The current debate about allowing EPA to regulate carbon emissions or encouraging Congress to act in its stead is a significant and heated one. However, we believe there are more effective and pragmatic ways of reducing carbon emissions than government mandates, regardless of which branch of government is issuing them. For example, using America’s most reliable, efficient and environmentally friendly fossil fuel, natural gas, and using it as efficiently as possible, can significantly reduce carbon emissions.

To that end, government policies that promote the increased use of natural gas are the most effective way to help reduce greenhouse gas emissions and increase energy efficiency. And because natural gas is domestically abundant—more than 97 percent of the natural gas we use comes from North America—it contributes to our energy security as well.

The fact is that, for four decades, natural gas residential and commercial customers have been leading the way in energy efficiency and carbon emission reductions. For example, the number of residential households using natural gas increased from 38 million in 1970 to 66 million today — an increase of more than 70 percent — yet aggregate residential consumption over that time has remained essentially flat. That is because residential natural gas users have cut their natural gas use, per household, by about 40 percent. This decline in residential gas usage per household is due to better insulated homes, more efficient appliances and conservation/efficiency programs that are supported by natural gas utilities.

This remarkable success in both reducing natural gas usage on a per-household basis and increasing appliance efficiency should be considered when crafting a national energy strategy. An effective course of action would be to continue to support these successful approaches and encourage other innovative ways to promote conservation.

We believe that natural gas could, and should, be used as a tool to improve environmental quality and energy efficiency. An approach to reducing emissions that is focused on appliance efficiency standards, building codes, and utility-supported conservation/efficiency programs has a proven track record for residential and commercial natural gas customers.

Let’s focus on what works for America, our environment and our future. We need to be talking about natural gas - domestic, abundant, affordable and available right now.

I applaud President Obama’s recent action expanding access to domestic oil and natural gas. These energy sources presently meet more than 60 percent of U.S. needs. They are reliable and abundant, and technology has enabled new and innovative ways to increase recovery rates while lessening their environmental footprint.

Some say opening up these areas won’t make a difference – that it’s too small a fraction of the global market; that it’s not enough to affect prices; that we should just forego oil and gas altogether and focus solely on renewable energy investments. I disagree. The importance of developing our nation’s oil and natural gas resources to create jobs, generate revenues and fuel our nation’s economy should not be underestimated.

For example, Shell recently launched first production from our Perdido ultra-deep water project in the Gulf of Mexico. Such projects can have a significant impact on the U.S. energy supply and employment situation. One day's production from Perdido is enough to meet the energy needs of more than 2.2 million American households. In addition, more than 12,000 people were involved in its construction.

By opening up Virginia’s offshore areas for exploration and production, many more well-paying jobs could be added to the state’s more than 140,000 jobs already supported by the oil and gas industry. And according to ICF International, nearly $19.5 billion in revenue could flow to federal, state and local governments for improved transportation and education. The oil and gas resources estimated to be available in the proposed Virginia lease sale area could fuel all 4 million cars in Virginia for more than four years and heat all of the state’s 3.2 million households for more than 11 years.

We know we can do this responsibly. The President’s decision to move forward with existing leases in the Alaska offshore is a positive acknowledgment that we have the technology and experience required to operate safely in the Arctic. The oil and gas believed to be in the Alaska offshore is of a size that is of strategic importance to the U.S., and the sooner we begin drilling the sooner we create tens-of-thousands of jobs, expand Alaska’s tax base, improve domestic energy security and breathe new life into the Trans-Alaska Pipeline.

While these are important and welcome steps for oil and gas, this is not an argument about fossil fuels versus renewables. Our belief, shared by many, is that in the coming decades all countries must find more energy at a much-reduced environmental cost as we transition to a low-emission energy economy. But, as much as we might wish, it is unrealistic to think renewable energy can be deployed as quickly as the next iPhone.

The transition will take time. In the 20th century, every new energy technology took about 30 years to gain a one-percent market share following commercial introduction. Right now, after more than a quarter century of dedicated effort, biofuels are nearing that one percent mark. Wind is still a few years away, after the first major installations in the early 1980s. But every step forward makes a difference.

