“Drill here and drill now” is the mantra of Republican John McCain’s presidential campaign when its comes to addressing the high oil prices that have had US motorists paying more than $4 a gallon at the gas pump this summer. And the polls seem to bear out the attractiveness of McCain’s position (reflecting a 2008 conversion from being against offshore drilling to being for it), with a July Gallup poll reporting that 57% of those polled favored new offshore drilling while 41% were against it. These results were enough for the Democratic presidential candidate Barack Obama to change his tune on offshore drilling. Formerly also in favor of a moratorium on drilling, he recently announced a willingness to entertain new drilling as part of an overall energy package that supported the development of alternative energy as well.
But is new offshore drilling the answer to high gas prices? The answer is, no, at least not in terms of making a short term impact on oil prices. Simply put, it takes too long and does too little. Permits, initial surveys, exploratory drilling, and the usual trial and error of oil exploration places new production of relatively small quantities of oil at least a decade away.
A little context. According to the Mineral Management Service, the Outer Continental Shelf of the Pacific Coast, the Gulf of Mexico, and the Atlantic Seaboard contains about 574 million acres (or 85% of the total acreage) that are off-limits to drilling. The US Congress imposed this moratorium on offshore drilling in 1981, more than a decade after an offshore drilling rig accident caused 3 million gallons of oil to spill, covering 35 miles of pristine coastline near Santa Barbara, California with a thick layer of crude.
Environmentalists, tourism advocates, and other critics of offshore drilling argue that the risks of oil spills and the subsequent contamination of coastlines would not only harm the environment severely but would decimate the multibillion dollar tourism industries in California and Florida. Even without the potential for spills and even though the bulk of new rigs would be well offshore, the idea that there might be oil rigs within sight of their Pacific or Atlantic shores is a political non-starter in those two populous and tourist-reliant states.
So what is shaping up? A compromise. The US Senate’s bipartisan Gang of Ten is floating an energy plan that would open up new offshore drilling areas (as close as 50 miles offshore) in the Southeast Atlantic and Eastern Gulf of Mexico. The other side of the deal — raising taxes on the big oil companies such as Exxon Mobil, BP, and Royal Dutch Shell.
Florida’s Gulf coast and the Atlantic coastlines of Virginia, the Carolinas, and Georgia are all targeted for the new drilling — if the Senate and the states involved agree to the proposed compromise. So far the proposal has infuriated the partisan zealots on both sides (who want to demonize the other side’s position) and has actually prompted some deep reflection about the energy crisis.
Could an energy compromise actually break out in the white hot heat of a US presidential campaign? Maybe so. The fear of losing office (or not gaining office) is a powerful political mediator.
“Yes, we can” may end up in the same sentence as “drill here and drill now.”
Comments
Gartho Says:
August 14th, 2008 at 6:33 pm
Few points I would add:
1) Just opening the offshore drilling areas would lower oil prices immediately because one of the main reasons it is high is futures SPECULATION. If you give a reason to have more oil on the market in the future, speculation of that will drive down prices NOW.
2) You didn’t mention that for national security we MUST have our own oil supplies. Russia is a bear and is making billions off oil (more than our “big oil” companies…and they are again acting aggressive and we need to be concerned). Iran and other middle east countries hate the west and could for any reason turn off our oil supply.
3) Windfall taxes are a stupid idea….guess what, consumers would end up paying for those taxes at the pump in the form of higher gas prices. Stupid idea. BTW, google and other companies make more profit (gross margin). Also, look at Dubai…..I would rather that my money was staying in the USA than building Dubai (talk about profits).
4) We need to build new refineries. This is a must.
The democrats have no flipping idea what they are doing. They are killing this country and setting us up for a huge fall. Please use common sense. Drill NOW to take care of today and the next 10-20 years while continuing to find alternatives for the future. Al
Mick Says:
August 15th, 2008 at 7:58 am
Dittos Gartho. At what point WILL we start drilling and quite using the excuse it will take so long. Money is a HUGE motivator for the oil companies (and the rest of us) and the money is there to start drilling HERE and drilling NOW.
peter sterling Says:
August 15th, 2008 at 12:22 pm
We offered the following benefits to Santa Barbara County if they let us develop some proven oilfields in the Santa Barbara Channel.
Much bigger reserves are owned by other companies nearby.
Increased oil production could start in months from existing oil platforms if the American Oil Embargo was lifted. It only benefits OPEC and Russia.
PRIMARY BENEFITS OFFERED TO SANTA BARBARA COUNTY RESIDENTS
1. $2.50 GASOLINE for all registered Santa Barbara County residents and County vehicles from local oil production.
2. $2.50 GASOLINE for all registered hotel guests in Santa Barbara County.
3. County-wide Clean-Air, Compressed Natural Gas (CNG) car conversions facilities.
4. $1.50 CNG for Santa Barbara and Coast residents for flexi-fuel vehicles.
5. Substantial Annual Grants to local environmental study groups and renewable energy programs.
6. Significant decrease in County-wide Air pollution from lower natural reservoir seepage.
7. Much lower C02 emissions for the County and State of California.
8. Significantly reduce potent greenhouse gas methane emissions from offshore gas seeps.
9. Much cleaner Santa Barbara beaches and oceans by reduction in beach tar balls.
10. Large new natural gas supplies from Bering Sea, landing via Santa Barbara County, to lower America’s C02 emissions from out of State coal-fired power plants, which will no longer be needed.
11. Increased local, State and National energy income streams, with monies all staying inside the County and America.
12. Provide Complete Santa Barbara energy self reliance and improve America’s energy security.
13. Significant high-paying local jobs boost.
14. Significant increased cash energy royalties to County of approximately $250-500 million p.a will improve the quality of life for all Santa Barbara County staff and local residents.
15. Special Proposed Community royalty payment from Bering Sea Gas imports landings to fund FREE County-Wide clinics and a new FREE County Hospital.
16. Lower-cost CNG for public transport-busses and vans, will enable disadvantaged and senior citizens to travel more freely.
17. Natural Gas for County home heating and cooking at a 30% discount to the prevailing rate.
18. Significant Increase in Local Property Values due to many of the above benefits.
CNG Car Says:
October 28th, 2008 at 11:54 am
I think the best way to relieve gas prices is to relieve the demand for gasoline. One of the best ways to do this is using natural gas as an alternative fuel for vehicles. There are some amazing new prototypes coming out soon, like the one I test drove that gets 70mpg. And when I can get clean burning CNG (compressed natural gas) at a third of oil based gasoline, this turns out to be a great deal. More info about the cng car.
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