[Pages S2985-S2989]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

THE ADMINISTRATION'S RESPONSE TO THE THREAT TO U.S. NATIONAL SECURITY
POSED BY U.S. GROWING DEPENDENCE ON FOREIGN ENERGY

Mr. MURKOWSKI. Mr. President, I rise to discuss President Clinton's
``do nothing--and I repeat ``do nothing''--response to the threat to
our national security from the rising tide of oil imports.
Mr. President, the threat posed by our growing dependence on foreign
energy is once again in the spotlight because of last Thursday's
release of the Commerce Department's report to the President titled
``The Effect of Imports of Crude Oil and Refined Petroleum Products on
the National Security.'' The report found that:

* * * the reduction in exploration, dwindling reserves,
falling production, relatively high cost of U.S. production,
and the resulting low rates of return on investments all
point toward a contraction of the U.S. petroleum industry and
increasing imports from OPEC sources. Growing import
dependence, in turn, increases U.S. vulnerability to a supply
disruption because non-OPEC sources lack surge production
capacity; and there are at present no substitutes for oil-
based transportation fuels which account for two-thirds of
U.S. petroleum consumption.

Based on these findings, the Secretary of Commerce formally advised
the President that:

The Department found that petroleum imports threaten to
impair the national security. I recommend that you confirm
this finding.

Mr. President, it is reasonable to expect the President of the United
States to take bold action--bold action--if the national security is at
risk. President Clinton agreed that it is at risk, but he simply
refuses to take action or propose anything. In his statement, President
Clinton said:

I am today concurring with the Department of Commerce's
finding that the nation's growing reliance on imports of
crude oil and refined petroleum products threaten the
nation's security because they increase U.S. vulnerability to
oil supply interruptions.

So far, so good. But President Clinton went on to say:

[[Page S2986]] I also concur with the Department's
recommendation that the Administration continue its present
efforts to improve U.S. energy security, rather than to adopt
a specific import adjustment mechanism.

So that is out.
Further, Mr. President, translated into English, President Clinton
will not do anything; the administration will simply continue its
existing policies--the very policies that allowed the threat to our
national security to occur in the first place. I would have hoped that
he would come up with at least one new initiative. I know that I could
have. But he did not.
It is not that the report is trivial and can be ignored. It was put
together by a high-level interagency task force led by the Department
of Commerce, and included every major Federal agency; namely, the
Department of Defense, the Department of State, the Department of the
Treasury, the Department of the Interior, the Department of Labor, the
Department of Energy, the Office of Management and Budget, the Council
of Economic Advisers, and the U.S. Trade Representative. Public
hearings were held throughout the country, and testimony was received
from 69 witnesses. The report is well researched, thoughtful, and based
on fact.
It is not that the President does not have any authority to act. He
certainly does. Under the Trade Expansion Act, once a determination is
made that imports threaten the national security, the President obtains
broad powers. These powers have been used in the past against other
threats to the national security, just as they should have been put to
use here. Moreover, even if the President did not want to make use of
the Trade Expansion Act authority, there is a host of other regulatory
and administrative changes the President could take under existing law.
If the President found these powers too limited, he could have proposed
legislative changes. But for reasons I cannot fathom, he has not done a
single thing other than continue the administration's policy which
makes us more dependent on imports.
The President's don't worry, be happy attitude may be disturbing, but
I guess it is not surprising. He is equally unwilling to promote
hydroelectric power, nuclear power, or coal power. He strongly supports
the use of natural gas, but not the domestic production of natural gas.
Based on unfounded fears of the environmental community, he is
unwilling to open up even the smallest amount of the Arctic National
Wildlife Refuge for exploration and development, just as he does not
want to see additional onshore and offshore Federal lands opened up.
I find it ironic that at the very moment that the President of the
United States is saying that the administration will do nothing new to
promote energy production in the United States, the Secretary of Energy
is in China promoting Chinese energy production. Perhaps we should
invite the Chinese Secretary of Energy to the United States to help our
industry.
To this Senator, the President's decision to do absolutely nothing
about a threat to our national security is nothing short of incredible.
To agree with the Department of Commerce that the national security is
at risk, but to take no action, is simply unconscionable. That is
particularly mystifying because in 1992 candidate Bill Clinton made the
following statement:

Our reliance on foreign oil is a genuine threat to our
national and economic security. When George Bush took office,
foreign oil made up a third of our trade deficit, and since
then the U.S. has not had an energy policy. Now we import
nearly half our oil, which accounts for two-thirds of our
trade deficit. Even James Watkins, the President's Secretary
of Energy, has written that the U.S. imports much of its oil
``from potentially unreliable suppliers half a world away.''
That kind of dependence makes us vulnerable, and we must
change that situation.

