DRILLING AND ENERGY: Clean future should be the goal

The controversial bans on drilling offshore and in the Arctic National Wildlife Refuge (ANWR) have preserved precious oil and natural gas reserves owned by the public. Thank an environmentalist for this unintended gift.

But for the bans, we would have wasted these remaining reserves without a strategy. Leasing and drilling would have lowered world oil prices a few cents, benefiting global consumers more than Americans. The federal revenues from royalties, leases and taxes would have been used to meet current federal expenditures. And our remaining publicly owned oil and natural gas would have been substantially depleted. Consequently, our dependence on foreign sources would be even greater —- and the current commodity price crisis likely would be even worse.

We hope this crisis prompts the adoption of a strategy to use the remaining value of our federally owned oil and natural gas reserves to fund a clean, affordable and independent energy future for America. This is a goal worthy of short-term environmental concessions and risks. Virtually all general drilling bans should be lifted. We should permit drilling offshore and in ANWR and require it be done with care.

Before granting additional drilling rights, however, we should fundamentally change the terms of future oil and gas lease agreements to ensure taxpayers capture more of the revenues from our remaining reserves. Today’s agreements provide exceptional profits for the leaseholder when prices rise, so much so that leaseholders have a significant financial incentive to delay production until prices go up. That must change.

In a huge net win for the environment, the federal revenues from future oil and gas production should be placed in a trust fund and used to create a clean, affordable and independent energy future for America. This must supplement, not replace, other environmental commitments. We should jump-start the necessary federal investments for this secure energy future by immediately issuing bonds against this expected revenue. Perhaps we call them Energy Independence Bonds. Issuing these bonds would ensure that our remaining oil and natural gas revenue is actually used to establish an energy alternative. The bonds would have to be repaid with that revenue.

Opinions differ concerning the volumes of remaining U.S. federal oil and gas reserves and the likely revenues. By any measure, it is an enormous sum. Estimates are in the trillions, assuming competent management.

In a sharp break from current practice, none of these revenues should be shared with host states. Most host states already enjoy revenues from oil and gas production on state lands. They have no legal or inherent claim to federal revenues, and the drilling bans remove any practical expectation. Lifting those bans would give host states windfall benefits from jobs, economic stimulus and tax revenue related to federal production. And most importantly, host states directly benefit from federal revenue used to secure America’s energy independence. We are all in this together.

Simply adopting a plausible U.S. strategy for energy independence would have a positive impact on world oil prices. Absent a significant supply disruption, oil’s economic stranglehold is eliminated if U.S. domestic oil demand stays flat or grows only slightly while U.S. consumption of alternatives to oil, including natural gas, increases by a few percentage points per year. With prompt federal action, we can quickly attain these demand and growth rates and greatly lessen oil’s pressure on prices.

The United States could be virtually free of fossil-fuel use within a few decades —- if we pursue this goal and act aggressively. (Air travel may be the sole exception.) If being fossil-free were the objective, solar and wind would be the two principal sources of alternative energy. Nuclear should be in the mix as well, at least for the foreseeable future. We should rethink biofuels, discouraging those that compete with food or degrade the environment while encouraging those that capture energy from waste. We are intrigued by the promise of a direct current superhighway permitting the efficient transmission of nuclear, solar and wind power throughout the nation.

But we should adopt a strategy before making such tactical decisions. Clean energy technologies developed with federal funding should be federally owned and strategically shared with other nations.

Taking these reasonable steps promptly would avoid the economic train wreck that inexorably seems upon us, while greatly improving our national security. America would again be leading the world, this time toward a sustainable future.

> U.S. Rep. Jim Marshall (D) (left) represents Georgia’s 8th District. U.S. Rep. Roscoe Bartlett (R) represents Maryland’s 6th District.

 DEAN ROHRER / NewsArt