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The recent finds of huge natural gas fields like the Haynesville Shale in north Louisiana and the resulting dip in natural gas prices have not only been a godsend to state residents, but to a new wave of industrial expansion in Southwest Louisiana and around the state.

Last month, natural gas prices dipped to a 10-year low — around $2.30 per million British thermal unit — or about $2 less than where they were in 2010.

That lower price has not only resulted in noticeable lower electrical bills for residential customers, but substantially lower electrical bills for the petrochemical industry in Louisiana.

Department of Economic Development Secretary Stephen Moret said the lower natural gas prices raise optimism regarding industry expansion and job growth.

‘‘I’m really confident that Louisiana will benefit more from low, stable natural gas prices than any other part of the country because of the high concentration of the chemical industry, because of the infrastructure and because of the high level of natural gas in our electricity production base and reduction in our industrial electricity rates,’’ told this newspaper’s editorial board recently.

He said forecasts of stable gas prices will lead to millions of dollars of new investment in our area, along the Mississippi River corridor south of Baton Rouge and in southeast Louisiana.

Moret predicts that construction activity will increase in Southwest Louisiana from the second half of this year through 2014 and likely remain steady for five to seven years.

He said as opposed to the United States, most other parts of the world’s energy consumption is based on oil, not natural gas.

While natural gas prices have fallen nearly 100 percent in the last two years, the price of crude oil has risen 10 percent.

‘‘The economic advantages for industry in the U.S. and the chemical industry in particular has changed dramatically,’’ said Moret.

Last month, a Canadian company announced that it had purchased land in Geismar and was considering moving an idle methanol plant there from Chile.

And it’s possible in the not-to-distant future, the Cheniere and Sempra LNG plants in Cameron Parish and the Trunkline LNG facility south of Lake Charles could all be exporting liquefied natural gas.

‘‘Obviously, global conditions could change,’’ said Moret, ‘‘but this advantage that we have with low, stable natural gas is a very big deal and it’s not really counting on economic recovery. Even a flat national economy could still result in significant out-performance of this region and the state because of the economics of natural gas.’’

That’s promising news for our corner of the state.

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BASTROP — In a few short weeks, our Legislature will begin to grapple with confecting a very difficult budget. The easiest way to take the pain out of tough budget decisions is to grow the revenues needed to keep state finances on a positive growth trend. There are four key factors that can go a long way toward ensuring future economic growth for Louisiana.

First, the federal government needs to end its economic hostage-taking and allow the full resumption of both shallow water and deep water drilling in the Gulf of Mexico. A full resumption of offshore drilling would give a substantial lift to our economy through capital investment and job creation. Only one deep water permit has been issued since the moratorium ended and that was not for a new well. Shallow water permit issuance is woefully behind pre-moratorium levels. Resuming exploration and production in both deep and shallow waters would quickly result in increased economic activity for Louisiana.

The second factor that can greatly expand economic activity in the state is for the federal government to stay out of regulating shale oil and gas drilling activities. In 2004, the EPA concluded a 5-year study that concluded that the hydraulic fracturing process used in shale drilling was safe. Now the current EPA wants to go back and revisit the issue. If the EPA outlaws hydraulic fracturing, it will be the death-knell for shale oil and gas production. There is currently a tremendous amount of economic activity going on in northwest Louisiana from shale gas drilling in the Haynesville Shale play. Across central Louisiana, there is a potential for as much as 70 billion barrels of crude oil from the Tuscaloosa Shale play. Production from these shale plays can be a real shot in the arm to jobs and investment in our state.

Another major factor that can impact Louisiana’s economy is the greenhouse gas “endangerment finding” handed down recently by the EPA. If the agency proceeds with establishing a punitive regulatory scheme for carbon dioxide emissions, it will impact our oil refineries and the chemical industry initially and eventually most businesses in Louisiana.

Another key factor in the state’s economic outlook is manufacturing. In most recessions, housing is the sector that leads the economy out of recession. That is not the case with the latest recession. Clearly manufacturing is the bell cow attempting to pull the national economy out of its doldrums. Many residents of our state do not realize that Louisiana is one of the top five states in the U.S. in manufacturing. Much of Louisiana’s manufacturing is geared to exports due to our location at the mouth of the Mississippi River. Here are some interesting facts: between 2003 and 2008, Louisiana’s manufacturing exports grew by 266 percent while the rest of the state’s economy grew by only 51 percent. During that same period, jobs created by Louisiana’s manufactured exports grew by 131 percent while all other jobs in the state fell three percent.

