Interior Secretary Ken Salazar said he won't hesitate to yank a pair of new oil and gas leases in the Arctic Ocean if new infrastructure and scientific insight are not developed in time for their sale, a move that would please environmentalists and some Democrats but would likely infuriate Republicans.

Salazar, who testified this morning before the House Natural Resources Committee, said he is concerned about the Coast Guard's current capacity to respond to a spill off the North Slope, a view that was echoed this summer by a top Coast Guard admiral (E&E Daily, July 28).

The secretary, flanked by the directors of the Interior Department's Bureau of Ocean Energy Management and Bureau of Land Management, defended the Obama administration's decision to focus future offshore oil and gas leasing in the Gulf of Mexico, with two sales in frontier Arctic waters beginning in 2015.

"We can always pull those leases if the infrastructure is not in place," Salazar said.

The decision will also be based on how well scientists understand the Arctic environment, said BOEM Director Tommy Beaudreau.

"We will make those decisions at the appropriate time in the leasing schedule and evaluate the science as it stands at that time," Beaudreau said.

But what qualifies as adequate infrastructure in an area marked by harsh weather, icy waters and limited daylight will be a matter of intense debate.

The decision, which would likely come well after the 2012 election, will be closely watched by industry advocates who point to the likely presence of 26 billion barrels of oil underneath the seas.

Even more elusive, some would argue, is determining what level of science is necessary to justify further development in Alaska's Beaufort and Chukchi seas.

"The facts clearly show that there is no way to clean up an oil spill in the Arctic's icy, extreme, remote conditions," said Cindy Shogan, executive director of the Alaska Wilderness League, in a statement this morning. "Interior's own scientific arm, the United States Geological Survey, confirmed that important missing information about the Arctic's unique marine environment presents a 'major constraint to a defensible science framework for critical Arctic decision making.'"

Interior last week indicated it would also closely monitor Royal Dutch Shell PLC's proposal to drill for oil in both seas beginning next summer for clues to whether, or how, new leasing should proceed.

The agency has conditionally approved Shell's drilling plan in the Beaufort Sea and is being pressured to approve its Chukchi plan by the end of the year.

Facing heat from the Republican-led panel, Salazar defended his agency's recently released five-year blueprint for offshore leasing, arguing that it would make available more than three-fourths of the undiscovered, technically recoverable oil and gas off the nation's shores.

Republican members ridiculed the plan for leaving the Pacific and Atlantic oceans off the table. Committee Chairman Doc Hastings (R-Wash.) said it would essentially return the country to an offshore moratorium that Congress lifted in 2008.

"There are no new areas offered in the draft plan," said Hastings, who displayed slides comparing Congress' moratorium with Salazar's plan and criticized the agency's decision not to move forward with a George W. Bush administration plan that would have begun in 2010. "The administration took an additional two years to offer less than what was originally proposed."

Salazar came to the hearing armed with statistics indicating domestic oil production is at its highest level since 2003. Oil production has jumped 5 percent on public lands over the past two years and is up one-third in federal waters since 2008, he said. "We are walking the walk, and the statistics prove it."

But Rep. Doug Lamborn (R-Colo.) pressed Salazar to estimate what percentage of new oil and gas developed on the nation's lands and beneath its waters should be attributed to the Obama administration, arguing that much of the new production is occurring on leases issued by previous administrations.

"We are all responsible for it," Salazar said, crediting industry for new discoveries, particularly in the deepwater Gulf. "It's a shared accomplishment."

The hearing was marked by partisan rancor, with some Republican members shouting down Salazar's responses to questions ranging from hydraulic fracturing to the role of a prayer plaque near Washington, D.C.'s World War II memorial.

Rep. Don Young (R-Alaska), a fierce advocate for Alaskan oil and gas development and an outspoken critic of Interior policies, came to the hearing wearing a beanie with a propeller.

Rep. Ed Markey (D-Mass.), who was one of only a few Democratic members in attendance, introduced new legislation he said would raise $19 billion over the next decade through revised lease terms for oil and gas firms and royalties on hardrock miners, among other things.

Three-pronged approach to fracking

Salazar, who was joined by BLM Director Bob Abbey, also provided hints of the agency's forthcoming decision on how to regulate hydraulic fracturing for natural gas on public lands.

While no decisions have been made, Salazar said the agency was considering requiring firms to disclose the chemicals they inject underground as well as updating standards for wellbore integrity and the management of water that flows back up from the well.

Salazar, who last month indicated the new regulations could come as early as this month, did not provide a timeline for their release. He argued that BLM regulations over fracturing are nearly 30 years old and that the tougher standards will earn much-needed public confidence that will ultimately support the industry.

"I have a view that the issue of fracking is the Achilles' heel of the industry" unless the chemicals that are injected underground are disclosed, Salazar said.

Hastings and other Republicans warned Salazar to strike an appropriate balance that would protect jobs and acknowledge the work that states have already done to manage the technique.

"It is concerning that potential onerous regulations could drastically curtail that cooperation and impede its development and usage," Hastings said.

Salazar assured lawmakers that the regulation of flowback is not an effort to get involved in state water law.

Abbey again affirmed that there was no recorded evidence that hydraulic fracturing on public lands had harmed public health but said the dramatic increase in the use of fracking was grounds for updating the agency's approach.