As research and development continues on exciting new energy sources, natural gas will play an important role as both a growing part of the future energy mix, as well as a bridge to a low-carbon energy future. It is the cleanest-burning fossil fuel, and some estimates say the U.S. holds natural gas resources to meet current demand into the next century.

Meeting the global energy challenge requires strong cooperation among businesses, environmental organizations, policymakers and citizens. Shell remains active in this dialogue because we believe a comprehensive energy and climate policy is key to any secure and sustainable energy future.

The oil and gas industry can best contribute to sustainable energy by making more energy available, reducing emissions from fossil fuels, increasing the share of lower-carbon energy and generating jobs in the process. For Shell, that means more natural gas, biofuels and wind power.

A sustainable energy future is achievable…if we all work at it.

President Obama’s plan to expand offshore natural gas exploration is a clear sign that his administration understands the importance of achieving American energy security on all fronts. While AGA is happy that the president sees the vital short- and long-term role that natural gas plays in a low-carbon future, greater inroads to capturing natural gas’ inherent efficiency and robust domestic resource base are still needed.

Just this Tuesday, AGA reported that at year-end 2009 the known reserves of natural gas in the United States likely increased for the 11th straight year, approaching 250 trillion cubic feet. Combined with the most current estimate of undiscovered resources, we have a total future supply equaling more than 100 years at the current rate of use. This is the highest level in more than 35 years. Much of the supply optimism can be traced to the influences of unconventional onshore resources such as natural gas from shale and tight sands. Access to offshore natural gas reserves will provide additional strength to domestic resources.

This kind of robust supply base reinforces the pivotal role that natural gas will continue to play in the years ahead. When used directly in homes, businesses and industry, natural gas is at its most efficient. And when used for power generation, natural gas is the cleanest of fossil fuels. All of these benefits point to the need for continued domestic exploration for natural gas onshore and off, unconventional and conventional.

The goal of a diverse stable of carbon-neutral alternatives for power generation is an important one; it is certainly a goal worth pursuing. To that end, AGA has long supported the development of a diverse domestic energy supply, including oil, nuclear, coal, wind, hydro, solar and, of course, domestic, abundant and clean natural gas.

But we as a nation also need to get behind the best low carbon fuel that is domestically accessible, already abundant, available and ready right now. Natural gas meets all of these criteria and expanded offshore access will help to ensure it continues to do so.

President Obama’s announcement last week is a dream come true for opponents of domestic offshore oil and gas exploration and production. While the media and political pundits were busy praising the announcement as some major policy breakthrough and the White House's willingness to compromise on energy policy, the President, in fact, did not open anything. What he did do was hamstring a potential resource base in Alaska of up to 77 billion barrels of oil – more oil than the entire Russian reserve. What he also did was delay a scheduled lease sale off the Virginia OCS from 2011 to 2012, lock up the North Atlantic while Canada is busy utilizing their energy resource just above the border, lock up the entire West coast, and directed his Secretary of the Interior to merely study opening up the Atlantic coast from Delaware to Georgia.

Oil and gas exploration in the OCS would create 1.2 million jobs and generate trillions of dollars for the government through the collection of increased royalties and tax revenues. In poll after poll, the public overwhelmingly supports increased offshore development of taxpayer owned resources. The President clearly understands this, which is why he has gone to great lengths to appear to support it, while in reality his administration has done everything in its power – both onshore and offshore – to deny Americans access to the energy that rightfully belongs to them.

Coal, natural gas and oil provide us with 85 percent of our energy needs. Cap-and-trade, pricing carbon, a carbon linkage fee, KGL – call it whatever you want, but whatever you do call it won’t change the fact that in order for it to actually work, consumers will be forced to pay more for their energy, further stretching already tight family budgets. Could the president's head fake on offshore energy production finally move cap-and-trade through the Senate? That remains to be seen. But for the sake of our already struggling economy, let’s hope not.

To meet America’s energy challenges head on, our country will need to rely on a plan full of energy options. Offshore drilling by itself is not a silver bullet solution. Rather, as we seek to bridge to a new clean energy future, our nation will continue to rely on fossil fuels, like the oil and natural gas supplies in our nation’s Outer Continental Shelf.

