wagner, Senator, 
                    Senate of Virginia, 7th District

    Thank you, Chairman Rahall, Congressman Hastings, for the 
opportunity to testify before you today.
    As you know, Mr. Chairman, Virginia has taken a leadership role in 
asking the federal government to open up the Atlantic Outer Continental 
Shelf for exploration of hydrocarbons. The official policy of Virginia 
is to request that the federal government allow for exploration for 
natural gas only no closer than fifty miles from our own coastline.
    However, there are many in Virginia, including myself, that 
consistent with Navy training requirements and environmental review, 
would take a much broader approach.
    We in Virginia were pushing this policy long before $4 a gallon 
gasoline and prior to the current large-scale recession in which we 
find ourselves.
    During peak energy prices last summer, it was estimated that this 
nation was spending nearly $700 billion a year importing hydrocarbon 
energy from outside the borders of this country. This dollar figure is 
surprisingly similar to the TARP package and the economic stimulus 
package that this Congress passed within the last few months.
    Mr. Chairman, imagine for a minute, if these hundreds of billions 
of dollars we currently spend outside the borders of this country 
buying energy were spent inside this country, developing our own 
natural resources, employing Americans to produce American Energy for 
American Industry.
    At a time when job creation and economic stimulus is absolutely 
critical, putting Americans back to work developing our own natural 
resources would go a long way towards restoring American economic 
viability.
    Mr. Chairman, I need not tell you that states are struggling. I 
just drove up from Richmond where Virginia is attempting to close a 
nearly $4 billion deficit. This Congress has authorized revenue sharing 
with the coastal states as part of opening more areas of the Outer 
Continental Shelf. We sincerely hope you continue the program.
    Mr. Chairman, I ask you to only look north to our friends in 
Canada. They are already in the Atlantic Outer Continental Shelf 
recovering 500 million cubic feet of natural gas a day off of Nova 
Scotia. Canada is also expanding hydrocarbon recovery in the Atlantic 
basin off Newfoundland. To our south, Cuba is moving forward with 
development of their offshore resources. Yet, we continue to restrict 
access to potential reserves of unknown amount because this nation has 
chosen to restrict event he basics of exploration to make this 
determination. Mr. Chairman, in this instance ignorance is not bliss.
    Mr. Chairman, because of Virginia's actions, we are currently in 
the MMS five-year leasing plan with potential lease sales occurring as 
early as 2012. We would encourage you to work with Secretary Salazar to 
keep Virginia on schedule.
    We in Virginia recognize that there is no one silver bullet to 
solve our nation's energy crisis. The solution must be thought of as a 
silver shotgun shell, with each pellet as important as the next.
    Opening additional OCS areas is one pellet. Expansion of nuclear 
power and revisiting prior decisions on breeder reactors is another. 
Conservation, energy efficiency, development of renewables and 
alternative energies are pellets, and the list goes on.
    Three years ago in Virginia we passed a comprehensive energy plan, 
which I authored, with bipartisan support. The Virginia Energy Plan 
includes all the forms of energy just mentioned as well as the 
expansion of energy research and development.
    However, we do not hold the keys, Mr. Chairman. You in Washington 
do. Please, Mr. Chairman, unlock the doors. One has been opened with 
MMS action to date with regards to Virginia's OCS. Open that door for 
other states that want to follow Virginia. Facilitate the expansion of 
our nuclear industry. Open up more areas for energy development. 
Continue to expand the good work to date on funding energy R&D. Expand 
our efforts to use our existing energy more wisely. We as a nation are 
at a critical juncture where the health of our economy and the health 
of our planet are intertwined. We look to you, our federal 
representatives, to make the right decisions for the future of our 
country. Please hear my plea to allow us as Americans to take advantage 
of our domestic resources so we may secure America's energy 
independence while putting Americans back to work.
    Thank you for allowing me to testify before you today. I would be 
happy to answer any questions at the appropriate time.
                                 ______
                                 
    The Chairman. Thank you, Senator. Mr. Graves?

          STATEMENT OF HON. GARRET GRAVES, DIRECTOR, 
       LOUISIANA GOVERNOR'S OFFICE OF COASTAL ACTIVITIES

    Mr. Graves. Thank you, Mr. Chairman. Happy Mardi Gras. It 
is a state holiday, but apparently nobody else got the 
headline.
    The Chairman. Happy Mardi Gras to you, too.
    Mr. Graves. I want to thank you very much for the 
opportunity to testify today. It is actually better, for both 
my health and marriage, that I am here versus there, I am sure.
    I want to show a quick satellite depiction from NOAA of 
North America. You can see, 60 million years ago, how the 
Mississippi River Delta was somewhere near Illinois perhaps. 
Over this 55-million-to-60-million-year period, you can see the 
evolution. The point here is that you have an extraordinarily 
dynamic coastal area in Louisiana, an extraordinarily dynamic 
delta in coastal Louisiana, that today is one of the most 
productive areas in the nation.
    An MMS report, years ago, determined that the evolution of 
the oil and gas industry has had profound impacts on the 
culture, geography, society, and the economy of the state in 
the 20th century.
    In reviewing the testimony in the hearing that was held by 
this Committee on February 11th, a number of issues were 
repeated, and they pertain to tourism, commercial fishing, 
recreational fishing, and the maritime industry. Those concerns 
that were brought up were hypothetical projections or estimates 
of what would happen if additional offshore production were 
established in states that currently do not host such 
production, or if production was expanded where states that are 
currently hosting.
    I can show you exactly what is happening in Louisiana 
rather than giving you theories or hypothetical suggestions of 
what is happening. This is really what we are facing and what 
we have seen in Louisiana after several decades of production.
    New Orleans is one of the top tourist destinations in the 
Nation and the world. We have 10 million visitors to New 
Orleans alone and over 20 million visitors to Louisiana last 
year, and it is one of the state's largest economies, totaling 
$10 billion just last year.
    The commercial fishing industry; we have the top commercial 
fishing industry in the continental United States, the top 
producer of crabs, oysters, crawfish, and we were the top 
producer of shrimp until Katrina wiped out our infrastructure, 
but we will take that back from Texas. The commercial fishing 
industry represents 50,000 jobs in the state and has a $2 
billion economic impact.
    Here is some NOAA data showing, and confirming, again, the 
importance of the commercial fishing industry to Louisiana. The 
top fishing ports in the Nation are in Louisiana, with the 
exception of one in Dutch Harbor, Alaska.
    On the recreational fishing side, Louisiana is home to 
numerous national and world fishing records. There are 1.2 
million saltwater anglers just in 2006, and recreational 
fishing in our coastal area represents a $3 billion annual 
impact, tens of thousands of jobs, and Louisiana has the 
fourth-best recreational fishing industry in the nation, 
measured by economic activity.
    In addition, in terms of the sustainability and the 
productivity of our ecosystem, many of you may remember that 
alligators were on the brink of collapse several years ago. As 
a result of improvements to the ecosystem in coastal Louisiana, 
the alligator population has rebounded. Now, we actually have 
hunting seasons for alligator, in addition to a very active 
farm-raised alligator community and population: boots, belts, 
and other products I will be selling later. But, again, just 
showing the success of the ecosystem.
    On the maritime side, once again, there were concerns 
expressed in the previous hearing that oil and gas development 
would box out the maritime industry by requiring the use of the 
ports and limited slips, and things like that. Louisiana is 
home to five of the top 15 ports in the nation, and that does 
not count the impact from oil and gas activity. It is not 
measured in these statistics.
    We have the top tonnage port in the hemisphere, the largest 
port system in the world between Baton Rouge and New Orleans, 
and over 30 states today rely upon our port system for maritime 
commerce.
    In addition to those benefits, and, again, showing you 
exactly what is happening in Louisiana, where we produce more 
offshore oil than anywhere else in the nation, there are 
additional benefits. We produce up to 20 percent of 
domestically generated oil and gas. We have safe, stable, 
secure, and clean production. Since production began offshore 
in Louisiana, we have produced 14 billion barrels of crude oil 
and condensate and 135 trillion cubic feet of natural gas.
    Just from the production offshore of Louisiana, it is 
estimated that the U.S. Treasury has received direct benefits 
related to rents, bonus bids, and royalty payments totaling 
$150 billion, and, as many of you know, virtually no money has 
been returned to the state from that $150 billion.
    In addition, 320,000 jobs are sustained as a result of 
offshore oil and gas production. It has an annual economic 
impact of $65 billion, and that is the petrochemical industry, 
which includes onshore, offshore, and associated industrial 
activity, and the direct OCS impact is $6 billion annually.
    Louisiana is a laboratory. I am not going to sit here and 
tell you that we have not made mistakes and that there were no 
adverse impacts from oil and gas production in Louisiana, but 
one thing is, is that we have cleaned up the industry. We have 
changed our coastal management practices to make them more 
sustainable, but, again, there have been impacts from that 
production, but I think that showing the maritime, showing the 
fisheries, showing the healthy ecosystem, it shows that it is 
possible to have a sustainable oil and gas activity while 
having a sustainable ecosystem.
    In coastal Louisiana, the Corps of Engineers identified 
9,300 miles of pipelines. We have some of the most intense 
energy infrastructure in the world, and these all represent 
pipelines, these lines here in the Gulf of Mexico, again, the 
most intense energy infrastructure in the world. In the state, 
we have almost 40,000 miles of pipelines related to the energy 
industry.
    Another concern that was expressed at the previous hearing 
was from spills, and that is something that clearly is very 
important. After Hurricanes Katrina and Rita, we did experience 
some spills, but the majority of those spills were results of 
onshore activities that were not related necessarily to 
offshore production.
    The third bullet down there identifies that an MMS study 
found that there were no spill contacts to the shoreline; there 
were no oiled-up marine mammals, birds, or other wildlife; 
there were no large volumes of oil on the ocean surface to be 
collected or cleaned up; and there were no environmental 
impacts from any spills from Hurricane Katrina or Rita. There 
were no major spills, and I want to clarify, the word ``major'' 
is a term of art defined by the Coast Guard, and it signifies, 
it represents, a spill in excess of 100,000 gallons. But with 
over 120 offshore platforms destroyed as a result of those two 
hurricanes, again, no major spills.
    Again, we had approximately eight million gallons that were 
discharged or lost, the majority of that being onshore. That 
compares to 11 million from the VALDEZ spill. Natural seepage, 
as was discussed earlier, from oil and gas activity in the Gulf 
of Mexico represents a larger loss or discharge in the 
environment than anywhere, in any spill source or anything else 
in the United States, and there is up to an 800-percent greater 
chance of losing or discharging oil and gas into the atmosphere 
as a result of shipping rather than production. So, obviously, 
the closer to production the consumption of that product, the 
safer you are.
    I know I am out of time, so I am just going to very quickly 
run through a couple of slides here.
    This just depicts the subsidies that the Federal government 
is currently putting toward the various sources of energy 
production. You guys talked earlier about the need to use 
solar, use wind, and other types of alternative energy sources. 
Clearly, they are important, but, in looking at this, you have 
extraordinary subsidies that are being put toward those energy 
sources. It is simply not sustainable. It is not competitive, 
and especially when we are facing economic challenges, I think 
we need to continue to look at oil and gas as a source of 
energy.
    We are continuing to import in excess of 60 percent of our 
oil consumed in the United States, and that includes from 
volatile sources, like Nigeria and Venezuela. We have 
extraordinary reserves that are recoverable out in the OCS 
today--let me blaze through--showing the significant 
improvements in energy efficiency. I believe that continued 
investment in energy efficiency should be part of a package and 
could be funded from additional offshore revenue generated from 
new production.
    This shows the current projections, and it is commendable 
that California is attempting to achieve a 33-percent renewable 
portfolio, but, in many other states, it is simply 
unachievable, and, again, it is not economic.
    I would urge that the Committee continue to look at all of 
the tools that are available, to not say ``no'' to offshore 
drilling. I am not going to sit here and be a knuckle dragger 
and tell you that you can drill your way out of the energy 
challenge because that is not the case, but I do think that 
continued expansion and development of the offshore area should 
play a key role in the development of future comprehensive 
energy policy.
    [The prepared statement of Mr. Graves follows:]

  Statement of Garret Graves, Director, Office of Coastal Activities, 
 Member, Mineral Board, and Chair, Coastal Protection and Restoration 
                     Authority, State of Louisiana