That was President Clinton the candidate.
Mr. President, there is an old saying that those who do not learn
from the past are condemned to repeat it.
Does President Clinton remember the shortages, price increases, and
long gasoline lines caused by the 1973 Arab oil embargo?
Does he remember the energy shortages during the 1976-77 winter,
which shut down schools and businesses throughout the Midwest?
Does he remember the Khomeni revolution and the Iraq-Iran war which
threatened international oil supplies?
Does he remember our reflagging Kuwaiti oil tankers to allow the
United States Navy to protect them from Iran?
And, finally, does he remember Iraq's invasion of Kuwait, which
threatened two-thirds of the world's oil reserves and resulted in one-
half million United States troops laying their lives on the line?
Mr. President, that was a war over oil, make no mistake about it.
In refusing to take any action, however modest, President Clinton is
putting hope over experience. He is also placing our energy and
economic destiny into the hands of foreign producers--producing nations
who have demonstrated time and time again, that they have their
political and economic interests in mind, not ours.
Mark my words: If we do not pay attention to the present, we will
relive the past.
We will look at the energy situation very briefly this morning.
Mr. President, there is no question that each day our energy
situation is increasingly perilous. That is obvious from the data which
I would now like to provide for the benefit of the Senate. I will first
describe the rapid decline in U.S. crude oil production, and the state
of natural gas production.
In 1970, U.S. crude oil production hit its all-time peak of 9.6
million barrels per day. In 1973, the year of the Arab oil embargo,
U.S. production had fallen to 9.2 million barrels per day. Today, we
produce only 6.6 million barrels per day, a 28-percent decline since
1973 and a 32-percent decline since 1970.
Today, the United States produces less crude oil than we did back in
1955. Had environmentalists succeeded in preventing the development of
the Prudhoe Bay in Alaska, the United States would now be producing
less oil than before 1949, the first year for which we have data.
I might add, that Prudhoe Bay has been contributing about 25 percent
of the Nation's total crude oil for the last 17 years. That production
is now in decline. We would like to open up new areas in Alaska to
replace the decline of Prudhoe Bay, but clearly it is not the present
policy at this time. I would hope the President would see fit to change
his mind. He has been known to do that on occasion.
As bad as that sounds, it is only going to get worse. According to
the Department of Energy, in 5 years the United States will be
producing only 5.4 million barrels per day of crude oil. In the year
2005--only 10 years from now--U.S. oil production will fall to 5.2
million barrels per day. Thus, unless we take action, and take it now,
in the year 2005 we will be producing about the same amount of crude
oil as we did back in 1949.
To put this all in perspective, in 1949 there were only 36 million
cars on the road; today there are 143 million on the road, four times
as many. The good news, of course, is that energy efficiency has
increased dramatically.
Although natural gas production has increased over the past 2 years,
it is still 13 percent below the 1973 production rate. Moreover, the
Department of Energy forecasts that natural gas production will not
keep pace with increased demand over the next decade.
Let me now very briefly talk about our dwindling reserves of crude
oil and natural gas.
As worrisome as the decline in U.S. production may be, the decline in
U.S. proven reserves of crude oil and natural gas is even more
worrisome.
From 1949 until 1968, the combined U.S. reserves of crude oil and
natural gas increased every year. Beginning in 1968, however,
production exceeded net additions to proved reserves, and net reserves
began their current decline. Since 1968, except for the addition of
Alaska's North Slope reserves in 1970, our combined proven reserves of
oil and gas have consistently declined.
Today, U.S. proven reserves of crude oil are 40 percent below their
peak in 1979. They are even lower than they were back in 1949.
Today, U.S. proven reserves of natural gas are 43 percent below their
peak in 1967. They are also lower than they were back in 1949.
In this connection, it is interesting to note that the Commerce
Department's report cites the decisions
[[Page S2987]] ``against developing other geological prospects such as
the Arctic National Wildlife Refuge and the Outer Continental Shelf''
as key factors contributing to the decline of U.S. oil reserves.
It should not come as any surprise that the combination of increasing
demand and declining production results in growing foreign dependence
on imported oil.
In 1973, the year of the Arab oil embargo, we imported 6.3 million
barrels per day of crude oil and refined petroleum products. We were 36
