OCS development a boon

Posted: Tuesday, April 13, 2010

President Obama surprised many when he recently gave the green light for offshore oil and gas development along the East Coast, Gulf of Mexico and in Alaska.

For our state, it means exploration can begin - as early as this summer - on already leased areas in the Chukchi and Beaufort seas and Cook Inlet. The President's decision is good news for Alaskans for two reasons.

First, development in Alaska's Outer Continental Shelf (OCS) could stimulate a renaissance in our oil and gas industry at just the right time as an Alaska gasline project is poised for development and flow through the Trans-Alaska Oil Pipeline is at an all-time low.

The federal Minerals Management Services estimates there are recoverable reserves of nearly 22 billion barrels of oil and 99 trillion cubic feet of natural gas in the Chukchi and Beaufort seas alone. This new development could create thousands of good-paying jobs as Alaska's unemployment rate reached a 20-year high.

Second, I'll insist that some of the proceeds from OCS development be directly shared with affected coastal communities and the State of Alaska. Last July, I introduced legislation (S.1560) to do exactly that as part of my package of seven bills designed to address the impacts of climate change on Alaska.

Back in 2006, Alaska was left out of legislation passed by Congress that gave Gulf of Mexico states a direct share of OCS revenues from leases off their coasts. Alaska deserves the same deal those states received because oil and gas development requires expanded community infrastructure, improved emergency response capability and mitigation for potential impacts to fish and wildlife.

If our state had been included in the 2006 legislation, Alaska would have received more than $900 million of the $2.6 billion in revenues from the 2008 Chukchi Sea leases alone. These funds could have helped coastal communities, spurred more investment in renewable energy and energy efficiency and helped develop critical facilities like roads and harbors.

Unlike other revenue sharing legislation introduced in Congress, my bill respects the needs of Alaska communities adjacent to offshore development and the unique needs of the indigenous people who live there. In addition to sharing revenue with the State, my legislation also provides a portion to those affected communities.

Alaskans have been fighting for our fair share of offshore oil and gas revenues for years, but now the political and policy stars may be aligning to finally make it happen. I have been working with several of my colleagues from Virginia, South Carolina and other states which now have real potential for offshore oil and gas development.

They want their fair share of offshore leasing revenues, too. Already, we have seen some progress on the issue. The latest Senate outline for national energy and climate legislation includes revenue sharing.

Since getting elected to the Senate 16 months ago, I've been arguing to the Obama administration that Alaskans know how to do environmentally responsible oil and gas development in challenging Arctic conditions. I've met numerous times with Interior Secretary Ken Salazar, Environmental Protection Agency Administrator Lisa Jackson and the President himself to seek the opportunity to prove it.

With the EPA's recent approval of an air permit for Shell's Beaufort development, the pressure is on for Shell and other companies gearing up for OCS development to do it right. To me, this means being sensitive to the Alaskans who rely on marine mammals for subsistence, it means hiring Alaskans, it means use of the best technology and it means the strictest environmental standards so not a drop of oil is spilled.

Several other bills in my Inuvikput package of legislation for a changing Arctic address these points. To maintain the public's confidence that we can responsibly develop these resources, we're going to have to do more than simply take oil companies' word for it.

We need to do the basic research and put reasonable standards in place. It's the right thing to do and it will reduce the ability of those opposed to development to tangle up future leases and permits in court.

Oil and gas development in Alaska's waters still has regulatory hurdles to jump. I am confident Alaskans can demonstrate to the world that we can safely provide our nation the enormous energy resources beneath our oceans, while at the same time addressing Alaskans' needs for public services and facilities through revenue sharing.

Mark Begich represents Alaska in the U.S. Senate.

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