    Happy Mardi Gras. Mr. Chairman, Ranking Member and Committee 
members, thank you for the opportunity to participate in today's 
important hearing. I am Garret Graves, Director of the Louisiana Office 
of Coastal Activities, a member of the State's Mineral Board and Chair 
of the Louisiana Coastal Protection and Restoration Authority.
    Louisiana's coastal area is often referred to as a ``working 
coast'' and is home to the world's best food, the unique Cajun culture, 
five of the nation's top 15 ports, the top producer of fisheries in the 
continental United States, the largest source of domestic oil, number 
two domestic provider of natural gas, the second largest percentage of 
oil refining capability in the country, the nation's highest capacity 
of Liquefied Natural Gas terminals capacity and the home of over two 
million people that rely upon a resilient, progressive, sustainable and 
productive coastal area. The Office of Coastal Activities was 
established to coordinate the various policies affecting activities in 
Louisiana's coastal area. It operates similar to the Council on 
Environmental Quality in that the office is designed to function across 
all state agencies and advocate the consensus state coastal policy.
    I commend the Committee for taking on the extraordinary task of 
developing comprehensive national energy policy. It is a challenging 
effort that, while necessary, I would not wish upon anyone. Your 
approach to take a step back and fully evaluate all energy sources, 
their potential to meet energy demand in both the short and long-term, 
and to implement progressive, sustainable energy policy is exactly the 
recipe that is needed to reduce the volatility in energy prices, reduce 
the burden on consumers' pocketbooks, increase employment opportunities 
and to improve our national, economic and environmental security--as 
President Obama has defined in his energy goals.
    Last month, the Department of the Interior's Minerals Management 
Service released a draft plan for offshore oil and gas development that 
included the potential for additional production offshore California 
and new oil and gas production areas on the east coast. Released by the 
previous Administration, the plan would go into effect following the 
current 2007-2012 offshore plan. The release of the draft plan was the 
impetus for many thoughts and discussions on a comprehensive energy 
policy and evoked many strongly-held opinions from communities across 
the country. I believe this was the intent of the proposal. Secretary 
Salazar's recent decision to provide for additional time to consider 
this draft plan was appropriate considering the significant change in 
policy that could result.
    In reviewing the Committee's previous outer Continental Shelf 
hearing on February 11, and the response of a number of coastal states 
regarding the anticipated impact of the draft 2010-2015 plan, I believe 
it important to share and hope that the Committee considers the 
experiences of Louisiana related to offshore energy development.
    Offshore Louisiana has provided approximately 85 percent of the 
outer Continental Shelf (OCS) oil and an estimated 81 percent of OCS 
natural gas. This translates to over 14 billion barrels of crude oil 
and condensate and 135 trillion cubic feet of natural gas produced 
offshore our state. As you can see, we have had more offshore 
production of oil and gas than any other area of the nation. Rather 
than rely upon beliefs or feelings, I hope that some of our actual 
experiences will weigh heavy during this Committee's deliberations.
    There are many experts that have predicted the collapse of tourism, 
fishing, maritime and other coastal activities with the introduction of 
offshore production. The facts in Louisiana prove otherwise:
Tourism
      New Orleans is one of the top national and world tourist 
destinations.
      Before Hurricane Katrina tourists to New Orleans alone 
had over 10 million visitors per year.
      Tourism, including this week's Mardi Gras celebration, in 
the New Orleans area provides a $5 billion economic impact annually.
      Replacing the revenue from tourist visits to New Orleans 
would require imposing a tax of $3000 per family statewide.
      The State of Louisiana had over 24 million tourists 
visits last year.
      Tourism is one of the largest economic sectors in the 
state and generates an estimated $10 billion annually.
Oil Spills
      According to the Minerals Management Service, since 1980 
over 4.7 billion barrels of oil have been produced and less than one-
thousandth of one percent of that has spilled.
      The MMS also found that there has not been a spill 
greater than 1000 barrels in the last 15 years from an offshore 
platform.
      An MMS study determined that Hurricanes Katrina and Rita:
        no spill contacts to the shoreline
        no oiling of marine mammals, birds, or other wildlife
        no large volumes of oil on the ocean surface to be 
collected or cleaned up
        no identified environmental impacts from any OCS spills 
from Hurricanes Katrina or Rita
        no major spills
Fisheries
      Louisiana is the top producer of seafood in the 
continental United States.
        The state produces more oysters, crabs, crawfish than any 
other
        More shrimp is harvested offshore Louisiana than any other 
state (pre-Katrina)
      Louisiana is a top recreational fishing destination
      In 2006, an estimated 1.2 million recreational anglers 
tested their saltwater fishing skills in Louisiana's coastal waters
      Numerous national and world fishing records have been set 
in Louisiana's coastal area.
      According to the National Oceanographic and Atmospheric 
Administration, Louisiana has the fourth best recreational fishing 
industry in the nation (measured by economic impact).
      There is an estimated $3 billion annual economic impact 
from recreational saltwater fishing in Louisiana.
      Tens of thousands of jobs in our state are dependent upon 
the recreational fishing industry.
      The commercial fishing sector generates over $2 billion 
in sales annually and supports an additional 50,000 jobs.
Maritime
      Five of the nation's top ports are located in Louisiana's 
coastal area.
      Louisiana is home to the top tonnage port in the 
hemisphere and the largest port complex in the world.
      Over 30 states rely upon Louisiana's port system for 
maritime commerce.
    I would like to reemphasize that these are realized not projected 
statistics.
    While Louisianans have benefited by the extraordinary economic 
activity associated with Louisiana's tourism, fisheries and our 
maritime industries, the nation has been the true beneficiary of our 
hosting federal oil and gas activities:
Energy
      An estimated 17-20 percent of domestically-produced oil 
and gas comes from Louisiana.
      30 percent of the nation's crude oil supply and 34 
percent of the natural gas consumed in the U.S. is either produced in 
Louisiana, in the Louisiana OCS or requires Louisiana's energy 
infrastructure for passage to market.
Fiscal Impact to U.S. Treasury
      In addition to indirect benefits to the economy and 
revenues generated by income taxes, OCS energy production provides one 
of the largest non-tax revenue streams to the U.S. Treasury.
      In recent years, direct OCS revenues to the federal 
treasury were estimated to approach $10-12 billion annually.
Jobs
      A study performed for the Mid-Continent Oil and Gas 
Association determined that the energy industry (includes onshore and 
offshore production) has a $65 billion annual economic impact on the 
state.
      OCS production has an economic impact of nearly $6 
billion annually and supports over 320,000 jobs in the state.
    I recognize that many believe that increasing oil and gas 
production will prolong America's dependence upon fossil fuels and 
threaten the health of the environment. The State of Louisiana commends 
the Committee for its continued focus on promoting diverse alternative 
energy sources to meet our nation's growing energy demands. We believe 
that wise investments of the nation's resources include efforts to 
improve the competitiveness and efficiency of wind, solar, geothermal, 
hydropower, nuclear, wave, tidal, biomass and many other energy 
sources. For countless reasons, it is an appropriate and laudable long-
term goal to power our homes, cars, businesses and industrial 
activities with alternative sources of energy. Unfortunately, cost 
competitiveness issues and a lack of appropriate infrastructure prevent 
access to many alternative energy technologies for most Americans. With 
the current state of the economy, Congress should be very sensitive to 
any policies that would increase financial pressure in the form of 
higher utility and fuel costs on our already-struggling families.
    As we all know, it would be impossible to simply flip a switch to 
fulfill all energy demands with alternative sources overnight. It is 
difficult to predict any scenario whereby conventional fuels will not 
continue to play a major role in powering our economy as part of a 
near-term or transitionary energy strategy. This near-term strategy may 
take 15 years or it may take much longer, but significant thought must 
be given to how and where our conventional fuel demands will be met.
    The United State is currently importing nearly 60 percent of the 
oil we consume. This is up from 24 percent in 1970. In addition to 
increasing our trade debt, current supplies of oil are being met by 
increasingly volatile or threatening countries. The top five exporters 
of oil to the United States include the unstable regulatory 
environments of Venezuela and Nigeria. In addition, many of 
environmental standards related to oil production fail to compare to 
the stringent standards in the United States. It is often said that we 
should not expand OCS production in the United States because it would 
take up to ten years to get new production areas online. While we could 
quarrel over the timing of bringing production online, it is 
counterproductive to the larger issues before the Committee. We should 
focus on a comprehensive vision that plans for our long-term goals 
while providing for our immediate and transitional needs.
    I urge the Committee to keep in mind that oil imports have steadily 
increased since the 1970s and are projected to continue to increase for 
the next several years. The United States has one of the most stable 
regulatory climates in the world and we maintain some of the most 
stringent environmental standards. For those of us concerned about the 
environment, I would assume that this concern expands beyond the 
borders of the United States--the global environment. Would it not make 
more sense to meet our near-term demands for conventional fuels by 
expanding domestic production areas? If properly implemented, this will 
increase employment opportunities, reduce our trade deficit, prevent 
the transfer of billions of dollars per month to foreign governments 
and increase our energy security.
    Earlier this month, Secretary Salazar said, ``We need a new, 
comprehensive energy plan that takes us to the new energy frontier and 
secures our energy independence''. President Obama established a goal 
of eliminating our dependence on Middle Eastern oil within 10 years. 
While it would be premature to endorse the proposed 2010-2015 OCS plan, 
a responsible expansion of domestic production areas combined with 
increased energy efficiency, conservation and strategic investments in 
expanding alternative energy production and development are fundamental 
components of any solution. Oil and natural gas prices will increase 
again. We cannot drill ourselves out of our energy demand, but we can 
take responsible steps to transition ourselves onto a path of true 
energy independence.
    To summarize my initial recommendations to achieve the President's 
energy goals:
    1.  Recognize that any near-term or transitionary comprehensive 
energy strategy will continue to rely upon conventional fuels 
(including natural gas) beyond that which are currently produced 
domestically;
    2.  Expand efforts to improve energy efficiency and the 
conservation of energy resources;
    3.  Supplement the tens of billions of dollars previously-invested 
in alternative energy research, development and incentives to improve 
the competitiveness and infrastructure associated with alternative 
energy sources (including nuclear and hydropower);
    4.  Make strategic investments in improving the efficiency of 
conventional fuels;
    5.  Recognizing the stringent environmental standards in the United 
States, determine where significant reserves of accessible hydrocarbons 
can be safely produced domestically;
    6.  Ensure that investments in this transitionary strategy will 
complement longer-term efforts to achieve energy independence and 
improve our energy security by meeting our energy demands with clean, 
safe, stable domestically-produced energy; and
    7.  Energy revenues should be shared with host states as outlined 
below.
    Our experiences in Louisiana demonstrate the ability to allow for 
the coexistence of multiple uses of coastal areas; however, I do not 
want to suggest that OCS activities are without impact or cost to 
states.
    As the nation's top energy source and the ``guinea pig'' for many 
early oil and gas production practices, Louisiana has experienced 
adverse impacts from energy production. These cumulative impacts from 
decades of production include:
      Stress upon our landside infrastructure to support 
offshore activities.
      The loss of coastal wetlands as a result of early 
practices related to accessing hydrocarbons in the coastal area.
      The intrusion of saltwater into freshwater ecosystems.
    Congress should accompany any new expansion or increase in domestic 
oil and gas production with a program to allow for the sharing of 
energy revenues. While Congress did provide for the limited sharing of 
offshore production revenues in the Gulf of Mexico Energy Security Act, 
pursuant to the act revenue sharing begins in 2017. This program is too 
far in the future to address the current needs in coastal states like 
Louisiana and would prevent proactive steps to be taken by states 
initiating offshore production.
    Rather than reinventing the wheel, Congress should simply model any 
energy revenue sharing program after that which has been used for 
onshore production areas on federal land since 1920--the Mineral 
Leasing Act (MLA). Under this law, 50 percent of energy revenues from 
production of resources on federal lands are shared with states that 
host such production. In the case of the MLA, there are no strings 
attached to the use of these shared revenues. In recent years, the 
states of New Mexico and Wyoming have shared $1 billion annually from 
this program.
    In addition to the 50 percent going directly to states that host 
onshore energy production, an additional 40 percent goes into the 
Reclamation Fund to carry out water projects in these same states. In 
effect, 90 percent of the energy revenues from production on federal 
lands are returned to states while only 10 percent goes to the U.S. 
Treasury. In the case of offshore production today, virtually all 
revenues generated from production in the OCS goes to the Treasury. 
Quite simply, the disparity between onshore production and offshore 
production revenue sharing is illogical and contrary to the nation's 
best interests.
    In the case of Louisiana, our citizens adopted a Constitutional 
amendment by an overwhelming margin that dedicates any OCS revenue 
sharing to a coastal trust fund to be used for coastal restoration and 
hurricane protection.
    Louisiana has lost up to 35 square miles of coastal lands and 
wetlands per year in recent years. Since the 1930s, we have lost over 
2300 square miles. In 2005, the state lost over 200 square miles of 
land in just two days. Hurricanes Katrina and Rita had an extraordinary 
impact on our coastal ecosystem that exacerbated land loss. This may 
seem like a parochial issue or ``Louisiana's problem'' to many of you. 
I would like to help you to understand why this is actually the 
nation's challenge.
    Following the 2005 hurricanes every consumer in America was paying 
an average of 75 cents to one dollar a gallon in higher fuel prices. 
This was a result of the energy infrastructure damage in our state. A 
recent study found that if just one of Louisiana's energy ports were 
shutdown for three weeks, the loss in revenues to U.S. firms would 
exceed $10 billion.
    In addition, responding to the 2005 hurricanes Congress has 
appropriated funds or established programs totaling nearly $150 
billion--the key word here is ``responding''. Had revenue sharing 
provisions been in place, I estimate that nearly 80 percent of the 1800 
lives that were lost and 80 percent of the funds appropriated by 
Congress could have been saved. Further, the fuel price spikes 
experienced by consumers nationwide would have been averted. Under the 
Louisiana Constitution, the state would have utilized its revenue 
sharing funds for measures to protect, restore and improve the 
resiliency of coastal Louisiana.
    Finally, we urge that Congress establish parity on state seaward 
boundaries. Currently, the states of Texas and Florida enjoy a state 
seaward boundary of three marine leagues, or roughly nine miles. 
Louisiana, Mississippi and Alabama have a seaward boundary of only 
three miles. The disparity dates back to when states were admitted to 
the union and its basis is simply irrelevant to sustainable coastal 
management. Providing consistent or expanded state boundaries would 
allow states to exert greater control over those areas which affect 
onshore and near shore activities. It will reduce conflicts related to 
coastal consistency determinations and result in improve management of 
coastal resources.
    Recommendations related to the expansion of offshore development:
    1.  Identify those areas with significant recoverable hydrocarbon 
reserves;
    2.  Evaluate the impact of the recovery of reserves with states;
    3.  Weighing state interests, consistency with ongoing coastal 
uses, energy independence goals and national security determine which 
new production areas should be developed;
    4.  Establish an offshore revenue sharing program comparable to 
that under the Mineral Leasing Act for onshore energy production;
    5.  Energy revenue sharing should have a historical component 
recognizing and addressing needs related to historical and cumulative 
impacts of multi-decadal production;
    6.  Revenue sharing should provide sufficient resources to allow 
for proactive efforts to prevent adverse impacts from offshore 
development;
    7.  A portion of offshore energy revenues should be dedicated to 
the development of onshore and offshore alternative energy resources; 
and
    8.  As recommended by the Oceans Commission, an ocean and coastal 
trust fund should be established to address coastal and near-shore 
management efforts of all coastal states and territories.
    I appreciate this opportunity to share experiences from Louisiana's 
long offshore development history and look forward to your questions.
                                 ______
                                 
    Mr. Abercrombie. Mr. Chairman?
    The Chairman. Yes.
    Mr. Abercrombie. Before we go to the questions, could Mr. 
Graves make available to us a document which incorporates his 
slides and commentary because I think your well-crafted 
commentary here is very good, that we have here, but it does 
not contain the slides?
    Mr. Graves. Sure.
    Mr. Abercrombie. And I think it would be very valuable if 
we could have them. I learned a lot from them. I am a big fan 
of what you are doing down in Louisiana. I have seen it myself, 
when the speaker, the then-majority leader, took us down there 
in connection with Katrina. This is very, very valuable 
information for us to have as to with regard to a practical 
implementation of what we would like to do here. Could we do 
that?
    The Chairman. Mr. Graves, if you could do that, by 
unanimous consent, we will allow you to submit that at another 
time, a later time, for the record of today's hearing.
    Mr. Graves. Yes, sir.
    The Chairman. And also, I would like to ask unanimous 
consent that a letter from Governor Tim Kaine, from the 
Commonwealth of Virginia, requesting that the letter he sent to 
Secretary Salazar, on February 19, 2009, be made a part of 
today's hearing record as well.

