Off-Shore Drilling, Our New Energy Policy

One of those little milestones the press likes to pick up on was reached today: oil prices soared to $78.00 and change, a new record high. The escalating violence in the middle east, as well as in Nigeria, may be playing a big part in this. If so, we should probably expect to see this as merely a rung on a ladder. The violence shows no sign of de-escalating any time soon, and oil prices are forecast to rise higher as the summer continues.

How long ago was it that Dubya made the famous "oil addiction" remark? Rehabilitation from this addiction so far has amounted mostly to lip service. The problem apparently was that we are addicted to foreign oil imports, not that we are addicted to oil itself.

The energy-policy debate in Washington right now centers around efforts to repeal the ban on offshore drilling and to fix a law that allows oil and natural-gas companies to avoid billions of dollars of royalty payments on offshore drilling leases.

Critics say Congress has failed in its approach to deal with soaring energy costs because it has not given as much attention to curbing demand as it has to adding supplies, such as a hotly debated proposal to open an Alaskan wildlife refuge to oil drilling.

"We too often forget that the United States is far and away the biggest consumer of oil," said Tyson Slocum, an energy expert at Public Citzen, a Washington-based consumer watchdog. Slocum said the country needs to invest more in public transportation and to sharply increase automobile fuel-economy standards. (Oil Prices Settle Above $78 a Barrel)

So, yes, our new energy policy seems to be repealing the ban on offshore drilling. The House has already (June 30) voted on a bill to allow oil and gas drilling in coastal waters that have been off limits for a quarter-century. A "compromise" is being discussed in the Senate, where passage of such a bill is far from a done deal. This AP story, House Lifts Offshore Drilling Ban, but a Battle Looms in Senate, gives a fairly concise and user-friendly layout of the House plan, and the Senate compromise proposal.

The "critics" in the quoted paragraphs above are exactly correct in claiming that Congress is paying far too little attention to curbing demand, and far too much to adding supplies. For instance, Hebert's article states that "The Interior Department estimates there are about 19 billion barrels of recoverable oil and 86 trillion cubic feet of natural gas beneath waters under drilling bans from New England to southern Alaska."

Okay, 19 billion barrels. Sounds like a lot, you betcha. However, Robert Rapier in his April post "Fuel Efficiency and Lessons from Europe," gives us this

A study by the Consumer Federation of America points out that "an increase of 5 miles per gallon in fuel efficiency of (the United States) domestic fleet would save about 23 billion gallons of gasoline each year."

Doing the math shows that a simple, and very slight, tightening up of fuel efficiency standards in this country would save 4 billion more gallons of gasoline than turning all our coastlines into the Texas/Louisiana Gulf Coast. Senators from states (California, Florida, the entire East Coast, in fact) are rightly concerned about their tourism industries based on beaches. Beaumont, TX, bears little resemblance to the Monterey Peninsula, or Cape Cod, the Outer Banks, Rehoboth Beach, Sanibel Island.

We can turn the entire coastline of this country into Beaumont, Texas, or we can get cracking on those fuel efficiency standards. We are currently at about 25 miles per gallon. China, for heaven's sake, is over 35, and Japan is well on its way to 45.

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