Can Offshore Drilling Lower Gas Prices, Make the U.S. Energy Independent?

by Emily Gertz

Published October 05, 2008 @ 06:04PM PST

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