Obama administration 'hostile to oil states,' Alaska Gov. Parnell says

McClatchy NewspapersFebruary 28, 2011 

WASHINGTON — With the unrest in the Middle East as his springboard, Gov. Sean Parnell lashed out at the Obama administration's stance on domestic oil production, saying the White House approach was having a tangible effect on the country's foreign policy.

In a speech at the National Press Club, the Republican governor called the federal government "openly hostile" to oil-producing states, particularly for the delays in allowing Shell to drill exploratory wells on leases off Alaska's northern coast that the company purchased in 2008.

"If it looks like a moratorium and walks like a moratorium ... maybe it is," said Parnell, who is in Washington this weekend for the National Governor's Association winter meeting.

Parnell said there's a direct link between the economic recovery and the failure to use Alaska's oil reserves as a national security buffer against the uncertainty in Libya and other oil-producing countries in the Middle East. Higher gasoline prices could harm any economic recovery, Parnell said.

"This is the moment our government must re-examine its 'no new wells' policy when it comes to oil exploration and development here at home," Parnell said. "The U.S. foolishly imports more than 63 percent of our oil. That leaves us vulnerable to the economic shock of disruption of these oil supplies and it drives down that economic recovery."

Federal decisions have blocked oil companies from three of the most promising Alaska locations for major oil discoveries, all in the Arctic:

• The Chukchi and Beaufort seas that Shell wants to explore.

• The coastal plain of the Arctic National Wildlife Refuge.

• The Teshekpuk Lake region of the National Petroleum Reserve-Alaska.

Parnell also criticized President Barack Obama's proposal in his State of the Union address to do away with some tax credits for oil companies, echoing the governor's statements about Alaska needing to cut its own oil-production tax.

"Anything you tax more, you get less of," Parnell said, adding that overregulation can have the same effect.

"The Department of Interior and the EPA appear to be driving U.S. policy in the Middle East and North Africa," Parnell said. "In many senses, the State Department is forced into a reactive, mitigating role because of the increasingly hostile stance that Interior and the EPA have taken to domestic energy exploration and production."

"These are agencies that can lock down domestic oil with no responsibility for consequences," he said. "They can force America to depend ever more heavily on foreign oil, at an enormous cost of lives, tax dollars and economic opportunity. They do this by delaying leasing, by delaying permitting, and by attempting sweeping lockups of land without congressional approval or authority."

Parnell was referring to the Obama administration's new Bureau of Land Management policy on wild lands, which calls for the government to inventory holdings across the country in an effort to protect wilderness-quality land.

Parnell and several other western governors are scheduled to meet next week with Interior Secretary Ken Salazar to talk about the policy, which Parnell likened to a "shopaholic with a stolen credit card and a taste for empire building."

One environmentalist in the audience, Emilie Surrusco of the Alaska Wilderness League, criticized Parnell's claim that the federal government isn't approving permits quickly enough.

"He left a few things out," Surrusco said. "He's talking about how they need to keep speeding things up, speeding things up, speeding things up, yet there's no mention of the government responsibility in trying to protect our resources and make sure what happened in the Gulf doesn't happen again."

Parnell was asked how he reconciled his call for speedier permitting and the need to protect resources in light of last year's Gulf oil spill. Alaskans are "intimately familiar with messes created when oil is not developed and shipped responsibly," he said.

"Think back to 1989 and the Exxon Valdez. The Deepwater Horizon, a significant tragedy to Americans and to our environment, no question," he said. "The fact remains, though, that America develops its resources in a more responsible manner than virtually any other place in this world."

But he argued that waiting five years for an air permit, as Shell could, is "unreasonable."

Parnell also said he was taking his own advice he's giving the federal government, by advocating to open more land to oil and gas development, building roads to those places and rewriting the existing oil-industry tax structure.

That tax regime, known as Alaska's Clear and Equitable Share, or ACES, was a hallmark of former Gov. Sarah Palin's administration. It had his support at the time of its passage, Parnell acknowledged, but said he believes the tax structure is due for an overhaul.

"Alaska needs to make itself more competitive," Parnell said. "So to do that, we are working to lower taxes. Alaska can become more competitive."

Parnell's speech came a day after U.S. Sen. Lisa Murkowski, R-Alaska, told state lawmakers in Juneau that she's not above "throwing some elbows, perhaps ruffling a few feathers" to push for additional exploration and production, including in the Arctic National Wildlife Refuge, that would keep oil flowing through the trans-Alaska pipeline for decades more.

Sen. Mark Begich, D-Alaska, who sits on the Senate Commerce Committee, has asked for the panel to hold a hearing on the pipeline, with the approach that getting more oil in the pipeline to keep it open is "a national issue, not just an Alaska issue," said spokeswoman Julie Hasquet. He also has asked for an energy security hearing in Senate Armed Services Committee, Hasquet said.

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