|Outer Continental Shelf Testimony April 14, 2009
ConocoPhillips - Geoff Haddad, Alaska Exploration Manager
Good Afternoon. My name is Geoff Haddad and I am the Alaska Exploration Manager for ConocoPhillips. I appreciate the opportunity to come speak before the Department of Interior in this public meeting.
ConocoPhillips favors developing all forms of energy -- conventional, renewable and alternative. However, we recognize that even with aggressive alternative energy research and development, most sources estimate that fossil fuels will still represent more than 80% of the world’s total energy supply even by 2030. In addition, the United States currently produces only 42 percent of the oil it uses each day, so the majority of our oil must be imported leaving us vulnerable to supply disruptions. Given this background, ConocoPhillips strongly encourages the Mineral Management Service to continue promoting exploration and development, including ongoing leasing, in the nation’s Outer Continental Shelf waters.
The MMS rates the Chukchi Sea as one of the most promising areas for offshore oil and gas exploration in the United States, ranking it second only to the Gulf of Mexico. The MMS decision to lease in the Chukchi Sea was not arrived at quickly; it was made after extensive environmental analysis and public input over a six year period. ConocoPhillips strongly believes that the MMS took the hard look required by the National Environmental Policy Act prior to holding OCS Sale 193 last year.
ConocoPhillips sees great potential in the Chukchi Sea as evidenced by our investment of $506MM on 98 OCS leases. ConocoPhillips has also invested tens of millions of dollars on environmental studies, working with universities, research institutions and local stake holders on a multi-year program collecting biological, oceanographic and air quality data in the Chukchi Sea. We are taking a measured and responsible approach to prepare for our initial exploration well in the Chukchi Sea, which is now planned for summer of 2011.
As the largest owner of state and federal leases in Alaska, a major owner in the three largest oil fields on the Alaska North Slope, operator of both Kuparuk and Alpine oil fields and an operator in the Alaska Cook Inlet, ConocoPhillips has decades of safe and environmentally responsible operating experience in Arctic conditions. Through different wholly-owned subsidiaries, ConocoPhillips is a 50% owner in Denali-The Alaska Gas Pipeline -- which is working to advance a natural gas pipeline project to move clean-burning natural gas from Alaska to the Lower 48 -- and owns a 28% share of TAPS - the Trans Alaska Pipeline System.
Alaska’s North Slope production continues to decline, with TAPS currently flowing at a third of pipeline capacity. Persistent onshore exploration in Alaska has not resulted in oil discoveries sufficient to fully stem the decline in supply to TAPS. The Arctic OCS waters, particularly the Chukchi Sea, have the potential to significantly extend the life of TAPS. The Chukchi Sea is also a potential source of natural gas that could help fill a proposed large-diameter natural gas pipeline from the North Slope.
Working together, government and industry can develop a plan for careful exploration and production of oil and natural gas within the Arctic OCS waters. If exploration efforts are successful, new OCS resources would play a vital role in decreasing America’s dependence on foreign oil while assuring a steady supply of oil and natural gas during the critical period while America balances fossil fuel energy use with other types of energy. ConocoPhillips is an industry leader in pushing for alternative energy while also addressing climate change. Since early 2007, we have been a member and active participant in the US Climate Action Partnership (USCAP), which backs legislation to fight global warming and seek a federal cap on greenhouse gas emissions.
In closing, ConocoPhillips supports ongoing leasing in America’s OCS as well as steady progress for already leased acreage in the OCS including the Chukchi Sea. We are committed to explore the Chukchi Sea responsibly with respect for the environment and in a manner that also respects the subsistence way of life of the residents of Alaska’s North Slope.