    [The letters from Governor Kaine submitted for the record 
follow:]
     
     
     
     
    [GRAPHIC] [TIFF OMITTED] 47607.003
    

    .epsSec. 67-300. Offshore natural gas and wind resources.
    A. In recognition of the need for energy independence, it shall be 
the policy of the Commonwealth to support federal efforts to determine 
the extent of natural gas resources 50 miles or more off the Atlantic 
shoreline, including appropriate federal funding for such an 
investigation. The policy of the Commonwealth shall further support the 
inclusion of the Atlantic Planning Areas in the Minerals Management 
Service's draft environmental impact statement with respect to natural 
gas exploration 50 miles or more off the Atlantic shoreline. Nothing in 
this Act shall be construed as a policy statement on the executive or 
Congressional moratoria on production and development of natural gas 
off the Atlantic shoreline.
    B. It shall be the policy of the Commonwealth to support federal 
efforts to examine the feasibility of offshore wind energy being 
utilized in an environmentally responsible fashion.
    (2006, c. 939.)
                                 ______
                                 
                                 [GRAPHIC] [TIFF OMITTED] 47607.004
                                 
    .epsThe Chairman.Gentlemen, thank you for your testimony. I 
would like to ask a question, I guess, to the entire panel.
    In recent days, of course, we have seen some activity and 
statements made here in Washington by some Governors of our 
states that they will not accept parts of the stimulus package, 
in particular, your Governor, Mr. Graves. And, by the way, Mr. 
Graves, we welcome you back to Capitol Hill. I understand you 
used to be on the staff of our former colleague and dear 
friend, Billy Tauzin, so we welcome you back.
    Anyway, your Governor, among some others, has said that----
    Mr. Abercrombie. Mr. Chairman, excuse me. Could Mr. Graves 
give us the information despite the fact that he worked for 
Billy Tauzin?
    The Chairman. Governor Jindal, in particular, has said that 
he will not accept parts of the stimulus package. He may accept 
some programs but not others, and some of the Governors are 
reserving the right not to be told by the Feds what to do.
    This is yet another example of the states wanting it their 
way. We have so often heard states saying they resent Federal 
mandates and Federal intrusions, et cetera, et cetera. We have 
this problem when it comes to OCS oil and gas drilling. We have 
the same problem. Some states fully support unlimited offshore 
drilling, some states support it with qualifications: drilling 
for natural gas only, drilling only if they ran the program, 
drilling if they get their half of the revenues, and on ad 
infinitum.
    However, these are Federal waters. These are Federal oil 
and gas resources, and we are a nation comprised of a union of 
states. These are lands that belong to all of our American 
people. The fact of the matter is that the states do not exist 
in a vacuum. We all have neighbors who may or may not support 
what your state wants to do on offshore oil and gas leasing.
    So, my generic question is, how do we address this 
situation? How do we reconcile the problem? Senator?
    Mr. Wagner. Mr. Chairman, you make the statement, and, 
certainly, you have heard a lot of testimony that there will be 
some impact to those states where the activity occurs. I know 
you have entertained some revenue sharing in some of the most 
recent parcels that you have put out, but while we recognize 
that that is Federal land, we also recognize that that is 
Federal land in Wyoming, Federal land in Colorado.
    That is Federal land, yet the revenue sharing contemplated 
for those states with activity off their shore is far less than 
the current revenue sharing ongoing from that Federal property 
that is collectively owned by all of us around the nation, yet 
the revenue share back to these states is a much greater 
percentage, off the top of my head. I am sure someone on the 
Committee knows.
    Under that same concept, we would look to see that those 
lands adjacent to our state, from three miles out to the end of 
200 miles, get that same consideration. In fact, I know of one 
plan recognizing that border states may also have consequential 
impacts if the revenue sharing spreads even up, you know, north 
and south, in the case of the Eastern Seaboard, with other 
states so that all states where the activity is constructing 
off their shore would probably enjoy some of those benefits 
also.
    Clearly, I think you have heard a lot of statements today 
about--we all understand it is about money, who knows best how 
to spend that money, and we happen to feel that, in Virginia, 
that we had part of the bill--it is not currently part of it, 
but 40 percent would go to our efforts to clean up the 
Chesapeake Bay, 40 percent would go to transportation, 
statewide, so some of you folks can get back and forth, if you 
live in Virginia, a little easier than you can right now; 10 
percent for energy tax credits to encourage conservation, and 
10 percent to help fund research and development as matching 
money to use for Federal efforts.
    Those were our thoughts in Virginia with regards to the 
stimulus package. We were facing a $4 billion deficit. This 
will help plug that hole significantly for this year. What we 
are already talking about right now in Virginia is the ``cliff 
effect,'' that we are seeing significant revenue drop off. 
January was a shocker for us--we did not get the results until 
three weeks in--some 15-some percent in income tax collections.
    It very much concerns us, if this trend continues. We see 
that, while it is a one-time, in the absence of that, that the 
cliff could become much larger next year when we go back to 
contemplate our biannual budget next year.
    So, that is our concern now. We have kind of escaped for 
the next 10 or 11 months, but it is not escaping us unless we 
see a significant economic turnaround, that we are going to be 
facing a very, very large cliff and a very large funding hole 
next year that, quite frankly, will be very, very difficult to 
patch up.
    Mr. Chrisman. Mr. Chairman, if I might, from California's 
perspective, our Governor has said we are going to take the 
Federal stimulus dollars to California because we see the 
dollars, we think, being well spent, in terms of the 
partnership programs and our transportation infrastructure 
across the state in many other areas that we think are 
important.
    You asked specifically about in the context of OCS offshore 
drilling in Federal waters. What do we do next? How do we get 
through this conversation, this debate, that you have obviously 
had in Congress for a number of years and are obviously trying 
to tee up again, from a policy conversation?
    I would suggest you do exactly what you are doing and 
continue to do exactly what you are doing, and what the Obama 
administration is proposing to do, in terms of a national 
conversation and debate around a coherent, short-, medium-, and 
long-term energy policy for this nation that recognizes that we 
have conservation as an integral part of it, smart metering. 
You have heard a lot of the conversation today, really good 
ideas put forward today. They need to be a part of this 
continued conversation and debate, getting us, the states, 
involved in it as we move through this process because we all 
have a stake in it.
    In California, as you have heard, we have experienced a lot 
of this. Back in the mid-to-late seventies, as a result of the 
energy crisis, we decided, as a state, we were going to get 
more energy efficient. You heard the results of that today.
    We did it through appliance standards, water-reuse 
opportunities, and other activities that have essentially 
created some real good opportunities for us in California, in 
terms of our electricity use. But, at the end of the day, in 
California, there are 38 million people. We have a growing 
population across this nation. We have all got to be a part of 
this growing debate, and what you have teed up here, I think, 
is the right approach.
    The Chairman. Does anybody else wish to address the 
question? Yes?
    Mr. Graves. Mr. Chairman, I think you addressed that 
question to me, to some degree, so I feel like I need to answer 
it. I just want to clarify, the Governor did express concern 
about the unemployment benefits and the strings that were 
attached to those funds. I need to be very careful with I say, 
or I will be applying for them.
    I believe that the Governor's concern in this case was that 
the program established an unsustainable benefit program, 
whereby, after two to three years, when the Federal funds were 
no longer available, the state would be unable to sustain that 
level of benefit, and that was the concern that the Governor 
had, but we are continuing to evaluate all of the stimulus 
revenue streams, and we will continue to make determination on 
whether or not we would access those based upon the conditions 
associated with the funding.
    In regard to your second question on how to, I guess, 
strike that balance of the Federal resource, yet the impact 
perhaps upon the state, Mr. Chairman, I think that a sweet spot 
can be found in this case.
    For example, the State of Virginia is willing to produce, 
they have expressed an interest to produce--I know that Senator 
Warner pushed legislation in the Senate recently, last 
Congress, to try and open up some of the OCS areas offshore of 
Virginia. Associated with that, providing for revenue sharing, 
like is done under the Mineral Leasing Act since 1920, where 
the States of Wyoming and New Mexico receive in excess of a 
billion dollars a year, with no strings attached on those 
monies.
    So, again, there are impacts, but I think providing funds 
and sharing those revenues with the states, like is done for 
production on Federal lands onshore, you can address those 
impacts, and you can have healthy, sustainable, offshore energy 
production areas in the United States.
    The Chairman. OK. My time has expired, but I will ask a 
follow-up question on my second round. I now recognize the 
Ranking Member, Mr. Hastings.
    Mr. Hastings. Thank you very much, Mr. Chairman, and thank 
all of you for your very enlightening testimony.
    Mr. Chrisman, I would like to ask you a couple of 
questions. In your written testimony, you stated, and I want to 
quote you directly on your written statement, you ``want to 
dispel that myth that California only consumes oil and gas and 
does not produce it.''
    However, according to ``ca.gov,'' which is, obviously, a 
government organization, California only produces about 37 
percent of the petroleum that it uses and only produces a 
little over 13 percent of the natural gas that it uses. This is 
according to ``ca.gov.''
    Don't you think that a reasonable person would suggest that 
you could use the OCS resources, and it is estimated, by the 
way, to be about 10 million barrels of oil and about 16 
trillion cubic feet of natural gas, to reduce its dependence on 
out-of-state energy? And that is especially so since and 
overwhelming amount of your gas goes to producing electricity.
    Mr. Chrisman. It is a debate we continue to have. We have, 
in California, recognized that the trade-offs, as I said in my 
prepared comments to you and my comments here today, for 
offshore oil and gas development, for us, are not, at least at 
this stage of the game, are not worth the risk.
    We have opted to go the energy-efficiency route, to go the 
alternative route in all that we are doing in California.
    Mr. Hastings. But you are not dispelling the myth, then, 
are you?
    Mr. Chrisman. No, of course, not.
    Mr. Hastings. But you said that in your statement. I just 
wanted to make that point.
    So, in a way, you are correcting that you are not 
dispelling the myth that you do not produce oil and gas.
    Mr. Chrisman. The myth that we are talking about is that we 
do not produce any. We do some.
    Mr. Hastings. Right.
    Mr. Chrisman. I am not going to quibble with the numbers 
that you presented. I am sure they are correct, but, at the end 
of the day, as we look at the long-term growth of California, 
clearly, the alternatives that we are talking about--the 
transportation fuel, the low-carbon standards that we have put 
in place in our transportation fuels and others--we think, is 
the right approach.
    Will we continue to have the debate about the need to 
access that energy in the Outer Continental Shelf? Yes, we 
will. We will continue to have that, but, at this stage of the 
game, we are where we are and continue to be very strongly in 
that position.
    Mr. Hastings. You also stated in your testimony about what 
California has done, and you alluded to it just a moment ago, 
about your renewable. While I am sitting here listening to this 
testimony, there is an article that showed up in one of my 
large papers in my district, the Yakima Herald-Republic, and it 
reports that wind power from a wind farm in my district is 
being sold, lock, stock, and barrel, to Southern California 
Edison. It is a wind farm that produces enough electricity for 
100,000 homes, which, by my math, equates to a city of about 
400,000 to 500,000 people, which is a substantial part.
    I have to tell you that when I hear testimony from a state 
that does not want to utilize the resources it has and would 
rather by resources from my state on energy production, I find 
that sort of attitude somewhat disturbing, and I say that 
because wind turbines--listen, I am all in favor of alternative 
energy, but when a state puts in standards, like you do, and 
now you are going to import enough electricity from just only 
one company to electrify a city of up to 500,000 people, I find 
that disturbing. Any response to that?
    Mr. Chrisman. I mean, we are contributing to the economy of 
your state by doing that, and, at the end of the day, we are 
all on a west-wide grid in the United States. We all share 
power. We all depend on hydropower certain times of the year 
from Washington, from the Bonneville Power Project. At certain 
times of the year when hydro is at a peak, we will ship a lot 
of the hydro north to other parts of the western grid.
    Mr. Hastings. Let me ask this question, then, in this 
regard, because you have a standard of so much renewable that 
has to be--our state does the same thing.
    Mr. Chrisman. Right.
    Mr. Hastings. So, what is the response to my constituents, 
where we build these wind farms in my district and ship it to 
California? When you testify here, you say, ``Well, it may help 
our economy,'' but you do not want to help yourself by going 
offshore.
    Mr. Chrisman. But we help ourselves by building our own 
wind farms, by having 21 percent of the nation's available 
solar power that we are using for our own folks. That is 
exactly what we are doing.
    Mr. Hastings. According to Mr. Rohrabacher, there are some 
problems getting that decided because of lawsuits.
    Mr. Chrisman. Well, we are in the midst of making that 
happen. We are working on that right now, expanding upon that 
21 percent available solar nationally. That is what our figures 
are. We are expanding them now.
    Are there challenges? Of course, there are challenges. We 
are working in partnership with the Bureau of Land Management 
out in the desert region to put these solar farms in place and, 
at the same time, get the environmental permits necessary not 
only to site them but to get the transmission lines in place to 
get them----
    Mr. Hastings. One last question. I appreciate the 
indulgence, Mr. Chairman.
    Can you meet, within your own state, the standards that you 
put in place of renewable energy?
    Mr. Chrisman. We are convinced we can. We are just over 20 
percent right now----
    Mr. Hastings. OK.
    Mr. Chrisman.--and we are setting at 33 by 2020. We are 
convinced we can. We will probably exceed that.
    Mr. Hastings. One last question to Senator Wagner. The 
Chairman put into the record a letter from Governor Kaine. Are 
you familiar with that letter?
    Mr. Wagner. Yes, Mr. Chairman and Congressman Hastings. It 
was delivered to me while I was sitting in the Committee 
yesterday by the Deputy Secretary of natural resources, so the 
first I saw it was at about 2:00 yesterday.
    Mr. Hastings. What does it say, essentially?
    Mr. Wagner. The letter basically says that he supports 
Secretary Salazar's position to extend the delay, that since 
the existing regulations do not provide for natural gas only 
and do not provide for exploration only, that his position is 
that Virginia does not want to be in the program because of 
what has gone on. So, he supports the delay, and he asks for 
additional study and that type of thing, as near as I can 
recall.
    Mr. Hastings. Thank you very much, Mr. Chairman.
    The Chairman. Thank you. The gentlelady from New Hampshire, 
Ms. Carol Shea-Porter.
    Ms. Shea-Porter. Thank you, Mr. Chairman. I am sorry that I 
arrived a little late, but if you do not mind, I am going to 
say I will brag about the person who is sitting here from New 
Hampshire. I am very happy to see you here today, Ted. Ted is 
the manager of the New Hampshire Coastal program, which is 
really critical for conservationists, and your wisdom and your 
experience contribute a lot, and we thank you for your work.
    I will start out by asking you some questions. In your 
testimony, you had talked about, and I am going to quote you 
exactly, ``multiple uses must be considered with long-term 
productivity of these resources.''
    Can we do that? Can we really have long-term productivity 
if we have multiple uses of the oceans?
    You also talked about putting money into these programs. 
Will money fix these problems, or are these issues really the 
tension between the multiple use of a critical resource, for 
example, the fisheries, versus oil? Do they have to be in an 
adversarial position there? How do you think we would be able 
to solve that?
    Mr. Diers. Thank you very much for having me here also. 
Usually, I am the only person from New Hampshire in the room in 
Washington, so it is great that there are two of us.
    Ms. Shea-Porter. That is the whole state now. We are here.
    Mr. Diers. I think that the issue is, to some extent, we do 
not know because we have never really tried, and I think that 
that is one of the issues that was being raised by Mr. Farr 
this morning, and I think it has been raised by a number of the 
questions that have come up today, is that I do not know that 
we have ever given it the full college try, in doing some very 
large-scale, Federal-state-partnership kind of planning that 
would happen on a regional basis in which the states and the 
feds go together as full partners and have a great, scientific 
assessment of our resources, and what are the impacts of those. 
We can barely count the fish.
    I think it is really challenging that we need to put 
resources toward that kind of examination, and I think that 
that is what the states have largely been saying, is that, 
before we charge ahead in some direction, that we need to make 
sure that we have looked at these issues, and especially as it 
relates to, we do not want to preclude some sort of renewable 
energy source as we are developing some traditional energy 
source and then trying to protect some of the resources that, I 
think, Dr. Marvinney talked about in the Gulf of Maine, for 
instance.
    That all needs to come together in a rational and 
comprehensive energy policy, and so I think that that is really 
what we are talking about and what the states have been trying 
to put across.
    Ms. Shea-Porter. It is sort of like jumping off of a 
building, and they keep telling you there is a net there, but 
you are not entirely certain because we have not done enough 
research to know, at this point. We have not put enough money 
into these programs to really study the impact.
    Mr. Diers. I think that the two Ocean Commission reports 
that came out made that very, very clear, that we have not, and 
I think the Chairman, in his comments last week, also said that 
we are not putting enough money into oceans, or the money that 
was coming in is going everywhere but oceans.
    These are serious, serious issues that we have not fully 
addressed, and I think that we are just now at the cusp of 
having the kinds of technologies and the kinds of analytical 
tools that we can use to be able to do this. We are at the 
point where we finally, I think, can start to do this, but it 
is going to require some significant resources and some 
significant critical will to make that happen.
    Ms. Shea-Porter. I think they have to get it right when 
more than half of the world depends on the oceans for essential 
protein. If we make a mistake, and we cannot pull back from it, 
we are going to create a problem that is larger than any of us 
could ever imagine. I appreciate your warning that we have to 
really take a good, hard look at this.
    Dr. Marvinney, I wanted to ask you--you talked about the 
cost of development versus the return, and you were citing 
