The Thrill of the Drill

(Editor's Note: For another look at the calls to, "Drill here, drill now," see McCain's Offshore Drilling Hogwash.)

John McCain and Sarah Palin stand convinced that drilling now for domestic oil is paramount to bridge the gap to an energy-independent future. Even Congressional Democrats have given up on a 25-year-old ban on drilling for oil off the United State's coasts. However, don't expect to see gasoline prices take a sudden dive any time soon. That's because in the petroleum business reducing our dependence on foreign oil is a complicated process.

Although the Republicans chanted "Drill, baby, drill" at their convention in Minneapolis, and many believe oil drilling to be a panacea against our energy ills, the USA's natural oil reserves are difficult to get to, will take years to tap, and even at peak usage won't last very long.

"By 2016, drilling on the Outer Continental Shelf will end up producing zero barrels of oil at current rates of usage, " said Marchant Wentworth, legislative representative for clean energy for the Union of Concerned Scientists. "Oil companies could continue to draw oil from U.S. locations longer if minimum fuel standards are put in place," Wentworth added. But don't count on it. Congress has been dragging its feet on fuel efficiency standards for years.

Will an added supply of domestic crude bring down the price of oil, as Republicans such as John Boehner of Ohio proclaimed? "Opening up the Outer Continental Shelf will have no effect to a minuscule effect on gas prices," Wentworth said.

The reason is that America's oil is literally a drop in the bucket compared to worldwide reserves of oil. The United States buys more than 13.2 million barrels of crude oil a day. More than half of our supply of crude oil is from OPEC (Organization of Petroleum Exporting Countries) and the rest is from countries such as Canada, Mexico and Brazil (source: the CIA World Fact Book).

We use almost all the oil we pump for ourselves, exporting an average of only 1 million barrels a day (source: CIA World Fact Book). The amount of oil that exists out in the Atlantic and Pacific shelves is not thought to be significant. The Interior Department estimates that there are 18 billion barrels of recoverable oil beneath the coastal waters. The oil in the controversial ANWR reserve in Alaska is considered to be much smaller, although no one knows by how much.

Oil prices are, essentially, set by OPEC. Even non-OPEC countries tend to follow prevailing price trends. Supply and demand alone don't determine prices as there are national interests to be considered which hike prices higher than they would be in a free market. Since it's highly unlikely that Americans will be "fillin' 'er up" with all-American gasoline but rather with a blend of various fuels from many countries, the price will most likely remain closer to world prices than anything the U.S. Congress can dream about.

"The only way we can reduce prices is if we start now to reduce demand and get more efficient cars on line," Wentworth said.

The reason the Democrats finally conceded defeat on the drilling ban even though their party platform is against drilling and for alternative energy sources is due to public opinion on rising gas prices. They also wanted to pass an underlying bill that included the Pentagon budget, $24 billion in aid for flood and hurricane victims, and also to keep the government functioning past this month's start of the 2009 budget year.

What about all the renewable energy that's been so highly touted by everyone from the Democrats to energy baron T. Boone Pickens? It's still out there. Even John McCain devotes a large part of his energy program, "The Lexington Project," to such things as a $300 million prize for a cost-effective electric car battery, and "clean coal" development. Barack Obama touts everything from spending $150 billion over 10 years to develop alternative energy to giving tax credits to put 1 million hybrid vehicles on the road by 2015.

Many hybrid cars are already on the roads. In a recent news item reporters found that McCain had 13 cars, all conventional, and Obama has one car, a hybrid Ford Escape. The Toyota Prius was the first hybrid on the market but automakers are falling all over themselves trying to put out hybrids that run on both gasoline and electricity.

Alternative energy is about more than new automobiles. Wind power is something we can capture right now and it is being used in fields and off remote shores. "Wind power is here and now. Even the Bush Administration says we could get 20 percent of our electricity with wind," Wentworth said.

According to T. Boone Pickens, the plains states of the U.S.A. are the "Saudi Arabia of Wind." Once windmill generators are installed, a one-time expense, the U.S. would have access to free energy for centuries, Pickens says.