For this reason, we at Dow applaud the President’s plans to expand oil and natural gas drilling to enable more American supplied oil and natural gas. In the near term, our nation’s economic growth will rely on hydrocarbon energy and will require additional domestic supplies to improve energy security and reduce price volatility. Every barrel of oil and cubic foot of natural gas we produce at home reduces the dollars we send to foreign governments, some of which don’t have our best interests at heart.

But we must do this responsibly and in a way that pays full attention to the important priority of minimizing environment impact. We know that oil and gas recovery technology has greatly improved over the years. We know this because Dow services this industry with products and technology that aids in the recovery of conventional and unconventional oil and gas resources.

Moving forward, America needs a comprehensive and sustainable national energy and climate change policy that enables the transition to a sustainable energy future -- balancing economic, environmental and security concerns. This policy must include plans to: 1) Aggressively pursue energy efficiency and conservation; 2) Increase, diversify and optimize domestic hydrocarbon energy and hydrocarbon raw material, also referred to as, “feedstock” supplies; 3) Accelerate development of alternative and renewable energy and feedstock sources and; 4) Slow, stop and ultimately reverse the growth of greenhouse gas emissions.

President Obama is to be commended for his decision to increase our domestic oil and gas production as an important first step to optimizing fossil fuels and accelerating the development of cleaner alternatives. This decision, coupled with his efforts to promote new construction of nuclear plants represents the kind of outreach needed to build bipartisan support for Senate action on energy and climate change. As the President has said many times — and we at Dow agree — it is only part of a much larger commitment to a comprehensive national energy and climate change policy that addresses economic development, security of our national energy supply and reducing our carbon footprint.

The Obama administration made some important announcements about offshore drilling last week. And in the near and medium term, we believe increasing U.S. oil production is compatible with successful efforts to significantly reduce U.S. greenhouse gas (GHG) emissions.
Offshore drilling has been much talked about lately. Expanding offshore drilling in the federal outer continental shelf (OCS) areas and increasing oil and gas revenue sharing for nearby coastal states is part of the package of climate and energy policies being negotiated by Senators Kerry, Graham, and Lieberman.
Many analyses of U.S. energy use show that even with aggressive efforts to reduce GHG emissions from fossil fuel use, the country will likely continue to use oil as a significant if not dominant transportation fuel for decades while fuel economy improvements, electric vehicles, biofuels, and perhaps other alternative fuels reduce oil consumption. In fact, just one day after the Obama administration announced its offshore oil and gas strategy, it also formally established new fuel economy and GHG standards for passenger cars and light trucks. In this context, increasing domestic oil production while also enacting policies to significantly reduce GHG emissions could mean that domestic oil production makes up an increasing percentage of a declining total U.S. oil consumption. From a climate perspective, in the near and medium term, increasing U.S. oil production can be consistent with successful efforts to significantly reduce U.S. GHG emissions.

America cannot drill its way to energy independence. We already have hundreds of thousands of oil and gas wells operating in the U.S.

And right now, there are over 38 million acres of federal OCS lands under lease, of which only 9 million are being developed or are in production. On-shore, about 45 million acres of federal public lands are currently leased out, with about 13 million acres in production. In other words, barely a quarter of the land and water already leased to energy companies is being used, and still the mantra of “drill, baby, drill” continues, creating a false notion that “energy independence” will result if only we lease more of our wild places.

Opening up new areas off the Atlantic seaboard likely won’t reduce our dependence on foreign oil, but we are very pleased that the Obama Administration has recognized the importance of protecting Alaska’s Bristol Bay from development, and has hopefully decided to take a science-based approach to future decisions about development in the Arctic Ocean.

Moreover, the Obama Administration recognizes the reality that we cannot drill our way to “energy independence, and is trying to redirect federal energy policy toward more reliance on new, cleaner technologies and energy efficiency strategies, and away from the assumption that we must continue to rely on the combustion of fossil fuels to power our economy.

The Obama administration’s planned expansion of oil drilling risks the health of marine wildlife, fisheries, and coastal economies. If this drilling plan is fully implemented as outlined last week, it could spell disaster for much of America’s coastline, and the tourism on which many coastal communities depend economically.

