Let me just say to my good friend, Congressman Westmoreland from Georgia, I am so happy that you are going to all this trouble to get all of our colleagues to sign this petition. And if you're at 191, you're not too far short of 218. And…
Let me just say to my good friend, Congressman Westmoreland from Georgia, I am so happy that you are going to all this trouble to get all of our colleagues to sign this petition. And if you're at 191, you're not too far short of 218. And when you get 218, I will join with you to go to the Speaker and show her that we have 218 signatures--or you do--and that they ought to bring this to the floor for a vote because a majority of the House wants this done.
You know, we passed another week. A week has gone by since you and I, I think, last were on the floor. And everybody's going home for the 4th of July recess--they're going to be in parades, they're going to be on radio, they're going to have town meetings--and we haven't done anything about reducing the price of gasoline or moving toward energy independence. And so I, like you, if I were talking to the American people right now, I would say, when your Congressman or your Senator is in that parade, I want you to talk to them strongly and say, we want you to drill in America. We want you to move us toward energy independence. We've been talking about it since Jimmy Carter was President 30-something years ago, and we aren't doing anything. And that's why we're dependent on foreign oil and that's why gasoline prices are over $4 because we aren't producing the oil here, we're sending it overseas.
We're sending over $400 million a day to Saudi Arabia to pay for oil that we're using. We could use that money right here in America, and it would help create jobs and expand our economy. We're sending $125 million a day to President Chavez in Venezuela, who's trying to move every country in this hemisphere toward communism and who is a good friend of the Castro brothers, Fidel and his brother Raul.
We have big problems here because we aren't drilling in America. And we need to have everybody in this country contact their Congressman and Senator and say, hey, listen, get with the program, it's time for us to move toward energy independence. We can't have this economy of ours suffer anymore.
I would like to enter into the Record, Madam Speaker, if I might, a
letter that was sent by the American Association of Petroleum Geologists. These are the experts that say there is oil here, we ought to drill here, and here's how we ought to do it and here's how we ought to explore. And when you read this letter--which is now going to be put in the record--it tells very clearly that drilling costs for one well onshore costs a half a million dollars, and offshore it can cost up to $25 million. And so these geologists, when they get these permits to drill in a certain area, they go out to make darn sure that there's oil there before they sink a well that's going to cost $25 million. And that's an exploratory well. And it's a half million dollars if you drill onshore. So we're talking about big money. And when you realize that 68 percent of the people who drill for oil are independent drillers, they're not the big oil companies, and 87 percent of the people who drill for gas are not the big oil and gas companies, they're individual people who have small companies, and if they find oil they're going to get it, and if they find gas they're going to get it. And so this idea that these permits are not being researched and looked at is just crazy.
And when you read what the American Association of Petroleum Geologists said, and the President is a Mr. Willard Green, you realize that these people want to get oil and gas out of the ground, they want to get it out of the offshore sites on the Continental Shelf, and they can't do it simply because they don't have the ability to pursue these permits.
Only 3 percent of the area offshore is available for permitting and for drilling for oil; 97 percent of the Continental Shelf isn't being touched. And we have about 80 percent onshore that's not being touched. We ought to explore every place we can to move this country toward energy independence. We ought to remove ourselves from being dependent on Saudi Arabia, who isn't really a friend of ours, and on Venezuela, which really isn't a friend of ours, and other countries that aren't friends of ours. We ought to really move towards energy independence. And the minute we announce we're going to do that, we're going to drill on these sites, I'm sure the American people realize the price of oil is going to go down. The competitive nature of the free enterprise system and supply and demand will force the price of oil down, and it means the price of gasoline will go down as well.
June 3, 2008.
Hon. Nancy Pelosi,
Speaker, House of Representatives,
Washington, DC.
Hon. Steny Hoyer,
Majority Leader, House of Representatives,
Washington, DC.
Hon. John Boehner,
Minority Leader, House of Representatives,
Washington, DC.
