How Not to Lower Gas Prices

President Bush's announcement today that he is lifting the Executive Ban placing a moratorium on new offshore drilling is disappointing, but really not that surprising. For the last 7½ years, he and Vice President Cheney have pushed an energy policy which focuses primarily on drilling everywhere. The result has been sky high energy costs for American consumers and record profits for big oil and gas.

As someone who lives in and represents Santa Barbara, CA and witnessed the horrible economic and environmental consequences of the huge 1969 oil spill, I know I have a certain bias against new offshore drilling. But even so, President Bush's call for more drilling as the solution to high gas prices hits a few dry holes.

First, a report last year threw cold water on the idea of new offshore drilling as the way to lower gas prices. It said that new offshore drilling "would not have a significant impact on domestic crude oil and natural gas production or prices before 2030" and that the impact on prices would be "insignificant." The source of this report is...the Bush administration's own Energy Information Administration!

Second, we simply can't drill our way to "energy independence" even if we wanted. The U.S. has less than 3% of world oil supplies, yet we make up nearly 25% of world demand. More drilling off our coasts (and in Alaska, for that matter) isn't going to change those numbers. No one should believe arguments that more drilling in these pristine areas means we will stop relying on oil from the Middle East, Venezuela or Russia. More drilling won't end our addiction to oil -- it just enables it.

Third, most people probably don't know that 80% of the oil and gas resources off our coasts are already available for leasing and drilling! While large swaths of our coasts are off limits to new drilling, the areas where most oil and gas are located are not. Listening to President Bush, Sen. McCain and others, you'd think we've been locking up all our resources -- the opposite is true.

Fourth, we are drilling more domestically than we have in years. Following on Vice President Cheney's ridiculous statement that conservation is merely a "personal virtue," the Bush administration's energy policy has basically been to drill for more oil and gas wherever they can and hope that the prices come down. It has leased public lands for drilling throughout the West, the Gulf Coast and elsewhere at a record pace over the last 7½ years.

Interestingly, right now the oil and gas industry is sitting on 68 million acres of public lands where it could be drilling but isn't. It has some 6,000 leases in the Gulf of Mexico (where the majority of oil and natural gas reserves are found) that are not being explored. According to Senator McCain and President Bush, the oil and gas industry wants to lower prices for American consumers but they can't because they're prevented from drilling. This couldn't be further from the truth.

So, we're drilling domestically more than ever, the oil industry already has access to most offshore resources, the industry is not drilling in millions of acres of public land that it has leased and, even if it did, it wouldn't release us from our reliance on foreign oil and it wouldn't lower prices. And more offshore drilling is the president's solution?

In contrast to these tired "drill only" proposals, Democrats have pushed a responsible, comprehensive energy policy to provide relief from these high prices and wean our economy off fossil fuels. In the short-term, we're calling on President Bush to immediately release oil from the Strategic Petroleum Reserve (SPR). Earlier this year it took an act of Congress to force the Bush administration to stop filling the SPR while oil is at record high prices. Now we are calling on him to release some of the SPR oil onto the market to help drive down prices. Similar actions have been taken several times, most recently by President Bush following Hurricane Katrina. Each time prices dropped significantly. Taking this simple step would probably reduce gasoline prices more in 10 days than President Bush's offshore drilling proposal would do in 10 years.
In addtion, oil and gas companies should "use or lose" access to the 68 million publicly held acres where they can currently drill but aren't. There's no reason that companies should be able to lock up oil and gas reserves on publicly held land when we've made a choice as a nation to begin extraction in those locations.

In the long term, we need to extend and increase tax incentives for alternative energy, like solar, wind and biomass, and require utilities to get an increasing share of their energy from renewable sources. This is being done in states like California and Texas already, but President Bush is fighting our effort to make this a nationwide mandate. We also have to become more energy efficient. The new Democratically controlled Congress already passed the first increase in fuel efficiency standards for cars in 32 years and took steps to make our appliances and buildings more energy efficient. But we have to do more. Much more.

Unfortunately, President Bush, Senator McCain and Congressional Republicans have responded to our serious energy challenges pushing political gimmicks like the gas tax holiday and new offshore drilling. These are the policies that got us into this mess in the first place and they aren't going to get us out of it.

Comments

[Desmo]

Please tell me one form of stable alternate energy, other than nuclear power (not feasible in automobiles) that passes the cost benefit test of oil? Even at $300 a barrel it would still be the most cost effective.

[VeggieCar]

1oz of conservation= many millions of barrels of oil

[MajorKong]

Efficiency. The cheapest barrel of oil is the one you don't use in the first place.

[KillTheMessenger]

Mrs. Capps, may I ask if you know that there is actual oil under those 68 million acres or leased land? Because I don't know that.

I do know that I don't want any offshore drilling. It is a waste of our resources and of our ecology and will do absolutely nothing to solve our oil dependence problem. And if you tell me where to send the money to campaign against offshore drilling and drilling in ANWR, I will get my credit card out ans support that effort.

But I am getting tired of hearing about all these leases. Just because the government leases land to oil companies does not mean there is oil under that land. Or that there is any oil under that land worth drilling for before oil reaches $300/barrel.

Let's have an argument about how we can solve this problem without any drilling instead of drilling potential dry holes in somebody's back yard. The sooner we confront the American people with the reality they need to hear instead of the fairy tales they want to hear, the better.