If oil drilling is allowed to proceed off our mid-Atlantic coast, for example, major fisheries and wildlife areas including the Chesapeake Bay and North Carolina’s Outer Banks will be subject to disruptive seismic testing and potentially catastrophic oil spills. Oil exploration and drilling will pose a particular risk to the highly endangered North Atlantic right whale, which migrates along our entire Atlantic coast. Defenders of Wildlife and other organizations have recently petitioned to expand critical habitat protection for the North Atlantic right whale to include areas being considered for drilling off the south and mid-Atlantic coast.

Any drilling in the Beaufort and Chukchi Seas could prove disastrous for those fragile Arctic ecosystems and imperiled species such as polar bears. No clean-up technology has yet been invented that could shield polar bears and other Arctic species from inevitable oil spills.

We’re pleased that the Obama plan sets aside – for now – the world-class sockeye salmon fishery of Alaska’s lush Bristol Bay, and protects the California coast until 2017. But there’s no guarantee that those protections will last. Last week’s announcement reverses a 2006 bipartisan compromise reached by Congress that pledged to safeguard Florida’s Gulf Coast and Panhandle through 2022. As Senators, President Obama, Vice President Joe Biden and Interior Secretary Ken Salazar all voted in support of the compromise, which Congress is now being asked to overturn. What kind of message does that send to citizens of California, for example, who today were promised a reprieve from drilling until at least 2017?

Increasing offshore oil drilling also continues and expands our dependence on fossil fuels at a time when we need to reduce our dependence in order to address the harmful impacts of global warming. Today’s announcement threatens the health of our near-shore waters, an environment at particular risk from global warming. Now, more than ever, it is urgent that Congress pass comprehensive climate and energy legislation that tackles carbon emissions and addresses the climate impacts already being seen today.

The key question is why President Obama capitulated to Big Oil and Gas in allowing dangerous drilling off the coast of some of America’s most treasured places, simultaneously feeding the country’s addiction to fossil fuel.

Will we really get that much oil and gas? No, nowhere near enough to satisfy current American energy demands. To distinguish himself from his predecessor, President George W. Bush? No, it’s essentially the same plan. To pump up his political base? No, coastal Senators are not happy with his plan and millions of environmentalists are outraged. Because he’s following the best available science in proposing these plans? No, he ignored the advice of the National Ocean and Atmospheric Administration (NOAA), which has warned about the significant perils of offshore drilling, and does not like this plan because of threats to beaches, fisheries and other marine values. To save the polar bear? No, Obama’s plan to drill in the Chukchi and Beaufort Seas, prime polar bear habitat, will continue the serious disturbances plaguing the Arctic ecosystem and contribute to the very global warming that is already melting it. Because he’s a true believer in “compromise?” No, this plan reneges on a deal reached in 2006 not to drill off the Florida panhandle, which then Senators Obama, Biden and Salazar all supported.

So this leaves us with the only remaining rational explanation for the Department of the Interior’s offshore oil and gas drilling proposal: to help the Senate pass a global warming bill. If this is true, then we all are in big trouble. Not only did the White House gain precisely zero votes with the move (and probably lost some), but it also has clearly indicated there is no end to the wheeling and dealing to get a piece of legislation that has the word “climate” in it. This is bad politics, very poor policy and disastrous ecological news.

The Natural Resources Defense Council (NRDC) released an interesting study yesterday that details exactly how much drivers spend on gasoline. In some states, at current prices, it’s as much as 6 percent of an individual’s annual income. During periods of peak prices, the percentages spike to as much as 11 percent of income.

It is not surprising then that a new Rasmussen poll out today reveals that 72 percent of U.S. voters believe offshore drilling should be allowed, with just 12 percent opposing. Support for drilling is at its strongest level since Rasmussen began surveying three years ago.

Right now, the number one priority of the American people is the economy. People spend a lot of money on gasoline, and they know that a good portion of this money goes overseas -- and not back into our economy where it can create jobs and revenue for our cash strapped nation. That’s why they want to develop more of our own oil and gas resources now, but that’s not what the offshore drilling plan released by the Obama Administration yesterday does.

