It's a pleasure to be back in Juneau. I spent a week here the year before I became Secretary of Interior. Being from Colorado, I love the mountains. I find Alaska's combination of mountains and glaciers spectacular. You have a huge amount of land here in Alaska.

While at Interior, I have worked with Alaskans on tourism, wildlife, and cultural and economic issues for Alaskan natives. So even though your state is thousands of miles from Washington, D.C., it's always on my mind. I also think of Alaska because of the key role it plays in our nation's overall efforts to secure reliable and stable sources of energy.

It will continue to do so but only if the state and federal governments, local communities and Alaska residents stay joined as partners to get Alaska's vast energy resources developed in a responsible manner.

When President Bush took office three years ago, one of his first priorities was to address a long-standing but unmet need for a comprehensive national energy policy. For too many years, we had drifted along, assuming that somehow we were always going to have access to the energy our nation's families and businesses need.

Under the leadership of this President, the administration moved quickly. Within a few months the Bush administration issued the National Energy Policy. The policy is a comprehensive, long-term strategy for America's energy future that seeks to reduce our rising dependence on unstable foreign energy supplies.

It focuses on three primary areas: First, conservation efforts to ensure America is using our energy wisely and effectively.

Second, development of alternative and renewable resources, such as wind power, biomass and geothermal. And third, which we'll cover in some detail this afternoon, the National Energy Policy hopes to boost domestic production of traditional energy sources.

I am pleased to say we have made great progress in this area, especially in Alaska.

Let me share with you some of the exciting things happening in this state. Interior is actively participating in a number of energy projects, both big and small. These projects will not only help America but will also have a great impact on your state and local economy.

Let's start at the top - the North Slope - where the bulk of your oilfields and potential natural gas fields are found.

Last year I signed the Record of Decision to renew the 30-year right-of-way for the Trans-Alaska Pipeline. The renewal culminated an exhaustive two-year effort by a number of federal and state agencies.

I am glad that we were all able to accomplish this well in advance of the expiration date of the original right-of-way. Few who were around 30 years ago ever imagined that this engineering masterpiece could be functioning for up to 60 years.

But the pipeline may NOT be around that long unless we work to develop new fields to maintain sufficient amounts of oil to pay its operational expenses. That's why the recent developments in the National Petroleum Reserve-Alaska are so important.

The Interior Department's Bureau of Land Management - the BLM - manages the petroleum reserve and is very busy with some major initiatives there. Three major planning efforts are underway that will hopefully result in additional discoveries and production.

Right now, BLM is in the final stages of writing the Alpine Satellite Development Plan Environmental Impact Statement. Alpine has been a pleasant surprise. The original estimates expected it to produce 220 million barrels. Following a number of successful exploration wells, industry has revised that estimate upward to near 500 million barrels.

Although the main Alpine facility is on state lands, some of its satellite development will extend into the Petroleum Reserve. The 1st commercial production from the Reserve should begin in 2008.

The second BLM initiative is the plan for 8.8 million acres of public lands in the northwest corner of the National Petroleum Reserve-Alaska. I signed the Record of Decision in January, clearing the way for a lease sale this June. Even though the Petroleum Reserve's purpose is energy production, our plan balances energy with protection of biological diversity.

In 2001, the President's National Energy Policy Development Group recommended that we consider energy development in "areas not currently leased within the northeast corner of the National Petroleum Reserve-Alaska."

Some of this area surrounds Teshekpuk Lake and overlies the Barrow Arch, one of the most promising geologic structures on the North Slope.

The U.S. Geological Survey and BLM think there could be as much as 2 billion barrels of oil present in an area either closed to leasing or subject to no surface occupancy restrictions.

BLM wants to see if there is a way to manage exploration and possible development in a responsible way that remains sensitive to biological and subsistence values. The agency has been consulting closely with local residents to identify their concerns. The draft environmental impact statement should be released this mid-May.

All this activity in the petroleum reserve generates some significant income to the state. The federal government shares the bonus bids, lease payments and royalties with Alaska on a 50-50 basis. The two lease sales in the reserve in 1999 and 2002 generated $167 million in bonus bids alone. Much of the state's portion of this money is specifically earmarked to aid local communities affected by energy development.

