THE BLOG
06/06/2010 05:12 am ET | Updated May 25, 2011

Check-up on Obama's Energy Plan: Inflating the Tires, Not the Numbers

Crossposted with www.theGreenGrok.

Once, he dismissed the idea of offshore drilling; now, President Obama says "drill."

2008 Flashback: When Inflating Tires Was a Good Idea

Remember Obama's tire-gauge message? Candidate Obama claimed Americans could save more oil by keeping tires properly inflated and getting tune-ups than we could get by opening up offshore areas for drilling.

2010-04-06-tiregauge.jpg
On the stump in Springfield, Missouri, back in July 2008, Obama told the crowd:

"We could save all the oil that they're talking about getting off drilling, if everybody was just inflating their tires and getting regular tune-ups."

It was a point the winning candidate drove home throughout his campaign -- and a point widely ridiculed by his colleagues across the aisle (see here, here [video], and here).

Remember the hand-outs at McCain rallies? If not, just take a look at the photo above.

I bet the McCain folks used those tire gauges on the QT because Obama's analysis was pretty much on the money, in more ways than one. (Even NASCAR recommends good tire maintenance to boost fuel efficiency, noting that 90 percent of drivers neglect this simple routine.)

We crunched the numbers back in '08 too and found Obama's conclusions sound: saving oil by properly maintaining tire pressure trumps the oil to be gotten from tapping closed areas of the outer continental shelf.

We also discovered that it was easy to get confused about just how much oil was in them thar continental shelves. A plethora of numbers was being bandied about on the subject -- many inaccurate. More often than not, the problems came from conflating different types of oil resources (e.g., total endowment versus undiscovered resources) and whether the oil was heretofore off-limits or already accessible. (For more info, see here.)

That Was Then, This is 2010: A Deflated Idea?

Over time, Obama has slowly distanced himself from the tire inflation-offshore drilling comparison. A big step away came in his State of the Union address when he argued that the United States should expand offshore drilling.

The other shoe dropped on March 31, 2010, when he announced the administration's intention to open up roughly 400,000 square miles of U.S. outer continental shelf for drilling and/or exploration. The areas now available, following the announcement, include the entire U.S. coastline except for the eastern seaboard north of Delaware, part of the eastern Gulf of Mexico within 125 miles of Florida's coast, the contiguous U.S. Pacific coast, and Hawaii. (See map below.)

How Much Oil Obama's Plan Should Add

So how much additional oil might that net us? Enough to make a dent in our oil imports? Enough to help rebalance our unbalanced balance of payments? If you've been reading the reports and listening to the talking heads, you're probably confused. Just like way back in 2008, there's a host of different numbers being bandied about. (See here and here and the government's numbers here, for a taste.)

The key point to remember is that if you want to know how much new oil is being opened up by Obama's plan, you can only count the oil in those areas that have been previously excluded -- no fair counting oil in areas that already had standing leases for drilling and/or exploration before the announcement.

Despite what you may have read, the only newly opened areas are (see map):

  • that slice of the eastern Gulf of Mexico that is 125 miles offshore of Florida (and there are already some existing leases in this area) and
  • the central and southern Atlantic Seaboard.

In many articles covering Obama's new plan, it is claimed that Alaska's northern coast -- the Chukchi and Beaufort seas -- "would be eligible for exploration and drilling after extensive studies." But these areas were not under any bans or moratoria restricting other parts of the outer continental shelf between 1990 and 2008. (See here [pdf] and here.) In fact, leases exist in both seas (Beaufort Sea production began in 2001
[pdf]
), although drilling has been limited, hampered by location and lawsuits.

Remaining
closed [pdf]
are both the continental Pacific coast and Alaska's
Bristol Bay area.

How much undiscovered economically recoverable resource (UERR) do the new areas open to drilling hold?

2010-04-06-_UERR_map_20122017.jpg
Oil resources available for exploration and drilling under Obama's new plan. The three circled areas, adding up to up to roughly 3.5 billion barrels of oil, are the only new resources -- and even these already had some exploration and drilling leases available before Obama's plan was unveiled.

The Interior Department estimates that the newly opened slice in the Eastern Gulf holds 64 percent of the 3 to 3.5 billion barrels of the total UERR in an area that was to be under a moratorium until 2022. That puts the potential oil to be gained there at between 2 and 2.2 billion barrels.

The central and southern Eastern Seaboard adds another 0.5 to 2.15 billion barrels of the same UERR oil.

This makes a grand total of somewhere between roughly 2.5 and just over 4 billion barrels of oil. By comparison, we currently use about 7.1 billion barrels annually. So, the newly available oil could potentially give us the equivalent of about half a year's worth of crude, but would only trickle into the system over time.

On the other hand, if we all channeled candidate Obama and collectively inflated our tires properly, we could save up to about 3 billion barrels of oil between now and 2030.

So, is this expansion into the central and southern Atlantic and the eastern Gulf worth the risks of spills near our East Coast fisheries and beaches to get a half a year's worth of oil? I imagine your answer depends on your politics.

But don't forget there is also a political calculus in much that goes on inside the Beltway. Could this be the goody that the oil industry gets for its acquiescence on a climate bill? Stranger things have happened. Which reminds me: whatever happened to EPA's promised regulations on coal ash?