It is encouraging that the President acknowledged the critical need for more domestic oil and gas. I wholeheartedly agree. The problem is that the plan itself does not actually develop more of those resources. Instead, it set up years of studies and takes billions of barrels of oil and a large portion of our gas reserves off the table.

Developing more of our own resources also makes sense from the standpoint of environmental stewardship. All forecasts, no matter how rosy the scenario, show that America will be using oil for decades to come. Wouldn’t it be better to use American oil that is obtained under the most stringent environmental regulations in the world, rather than imported from other nations, many of which have less stringent rules? That should be something that both the U.S. Chamber and the environmental movement can agree on.

For a multitude of reasons, the U.S. needs to take advantage of our own resources now. We do not need more studies and more delays—but that’s exactly what the Administration has given us.

Ensuring access to reliable and abundant energy supplies is important to our economy. We welcome President Obama’s willingness to expand our traditional energy resources like domestic oil and natural gas while we work to develop and increase alternative sources. Affordable energy is essential to American forest products manufacturers’ competitiveness, since international competitors often enjoy significantly lower costs.

America’s forest products industry embraced renewable energy early in the last century and today generates two-thirds of its own power onsite from carbon-neutral renewable biomass. And while we seek to continue the progress we’ve made as an industry and satisfy even more of our energy needs from renewable biomass, purchased energy remains one of our highest manufacturing costs.

In order for our economy to grow, we need a growing supply of energy, and a vibrant manufacturing sector requires abundant energy supplies. By increasing our existing energy supplies, we can help to ensure the economic growth that is vital to make the energy efficiency and environmental improvements we all want to see. The President’s proposal seems to be a step in the right direction.

The path to a secure energy future in America begins with clean, renewable sources here at home. Expanded oil drilling will simply continue our reliance on dirty fossil fuels, while doing little to reduce our dependence on foreign oil. The President must now deliver a comprehensive plan for curbing carbon pollution so we can invest in the clean energy technologies we will need in the 21st century.

The longer we spend time discussing whether and where to drill for oil, the longer we delay a more comprehensive solution. The best path forward is a policy that limits carbon pollution and makes clean energy profitable. When we make the transition to a clean energy economy, we will create millions of new American jobs and put a cap on the pollution that is changing our climate.

A balanced energy policy means a balance between wind, solar, energy efficiency, and countless other sources of energy that we have yet to discover. What we need now is presidential leadership on comprehensive clean energy and climate legislation, which can end our reliance on foreign oil, create jobs and make our country more secure.

The newly announced offshore plans, even grading on a curve, would earn the President a gentleman’s C. Though it’s an important step and, in some respects, a politically balanced one, the proposal offers less access than the leasing plan Obama inherited and much less than what America needs. The moratoria on offshore drilling expired two years ago. And new lease sales under the administration’s new 5 year won’t take place until 2012. Lost time and lost opportunities are starting to add up. And this costly delay is inexplicable.

The President’s action lacks the sense of urgency that our leaders should have about developing our own resources. If reducing imports of foreign crude is important for energy security, why delay the leasing process? Interior Secretary Salazar had over a year to review and modify the leasing plan he inherited from President Bush and then go forward with the first sale (originally scheduled for this year).

The White House could have easily announced its revised plan along with a decision for prompt leasing of tracts off of the East Coast where states like Virginia support drilling. Failure to do so raises questions as to why and whether there is more to this than meets the eye. Politics, anyone? Since Mr. Obama showed distain toward oil development in the past, this seeming reversal brings to mind two old sayings: “Trust but verify” and “Beware of Greeks bearing gifts.”

On the surface, this decision appears significant. Experts believe the coastal waters on the East Coast and the eastern part of the Gulf of Mexico are very rich in oil and natural gas. So, the President gets high marks for a decision to make them available. But his inaction on Alaska deserves an F. The coastal plain, known as ANWR, may be one of the richest areas for exploration and development, perhaps even exceeding the oil in Prudhoe Bay. US companies could develop its reserves in an environmentally safe manner, as the development at Prudhoe Bay demonstrated.

The potential oil and gas reserves in the areas that can be leased and in Alaska could exceed 60 billion barrels and an equally large amount of natural gas. That would make a major contribution to our national wealth and help our balance of payments. Consequently, keeping Alaska off-limits shows either confusion over what ANWR’s development could mean for America’s economy and energy security or simply a lack of political courage.