Natural gas is also a fuel that is common in some parts of the country but fairly new in other areas. We haven't even begun to tap all the natural gas available in this country. Compressed natural gas is 90 percent cleaner than oil or coal which makes it a much sought-after fuel for homeowners and factories.

Solar power is available everywhere but the means to harness it need to be developed and a market must be created. Electricity companies are interested but individuals can fit their own homes with solar panels and produce their own energy for free. All it takes is planning and ingenuity.

That's the future of energy in this country and the drumbeat of future thinkers who talk about maintaining freedom from foreign energy markets. It's sometimes hard to attain and often prohibitively expensive but those who seek energy independence say it's worth it to cut ties with price-gouging OPEC sheiks.

Drilling for more oil does little more than buy the United States a few more years of extra fuel and even the Republicans in Congress know that. Look for the Democrats to ask for limits on drilling next year and for Republicans to challenge any drilling bans.

The thrill of the drill is still too tempting to pass up and the battle is likely to rage for a least a few years to come.

Comments

[Lynn Voedisch - Huffpost Blogger]

Thanks for your comments. We continue to hear people chanting for more drilling, while alternative energy groups insist that it's not going to do us any good. What concerns me--and what I didn't even get into in the article--was how much money we'd spend on each oil rig. After pumping relatively little crude, the rigs would have to be abandoned. Big waste of money. But if we invested the same amount of money in wind or natural gas, the equipment would keep on producing. Thinking about the future is what it's all about.

[kauffmanr]

so now that we've drilled here, drilled now and drilled everywhere can we move onto the more important stuff.... like ending our use of fossil fuels by 2020? The We Can Solve it campaign is working towards this goal, even if ABC news refuses to run their ads occasionally. Check out their website:

http://www.wecansolveit.org/

[pritchet1]

May I suggest that folks take a look at http://peswiki.com/index.php/Directory:North_American_Oil_Fields
"Directory of information and resources related to oil production and the vast untapped reserves in the North American Continent."

All that really needs to be done is for Congress to remove the cap on oil flow. The North Slope pipeline is running at 1/2 capacity per Congressional mandate. Why is that?

[derik]

By the time any crude flows out of "drill baby drill" rigs, my kids will have finished college. Then; when the flows happen, the world market price of crude will magically remain the same (due to as you said a drop in the bucket). Either way, when the crude stops flowing in a few years, the oil companies will have a bunch of rigs sitting there. My understanding, is that an oil rig is quite a capital cost (and time to build). When I input the "investment" into my handy dandy spreadsheet, it turns out that such a "program" does not seem to really provide much of a return (on capital etc). Obviously, since the oil companies are private and global they do have, I assume, some smart finance folks that also have some handy dandy spreadsheets (ok, some handy dandy turbo spreadsheets) that help them figure out what to invest in. Then again, it seems that nationalizing the oil companies takes away the need for a return on capital etc. In that model, we then join Hugo. Obviously, such nationalizing will never happen here, I hope. Then again, I find that much of the nationalizations of the world have all been a political thing that never works. For now, we just politicize the "drill baby drill" until the elections are over. Then the big boys at the oil companies will break out their handy dandy spreadsheets and do the finance analysis.

[Linda Hansen - Huffpost Blogger]

Well said, Lynn.

If we do the McCain/Palin "Drill, Baby, Drill" Tango, we'll be dancing for about 17 years before we see any positive impact at the pump -- and then we'll have tapped into enough new oil to last maybe two years at our current rate of consumption.

Sadly, the low-information voter doesn't want to be confused by hard facts, and this mass ignorance is what John McCain and oil-expert­-by-accide­nt-of-resi­dence Palin count on when they're selling their faux-energy platform.

What they're selling is oil, alright. Snake oil. Buyer beware.

[StephenFox]

Congratulation, Lynn. As a member of WritersforObama, we are all proud of you, and the articulate and significant way you make very original and compelling points.

Stephen Fox, Contributing Editor New Mexico Sun News