[TxAggie]

You are spot on regarding the 68 million acres- only mother nature know sfor sure there is oil or gas miles beneath the earth. What the dems don't mention is the acreage that is leased where the gov't will not grant drilling permits, nor do they mention that geology plays just a wee little bit of a role. They also fail to mention that the primary exploration tool is seismic, drilling is the last thing done in the exploration process and moreoften than not the result is a dry hole- finding oil and gas is difficult-that is why it is scarce. I disagree with you on drilling being a waste of our resources- not to drill and not to utilize our domestic resources that is a waste.

[AngelHair]

The oil companies decided now is the time to make a strategic push to pick up all possible oil leases. Once they have them, they have them forever, and can use them whenever --now or decades from now.
The reason to try now is because people are jolted by the huge runup in oil and gasoline prices. So they'll give credence to 'more drilling' as a way to reduce prices.
Big Oil generated a list of talking points and handed them to the Republicans to parrot. The Bush administration will push out the leases -- for public lands -- dirt cheap, relatively speaking, as quietly as they can.
Somebody has a new book out on the Teapot Dome Scandal in the 1920's when oil companies bought off corrupt officials. It shocked people at the time, I remember hearing the old folks remark on it even 50 years later. I intend to read the book, as soon as I think my stomach can take it. Don't think anything has changed.
And don't believe letting out the leases will impact the price of oil. If you want it to help you economically, go to work for an oil company. One CEO got almost 1/2 billion (yeah, I know the value of a dollar is done, but 1/2 billion of them is still a nice hunk of money). For One Year. What percentage of the $6 billion subsidy the oil companies got went directly into the pockets of 20 or 30 people?

[Mildmannered]

Thank you for your article Rep. Capps. You should include links to photos of the 1969 Santa Barbara oil spill. Maybe one of your readers will post a comment with links.

[Pdubya]

Dear Honorable Capps:

We are looking through rose colored glasses when we focus on more drilling. The saddest part is that most Americans, including our representatives, either refuse to believe or complicitely nod at the real issue - our monetary policy.

A brief persual through history will show who, what, when, how, where and why our U.S. dollar fiat currency was invented and used as a ruse to trade on oil with [Persia]. "We'll buy your oil if you buy our dollar." That promise is being broken because the gluttony of the complicit has run amok and "rogue" nations such as Afganistan, Iraq, Iran, Venezuela, and North Korea have refused to trade on our dollar.

Ain't it peculiar these are the very nations we're "having trouble with"?

Until we address our currency, monetary policy, and the constitutionality of the Federal Reserve and its fieat Note, we will never be energy independent - even if we get 100% of our oil stateside.

Am I talking into a tin hat?

Have you noticed the price of tin lately?

Please, do something to address the constitutionality of the Federal Reserve and re-instate SOME form of the gold standard again. No New World Order, thank you very much!

[Chavez08]

What is slavery?

[Chillinout]

I don't understand why every time the McClone camp brings up allowing more drilling, the pundits don't ask this very question. "Why don't we have the oil companies drill what they already have, instead of opening up more oil fields?"

[kevinbaja]

Rep. Capps -
Do you have ANY idea when the oil that is being shipped out of Alaska will be flowing to the lower 48 INSTEAD of CHINA ? ? ? Inquiring minds want to know.....

[ScooterLiddy]

Never. It is suited for heating oil. The only place we use heating oil is the east coast. Doesn't make economic sense to transport it through down through the Panama Canal and up.

[Maverick80229]

Put it on a train.

[skibum49]

According to the Department of Energy the total US export of oil has averaged about 27,000 Barrels a day during the last year. See this chart for the averages for the last 17 years.
The oil exports primarily go to Canada.




http://tonto.eia.doe.gov/dnav/pet/hist/wcrexus2W.htm

[WallStreetNobody]

Bush's answer to the oil price crisis is to open up offshore drilling that his own father prevented and his own Department of Energy tells him will do nothing to oil supplies and prices until at least 2030. It will of course enrich his oil buddy friends immensely. He uses the argument that Americans are hurting, yet his plan does absolutely nothing to address the current situation. It is a complete lie. Congress has asked him to open up the SPR which is filled at record levels with over 700 million barrels of oil. Releasing just 50 million barrels of this over the next 3 months would lower oil prices RIGHT AWAY. Some analysts expect it can lower prices by as much as 30% within a few days! That would provide immediate relief to Americans as well as raise funds for a government that is massively spending. We can see gas fall back to $3 per gallon on average within a week if Bush would just open up the SPR and drawdown a small percentage of our reserves. But that of course would only benefit the American people, not his oil buddies.

[Birdwatcher]

This article is right on! We have been talking about this very thing for months, but the MSM seems to ignore it. Sh__ or get off the pot-drill where you already own the leases. Refine the oil you have-oh that's right you don't want to produce too much gas cause the price might go down!

[KillTheMessenger]

Some analysts are wrong. Threatening traders with opening the SPR is not going to do anything. It would probably prove to more Americans that this thing is real and is not going to go away, though. So on a psychological level it might actually help. But not the way you think.

[Leatherhelmet]

2030?

RIG, the biggest oil drilling company in the world says some wells would be producing in one year and no well no matter where you put it would take longer than 6 years to produce.

Your logic is ridiculous. IF the SPR released 50 million barrels, the government would just have to buy it back anyway. We are in a time of war and we need a back-up.