Georges Bank. Can you talk a little bit about why Georges Bank 
is so critical, tied in with the issues that we just brought 
up?
    Mr. Marvinney. Well, it is a hugely valuable fishery for 
the State of Maine and for the rest of New England, the other 
New England states, and, I am sure, New Hampshire as well, and 
I do not have numbers on what that economic value is, but it is 
a big reason why our coastal seaports are what they are today. 
It has been driven by that fishery and the economics that go 
with the fishery, and certainly there have been a lot of issues 
with these fisheries over the years, with overfishing, et 
cetera, and we are collectively trying to work on that.
    I think that the comments of Mr. Diers on working together, 
states and the Federal agencies, is a primary way to go because 
there are so many overlapping issues here, in terms of these 
resources, we need to be sure that one activity is not going to 
harm another activity that is already in place.
    Ms. Shea-Porter. Thank you.
    Mr. Graves, not to pick on you at all here, but I, too, was 
down in Louisiana during Katrina, and I read the papers every 
day, and the picture that you portrayed up there was quite 
different from what they were talking about in the papers, and 
I also had lived in Louisiana before, and I know that a lot of 
the land was degraded, and it was not necessarily the offshore 
drilling but the refineries and everything tied in with it. So, 
it adds to the sense of urgency that we need to really fully 
invest in our renewables so that we are not trapped like that.
    But I want to have you talk a moment, if you would, please, 
about all of the reasons that they thought that New Orleans 
suffered so greatly, for example, the loss of the land, the 
acres of the wetlands, and the fact that they built that 
channel in and how that allowed the surge for the water.
    I love your state. I have lived there, and I urge everybody 
to go and be a tourist there. It is a great place, but there is 
a problem, and there has been a problem for a long time. I know 
that the source of the water was the Mississippi when I lived 
there, and they would have problems and tell people, ``You 
might have to worry about your drinking water today until they 
clean it out.''
    So, could you address what you realistically see as some of 
the problems with having oil and gas? I would like to say, up 
front, that I support drilling. I know that we need to do this 
right now. What I am trying to do here is say there are some 
problems and that if we invested in renewables right now with 
the same sense of urgency that we have faced other problems in 
our history, that we would be able to switch over, at some 
point.
    Mr. Graves. Congresswoman, thank you for the opportunity to 
respond. I appreciate you going to Louisiana just after Katrina 
had happened.
    Ms. Shea-Porter. It is a great state.
    Mr. Graves. Since the early 1930s, the State of Louisiana 
has lost in excess of 2,300 square miles of land, the greatest 
land loss in the nation, by far. If we were the State of Rhode 
Island, we would no longer exist. If we were the State of 
Delaware, nearly three-quarters of the state would be gone.
    The primary cause of that land loss is not related to oil 
and gas production. I want to be clear. The early oil and gas 
production, in my opinion, was done in a manner that was not 
sustainable, but the major cause of land loss in Louisiana was 
the channelization of the rivers--the Mississippi River and the 
Atchafalaya River--that began in the 1800s and continued after 
the Great Flood of 1927.
    It did achieve its goal of reducing flood losses in those 
areas, but it had an adverse impact of cutting off the 
sediment. The reason I showed a satellite depiction of the 
changes in North America landscape over 60 million years was to 
show that, was to show that the river caused the accretion of 
land. It was a delta-building process. Whenever the river was 
channelized, you cut off that sediment material from continuing 
to build the delta, and it now goes into the deep part of the 
OCS, where it has no beneficial use whatsoever. So, again, that 
is the primary cause.
    To be clear, going back to the 1940s and the 1950s and even 
1960s, there were access channels that were cut into our 
coastal area to get to hydrocarbons and produce those 
hydrocarbons. We now know that that also caused the intrusion 
of saltwater into freshwater estuaries, and that did have an 
adverse impact on the ecosystem.
    The channel you referred to is known as the ``Mississippi 
River Gulf Outlet,'' and, as you know, that channel was a man-
made channel. It was not cut for oil and gas development; it 
was cut for maritime purposes to provide an alternative to the 
Mississippi River.
    You will be happy to know that, two months ago, I signed an 
agreement to close that channel, and construction is underway 
to close that channel.
    So, again, just to be clear, there are adverse impacts. I 
think, if the Mississippi River and the Atchafalaya River had 
not been channelized, I think that the sediment from the river 
likely would have refilled those cuts into our coastal area 
that caused the intrusion of saltwater.
    Last, if I could just respond to your water-quality issue, 
and I am glad you brought that up as well, in Louisiana, we do 
have water-quality problems, and the majority of those are 
actually represented or recognized in the Gulf of Mexico, where 
we had the largest dead zone, each spring, in the nation, and 
it grows to around 10,000 square miles, an oxygen-depleted zone 
that is virtually devoid of marine life.
    But the important thing to know, in this case, is that the 
nutrients--the nitrogen and the phosphates and other 
chemicals--that cause that dead zone are not as a result of 
discharge from Louisiana. We drain 32 percent of the contiguous 
land mass of North America and two-thirds of the United States, 
and the runoff from the Midwest, the runoff from the rest of 
the nation, is what caused our dead zone, and you can see, 
where we are with a 10,000-square-mile dead zone and the 
largest producer of fisheries in the continental U.S.--no 
relationship to the oil and gas industry.
    The last point, if you do not mind, is that you talked 
about the structures, and you talked about the habitat in the 
coastal area. In Louisiana, I can tell you, from personal 
experience, that the structure that is established by oil and 
gas infrastructure is where the fish are. That is where you 
catch fish. So, there is a win-win situation there.
    Ms. Shea-Porter. OK. Thank you. I was thinking about this 
town, but I could not remember the name of it, but I know this 
is going to be familiar to you now, the Murphy oil spill. You 
know what happened there. I was there at the time, and we know 
that there was that terrible spill and that it ruined the 
community. I remember the heart-breaking stories there.
    Now, the point I am making again: I appreciate the fact 
that Louisiana is willing to be a center for gas and oil 
drilling, and, by the way, that water spill that I was 
referring to was not from the Midwest, but we will let that go; 
it was right from Louisiana.
    But the problem here is that anytime we do this kind of 
drilling, there is going to be some risk, whether it is in the 
offshore or whether it is the refineries or wherever. There is 
going to be some environmental pain there, and I appreciate the 
fact, again, that Louisiana absorbs so much of it, and I know 
that we need the gas and the oil. This is not to say that we 
can stop today; we cannot.
    But would you talk for a moment about what happened to the 
people of St. Bernard Parish and how you think that could have 
been avoided and still be heavily into this business, and what 
you see, in terms of the future, and do you have a basic belief 
in our ability to use renewables and eventually phase out some 
of this?
    The Chairman. Before the gentleman can answer, we have five 
votes. I do want to allow a response, but just as a way of 
housekeeping here, we have five votes on the Floor of the 
House, at the current time, and that is going to take, I would 
estimate, an hour.
    Would the panel be able to return, if we recess for one 
hour? Would the panel be able to return in one hour, for a half 
an hour? That should wrap it up.
    We do have three or four Members left to question. We 
should be able to wrap it up in a half-hour once we return in 
an hour. So, if you can hold that response, Mr. Graves, until 
we return in one hour.
    Mr. Abercrombie. Mr. Chairman?
    The Chairman. Yes, Mr. Abercrombie.
    Mr. Abercrombie. Before Mr. Marvinney leaves, Doctor, could 
you please let Governor Baldacci know that he still owes me 
spaghetti sauce that his mother makes that he said he was going 
to get to me, and I have yet to see it?
    The Chairman. And me, too.
    Mr. Marvinney. I will be sure to pass that on. Thank you.
    The Chairman. The Committee will stand in recess for one 
hour.
    [Whereupon, at 1:36 p.m., a recess was taken.]
    The Chairman. The Committee on Natural Resources will 
resume sitting, and the next gentleman to be recognized is the 
gentleman from Virginia, Mr. Wittman.
    Mr. Wittman. Thank you, Mr. Chairman. I want to thank the 
panel members for your participation today. I appreciate your 
patience. I know today was a long affair, so we appreciate your 
patience there.
    I want to especially thank Senator Wagner for coming here. 
I especially appreciate your hard work there in Virginia on 
crafting an energy policy there that now stands as the state's 
energy policy today, so we appreciate that.
    In order to follow up on that, you spoke, a little bit 
earlier, about Virginia's energy policy and about how the 
current policy supports just natural gas exploration in the 
OCS, and I wanted to ask you if you think that that is a 
practical position, from a public policy standpoint, and 
whether that really lends itself to wise policy for the 
development of our hydrocarbons offshore in the OCS.
    Mr. Wagner. Let me just start, Mr. Chairman and Congressman 
Wittman, by saying that, a year prior to the Energy Bill, we 
did pass a piece of legislation that called on our Virginia 
liaison office, who are lobbyists in Washington that represent 
the Commonwealth of Virginia, to lobby to lift the moratorium, 
which included oil and gas, and it passed in overwhelming 
numbers in the Senate and the House, and was conferred to then-
Governor Warner, now Senator Warner, who vetoed the bill 
because he said he wanted to study it for an additional year.
    He did complete that study. Amazingly, it came out about a 
day after he left office, and the study determined that it 
would have been altogether appropriate to pursue that.
    So, as part of the comprehensive energy plan, that language 
was kept in the bill in its exact form that it passed. 
Somewhere after it passed the general assembly, in those same 
words, and while it was sitting on Governor Kaine's desk, I got 
worried that perhaps all of that would be struck, and what you 
see, a product of negotiation between myself and the Governor's 
Office, is that language, and, concurrent with that language 
going on, I was in conversations with him, and that is because 
they were considering, at the time, removing Virginia from the 
five-year plan, and that language, MMS conveyed to me, would be 
sufficient to keep Virginia in the five-year plan, which was 
really the goal. We do not have a whole lot of say with regards 
to our policy.
    Having said that, I think it is totally impractical. I 
think everyone in this room knows that the government does not 
have the facilities or the capabilities to actually do the 
exploration, the 4-D exploration, they do now. Those 
capabilities are controlled by those in the industry. Clearly, 
they are not going to expend the type of resources that they 
would need to actually go out and do the surveys to confirm 
whether or not, what type, and where it is without reasonable 
certainty that they could then develop it, should they so find 
it.
    So, obviously, it is an impractical policy, from my 
standpoint. Again, the 50-mile negotiation that we negotiated 
in Virginia was determined by our geography, which indicates 
that there is not going to be much of interest within 50 miles. 
I know that may not be the area. There are other areas, 
particularly in North Carolina, where those deposits might be.
    I think it would be a bad step if this Committee would move 
forward with 50 miles as the limit barrier to go forward with. 
I think it is one of those areas that just, in terms of 
negotiating, was something that I was able to negotiate with 
the Governor's Office and not really give away anything.
    So, as a practical step, I think that is an impractical 
position, and I think it is important that we move forward with 
and do that. Having said that, you know, I hope that there are 
substantial resources off the coast.
    Mr. Wittman. Thank you, Senator. As you well know, under 
the current Outer Continental Shelf Lands Act, exploration, by 
itself, of just natural gas resources is not something that is 
allowed as they go forward with the five-year plan to look at 
leasing off of Virginia.
    Based on that, do others in the general assembly agree with 
the Governor's request in providing a limitation to just 
natural gas exploration in the OCS off Virginia?
    Mr. Wagner. I would say the views vary as much, and I do 
not want to pin down any specific legislator on their 
particular views. Certainly, I think the vote that most 
legislators took, on behalf of my original bill, would be 
indicative that they are supportive of the entire measure.
    I think the Energy Bill got through with major equal 
proportions with that same language in. Obviously, the 
negotiated language was taken up during the veto session and 
accepted by everybody, but I think there are those that 
definitely want to move forward with it and move forward with 
it relatively rapidly.
    It is interesting that we talk about the tourism issues and 
that type of thing. I do represent half of the City of Virginia 
Beach. Obviously, tourism is a major component of our business 
triad right now, and an overwhelming percentage of people 
support the particular positions that a number of us have taken 
in that area in support of it.
    What we found actually impacted tourism, this last year, 
was $4-a-gallon gasoline, the lack of availability, and the 
state of the economy, at that point, and I think what you are 
going to see impacting tourism this particular summer, as the 
tourism season comes in, is going to be the economy itself, 
people taking less trips, people spending less money.
    That is what we saw in Virginia, significant reductions in 
tourism along the Shenandoah Valley. Our hotels were filled in 
Virginia Beach. What we found is that they were not spending 
the money that they would have normally spent out there, and so 
it was directly related, we felt, to fuel prices.
    Mr. Wittman. Let me ask one final question. I talked, a 
little bit earlier, about a comprehensive U.S. energy policy. 
Can you tell me, in that context of a national comprehensive 
energy policy, what do you see as a reasonable policy for 
drilling in the OCS off of Virginia?
    Mr. Wagner. I think that a reasonable policy would be that 
we do take advantage of those resources. Whether you subscribe 
to the greenhouse gas theories or do not subscribe to the 
greenhouse gas theories, the fact of the matter is, we import a 
substantial, 60-some percent of our hydrocarbon energy from 
outside our borders, to the extent that we produce it 
ourselves, as opposed to importing it, only improves this 
economy.
    I think our focus, Job One, ought to be Job One for 
America. That should be our focus right now, and, clearly, that 
is going to be a part of that issue. I think, equally 
important, as a part of our strategy, whether you subscribe to 
greenhouse gas or not, is clearly the expansion of the nuclear 
industry. That is an industry that we basically made practical 
in this country.
    We invented many of the things they use. We walked away 
from it; France did not. We could take a lesson off of what 
France has done, both with that and the use of the breeder 
reactor technology, to recycle their spent rods that we take 
out of our reactor that are now part of our storage problem. 
They are actually a significant resource, if we go back and 
revisit our decision to walk away from breeder technology and 
reuse those rods. Eighty percent of the energy in those nuclear 
rods is still available in that rod at the point where we can 
no longer use them in our reactors, at this point.
    I think a number of issues do that, and I think we can get 
here. Remember, the demands on natural gas and many of the 
policies that you have pushed forward in Washington here only 
serve to increase the demand on natural gas in this country, 
particularly, the clean air laws and number of those issues 
have really substantially--the large growth area we see in 
natural gas in Virginia and probably around the Nation is in 
the generation of electricity, where, more and more, it has 
become a part of the base load or, at least, more frequently 
coming online.
    The Chairman. Thank you. I want to continue where we left 
off before we broke for the votes on the House Floor, and Ms. 
Carol Shea-Porter was asking a question of Mr. Graves, and you 
may respond to it now, Mr. Graves.
    Mr. Graves. Thank you, Mr. Chairman. Congresswoman, thank 
you for your question.
    As I recall, there were approximately two million gallons 
that were spilled at the Murphy oil refinery in Chalmette, 
Louisiana, St. Bernard Parish. There was actually a larger 
spill that occurred on the west bank of the Mississippi River, 
Blackman's Parish, the Bass facility.
    Both of those facilities, I think it is very important to 
keep in mind, were refining and storing facilities that were 
not necessarily related to the offshore production. I talked 
earlier about the MMS study that found that, in regard to the 
offshore production, there were no major spills, and there was 
no shoreline impacts, that natural processes absorbed the oil, 
and the oil evaporated.
    Those were storage facilities where we had a Category 5 
hurricane with, at one point, wind gusts as high as 235 miles 
per hour, which took a huge tank battery and picked it up and 
moved it.
    I do not know if it is even possible to design structures 
that are resilient enough to withstand the extraordinary 
beating that they took.
    One thing that is important to keep in mind, and you hit on 
this earlier, we have lost, as I said, 2,300 square miles of 
land in coastal Louisiana. That land, I do not think I drew 
this connection, and I need to, that land serves as a vital 
buffer between the Gulf of Mexico and some of the developed 
areas of coastal Louisiana.
    With the loss of those 2,300 square miles, there is a rough 
equation that the Corps of Engineers developed where they said 
that, for every 2.7 miles of healthy wetlands, you reduce storm 
surge by one foot. Well, these facilities, in many cases, had 
10, 20, 30 miles of buffer between them and the Gulf of Mexico, 
and now, in many cases, like the Bass facility and, to some 
degree, the Chalmette facility, the Gulf of Mexico is lapping 
at their doors.
    So, again, just to recap, I think the wetlands buffer was a 
significant cause of that.
    Number two, these were facilities that were not necessarily 
related to offshore production. They were related to the 
petrochemical industry, that it would have come from somewhere 
but not definitely from the offshore.
    The other question that you asked, if I recall, is you 
asked if I thought there was a role for renewables in the 
future, and, if so, how to proceed. The answer, in my opinion, 
is, absolutely. I think that renewables have to play a major 
role as a future energy source, and I commend California, 
again, for their efforts to try and achieve a third, and I 
think that we should set goals to try to develop and produce a 
larger share of our energy from renewable sources over the long 
term.
    But it is vital to keep in mind that we have to develop a 
transition plan. We are not going to be able to, as I said in 
the testimony, flip a switch and, overnight, go toward 
renewable fuels. There is going to be a role in that transition 
plan for the continued production of oil and gas, and rather 
than us shutting down all production domestically, like I 
believe I have heard some propose, that demand for oil and gas 
production is going to have to be met.
    So, we can either produce it here and expand oil and gas 
production as part of that transition plan where we have the 
safest, most stringent environmental standards, where we have a 
stable regulatory environment, or we can produce it in 
Venezuela, we can produce it in the Middle East, we can produce 
it in Nigeria, where, by the way, last week, three Americans 
were taken captive, and where you have much less-stringent 
environmental standards.
    Ms. Shea-Porter. Let me just say, for the record, that I am 
