-- Jeannette Lee, NationalJournal.com

NARUC strongly supports improved energy efficiency as the first option for achieving greater energy security, but conservation alone will not be enough to address anticipated demand. To become truly energy independent, Congress and the Obama Administration will need to keep all options on the table—efficiency, renewables, fossil fuels, natural gas, and nuclear. All of these fuels have domestic components, and all must be considered if we are going to wean ourselves from inhospitable foreign energy sources.

Over the past several years, NARUC has endorsed calls for lifting the Outer Continental Shelf moratorium in an environmentally and economically responsible fashion. The U.S. possesses large untapped deposits of oil and natural gas in State and federal waters off of the Atlantic and Pacific Oceans, along with the Gulf of Mexico. If we tap into these resources soon, we can help stem the rising prices that will accompany any uptick in our economy. We believe this is especially important with respect to natural gas development given the critical role that gas-fired electric generation will be called upon to play to meet our greenhouse gas reduction goals.

We must do this carefully and in an environmentally sound way, and we must also properly align royalties and boundaries so States can have the right to control resource development within their respective borders and off their respective shores.

The broader portfolio of energy resources that we have at our disposal, particularly at a time when consumers are more strapped than ever, the better our chances are at meeting our energy challenges.

• Keeping the OCS open is widely supported by voters:  Voters overwhelmingly support offshore drilling by a two-thirds majority.  If President Obama and his Democratic colleagues kill offshore drilling before it begins, there will certainly be a backlash by voters in 2010.    
• The OCS will be good for jobs and the federal budget:  Approximately 6 million Americans rely on the natural gas and oil industry for their employment, and opening up the OCS and other areas now off-limits could add another 160,000 well-paying jobs to our economy.  Those new resources and new jobs could create as much as $1.7 trillion in additional revenue for federal, state and local governments. 
• Developing the OCS open makes environmental sense: Natural gas is the cleanest fossil fuel and most economic, reliable backup to wind and solar generation. Modern technology allows us to develop offshore while protecting the environment. 
• Opening the OCS will help keep price pressure down:  In the coming decades, demand for natural gas is expected to grow.   Enactment of climate change legislation would drive up demand for natural gas up approximately 20 to 30 percent as major utilities will choose natural gas for power generation.   In order to keep price pressure in check, it is imperative that new sources of natural gas supply be made available. 

Energy independence, economic growth and environmental protection are not mutually exclusive. In fact, all three are essential to a prosperous and secure future for the United States, and all are attainable if we pursue the right policies. As for the question about offshore oil, yes, the new administration should consider drilling in promising areas offshore if it can be done safely, but no credible energy expert believes there are untapped offshore resources sufficient to change the basic equation of our energy picture.

We should only drill as part of a broad effort to revamp and integrate national energy and environmental policies to address the array of problems we face. The most serious natural threat confronting us is climate change. Continuing to hope that we can meet our energy needs by more drilling, more imports, more fossil fuels will only make it more difficult to reverse the warming trend.

President-elect Obama’s energy and environment appointments and pronouncements strongly suggest that he understands the folly of relying too much on fossil fuels, and will bring the right priorities to the White House. We expect his administration to seek resources and incentives for renewable energy--including wind and solar--a new emphasis on energy efficiency, a commitment to reducing greenhouse gases through concrete actions, and an emphasis on doing all these things in a way that creates new jobs in the green economy. He may also allow for more domestic drilling in order to reduce oil imports as much as possible.

We need to think in new ways about our energy future and, with a new President and Congress, chances are good that we will begin that transformation soon.

For the sake of our national security and economic well being, President-elect Obama should resist all calls to reinstate an executive moratorium on offshore energy exploration and production. Opponents to offshore energy production should not be alarmed, however, as there already exists under current law a long and thorough process for determining what, if any, areas of the Outer Continental Shelf (OCS) can be leased for oil and gas exploration and production. Only those areas included in an officially approved MMS 5-Year OCS Leasing Program can be considered for leasing.

The Obama Administration can simply choose to exclude areas of the OCS that lie off states whose citizens are opposed to offshore energy production.  Public opinion clearly favors offshore exploration and production, with strong support in states along the southeastern Atlantic coast and the Gulf of Mexico, including Florida.