Every barrel of oil produced domestically is one less barrel we must import. Investment in increased domestic production will create good paying jobs, and a number of states will derive economic benefits from the demand for goods and services needed to carry out the exploration and production activity. Starting now would bring those benefits to our economy and security sooner rather than later.

At least the decision to move forward, slow though it may be, hints that this administration is beginning to recognize that there are no near-term substitutes for traditional fuels. In fact, the Energy Information Administration estimates that in 2030 we will be consuming slightly more oil than we do today. As much of that as possible should be produced here at home.

While there might be important political reasons for expanding offshore oil exploration, the President's proposal to increase offshore drilling is unlikely to have a significant effect either on the supply of natural gas or on energy security in the U.S. In fact, the end result might simply be to increase greenhouse gas emissions.

Most of the offshore gas is relatively expensive to bring to market, and the recent technological innovations that significantly lowered the cost of recovering abundant shale gas resources are likely to make the offshore areas a less attractive source of natural gas supply. Thus, unless there is a substantial expansion of natural gas demand beyond what is currently forecast, we are unlikely to see major increases in offshore drilling for natural gas.

The situation with offshore oil, however, might be considerably different. If it is profitable to produce oil from these offshore areas, it might increase our oil security somewhat. However, as a recent RFF study, "“Reassessing the Oil Security Premium,” by Stephen Brown and Hillard Huntington shows, there are two effects to consider when we increase the supply of U.S. produced oil. Certainly producing more oil in the U.S. will reduce our dependence on foreign oil and increase the stability of our oil supply. However, partly offsetting this positive effect is the basic law of supply and demand. New oil supplies will lower the price of oil on the world market - which will increase oil consumption in the U.S. This partly offsets the energy security benefit of new oil production in the U.S. because increased oil consumption increases the economy's exposure to supply disruptions. In other words, each new barrel of oil production does not necessarily result in one less barrel of oil imports. This doesn't mean that there are zero energy security benefits, however. Netted out, the Brown and Huntington estimates suggest that the effect of increased U.S. oil production is about $1 per barrel (or 2.4 cents per gallon of gasoline); for each barrel of increased U.S. oil production, the risk to the U.S. economy of supply disruptions is reduced by an expected value of about $1.

The story for greenhouse gas emissions, however, is not so rosy. It is important to realize that policies that enhance energy security do not always result in lower greenhouse gas emissions - in some case, policies are complementary, but oftentimes a policy that enhances energy security results in higher greenhouse gas emissions. In fact, that is true with offshore oil drilling. Nearly all of the increase in U.S. oil production will result in increased oil consumption somewhere in the world, which will likely result in a net increase in CO2 emissions. The bottom line is that the President's policy might have a small positive effect on energy security - but might ultimately increase - not decrease - greenhouse gas emissions.

The announcement by President Obama and Secretary Salazar is a positive development. We look forward to reviewing the details of the proposal, and we stand ready to work with them to make this a reality. We appreciate the administration's recognition of the importance of developing our nation's oil and natural gas resources to create jobs, generate revenues and fuel our nation's economy.

Exploring for and developing our nation's offshore resources could help generate more than a trillion dollars in revenues and create thousands of jobs to add to the already 9.2 million jobs supported by today's oil and natural gas industry.

As we move forward, we hope that consideration can be given to other resource-rich regions, such as the Destin Dome area of the Eastern Gulf and areas off the Pacific Coast and Alaska. We also need to ensure that the permitting processes are handled in an expeditious way. The oil and natural gas industry has a proven track record of safe oil and natural gas development and the majority of the American people recognize this by supporting greater offshore development for the benefit of their communities, their states and their nation.

When the President pushed Republican leaders to engage with him on healthcare it was a legitimate carrot - that was promptly dismissed. So he turned to the stick of power politics to achieve his objective. Now the President is offering drilling & nukes carrots for Republican engagement on climate and energy legislation. And as the initial Republican response (as Carl Pope noted below) is nil, Obama will likely need the stick to achieve his climate objectives. The question is this: will the marginal voters (who decide all elections) recognize carrots and sticks as the only means of action in a party-locked system? Will they reward winning ugly - relative to the losing alternative of getting nothing whatsoever accomplished? I don't know about the electorate, but I will.

