06/14/2011 10:27 am ET | Updated Aug 14, 2011

Drill Baby Drill: An Empty Slogan That Echoes Whenever Prices Rise

It's a predictable, almost Pavlovian, response every time consumers start to pay sky-high fuel prices that we hear a loud chorus for more oil production -- exemplified by the 2008 campaign slogan "Drill Baby Drill" -- like a scratched phonograph record that repeats the same sound ad infinitum.

And, when the oil companies can't give orders to the occupant of the White House, they add another element: the administration is allowing "radical environmentalists" to tie our hands and prevent "safe" oil development. They screech and hiss that if only President Obama stopped standing in the way of oil production, we would pay half as much for our fuel.

What development is Obama blocking? His administration issued a temporary moratorium on new drilling leases in the Gulf of Mexico after the worst oil spill in history a year ago. As safety rules were updated, the government quietly began to issue new permits again earlier this year.

Since Obama took office, overall crude oil production in the United States surged 11 percent to 5.5 million barrels per day (bpd) last year after it languished during the Bush administration. In fact, U.S. oil output slumped as low as 4.9 million bpd in 2008, Bush's final year in office, the lowest point since the 1940s. Why did levels reach historic lows under Bush? You can't blame the environmentalists. Bush and his team ran all the regulatory agencies that oversee energy production and loosened environmental rules.

If Obama is blocking oil production, why has it gone up on his watch? And why is this year's total expected to keep up with last year? By listening to Obama's critics, without knowing the facts, one would think that U.S. oil output plunged since he took office.

Bush, Obama and everyone else is hamstrung by the same inexorable laws of nature, in this case, Peak Oil. Crude peaked in the United States at 9.6 million bpd in 1970 and since then fallen off. It has also topped out in most oil-producing countries and is rising in only a handful of nations. Within the next decade, the world will reach peak oil production before starting a slow decline. The sooner we recognize that we must replace dwindling oil reserves, the better we can make the transition. If not, we are doomed to skid, energy starved, on the downward slope, unprepared and frightened.

ExxonMobil recently announced a "big new discovery" offshore. The problem for a world reliant on oil is that the newer discoveries are smaller than the old wells that are now sputtering. Is a field with the potential for 700 million barrels what passes for a windfall in the 21st century? That sounds like a lot, but over its lifetime represents only a stingy 10 days' supply for the world. Drill baby drill all you want, but the oil fields are drying up and new breakthroughs are not enough and oil reserves are running out. There is a lot of talk about drilling in the Arctic, producing Bakken reserves in the West, converting shale to oil and increasing the use of natural gas as a fuel. All of those are occurring, and yet we still are unable to raise overall domestic energy production by more than drips and drabs.

The United States consumes 19.6 million bpd of petroleum. Oil professionals know that the United States is incapable of producing that much, so oil companies are also investing in alternatives.

Let's suppose we doubled oil production. That's not feasible, but for argument's sake, let's just pretend. Would that make a big difference for us? Alaska North Slope crude was shipped to Asia, as well as the U.S. West Coast, for years. Right now, refiners in the United States dispatch a veritable Spanish Armada of gasoline and diesel -- by the millions of barrels every month -- for customers in Europe and Latin America. Even if we doubled crude oil production, would it stay here? Want to ban exports? The folks calling for increased U.S. oil production are free-market advocates. If they feel strongly enough about it, why don't they pressure Congress to ban exports of gasoline and diesel that we badly need at home?

Obama, on the other hand, gets it. He is encouraging the exploitation of traditional carbon fuels, but the big difference is that he is also mindful of alternative energy sources. The appointment of Nobel physicist Steven Chu as energy secretary demonstrates Obama's serious commitment to energy diversification and innovation. Obama and Chu have directed the most dramatic policy shift in history by investing unprecedented levels of federal dollars in new energy sources. All of those renewable sources combined meet no more than a skimpy part of our total needs, but the key to a reliable energy future is safe alternatives. Drill baby drill might be a snazzy slogan, but it is far too simplistic and short-sighted to be the central thrust of U.S. energy policy.

Steve Hallett is the author, with John Wright, of Life Without Oil: Why We Must Shift to a New Energy Future (March, Prometheus Books). Wright is also the author of The Obama Haters (April, Potomac Books).