percent dependent on foreign oil.
Today, we import 8.9 million barrels per day of oil, making us more
than 50 percent foreign dependent.
By the year 2005, the Department of Energy projects that we will
import 12.5 million barrels per day of oil, making us 68 percent
foreign dependent.
Although we are less dependent on imports of natural gas than we are
on imports of oil, our natural gas imports are also rising. In 1973, we
imported 5 percent of the natural gas we consumed. Today, we are
importing 12 percent, and the Department of Energy projects that by the
year 2005 our foreign dependence will increase to 14 percent.
As the Commerce Department's report notes, our growing dependence on
foreign energy is very worrisome because:
``The United States and the OECD countries have limited prospects to
offset a major oil supply disruption ***.'' and that ``(d)uring a major
oil supply disruption, there could be substantial economic austerity as
a result of the decreased availability of oil *** (which would) pose
hardships for the U.S. economy.''
Our foreign oil dependency also has significant financial
implications for the United States, particularly with respect to the
trade deficit.
Each and every day we spend $140 million on foreign energy--$55
billion last year alone. Altogether, over the past decade we have spent
one-half trillion dollars on imported energy.
Clearly, our economy would have been healthier and more of our
workers employed if we had spent that money on domestically produced
energy instead of on imports.
Imports of foreign energy have cost oil workers thousands of jobs,
according to IPAA and Department of Commerce statistics. In 1981, there
were 15,000 independent oil and gas producers; today there are less
than 8,000. Total employment in oil and gas production has fallen from
700,000 in 1982, to 350,000 today--a 50-percent decline. We can only
expect this to get worse over the next decade as domestic production
declines and imports increase.
You do not have to be a rocket scientist to figure out what it all
means. The Department of Commerce is right on target. Our economic and
national security is threatened. Our growing dependence on foreign
energy leaves the United States vulnerable to the whims of foreign
producers. No matter how stable our energy supply now appears, the
price and availability of energy from foreign nations has been, and
will continue to be, a function of their political and economic
priorities, not ours.
The problem is largely self-made. For example, the entire east coast
of the United States is under a leasing moratorium, just as is the west
coast and the eastern Gulf of Mexico off Florida's coast. There is
great oil and gas potential there which can be developed with due
regard to the environment. Drill in ANWR? Not a chance, says the
environmental community.
We must not forget that the picture is no better for our other energy
resources. For example, no new nuclear powerplant has been announced
for two decades. It is difficult and costly for U.S. refineries to
comply with environmental restrictions. Federal environmental laws and
regulations likewise make it difficult and very costly to build a
natural gas pipeline, a coal-fired powerplant, an electric transmission
line, or a hydroelectric dam.
There is much that can be done to promote the production of domestic
energy from our abundance resources. It ranges from the mundane to the
controversial. But if we do not take action, our children are going to
be very critical of us as they sit in long gasoline lines or are cold
at night or are unemployed.
Mr. President, the Commerce Department's report is a clarion call to
action, not a lullaby to put us to sleep. We have a choice: Produce
more energy domestically, or suffer the consequences of our dependency.
I choose the former; President Clinton chooses the latter.
Finally, Mr. President, I ask unanimous consent that the press
release from the Independent Petroleum Association of America, the
American Petroleum Institute, and the National Stripper Well
Association be printed in the Record following my statement.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
(See exhibit 1.)
Mr. MURKOWSKI. I thank the Chair.
Mr. President, these press releases really express the petroleum
industry's deep disappointment with the President's response to the
Commerce Department's finding that oil imports threaten the national
security.
Mr. President, I also want to bring to the attention of the Senate a
letter to the President dated February 10, 1995, sent by 70 Members of
Congress, myself included. This bipartisan letter identifies a host of
administrative, regulatory, and legislative actions that the President
could have taken in response to the Department of Commerce report. But
as I have stated before, the President instead decided to do nothing,
and this is disappointing to me and to my colleagues who signed the
letter.
I ask unanimous consent that this letter be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Congress of the United States