For manufacturing to continue to lead our economic recovery, our trade policies must encourage exports. One major way to accomplish that is to enact the free trade agreements that are pending between the U.S. and several nations around the world.

There is reason to be optimistic about Louisiana’s economic future. Left to their own devices, our businesses and industries could accomplish a major turnaround in our economic fortunes rather quickly. The major change that is needed is for the federal government to give us oars and not anchors as we try to navigate the ship of our state’s economy out of perilous waters.

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Caddo commissioners joined their Bossier counterparts Thursday in amending parish law to regulate noise.

The 8-3 vote came months after local governments considered the idea, brought on by a pickup in Haynesville Shale natural gas production. Lag time included scientific measurements and working with industry leaders to find compromises.

As approved, businesses must submit plans on how they will meet an area’s maximum permissible level — 5 decibels above ambient sound. The ordinance applies to future development, not existing noisemakers.

“Compliance with this ordinance is still going to be very expensive,” said Jodee Bruyninckx, regional director of the Louisiana Oil and Gas Association, who also thanked commissioners for working with businesses. “But we understand that, and we accept that.”

Caddo’s version allows higher decibel levels than Bossier’s, which passed in January but doesn’t take effect till April. Bruyninckx said she hopes the Bossier Police Jury will bring its law in line with Caddo’s.

Commissioners Jim Smith, David Cox, Doug Dominick and Matthew Linn voted against the proposal. Carl Pierson was absent.

Smith said he hasn’t heard what his constituents want. He supposes that’s because of the issue’s complexity.

“The reason they don’t know about it is it’s so difficult for us to know about it,” Smith said. “It’s extremely difficult to put your finger on this situation.”

Local governments took direction from Fort Worth, Texas, home of the Barnett Shale. That city has seen drilling inside its limits, while most production here has stayed in rural areas. Arpeggio Acoustic Consulting, of Atlanta, contracted with Caddo and Bossier to measure sound.

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Its attempt to change a local law that bars chemical-waste facilities near homes was unsuccessful, but that has not stopped Vanguard Environmental from pursuing its project plans.

Vanguard still seeks a state permit required to dispose of oil-waste fluid — mostly highly concentrated saltwater that is a byproduct of oil production — by pumping it thousands of feet underground.

A public hearing, required ahead of a permit, was held Wednesday night at the Government Tower in downtown Houma, drawing dozens of Terrebonne Parish residents and officials who peppered state natural-resources officials with questions and concerns.

State officials also said Vanguard intends to challenge the local law, which prohibits such facilities within a mile of homes and businesses. State law requires a 500-foot buffer.

Vanguard, a Houma-based company, wants to build the injection well on two acres on La. 182 just south of its sister company, Vanguard Vacuum Trucks. That site is within one mile of two schools, two churches and numerous homes.

State officials will decide in about two months, based in part on public input, whether to issue the drilling permit. More than 100 people attended that hearing and about 30 made comments.

Vanguard representatives attended the meeting but didn’t speak publicly. One of its owners refused comment after the meeting when approached by The Courier and Daily Comet.

John Adams, an attorney for the state Department of Natural Resources, said Vanguard has notified his agency it plans to challenge the local law. As of Tuesday, Vanguard had not filed suit against parish government in local or federal court.

The Parish Council unanimously rejected a change to the local law which would have exempted injection wells. Terrebonne Parish President Michel Claudet said the parish government will “hold Vanguard to the letter of the law.”

The state won’t get involved in the legal dispute, Adams said, but it will require the company to meet all local permit rules.

“It’s ultimately the courts that can decide whether a parish ordinance is binding over a particular party or over a particular activity,” he said.

INJECTION-WELL PLAN

Water injected in the well would mostly come from oil production, pipeline testing and cleaning. It could also include rainwater collected from other sites or spills, state officials have said. It would not handle drilling fluids or muds, which are thicker.

Two above-ground tanks would separate incoming oily fluids. Recovered oil intended for resale would go in one tank. Ten other tanks would store saltwater intended for use in the well.