Dear Speaker Pelosi, Majority leader Hoyer, and Minority
Leader Boehner: Given the on-going debate about access and
leasing activity on federal onshore lands and the Outer
Continental Shelf, I would like to offer some perspective, on
behalf of the American Association of Petroleum Geologists
(AAPG), on the science and process of finding oil and natural
gas.
AAPG, an international geoscience organization, is the
world's largest professional geological society representing
over 33,000 members; The purpose of AAPG is to advance the
science of geology, foster scientific research, promote
technology and advance the well-being of its members. With
members in 116 countries, more than two-thirds of whom work
and reside in the United States, AAPG serves as a voice for
the shared interests of energy geologists and geophysicists
in our profession worldwide.
AAPG strives to increase public awareness of the crucial
role that the geosciences, and particularly petroleum and
energy-related geology, play in our society.
Finding and developing oil and natural gas blends science,
engineering, and economics. It has distinct phases:
exploration, development. and production. And it is risky,
because finding oil and natural gas traps, places where oil
and natural gas migrate and concentrate, buried under
thousands of feet of rock is like finding the proverbial
needle in a haystack. Talent and technology increase our
chances of a discovery, but there are no guarantees.
What is exploration? Well, the grid pattern on a block map
makes it tempting to think of exploration as a process of
simply drilling a well in each grid block to determine
whether it contains oil. But because of the natural variation
in regional geology, one cannot assume oil and natural gas
are evenly distributed across a given lease or region,
Rather, exploration is about unraveling the geologic history
of the rock underneath that grid block, trying to understand
where oil or natural gas may have formed and where it
migrated. If the geology isn't right, you won't find oil
or natural gas.
Legendary geologist Wallace Pratt once observed, ``Where
oil is first found is in the minds of men.'' When preparing a
lease bid, geologists use their knowledge to identify the
specific areas in a region that they believe have the highest
likelihood of containing oil and natural gas traps.
Successful exploration begins with an idea--a hypothesis of
where oil may be found.
Since exploration is about developing and testing ideas,
some acreage available for leasing is never leased. That is
because no one develops a compelling idea of why oil or
natural gas should be there. Similarly, some acreage is
leased and drilled repeatedly with no success. Then, one day,
a geologist develops an idea that works, resulting in new oil
or natural gas production from the same land that others
dismissed as barren.
Once a lease is awarded, geologists begin an intensive
assessment. They collect new geological, geophysical, and
geochemical data to better understand the geology in their
lease area. They use these data to construct a geological
model that best explains where they think oil and natural gas
were generated, where it may have been trapped, and whether
the trap is big enough to warrant drilling.
If there is no evidence of a suitable trap, the explorer
will relinquish the lease and walk away. If they see a trap
that looks interesting, they schedule a drill rig to find out
if they are right. Drilling is the true test of the
geologists' model, and it isn't a decision to be made
lightly. Drilling costs for a single well can range from $0.5
million for shallow onshore wells to over $25 million for
tests in deep water offshore.
As the well is drilling, geologists continually collect and
evaluate data to see whether they conform to their
expectations based on the geological model. Eventually, they
reach the rock layer where they think the trap is located.
If there is no oil or natural gas when the drill reaches
the trap they were targeting, they've drilled a dry hole. At
this point the explorers will evaluate why the hole is dry:
was there never oil and gas here; how was the geological
model wrong; and can it be improved based on what they know
from the drilled well? Depending on the results of this
analysis, they may tweak the exploration idea and drill
another well or decide the idea failed and relinquish the
lease.
If there is oil and/or natural gas, they've drilled a
discovery. Typically, they will test the well to see what
volumes of oil and/or natural gas flow from it. Sometimes the
flow rates do not justify further expenditures and the well
is abandoned. If the results are promising, they will usually
drill several additional wells to better define the size and
shape of the trap. All of these data improve the geological
model.
Based on this revised geological model, engineers plan how
to develop the new field (e.g., number of production wells to
drill, construction of oil field facilities and pipelines).
Using complex economic tools, they must decide whether the
revenue from the oil and natural gas sales will exceed the
past and continuing expenses to decide whether it is a
commercial discovery.
