Press Release
Letter from Lieutenant Governor Bolling to Secretary Salazar on Offshore Lease Sale
Tuesday, March 03, 2009
Richmond - March 3, 2009
The Honorable Ken Salazar
Secretary of the Interior
Department of the Interior
1849 C Street, N.W.
Washington, DC 20240
Dear Secretary Salazar:
I am writing in response to a letter that you recently received from Governor Timothy M. Kaine, dated February 19, 2009. In his letter, Governor Kaine asked that you delay the previously scheduled lease sale for the mapping, exploration or development of oil or natural gas off the coast of Virginia.
I am writing to respectfully express my disagreement with the Governor's position on this issue and encourage you to proceed with the Virginia lease sale as authorized by the 2007-2012 Five-Year Outer Continental Shelf (OCS) Oil and Gas Leasing Program that took effect on June 30, 2007.
As you know, in 1978 Congress passed legislation that required the Secretary of the Interior to maintain a five-year program for offshore oil and natural gas leasing on the OCS. The 2007-2012 Five-Year plan included 21 lease sales in Alaska, the Gulf of Mexico and one in the Atlantic (off Virginia's coast).
It is my belief that proceeding with this lease sale is essential to furthering Virginia's efforts to develop our offshore energy resources. The development of these resources would contribute greatly to Virginia's economy and the national economy, and it would help advance our efforts to achieve a higher degree of domestic energy independence.
I would note that a recent study by Old Dominion University concluded that gas production off the Atlantic coast near Virginia would, over a 10-year period, help create 25,778 jobs, induce capital investment of $7.84 billion, yield $644 million in direct and indirect payroll, and result in $271 million in state and local taxes. There would also be enhanced state and local revenues from royalties and impact fees. These revenues are estimated at $3.5 billion or more over the next 30 years.
The development of our offshore energy resources could help Virginia address a number of critical needs that exist across the Commonwealth. For example, we have proposed legislation that would dedicate the vast majority of any revenues generated from the development of our offshore energy resources to Virginia's Transportation Trust Fund, where it could help pay for critical transportation infrastructure throughout our state.
As you further know, the purchase of a lease does not guarantee development and production. In order to move forward with the exploration and production of oil or natural gas in the OCS, a private company must first purchase a lease from the federal government. When a company receives a lease it believes the area contains enough oil or gas to be beneficial to consumers and economically viable for the energy company. However, until the company completes the expansive exploration process, it does not know if the lease is viable.
Accordingly, the issuance of a lease as contemplated by the 2007-2012 Five-Year plan is merely the first step in an exhaustive process that must take place before actual development of these offshore energy resources can occur. However, given our desire to proceed with responsible development at the earliest possible opportunity, it is imperative that the leasing process be completed on schedule and not delayed.
I did not want you to think that Governor Kaine speaks for all statewide elected officials in asking for a delay in the lease sale. He does not. In fact, it is my belief that a majority of the members of the General Assembly and the vast majority of the people of Virginia share my belief that we should proceed with this sale as scheduled in order to further our efforts to explore and develop our offshore energy resources at the earliest possible opportunity.
Thank you for considering my views on this issue.
Very Truly Yours,
WILLIAM T. BOLLING
Lieutenant Governor
Commonwealth of Virginia
WTB/
cc: Governor Timothy M. Kaine
Senator Jim Webb
Senator Mark Warner
For additional information contact Randy Marcus at 804-814-7117 (cell) or randy.marcus@ltgov.virginia.gov.