not one to say stop because we cannot. My whole point here is 
that we need to start getting very, very active, and we cannot 
just have one way to provide energy and that this is the point 
where we make a decision about investing in our future.
    We know what our present is, and our present definitely has 
oil in it, and our near future has oil in it, but I also would 
want to point out that there is benzene in the sediment of that 
community, and that was Murphy Oil. I know that there was some 
damage done by the oil rigs, but the point is that, as long as 
we need to produce oil, we are going to have some of these 
unintended consequences. So, it is not simply what happens out 
in the ocean; it is what happens when we bring it in and where 
we have it along our coastline in our communities.
    But you are absolutely right, and I hope that we never 
frame the argument ``either/or'' because I do not think it is 
that. I think it is, both, everything we can do right now so 
that we can supply our energy needs with an eye to our future, 
and I think we have probably used up all of the time that we 
could reasonably expect to use right now, so I thank you very 
much for your testimony today, and I thank all of you.
    Mr. Costa [presiding]. I thank the gentlewoman, and it 
appears that you got a second round, and since I did not get my 
first round on this panel, I will indulge the Committee, with 
everyone's permission.
    Mr. Graves, could you explain to me, succinctly, very 
briefly, why somehow it is safe to drill off the coast of 
Louisiana, Texas, Mississippi, and, yes, California, and 
nowhere else in the country?
    Mr. Graves. Mr. Chairman, I do not agree with that 
statement. As I said before, I think that there were some 
impacts from the early production. I think we have refined the 
technology, we have refined the production techniques, and I 
think it is safe to produce.
    Mr. Costa. It was somewhat, in all fairness, a rhetorical 
question because I do not agree with it either, but I think you 
made the point well in your statements and with your slide 
panel.
    Mr. Diers, the Chairman of the Coastal States, how many 
coastal states does that include?
    Mr. Diers. We have 35 members, the Coastal States 
Commonwealth----
    Mr. Costa. Eastern coastal states?
    Mr. Diers. All of them, including our territories and 
islands.
    Mr. Costa. All of them, OK. Well, you are a real powerful 
guy.
    I remember a controversy that came up, but I noted your 
testimony, and your colleague from the Northeast as well, 
talking about utilizing the oceans and having a balanced 
approach, but on wind renewable and efforts to introduce and 
develop wind renewables, I believe it was off of Massachusetts 
that it was very controversial.
    What renewables should or should not be considered? I 
guess, is my question. I mean, I can understand why some people 
have problems with oil and gas, but answer the question, 
please.
    Mr. Diers. Sure. I would say that our position, from a 
broader, coastal states perspective, is the same as it is on 
the offshore drilling. It is that we hope that the states will 
continue to have a key role to play in those decisions.
    Mr. Costa. I understand, but there was controversy, 
particularly around wind power, on a project that I read a bit 
about. I am not an expert. What was the source of that 
controversy?
    Mr. Diers. Well, I do not actually work in Massachusetts. I 
believe you are talking about the Cape Wind project, and my 
understanding is that there was a conflict in uses the people 
wanted there at that particular site and that that was the----
    Mr. Costa. Would it be fair for all of the panel members, 
and if any of you disagree, shake your head, that part of when 
we are balancing a renewable portfolio versus a traditional oil 
or gas, and I understand why, and we have that with other 
issues that are off the coast, that are inland, but there is 
just a NIMBY syndrome. Some people do not want--I mean, isn't 
there a percentage of that? Mr. Chrisman?
    Mr. Chrisman. There is a number of issues we have been 
discussing here today. One is an energy policy, a renewable 
portfolio that California has established that I actually voted 
for and supported. I want to commend you and the Governor, and 
I think it is a standard that we ought to try to obtain 
nationwide, and I also applaud myself since I voted for some of 
that effort over the years, in terms of a balanced energy 
package that was using all of the energy tools in our toolbox.
    But the other part of the discussion that has taken place 
here today is the impact on the oceans, and I would just like 
to try to put it in perspective. One of our colleagues, earlier 
today, made the comment that the moratorium was responsible for 
improvements, but I am trying to understand that because the 
fact is that, in four states, we have not had a moratorium. I 
am not so sure how we can credit the moratorium for helping 
improve the fisheries.
    What would you, as Natural Resources Agency Secretary in 
California, what impact would you say, in terms of not the 
energy portfolio--that is a separate discussion--but in terms 
of helping deal with the degradation of fisheries in the ocean?
    Mr. Chrisman. Congressman, as I understand it, the question 
is not so much the oil impact but other impacts. Is this what 
you are talking about, degradation of the oceans?
    Mr. Costa. I made the comment, and if any of you have any 
new information, please, I am always trying to get the newest 
information.
    It was a 2002 National Academy of Sciences report that 
basically studied all of the various analyses on contributing 
sources of degradation to the oceans and fisheries, and it 
basically said that over 85 percent of it was as a result of 
nonpoint-source pollution, runoffs and all the kinds of things, 
and I think they attributed, in North America, one percent was 
the result, and I do not know if these figures are accurate or 
not, was the result of oil and gas production, and three 
percent around the world. Do any of you have any newer figures 
on that?
    Mr. Chrisman. I get what you are asking, and I think, quite 
frankly, they are the figures that we keep using as we look at 
the work that we are doing in the California Ocean Protection 
Act, the recognition that what we really have to do is we have 
to take a look at the adverse water-quality impacts along the 
coast, pretty significant, up into our estuaries where our 
water supply projects come from. There is significant 
degradation there.
    But in the ocean, it is, in certain parts of our state, 
particularly in Southern California, where we have numerous 
sewer outfalls all up and down the coast in Southern 
California, we see significant degradation of the fisheries and 
the fisheries resource.
    Mr. Costa. So, there are two discussions here, and I 
understand why people want to link them, but one is the 
degradation of the oceans and the fisheries, and the other is 
as to whether or not we should encourage additional oil and gas 
development, OCS, because that might somehow diminish our 
impacts to move to renewables.
    I am one of those who do not believe that that is--some of 
my colleagues----
    Mr. Chrisman. I do.
    Mr. Costa. I mean, I think there is a short-term, an 
intermediate, and a long-term energy policy----
    Mr. Chrisman. I agree.
    Mr. Costa.--which continues to seem to miss us here, for 
whatever reasons that I cannot quite put my finger on.
    So, if you were trying to get your best bang for your buck 
for protection of the oceans, the impacts of the 27 platforms 
in California, would you say that is significant, or would you 
say that that is de minimis.
    Mr. Chrisman. It is de minimis.
    Mr. Costa. And are we not doing a lot of slant drilling 
within that three-mile area along California and deriving 
literally hundreds of millions of dollars to the State Lands 
Commission that Californians enjoy spending for other 
environmental and park purposes?
    Mr. Chrisman. Are you referring to the PXP?
    Mr. Costa. Well, there is that, and then there is the 
existing facilities. I think, out of the 27 platforms----
    Mr. Chrisman. Historically, we have, yes.
    Mr. Costa. Five of them are in the three-mile limit----
    Mr. Chrisman. Right.
    Mr. Costa.--and we do slant drilling off of Vandenberg and 
Ventura County----
    Mr. Chrisman. Yes.
    Mr. Costa.--and they seem to work OK.
    Mr. Chrisman. They work fine, off of existing platforms.
    Mr. Costa. Right, right. Let me ask a final question 
because we have taken a lot of time, and I think it is just Doc 
Hastings and myself, and we probably ought to give you folks a 
break.
    I just think that, as we try to strive to, whether it is a 
20-percent or 30-percent renewable portfolio, that we be 
careful about the issues. I mean, a lot of people have agendas 
around here, and California is no different, but it seems to me 
that trying to develop that policy, and I asked that question 
to our colleagues earlier, and I said I would ask it to you 
again, what is missing, as we develop a near-term, 
intermediate, and long-term, comprehensive, sustainable energy 
policy, that you think you are doing in California that we are 
not doing here?
    Mr. Chrisman. What is missing is, and I have said it in my 
answer to the question of the Chair, what is missing is the 
conversation that has begun here, with the president and 
others, about an integrated, national energy policy that 
recognizes all of the issues that we have been talking about 
today and gets us, at the states, engaged with you, at the 
national level, to bring this about because there are going to 
be significant regional differences with respect to the policy, 
significant regional differences in demands. There are going to 
be ocean issues and ocean-degradation issues that are not 
applicable to other parts of the nation.
    So, it is the work that gets done here, in the policy 
conversation, and focus, with the support of the president, 
with the support of the administration, and the support of the 
Congress, to carry forward and recognize that we have to get 
that short-term, medium-term, and long-term energy policy in 
place.
    Mr. Costa. All right. One final question, and then the 
Ranking Member has a few questions that he would like to ask.
    We know that, out of the 27 platforms in California--I like 
to remind my colleagues, especially my California colleagues, 
that we do drill in California--and while five of them are 
within the three-mile limit, the 23 that are in the Federal-
designated area, OCS, with the new technologies that I have 
been becoming more familiar with in the Gulf of Mexico, where 
they are able to actually go out in deep water and develop 
these pods on the ocean floor and develop multiple wells to 
further expand that resource, clearly, you made it clear about 
the Governor's emphatic statement about his view about 
additional drilling.
    I am just wondering, in those 23 platforms that exist in 
California, if that new technology was implemented that would 
allow for additional development of that resource. Is that in 
that emphatic no and no but no, or would that be considered?
    Mr. Chrisman. It would be considered, but we have to be 
careful. We had a Plains Exploration Petroleum Company that it 
was actually a platform in Federal waters for the proposed 
slant drilling into state waters. We have the authority, in 
statute, the state lands commission has the authority, to 
regulate that, and so, with the Governor's support, we took to 
the state lands commission the support to allow that additional 
slant drilling to take place. The state lands commission turned 
it down.
    Mr. Costa. Yes. I think I remember that vote, two-to-one. 
All right.
    Mr. Chrisman. The Governor--we supported that move.
    Mr. Costa. Well, I applaud the Governor for supporting that 
move.
    My questioning is completed at this time, and I will submit 
further questions, in written form, for the other witnesses.
    Thank you, all of you, for your good work. We will listen 
to my colleague, the gentleman from Washington, and then, when 
he is finished, we will conclude the hearing. I will ask for 
unanimous consent that our Members submit additional questions 
for the record.
    My good friend, Doc Hastings, will be the final word on 
today's, I think, helpful and informative panel. It is good to 
see all of you, especially Mike. Thank you.
    Mr. Hastings. Thank you, Mr. Chairman. Let me thank you for 
coming here today and for staying through, which is a normal 
interruption for us, the necessary votes and staying for an 
extra hour and 15 minutes.
    This hearing is the second of three hearings, and we are 
talking about drilling in the Outer Continental Shelf, and we 
have characterized it a great deal about energy, which, of 
course, is true, but there are a lot of byproducts, for 
example, that come from petroleum and natural gas. You are all 
drinking water out of a container that is a byproduct of 
petroleum and natural gas, and I would suggest that probably, 
with the exception of Senator Wagner, all of you flew here. Am 
I right? The other four of you, except Senator Wagner, flew 
here. You drove, too?
    Mr. Marvinney. I took a train.
    Mr. Hastings. You took a train? OK.
    Let me broaden this and get you all to say ``yes,'' in a 
way, by saying, have you flown in the past month or the past 
year, anybody, all of you, at one time? All right.
    The reason I bring that up is because the newer generation 
of airplanes, and I am from Washington State, even though 
Boeing does not have a plant in my district, but the new 787 is 
built entirely of carbon composites, entirely of carbon 
composites, and a lot of the airplanes that are being built 
today, different parts of them are carbon composites.
    So, if we look at offshore and the byproducts of all of 
this, we have to go beyond just what energy produces, as 
necessary as that is, and for us to wean our way from that is 
going to be a very long process. Now, ironically, one of the 
reasons that the 787 is so attractive is because its much 
lighter weight, which means it burns less fuel, so it is a win-
win situation.
    I think that is worth talking about, although I certainly 
believe that we need to be energy independent, that we start 
with that basis.
    Mr. Chrisman, you and I had an exchange earlier. I want to 
ask you another question, and, Mr. Marvinney, I am going to ask 
you a similar question. Do you know how many LNG facilities, 
liquid natural gas facilities, are planned in California to be 
built?
    Mr. Chrisman. The last number, the possibility, being 
proposed was four, none of which have attained the necessary 
permits yet.
    Mr. Hastings. OK. Is this something that you support?
    Mr. Chrisman. Yes, we do.
    Mr. Hastings. You do. OK. Mr. Marvinney?
    Mr. Marvinney. I believe there are only two that are in the 
discussion phase, at this point.
    Mr. Hastings. OK. And do you support them?
    Mr. Marvinney. I think it is part of our transition from 
fossil fuels to other sources, so we need to find ways of 
increasing that.
    Mr. Hastings. So, it is part of the fossil fuel transition.
    Let me just ask this question. Since we know the Outer 
Continental Shelf has huge deposits of natural gas, don't you 
really think that it might be more advantageous to open that up 
rather than to ship natural gas from, say, Saudi Arabia or 
Venezuela or Brazil? Doesn't it seem to be more logical to 
utilize the resources we have rather than to bring that in, 
either one of you or both of you? Would you like to answer 
that?
    Mr. Chrisman. Yes, I would, because we debated this very 
question, and we opted, because so much of our electric 
generation comes from natural gas, in addition to hydro 
facilities, but natural gas is our predominant generating 
capacity, we opted to support liquefied natural gas because of 
the price of natural gas at the time; for us, it was more 
economical.
    We spent some time talking to the folks where we were 
actually talking about buying the gas, actually off of 
Australia. We actually visited some of their facilities, looked 
at it, and we essentially made an informed decision, on our 
part, to support the importation of LNG, the creation of those 
terminals.
    Mr. Hastings. And you think that is a better option than 
having your own domestic supply of liquid natural gas?
    Mr. Chrisman. The option that we are looking at is a 
balance.
    Mr. Hastings. I understand that. That is why I asked the 
question. You said you made the decision to import natural gas. 
Do you think that is a better option rather than having our 
own?
    Mr. Chrisman. No. I think it adds to our balance, our 
balance of fuels that we are bringing into California. It adds 
an additional source of supply for us that we need for our 
population.
    Mr. Hastings. When will those plants be built? Do you know?
    Mr. Chrisman. I do not know.
    Mr. Hastings. Can you give me a rough----
    Mr. Chrisman. They have met some significant opposition 
along the coast. We were hoping we would have one built now. 
Our best estimate is that our need in California, and, again, 
we have debated the need--there are those, in significant 
numbers, at home that disagree with the need, but, essentially, 
we are looking, we think, at maybe two LNG terminals in 
California will get done.
    Mr. Hastings. By when?
    Mr. Chrisman. We hope, over the next eight to 10 years.
    Mr. Hastings. Eight to 10 years. Now, couldn't we develop 
the our Outer Continental Shelf resources and not have to worry 
about these LNG terminals?
    Mr. Chrisman. We could, yes.
    Mr. Hastings. Is that an option, too?
    Mr. Chrisman. No.
    Mr. Hastings. That is not an option.
    Mr. Chrisman. No.
    Mr. Hastings. OK. I wonder why, but go ahead, Mr. 
Marvinney.
    Mr. Marvinney. As I said in my testimony, we are not 
opposed to offshore oil and gas exploration and development. I 
just think it needs to be in the places where there is the 
greatest potential for those resources and consider the great 
potential of other resources in some of the other areas.
    So, certainly, where there are appropriate gas resources, I 
think that is an important part of the picture.
    Mr. Hastings. Well, I think everybody would agree that you 
do not want to drill where there is no product to drill. That 
makes sense, but, as I understand the industry, you do not know 
that until you drill, which makes it kind of difficult to find 
out. There are other tests, but you really do not know until 
you drill.
    Let me just conclude. I thank you. Mr. Chrisman, in due 
respect, I really feel that your response that it is better to 
import than utilize our own resources----
    Mr. Chrisman. That is not what I said, Congressman. What I 
said was, it is part of our mix.
    Mr. Hastings. Right, but given the 10-year time period when 
you could probably go out to the Outer Continental Shelf and 
get natural gas, if we started today, that might be a shorter 
timeframe, and I thought you responded to me by saying, no, 
that was not an option.
    Mr. Chrisman. For us, it is not an option. We do not 
support going out in the Outer Continental Shelf.
    Mr. Hastings. OK. Well, I think that maybe we are passing 
each other in the night, but I still interpret that as being a 
``no.''
    I mean, here we are. You know, your state has gone through 
some very tough fiscal times. Everybody in the country knows 
what you went through. Your unemployment rate is nearing 10 
percent, and it just seems to me, part of becoming energy 
independent, part of getting product that can be used by a 
whole variety of other things, is a positive thing in order to 
help our economy, and we know, by testimony we heard on this 
panel and other panels, that you can do it in an 
environmentally safe way, why we would not do that.
    I just want to make that observation. Clearly, there is a 
divide in this country. Hopefully, the side that I think we 
ought to do it, knowing we can do it in an environmentally safe 
way, is the proper way to go.
    At any rate, once again, I want to thank you for your time 
here and for your testimony, and, Mr. Chairman, thank you very 
much.
    Mr. Costa. Thank you very much. Yes?
    Mr. Hastings. I ask unanimous consent to submit for the 
record the UCSB study.
    Mr. Costa. Without objection, and, once again, I will 
indicate, for staff and Members who are in their offices or in 
other committees, that unanimous consent be allowed to Members 
to submit additional questions for the record. As we always 
urge Committee Members, if they do have those additional 
questions, that 10-day period, we urge them to submit them 
earlier rather than later, and we will follow through with the 
distinguished panels that we had today and ask that the 
questions be answered in a timely fashion.
    So, without any further ado, I want to thank all of the 
Members who participated and both panels for a very good 
Committee hearing.
    The Natural Resources Committee hearing today is now 
adjourned.
    [Whereupon, at 3:10 p.m., the Committee was adjourned.]