A state-required containment system would help prevent surface water contamination. At Vanguard, that would take the form of a concrete basin with 5-foot walls surrounding the tanks and truck-loading area. A 3-foot-tall ring levee would surround the entire facility.

The state requires 100 feet deep layer of shale underground between the deepest source of drinking water and the waste-injection formation. Dense shale prevents water from migrating to the surface.

The well’s steel casing, akin to a straw and used to funnel waste, could erode over time. Daily pressure recordings, which must be forwarded to the state monthly, are designed to keep tabs on the casing’s integrity.

According to Vanguard’s permit application, the company hasn’t had any Department of Natural Resources compliance issues in the past five years.

RESIDENTS QUESTION COMPANY

Phyllis Schmidt, whose two children attend a school near the proposed well, questioned why the site is not considered wetlands, citing the soft soil and birds and alligators who make their home there. Federal law protects wetlands from development.

Residents also questioned the potential health risks if waste is leaked or not handled properly. A similar disposal site in Venice, owned by Texas Petroleum Investment Company, had a spill in 2009 and was ordered to pay a $525,000 fine for polluting a wildlife area, said John Rochelle, chairman of the local nonprofit Keep Our Peaceful Environment. The spill came from a storage tank that overflowed because a saltwater-injection well malfunctioned. Saltwater, also called brine, contains radiation, metals and cancer-causing compounds, such as benzene.

The company’s lack of transparency is also a concern, Rochelle said. Vanguard’s permit application says it has a policy to allow the public to visit and ask questions. At the same time, the company has not responded to media questions or publicly presented its plans to parish officials, he said.

“The walk doesn’t match up with the talk,” Rochelle said.

Vanguard Environmental has not filed an annual report with the Secretary of State’s office since 2009 and is “not in good standing,” the agency’s website says.

There’s no fine associated with that status, said Mandy Harlan, the office’s commercial assistant administrator. To be “in good standing,” a company must pay a $25 fee and file a report detailing the group’s address, officers and agent. If a company or nonprofit doesn’t file a report for three consecutive years, its charter to do business in the state is revoked, she said. To be reinstated, a company must file a report and pay a higher fee. Limited-liability companies pay $100. Corporations pay $85.

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As oil prices rose to around $96 a barrel Wednesday — a two-year high — amid fears that a continued violent power struggle in Libya could disrupt supplies, motorists are feeling the pinch here at the pump even as drilling activity was ramping up in local onshore plays.

According to AAA’s Daily Fuel Gauge Report, the current average price statewide for a gallon of regular gasoline was $3.05, up from $3.03 yesterday, and also up from $3.00 a week ago.

A month ago regular was going for $2.99 a gallon on average, and a year ago it was priced at $2.56.

AAA’s report also showed that drivers in Lafayette were feeling a little lighter in the wallet than those in other cities across Louisiana. While regular was selling for $3.07 a gallon here, or a couple pennies more than the state average, drivers in New Orleans were spending about a nickel less.

The price of gasoline at the Chevron station on the corner of Bertrand Drive and Congress Street reflected the average for Lafayette, but that was no consolation to Richard Cassidy.

“It is terrible. My whole check is going for gas,” said Cassidy, who drives to Lafayette from his home in Erath daily in his SUV to go to work. “It is costing me about $20 a day. I sure hope it comes down soon.”

James Aucoin, who said he drives his car 60 miles each day to get back and forth to work, shared that view.

“I used to be able to fill up my tank for $15, now it is $35. That is way too high. It is really hard,” Aucoin said.

Despite the fact that his car gets close to 30 miles a gallon, Sonny LeBlanc said the higher price of gasoline is causing him to avoid any unnecessary trips.

“Every time it goes up, I drive a little less,” LeBlanc said.

Holding a slightly different view was Erin Blanchard, who is a land contractor for an oil company. “This is what is paying my bills,” Blanchard said.

Still, she said the rapidly rising prices are hurting. She is compensated by her company at the mileage rate set by the Internal Revenue Service, which is currently 51 cents a mile.

As oil prices rose to around $96 a barrel Wednesday — a two-year high — amid fears that a continued violent power struggle in Libya could disrupt supplies, motorists are feeling the pinch here at the pump even as drilling activity was ramping up in local onshore plays.