Washington, DC, February 10, 1995.
Hon. William J. Clinton,
President of the United States, The White House, Washington,
DC.
Dear Mr. President: The Secretary of Commerce recently
reported to you the results of an investigation, conducted
under the Trade Expansion Act, into the impact of crude oil
imports on the national security of the United States. The
investigation determined that oil imports threaten to impair
the national security of the United States. While this
finding may be startling to some, that is exactly the point
that so many of us made when we met with you, Secretary
Bentsen, and Deputy Secretary White last June.
As required by the Administration's Domestic Natural Gas
and Oil Initiative, the Department of Energy recently
completed a cost benefit analysis to quantify the costs of
imported oil that are not reflected in the price. DOE's
analysis determined that the United States pays a hidden and
exorbitant economic and environmental price for imported oil.
Clearly, it is imperative that we take immediate action to
alleviate this threat to our national security. By removing
unnecessary impediments to domestic exploration and
development we can strengthen our domestic oil and gas
industry and begin to correct this dangerous oil trade
deficit.
During the 103rd Congress, a bipartisan group of Senators
and Representatives submitted to you the attached
comprehensive domestic oil and gas policy initiative. This is
a balanced package of legislative proposals and regulatory
actions that could immediately boost domestic energy
production.
As you will recall, the Departments of Energy, Treasury,
and Interior favorably expressed a willingness to work within
the framework of this bipartisan policy proposal in an effort
to respond to the crisis in the domestic oil and gas
industry.
In addition to the widespread support on Capitol Hill, all
of the segments of the domestic energy industry
enthusiastically support our proposed solutions.
Mr. President, the Trade Expansion Act requires you to take
action within ninety days of the Secretary of Commerce's
report. We strongly believe that our recommendations to
preserve marginal well production, encourage new oil and
natural gas drilling, reduce regulatory compliance costs,
abolish existing prohibitions against the export of domestic
crude oil production provided that full and adequate
protections for the domestic merchant marine industry are
assured, and ensure reasonable access to oil and gas
resources on public lands, provides a blueprint for fast,
effective action to protect our Nation's vital economic and
security interests.
We are confident that working together with the
Administration, we can quickly implement these proposals and
reduce our dangerous dependence on imported oil.
We look forward to working with you to protect our
Country's future.
Sincerely,
Bill K. Brewster, Glenn Poshard, Frank H. Murkowski, J.
Bennett Johnston, Craig Thomas, Jim Inhofe, Jim
McCrery, Pete V. Domenici, Jeff Bingaman, Conrad Burns,
Howell Heflin, Kay Bailey Hutchison.
Nancy Landon Kassebaum, Don Nickles, Paul Simon, Richard
Shelby, Larry E.
[[Page S2988]] Craig, John Breaux, Alan Simpson, Trent
Lott, Ted Stevens, Thad Cochran.
Frank D. Lucas, Tom A. Coburn, Henry Bonilla, Jerry F.
Costello, Pete Geren, Ralph M. Hall, Barbara Cubin,
Blanche Lambert Lincoln, Sonny Callahan, Greg Laughlin,
Wm. J. Jefferson, Bob Livingston, ------ ------.
Jim Chapman, Ernest Istook, Tim Hutchinson, James Hayes,
W.J. Billy Tauzin, Ken Bentsen, Gene Green, Charles
Wilson, Pat Danner, Alan B. Mollohan, Chet Edwards, Bob
Wise, Don Young.
Larry Combest, Steve Largent, Ray Thornton, Lamar Smith,
Jack Fields, Wally Herger, Joe Skeen, Sam Johnson.
Charlie Stenholm, Jay Dickey, Frank Tejeda, Jerry F.
Costello, Solomon P. Ortiz, Calvin Dooley, Mac
Thornberry, Bill Thomas, Dave Camp.
____

