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For Immediate Release: February 15, 2010
Contact: Rob Thormeyer, 202-898-9382, rthormeyer@naruc.org

NARUC Gas Committee Receives Final Report Detailing Oil/Gas Moratoria Impacts

WASHINGTON— A public/private Study Group today reported to the nation’s State utility regulators in Washington that its research has identified trillions of dollars of impacts resulting from updated domestic oil and gas resource projections and decisions to maintain moratoria restrictions against development of America’s oil and gas resources.

The presentation marks the end of an almost two-year study effort administered by the National Association of Regulatory Utility Commissioners and a broad group of public and private interests to determine the financial and environmental impacts of maintaining the moratoria restrictions.

“The previous Administration and Congress removed oil and gas moratoria on public lands over one year ago,” Study Group Chairman O’Neal Hamilton said, “but required actions to access the energy resources thought to exist there have not been taken.” Hamilton is past Chairman of the South Carolina Public Service Commission and Chairman of the National Association of Regulatory Utility Commissioners’ NARUC Committee on Gas, which initiated the study in 2007. “Whether additional Federal lands should be leased for energy development--and under what conditions leasing should occur--is a matter for national energy policy decision makers,” Hamilton said.  “Our research allows policy makers to know the extent of the resource base and the effects that maintaining the restrictions would have on the country. Our public interest work is dedicated to giving decision makers information upon which they can rely in developing America’s national energy policy.”

In July 2007, NARUC’s Gas Committee and Board of Directors adopted a resolution authorizing the Association’s participation in a public-private partnership to study the impact of existing moratoria against energy exploration and production on federal lands, both on-shore and within the 200 mile limit around the Country’s coasts.   

The “Moratoria Study” used a Federal government modeling program relied upon by Congress and the Administration for analyzing the energy outlook under existing laws and projecting the impacts of new energy
policy proposals.  The “NARUC-National Energy Modeling System (NARUC-NEMS)” version of the model was employed by the Study Group’s contractor, Science Applications International Corporation (SAIC) . 

Hamilton said SAIC’s report provides a comprehensive review and update of domestic oil and natural gas resources, and using the new resource estimates, projects the relative social, economic and environmental effects on the nation of maintaining various moratoria and restrictions on domestic oil and gas exploration and production through 2030.

In updating the resource base, the report estimated that:
• The domestic natural gas resource base on federal lands should be increased over previous estimates by 132 Tcf onshore and by 154 Tcf offshore - - a total estimated increase in domestic natural gas from 1748 Tcf to 2034 Tcf.  To give that number perspective, in 2009 the United States consumed 22.8 Tcf and, of that amount, imported 2.7 Tcf.
• The domestic crude oil resource base is estimated to increase, offshore, by 37 Bbo (excluding parts of Alaska); onshore, the crude oil resource base is estimated to increase by 6 Bbo for the Arctic National Wildlife Refuge (ANWR), with no estimated increase in the Lower-48 resource base - - a total estimated increase in domestic oil from 186 Bbo to 229 Bbo.  In 2009 the United States consumed 5.2 Bbo oil, produced 1.9 Bpo at home and imported 3.3 Bbo.
 
The report projects effects on the nation of maintaining moratoria under two scenarios: 1) determining the social, economic and environmental effects of maintaining moratoria and the updated oil and natural gas resource base estimates, and 2) determining those effects without the updated resource base.

SAIC’s NEMS-NARUC model results determined that maintaining traditional energy exploration and production moratoria on Federal lands would result in an alternative domestic energy future that, “…increases the cost and restricts the availability of domestic oil products and natural gas…” in all economic sectors and regions of the country.  According to the study, under the “Combined Comparative Case”, which combines the estimated increase in the oil and gas resource base with maintaining moratoria from 2009-2030, model projections show that :

– Cumulative domestic oil and natural gas production decreases by 15% and 9%, respectively.
– Average natural gas price increases by 17% and average electricity prices increase by 5%.
– Cumulative national real disposable income decreases by $1.163 Trillion ($4,500 per capita).
– GDP decreases cumulatively by $2.36 Trillion ($1.16 Trillion NPV), an average annual decrease of 0.52%
– Cumulative oil imports from OPEC countries increase by 4.1 Billion barrels.
– Cumulative national payments to OPEC countries increase by $607 Billion ($295 Billion NPV).
– If resources within the moratoria areas are not developed, there would be no new environmental effects within the U.S. jurisdiction attributable to development of those resources.  However, as a non-modeled item, the study observes that there could be environmental effects on domestic and international waters as a result of increased tanker transport of oil and gas imports and unknown environmental effects in countries from which the U.S. would import the resources.

An Executive Summary and full report are on the NARUC Website at: http://www.naruc.org.
 

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NARUC is a non-profit organization founded in 1889 whose members include the governmental agencies that are engaged in the regulation of utilities and carriers in the fifty States, the District of Columbia, Puerto Rico and the Virgin Islands. NARUC's member agencies regulate telecommunications, energy, and water utilities. NARUC represents the interests of State public utility commissions before the three branches of the Federal government.

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