According to AAA’s Daily Fuel Gauge Report, the current average price statewide for a gallon of regular gasoline was $3.05, up from $3.03 yesterday, and also up from $3.00 a week ago.

A month ago regular was going for $2.99 a gallon on average, and a year ago it was priced at $2.56.

AAA’s report also showed that drivers in Lafayette were feeling a little lighter in the wallet than those in other cities across Louisiana. While regular was selling for $3.07 a gallon here, or a couple pennies more than the state average, drivers in New Orleans were spending about a nickel less.

The price of gasoline at the Chevron station on the corner of Bertrand Drive and Congress Street reflected the average for Lafayette, but that was no consolation to Richard Cassidy.

“It is terrible. My whole check is going for gas,” said Cassidy, who drives to Lafayette from his home in Erath daily in his SUV to go to work. “It is costing me about $20 a day. I sure hope it comes down soon.”

James Aucoin, who said he drives his car 60 miles each day to get back and forth to work, shared that view.

“I used to be able to fill up my tank for $15, now it is $35. That is way too high. It is really hard,” Aucoin said.

Despite the fact that his car gets close to 30 miles a gallon, Sonny LeBlanc said the higher price of gasoline is causing him to avoid any unnecessary trips.

“Every time it goes up, I drive a little less,” LeBlanc said.

Holding a slightly different view was Erin Blanchard, who is a land contractor for an oil company. “This is what is paying my bills,” Blanchard said.

Still, she said the rapidly rising prices are hurting. She is compensated by her company at the mileage rate set by the Internal Revenue Service, which is currently 51 cents a mile.

“That is enough to pay for my gas, but it isn’t enough for oil, tires and all the rest,” Blanchard said. “They need to raise that rate.”

Planning ahead helps company’s bottom line

Richard Zuschlag, chairman of the board and founder of Acadian Cos., has a fleet of 360 ambulances in Lafayette, 300 of which are in regular use. He said higher gasoline prices will hurt the company’s bottom line, but not as much as they did in 2008.

“In 2008 we had a $7 million budget for fuel and we went over budget by $2 million that year,” Zuschlag said. “It crippled us.”

The company found that it couldn’t add a surcharge for its fuel rate. But on the advice of Bill Vidacovich, Acadian’s vice president of vehicle management, the company made a decision to hedge 75 percent of what it pays its supplier for fuel.

“So if the price goes below $2.75 a gallon we pay a hedge, but if it goes over $3.50 a gallon, they pay us,” he said. Acquiring 100 smaller, more fuel-efficient ambulances have also lowered costs, he added.

Increased oil prices will spur more onshore drilling in Louisiana and Texas predicted Don Briggs, president of the Louisiana Oil & Gas Association.

“We’re already starting to see more activity in onshore oil plays,” he said. “But we in this industry have to fill our cars up and buy groceries, and we don’t want to see oil and gas prices that are extravagant. It’s not good for the national economy and that’s not good for the local economy.”

If the chaos in Libya spreads to other bigger energy producers in the region, such as Iran or Saudi Arabia, price fluctuations could become as sharp as those in the 1970s, when an OPEC embargo caused gasoline shortages in the U.S., analysts warned.

Briggs said that reopening drilling in the Gulf of Mexico, which has been at a near standstill in the aftermath of the BP blowout in April 2010, would go a long way toward creating what he calls “energy security” for the United States. “I don’t know of anybody in their wildest imagination saying they feel secure about energy prices knowing that the Middle East is as volatile as it is.”

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By Jonathan Tilove

WASHINGTON — The National Oil Spill Commission called Tuesday on Congress to create an independent safety agency to oversee oil drilling, raise the $75 million oil spill liability cap and dedicate 80 percent of any Clean Water Act penalties paid by BP to restoring the Gulf Coast.

The commission also called on the oil industry to create its own “Safety Institute” to develop and enforce world-class safety standards, to adopt a more proactive “safety case” approach to reducing risk, like that used in the North Sea, and to pay for tougher federal regulatory oversight through its permit and licensing fees.

The recommendations and others are contained in a 380-page report to President Barack Obama issued Tuesday by the commission, which was created by the president to examine the causes and lessons learned from the April 20 blowout of BP’s Macondo well in the Gulf of Mexico, which killed 11 workers and led to the worst oil spill in U.S. history.

