Murkowski on America’s Tremendous Resource Potential

WASHINGTON, D.C. – U.S. Sen. Lisa Murkowski, R-Alaska, spoke on the Senate floor today about a newly-released Congressional Research Service report that estimates the United States has the largest fossil fuel endowment in the world.

Watch Sen. Murkowski’s floor speech on her YouTube page.

Below is the full text of Sen. Murkowski’s floor statement:

“Madam President, I’ve come to the floor to discuss America’s tremendous natural resource potential, and to again highlight the fact that if we choose to, we can absolutely produce more of our energy to meet our own needs.  I also want to address an argument that is often made in opposition to new domestic production, because I believe every member of this chamber needs to know the facts and the consequences of our current approach.

“Without a doubt, understanding how much energy we have is at the very foundation of energy policy.  For resources like wind and solar, it’s pretty easy – they’re renewable, so we should never run out.  But for conventional resources, which make up about 83 percent of the energy that America consumes, it’s a different story. Oil and natural gas and coal aren’t located on the surface of the Earth, so we don’t always know exactly what we have and where we have it.

“Finding and quantifying our resources is a tough enough task.  Adding to the complexity is the litany of technical terms that are used to describe them.  There are proved reserves, probable reserves, possible reserves, unproved reserves, and our demonstrated reserve base.  Then we move into resources, which are different from reserves.  That list includes eight more categories, and every one of them means something different.

“I’d imagine that most people don’t have a great understanding of these terms.  By and large, that’s perfectly fine – unless you’re a member of the U.S. Senate.  Because we’re tasked with helping to formulate our nation’s energy policy, we need to know the details and distinctions.  Before we make critical decisions that affect the price and the source of our energy supply, it’s our responsibility to know what our experts think we actually have.

“To help gain a better understanding of our nation’s energy base, Senator Inhofe of Oklahoma and I requested a report from the Congressional Research Service.  First released in October 2009, CRS’ experts updated their report last November.  It’s entitled “U.S. Fossil Fuel Resources: Terminology, Reporting, and Summary” and it’s a great primer on these issues.  When Senator Inhofe and I publicly released the report last week, I noted that it ought to be required reading for every member of the Senate.   

“Education is not the only reason we released this report, however.  We also hope it will help set the record straight.  Too many of the facts presented here, particularly about energy, are based on foregone conclusions.  In some people’s minds, we’re supposedly running out of oil because, well, we’ve always been running out of oil.  So at our request, CRS also surveyed existing government estimates to determine how much conventional energy we think we really have. 

“The results were surprising, to say the least.  The truth is, our experts don’t believe we’re on the verge of running out of oil, natural gas, or coal.  Far from it.  According to the government’s own estimates, the United States actually has the largest fossil fuel endowment in the world – larger even than Russia, and far larger than countries like Saudi Arabia and China.

“Within our endowment is an incredible amount of oil – an estimated 163 billion barrels of technically recoverable resources, which would be enough to maintain current production for more than 60 years. We have huge volumes of natural gas – potentially more than 2,000 trillion cubic feet, which would last for 90 years at today’s rate of consumption.  And our coal resources are truly unrivaled – at 264 billion short tons, our supply will last for more than 200 years.

“CRS also found that we have a tremendous range of “sub-economic” resources that are not yet commercialized, including an estimated 100 billion barrels of heavy oil, more than 800 billion barrels of oil shale, and up to 320,000 trillion cubic feet of methane hydrates.  For oil shale, that’s over 100 years’ worth of conventional oil. For methane hydrates, that could be an amazing 14,000 years’ worth of natural gas if we endeavor to find ways to produce it.

“The numbers in the CRS report are our best experts’ best estimates of how much oil, natural gas, coal, and unconventional fossil fuels lie within the United States.  Those numbers can be obtained by anyone who works in Congress and anyone capable of navigating to my website or Senator Inhofe’s website.  I hope the members of this chamber will make good use of them.  Not only does this report provide objective figures for the Senate to use; it also casts serious doubt on many of the false arguments that are made against new domestic production. 

“Let me give you one of the most notable examples. There’s a claim, regularly heard here on the Senate floor and even used by the President last week, that the United States has just “two percent of the world’s oil reserves, but consumes 25 percent of the world’s oil.”  That line is designed to make its audience think that the United States is both running out of oil and using oil at an unsustainable rate.

