Thursday, August 25, 2011

Newt's op-ed on Warner-Webb energy bill

From the op-ed published by The Virginian-Pilot:
The Webb-Warner bill would establish a revenue-sharing plan that would direct half the public revenue from offshore energy development to the federal government and half to Virginia.

The commonwealth would receive 37.5 percent of any revenues, and an additional 12.5 percent would be set aside for land and water conservation projects, public transportation projects and alternative energy development projects.

The offshore oil and gas industry could add more than 15,000 jobs in Virginia and add $3.2 billion to the commonwealth's economy, according to a 2009 report by the American Energy Alliance.

The Norfolk area is primed to benefit from that growth due to its good location and harbor, with its shipbuilding infrastructure already in place. The bill could give Norfolk an early-mover advantage, since the Obama administration has blocked leases off other Atlantic states as well.

The bill also calls for a new resource assessment of the mid-Atlantic Outer Continental Shelf.

The last estimate was completed in 1984, using technology that is now decades out of date. That estimate suggested the area could have as much as 750 million barrels of oil, but with new exploration and drilling technologies, it could contain billions of barrels.

Outdated research like what we have for offshore Virginia has often dramatically underestimated the potential of American energy. The estimate of the Bakken formation in North Dakota, for instance, has jumped 2,500 percent since 1995 due to new technology. The amount of natural gas in shale has increased our estimated supply of natural gas fifteenfold in the last decade.

Just a fourfold increase in the oil estimated off Virginia would mean reserves of 3 billion barrels. That supply would be worth hundreds of billions of dollars, and under Virginia's revenue-sharing plan, half the revenues it produced would go directly to the commonwealth and millions more would go to the Virginians working in jobs created in areas like Norfolk.

New oilfield innovation has turned around a 25-year decline in American oil production, and domestic supplies are growing once again, but American production could grow even faster if President Barack Obama's unnecessary regulatory barriers were removed.

The plan to allow Virginia to move ahead with offshore drilling is a truly bipartisan proposal.

The Senate bill is sponsored by the Democratic senators and supported by Republican Gov. Bob McDonnell and by both candidates for Virginia's U.S. Senate seat in 2012, Democrat Tim Kaine and Republican George Allen.

The House should move to pass the bill immediately and challenge Senate Democrats to approve the proposal of their colleagues. Then Obama would have to decide if he wanted to veto a plan that would create jobs, increase revenues and produce more American energy.

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