The process of leasing, evaluating, drilling, and
developing an oil or natural gas field typically takes five
to ten years. Some fields come online sooner. Others are
delayed by permitting or regulatory delays or constraints in
the availability of data acquisition and drilling equipment
and crews. Large projects and those in deep water may require
a decade or more to ramp up to full production.
As you can see, oil and natural gas exploration is not
simple and it is not easy. It requires geological ingenuity,
advanced technologies, and the time to do the job right. It
also requires access to areas where exploration ideas can be
tested--the greater the number of areas available for
exploration, the higher the chance of finding oil and natural
gas traps.
U.S. consumers are burdened by high crude oil prices.
Conservation and efficiency improvements are necessary
responses, but equally important is increasing long-term
supply from stable parts of the world, such as our very own
federal lands and Outer Continental Shelf.
As Congress considers measures to deal with high crude oil
prices, I urge caution. Policies that increase exploration
costs, decrease the available time to properly evaluate
leases and restrict access to federal lands and the Outer
Continental Shelf do not provide the American people with
short-term relief from high prices and undermine the goal of
increasing stable long-term supplies.
I am happy to further discuss these ideas. Please contact
me through our Geoscience & Energy Office in Washington, D.C.
at 202-684-8225 or 202-355-3415.
Sincerely,
Willard R. (Will) Green,
President, American Assoication of Petroleum Geologists.
And when they talk about these speculators, there are people that speculate in gas futures and oil futures, there is no question about that. But the minute we say we're going to drill here in this country, you watch those prices drop; you watch those speculators start getting out of the market and selling what they have. And that will force the price
down on oil, it will force down the price of gasoline, and it will help this country.
And let me just say to my colleague--and I really appreciate him yielding to me--if we don't get with the program, if my colleagues on the other side of the aisle and the Senate and the House don't work with us on this side of the aisle, we're going to end up with gasoline prices being $5 or more per gallon. And if we have a conflict in the Middle East, as we've heard talked about here tonight, it could go much higher than that. That will put extreme pressure on this economy.
And I hate to predict this, but I really believe that if we don't get control of this situation and start drilling onshore and offshore in our territory, I think we could have a severe economic recession in this country. And when I say severe, I mean severe. The price of food is going up rapidly, the price of gasoline is going up rapidly. The price of products that are shipped across this country, which is almost--everything is going up very rapidly, and we're not doing a darn thing about it because we're depending on the Saudis.
We had Senators go over to the Saudis just recently and ask them to open up more oil fields so we can buy more of their oil. Why are we doing that? Why aren't we drilling in America so we don't have to depend on foreign oil? It makes absolutely no sense to send billions and billions and billions of dollars overseas and to other countries that don't even like us when we won't even drill here in the United States.
And so I am so happy that my colleague has taken the time and the effort to get the message out to our colleagues that they ought to sign onto this petition. And I know he feels like I do--and we come down here night after night talking to each other--that we would like, if we could talk to the American people, to put pressure on their Congressmen and Senators to sign onto this policy of drilling in America, to sign this petition so we can move toward energy independence. If we do that, and I would say this to my American friends all across this country, if we do that, you watch the price of gasoline go down. It will go down like a rock. You will see gasoline below $3 before you know it. But we have to say that we're going to drill for oil in this country, onshore and offshore. The minute we do that, America, just watch these prices go down. But first of all, we have to get this body and the other body, the House and the Senate, to get together and say, okay, we're going to drill. And we can't do that unless the American people put pressure on their Congressmen and Senators to sign on.
You have done yeoman service to this country, Congressman Westmoreland, because you've got 191 Members that have already signed that. And I'm going to work with you to get 218. And as I said before, the minute you get 218, I will walk with you to the Speaker's office and say, hey, it's time to bring this to the floor.
You're doing good work. I'm proud of you.
Will the gentleman yield for a moment?
I just want to follow up the train of thought that you have.
