[Welcome]

It is a pleasure to be with you today in this place that is certainly among the nation's most scenic.

I often tell people that I have the best job in the federal government. Your invitation for me to be with you today at this wonderful place is just another example. As Secretary of the Interior, I have the opportunity to visit so many of our nation's awe-inspiring locations.

And yet, it should not be a surprise to you that a job like mine - with such great benefits - also has some significant duties. Of all of them, perhaps, there is none more important than that of steward of the public lands.

The Department of the Interior oversees one out of every five acres of land in the United States, which makes Interior the nation's largest landlord. But the economic future of this nation is also tied to that land, through the economies of recreation, agriculture and energy development.

On the topic of energy, I am responsible for the management of the lands and offshore areas that now supply about 30 percent of the nation's energy production. Today, I wanted to discuss some of the opportunities and the challenges that are part of our future economic and national security - an issue that is directly tied to energy development and productions.

Three years ago, a friend to so many of you, your former United States Senator and current Secretary of Energy Spence Abraham warned about the grave mismatch in this nation between energy supply and demand. If ignored, he said, this mismatch would threaten our nation's prosperity, compromise our national security and produce lifestyle changes for families and communities across our land.

Today, some of the conditions that Secretary Abraham, President Bush and I have been deeply concerned about are still with us. There is a great sense of instability in energy supplies that is creating enormous price pressure for the international crude oil market and the domestic natural gas market - and it's having a real impact.

You don't have to look too far - or drive that far, for that matter - to see that direct consequences of our energy economy. One day, a few OPEC ministers talk about increasing their crude oil production and the price of a barrel of oil starts to ease up a bit. Two days later, an outbreak of violence in Saudi Arabia sends the oil markets into a frenzy once again, and the price of oil begins to skyrocket. Only a couple days later, OPEC ministers once again talk about increasing oil production, and crude oil prices begin to decline once again.

This volatility is sometimes hard to follow from afar, but it is having far-reaching effects for each one of us and for the nation's industries. At the gasoline pump, consumers can feel the direct consequence of rising crude oil prices.

When energy costs escalate, there is a ripple effect that reaches through all sectors of the economy, including your businesses both large and small.

Farm groups have told me that farmers are paying higher prices for fertilizer made with natural gas. Increased gas prices also make it more expensive to run irrigation pumps, heat greenhouses, and ironically, to produce ethanol.

As large as the impacts are on farmers and on residential customers - I was most shocked by the long-term impact that high natural gas prices can have on American factory workers.

Higher energy costs directly impact the agriculture and food-processing industries, the pharmaceutical and chemical industries, manufacturing, transportation, tourism - each of these economic sectors - and the millions of employees whose livelihoods depend upon them - can feel the strain of rising energy costs. When energy prices rise, they feel the impact immediately - at the gas pump, with the potential loss of their own jobs and with higher prices for consumer goods.

Today, the rise in fossil fuel prices is having a direct impact on each of you. Sadly, our chemical, fertilizer and plastic industries have already suffered direct job losses that are a result of high natural gas prices. Even without the tragedy of 9/11, however, these rising prices were looming on the horizon when Spence Abraham met with you just three years ago.

When President Bush took office, he brought together a team to address the long-standing need for a comprehensive national energy policy.

Under the President's leadership, the administration moved quickly and within a few months issued the National Energy Policy. The policy is a long-term strategy for America's energy future.

The instability of imported oil sources is now apparent at every service station in the country. The Department of Energy's Information Administration says we are currently importing almost 60 percent of our oil from foreign sources - a percentage that is expected to rise to 68 percent by the year 2025.

In the 30 years since the 1973 oil embargo, we have diversified our supply of oil, but our increasing has made us dependent on unstable or unfriendly parts of the globe. Our foreign oil dependence, quite frankly, has created uncertainty and anxiety at home, and has threatened our quality of life.

But our nation is entering the same troubled waters with our natural gas consumption and production. Today, 99 percent of the natural gas we use is produced in North America - 84 percent produced at home, 15 percent from Canada. Only 1 percent of our natural gas supply is imported - liquefied natural gas.

The demand for clean-burning natural gas is accelerating and, over the next 20 years, U.S. gas consumption is projected to grow by more than 50 percent. During this same time, domestic gas production is expected to grow by only 14 percent. That's a sizeable gap that is expected to open between gas supply and demand. It has a direct impact on our nation's economy and our ability to create new jobs.

The bottom line is this: The American economy will not be able to grow without maintaining reliable sources of energy at home.

The Department of the Interior has a critical role to play on this issue, as we work to implement the National Energy Policy. As I mentioned, Interior Department-managed lands and offshore areas now produce a third of our nation's energy. Today, Federal lands supply more than 35 percent of America's natural gas.

Because natural gas burns cleaner than other fuels, 90 percent of our new energy plants will be powered by natural gas. In many ways, this is driving up demand for natural gas. At Interior, we are working to escalate domestic production on Federal lands and waters in an environmentally responsible way. Our future economic security and our national security will depend on it.

Let me give you some specific examples of what we're working on at Interior.

Several years ago, the President proposed and received Congress some additional funding for the Bureau of Land Management's energy activities. The additional funding has allowed BLM to handle increased oil and gas leasing and permitting, to step up oil and gas compliance inspections by 25 percent, double geothermal leasing, and process 400 more energy rights-of-way.

