Transcript: Peter DeFazio. Drilling for oil. Jun 18th 2008

Congressman Peter DeFazio of Oregon discusses the Republican's meme of a "ban" on offshore drilling, when there is in fact only a moratorium on new licenses; the oil companies are sitting on many viable leases for which they are not drilling. There is a shortage of equipment, trained manpower. And there is a field, the National Petroleum Reserve of Alaska, which has been proven by oil wells which have been capped, which is larger than ANWR is estimated to be.

Thom Hartmann interviews Congressman Peter DeFazio, 18 June 2008

[Thom]: I'm getting messages going in 16 different directions around this whole "ban on offshore drilling". Here, Barbara Lee, this in the California Chronicle. Congresswoman Barbara Lee, Democrat from Oakland, said in a news release, this was actually two years ago. She said,

"For twenty five years we have maintained a bipartisan agreement to ban any new drilling off our shores because we believed it was more important to safeguard the health and beauty of our coastal environment for future generations ... now the interior appropriations bill threatens to upset this agreement and open our coastal areas to drilling despite overwhelming opposition from the American people."
And yet,

I understand that maybe "ban" is the wrong word. Congressman Peter DeFazio of Oregon is with us, and Congressman, welcome to the show.

[DeFazio]: Thanks Thom. "Ban" sort of as broadly used implies there are no places that are suitable for, and available for, drilling off of America's coast. Now, to the contrary, there are 44 million acres off the coast leased, 10.5 million acres of that has been developed, but the other 33.5 million acres are available for offshore drilling.

[Thom]: So, off the coast of California, off the Cost of Florida right now...

[DeFazio]: There's a moratorium on new leases beyond those which are outstanding. Now I think most of the leases outstanding are probably in the Gulf but my understanding in talking to Lois Capps from California is there is about to be an agreement to do further drilling even off Santa Barbara, the most sensitive area in the country, using the existing oil platforms with some new slant drilling underwater drilling techniques which are going to be signed off on very broadly. So, you know, there are concerns in particularly inshore drilling in California and other states. But the point is, many of the most promising areas, according to our Minerals Management Service, 80 percent of the potential available offshore oil, all of it geologically available, not environmentally, is accessible from the existing


And then, the bigger one that I talked about ? Bill Clinton took something that used to be called the Naval Petroleum Reserve which has massive known reserves, the largest known in the continent.

[Thom]: 13 billion barrels?

[DeFazio]: 13.4 billion, b, billion barrels known reserves underneath what was called the National Petroleum Reserve, renamed the National Petroleum Reserve of Alaska from the Naval Petroleum Reserve.

[Thom]: Right, and this is not ANWR.

[DeFazio]: No, this is just west of ANWR, the other side of the pipeline. It's a little bigger area. It's a little bit further from the pipeline, but not much and they've drilled 25 test wells and capped them. And it has known reserves. And there is no move to access that oil ? pipelines or anything else.

[Thom]: So let me boil this down, Congressman

DeFazio. Number one, the word "ban" is a Republican meme, this is Newt Gingrich, Newt Gingrich is orchestrating this thing, and...

[DeFazio]: Sure. This is their way back to the majority and the White House, yeah.

[Thom]: Right, what they're trying to do is blame the cost of gasoline, half of which is the result of the decrease in the value of the dollar, the other quarter of which is arguably a function of supply and demand on the market place, who knows, and speculation, you add them all together, but I mean, if we were paying for gas in Euros right now we'd be paying two dollars and 25 cents a gallon. So they're going to try and shift the blame away from the Bush administration and their failed and catastrophic policies onto Democrats and environmentalists, number one.

And number two, you're saying that there is not a ban and in fact, what we've got, I mean, I'm looking at this Committee on Natural Resources report. Between 1997 and 2007 the number of drilling permits, now we're actually talking about permits for drilling, on public lands increased by 361 percent. There's over ten thousand of these permits that the oil companies are simply, they got them and they're just sitting on them.

So it sounds like what they're trying to do is two things. Number one, make political hay with this, and number two, help their buddies the oil companies get thousands or millions of more acres of land leased to them so that they can sit on it as it continues to appreciate in value as we slide into peak oil or as the value of oil goes up.

[DeFazio]: Eureka! Eureka!

You've got it nailed, Thom.

[Thom]: That's the bottom line, period.

[DeFazio]: Wouldn't it be great if they could get whatever other potential areas there are under their control and sit on those too and wait for the day when, you know, they can make even more money on it. This isn't about domestic versus international production. I mean, and again, I just point to the former Naval Reserve. We sat on that land for seventy years. We knew there were massive oil reserves under it. Clinton leased it, they've drilled it, and they're sitting on it.