“Here’s the truth: government officials have claimed that the United States is “running out of oil” since at least 1919, but we’re still the world’s third-largest producer – behind Russia and Saudi Arabia, but well ahead of everyone else. If you think back to the categories I named earlier, you can also see why simply referring to our “reserves” is misleading – those account for just a small sliver of our total oil.  To classify a barrel as a “reserve” you literally have to drill and prove it’s there.  By definition, that excludes all the lands that have never been explored.  It excludes a huge range of places where we think there’s oil, and in the end, it dramatically underestimates our nation’s oil resources.

“Consider this: the United States’ “proved” oil reserves have never exceeded 40 billion barrels. Over the past 110 years, however, we’ve managed to produce nearly 200 billion barrels of oil. That alone should cast doubt on the words of so many.  Arguing that we have just two percent of the world’s oil is like arguing that only your checking account – but not your much-larger savings account – counts toward your net worth.  The reality is, if you have money in both accounts, neither provides a complete picture by itself.  Oil is the same way.  Between 2008 and 2009, our reserves actually rose by more than eight percent, even as we produced about two billion barrels of oil. That was made possible by our substantial resource base.

“So why claim that America is running out of oil, when that’s just not the case?  The easiest explanation is that it’s an attempt to turn perception into reality.  If Americans can be convinced that we have no oil, we’ll stop demanding that our government allow access to it.  Instead of running out of oil, we’ll simply stop producing it.  In some people’s minds, regardless of the economic consequences, the end result will be the same.

“The reason I’m so encouraged by the CRS resource report – and the reason I’m so disappointed by continued claims that America has nearly exhausted its resource wealth – is that an understanding of our true energy potential helps point the way to a viable national energy policy.  Instead of locking up our lands, we need to open them, streamline access and permitting, and bring more of our own resources to market.  Doing so will not only allow us to increase domestic production, but also decrease domestic consumption.  Those steps aren’t mutually exclusive.  Given our energy and fiscal challenges, they’re actually dependent on one another. 

“Let me put this into context.  For years, Alaska’s congressional delegation has sought to allow 2,000 acres of the non-wilderness portion of ANWR to be opened to development.  Usually when we talk about ANWR, we talk about how much new oil production could result – probably somewhere between 800,000 and 1 million barrels a day.  Left out of the conversation are the tremendous revenues that would accrue to the federal government.  According to CRS, those revenues would reach more than $150 billion – again, that’s $150 billion – at today’s oil prices.

“If we use those revenues wisely, we could make serious progress on deficit reduction and serious investments in new technologies.  Right now there’s a bill from the Michigan delegation that would increase incentives for electric vehicles by an estimated $19 billion. The problem – the reason their bill probably won’t go anywhere – is that there’s just no way to pay for it. 

“Now think about what would happen if we brought ANWR into the conversation.  We could fully fund incentives to put not just a couple million, but upwards of 20 million electric vehicles on the road. We could help create an entire industry even as we fully protect our most valuable resource, the American taxpayer.  At the end of the day, our decision to produce more of our own oil would be matched by a tremendous reduction in our oil consumption, thanks to the advanced vehicles we deploy with the revenues from oil production.

“By holding back production, we’re holding back progress.  For far too long, I believe anti-production arguments have prevented Congress from developing a coherent energy policy.  We see them again today – “Oh, it’s the speculators.”  Or, “Producers aren’t using the lands they already leased, that’s all.”  But today we’re also seeing the consequences of those arguments –higher gasoline prices, a weaker economy, and a loss of international standing. 

“The longer our nation waits to develop its resources, the longer we wait to create new jobs, improve our energy security, pay down the debt, and invest in next-generation technologies.  The longer we decide it’s acceptable to import oil instead of producing our own, the longer we’ll continue to export our wealth, and our jobs, and the other benefits of production to other nations.

“CRS’ new report on America’s true energy potential should be an eye-opener for us.  I intend to circulate a copy to every Senate office, and I would ask that my colleagues take just a few minutes to flip through the report, understand what it means for our energy policy, and then join me to make sure this Congress takes advantage of the opportunity it presents.”