    [Additional material submitted for the record follows:]

   Response to questions submitted for the record by Mike Chrisman, 
             Secretary, California Natural Resources Agency

 (Question 2). To all panelists: A number of legislative proposals 
regarding the Outer Continental Shelf have proposed that any new 
revenues that accrue as a result of new offshore oil and gas activity 
be shared with the States, as is now the case with the Gulf of Mexico 
States. At the hearing, Congressman Farr suggested the formation of an 
Oceans Trust Fund, while Congressman Rohrabacher suggested giving 
revenues directly to coastal communities to allow them to address local 
needs, such as reducing urban runoff and repairing sewers, although it 
was not clear whether only communities that have drilling off their 
shores should be provided with funding to address those needs, or if 
all communities should have access to such funding, regardless of the 
proximity of offshore drilling. Please provide the positions of your 
state governments regarding the best use of any potentially shared 
offshore revenue: would you prefer an Oceans Trust Fund model that 
provided revenue nationally to address ocean issues, a revenue sharing 
model that only included states or communities that have offshore 
drilling off their shores, a revenue sharing model that provides shared 
revenues directly to states and coastal communities regardless of 
whether they have drilling off their shores, or another model entirely? 
Also, are there any analogous revenue sharing programs that Congress 
should look at as good models for how to move forward, should we decide 
to increase the amount of OCS revenues shared with states and local 
communities?
 Response:
    In its Final Report, the U.S. Commission on Ocean Policy identified 
a myriad of challenges to improve the management of our nation's ocean 
and coastal resources. The Commission recognized that to meet these 
challenges additional investments would be necessary, and Outer 
Continental Shelf (OCS) receipts were identified as the primary source 
of funding. Additionally, the Commission recommended that a portion of 
OCS revenues should be shared with coastal states (Recommendation 
24-1).
    California supports revenue sharing, but only if it does not 
provide incentives for new OCS oil and gas development. In addition, 
revenues shared with the states should further the goals of improved 
coastal and ocean management, restoration, conservation, preservation, 
mitigation, research and education and the Congress and the Obama 
Administration should consult with coastal states in the development of 
any new program or formula of revenue sharing.
    The California Ocean Protection Council, which I chair, supports 
the establishment of the ocean trust fund supported by the Coastal 
States Organization in its Call for Action and is included within H.R. 
21 (Farr). California also has extensive experience with two Coastal 
Impact Assistance Programs (CIAP) that were established by the 
Commerce, Justice, State (H.R. 5344) Fiscal Year 2001 Appropriations 
Act and more recently the Energy Policy Act of 2005. These laws 
authorized funds to be distributed to Outer Continental Shelf (OCS) oil 
and gas producing states to mitigate the impacts of OCS oil and gas 
activities. Though this model only provides revenue to producing 
states, it could be adapted to include all coastal states. Under this 
model, states must submit a Coastal Impact Assistance Plan (Plan) that 
meets the federal government's approval to be eligible for CIAP grant 
funds. A producing state or coastal political subdivision (CPS) may use 
the funds for a variety of projects to help mitigate the impacts of 
offshore energy development.
    Other models have been proposed, including H.R. 701, Conservation 
and Reinvestment Act (CARA) in the 106th Congress. CARA passed the 
House on May 11, 2000, and was approved by the Senate Committee on 
Energy and Natural Resources on July 25, 2000, but did not progress 
further. This approach would have allocated revenues from OCS oil and 
gas activities for federal and state resource acquisition and 
protection, urban recreation, wildlife protection, and related 
purposes. It would have created and funded a new coastal energy impact 
assistance program, amended and funded the Land and Water Conservation 
Fund (LWCF), funded the Urban Park and Recreation Recovery program and 
the Historic Preservation Fund, increasing funding for wildlife 
conservation, and funded land restoration and easement programs. 
Another model, which should be evaluated, is the ``Coastal and Ocean 
Protection Plan Implementation Act'' that was introduced in June 2007 
by former Sen. Stevens of Alaska. This bill would have established an 
ocean and coastal development impact assistance fund and grant program 
and an ocean policy trust fund and would have provided funding to 
federal agencies, coastal states, local governments, and non-
governmental entities to address ocean and coastal protection.
 (Question 3). To all panelists: Do you believe that states have an 
        adequate role in the current MMS offshore leasing planning 
        process? Or is there any way that you would like to see the 
        states roles strengthened?
 Response:
    We support any processes that will facilitate full state 
participation in all phases of the federal offshore energy policy and 
leasing processes. We are encouraged by the recent decision of the 
Department of the Interior to take a broader look at offshore energy 
production, be it oil and gas, wind, wave, ocean currents, or energy 
conservation. We also concur with the recent emphasis on folding 
offshore energy evaluations into this comprehensive energy policy 
approach. This type of comprehensive approach to energy policy has been 
lacking in the MMS process to date.
    We also want to underscore the importance of maintaining the 
federal consistency provisions within the Coastal Zone Management Act. 
These provisions are essential to the federal/state partnership 
envisioned by Congress. Our concern about maintaining this authority is 
paramount and any legislation that would weaken this authority would be 
unacceptable to California.
 (Question 4). Secretary Chrisman, could you provide the Governor's 
        position on the Plains Exploration and Production (PXP) 
        proposal to allow an existing federal platform to drill a new 
        well into California state waters? Does the state believe that 
        it has the authority to require a platform operating in federal 
        waters to cease operations as of a certain date? Does the state 
        believe that the PXP model proposed at this site could also be 
        used to access additional oil fields under state or federal 
        waters?
 Response:
    The following is an overview of the recent developments with PXP's 
proposal.
      On January 29, 2009, the California State Lands 
Commission considered PXP's application for a permit. Despite much 
public testimony supporting the project and support from environmental 
stakeholders and the local community, the permit application was 
defeated 2 to 1. Commission decisions cannot be appealed.
      Governor Schwarzenegger's representative on the 
commission supported PXP's application due to unique circumstances and 
benefits of the proposed project; e.g., drainage of oil from federal 
waters, agreements by the company to cease operations of this facility 
and the entire Tranquillon Ridge and Pt. Pedernales fields by a certain 
date, and property donations to the community.
      The commission's legal counsel in consultation with 
California Attorney General's office has determined that PXP may 
reapply for a permit. It is our understanding that PXP is aware that 
may reapply and this it is currently weighing its options. If PXP 
decides to reapply it will have to develop a project proposal that 
addresses the concerns of the commission.
    The State Lands Commission does not believe that it has the 
authority to require a platform operating in federal waters to cease 
operation as of certain date. Note: California's CZMA agency for the 
open coast, the California Coastal Commission, has not yet considered 
and voted on PXP's proposal. This would not occur until an approval was 
achieved by the State Lands Commission.
    State Lands Commission engineering experts believe that is 
technically feasible to use the directional drilling technology that 
was incorporated into the PXP proposal at other sites in California to 
access additional oil fields under state or federal waters. However, 
the PXP proposal presented a unique set of circumstances (e.g., federal 
drainage, agreements by the company to cease offshore drilling 
operations, and property donations to the community) that are not 
likely to lend themselves to development of other sites. However, 
consistent with my testimony, the Schwarzenegger Administration remains 
opposed to new offshore oil and gas drilling off the California coast.
 (Question 5). Secretary Chrisman, at the committee hearing on February 
        11, 2009 a witness argues that additional oil drilling along 
        the California coastline would help reduce natural oil seeps. 
        Does the state agree with that argument?
 Response:
    According to the California State Lands Commission approximately 
2,000 individual seeps are believed to exist in the Santa Barbara 
Channel and Santa Maria Basin. Our engineering experts with the State 
Lands Commission do not believe there is sufficient proof that 
additional oil drilling would be helpful in reducing natural oil seeps. 
They also note that there is very little data focusing on the 
relationship between natural seepage and production. For the following 
reasons we believe that a theory of significantly reducing seep 
activity through increased production is not realistic:
      Most oil is not being produced from the same (probably 
shallow) geological structures as those from the seeps. Therefore there 
will be little or no impact, unless these geologic structures are 
somehow connected.
      When pressures begin to subside with production, natural 
repressurization could occur through aquifer influx; or water or 
produced gas is commonly injected back into the structure to maintain 
high pressure for production. This is regular practice by the 
operators.
 (Question 6). Secretary Chrisman, the committee has been told that 
        California has more stringent environmental requirements for 
        oil and gas production in state waters than the federal 
        government has in other parts of the OCS. For example one of 
        our witnesses at the February 11, 2009 hearing described how 
        California requires operators to treat and dispose of drilling 
        muds onshore, rather than disposing of them on the sea bottom. 
        Could you provide a list of environmental requirements imposed 
        by California that are not regularly imposed by the federal 
        government?
 Response:
    California has a long history of placing special requirements for 
offshore oil and gas operations. The precautions pertaining to drilling 
muds is just one example. Some others include:
      Oil Spill Containment and Cleanup. California has placed 
special requirement for equipment to be placed at the site of 
operations and with special cleanup organizations (spill cooperatives 
and contractors) who can respond to larger spills. In addition, there 
is a $0.05 surcharge applied per barrel for the state Oil Spill 
Prevention and Response fund (collected monthly by the Board of 
Equalization) for preparedness and prevention activities of the state. 
For marine response to oil spills, the state maintains the Oil Spill 
Response Trust Fund. Currently, fees are generated at $.25 per barrel. 
The fund is capped at $58 million. Per statute, the fund is to be kept 
at 90% of this cap.
      Safe Navigation. Prohibitions of the placement of any 
facilities in buffer zones of the vessel traffic lanes.
      Air quality. Restrictions placed on emissions from 
drilling facilities, work and supply boats, and onshore facilities.
      Habitat and Fisheries Protection. Reducing impacts from 
the placement of pipelines to bottom habitats such as eel grass, rocky 
bottoms, and placing equipment or operations that would interfere with 
commercial or sport fishing.
 (Question 14). Secretary Chrisman, could you provide the committee 
        with an update on where California stands with the Coastal 
        Impact Assistance Program--how close is the state to receiving 
        funding through that program, and on what projects does the 
        state expect to be using that funding on? Also, please describe 
        the state's experiences with the CIAP program, including any 
        ways that the state believes it should be modified.
 Response:
    The California Natural Resources Agency, which I head, is Governor 
Schwarzenegger's designated lead agency for implementing the Coastal 
Impact Assistance Program (CIAP) in California. As such, the Agency has 
developed and drafted with substantial public input a Coastal Impact 
Assistance Plan (Plan) for expenditure of $20.6 million in CIAP grant 
funds. The Plan includes 80 total project proposals from 17 eligible 
coastal counties and 9 state agencies. The Natural Resources Agency is 
finalizing the Plan so that it can be submitted to the MMS headquarters 
and the MMS's Pacific OCS Regional Office by the end of March 2009.
      These 80 projects fall under one of the following 15 
categories:
         1.  Climate Change
         2.  Coastal Habitat Restoration
         3.  Coastal Protection and Public Access
         4.  Coastal Sediment Management
         5.  Coastal Water Quality
         6.  Coastal Wetlands
         7.  Energy
         8.  Invasive Species
         9  Mapping
        10.  Marine Debris
        11.  Marine Law Enforcement
        12.  Marine Life Protection Act/Marine Life Management Act 
        Implementation
        13.  Public Education and Outreach
        14.  Science and Research
        15.  CIAP Administration
      The Natural Resources Agency has enjoyed a close working 
relationship with MMS staff, especially staff at the Pacific OCS 
Regional office. However, development of the state Plan has not been 
without significant problems. Specifically, in June 2008, after 
completing a 30-day public comment period on a draft Plan, the Natural 
Resources Agency was informed by MMS headquarters that the funding 
level assumptions contained in the Plan would probably not come to 
fruition. We were further directed by MMS headquarters to redraft our 
Plan based on lower funding expectations. The Natural Resources Agency 
followed this direction and redrafted the Plan. A revised draft Plan 
was circulated for public comment during October/November 2008.
      One fundamental way that the CIAP could be modified to 
benefit the states is to change the requirement that each project 
contained within a state's Plan have its own grant agreement. As with 
the NOAA CIAP, the Natural Resources Agency would prefer to execute one 
grant agreement with the MMS covering all projects with each state or 
local jurisdiction. This change would streamline the granting process 
and greatly reduce the administrative burden on the MMS, states, and 
local jurisdictions. It would also enable grant funds to flow to grant 
recipients much more quickly.
      In drafting future CIAP type programs, Congress should 
consider allocating grant funds using a formula that uses currently 
available OCS revenue information and does not rely upon waiting for 
future revenue information. This change to the CIAP will provide states 
with more certain grant funding allocation information and thus enable 
them to develop CIAP plans not vulnerable to fluctuating OCS revenue.
 (Question 15). To all panelists: Last September the House passed a 
        bill that would have created a 50-mile buffer zone where 
        drilling was not allowed, and then a 50-mile zone where states 
        would get to decide where drilling was allowed. What are your 
        states' opinions on the use of buffer zones, and do you believe 
        that 50 miles, or some other distance, is appropriate?
 Response:
    Governor Schwarzenegger has a long standing policy of opposing new 
offshore oil and gas leases off the coast of California. In addition, 
the Governor has taken every opportunity to ensure that the 
(Congressional) moratorium on offshore oil and gas leasing is 
maintained.
    We do not believe that buffer zones would eliminate the impact of a 
major oil spill off our shores. This position is based on our 
experience with oil spills in California such as the 1969 Platform A 
spill in the Santa Barbara Channel and our observations of other spills 
(such as the Exxon Valdez in Alaska and the tanker vessel Puerto Rican 
off San Francisco Bay). These events demonstrate that a buffer zone of 
50 or even 100 miles would not eliminate the impacts during a major oil 
spill. Oil spilled during a major accident can travel long distances 
(well over 1,200 or more miles in the case of the Exxon Valdez).
                                 ______
                                 