Proposal, March 25, 1994

a tax credit to preserve marginal production and to encourage new
drilling

The provision will first establish a tax credit for
existing marginal wells. The provision will allow a $3 per
barrel tax credit for the first 3 barrels of daily production
from an existing marginal oil well and a $0.50 per Mcf tax
credit for the first 18 Mcf of daily natural gas production
from a marginal well.
The current definition of marginal wells will be expanded
to include a new category for ``high water cut property''--
producing 25 barrels per day or less per well, with produced
waters accounting for 95 percent of total production. In
addition, techniques such as waterflooding and disposal,
cyclic gas injection, horizontal drilling, and gravity
drainage should be encouraged to enable domestic producers to
capture more of the oil in a given marginally economic
property.
The provision will also include a tax credit for production
from new wells that have been drilled after June 1, 1994. The
provision will allow a $3 per barrel tax credit for the first
15 barrels of daily production for such oil wells and a $0.50
per Mcf for the first 300 Mcf per day for such gas wells.
The tax credit will be phased out in equal increments as
prices for oil and natural gas rise. The phaseout prices,
which are based on BTU equivalence, are as follows: Oil--
phase out between $14 and $20; Gas--phase out between $2.49
and $3.55.
The tax credit is creditable against regular tax and AMT.

additional legislative initiatives

Geological and Geophysical Costs. We continue to urge the
administration to support the current expensing of G&G costs.
We understand that the administration is studying the tax
treatment of G&G costs, and we recognize that legislative
action may be required.
Eliminate the Net Income Limitations on Percentage
Depletion. Currently, the depletion deduction cannot exceed
100% of income from the property, and the deductions from all
properties cannot exceed 65% of taxable income. Many of
producers have so little income from the property that the
net income limitations further restrict the value of their
deductions. We support the repeal of both these limitations.
Limitation on Exports. We favor abolishing the existing
prohibitions against the export of domestic crude oil
production provided that full and adequate protections for
the domestic merchant marine industry are assured.
OCS Deepwater and Frontier Area Production. With domestic
reserves dwindling, areas with potential for new production
are the deepwater of the Outer Continental Shelf (water
depths greater than 400 meters) and frontier areas. The costs
of finding and producing most oil and gas in these areas
exceed the current price for that oil and gas. We support the
consideration of a per barrel tax credit to encourage
deepwater and frontier production.

Administrative/Regulatory Initiatives

Oil Pollution Act of 1990. We believe that the financial
responsibility requirements of OPA '90 are excessive, and we
support a reduction in the dollar levels. In addition, the
agencies implementing the financial responsibility
requirements should revise their regulations to make the
requirements more realistic in several ways. First, the
regulations must recognize that Protection and Indemnity
Clubs function as indemnitors, rather than guarantors.
Second, we support a thorough examination of existing
resources to identify those that are available for immediate
response and those that are available to pay damage claims
and restoration costs. Third, we believe that the MMS should
propose regulations regarding de minimis quantities. Finally,
the MMS should apply the requirement for offshore facilities
to maintain financial responsibility only to the area seaward
of the coastline, consistent with prior agency actions
implementing the OPA '90 and with the February 28, 1994,
Memorandum of Understanding establishing Federal
jurisdictional boundaries for offshore facilities.
Royalty Reduction. To remain competitive in attracting
capital, U.S. royalty laws should be reassessed. The existing
royalty reduction for marginal oil wells on public lands
(onshore) should be expanded to include marginal natural gas
wells. The royalty reduction for offshore production should
be extended for new activity, especially deep water and other
frontier areas, and marginal properties. Finally, we support
legislation that would temporarily suspend the collection of
royalties from wells in deep water, such as the bill that was
approved by the Senate Energy and Natural Resources
Committee.
Royalty Collection. `Reinventing Government'' legislative
proposals establish an unworkable, unfair penalty regime that
will have particularly adverse affects on natural gas
production. The Administration should withdraw this proposals
and work with industry to eliminate royalty collection
problems.
Underground Injection Control. The EPA is developing
revised regulations, reportedly deviating from
recommendations made by the Advisory Committee on UIC.
Indications that the EPA is considering tightening
regulations are disappointing, especially in light of its
report to Congress which found that any problems could be
solved by enforcing existing regulations, rather than
adopting new rules. This proposal could be extremely costly
to the industry without improving environmental protection.
We oppose the EPA proposed revision of existing UIC
regulations.
Natural Resources Damage Assessment. The Departments of
Interior and Commerce are developing regulations to impose
liability on natural resource producers for injuries caused
by hazardous discharges. Although relevant statutes do not
require it, damages could include emotional loss of persons
who do not suffer from direct contact or use of the natural
resources. The ``non-use'' damage proposal relies on an
economic methodology known as contingent valuation (CV).\1\
However, a panel of economists created by NOAA was unable to
confirm that CV was a reliable methodology. We believe that
CV for damage assessments is seriously flawed and oppose the
inclusion of liability for non-use value loss in the final
regulations.
\1\A simplified example of the use of CV is as follows:
Trustees representing the public's interest in natural
resources injured by an oil spill conduct a survey in which
individuals are asked to state an amount they or their
household would pay to prevent this injury. The reported
amounts are averaged and then multiplied by the number of
affected individuals or households. Since no actual use of
the injured natural resource is required, the multiplier is
frequently quite large and the resulting ``damage'' figure
can run into the billions.
---------------------------------------------------------------------------
Oil and Gas Leasing on Public Lands. The Interior
Department is conducting an internal review of leasing to
promote a new approach called ``ecosystem management.''
Current law, the Federal Land Policy Management Act (FLMPA),
is based on multiple use, including oil and gas leasing
activity. We urge the Interior Department to abide by the
principle of multiple use.
Exhibit 1