That's a bad paraphrase from Dickens, but it captures the twin announcements from the Obama Administration.

One is going to genuinely advance America's climate and national security by reducing oil demand by 1.5 billion barrels, make a huge cut in the carbon waste that is disrupting the climate, and save drivers billions of dollars.

This, of course, is the final promulgation of rules that will require passenger vehicles to average 35.5 miles per gallon and no more than 250 grams per mile of CO2 by 2016, the rule that will bring America's cars, trucks and SUV's into the 21st century.

Obama's other announcement was that he will offer for lease to the oil industry a huge swathe of previously intact off-shore marine habitat -- the Chuckchi and Beafort seas in the Arctic, the mid and South Atlantic Coast, and many new areas off Florida in the Gulf of Mexico. This was a blatantly political move by the Administration. Obama made clear during his campaign that he fully appreciates, as oil man T. Boone Pickens puts it, that our oil addiction "is one crisis we can't drill our way out of." The Administration knows that offering these leases will do nothing to reduce our oil addiction -- they may even provide a false sense of security.

Americans -- although not oil speculators -- may believe that new supplies are coming once the lease process is completed.

Not likely. Even if the estimates prove accurate, there are, for example, only a few days supply off the Atlantic Coast of Virginia . The Beaufort Sea has been leased previously, without success. As one oil industry analyst put it when the Bush Administration first tried to offer leases in the area,
"A lot of really expensive dry holes have been drilled" in the Beaufort Sea. And a lot of really major players have almost gone under. When the Hunt brothers tried, and failed, to corner the silver market, they used their Beaufort Sea leases as collateral. And when the Englehard Corporation pricked the bubble, it made the mistake of taking the leases as payment -- only to find that it had bought some extremely pricey dry holes.

What about more established oil production marine areas, like the Gulf of Mexico. Are oil companies chomping at the bit to get the drill bits down into those formations and start producing oil to help the American economy? Well, not precisely. It's not as if we haven't been leasing off the coast and in the Gulf. Only a few weeks ago the Department of the Interior announced the results of their latest lease sale in the Gulf of Mexico. http://www.gomr.mms.gov/homepg/lsesale/213/pstat213.pdf. They offered 6,958 tracts, but received binds on only 7%, 468 of them. Worse, even the tracts that drew bids attracted very few offers -- an average of 1.37 bids/tract. And the price of oil is reasonably attractive.

What this means is that most of the off-shore oil has already been produced. The oil industry wants to cherry-pick the remainder, pump the most lucrative leases, and leave the rest -- and any mess -- behind.

The White House made clear, as with their earlier announcement of gold-plated subsidies for nuclear power plants, that this was part of their strategy to help encourage Congress to pass comprehensive climate and energy legislation. It's bad vote counting. While I have conceded that the nuclear loan guarantees, while bad policy, are probably decent politics in Congress, OCS is not. Obama has already riled up the New Jersey and Maryland delegations, previously safe votes. And now the thorny issue of who gets the money -- the coastal states or the federal treasury -- is going to roil the Senate vote count further. The oil industry attacked Obama for not offering even more areas -- and no new Republican votes for climate legislation popped out of the Capitol Hill woodwork.

The likely outcome of all of this is damaging leasing, little oil production, and fewer, nor more, votes for climate legislation.

So the President was at best 1 for 2 today. He could have, and needs to, do better. He'll have a chance. Now that the 2016 auto standards are in place, and EPA has drawn the road map to genuine energy independence, http://www.epa.gov/otaq/climate/GHGtransportation-analysis03-18-2010.pdf, the President ought to preempt the inevitable Republican return to "drill baby drill" with a real vision for "Energy Independence Now."

OCS drilling won't cover the oil imports deficit, innovation can. Obama ought to make clear that by 2025 our vehicles will be getting far, far more miles per gallon than 35 -- and that by 2030 most of them will be plug-in hybrids or electric. We ought to give people options to walk or bike around -- cars shouldn't be our only transportation choice. Combining this with more investments in our railroads and mass transit, using natural gas in long-distance trucking and eliminating transportation bottlenecks we can cut oil dependence by 7 million barrels a day by 2030.

