06-19-08 by dugan
It’s easy to understand why President Bush and Sen. John McCain are getting media and public traction from their demand that California, Florida and other coastal states open up their shorelines to oil drilling. After all, more oil means cheaper gas, right? No, wrong. It’s a complete fake, and not just because coastal drilling is environmentally dangerous. Here’s the Bush administration’s own study, from the federal Energy Information Administration, predicting zero effect on oil prices and at best a 7% oil production boost, but not until 2030.
Here’s a 10-point rejoinder from the Center for American Progress, including the critical point that oil companies aren’t even drilling many of the leases they already own, including in the Gulf of Mexico:
In 2006, President Bush said that the United States was "addicted to oil." But in a speech
yesterday, he echoed an old line when he called for Congress to open
the Arctic National Wildlife Refuge to drilling, allow access to oil
shale, increase refinery capacity, and allow offshore oil drilling in
areas that have been off-limits since 1982.There are many reasons that offshore drilling in sensitive coastal areas is a bad idea. These 10 are only the beginning:
1. We can’t drill our way out of the energy crisis.
According to a report by the House Committee on Natural Resources Majority Staff:
"Between 1999 and 2007, the number of drilling permits issued for
development of public lands increased by more than 361 percent, yet
gasoline prices have also risen dramatically, contradicting the
argument that more drilling means lower gasoline prices. There is
simply no correlation between the two."2. We don’t have enough oil to meet our demand.
The U.S. oil supply-demand balance is insurmountable. We have less than 2 percent of the world’s known reserves, yet use 25 percent of its oil.
Even if we drilled off of every beach, and inside every national park,
refuge, and forest, we could not produce enough oil to offset our
growing demand.3. Oil companies have not utilized the leases they have now.
Why open up new areas to drilling when oil companies hold over 4,000 undeveloped leases in the western Gulf of Mexico?
What’s more, the government already leases 44 million acres offshore,
of which only 10.5 million-or one quarter-are producing oil or gas.4. Offshore drilling would have an "insignificant" effect on long-term prices.
Offshore drilling in sensitive areas would increase domestic oil production by 7 percent by 2030 compared to a reference case, according to the EIA.
But "because oil prices are determined on the international market…any
impact on average wellhead prices is expected to be insignificant."5. Drilling could lock us in to a future of expensive gasoline.
By committing to costly recovery, oil companies are betting that oil
prices (and gas prices) will stay high enough to justify their
investments. Opening the Outer Continental Shelf could never bring us
back to $2-a-gallon gas, but would ensure that companies that develop
the newly available oil have an interest in keeping gas prices high
enough to justify their investments.6. Production would be expensive, would not start for a long time, and would have no short-term effect on oil prices.
The average oil field size in the OCS is smaller than the average in
the Gulf of Mexico, which is already being developed As a result, much
of the oil in the OCS would be expensive to extract, and is only becoming attractive now as a result of high oil prices.According the Energy Information Administration,
it would take at least five years for oil production to begin. EIA
predicted that there would be no significant effect on oil production
or price until nearly 20 years after leasing begins.7. There isn’t enough drilling equipment.
Due to the high price of oil, existing drilling ships are "booked
solid for the next five years," and demand for deepwater rigs has
driven up the price of such ships. Oil companies just don’t have the resources to explore oil fields in the OCS.8. We can’t refine the oil we would extract.
In his speech yesterday, President Bush
noted that, "Refineries are the critical link between crude oil and the
gasoline and diesel fuel that drivers put in their tanks." Yet
refineries are already so stretched that last year, the United States had to import almost 150 million barrels of gasoline. The Wall Street Journal reported oil companies are not building new refineries because it would be bad for their bottom line. "Building a new refinery from scratch, Exxon believes, would be bad for long-term business."9. Drilling more oil now is not the path to a future based on alternative energy.
President Bush said in his speech that "in the short run, the
American economy will continue to rely largely on oil," but "in the
long run, the solution is to reduce demand for oil by promoting
alternative energy technologies." Unfortunately, President Bush
opposed efforts to shift tax incentives from big oil companies to
efficiency and clean energy technologies, such as plug-in hybrid
electric vehicles. If alternatives are the future, why propose an
oil-based solution to the energy crisis that will not show any results
for years?10. Debating offshore drilling in sensitive areas distracts from real solutions.
Instead of focusing on offshore drilling in sensitive areas, we should be thinking about both short- and long-term solutions
to the energy crisis. To reduce oil prices, we can burst the
speculative bubble by selling a half million barrels of oil per day
from the full Strategic Petroleum Reserve.
To help families, we should close oil company tax loopholes and recover
lost royalties on oil and gas from federal waters, and return these
funds to low- and middle-income households in a fuel price "relief bate" program.Speculators have increased oil prices by up to $30 per barrel, so
the administration should make trades more transparent and increase the
"margin" for speculators. In the long run, we must move beyond oil by
investing in clean, sustainable biofuels such as cellulosic ethanol, require and promote super fuel-efficient cars, and shift tax incentives away from fossil fuels and toward clean alternative energy and efficiency.
The real solution to the energy crisis-and to the climate crisis-is
to innovate, become more efficient, and move forward. That’s why
offshore drilling in sensitive areas is a bad idea. For a long-term
plan, it is remarkably short-sighted.