Ocean Industries' Luthi discusses House action to overturn drilling plan

Transcript

Monica Trauzzi: Hello and welcome to OnPoint. I’m Monica Trauzzi. Joining me today is Randall Luthi, president of the National Ocean Industries Association. Randall, thanks for coming back on the show.

Randall Luthi: Absolutely, thank you for the opportunity.

Monica Trauzzi: Randall, the House Natural Resources Committee approved a bill last week that would overturn the Obama administration’s offshore leasing plan. And the bill seeks to expand drilling on the coasts of Maine, California, Oregon, Washington and also in Alaska’s Bristol Bay. Do these areas support the expansion of drilling in their regions?

Randall Luthi: Part of the question that we have is we just don’t know. Any new technology that’s been available for the last 10 or 20 years has not been used in these areas to try and determine what’s there. So far, what we’ve done as a federal government is we’ve limited our ability to look for new oil and gas only in the Gulf of Mexico. And the Gulf of Mexico has been fantastic. You know, it supplies about a third of our oil now. But we really don’t know what else is out there, so we really need the opportunity to look. Industry needs the opportunity to look. And it’s the idea of having the potential of sales there that would allow this to happen.

Monica Trauzzi: The administration says that their leasing plan would allow access to 75 percent of the nation’s known oil and gas resources. Isn’t that significant and isn’t it also a sensible approach when you are considering both the expansion of energy, but also environmental policy?

Randall Luthi: Well, it’s somewhat of a limited approach and I think of it somewhat as the Old Mother Hubbard approach to energy and that is we’ve gone to the same cupboard so many times that we’ve only looked in the Gulf of Mexico. And the reality is, when you only look in one area you say, oh, that is where most the known resources are found. But, again, we haven’t looked off the coast of South Carolina. We understand there is significant deposits off the coast of Virginia. Other areas, we just don’t know. We need that ability to look. So it’s somewhat of, I would say, a shortsighted argument. And the other thing it does is it limits our ability for energy security to the Gulf of Mexico. As we’ve seen over the past few years and before, hurricanes are not necessarily an uncommon event and we certainly don’t want any, but when they come through the Gulf of Mexico, that is where the bulk of our offshore development is. I think it would be a better approach to spread that out throughout most of the Outer Continental Shelf.

Monica Trauzzi: And, in fact, the Congressional Research Service recently released a report that shows the Obama leasing proposal includes the smallest number of sales since the planning process began in 1980. How do you think that report might influence the discussion?

Randall Luthi: Well, I hope it does, because it does bring up an interesting point. There’s fewer sales being offered by this administration than have been since the program began. Now, they offer 15, and as you look back over the history of the five-year program, even though sales were offered, they didn’t always occur. So even if you look at 15, they could be even fewer sales than that. So I’m hoping that this year our study actually gets members of Congress to read it and think about voting for the Hastings bill.

Monica Trauzzi: So, it’s most probable that this bill will die once it reaches the Senate, if it does reach the Senate. Why then this major effort by House Republicans?

Randall Luthi: Well, I think it’s very important, some of its messaging, to show the United States is serious about offshore development and it also sets the stage. You never know what’s going to happen in politics in four weeks, six weeks, a year and it sets a good firm foundation should they want to move forward in the future.

Monica Trauzzi: In the Senate though, Senators Vitter and Coats have released a bill that would take energy issues out of the hands of the Interior Department and they cite a lapse in offshore production under the Obama administration. Do efforts like this, are they effective or do they simply serve as sort of a distraction or adding more noise to the discussion?

Randall Luthi: I think what they help do is call attention to the problem and I think that’s one way to do it, is you say look at Interior. They’re now offering fewer sales than they ever have in their past. You know, is there something, another approach we should try? So I think it actually adds somewhat not necessarily to the noise, but it does shine a little more light on what we think is a very important issue.

Monica Trauzzi: At your organization you represent a wide range of industries, including renewable energy industries. Is there a conflict of interest when you’re so strongly supporting carbon-intensive production of energy?

Randall Luthi: Certainly I don’t think so. Our administration and our organization has always supported all forms of energy, all the above. And so we want renewables to move as well as offshore. The reality is, is renewables are coming more and more offshore, but it is slower. It’s taking more time, but we’re very supportive of all forms of energy.

Monica Trauzzi: OK, we’ll end it there. Thank you for coming on the show, nice to see you.

Randall Luthi: Thank you.

Monica Trauzzi: And thanks for watching. We’ll see you back here tomorrow.