I can't overemphasize how much we need your help and support for our efforts to maintain North Slope production. As you know, the 1.5 million-acre coastal plain section of the Arctic National Wildlife Refuge remains off limits to exploration, and will continue to remain off limits until we can secure additional votes in the Senate.

This means the National Petroleum Reserve is the only other major on-shore block of federal land that can make an immediate contribution to the continued operation of the trans-Alaska Pipeline.

We are working with the Congress on legislation specific to the petroleum reserve that recognizes the challenges of producing oil and gas from this remote area. The proposed legislation would provide for leases longer than 10 years, so companies can make the long-term investment this area requires to be successful.

Types of Resources

Another resource on the North Slope is what is commonly referred to as "heavy oil." Fortunately the deposits (which could exceed 25 billion barrels) also overlap a large area around Prudhoe Bay, where infrastructure is in place.

Heavy oil production is challenging-it's cold, slow moving, viscous and sells for less than lighter oil. Industry has yet to devise all the cost-cutting strategies and production technology needed to make this resource competitive and government has yet to provide some fiscal incentives to spur development.

Since this oil occurs at shallow depths, there are some promising lines of inquiry open. For example, BLM, the U.S. Geological Survey, the University of Alaska Fairbanks and the state have proposed a project to study low impact drilling techniques that could be employed year round in a tundra environment.

While oil has been Alaska's primary contribution to America's energy mix, we must not lose sight of the future of natural gas.

This emerging global marketplace could affect Alaska's ability to compete. But in the next two decades, demand exceeds supply even with both.

Research in the realm of gas hydrates is also promising. The estimates are huge. To put them in context, the conventional natural gas reserves in the lower 48 Rocky Mountain Region is 140 TCF. For the North Slope, methane hydrate estimates are 590 trillion cubic-feet, 100 trillion cubic-feet of which are within the existing Prudhoe Bay infrastructure.

We are pursuing gas hydrate research through BLM, USGS and the Alaska Department of Natural Resources' Division of Geological and Geophysical Surveys. We're tying together with University of Alaska Fairbanks, enabling us to undertake a 3- to 5-year research project that will further identify locations and quantities of gas hydrates across the North Slope.

Now, let's turn to something that appears to be a bit more likely to happen, coalbed methane. Or, what is now being referred to as coalbed natural gas. The resource estimates for Alaska are staggering … perhaps up to 5.5 trillion short tons of coal could have 1,000 TCF of coalbed natural gas in place.

There are several applications for this resource; perhaps the most exciting is bringing a low cost energy alternative to Alaska's remote villages. Studies have identified at least 35 Alaska villages that could benefit.

These villages currently depend on diesel fuel for space heating and power generation. BLM, along with the state of Alaska, has met with a number of villages that are interested in this technology. BLM expects to be spending about $150,000 a year for the next 3 years on interagency coalbed natural gas research in Alaska.

So far, we've talked only about things happening on shore. But I would be remiss if I did not mention Alaska's off-shore contributions to our energy supplies. For example, the Chukchi Sea may have from 9 to 25 billion barrels of conventionally recoverable oil and 14 to 154 trillion cubic-feet of natural gas; the Beaufort Sea, 4 to 12 billion barrels of oil and 13 to 63 trillion cubic-feet of natural gas. But there are enormous economic and technological challenges to overcome to bring these supplies to market.

Last September, the Minerals Management Service had its most successful sale in the Beaufort Sea in more than a decade. The agency is starting to attract new companies to Alaska, companies who have good safety records and have been operating in the Gulf of Mexico and elsewhere.

For the first time in Alaska, MMS included economic incentives in a sale, which should facilitate the necessary exploration. The sale had safeguards attached to ensure that development remains compatible with the important bowhead whale subsistence hunting by the residents of the North Slope.

Next month MMS will be holding an oil and gas sale in southern Cook Inlet, which hopefully will become another favorable location for companies searching for new supplies. It will include safeguards to ensure that any oil and gas activities do not adversely affect subsistence, commercial or sport fishing.

I've spent a lot of time addressing things on the supply side of the energy equation, but we must remember that conservation is part of the solution as well.

The Interior Department looks for ways to practice energy conservation in highly visible ways to inspire the public. For example, the National Park Service has been using propane- powered vehicles in a number of national parks. We will be using a number of gas hybrid vehicles in Denali National Park beginning this summer.