Because just because we could get to energy independence by 2030 doesn't mean we will. The transportation sector will innovate sluggishly unless investors know that the US simply won't keep covering the oil deficit with imports. Carrots won't be enough. That ought to be a line in the sand, drawn by the President. He ought to say, "Let there be no doubt. We will cut our demand for oil every year starting this year. And if I have to, I will use my Presidential authority to back-up this line in the sand, by restricting oil imports. (He doesn't need Congress to do this!)

If banks, local government and industry know that the President won't let imports flood the oil markets, then they will invest in electric cars, mass transit, natural gas trucks, and modernizing the railroads. Otherwise they will wait and see -- and the opportunity, both politically and in policy terms, will slip away.

President Obama’s decision to open vast areas of our oceans to offshore drilling is dangerous move in the wrong direction.

Spending time and money on dirty, 19^th century fuels will take us backward. The new fuel economy standards President Obama is establishing are the kind of solution we need right now--the kind that will get us moving into the 21^st century.

As Obama pointed out, these new standards will not only save drivers money, but will also save 1.8 billion barrels of oil. That is the equivalent of taking 58 million cars off the road for a year.

If we want to boost our domestic oil supply, we should focus on enhanced oil recovery from existing fields, a process that can supply more than 10 times the amount of oil that could be produced by drilling in our oceans over the same period.

Turning back the clock and returning to more offshore drilling, meanwhile, will do little to relieve America’s oil addiction.

According to the Department of Energy’s Energy Information Administration, drilling in America’s previously closed ocean areas “would not have a significant impact on domestic crude oil and natural gas production…before 2030.” Even then, “because oil prices are determined on the international market …any impact on average wellhead prices is expected to be insignificant.”

Offshore drilling would yield little cost or supply benefit, and yet it would pose serious long-term danger to our beaches and marine life. It also threatens commercial fishing, ocean-related tourism, and recreation industries that contributed more than $128 billion to the nation’s economy in 2004 and supported more than 2 million jobs.

I agree with President Obama that we need to transition to cleaner fuels now. And I applaud the U.S. military’s efforts to confront the twin challenges of oil addiction and climate change.

But sinking more drill pads into our oceans is not the answer. Not when better running cars and more efficient use of existing oil fields can transition us to the 21^st century without harming marine life or marine jobs.

America’s energy challenges require an all of the above approach. We cannot ignore the immediate contributions from traditional energy sources, such as petroleum. This a fact President Obama clearly understands.

President Obama also embraces the truth that the 21^st century challenges we face cannot be met with 20^th century solutions. America’s energy policy must be focused on new, renewable energy sources that provide both immediate and long term displacement of foreign, reductions in greenhouse gases, and enduring economic opportunity. Ethanol, for example, is the only widely available alternative to petroleum-based fuels, backing out more than 360 million barrels of imported oil a year today. Additionally, ongoing innovations are making current ethanol production technologies more efficient while simultaneously expanding the basket of feedstocks from which ethanol is made.

In February, President Obama released a biofuel roadmap that demonstrated this Administration’s appreciation for the contributions of current ethanol technologies and the promise of next generation technologies on the cusp of commercialization. This roadmap is a good starting point for accelerated development of ethanol technologies.

While the President’s biofuels agenda is one with a long term vision, there are three immediate steps available for this Administration to take that would provide a jump start this agenda.

1. EPA should approve without condition the use of up to 15% ethanol blends in gasoline.

2. DOE must rework existing loan guarantee programs to make them more accessible to cellulosic ethanol and other next generation biofuel technologies.

3. The White House should make Members of Congress aware of its support for key ethanol tax incentives to spur the accelerated evolution of the industry.

Whether President Obama’s announcement today improves his chances for passing climate change legislation I cannot say. But his willingness to take steps previously thought unachievable demonstrates his understanding of the pressing energy issues at hand. The focus must continue to be on renewable sources of energy and 21^st century solutions. Fossil fuels, like oil, are finite resources and reliance upon them for future supplies is economically and environmentally unsustainable.