“If dramatic steps are not taken, I’m afraid that at some point in the coming years another failure will occur and we will wonder why did the Congress, why did the administration, why did the industry, why did the American people allow this to occur again?” said former Florida senator and governor Bob Graham, the commission co-chairman.

Graham said he recognized that new regulation and increased spending are far out of favor in Washington at the moment, but, “I believe that this issue and the searing impact that Deepwater Horizon has had on the conscience of Americans, is such that it will override an ideological preference for less government, less government intrusion, less government cost.”

No bomb-throwers

Or, as Aaron Viles, deputy director of the Gulf Restoration Network, put it, “If Congress can’t act on the recommendation of a body such as this, than heaven help us.”

“This is not a bunch of bomb-throwers,” Viles said.

Sen. Mary Landrieu, D-La., who early on had been concerned that the commission’s membership was stacked against the industry that creates thousands of jobs for her state, said Tuesday she was “grateful and happy” that the commission had produced a thorough and balanced report.

“The report could have easily called for the end of deepwater drilling, but it doesn’t,” Landrieu said. “That’s the really big takeaway. That this commission, having examined a horrible incident that occurred, has basically concluded that deepwater drilling can be done safely, it’s being done safely around the world, and it can be done safely in the Gulf of Mexico.”

Landrieu said she was pleased by the commission’s “very significant endorsement” for directing at least 80 percent of any penalty money assessed against BP to Gulf Coast restoration, an idea embraced by the Obama administration and embodied in legislation Landrieu will reintroduce in this Congress, and sponsored in the House by Rep. Steve Scalise, R-Jefferson, with the backing of others in Louisiana’s delegation.

Landrieu said she also agreed with the commission’s call to raise the current $75 million oil spill liability cap, though she would have liked to have seen more specifics. She said she wants to see the cap raised in a way that doesn’t drive smaller independents out of the business, leaving Gulf drilling only to the largest multinationals.

But critics of offshore drilling were unhappy that the commission would contemplate leaving any cap on liability.

“Besides the implication that offshore drilling will continue, the failure to recommend removal of the liability limit is appalling,” said Jacqueline Savitz, a marine scientist and senior campaign director for Oceana, an international marine advocacy organization created by a group of leading foundations. “The commission seems to be saying that somehow, companies should not be held responsible for the full damages they cause. What is that saying about the BP payouts?”

BP agreed early on that its payments in response to the spill would not be limited by the current liability cap.

Like Landrieu, Sen. David Vitter, R-La., described the report as “credible and helpful in a number of ways.”

“But,” Vitter said, “I was sorely disappointed that no mention was made of the Gulf still being virtually shut down nine months after the fact, which is completely unnecessary and counterproductive. Related to that, I think statements in the report suggesting that the horrible misjudgments that led to this incident are systemic are really overstated — just not supported by facts.”

Tarring an entire industry

Industry representatives struck that same theme, with Erik Milito, upstream director for the American Petroleum Institute, expressing concern that the report casts doubt on an entire industry based on a “single incident.”

“This does a great disservice to the thousands of men and women who work in the industry and have the highest personal and professional commitment to safety,” he said.

Commission co-chairman William Reilly, a Republican former EPA administrator, who took a leave from the board of the energy giant ConocoPhillips to serve on the commission, addressed that concern.

“I have heard from CEOs of companies who dislike, who are revolted by the idea of being painted with the same brush, companies that have exemplary records for safety and environmental protection,” Reilly said. “We do not say those companies have been remiss. What we say is that the likelihood that dependency upon contractors who operate in virtually every one of the world’s oceans where hydrocarbons are mined are most likely at risk, as a result.”

Referring to the two other companies that, along with BP, the commission found culpable for the disaster, Reilly said, “In order to believe that this is not a systemic problem, one has to believe also that Halliburton would only have supplied faulty cement to BP. Or that Transocean, on any other rig but a BP rig, would have detected gas rising in the drill pipe.”

In a statement after release of the report, Halliburton said it “disagrees with the report’s characterization of the February and April foam stability tests related to the cement pumped on the Macondo well.”

