According to President Obama, the only path to energy independence is greater addiction! Or something:
Reversing a ban on oil drilling off most U.S. shores, President Barack Obama on Wednesday announced an expansive new policy that could put oil and natural gas platforms in waters along the southern Atlantic coastline, the eastern Gulf of Mexico and part of Alaska.
“This announcement is part of a broader strategy that will move us from an economy that runs on fossil fuels and foreign oil to one that relies more on homegrown fuels and clean energy. And the only way this transition will succeed is if it strengthens our economy in the short term and long term.”
But this is completely and utterly wrongheaded.
Let’s get two basic facts straight about the oil economy: 1) the US produces only a tiny fraction of the oil it consumes; and 2) the price of fuel is dictated by global commodity prices. What these facts mean is that drilling in US coastal waters will have a negligible impact on prices—and absolutely zero effect in the short term — and do essentially nothing to staunch the massive outflows of American money to the worst parts of the globe to pay for oil imports.
In other words, expanding domestic oil production is a pointless economic strategy.
He added: “To fail to recognize this reality would be a mistake.”
Really? Because it seems to me that the real mistake is doing permanent damage to fragile marine ecosystems, amping up the nation’s already gigantic carbon emissions, and, if anything, actually worsening the nation’s addiction to an expensive substance we fundamentally cannot supply for ourselves.
Obama made no secret of the fact that one factor in his decision was securing Republican support for a sweeping climate change bill that has languished in Congress.
Look, a sweeping climate change bill is crucially important, but why, why, why on earth would anyone responsible lead with this massive giveaway to the oil industry?
Expanded coastal drilling is the kind of bitter pill that one could argue about swallowing for the sake of a filibuster-busting 60th vote, or for a genuinely science-driven carbon cap, or full auctioning of carbon permits. But it is a terrible price to pay, and it does real and lasting harm to the world.
BOS
The Oil Slickster-in-Chief forgot about opening up the Left Coast to drilling. Hmmm… wonder how that happened.
eldan
I too am mystified by this. It seems to have come out of the blue, and even if it were worth doing as a price for a serious emissions reduction bill this would not be the moment to do that. You don’t bargain by giving away your chips before asking for anything in return….
Ron
The author should research the facts: The U.S. produces 40% of the oil it consumes. 40% is NOT a tiny fraction, it is more than Iran produces. The USA can easily produce an additional 2 million barrels per day from known reserves off-shore. And that production could be sustained for 30 more years. Off-shore oil production is a very good idea, so long as the U.S. continues aggressive action toward development of alternative fuels. The USA achieved energy independence in the 1980’s after 10 years of aggressive energy development, and then President Reagan abandoned energy independence policy in favor of Middle East oil imports because of low world oil prices. The USA has not returned to an energy independence policy since President Carter’s administration. Just talk, but no action, until now… so let’s hope Obama will follow through. AmericanEnergyIndependence.com
Eric de Place
Ron,I’ve stricken the word “tiny,” but my point still stands: the US consumes well more than twice as much oil as it produces. In other words, we are not even close to oil independence. Offshore drilling is a near-sighted strategy that can make only baby steps toward energy independence, and at a cost to the climte and our natural heritage. By contrast, there are dozens of policies that can move us toward independence in a responsible fashion.
SF
This will not feed our addiction to oil. Our oil consumption will go down drastically after the world passes peak oil, whether we like it or not. Rather than put up a lot of links, I would suggest that you start following the scientific articles in “The Oil Drum.” http://www.theoildrum.com/Offshore drilling will give us a little more time to phase out gas hogging personal vehicles, improve mass transit and develop other alternatives. We will need the time. Solar, Wind and geothermal provide about 1% of our energy now. The offshore fields will probably take five to seven years to develop. By that time, the world is likely to face a very tight oil supply situation.
Bill
Although I am extremely concerned about climate change, this decision is not absolutely cut and dry for me. This oil produces less GHGs than extracting oil sands. The truth is that we are very close to Peak Oil and that exported oil has been falling for several years and will continue to fall in amount. The oil being opened up in this decision will not be available for 7-10 years… that being the full period necessary for exploration, design, and extraction. Its also not very much oil likely. This means that a marginal .5-1 mbd will be available in 2017-2020, when the USA will likely be in the midst of a massive oil shortfall— electric cars will not make up for that shortfall that soon. This oil could be the patch that keeps people from using either oil shale or coal-to-liquids as a solution. I wish this was black and white, but its not.If this “concession” is tied in any way to a quid-pro-quo that gets resonably decent climate legislation in DC by buying off domestic oil companies to not go all out to block it, or to accept a sizeable gas tax… then its even more debateably worth it.Its still not quite worth it yet, its just that there is some room for debate and the future is unknown….
Bill
I should ammend my earlier post to note that I have been let down by this administration not getting national climate legislation done at this point, and that I am pretty dissapointed that he would just give away possibly one of his largest bargaining chips before the real negotiation got underway…
leapfrog
I wonder if there’s an upside to it: If there was a spill that close to DC (say, Virginia), would it be more real to those in charge, and possibly result in more aggressive environmental protections/penalties going forward? Not a fan, but seems it could happen. It’s likely our transition will be painful no matter how it’s handled. I’d be more comfortable if we had a carbon tax (pain) in place sooner than later, so that maybe we wouldn’t need to drill there at all.
Jesse
I think an argument that’s often used for increasing highway capacity applies just fine here. This also sounds like a great opportunity to let the market work like people are always demanding.For the first: Increasing capacity to treat congestion (as argued for roads) is like loosening your belt to treat obesity.Secondly, we should work on establishing better national capital rules and insurance. Lease the lands, but make sure that lease covers the almost inevitable leaks and damages against the natural worth of the land (carbon sequestration, bio-mass creation, oxygen creation, etc etc all the things that we just don’t count right now and thus land is “free” and all the services it does for us are unvalued) and insurance against those to mitigate. That should make the leases really high, and someone will only risk it when the price of oil is high enough to pay for the actual costs to the environment it causes.
SF
As far as covering costs, we should also tax OPEC imports enough to cover the approximately half of our national defense expenditures that go to ensure our supply of this oil. Then the value of domestic leases would easily go high enough to cover environmental costs.