     Response to questions submitted for the record by Ted Diers, 
                   Chair, Coastal States Organization

    I very much appreciate the opportunity to offer testimony on state 
perspectives on offshore drilling and support the efforts of the 
Committee on Natural Resources to develop an energy policy for the U.S. 
that includes traditional and renewable energy development offshore 
while recognizing the importance of coastal ecosystems and communities. 
The responses on behalf of the Coastal States Organization to the 
questions forwarded on March 9, 2009, are below.
1.  One of the concerns raised by those who are not supportive of new 
        offshore drilling, particularly along the East Coast, is what 
        role neighboring states would have in drilling decisions. For 
        example, hypothetically, if New Hampshire wanted to allow 
        drilling off its coastline, what kind of say should Maine or 
        Massachusetts have on that? Are existing Coastal Zone 
        Management Act provisions adequate to protect coastal states 
        interests? Or is there a need for a new regional approach on 
        these decisions, similar to what Mr. Diers mentioned in his 
        testimony?
    Through the federal consistency provision, the Coastal Zone 
Management Act (CZMA) provides states the ability to confer with a 
neighboring state on a consistency review. Thus, states have the 
ability, under the current statute, to review according to their own 
enforceable program. In addition, the current CZMA encourages 
coordination among states related to planning for such development. In 
the hypothetical above, Massachusetts would review what would be the 
direct impacts that New Hampshire's activities might have on the 
Massachusetts coastline and resources.
    CSO does support an approach that incorporates regional 
coordination. It allows for more fluidity - energy production often 
implicates an entire region (the vast distances vessels go, the nature 
of oil spills/cleanups). The existing regional partnerships could 
provide an on-the-ground mechanism for such regional planning without 
creating a new governance scenario or governmental layer.
2.  A number of legislative proposals regarding the Outer Continental 
        Shelf have proposed that any new revenues that accrue as a 
        result of new offshore oil and gas activity be shared with the 
        States, as is now the case with the Gulf of Mexico States. At 
        the hearing, Congressman Farr suggested the formation of an 
        Oceans Trust Fund, while Congressman Rohrabacher suggested 
        giving revenues directly to coastal communities to allow them 
        to address local needs, such as reducing urban runoff and 
        repairing sewers, although it was not clear whether only 
        communities that have drilling off their shores should be 
        provided with funding to address those needs, or if all 
        communities should have access to such funding, regardless of 
        the proximity of offshore drilling. Please provide the 
        positions of your state governments regarding the best use of 
        any potentially shared offshore revenue: would you prefer an 
        Oceans Trust Fund model that provided revenue nationally to 
        address ocean issues, a revenue sharing model that only 
        included states or communities that have offshore drilling off 
        their shores, a revenue sharing model that provides shared 
        revenues directly to states and coastal communities regardless 
        of whether they have drilling off their shores, or another 
        model entirely? Also, are there any analogous revenue sharing 
        programs that Congress should look at as good models for how to 
        move forward, should we decide to increase the amount of OCS 
        revenues shared with states and local communities?
    In its Final Report, the U.S. Commission on Ocean Policy identified 
a myriad of challenges to improve the management of our nation's ocean 
and coastal resources. The Commission recognized that to meet these 
challenges, additional investments would be necessary, and OCS receipts 
were identified as the primary source of funding. Additionally, the 
Commission recommended that a portion of OCS revenues should be shared 
with coastal states (Recommendation 24-1). CSO's position is that 
revenues shared with the states should further the goals of improved 
coastal and ocean management, restoration, conservation, preservation, 
mitigation, research and education. In addition, Congress and the 
Administration should consult with coastal states in the development of 
any new program or formula of revenue sharing.
    CSO does not have a formal position on any particular revenue 
sharing model but notes that the Coastal Impact Assistance Program 
(CIAP) was established in 2005 by the Energy Policy Act of 2005, 
authorizing funds to be distributed to Outer Continental Shelf (OCS) 
oil and gas producing states to mitigate the impacts of OCS oil and gas 
activities. Though this model only provides revenue to producing 
states, it could be adapted to include all coastal states. Under this 
model, states must submit a coastal impact assistance state plan (Plan) 
that meets Minerals Management Service approval to be eligible for CIAP 
funds. A producing state or coastal political subdivision may use the 
funds for: projects and activities for the conservation, protection, or 
restoration of coastal areas, including wetlands; mitigation of damage 
to fish, wildlife, or natural resources; planning assistance and the 
administrative costs of complying with this section; implementation of 
a federally-approved marine, coastal or comprehensive conservation 
management plan; and, mitigation of the impact of OCS activities 
through funding of onshore infrastructure projects and service needs.
    Other models have been proposed, including H.R. 701, Conservation 
and Reinvestment Act (CARA) in the 106th Congress. CARA passed the 
House on May 11, 2000, and was approved by the Senate Committee on 
Energy and Natural Resources on July 25, 2000, but did not progress 
further. Both proposed bills allocated revenues from OCS oil and gas 
activities for federal and state resource acquisition and protection, 
urban recreation, wildlife protection, and related purposes. Both bills 
would have created and funded a new coastal energy impact assistance 
program, amended and funded the Land and Water Conservation Fund and 
funded the Urban Park and Recreation Recovery program, Historic 
Preservation Fund, land restoration and easement programs, and the 
Payment in Lieu of Taxes Program. These two models provide a valuable 
starting point for discussions of revenue sharing models.
3.  Do you believe that states have an adequate role in the current MMS 
        offshore leasing planning process? Or is there any way that you 
        would like to see the states roles strengthened?
    CSO does not have a position on the adequacy of the MMS offshore 
leasing planning process. However, in the planning process, consistency 
review must be maintained and respected. This review enables states to 
take part in planning and informs MMS of the potential impacts in the 
coastal zone. Early consultation through consistency review allows for 
a more predictable process for both the state and the applicant, and 
for changes to be made before significant financial resources are 
invested.
4.  Mr. Diers, you mention in your testimony that federal consistency 
        authority under CZMA should be maintained, and states' 
        authority should not be weakened. Do you feel there is any need 
        to strengthen state consistency requirements with respect to 
        offshore drilling and other offshore energy development?
    No--it is CSO's position that consistency is an effective tool as 
written in the current CZMA. In CSO's efforts toward CZMA 
reauthorization, it advocates that the consistency provisions be left 
as status quo. Having said that, it is vital that consistency not be 
weakened as a result of energy legislation. Indeed, CSO encourages the 
explicit reference to CZMA consistency in any future energy legislation 
so that there is no doubt of Congress' intent to maintain the states' 
authority to review energy-related actions affecting the coastal zone.
    Since the enactment of the CZMA, early consultation and 
consultation between states, the consistency provision has been 
primarily a tool to find common ground between federal projects and the 
needs of the nation's coasts resulting in very few state consistency 
objections. In 2005/2006 alone, over 8,000 consistency reviews were 
conducted and only 60 objections were filed by the states: this is less 
than 1%.
    In addition, many states have found creative ways to use the 
consistency provision to form better partnerships and processes. These 
tend to help both the applicant and the review agency. For example, 
Alaska uses a memorandum of understanding with the Minerals Management 
Service to facilitate reviews of OCS activities. North Carolina's 
coastal program facilitates review of energy projects by identifying 
information needs up front to avoid delays and increase predictability 
for industry. Texas developed a general concurrence for its review of 
OCS oil and gas exploration plans.
5.  Mr. Diers, in our February 25th hearing, Mr. Larry Nichols of the 
        American Petroleum Institute states that the Coastal Zone 
        Management Act ``allows a state to block offshore activities 
        that are inconsistent with its coastal zone management plan. 
        That block can be removed only by the federal government 
        through an arduous appeals process, which can be followed by 
        litigation if the state disagrees with the federal government's 
        decision.'' The implication of his statement seems to be that 
        states possess all the authority they need now to effectively 
        block drilling from happening off their shores. Do you believe 
        that states have enough authority under CZMA to effectively 
        block offshore activities? Is it clear enough what constitutes 
        an ``affected state'' for the purposes of making consistency 
        determinations for offshore energy siting under the CZMA?
    It is important to note that framing consistency review as a method 
to ``block activities'' is not supported by the evidence. There have 
been fewer than 40 objections that have gone through the entire 
objection and appeals process. Louisiana, for example, has only had 1 
objection in state history. Furthermore, the appeals process was 
designed to be streamlined with specific timeframes and clarity on the 
process of review. The consistency review itself is also time-limited 
and cannot drag out a process; rather, it is usually the other siting 
and permitting concerns which tend to extend the length of project 
review.
    The consistency review is not put in place to block activities--the 
purpose of the review is to determine consistency of the project with 
state law. In fact, both producing states, as well as neighboring 
states, that can show an impact to coastal zone resources have 
authority to review. Producing states are particularly reliant on 
consistency review in order to manage the myriad development processes 
and associated impacts that go along with offshore energy development. 
The consistency review incorporates many elements beyond environmental 
concerns. For example, in my own state of New Hampshire, of our sixteen 
enforceable policies, only a few are related to natural resources. Most 
are related to managing conflict with human uses.
6.  Last September the House passed a bill that would have created a 
        50-mile buffer zone where drilling was not allowed, and then a 
        50-mile zone where states would get to decide where drilling 
        was allowed. What are your states' opinions on the use of 
        buffer zones, and do you believe that 50 miles, or some other 
        distance, is appropriate?
    CSO does not have a position on 50-mile or any other ocean buffer. 
However, it is important to note that a 50-mile buffer may not 
represent an ecosystem-based approach. Through a regional ecological 
and economic analysis, one might find that a 50-mile buffer is adequate 
but to our knowledge, no one has done such an analysis. This is clearly 
an important area of research and the type of policy assessment that is 
best accomplished at the regional level, and in partnership between the 
state and federal government.
                                 ______
                                 

Response to questions submitted for the record by Robert G. Marvinney, 
                Maine Geological Survey, Augusta, Maine

1.  To Mr. Diers, Mr. Marvinney, and Mr. Wagner: One of the concerns 
        raised by those who are not supportive of new offshore 
        drilling, particularly along the East Coast, is what role 
        neighboring states would have in drilling decisions. For 
        example, hypothetically, if New Hampshire wanted to allow 
        drilling off its coastline, what kind of say should Maine or 
        Massachusetts have on that? Are existing Coastal Zone 
        Management Act provisions adequate to protect coastal states 
        interests? Or is there a need for a new regional approach on 
        these decisions, similar to what Mr. Diers mentioned in his 
        testimony?
    Response: Existing Coastal Zone Management Act provisions leave the 
question of the role of neighboring states in these types of situations 
open to interpretation. The more realistic probability is the potential 
for oil and gas leasing on the Georges Bank, a major fisheries resource 
for the fisherman of Maine and New England. The proximity of the 
Georges Bank to Massachusetts presents the possibility that 
Massachusetts' interests might dictate more strongly than Maine's in 
this situation, in spite of the critical nature of this resource to 
Maine's economy. This can be addressed by directing the Minerals 
Management Service to engage in discussions early and often in the 
process with the most proximal state and neighboring states, and by 
weighting input from each equally. Maine is not opposed to the 
responsible development of oil and gas resources of the nation's OCS. 
The regional approach should be this: we need to consider the entire 
potential energy endowment of the entire OCS, including traditional oil 
and gas and renewables, and then develop a strategy to exploit these 
where each potential is the greatest. For oil and gas, this is the Gulf 
of Mexico, where the highest potential exists for significant reserves 
and where the infrastructure is already in place to support these 
activities. For the Gulf of Maine, the greatest potential is wind, and 
work is already underway to support this effort.

