Need for National Energy Policy

The attention to the subject of the U.S. oil industry is timely, appreciated and close to home. After all, even though California’s agriculture, high-technology, and tourist industries are high profile, oil is a major component of the Golden State’s economy. If Kern County, which is in my congressional district, were a state, for example, it would rank fourth among all states in oil production.

The Times solutions to the growing reliance on foreign oil are worthy, but fall short of the mark. Congress should think about encouraging conservation and stimulating use of alternative energy sources. Congress should not, however, look for ways to expand its meddling in the marketplace.

As a representative of a district that in addition to producing oil, produces geothermal, solar, and wind energy, I am less enthralled with the idea of a national energy policy.

Indeed, the restrictions on Alaska North Slope crude are prime examples of the folly of tight government regulation. ANS crude cannot be exported. Prevented from finding its economic home abroad, this oil most often--because of geography--is delivered to California, almost 800,000 barrels daily. This influx of oil depresses the price of oil produced in California, and in the past, such price cuts have forced California producers to reduce output or even to plug and abandon wells.

The key is: If you want to do something about America’s dangerous reliance on foreign supplies and the industry’s “inexorable decline,” part of the solution must be to encourage domestic oil and gas exploration and production.

How? Simple--by offering incentives for U.S. oil producers to drill more wells and to continue to operate those already drilled. There are an estimated 26 billion barrels of proven, recoverable oil in the United States today, of which approximately 5.2 billion barrels (at the end of 1987) are in California. Producing oil and gas isn’t like sipping soda through a straw. If we stop producing oil and gas from wells already in operation, reservoirs will repressurize and we’ll ultimately lose currently recoverable energy.

Some of my colleagues, such as Rep. Bill Archer (R-Texas), and I have been trying to encourage oil and gas producers to go forward with the fossil fuel work this country needs. The industry has the technical expertise. We’re suggesting tax incentives for the industry to invest in new operations. Among other things, we are suggesting tax credits for exploration and development and marginal production from stripper wells (those producing less than 10 barrels a day), heavy oil, and secondary and tertiary production to keep today’s wells in operation.

If we don’t give U.S. oil producers incentives now, it will be too late for the domestic industry to provide relief from imports later.

REP. WILLIAM M. THOMAS

R-Bakersfield

Washington, D.C.