Sir, we are in deep trouble. In a land of plenty, we are starving for energy. High oil and gas prices threaten to derail 10 years of economic growth. But, the underlying problem is worse: The Energy Information Administration says domestic oil production has declined every year since 1992. National output was averaging about 7.2 million barrels per day then. By the beginning of 2000, we were producing only 5.8 million a day. That's a decline of nearly 20%. This occurred despite the ups and downs of commodity prices and increased U.S. drilling based on the boom in technology applications during the '90s. Did you know that the oil and gas industry ranks second only to the financial industry in its use of computing power? During the same time frame, imports of foreign crude oil soared 60%, now accounting for more than half of our daily needs. U.S. consumers and industries are too vulnerable to sup-ply disruptions or price manipulations. What's more, oil imports make up too large a portion of our burgeoning trade deficit. No new refineries have been built in the U.S. in a decade. The existing ones operate at 95% -of capacity-in effect, they cannot do more. And yet, the U.S. population (and its demand for gasoline and heating oil) has risen in the last 10 years. Something has to give. Mr. President, the U.S. energy picture is changing: Within the next 10 years, Texas may start importing natural gas to meet its own needs! The state has recognized this and with tax incentives, is doing what it can to encourage drilling and rejuvenation of shut-in wells How do we expect farmers to be able to harvest anything if there is no fuel for their tractors? How do we expect businesses to make deals or meet customers and colleagues, if there is not enough energy for air travel, manufacturing or computer servers? What if travel becomes out of reach for every-day Americans who need to go for business, vacation, family ties? How do we expect to move our military if they must wait on fuel? Scientists say we have all the natural gas and most of the crude oil we need, if only U.S. producers are allowed access to more federal lands and offshore areas, where we know reserves lie. You must respond now. Do so on both the supply and the demand side of the equation. Here are some of the steps we recommend. Enact or extend tax credits for research into renewable and alternative energy supplies such as fuel cells, solar technology and other cleaner-emissions technologies. Allow oil and gas companies to expense their geological and geophysical costs. These are the "R&D" costs that precede drilling. They allow companies to more accurately pinpoint where to drill-and where to leave the land alone. New seismic technologies now enable producers to drill fewer wells in a given lease, and to make the wells that are drilled more likely to be successful. Allow oil and gas companies to expense the costs incurred for lease delay rentals. That way, they can afford to keep a lease until they have studied it to determine if they should drill or let it revert back to the lessor. Extend and improve royalty relief for production on federal lands, especially the deepwater Gulf of Mexico. The National Petroleum Council's 1999 natural gas study, done at the request of the energy secretary, says that the deepwater Gulf of Mexico will have to play a much bigger role in supplying gas to the nation. Today, the Gulf supplies about one-fourth of our total gas' supply, yet many of the existing fields are in permanent decline. Only by pushing into ever-deeper waters of up to 7,000 feet can companies hope to offset those declines. We know this works. All of the largest discoveries made in the U.S. in the last 20 years have been in deep water. • Allow careful, monitored access to federal lands currently off limits, including those in Alaska. We have the technology and the will to drill these safely. • Enact tax incentives for rejuvenation and production of smaller wells. Last year, producers abandoned 14,768 such wells. These could have displaced a lot of imported oil. Most of these ideas are not new. Over the last 20 years, the federal government, think tanks and the oil and gas industry itself, have remained constant in their message and proposed solution. Until technology advances to the point that we wean ourselves off crude oil, coal and natural gas, we need to keep drilling. Events of the last six months, from power outages in California and pending heating oil shortages, to violence in Yemen, remind us again: Energy matters more than ever. The I links between domestic energy supply and our economy, foreign policy and national security are clear. The industry asks you to focus on energy policy. We need to see you make tough decisions and take solid action. We are waiting. So are the American people.