Our new president should pay heed to the public’s support for domestic energy production, especially clean natural gas, and include areas of the OCS where coastal states have requested to be included in official leasing plans. The really crucial point, though, is whether or not he will also support revenue sharing with these states as the federal government currently does with the four Gulf of Mexico producing states. The Democratic congressional leadership currently opposes revenue sharing. I hope it is because they believe that all of the potential billions of new revenue are needed for federal programs and not because of a political calculation that acknowledges that without any revenue sharing, coastal states are not likely to allow exploration and production to take place.

America needs to significantly enhance production of domestic resources in order to preserve the competitiveness of domestic manufacturing. Congress needs to put in place a comprehensive energy plan to address the growing problem of America’s energy dependence on foreign sources and the growing imbalance between supply and demand.

Moving forward, our national policies must embrace: clean coal technologies – to take advantage of our most abundant resource in a sustainable manner; nuclear power; carbon sequestration technologies; offshore oil and gas exploration; wind and other renewables; and bio-gas technologies. Nuclear power, wind power, offshore exploration and bio-gas are technologies that are deployable today. Clean coal and sequestration technologies require further research and development to be deployed commercially at scale. A comprehensive U.S. energy policy that pursues both paths with urgency and in parallel will create a secure and sustainable energy future for U.S. manufacturers and consumers because smart energy policy is the fastest path to CO2 reduction.

1. Public supports development: Americans have spoken loudly on this issue: they want oil and natural gas exploration off our shores. Before the November elections, poll after poll showed strong support for offshore exploration and production. More significant, the Washington Post reported that exit polling on November 4 showed that two-thirds of voters support drilling for oil in U.S. offshore areas that are currently off-limit. Half of those who voted for the Democratic ticket shared this sentiment.

2. Jobs and revenue: Increased domestic production will lead to more good jobs for thousands of Americans, and it will mean more money for federal and state governments. A recent study by ICF International shows that development of the resources currently off-limits to development could create more than 160,000 new jobs by 2030. That is on top of the more than 6 million jobs our industry already supports. Most are well-paying jobs and many are the type of "green" energy jobs policymakers are seeking to create. It would generate $1.7 trillion in government revenue. Revenue from the development of all U.S. oil and natural gas resources on federal lands could exceed $4 trillion over the life of the resources.

3. National security: We have vast oil and natural gas resources in this country, and the more American oil and natural gas we produce, the less dependent we are on foreign sources. The ICF study found that developing the offshore areas that had been subject to congressional moratoria, as well as the resources in Alaska's Arctic National Wildlife Refuge and a small portion of unavailable federal lands in the Rockies, would lift U.S. crude oil production by as much as 2 million barrels per day in 2030, offsetting nearly a fifth of our imports. Natural gas production could increase by 5.34 billion cubic feet per day, the equivalent of 61 percent of the expected natural gas imports in 2030.

4. Environmental protection: Our offshore exploration and production record is proof that our technology allows us to produce these reserves safely and without harm to the environment. The Department of Energy under the last Democratic administration has said as much. The U.S. oil and natural gas industry has invested more than $160 billion since 1990 toward improving the environmental performance of its products, facilities and operations - $582 for every man, woman and child in the United States. In a 1993 report, the DOE praised the U.S. oil and natural gas industry for integrating "an environmental ethic into its business culture and operations." Since that report was issued, our industry's performance - even in the face of back-to-back Category 5 hurricanes - has repeatedly demonstrated the value of such environmental ethic.

5. Natural gas' vital role: Greater access to offshore areas could lead to increased production of natural gas, which plays an important role in our nation's economy. Natural gas is also the basic feedstock for much of the materials needed for the manufacturing of the products needed to bring about clean energy, from solar panels to batteries to wind turbines.

Americans are looking to the new administration and the new Congress for leadership on ways to get America working, producing and moving again. Our industry is prepared to be part of the solution, offering thousands of new jobs and billions more in government revenue -- while providing the energy necessary to expand the economy. However, to be able to do that, the industry must be assured of expanded access to the country's much-needed oil and natural gas resources, including those offshore.