[Thom]: But Clinton leased it to the oil companies. So in, here, I'm looking at the Department of Energy's web site,, right. And they have this thing called the Energy Information Administration. which is a division of the Department of Energy. And they're talking about the presidential order that George Herbert Walker Bush issued in 1990.

"George H. W. Bush responded to concerns about preserving the ocean and coastal environment with a directive ordering the Department of Interior not to conduct leasing or pre-leasing activity in places other than Texas, Louisiana, Alabama",
Blah di blah di blah di blah.

It says nothing about drilling. So basically, to the extent that there has been a moratorium, it's been a moratorium on giving away more land to the oil companies, not a moratorium on whether or not they can drill, federally. Now, do I have that right?

[DeFazio]: Absolutely, and what I hear from the industry is there's a shortage of drill bits, there's a shortage of rigs, there's a shortage of trained crews, and so that's why many, and I just got a, you know, the American Exploration and Production Council heard me speaking on the floor about an hour ago, and they faxed over a fact sheet, none of which I disagree with. They say, "hey, it takes a really long time to develop these leases, get the equipment there, drill them and do all we need to do."

[Thom]: Right, right.

[DeFazio]: And I said, "Yeah, that's true, but why do you need more in the queue when you haven't dealt

with a fraction of the ones you already have?"

[Thom]: Right, and all of this, this entire discussion steps aside of the discussion of, "hey, why don't we just develop alternative energy sources and ? or start saving our oil or stop exporting it?" I mean, we can get into that, but I just want to hit head on this meme that Newt Gingrich and the Republicans are driving so hard right now about, you know, there's this "ban".

If there is not a ban on drilling, why are they not drilling off the shore of Florida, for example, off the coast of Florida?

[DeFazio]: Well,

there is a ban on new leases off of Florida and the existing leases, which I think are pretty far out off of Florida, they're more off of Louisiana, Mississippi, Alabama, Texas, a lot of them are deep water, they require special equipment, and they say there is a shortage of that equipment.

[Thom]: So do individual states like Oregon, for example, you represent Oregon and I live here, do individual states ban drilling? Did California, for example, ban drilling off its coast after the disastrous oil spills of the 1980s?

[DeFazio]: Well, I believe, and I am not a lawyer, I believe within 3 miles the state has control. Over 3 miles out to 200 it's federal control.

[Thom]: Right.

[DeFazio]: But what the Republicans are proposing, Mr. McCain yesterday, the Republicans in the House for the last two weeks, is give states the option of banning offshore oil drilling and, you know, and then give the states more money if they allow it, so try to incentivize states to lift the ban.

[Thom]: Right. But don't states already have that option?

[DeFazio]: Well they have the option, I believe, within 3 miles. Beyond that it would be the federal moratoria off of California.

[Thom]: Right. So is there a federal moratoria on drilling off the shore, off the coast of California?

Or just on leasing?

[DeFazio]: My understanding, again, from what I know of the Santa Barbara situation is, no, they can, you know, from existing platforms. They use new technology and they can drill and there are apparently some promise of some new resources there. But they're not allowed to build new platforms in that coastal zone. But the bottom line is, again, just the sheer number of these things out there. I mean, you know, 6,391 offshore leases on 33.5 million acres of land that are, you know, that are out there available and not being drilled.

But the bigger one, the big enchilada here, the National, the former Naval Petroleum Reserve, which has, and they want to talk about ANWR. ANWR has speculative reserves that are not even as great as the known reserves under the Naval Petroleum Reserve. No one knows what's under ANWR because only one well was drilled, it's proprietary, an industry well, and they've never told anybody. So the only thing we have are guesstimates by the Minerals Management Service on what might be there. We know what's under Naval Petroleum Reserve, we've leased significants portions of it, the industry's drilled wells and they're capped.

[Thom]: They're capped. So basically Exxon Mobil et al, the oil companies, are just basically sitting on oil. And this whole Sturm und Drang that the Republicans are doing right now is (a) to try and cast the Democrats as the bad guys in the gas price, and (b) to grab more land for more oil in the future so that their oil company buddies can make more money. That's just the bottom line, period, end of discussion.

[DeFazio]: Absolutely, and remember, you know, the estimates I've seen say that if all these leases that are now available to be drilled and to be developed, including the former Naval Petroleum Reserve were developed, there would be 20 years supply that would double our domestic production. And that's without any new leases, which is what the Republicans are talking about, new leases. Let's drill what we've got, you know, develop them, and then we can talk about more if we really need them.

[Thom]: There you go, there you go. Congressman DeFazio, thank you.

Transcribed by Sue Nethercott.

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