Can Offshore Drilling Lower Gas Prices, Make the U.S. Energy Independent?
Published October 05, 2008 @ 06:04PM PT
Thanks to spiking gasoline prices earlier in the year, offshore oil drilling emerged in the spring as a seeming "wedge issue" in the 2008 elections. Support for the 26-year Congressional moratorium on drilling the Outer Continental Shelf had typically broken down along party lines -- Democrats for, Republicans against, and a few bipartisan delegations united in opposition -- usually from states like Florida, with tourist economies that rely heavily on both the fact and the appearance of strong protections for pristine sea beaches.
Whether offshore drilling would have split the electorate became moot, however, when Democrats read the public opinion polls (showing that a majority of citizens were in favor of lifting the moratorium) and in early August essentially backed off strongly opposition to opening the coasts to drilling. Illinois Senator Barack Obama, by this time the presumptive party nominee for president and de facto party chief, signaled the policy shift when he announced that he would be open to compromising on drilling as part of a more comprehensive energy plan that included investments in clean energy development. Predictably, this infuriated environmental advocates.
Thus evaporated any "wedge" potential; Republicans could not claim that Democrats were blocking access to a potential source of domestic oil. But that didn't stop Arizona Senator John McCain from working the issue as best he could -- and seemingly with a lot less nuance than Sen. Obama. The Republican nominee for president flipped from statements he made earlier in the summer that offshore drilling wouldn't lower gas prices, and would in fact be something of a distraction to coming up with a good energy strategy -- to leading his party convention in chants of "drill baby drill!"
The McCain/Palin ticket has since seemed to encourage a link between offshore drilling and fast cures to some of the nation's current energy ills. So it's worth asking if offshore drilling lower the price of a gallon of gas, or liberate the U.S. from foreign oil?
Will offshore drilling lower energy prices?
While chanting "drill baby drill!" can sway a crowd, it cannot change the fact that it will be at least five years -- more likely closer to a decade -- from the day the Congress lifts its drilling ban to the first barrel of oil coming on to the market, according to the Energy Information Agency (part of the U.S. Department of Energy) as well as industry experts. It takes years of advance work -- doing seismic surveys, analyzing the data, test drilling, and more -- before an oil company will commit an expensive oil rig to a particular site.
Once it's actually flowing, there would need to be huge amounts off oil offshore for the new supply to make any significant dent in energy prices. Right now government estimates predict 18 billion barrels of oil in offshore areas that have been under the 26-year moratorium -- which would equate to about 857 days of oil for the U.S. at our current demand, not even three full years worth.
The rest of the world is using oil, too -- about 86 million barrels a day, or 31.4 billion a year -- and since marketplace for oil is global, there's no guarantee that offshore drilling will result in more oil for the U.S. Oil tends to go wherever producers find the most optimal combination of lowest transportation costs, appropriate refining facilities, and highest price per barrel.
Will offshore drilling cut our dependence on foreign oil?
America's daily oil demand is currently 20.8 million barrels a day (874 million gallons), and we get about 75% from foreign sources -- so that's a 15 million barrel gap that needs to close to become "oil independent." It's possible that overall oil demand could be reduced in coming years through combinations of efficiency, conservation, and wider use of alternative energy sources (biodiesel instead of gasoline, for instance). But domestic oil production has been declining for decades, and it's very unlikely that offshore drilling will double or triple it.
For more info, check out:
Bush Lifts Offshore Drilling Ban, BBC News
Lawmakers to Let Offshore-Drilling Ban Expire, The Wall Street Journal
Can Offshore Oil Drilling Really Make the U.S. Oil Independent?, Scientific American
The Big Thirst, The New York Times
Minerals Management Service Releases Details of Drilling Rigs Destroyed by Hurricane Ike, Sept. 20, 2008
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Comments (7)
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Emily is a journalist and editor covering the environment and science, and has been working in online news, community and content since 1994.
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I do not believe we should put more resources into finding oil that will be there for us later. We should view oil as the sort of a sort of double-edged sword. It is a resource and in effect it is a form of national savings. We should conserve it. On the flip side, it's use is damaging to the environment at current rates of production. We should limit production and use. It will take economic sacrifice and innovation to move to other energy generation technologies. Many businesses tied to the oil and energy industry will be affected but it's important for the future that we shift to cleaner technologies. Solar, wind, and nuclear deserve every dollar people are thinking of spending on off-shore drilling.
