1. Oil Companies
Highlights from: Statement of John Hofmeister
Shell Oil Company
Before the Senate Judiciary Committee
Wednesday, May 21, 2008
- Let’s look at historical data on the price of a barrel of crude and the average
price of regular gasoline. Since April 2004, the price of a barrel of U.S. light
sweet crude has gone up by more than $70, which is more than a 300 percent
increase. In this same period, the average U.S. nationwide price of regular
gasoline at the pump went up 100 percent. Looking just at the last 12
months, the price of a barrel has increased $60, or more than 100 percent.
The price of regular gasoline has gone up 20 percent.
- The rate of growth in global demand for oil has accelerated in recent
years. This is largely the result of rapid economic growth and
industrialization in countries like China and India and also sustained
subsidies on oil products in oil exporting countries.
- Access to oil and gas resources is becoming more difficult around the
world. This, coupled with more stringent fiscal conditions governing
investment in several major oil and gas-producing countries, adversely
affects the economics of new energy projects. It may lead to reductions
or delays of new investment in oil and gas supply capacity.
- The world will demand an additional 35 million barrels of oil per day by
2030, which is a 42 percent increase over today’s demand. It will demand 64
percent more natural gas than we are producing now.
- There is no shortage of molecules of oil and gas in the ground. However,
there are multiple influences that will affect the pace at which this oil can,
and will, be developed.
- U.S. production has fallen steadily for the last 35 years. Oil production in
this country peaked in the 1970s. As U.S. consumption of oil has doubled,
domestic oil production has fallen off nearly 40 percent. Why? In large part,
this is the result of government policies that placed important oil and gas
resources off limits.
- We still have a significant resource base in this country, both offshore and
onshore. The U.S. Government estimates that there are about 300 trillion
cubic feet of natural gas and more than 50 billion barrels of oil yet to be
discovered on the Outer Continental Shelf surrounding the Lower 48. When
you then add in the Alaska OCS resource, you add the potential for another
122 trillion cubic feet of natural gas and 25 billion barrels of oil.
Unfortunately, 85 percent of the Lower 48 resource base is off-limits
because of Congressional moratoria.
For the past 30 years, federal policies have restricted the availability ofWe have all the oil and gas we need RIGHT HERE!
domestic oil and gas resources to U.S. consumers. Such as:
• Outer Continental Shelf Moratorium Atlantic Ocean
• Outer Continental Shelf Moratorium Pacific Ocean
• Outer Continental Shelf Moratorium Eastern Gulf of Mexico
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• Congressional bans on onshore oil and gas activities in specific areas
of the Rockies and Alaska
• And even a Congressional ban on doing an analysis of the resource
potential for oil and gas in the Atlantic, Pacific and Eastern Gulf of
According to the Department of the Interior, 62 percent of all onshore
federal lands are off-limits to oil and gas development with restrictions
applying to 92 percent of all federal lands.
The Argonne National Laboratory did a report in 2004 that identified 40
specific federal policy areas that halt, limit, delay or restrict natural gas
The proceeds from royalties and taxes paid by oil companies to the U.S. Treasury could fund nearly the entire cost of developing and implementing a non-fossil fuel energy economy for the United States. Instead, that money, TRILLIONS of dollars, goes to Arabs and the Venezuelans.
No Environmental Reason NOT to Drill
Oil and gas recovery is now one of the cleanest industrial sectors in the United States. When Hurricanes Katrina and Rita roared through the Gulf of Mexico in 2005 approximately 150 oil and gas rigs were damaged, many severely. But did you see any pictures of oil stained beaches? NO!
Near the Arctic National Wildlife Refuge (ANWR) at the very northern tip of Alaska, oil recovery has been ongoing at Prudhoe Bay for decades. Wildlife in the area thrives in the shadows of oil production installations (see photo right). Yet environmentalists and Democrats in Congress refuse to allow us to drill in ANWR, even though the area under consideration is the size of a few golf courses on Hilton Head Island in a wildlife refuge the size of the entire state of South Carolina.
The last argument of Democrats who wish to curtail U.S. energy production (and slow the U.S. economy to our disadvantage worldwide) is that it would take years to develop the resources we know we have. True. And had those same Democrats insisted President Clinton sign the bill Congress passed in 1996 instead of veto it ANWR oil would be supplying U.S. consumers today. When the issue was brought up again in 2005, Democrats blocked the measure as they have nearly every other source of U.S. domestic production that would increase supply and lower the cost of gasoline.
However, it's not too late to start drilling NOW! And yet, when that subject is raised, Democrats fall back on the litany of lies that have kept the American people paying more and more and more for energy with no end in sight.
Drill! Produce! DRIVE!