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Hugh makes his case to Interior Secretary Dirk Kempthorne to issue contingent OCS leases to rachet pressure on Congress to act.

Thursday, July 17, 2008

HH: This week, on Monday, George W. Bush issued an executive order. He had to do it, because there was an executive order in place that barred drilling on the Outer Continental Shelf. Now the Outer Continental Shelf is between 50 and 150 and 200 miles away from the coast. You can’t see the Outer Continental Shelf. You couldn’t see any drilling that went on out there, it would not impair your visuals whatsoever. But in 1991, the first President Bush had issued this executive order because the climate of the time was in fact to oppose drilling on the Outer Continental Shelf. And the fact of the matter is, that a lot of Americans believe that times have changed, that people, a lot of them, who supported the ban in 1991 are now very, very upset with that ban, and they want it be revoked. And the President, the new President Bush, President Bush II, 43, revoked 41’s handiwork. But that doesn’t mean that the drilling begins. That means we have to start pressuring Congress to get it done. I’m joined now by Secretary of the Interior, Dirk Kempthorne. Secretary Kempthorne, welcome to the Hugh Hewitt Show.

DK: Thank you, Hugh, very much.

HH: Mr. Secretary, good news about the Bush executive order. Now why not direct the Minerals Management Service of DOI to conduct sort of stand-by leasing, contingent leasing, so we’re ready to go if and when Congress lifts the ban on the drilling on the Outer Continental Shelf?

DK: We actually have two major sales that are coming up for additional leasing. One will be in the Gulf of Mexico, and the other one will be in the National Petroleum Reserve, Alaska. And that’ll be in about October. But the President’s action has, as you have pointed out, it’s made it very clear that the Executive Branch has cleared the decks, and it’s now awaiting Congress to take action.

HH: But Mr. Secretary, those are for areas where people could actually go and drill right now. For those areas which are off limits to drilling because of the Congressional ban, if you conduct a stand-by auction, we’ll know how much interest there is, and we’ll be able to make the argument, I think, to the American people that there’s a lot more demand for those leases than Democrats in Congress are letting on. Is there any reason why we shouldn’t do a stand-by leasing?

DK: Hugh, we do not have the provisions for stand-by leasing. With the President’s action, the industry has been waiting for that sort of signal, so now with the new technology, with the seismic information that they can now attain in the Outer Continental Shelf, I really think that you will begin to see the real interest. And the American people are so eager for the United States to say rather than sitting back, calling upon foreign sources of energy to start providing the supply to the United States, the United States is going to start moving out itself.

HH: You know, you’ve got such a great solicitor at the Department, Mr. Secretary. I’d urge him to look, because I don’t think planning can be in any way barred, and I really wish we’d get going so it doesn’t take so long. How about incentivizing first barrel production? You know, you get a longer lease or a lower royalty if you get the oil to market sooner?

DK: Well, that’s right, and again, all of this, we’re moving on this, Hugh. I mean, we’re looking at this, and when you say that we’re not getting the planning, the planning is underway.

HH: And how long do you think it will take if Congress lifted the ban to get previously banned production online, Mr. Secretary?

DK: I’ll tell you, the previously banned, you have to go through the exploratory, you have to go through a number of these permits, whether it’s the NEPA process, et cetera. So it will take a little bit of a while, but the significance is we have projects, one that started in 1996. They put $2 billion dollars in there. They’re going to put another billion in it, and it will come online. So we have additional resources that will begin coming online. The importance is to see that there is a continuation of that, and not an interruption.

HH: Now you know, of course, some of the environmental groups have filed a 60 day notice under the Endangered Species Act to say that the polar bear listing ought to prevent this, that it’s going to contribute to the emissions that are destroying the ice cap. You know, the polar bear listing gave them that hook. Do you think you’re going to be beat that back, Mr. Secretary?

DK: Oh, I do. I think that Hugh, number one, we have to go with what is the science that is before us. But we made it very clear, and we followed what some of the courts had actually outlined, and that is you cannot make a causal connection between in the lower 48 any sort of emissions that have a take on a polar bear in the Arctic. It just cannot be done.

HH: But what about in the Arctic leasing that you’re proposing to let go here in the next few months?

DK: Now say that again? I’m sorry.

HH: What about leasing up in the Arctic? Do you think that’s going to be disrupted by the polar bear listing?

DK: No, I do not for this reason. We have placed the Endangered Species Act with regard to the polar bear in connection with the Marine Mammal Protection Act. That is an act that’s been on the books since the 70s. Industry understands how to operate with the Marine Mammal Protection Act. It is more stringent than the Endangered Species Act. And also, it was pointed out by Fish And Wildlife Service that the oil and gas industry has not contributed to any diminishment of the polar bear.

HH: All right, the Endangered Species Act is obviously not going to get reformed in this Congress, Secretary Kempthorne. But before you leave office, do you think you could at least get the staff to get the backlog of the Section 7 consultations caught up with and processed? They’re way behind on all those things.

DK: Well, yes, in fact, we’ve made some real progress. And we will have, I believe it’s approximately 70 of those that we’re going to be looking at during this year and as we begin the new fiscal year.

HH: And the shale lands in the Western states, some endangered species are holding those up, the mouse in Colorado, for example. Any way to do sort of advanced habitat planning to get those shale lands freed up for development?

DK: Well, it’s a very good question, and one of the things that we are doing is taking a much more holistic look so that we don’t wait until we get to a 911 or a triage situation with an endangered species. The sage grouse is one example where through our healthy lands initiative, and working in very strong partnership with the states, it’s looking, identifying what is the critical habitat, what can be done to help that habitat so that you don’t get a species to the point that you do have to evoke the Endangered Species Act.

HH: Well, thanks for the update, Mr. Secretary. I hope you go back to the Solicitor and tell him let’s get those leases issued, let’s get that oil all but delivered, pending Congressional action. Thank you, Mr. Secretary.

End of interview.

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