“I certainly share the hope that release of those reserves, in conjunction with the release of reserves by our global partners in the International Energy Agency, does provide consumers some relief and helps in economic stabilization in the near term,” Angelle said. “I am proud to say that Louisiana is host to nearly half that strategic reserve – but I believe that the oil and natural gas found naturally beneath our surface and off our shores is what could offer us real hope and help during this generation.”
Angelle said that the reaction of U.S. consumers and the economy to the increased price of oil in the past year have once again shown the importance of placing appropriate emphasis on the part played by traditional energy sources in bolstering our national economy.
“Since 1972, there have been six recognized recessions in this country, all preceded by a sustained increase in the price of oil over the previous year – including the 2008 spike in energy costs that led to instability in energy prices and swept up our entire national economy,” he said. “We have seen it begin to happen again this year, as the federal government has openly recognized that energy price increases are a major reason our nation’s economic recovery has slowed through the first half of 2011.”
Angelle noted that Federal Reserve Chairman Ben Bernanke recently stated that increased consumer spending on a single commodity – gasoline – accounted for half or more of the increase in consumer price inflation in the early part of the year.
“Now we are seeing that the federal government is turning to an increase in the supply of oil to provide an economic boost,” Angelle said. “If we recognize that a short-term act to increase available domestic oil can have an impact, we must also recognize the value of a sustained increase in domestic supply through responsible and robust exploration for the resources we can produce right here in America.”
Angelle said that while the stated intent of the release of reserves was to offset the loss of production from Libya due to the ongoing civil war there, the price of oil had already risen nearly 30 percent over what it was prior to the imposition of drilling restrictions in the federal waters of the Gulf of Mexico by the end of 2010, well before reports of unrest in the Middle East.
He noted that oil production from the Gulf federal waters is down an estimated 200,000 barrels a day from what it was prior to the moratorium and the ongoing slowdown in permitting that has followed – and down about 375,000 barrels a day from pre-moratorium analyst projections for 2011.
“The reserves will provide 1 million barrels a day more than we produce right now for 30 days – when the Gulf of Mexico alone could have provided an additional 70 million to 130 million barrels this year and more for years to come,” Angelle said. “When you think about the Strategic Petroleum Reserve, and its capacity of 727 million barrels of oil, compare that to ExxonMobil’s recent announcement of an oil and natural gas discovery in the Gulf estimated to be capable of producing the equivalent of 700 million barrels of oil. Discoveries are still being made onshore and in the federal waters off our coast even in a time when permits for drilling in federal territory are moving slowly.”
Angelle said that the current economic concerns also make the opportunities offered by another traditional fuel – natural gas – harder to ignore, opportunities for cleaner-burning energy that is domestically produced, plentiful and affordable.
“As a nation, we have long recognized the need for alternatives to the oil that provides 40 percent of all U.S. energy and 90 percent of our transportation fuel, but forces us to rely on foreign sources for half our supply,” he said. “If we are serious about an alternative that works for our national economy, and the millions of family economies around this country, then we need to be serious about encouraging the wider use of natural gas.”
Angelle said that the goal of using more renewable energy is one worth supporting, but the fact is that renewable energy sources provide only about 10 percent of current U.S. supply and are more expensive for consumers – and the federal government’s own projections show that, even with new regulations and minimum renewable fuel standards, renewables are projected to provide only about 16 percent of that supply by 2035.
“Renewables are simply not likely to be ready to take on a significant portion of the load of supplying our nation’s energy within the next 20 years, but we have identified natural gas supplies amounting to more than 100 years worth of our current consumption within our own borders,” Angelle said.
The most recent U.S. Energy Department survey of prices showed the price of compressed natural gas (CNG) for a passenger car or truck averages from $2 to $1.50 less per gallon equivalent than a gallon of gasoline.
“If we truly want to build a stronger economy, one less vulnerable to threats from energy stability, we already have the resources, we just need to execute a realistic plan,” Angelle said.