2.  To all panelists: A number of legislative proposals regarding the 
Outer Continental Shelf have proposed that any new revenues that accrue 
as a result of new offshore oil and gas activity be shared with the 
States, as is now the case with the Gulf of Mexico States. At the 
hearing, Congressman Farr suggested the formation of an Oceans Trust 
Fund, while Congressman Rohrabacher suggested giving revenues directly 
to coastal communities to allow them to address local needs, such as 
reducing urban runoff and repairing sewers, although it was not clear 
whether only communities that have drilling off their shores should be 
provided with funding to address those needs, or if all communities 
should have access to such funding, regardless of the proximity of 
offshore drilling. Please provide the positions of your state 
governments regarding the best use of any potentially shared offshore 
revenue: would you prefer an Oceans Trust Fund model that provided 
revenue nationally to address ocean issues, a revenue sharing model 
that only included states or communities that have offshore drilling 
off their shores, a revenue sharing model that provides shared revenues 
directly to states and coastal communities regardless of whether they 
have drilling off their shores, or another model entirely? Also, are 
there any analogous revenue sharing programs that Congress should look 
at as good models for how to move forward, should we decide to increase 
the amount of OCS revenues shared with states and local communities?
    Response: There should be some reinvestment of new revenues from 
OCS oil and gas activities into ocean issues and affected ocean 
communities, although Maine does not have a position on which approach 
would be preferred.

3.  To all panelists: Do you believe that states have an adequate role 
in the current MMS offshore leasing planning process? Or is there any 
way that you would like to see the states roles strengthened?
    Response: MMS is striving to engage states at an early stage in the 
discussions of potential offshore leasing. Past history, however, 
demonstrates that the views of the Department of Interior and MMS most 
often prevail when there are differences with the views of the states. 
There should be a strengthened role for states in the planning process 
to ensure that state's views are given equal standing with federal 
views.

4.  Secretary Chrisman, could you provide the Governor's position on 
the Plains Exploration and Production (PXP) proposal to allow an 
existing federal platform to drill a new well into California state 
waters? Does the state believe that it has the authority to require a 
platform operating in federal waters to cease operations as of a 
certain date? Does the state believe that the PXP model proposed at 
this site could also be used to access additional oil fields under 
state or federal waters?

5.  Secretary Chrisman, at the committee's hearing on February 11th, a 
witness argues that additional oil drilling along the California 
coastline would help reduce natural oil seeps. Does the state agree 
with that argument?
    I oppose direct revenue sharing with states that is contingent on 
them opening their coastline to drilling, but I am in favor of using 
OCS revenue in a way that benefits all the states. How do your state 
governments feel about this issue?

6.  Secretary Chrisman, the committee has been told that California has 
more stringent environmental requirements for oil and gas production in 
state waters than the federal government has in other parts of the OCS. 
One of our witnesses at the February 11th hearing, for example, 
described how California requires operators to treat and dispose of 
drilling muds onshore, rather than disposing of them on the sea bottom. 
Could you provide a list of environmental requirements imposed by 
California that are not regularly imposed by the federal government?

7.  Mr. Diers, you mention in your testimony that federal consistency 
authority under CZMA should be maintained, and states' authority should 
not be weakened. Do you feel there is any need to strengthen state 
consistency requirements with respect to offshore drilling and other 
offshore energy development?

8.  Dr. Marvinney, the American Petroleum Institute recently put out a 
report entitled ``Untapped Oil and Gas Resources,'' in which the 
authors develop what they call an ``alternative resource case'' by 
multiplying the amount of oil that MMS currently thinks is in the 
Atlantic Ocean--3.8 billion barrels--by 4.8, reflecting the increase in 
our known Gulf of Mexico resources since 1975. In your opinion as a 
professional geologist, is that a valid estimation?
    Response: The API analysis is a useful statistical exercise that 
may help to define the broad range of potential resources in the 
Atlantic. However, it is strictly a statistical analysis that must be 
tempered with geological realities. There are profound differences in 
the geology of the Gulf of Mexico and the geology of the Atlantic, and 
the north Atlantic, in particular. The first difference is in the 
nature and duration of sedimentation in the Gulf of Mexico. The 
Mississippi delta system has been operational for 10s of millions of 
years, bringing enormous amounts of sediment into the Gulf that trapped 
prolific organic material. The burden of sediment further weighted the 
crust, bringing this organic-rich sediment into temperature zones 
conducive for the development of oil and gas. Along the Atlantic 
seaboard, and particular the north Atlantic, there are no analogous, 
large-scale, long-duration deltaic systems. The exploration work of the 
1970s and 1980s confirmed the lean organic nature of the sediments and 
their thermal immaturity.
    The second major difference is in the nature of the mobile 
substrate beneath the oil-generating units in the Gulf of Mexico. 
Massive and thick salt sequences in the Gulf of Mexico beneath the oil-
generating units have been mobilized by their buoyancy relative to the 
overburden materials, and have risen in salt diapers that have provided 
avenues and traps for oil migration and accumulation. While there is 
salt in the Atlantic OCS, it is far less extensive, thinner, and 
subsequently less mobile, providing fewer opportunities for hydrocarbon 
accumulations.
    The API analysis is interesting, but it is far more instructive to 
consider the hydrocarbon development history of nearby analogous areas. 
The Scotia Shelf off Nova Scotia has seen considerable exploration with 
the latest tools available. Since the discovery of the Sable Island gas 
field more than 30 years ago, very little has been added to the proven 
reserves of the shelf, in spite of extensive exploration. This is far 
more relevant to the potential for oil and gas reserves in the north 
Atlantic than the API statistical analysis.

9.  Dr. Marvinney, in the table you include in your testimony, showing 
the MMS estimates of economically recoverable oil from the Atlantic and 
Gulf of Mexico regions, it appears that at $46 a barrel oil, about 80% 
of the undiscovered oil in the Gulf of Mexico is economically 
recoverable, while the figure in the Atlantic is only 58%. Is it 
accurate to say that not only is there more oil in the Gulf, but it's 
also more economical to get to?
    Response: This is probably a reflection of the greater potential 
for larger fields in the Gulf of Mexico compared to the Atlantic and 
also perhaps that there is support and processing infrastructure 
already in place.

10.  Dr. Marvinney, your testimony mentions a Maine company that 
constructed two offshore drilling platforms that were used 
internationally. Has this company been involved in constructing 
platforms to be used in U.S. waters, and if so, could you provide 
additional details of who has contracted those platforms and where they 
are to be deployed.
    This company is Cianbro, and information about their Amethyst 
Project at this website: http://www.cianbro.com/CurrentProjects/
PastHighProfileProjects/Amethyst
SemisubmersibleDrillingRigs/tabid/343/Default.aspx
    The two semi-submersible rigs that this corporation completed in 
Portland, Maine were subsequently deployed in deep water off Brazil. 
Large portions of these rigs were originally constructed in shipyards 
in Gulf of Mexico states, but those corporations were unable to meet 
their contractual obligations. Cianbro transported the pontoon 
assemblies and deck boxes to Maine where they were mated, completed, 
and taken on sea trials. Cianbro is currently constructing large 
components for use in a refinery expansion project in a Gulf of Mexico 
state. I do not know if Cianbro has constructed platforms for use in 
U.S. waters.
11.  Mr. Graves, Louisiana is the first state to receive money under 
the Coastal Impact Assistance Program. Please list the projects, along 
with a short description, that Louisiana is funding with that money? 
Also, please describe the state's experiences with the CIAP program, 
including any ways that the state believes it should be modified.

12.  Mr. Graves, you mention an Ocean and Coastal Trust Fund in your 
testimony--a fund that would benefit all coastal states. You also call 
for additional revenue sharing with Louisiana specifically. What do you 
think the breakdown should be between money that goes specifically to 
Louisiana, and money that goes to a Trust Fund that benefits all the 
states?

13.  Mr. Diers, in our February 25th hearing, Mr. Larry Nichols of the 
American Petroleum Institute states that the Coastal Zone Management 
Act ``allows a state to block offshore activities that are inconsistent 
with its coastal zone management plan. That block can be removed only 
by the federal government through an arduous appeals process, which can 
be followed by litigation if the state disagrees with the federal 
government's decision.'' The implication of his statement seems to be 
that states possess all the authority they need now to effectively 
block drilling from happening off their shores. Do you believe that 
states have enough authority under CZMA to effectively block offshore 
activities? Is it clear enough what constitutes an ``affected state'' 
for the purposes of making consistency determinations for offshore 
energy siting under the CZMA?

14.  Secretary Chrisman, could you provide the committee with an update 
on where California stands with the Coastal Impact Assistance Program--
how close is the state to receiving funding through that program, and 
on what projects does the state expect to be using that funding on? 
Also, please describe the state's experiences with the CIAP program, 
including any ways that the state believes it should be modified.

15.  To all panelists: Last September the House passed a bill that 
would have created a 50-mile buffer zone where drilling was not 
allowed, and then a 50-mile zone where states would get to decide where 
drilling was allowed. What are your states' opinions on the use of 
buffer zones, and do you believe that 50 miles, or some other distance, 
is appropriate?
    Response: Given the geographic location of the Georges Bank, more 
than 100 miles from the coast of Maine, such buffer zones would do 
little to allay our concerns about fisheries impacts.

16.  To Dr. Marvinney, State Geologist, Maine: In your testimony, you 
state that ``the resources of the Gulf of Maine are most suitable to 
renewable energy development, with tidal and offshore wind power being 
the primary resources. Renewable wind power may provide manufacturing 
and support employment and contribute to a sustainable, secure energy 
future.'' To what extent is renewable energy production in conflict 
with oil and gas production?
    Response: In terms of geography, there would be little conflict 
between the likely footprint of oil and gas activities and the likely 
footprint of renewable energy activities. The only real potential for 
oil and gas in the Gulf of Maine is on the Georges Bank, more than 100 
miles from the Maine coast. The likely locations for wind power 
projects and tidal power projects are all within 50 miles of the Maine 
coast.
                                 ______
                                 

Response to questions submitted for the record by Hon. Frank W. Wagner, 
               Senator, 7th District, Senate of Virginia

1.  To Mr. Diers, Mr. Marvinney, and Mr. Wagner: One of the concerns 
        raised by those who are not supportive of new offshore 
        drilling, particularly along the East Coast, is what role 
        neighboring states would have in drilling decisions. For 
        example, hypothetically, if New Hampshire wanted to allow 
        drilling off its coastline, what kind of say should Maine or 
        Massachusetts have on that? Are existing Coastal Zone 
        Management Act provisions adequate to protect coastal states 
        interests? Or is there a need for a new regional approach on 
        these decisions, similar to what Mr. Diers mentioned in his 
        testimony?
Response to Question 1:
    I believe the Administrative Process for lease sales under the 
current structure allows more than ample opportunity for bordering 
states to address their concerns.
    I have been involved in actions to date regarding Virginia's 
inclusion in the Department of the Interior's MMS five-year plan. In 
the course of this very deliberate process, I have attended public 
hearings as far away as New Jersey. Comments and concerns were 
solicited and received not just from Virginia and bordering states, but 
indeed all over the nation.
    I will also bring to the Committee's attention that Canada did not 
come to Ohio, Michigan or Pennsylvania for the 2,000 gas wells in Lake 
Erie; nor did they include Maine or any other New England states prior 
to the major offshore operation off of Nova Scotia and their major oil 
fields off the coast of Newfoundland.
    In a similar manner, Cuba is not seeking Florida's position on 
their development of Gulf of Mexico hydrocarbon deposits.
    Look only to the Gulf of Mexico to see how thoroughly and 
effectively the existing Administrative Process is working for Texas, 
Louisiana, Alabama and Mississippi.

2.  To all panelists: A number of legislative proposals regarding the 
Outer Continental Shelf have proposed that any new revenues that accrue 
as a result of new offshore oil and gas activity be shared with the 
States, as is now the case with the Gulf of Mexico States. At the 
hearing, Congressman Farr suggested the formation of an Oceans Trust 
Fund, while Congressman Rohrabacher suggested giving revenues directly 
to coastal communities to allow them to address local needs, such as 
reducing urban runoff and repairing sewers, although it was not clear 
whether only communities that have drilling off their shores should be 
provided with funding to address those needs, or if all communities 
should have access to such funding, regardless of the proximity of 
offshore drilling. Please provide the positions of your state 
governments regarding the best use of any potentially shared offshore 
revenue: would you prefer an Oceans Trust Fund model that provided 
revenue nationally to address ocean issues, a revenue sharing model 
that only included states or communities that have offshore drilling 
off their shores, a revenue sharing model that provides shared revenues 
directly to states and coastal communities regardless of whether they 
have drilling off their shores, or another model entirely? Also, are 
there any analogous revenue sharing programs that Congress should look 
at as good models for how to move forward, should we decide to increase 
the amount of OCS revenues shared with states and local communities?
Response to Question 2:
    With regards to revenue sharing, I suggest that the best method is 
a direct appropriation back to the state and coastal communities.
    The Committee may also want to consider a hybrid where the states 
receive directly 50% of the revenue share and the two adjacent states 
split the other 50% of the revenue share.
    I believe the states and the local communities are in the best 
position, and need the flexibility, to apply the funding to their 
specific needs.
    For example, Louisiana has used the majority of their entire 
revenue share to restore the critical Mississippi delta habitat. That 
obviously is not a problem in Virginia. However, cleaning up and 
restoring the Chesapeake Bay is our number one environmental problem. 
We have pressing commitments (the majority of which are unfunded) to 
upgrade our sewage treatment plants, improve storm water run-off 
quality and act more aggressively to address our non-point source 
pollution problems.
    One piece of legislation considered by the General Assembly in 
anticipation of royalties would have allocated 40% of all funds to 
clean up the Chesapeake Bay, 40% to transportation (there is a direct 
correlation between congestion and pollution), 10% for tax credits/
deductions for improvements in energy efficiency and 10% for renewable 
energy research and development.

3.  To all panelists: Do you believe that states have an adequate role 
in the current MMS offshore leasing planning process? Or is there any 
way that you would like to see the states roles strengthened?
Response to Question 3:
    Having been part of the Administrative Process for the Department 
of the Interior's current five-year plan, it has been my observation 
that MMS has listened carefully and addressed many of Virginia's 
concerns with regards to the planned lease sale.
    As an example, Virginia has asked for, and MMS has agreed to, a 50-
mile restriction of any activity from our coastline. MMS has held 
public hearings to listen to the concerns of not just political 
leaders, but all interested parties and citizen groups.
    Furthermore, there is active state and local participation in all 
NEPA applications for exploratory and production drilling permits. 
Therefore, I believe the existing system more than adequately takes in 
the concerns of state and local governments.

15.  To all panelists: Last September the House passed a bill that 
would have created a 50-mile buffer zone where drilling was not 
allowed, and then a 50-mile zone where states would get to decide where 
drilling was allowed. What are your states' opinions on the use of 
buffer zones, and do you believe that 50 miles, or some other distance, 
is appropriate?
Response to Question 15:
    Throughout my involvement as a politician, most of the major 
objections to offshore drilling have come from waterfront residents, 
who have been given the impression that platforms will be built in 
their backyards. These residents and hotel guests do not want, 
naturally, giant platforms erected right off shore that spoil the view 
shed. If sightline becomes an issue, a 15-mile buffer would take care 
of this objection, as the eye's view only extends approximately 7 
miles.
    In Virginia, I negotiated with the Governor's office on an 
appropriate buffer. Because there is nothing of geological significance 
within 50 miles of the shore, it was quite easy for me to cede this 
point in order to get other language in my bill creating the Virginia 
Energy Plan.
    However, this is not the case in all areas. Significant offshore 
deposits in California, Louisiana and Texas are within a few miles of 
the coast. But, thanks to new directional drilling techniques, these 
reserves could be tapped while keeping production platforms out of the 
view shed.
    Thus, it would be my recommendation that a 15-mile buffer be 
established for any production platform and further, no exploratory 
drilling ships should be sited within 3 miles of the coast. These 
buffers will allow full access to all potential reserves while ensuring 
that no permanent structure is within the view shed of the coastline.

                                 
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