Energy Strategy Draws Critism from Various Factions

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The long-awaited National Energy Strategy unveiled Wednesday drew a good deal of criticism from various factions.

It holds drilling prospects in environmentally sensitive areas such as the Arctic National Wildlife Refuge and the North Slope in Alaska along with offshore drilling in the Outer Continental Shelf, but that will not affect many independents, who are the bulk of the oil and gas industry in Oklahoma.

In any event, many argue the plan does not adequately address domestic drilling incentives nor conservation methods.

The document is not being held out to answer the Persian Gulf crisis. It was begun far in advance of hostilities breaking out in the Middle East.

"The strategy is not specifically targeted at the problems of the moment. Indeed, it revealed that our nation and the world are likely to depend more on Middle East oil suppliers under any realistic scenario for the foreseeable future," it said.

"With regard to the short term, the strategy builds upon a decade of energy market deregulation that has allowed the rapid and appropriate market response to the Iraqi crisis."

The oil and gas industry is not as complimentary to the document.

"I think it's well-balanced. We hate it. The environmentalists hate it. The conservationists hate it," said Mike Coldren, executive vice president of the Oklahoma Independent Petroleum Association.

"The majors are about the only ones that like it."

Independent oil and gas producers had hoped for some pricing stability, such as a floor price for crude oil, and more drilling tax incentives, Coldren said.

Even though those wishes were not granted, he said the plan's call for promotion of horizontal drilling and pipeline decontrol appear to be helpful to the industry.

"We were hopeful that there would be some kind of price stability mechanism," Coldren said. "There's some hope that that can still happen."

Oklahoma delegates in Washington - U.S. Senators David Boren, a Democrat, and Don Nickles, a Republican - have introduced measures that would provide a floor price for independents and increase the tax incentives for domestic drilling.

"Frankly, as an oil state senator, I don't think the policy unveiled yesterday (Wednesday) contains nearly enough to enhance domestic production in the lower 48 states," Nickles said.

"I will be pushing for Congress to do much more, particularly with tax incentives."

Those arguments, and the plan itself, entirely missed the point of the energy issue, said Charles Mankin, director of the Oklahoma Geological Survey in Norman.

"I guess I'm disappointed," Mankin said.

"It would have been a golden opportunity to look at the problem with transportation fuels. That is really the only energy problem this country has ever had."

The United States uses about 2.5 times more transportation fuel per capita than the average of all other industrialized countries, he said. And, he added, U.S. consumers pay about one-third for transportation fuels than other countries.

"There's nothing in this strategy that says we need to get unhooked from this drug addiction we have," Mankin said.

He complained that the plan took great pains to look at reducing residential, commercial and industrial consumption of energy, primarily electricity, when that does little to reduce dependence on oil. He also criticized the document for taking a strong stance for ethanol, an alternative motor fuel, rather than compressed natural gas.

"We have, by all accounts, an abundant supply of natural gas," Mankin said.

"The problem we face, in my opinion, with transportation is that we've had a defacto energy policy that is based on adequate supply of transportation fuels at a low cost. …