Peter Lehner's Blog
We Can’t Drill To Lower Fuel Prices
June 20, 2008
Posted by Peter Lehner
Yesterday, I wrote a post about the need to limit opening additional federal lands to offshore drilling. Two comments got me thinking, and made me want to expand upon my thoughts here.
One commenter named Wayne said, “What this country needs is leadership and a multi-facted approach to solve our problems which involves oil drilling in the USA.” I agree with the need for leadership, Wayne – that’s why we at NRDC have worked for decades on energy issues, and why we’re now advocating a national energy plan that engages multiple sectors of the economy.
But President Bush’s proposal is not an example of leadership. The message that fuel prices are high because oil companies don’t have enough land is false, and won’t provide relief to the American people. We simply can’t drill our way to lower prices. We have to seek other, more energy efficient alternatives. This is the fastest, and cheapest way to lower fuel prices and combat climate change.
And yet, many members of Congress are now lining up to push for a repeal of the ban on opening more federal lands to offshore drilling. As the two comments, and other articles on the web illustrate, there’s substantive debate on this issue.
And so why do I oppose opening additional, ecologically sensitive areas to offshore drilling?
Consider that companies already have more than enough resources available to them. Between 1999 and 2007, the number of drilling permits issued for development of public lands increased by more than 361%. In the last four years, the BLM has issued 10,000 more permits than have been used. That means the oil and gas companies are actually stockpiling extra permits, and that these companies hold leases to nearly 68 million acres that are not in production.
This is particularly true for offshore areas. On the outer continental shelf, there are 7,740 active leases and only 1,655 in production. Only 10.5 million of the 44 million offshore leased acres are currently producing oil or gas. Moreover, four times more natural gas is contained within the waters already open to drilling than in those protected by the ban.
We should not give these companies more land when they already have more land than they can use.
Even if we did open the ecologically sensitive areas currently under a moratorium, it wouldn’t lower fuel prices. In the past two years, domestic oil and gas production has outpaced domestic consumption fourfold. In the mean time, fuel prices have soared. If you look to the UK, to Norway, Germany and Japan – all countries that promote offshore drilling – you’ll see their prices are much higher.
I’m not alone in saying this. Click here for a great report on the topic, released by the House Committee on Natural Resources this June. The Energy Information Administration, the independent statistical agency within the U.S. Department of Energy, says drilling offshore won’t help prices. And yesterday, in an editorial entitled “The Big Pander to Big Oil,” The New York Times described opening additional areas to offshore drilling by saying:
“This is worse than a dumb idea. It is cruelly misleading. It will make only a modest difference, at best, to prices at the pump, and even then the benefits will be years away. It greatly exaggerates America’s leverage over world oil prices. It is based on dubious statistics. It diverts the public from the tough decisions that need to be made about conservation.”
We can’t drill our way to lower fuel prices. As I’ve said before, efficiency is the fastest, and cheapest, way to lower fuel costs and combat global warming.
I have a lot to say on the topic of how efficiency can help meet our national energy goals. I’ll expand on that in another post soon.
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Comments
Bob — Jun 21 2008 04:12 PM
Ken Williamson makes so good points about this on http://www.posterspost.com.
He makes a good case for drilling.
The point is, we have no choice but to drill if we continue driving our vehicles.
Keith Harrington — Jun 22 2008 12:35 PM
"The point is, we have no choice but to drill if we want to continue driving our vehicles."
True if by vehicles you mean gas guzzling SUVs. Otherwise it would seem that you are completely disregarding the fact that the quickest way to keep fueling our vehicle fleet and reduce energy costs is to conserve gas by mandating higher fuel efficiency standards. It is both technologically and economically feasible to increase CAFE standards to 40+ miles to the gallon. If we adopted smart energy policies of this nature, the debate over increased drilling would be moot because we'd be saving more oil per year than those off shore areas could ever produce.
Jean Nero — Jun 23 2008 02:13 PM
Why doesn't anyone make mention of the fact that energy efficient automobiles have been waiting in the wings and ready for a long time. And why has our government not promoted such efforts? Tax incentives for such efforts? Why are they so expensive? Or the efforts of alternative fuel?
Could it be that our government have their hands in the sack and are in bed with the oil companies?
There is clearly something behind the decision for new drilling. As our blogger states, there is a stockpiling of permits.
Voting to elect this current president meant going straight into a clear conflict of interests. Have we forgotten that the Bush family is an oil baron dynasty?
Sorry for the rhetoric.
AMEN
Dan Troutman — Jun 24 2008 12:48 PM
Dudes, lose the emotional rhetoric - you're not helping the cause. There is no conspiracy going on. It's simple supply and demand. WORLDWIDE DEMAND
Exploding population growth and increased standard of living in developing nations such as China and India have increased worldwide demand for oil, steel, food, etc. America has been consuming approx. 20 million bbls of oil a day, China is consuming approx. 7 million bbls a day. In twenty years, China's demand for oil will match America's (20 million bbls a day). The world production of oil cannot keep up with this unprecedented demand - plain and simple. Oil production isn't growing nearly as rapidly as in the 60's and 70's. Existing fields are being depleted and are harder to extract (even with new techniques).
It's not a matter of whether new drilling will bring down the price, but whether new drilling will be able to supply oil (at any price). At some point in the future, each nation will need to secure its petroleum reserves. America needs to know how much oil lies off its coasts. We don't necessary need the oil today, but we will 10 years from now because "alternative" transportation won't be widely used. How ironic would it be if America has to hire CHINESE drilling companies one day to tap our shore reserves!?
You can't drill your way to lower prices because WORLDWIDE demand won't allow it!!
American's can go back to the "stone age" and walk to work and it wouldn't make any difference to the WORLD oil market. Any supply "saved" by America would be consumed by the other oil-starved nations without so much as a "thank you."
As an extensive business traveler, I've noticed that a lot of Americans have already given up their SUVs to commute - those of us still driving them do so for a reason - to haul things (job, food to market, etc). Enough of the SUV wise cracks - take a look around the big cities and see how many commuters are already driving 30mpg cars.