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Morning Bell: Drilling to Save the Economy
Posted By Conn Carroll On July 15, 2008 @ 9:12 am In Ongoing Priorities | Comments Disabled
Today the U.S. has about 22 billion barrels of proven oil reserves  that can be legally developed. Yesterday, President Bush lifted just one of the many roadblocks that stand between American consumers and the estimated 19.1 billion barrels of oil in the Outer Continental Shelf  that are currently off-limits from production. Bush’s rescinding of his father’s 1990 presidential directive restricting all new offshore exploration and drilling could almost double proven U.S. oil reserves. The next step is getting Congress on board.
Beginning in 1982, Congress restricted more and more offshore areas through annual Department of Interior appropriations . Each year since then, Congress has denied Interior the funding necessary to conduct leasing of new offshore areas. If Congress passes legislation making it clear to world markets that the U.S. is serious about doubling its proven oil reserves, that would lower prices today. As former former Reagan chief economic adviser Martin Feldstein explains :
The relationship between future and current oil prices implies that an expected change in the future price of oil will have an immediate impact on the current price of oil. … [I]ncreasing the expected future supply of oil would also reduce today’s price. That fall in the current price would induce an immediate rise in oil consumption that would be matched by an increase in supply from the OPEC producers and others with some current excess capacity or available inventories.
The problem is that liberals in Congress do not want lower gas prices, increased consumption or increased production. As the Sierra Club’s Carl Pope told the Washington Post : “People who tell us the solution to our problem is drilling offshore are peddling our addiction. The drug is oil, and they don’t want us to get rid of it.” But Pope is a rich man. And liberal Democrats opposed to drilling such as Speaker Nancy Pelosi (D-Calif.) and Sen. Dianne Feinstein (D-Calif.) are rich women who represent wealthy states. They, and their constituents, aren’t hurt by high energy prices as badly as the rest of the country.
Heritage policy analyst Karen Campbell ran the numbers  and finds that going from $3- and $4-a-gallon retail to $5- and $6-a-gallon retail for gasoline would significantly affect working-class Americans. If prices continue to rise at an accelerated pace over the course of a year:
Contrast those numbers with the extremely low risks from offshore drilling. The National Research Council found that offshore oil and gas drilling was responsible for just 2% of the petroleum in North America’s oceans , compared with 63% from natural seepage and 22% from municipal and industrial waste. Coast Guard reports show the amount of oil spilled in U.S. waters dropped from 3.6 million barrels in the 1970s to less than 500,000 in the 1990s.
A post-Hurricane Katrina study  by the Minerals Management Service found that oil spilled from offshore oil facilities in the Gulf of Mexico were “minor due to the downhole safety valves at wells and operating practices conducted by the oil and gas industry,” and that “while cleanup was required, the volume of oil spilled and impacts to shore from offshore infrastructure were categorized as minor.”
Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2008/07/15/morning-bell-drilling-to-save-the-economy/
URLs in this post:
 22 billion barrels of proven oil reserves: http://www.eia.doe.gov/emeu/international/reserves.html
 19.1 billion barrels of oil in the Outer Continental Shelf: http://www.mms.gov/PDFs/2005EPAct/InventoryRTC.pdf
 Congress restricted more and more offshore areas through annual Department of Interior appropriations: http://www.heritage.org/Research/EnergyandEnvironment/wm1990.cfm?renderforprint=1
 explains: http://www.foundry.org/2008/07/01/drilling-now-can-lower-oil-prices-today/
 Washington Post: http://www.washingtonpost.com/wp-dyn/content/article/2008/07/14/AR2008071401049.html
 ran the numbers: http://www.heritage.org/Research/Economy/bg2162.cfm
 found that offshore oil and gas drilling was responsible for just 2% of the petroleum in North America’s oceans: http://www.usatoday.com/money/industries/energy/2008-07-13-offshore-drilling_N.htm
 study: http://www.mms.gov/tarprojects/581/44814183_MMS_Katrina_Rita_PL_Final%20Report%20Rev1.pdf
 Ways and Means Chairman Charles Rangel (D-N.Y.) is soliciting donations from corporations with business interests before his panel: http://www.washingtonpost.com/wp-dyn/content/article/2008/07/14/AR2008071402546.html
 will land the city back in court: http://www.washingtonpost.com/wp-dyn/content/article/2008/07/14/AR2008071401332.html
 ban restaurants and other food facilities from using trans fats: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/07/14/MN0111OTUA.DTL
 Rasmussen Reports: http://www.rasmussenreports.com/public_content/politics/current_events/the_war_in_iraq/40_say_victory_possible_in_iraq_up_eight_points_from_year_ago
 Iraq-style “surge” of troops in Afghanistan: http://www.nysun.com/national/mccain-will-call-for-a-surge-of-troops/81861/
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