Independent Petroleum Association of America

Independent Oil and Gas Producers Reject Clinton
Administration's Do-Nothing Strategy, Call for Congressional
Hearings on Risks Posed by Oil Imports.--Independent
producers are stunned and disappointed by President Clinton's
response to a Commerce Department finding that oil imports
threaten to impair national security. ``The good news is the
president agreed that oil imports pose a national security
threat. The bad news is he's not going to do anything about
it,'' said IPAA Chairman George Alcorn. ``That's a do-nothing
approach from an administration that talks about taking
action but fails to follow-through.''
``It is unprecedented for a president not to take any new
action, direct or indirect, to address the national security
threat,'' said Alcorn. ``All other presidents who have
concurred with the national security finding have proposed
specific new initiatives.''
IPAA and a nationwide coalition of producers petitioned
Commerce to launch the investigation under section 232 of the
Trade Expansion Act last March following a drop in world oil
prices that forced producers to shut-in wells and lay off
thousands of employees. Last year the amount of oil the
United States imported reached an all-time high--over 50
percent of demand--while domestic production fell to a 40-
year low. During the first two years of the Clinton
administration, over 22,000 more American workers in the U.S.
oil and gas industry lost their jobs. ``It has all happened
on the Clinton administration's watch,'' said Alcorn.
``This industry has been made noncompetitive by over-
regulation and a confiscatory tax policy. Congress has
recognized the threat and asked for presidential leadership
in a letter written only a week ago,'' said Alcorn. ``Faced
with congressional support and evidence provided by the
administration's own investigation that the loss of this
strategic American industry poses a national security risk,
the president still proposes no specific action.''
``The lack of leadership and action by this administration
again demonstrates a flawed view of national security and
economic stability that cannot be allowed to prevail,'' said
Alcorn. ``Therefore we are calling upon Congress to
investigate the threatened impairment of national security
and to act where the president has failed to do so.''
IPAA Hails Energy Bill.--Today the Oklahoma Congressional
delegation led by Sen. Don Nickles (R-Okla.), a key member of
the Senate leadership and a member of the Finance Committee
and Energy and Natural
[[Page S2989]] Resources Committee, introduced a
comprehensive energy bill designed to help put the domestic
oil and natural gas industry back to work and strengthen the
U.S. economy by increasing domestic production and creating
jobs throughout the 33 oil and gas producing states.
``This bill goes a long way toward developing a national
energy strategy that will make the domestic oil and gas
producer more competitive,'' said IPAA President Denise Bode.
``These energy initiatives are far-reaching because they will
impact virtually every producer who explores for and produces
oil and natural gas in the United States. The legislation is
the foundation for much-needed energy reforms and it has the
support of independent producers.''
The bill was introduced in the House and Senate by
Congressmen Bill Brewster, Tom Coburn, Ernest Istook, Steve
Largent, Frank Lucas, J.C. Watts and Senators Nickles and
James Inhofe. It includes tax and regulatory measures that
will help maintain production from marginally economic wells,
encourage new drilling, provide relief from an unpredictable
royalty collection system, promote the cost-benefit analysis
of new regulations and support the export of Alaska North
Slope crude oil.
``This energy bill is clearly a way we can alleviate the
oil import crisis and jump-start the domestic industry,''
said Bode. ``It will put domestic producers back to work,
benefiting the nation with more jobs, economic wealth and tax
revenue.''
If you need additional information or would like to talk to
an independent producer for a local angle on this story
contact Kate Hutcheons or Jeff Eshelman.
____

