THE BLOG
03/25/2011 03:56 pm ET Updated May 25, 2011

Big Oil's Sleight of Hand

Headlines are blaring about the threat of $5-a-gallon gas, but what those stories don't tell you is that big oil couldn't be happier. Rising gas prices let big oil pull off an amazing sleight of hand -- the industry distracts the public with calls for more domestic oil drilling as it digs into Americans' wallets. The industry's Congressional allies call for an "all of the above' energy approach, and the new "drill here, drill now" mantra, don't have anything to do with lowering gas prices. They are a way for the oil companies to channel frustration about gasoline prices, and to keep us trapped in an "oil-centric" approach to energy. That oil-centric policy is bad news for Americans, but it's great news for big oil. As long as the oil companies can convince Americans that more domestic drilling will lower the price of gas -- which it won't -- the industry is in the driver's seat, and it's off the hook for its three biggest scams:
  • The Pricing Myth: No matter how much we drill, Americans will still be gouged at the pump by the oil industry. The OPEC cartel, not domestic drilling, is what dictates the price of oil. Ken Green, resident scholar at the American Enterprise Institute said it well: "We probably couldn't produce enough to affect the world price of oil. People don't understand that." Saying that more domestic drilling will bring down gasoline prices is a good PR strategy, but it won't do a thing for consumers struggling to deal with high gas prices.
  • The Subsidy Scam: As long as big oil can convince the public that drilling will lower the price of gasoline, they also can divert attention from the enormous, unjustified subsidies we shell out in taxes. We pay for more than 40 billion in taxpayer giveaways to the industry over ten years, even as the oil companies rake in record profits. BP posted profits of more than 5.5 billion in the last 3 months of last year, and that was after a 1 billion charge for destroying the Gulf of Mexico.
  • The Lease Fleece: And as long as big oil can convince Americans that drilling will lower the price of gas, they will be able to get their hands on more of our wild lands. The industry is sitting on over 29 million acres of onshore federal oil and gas leases that they aren't even using. Last year, they only used about a third of the drilling permits they got from the federal government. Yet they continue beating the drum for "more drilling", in an effort to deflect consumer frustration about rising gasoline prices.
The oil companies renew their call for more domestic drilling every year -- it's one of the few "renewables" to which the industry commits real time and resources. This year is no different. Let's hope that what is different is that consumers will wake up to Big Oil's sleight-of-hand. As long as we have an oil-centric approach to energy, Big Oil, with the support of their congressional allies, will be reaching into our wallets every time we are at the pump, and every time we pay our taxes. Policies that encourage more domestic drilling can't lower gasoline prices; they can only prolong a failed energy policy that is dragging down our economy, our security and our public health. What we need to do is finally get serious about energy efficiency, and about advancing clean, renewable energy technologies for America.