For the commission, the disaster was both the outcome of particular failures by BP, Transocean and Halliburton, but also a nearly predictable outcome of an industry that was venturing headlong into ever-deeper, riskier waters

“The fundamental finding of our six months’ investigation is that the Deepwater Horizon disaster did not have to happen. It was both foreseeable and preventable,” said Graham. But, he said, “for the past 20 years, there’s been a rapid movement by the oil and gas industry to deeper and deeper, riskier and riskier areas of the Gulf of Mexico,” a movement that, he said, even as it fattened industry profits and government coffers, left both industry and government to be “lulled into a sense of inevitable success, an illusion which masked the dramatic increase in risk which accompanied the deep water move. On April 20th, after a long period of rolling the dice, our luck ran out.”

Graham and Reilly will have their first opportunity to sell their recommendation on Capitol Hill on Jan. 26, when they will testify before Senate and House committees.

KEY RECOMMENDATIONS

Key recommendations of the National Spill Commission include:

“Congress and the Administration should create an independent safety agency with the Department of Interior, headed by an official shielded from political interference by a fixed term … to oversee all aspects of offshore drilling.”

Drilling regulations should be expanded to be on par with those in Norway and the United Kingdom, and supplemented by a “risk-based” approach that would require offshore drilling companies to “demonstrate that they have thoroughly evaluated all of the risks associated with drilling a particular well.”

The oil and gas industry should establish a “Safety Institute” to develop, adopt and enforce safety standards.

Science should play a bigger role in making “informed decisions about risk before exploration or drilling commence,” and the National Oceanic and Atmospheric Administration ought to have a more formal consultation role on environmental protection when the Department of Interior makes leasing decisions.

The president should seek “significantly increased funding for the key regulatory agencies that oversee oil spill response and planning, including Interior, Coast Guard and NOAA,” and regulatory oversight should be adequately funded through leasing and permitting fees.

The current $75 million cap on liability for offshore accidents should be raised significantly.

Eighty percent of any Clean Water Act civil and criminal penalties assessed against BP should be devoted to long-term restoration of the Gulf of Mexico.

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WASHINGTON — Democrats in Congress said Tuesday they would try to rekindle legislation to improve regulation of offshore drilling and raise the $75 million liability cap on oil companies for spills —steps a presidential panel says are necessary to prevent another catastrophic blowout.

The seven-member panel unanimously endorsed 15 recommendations to the oil industry, Congress and the Obama administration for preventing another large-scale oil spill. Most will require action by Congress, but some could be done through rulemaking, primarily at the Interior Department, commissioners said.

Democrats immediately used the 380-page report to jumpstart legislative efforts that failed after last year’s oil spill, the largest offshore incident in U.S. history. They will face an even tougher road to passage this year, with a Republican majority in the House of Representatives set on cutting spending and reducing the government’s regulation of business. In addition, already higher-than-normal gasoline prices are prompting calls for more domestic energy production.

Congress “must take action this year to prevent another catastrophic spill through smart regulation, and by giving regulators the tools and resources they need to do their jobs effectively,” Senate Majority Leader Harry Reid said. He endorsed raising the liability caps on oil companies, which BP waived after the Gulf disaster, “to ensure that taxpayers are never again on the hook for the damages caused by BP or any other oil company’s missteps.”

The Democratic-controlled House approved bills last year to boost safety standards for offshore drilling and remove the liability cap, but the measures were not taken up in the Senate. Those bills included many of the suggestions recommended by the commission Tuesday after wrapping up a six-month investigation requested by President Barack Obama.

Rep. Edward J. Markey, a Massachusetts Democrat and the ranking member on the House Natural Resources Committee, said the report should bring Republicans on board for greater regulation. He said he would introduce legislation to carry out many of the panel’s recommendations.

Rep. Doc Hastings, a Washington Republican who leads the natural resources panel, said some proposals “deserve real consideration.” But domestic oil and gas production needs to be expanded to combat rising gasoline prices, he said. “Reforms should accomplish our shared goals of improving safety, allowing drilling to move forward in a timely manner, and putting people back to work,” he said.

The 380-page report also calls for increasing budgets and training for the federal agency that regulates offshore drilling; dedicating 80 percent of fines and penalties from the BP spill to restoration of the Gulf; and lending more weight to scientific opinions by other federal scientists in drilling decisions.

When asked about the likelihood Congress would enact some of its suggestions, panel co-chair and former Florida Democratic Senator Bob Graham said that the magnitude of the disaster “would override an ideological preference for less government, less government intrusion, less government cost.”