Over in Glacier Bay we are installing a special heater for our new energy-efficient shop complex in Bartlett Cove. It will burn used motor oil collected from our vehicles and equipment.

This summer, when visitors to Kenai Fjords National Park walk toward the ancient ice of Exit Glacier, they'll walk past some of the newest available energy technology. The National Park Service, in partnership with the Propane Education and Research Council, the Alaska Energy Authority, the Denali Commission and other partners, is installing a fuel cell electrical system that will provide power and heat to the visitor facilities at the popular visitor destination.

The five-kilowatt solid oxide fuel cell will use propane as its hydrogen source, with the hydrogen in turn being used to generate electricity. The Exit Glacier project is the first time such a system has been used in Alaska in an area with no other commercial electrical source.

Finally, I want to tell you about our new Park Service regional office building in Anchorage. It uses recycled materials in a number of innovative ways. Newspapers, sunflower seed hulls and bio-based resins were made into walls. Ceramic tile used in the entry was made with 75 percent recycled materials.

There are plenty of opportunities for Alaskans to practice conservation in practical ways-we provide examples.

Many Alaskans may think of this state in terms of exporting energy to the lower 48, and indeed it does. But an energy shortfall is brewing here as well. Several industries on the Kenai Peninsula are already anticipating diminished supplies of low cost natural gas from Cook Inlet adversely affecting their operations.

Alaska needs to be aware of energy supplies just as much as the other states.

We are making good progress, both on shore and offshore, in boosting domestic energy production and fulfilling all of the elements of our National Energy Policy.

However, there is one area where we all need to do a better job if we are going to ensure our energy security. We need to educate the public about the impressive environmental and safety record of the energy industry.

During this time, we are engaged in a communications battle that we have too often lost in the past. 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 is like holding the automobile industry accountable for a design flaw in a1960s automobile and ignoring the enormous advances in technology and safety since.

The public must know that there is a proven record of producing domestic energy in a way that is environmentally safe. Together, we need to let people know that over the past 20 years, less than one one-thousandth of a percent of the oil produced in the U.S. waters has been spilled. We need to let them know that natural seeps introduce about 150 times the oil into the environment, compared to offshore operations.

We need to let them know about the National Academy of Science's recent publication, "Oil in the Sea." It makes the same point in another way. It found that roughly 63 percent of oil in the sea comes from natural seeps and 32 percent from river runoff, cars and small boats.

About 4 percent comes from tanker transportation and movement of imported oil. Only 1 percent comes from domestic offshore operations.

This message must get out to the businesses in the lower 48, who are watching their costs skyrocket and their profits drop because of higher energy costs. We must reach the average energy consumer.

The target audience? The homeowner who has seen his natural gas bill double or triple in the last year. The motorist who now pays $40 to fill the tank in the family car rather than $25.

These increases prompt difficult choices: whether or not to maintain the family car; to buy new clothes for the children; to purchase essential prescription drugs.
Now, think about what rising energy costs are doing to the budgets of our schools and hospitals, our libraries and our senior centers.

We simply cannot discuss the economic security of American families and the effort to protect American jobs without talking about the future of affordable and reliable energy in this nation.
Unfortunately, a lot of people in Washington are just not being realistic about the relation between America's economic future, energy supply and our national security.

Prices at the pump are skyrocketing, jobs are being lost to countries with lower natural gas costs. And through it all, some in Washington still continue to stubbornly ignore the potential of a vital domestic source of energy: ANWR.

ANWR remains an energy priority of the President. This administration will continue our work with Congress to authorize environmentally safe leasing of oil and gas in ANWR.

The President's plan requires the use of the best available technology and ensures that energy production activities protect the ANWR environment. We remain committed to these goals.

Domestic production will help us keep energy prices low and protect families and the nation's industries from wild fluctuations.
Before I leave you today, let me ask for your continued help and guidance. I tell folks that I have the best job in Washington … a business trip to Alaska is just another example why.

But I am also blessed to have the chance to work with you and your elected leaders - alongside the President - to move this nation forward into the 21st century. We are determined to keep moving America forward, with good jobs, a strong economy and security at home. Alaska has a critical role to play in that effort, and I thank each of you for being part of it.