American Petroleum Institute

Washington, February 22.--The surest and most important way
to stem rising oil imports is to produce more oil and natural
gas at home, the American Petroleum Institute emphasized
today.
The API made that observation after expressing
disappointment in President Clinton's reaction to the
Commerce Department's study and finding that rising oil
imports are a threat to the nation.
``The President had the opportunity to express his
commitment to open federal lands to new oil and gas leasing,
exploration and development,'' the API said in a statement,
``but he chose to emphasize federal programs that have had no
impact on rising oil imports, such as promoting alternative
fuels and renewable energy resources.''
The coastal plain of the Arctic National Wildlife Refuge in
Alaska holds the promise of billions of barrels of oil, as do
the offshore areas of California and Florida, now closed to
leasing by the federal government, API noted. The new
Congress indicates a willingness to grant greater access to
federal lands, but the President's support is vital, API
added.
In 1994, for the first time in history, more than half of
the oil used in the United States was imported. The 8,894,000
barrels a day of crude oil and petroleum products amounted to
50.4 percent of domestic demand and set an all-time record.
At the same time, domestic crude oil production averaged
6,629,000 barrels a day--the lowest level in 40 years.
The President often speaks of jobs and the need for federal
revenues. Both could be attained by opening new areas to oil
and gas development, API said. Tens of thousands of jobs, not
only in the oil fields, but in the host of service industries
and factories throughout the country would be created. At the
same time billions of dollars in revenues would accrue to the
federal treasury in the payment of bonuses, rentals,
royalties and income taxes.
The Bureau of Labor Statistics reported that in 1982,
employment in the exploration and development sector of the
petroleum industry reached a high of 754,500. At the end of
December 1994, that number stood at 332,800--a loss of
421,300 jobs! The principal cause, the API said, were unwise
federal government policies closing lands onshore and
offshore to oil and gas development.
``The opportunity exists now to reverse these unwise and
unsound policies,'' API said, ``and initiate policies to
increase oil and gas production that would impact on oil
imports.''
____

National Stripper Well Association Blasts Clinton Administration's
Response to Oil Imports Security Risk--Joins Call for Congressional
Hearings

Virginia Lazenby, president of the National Stripper Well
Association, made the following statement regarding President
Clinton's Feb. 16 response to the Commerce Department's
finding that oil imports threaten to impair national
security:
``I am enraged, not for myself, but for the thousands of
U.S. oil and natural gas producers the National Stripper Well
Association represents.
President Clinton agrees that the rising level of oil
imports--now over 50 percent--pose a threat to U.S. security.
That's a step in the right direction. What the Clinton
administration failed to do is address the threat by
proposing new initiatives such as tax and regulatory measures
that would help boost domestic production. The Clinton
administration's inaction is unacceptable.
In addition to the nine-month national security
investigation, other studies were completed last year,
including one by the National Petroleum Council, which
supports the call for the passage of initiatives to maintain
production from the nation's marginally economic wells. NSWA
played a key role in developing the report. At the time of
its release Department of Energy Secretary Hazel O'Leary said
``There are actions we can and must take that will benefit
the gas and oil industry.''
Why the administration has decided against taking action is
shocking. Nearly half-a-million people in the domestic oil
and gas industry have been forced out of their jobs over the
last decade as low-priced oil has been imported into the
United States. Domestic production is at a 40-year-low. The
nation can not afford to lose an increasing amount of
production from marginal wells which represents $10 billion
of avoided imports each year.
NSWA joins the Independent Petroleum Association of America
in its call for Congressional hearings on this matter and
hopes that the members of Congress will take action.''
The National Stripper Well Association represents domestic
producers who produce oil and gas from so-called stripper or
marginal wells which are wells that produce less than 15
barrels per day. NSWA was among the groups that petitioned
the Commerce Department to conduct the national security
investigation last March.

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