Posted by David Sterry on 12/20/2008 @ 04:56PM PT
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Scientific American has provided estimates that show that if we spent a fraction of what was spent on the war in Iraq, we could have been energy independent by now.
The future is renewable energy that will create domestic jobs and taxes, reduce pollution, ensure the United States is not dependent on foreign oil producers and potentially develop into an expertise that we can export.
Let's start spending our tax dollars wisely and reverse some of the damage done over the past 8 years.
Posted by Michael Spead on 12/31/2008 @ 09:08AM PT
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That's what I like is dreamers. Renewable energy isn't going to create ALL that many jobs. It is not a cost effective viable solution at this moment in time. It is a known fact that wind and solar doesn't work in most of North America due to the extreme climate changes. Most of congress got suck in investing in alternative energies now the american people will have to pay for their losses. The main issue is to be independant on foreign fossil fuels and the only way we can do that is to explore right here within our own boundaries. You people fail to realize how many bi-products are created from fossil fuels. Take a close look at the computer your using---GONE FOREVER IF YOU LIMIT THE EXPLORATION OF FOSSIL FUELS. That's just one example of many.
Posted by ROGER UNZE on 01/02/2009 @ 05:34AM PT
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Yes it's true and due to recession, many are in difficult situation howrver human are satiable beings and needs must still be met thus it's best to shop around in just about all things. It can save you from having to get a payday loan if you shop around. You definitely should shop around in finding the best way for your daily commute. You should also shop around for insurance and the best gas prices, hey - who says more of your money should go to Shell or Exxon? Also, look into public transport, carpooling, and also more conservative driving habits. Lay off the lead foot - it is bad for your car, and the tickets are bad for you and your insurance. (And who wants to give the government even MORE money?) When it comes to your transportation, it definitely pays to
href='http://shop">">http://personalmoneystore.com/moneyblog/2009/03/31/surviving-recession-compare-4/">shop around.
Posted by Richard G rtbrtyrtbyrt on 04/03/2009 @ 12:55AM PT
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When you say it would take 5 to 10 years before the first "barrel of oil coming on to the market" I say, "We should have done this ten years ago."
Most of the delay would be fighting enviornmental groups legal actions.
You say it would only be a mere 865 days worth of American consumption. That sounds great to me. Compared to 0. besides, it's only an estimate. By the time the use that up they would have found other offshore sources, and even if we cut foreign dependancy down to 50% from 75% that would be huge and that would last us 10 years.
New tech makes it easier and safer to drill in the ocean than ever before, and the more we do it the easier it becomes. More oil will be found.
Even if that oil was sold not used in America, (which would be a shame) it would still add to the world wide supply, thus lowering costs in a supply/demand scenario.
But Obama wants to wait for the "magic car" that runs on dreams and hope. But that could easily be another 10 years or more, or never. Let's stick with proven tech.
Posted by Thomas Mann on 06/28/2009 @ 09:21PM PT
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It takes five to ten years because first, the government needs to ramp up to sell the leases.
There has to be a seismic survey or two of any given lease area, since that is what helps create an estimate of its value.
Then the results of the survey have to be studied.
Then, if there's a good chance that it's worth spending the money to proceed further, a test drilling needs to be done.
If that produces, then a full rig needs to be brought in. Rigs are expensive to build or relocate.
If the economy remains slow, and energy prices relatively low, those factors will discourage drilling on the outer continental shelf, b/c it's especially expensive to do deepwater drilling. So that's another potential delay.
Posted by Emily Gertz on 06/29/2009 @ 09:38AM PT
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Granted, if the Gov. is involved to sell leases that bureaucracy could take way too long. Yes I do realize that drilling in the ocean is complicated. But we also went to the moon for the first in 10 years. We've already figured out how to drill for oil. It shouldn't take 10 years. Shouldn't take 5 years, but whatever it takes let's get drilling. And you must admit that the enviornmentalists will fight that drilling every step of the way, even if Americans overwhelmingly agree that we should drill.
Posted by Thomas Mann on 06/29/2009 @ 10:00AM PT
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