These taxes that they want to put on Big Oil, if there are excessive profits made and there is collusion or something like that, if there is criminal behavior, obviously everybody wants to make sure that doesn't take place. But whatever they're promising, everything that I have seen the opposition party promise, is that they are going to hit Big Oil with more taxes. That isn't going to get one more drop of oil to the-- --
No. That's right. They want to take tax breaks away. They want to increase taxes. And when you pass a tax increase on to a business or industry, oil or automobiles or whatever it is, it's passed on to the consumer in the form of price increases. So if they raise taxes, it won't give us one more drop of oil, which we ought to be drilling for right now, but it will make more expenses for the companies, and unless they can prove wrongdoing, those expenses will passed on to the consumer in the form of another price increase. So raising the taxes on the oil companies is only going to exacerbate the problem and make the cost of oil go up more. And I don't understand why my colleagues don't understand basic economics and the law of supply and demand. It makes absolutely no sense whatsoever.
We need to pass legislation that will get more oil to the refineries, build more refineries, as you've said, and start getting the price of oil down because we are energy independent. And just talking about, okay, we're going to hit Big Oil, that may resonate with a lot of people. Some people say, oh, my gosh, they are not paying enough taxes. They ought to be taxed more. They are making too much in profits. That's not going to bring any oil to the market, not a drop.
So I just say to my colleagues, quit beating on a dead horse. We have got to become energy independent. We have to drill here in America. And I hope everybody in the country who may be looking at this, and we can't talk to them, but everyone in the country who is looking at this tonight ought to ask their Congressmen and Senators, Is what you're talking about in Washington going to bring one more drop of oil to the marketplace? Is it going to move us toward energy independence? And if it isn't, they ought to sign that petition. They ought to get on with the program in making us more energy independent.
I thank the gentleman for yielding.
If the gentleman would yield, let me just elaborate on that really quickly.
I hope everybody who may be paying attention to this, our colleagues in their offices, realize that business and industry have a certain margin of profit that they have to make to keep the doors open, whatever it is. And as you have just said, if they are taxed and they have a margin of profit of 8 percent and you raise their taxes, they're going to pass that cost increase on to the consumer in the form of a price increase. And that's what my colleagues on the other side of the aisle, your colleagues, don't understand.
We really need to do what's necessary to move toward energy independence, and raising the price of gasoline by taxing these companies is not going to solve the problem.
I thank the gentleman for yielding.
So you have to settle for me.
If the gentleman will yield just for a minute, I would like to say I agree with my colleague. These new forms of energy, these new technologies, are extremely important. I am kind of awed by the fact that you have taken the lead in Nebraska in getting this done.
But while we are doing that, the one problem that I think we have is we have to realize the transition to the new technologies is going to take time, and while that is taking place, we are going to have to have energy. That is why we ought to be able to drill in the United States, and do it in an environmentally safe way, so we can produce natural gas and oil here at home. And while we are doing the transitioning to the new technologies like you are talking about, we won't have to depend so much on foreign oil and what might happen in another part of the world.
I want to thank the gentleman for taking this time. I know you have to catch a plane tonight. I think it is important that the people who are watching in their offices and maybe Americans who might be paying attention, that they realize that we are not just talking about oil and gas, we are talking about all forms of energy, and we want to get to that.
But, as you said and as has been said many times, that is going to take a transitional period, and during that transition, while we are trying to encourage more innovation, that we don't sink the ship by not having enough energy to get the job done.
Thank you, Mr. Fortenberry. Have a nice trip back, and tell the people of Nebraska we said hi.
Madam Speaker, we are about to wrap this up. I just want to say to my colleagues, I see my colleague from down south is waiting patiently for us to end our Special Hour, I just want to say that we all want to work together. We want to solve this problem for the American people. We want to get the price of gasoline down and we want to go to new forms of energy. But it is going to take time. And during that time for transition, it is extremely important that we start moving toward energy independence. And a main cog in that wheel is drilling here at home for oil and natural gas.
So I hope, if I were talking to the American people, that they would talk to their Congressmen and Senators over this July 4th break. They are going to be there for parades and everything else. And I would say to the American people, if I could talk to them, talk to your Congressmen and your Senators. Tell them you want to be energy independent, you want to move toward energy independence, and we ought to drill here in the United States wherever we can.