LIEBERMAN: No drilling? No excuses

By Ben Lieberman | Tuesday, July 8, 2008

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COMMENTARY:

With gasoline prices above $4 a gallon and no relief in sight, it makes perfect sense to open some of America's extensive off-limits areas to oil drilling. Yet Congress refuses to budge, citing a number of weak excuses. Among them:

(1) "The extra energy would be a drop in the bucket."

Drilling critics use low-ball figures for the amounts of oil in places such as Alaska's Arctic National Wildlife Refuge (ANWR) and the 85 percent of America's territorial waters now off limits to exploration and production. Even assuming they're right - that expanded drilling would reduce the pain at the pump only a little - that's hardly a reason not to proceed.

More likely, the energy potential is substantial. Midrange estimates are that just a few thousand acres near the edge of ANWR's 19.6 million acres contains 10 billion barrels of oil, and restricted offshore areas hold another 19 billion. That's about 48 years of current imports from Saudi Arabia. Such initial estimates tend to be low, sometimes by wide margins.

(2) "The environmental risks are too great."

In fact, the risks are overstated. Advances in technology have greatly reduced the above-ground footprint and the risk of spills. And new production would be subject to the strictest environmental and safety standards, something that can't be said of oil imports.

The recent track record speaks for itself. In 2005, when Hurricane Katrina ripped through the western part of the Gulf of Mexico - the one offshore area where drilling isn't severely restricted - it didn't cause a single serious offshore spill. And onshore drilling in Prudhoe Bay, near ANWR, has been under way for decades with minimal adverse impacts (indeed, the caribou herds are more plentiful now), and it used technology far less environmentally-friendly than would be required now.

Nonetheless, coastal states have legitimate concerns, which is why the most promising bills allow each state to decide for itself whether it wants drilling off its waters. For example, some may want to limit offshore platforms to areas too far from the shore to disturb coastal views. Overall, the environmental and aesthetic concerns can be handled without an all-out ban on new oil production.

(3) "Companies don't need new leases. They're sitting on the ones they already have."

The implication is that big oil is deliberately sitting on potential gushers to boost prices. Drilling opponents are assuming that every leased acre has oil beneath it, but in truth most do not. In other cases, oil exploration and development is under way. But the process takes many years - in part, ironically, because of the extensive post-lease permitting process and other regulatory requirements. In reality, we're getting as much as possible out of the relatively few areas where drilling is allowed, which is why we need to open new ones.

(4) "It would take too long for the oil to become available."

Bill Clinton complained that ANWR oil would take up to 10 years to come online - 13 years ago when he vetoed an ANWR bill. Actually, it probably wouldn't take nearly that long. Perhaps half of that time is due to regulatory delays that lawmakers could expedite.

Moreover, some market analysts believe that if America signaled its seriousness about expanding domestic supplies by opening new areas, prices would start dropping before the extra oil hit the market. In any event, America's energy challenges aren't going to disappear in a few years, so we need to begin the process now of providing future supplies.

(5) "More oil would discourage alternatives."

In fact, the research into alternative fuels and vehicles has been under way for years and has been accelerated by the rise in gas prices. This research will continue with or without new drilling.

We need to be realistic about the prospects for alternatives such as cellulosic ethanol, hydrogen fuel cells, electric vehicles and others. It takes time to develop and market viable alternatives. The task will probably take two decades or more.

The age of oil, meanwhile, will be with us for at least a while longer, so we ought to ensure it's as affordable as possible. More oil and alternatives is not an either/or proposition. We need both.

The restrictions on domestic oil were enacted in the 1980s and '90s when gas was little more than $1 a gallon. Much has changed since then. There simply is no good reason to continue keeping so much American oil off-limits.

Ben Lieberman is senior policy analyst for energy and environment in the Thomas A. Roe Institute for Economic Policy Studies at the Heritage Foundation.

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