We have also worked to find ways to reduce barriers and streamline processes to allow environmentally sensitive energy development on BLM lands. Over the years, the permitting process has become more complex and challenging. We have worked to meet the stringent environmental analysis required for these permits and match it with a process that is more efficient. In the Rocky Mountain west, our largest domestic onshore resource for natural gas is concentrated in five basins, containing almost 140 trillion cubic feet of natural gas - enough to heat all of the 55 million homes presently using natural gas for almost the next 40 years.

Meanwhile, at another Interior Department agency, the Minerals Management Service-MMS-has jurisdiction over offshore oil and gas leasing - and that holds enormous promise for future energy production.

In the natural gas arena, we have announced new incentives for the development of natural gas found through deep wells under the shelf in the Gulf of Mexico. We expect these incentives will spur new natural gas production, with a savings of $5 billion for consumers during the next decade and creating as many as 26,000 jobs.

MMS is providing incentives for producing natural gas in offshore wells located at least 15,000 feet below the surface…using new technology that is environmentally sound. It truly is a new frontier in domestic gas exploration.

Interior is also taking significant steps offshore in the field of deep-water oil development. Because of royalty incentives consistent with the National Energy Plan, there are now about 140 deep water discoveries of oil which about 90 are producing. This has helped boost U.S. offshore oil production from slightly less than 1 million barrels per day in 1995 to 1.7 million barrels per day in 2003.

And the interest in the deep water region grows with every new discovery. Just last month, MMS announced a record of 12 rigs were working in ultra-deep water. It's a milestone that shows how industry is continuing to focus on new frontiers with the use of modern technology.

And what of the environment? This administration remains fully committed to exploration and energy development utilizing the most environmentally sensitive methods.

Today, businesses such as yours that create jobs and growth are the in the midst of a communications battle when it comes to energy-a battle that has put many of you on the defensive. For too long, opponents of responsible offshore energy production have used the memory of a spill 35 years ago to mislead the public about offshore production today. It's similar to blaming the automobile industry for a design flaw in a 1960's model car and ignoring the enormous advances in technology and safety that have been achieved by the industry since.

The public needs to know that we have a proven record of producing domestic offshore operations.

Perhaps there is no clearer picture of the direct connection between energy and the rest of our economy, than one offered by Federal Reserve Board chairman Alan Greenspan. I've had occasions to meet with Chairman Greenspan on energy issues, particularly on the subject of oil and gas. He has said publicly that the rising costs of oil and gas can rapidly shift the investments decisions of businesses that consume large amounts of energy. So it's clear that our energy independence is a key factor in our economic independence and, ultimately, our national security.

On the subject of national security, consider this:
You've heard a great deal recently about Saudi Arabia's willingness to produce additional crude oil, in an effort to stabilize world oil prices. But did you also know that recent figures show that the U.S. currently imports, from Saudi Arabia alone, an average of about 1.5 million barrels of crude oil each day?

Here's another fact:
The Department of Energy, during the administration of President Clinton, estimated that the Artic National Wildlife Refuge - ANWR - could supply Americans an average of 1.4 million barrels of oil a day…that's slightly less than our imports from Saudi Arabia…but it is more than we import from Mexico, from Venezuela, or from Iraq. It's more than the daily production of the state of Texas, and every other state in the Union.

For every state, including Michigan, the stakes for ANWR development are huge. Based on USGS projections, ANWR oil could supply Michigan with oil for 50 years.

Just as we have been scrupulous with offshore energy development, our efforts to develop ANWR require the toughest environmental standards ever imposed on energy production. There are 19 million acres in the refuge, only 2,000 would be utilized for energy production.

ANWR oil development will create jobs. The men and women of organized labor strongly support responsible ANWR development because it will create more than tens of thousands of new American jobs. Alaskans, including the Alaska Natives who live in ANWR, support ANWR development because they understand its potential and recognize the ability for it to be done with respect to the environment.

In this hemisphere, the United States has become the pacesetter in environmentally responsible energy development. Earlier this week, I was intrigued to see a CBC News report that Canada's industrial pollution has actually been rising - up 3 percent in recent years, while the rest of North America's emissions have declined by 18 percent.

Our nation's economic growth is up, and our emissions are down. But we can always do better - which is why President Bush developed the Clear Skies initiative, cutting power plant emissions of sulfur dioxide, nitrogen oxides and mercury by significant amounts. The initiative creates a market-based approach to curtailing emissions and protects jobs. The bottom line is that emissions are declining significantly on this side of the border…and that's good news.

The Clear Skies Initiative and the National Energy Plan both need the support of Congress to succeed. Next week, Congress will once again take up the important issue of energy. Time is growing short, and the consequences of our failure to act are becoming all to clear. To ensure our place as the leader in the global marketplace, to remain competitive in the world, to ensure that our economic recovery continues its forward momentum, we must urge Congress to act. Congress must pass the Energy Bill.

A recent survey of Americans found that many of our neighbors have a lack of understanding about some very basic information on the subject of energy. For example, a majority of polled believe that hydropower is the source for most of our energy - when it is coal that supplies more than half of the nation's supply.

With events in Iraq and Afghanistan at the top of the headlines, we must ask ourselves this question - can our nation afford to ignore the important choices and policy issues that relate to our energy security?

As you well know, there is a world off this island of manufacturing and industry - dedicated workers building automobiles, creating life-saving medicines, packaging the foods we eat. Their jobs depend on the choices we make.

Now, after a few days here, I could understand why you might forget that the 'real world' exists. But long after this conference is over, I hope you will continue to be part of our efforts to promote the development of energy sources that are "made in America"-creating jobs and stability that will foster real economic and national security.

I am pleased to be part of this effort. Thank you again for allowing me to be with you in this truly miraculous place.