“This is not a typical example of government regulation of a private enterprise,” Graham said. “Drilling offshore is a privilege to be earned, not a right to be exercised by private corporations.” If the recommendations are not carried out, he warned, “the probability of another failure will be dramatically greater.”

The panel said Congress should draft legislation to create within the Interior Department an independent safety agency and a separate environmental office to evaluate the risks of oil drilling to natural resources. The commissioners said the change would fully separate the agency’s regulation of oil companies from its job of collecting revenue from oil produced and land leased offshore.

Panel co-chair William K. Reilly, a former Environmental Protection Agency administrator, said the current separation fails to ensure that revenue doesn’t drive decisions at the agency.

U.S. regulations for offshore drilling should be at least as stringent as those in other oil-producing nations and require oil companies to adopt safety procedures common elsewhere but lacking in the Gulf, the panel added.

In a statement, Interior Secretary Ken Salazar suggested he was receptive to some of the commission’s suggestions. He said his department already has adopted several “key reforms” proposed by the report, and that officials would consult its findings to improve oversight further.

The panel also called for an industry-led safety institute, similar to the one created by nuclear power producers after the 1979 Three Mile Island accident.

The American Petroleum Institute, which lobbies on behalf of 400 oil and gas companies, said it is working on an industry safety program. It also praised the panel for recommending more funding for the Bureau of Ocean Energy Management.

But Erik Milito, an institute director, said the report went too far in casting doubt on the safety culture of the entire industry. It also failed to recognize steps already taken to make drilling safer, he said.

Calls to BP, Halliburton and Transocean for comment were not immediately returned. Last week, the commission said management failures at the three companies led to the blowout and explosion that killed 11 workers and released more than 200 million gallons of oil from the damaged well.

Since then, the oil industry and government have taken numerous steps in an effort to improve safety.

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OKLAHOMA CITY (AP) — The chairman of Devon Energy Corp. said Tuesday he expects a “revolution” in the growing use of natural gas as a power source for electricity-generating facilities across the country.

Speaking to a group of freshman state lawmakers, Devon Energy co-founder and Chairman Larry Nichols said new technologies have dramatically increased the amount of natural gas available in the U.S., providing a more reliable source of energy for electric plants. Those technologies include horizontal drilling and hydraulic fracturing, which uses pressurized fluid and sand to break open oil-bearing rock.

“We’re in the midst of going through a revolution,” Nichols said. “That’s going to change things dramatically in terms of power generation in this country.”

Coal remains by far the largest source of electricity generation in the U.S., accounting for more than 1.7 billion megawatt hours of electricity in 2009, according to the U.S. Energy Information Administration. But natural gas surpassed nuclear as the second-most used source of electric power in 2006, and has steadily increased since 2008. Natural gas accounted for 920 million megawatt hours of electricity in 2009.

“If the fuels are allowed to compete, then natural gas will inevitably capture a larger percentage of power generation because it’s the cleanest burning fuel we have, it’s readily abundant and it’s here in the United States, including Oklahoma,” Nichols said.

Nichols downplayed concerns by some environmental groups that hydraulic fracturing, also known as fracking, poses a danger of gas leaking into ground water near the surface. He said the only potential risk of polluting water supplies is if producers use substandard well casing in the first few hundred feet of a well, a problem he said should easily be detected by state regulators.

“Any reputable driller would welcome that (oversight),” he said.

But coal also remains an abundant, inexpensive, domestic energy source, said Jason Hayes, a spokesman for the American Coal Council. He said new technologies are allowing coal to burn cleaner, and he expects it will remain a major source of electricity for decades to come.

“Coal is not going anywhere anytime soon,” he said.

Nichols said he doubts there will be much of an increase this year in the price of natural gas, which rose 8.7 cents on Tuesday to $4.476 per 1,000 cubic feet.

“There’s too much supply and not enough demand,” he said. “Industrial demand for natural gas, because of the recession, is somewhat depressed. That won’t change until the recession ends, and you can figure out when that is better than I can.”

Nichols also briefed lawmakers on the progress of the new 50-story skyscraper that Devon Energy is building in downtown Oklahoma City. He said workers are adding one floor each week to the tower, which will be the tallest building in the state when it’s finished. He said he expects employees to begin moving into the new headquarters in early 2012.

Original Article