Off Shore Drilling: A Long Term Solution for America’s Energy Crisis
by Sean Clerget ‘09
A USA Today article this past June told the sad story of a Cincinnati suburban couple, forced to alter a small part of their routine because of rising gas prices. In order to save money they had to commute into the city for work together! In one car! The article lamented that Americans were being forced to change their driving habits. The implication: carpooling clearly signals a disaster for the American lifestyle.
This story is just one example of the media’s, and the country’s, attitudes towards rising gas prices. This summer, stories like this appeared daily in the papers, hourly on cable news, and they are still showing up in the media now. The troubling thing about this media frenzy is the tone of the reporting. Why lament the changes the suburban couple made? Why not praise them? America has been spoiled by cheap gas for a long time. Keep in mind that even with these recent price increases the United States still has one of the lowest average prices in the world. According to the U.S. Department of Energy, on July 28, 2008, the U.S. average was $4.21. The average in France was $8.60, in Italy $8.88, and in the UK $8.79.
The changes made by the couple in Cincinnati are the type of changes that Americans everywhere can make in order to reduce their gasoline consumption and save themselves some money. Although the United States government should take a fresh look at its energy policies and make some much needed changes where it can, the whole solution cannot come from government policy alone. Changes should also come from individuals. Prices have gone down in recent weeks, arguably because of a decrease in demand. That couple, by driving to work together, helped bring gas prices down. Americans should realize how individual actions can make a difference and play a significant role in solving the country’s energy problems.
High gas prices are only part of the larger energy problems: America’s dependence on foreign oil and the impact of its consumption on the environment. The problem is economic, but it is also a vital national security issue and an environmental concern. America sends $700 billion overseas every year to import oil, which is a massive transfer of this country’s wealth to foreign governments, many of whom are not friendly to us. Some of these unfriendly nations have the power to cut off oil imports to the U.S., which would devastate the economy, and endanger American sovereignty. Environmentally, it is vital to put an end to what is often called America’s “oil addiction.” The U.S. has 30% of the world’s vehicles but produces half of the world’s vehicle greenhouse gas emissions per year. These are two serious problems that require strong leadership and resolve.
As to that, the energy crisis has become a major campaign issue in the 2008 Presidential election, leading to gimmicks and pandering, as happens all too often in politics. Back in May, Senator Hillary Clinton promoted the idea of a gas tax holiday during the Democratic primary contest right here in Indiana. The idea consists of suspending the gas tax for a certain period of time, therefore lowering the price of gasoline. Presumptive Republican nominee Senator John McCain also supported this idea at the time. Only Senator Barack Obama stood strong against what was clearly a political ploy – not sound policy. He should be commended for that. The gas tax holiday would only have temporarily saved Americans 18 cents a gallon and would have taken away revenue used to support our transportation infrastructure.
While he was right on the gas tax holiday, Senator Obama’s entire energy plan has several major problems. Just recently he ran an ad calling for a windfall profit tax (WPT) on oil companies and stating that he would use the revenue to give rebates of $500 to individuals and $1,000 to families to help relieve the burden of rising gas prices. Implementation of this policy would be a disaster. The WPT was tried before, in the 1980s, with dangerous results. According to a 2006 Congressional Research Service (a non-partisan congressional think tank) report, “The WPT had the effect of reducing the domestic supply of crude oil below what the supply would have been without the tax. This increased the demand for imported oil and made the United States more dependent on foreign oil.” The WPT reduced domestic oil production between “3 and 6 percent, and increased oil imports from between 8 and 16 percent.” Making the United States more dependent on foreign oil at a time when we import 70% of our oil and send $700 billion dollars overseas a year is simply irresponsible and dangerous. A little extra money might sound appealing to many Americans, especially if it is coming from the profits of the often demonized oil companies. However, not only do the costs mentioned outweigh the minor short term benefits, the WPT may also cause an increase in gas prices making that extra $1,000 completely irrelevant.
Fortunately, Senator McCain has backed off on the gas tax holiday idea and has started to take a more comprehensive approach to the energy crisis. He has pledged to invest in alternative energy sources, and has promised to create incentives for private companies to develop new technologies, including a monetary award for “the development of a battery package that has the size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars. Additionally, Senator McCain supports lifting the ban on offshore drilling in the United States, which Senator Obama opposes. Senator Obama said on June 20th in Jacksonville, Florida, that he does not believe offshore drilling will save Americans any money in the short term, nor does he consider it a worthwhile endeavor because it will take ten years to produce the oil. He is right about how long it will take, which is why drilling should begin immediately. Senator Obama’s position is very shortsighted. The ban should be lifted even if it won’t lower gas prices a cent, because as domestic oil production increases, the need for imported oil decreases.
Some Federal government estimates say that around 95 billion barrels of oil exist on U.S. land at the outer continental shelf. Various other estimates have been floated, but many of these areas have not been explored by the oil companies with new sophisticated technology because there is no incentive to spend money looking if there is a ban on drilling. Last year several huge oil reserves were discovered off the coast of Brazil. One of them is believed to hold around eight billion barrels, which experts believe will make them a major exporter in coming years. With estimates as high as 95 billion barrels, lifting the ban would create a huge incentive for oil companies to increase exploration off American shores.
In order to explore the environmental impact of offshore oil drilling, the U.S. should look to the states where drilling is already happening. For instance, Louisiana uses 3,200 drilling platforms that produce 25% of the country’s domestic oil. Yet in over 50 years of oil production, its coast line has not experienced even one major oil spill. The oil spills of the past that seem to be the cause for so much concern among environmentalists have come from the transportation of oil, not offshore oil drilling. Whether the ban on offshore drilling is lifted or not, the U.S. will still transport a massive amount of oil. Also, the rigs that did not produce major oil spills in the 50s, 60s, and 70s were using the technology of that time. Today’s technology is much more advanced, and so offshore drilling is done even safer than in the past. Therefore, the danger of an oil spill from offshore drilling is not a major threat.
Yes demand needs to be reduced, and yes alternative energy sources need developing, and these issues must be addressed, but reducing dependence on foreign oil is vital to our national security, and offshore drilling helps to do that. Safe drilling is happening off the coast of many states, and any new drilling will likely be even safer. The idea is also very popular: 69% of Americans, according to a July CNN/research opinion poll favor offshore drilling. Senator Obama has recently quoted T. Boone Pickens, who is a former oil man and is currently investing in wind energy and other renewable energy sources, as saying that the U.S. can’t drill its way out of this problem. Of course it can’t, and Senator McCain agrees, but drilling can be a part of the solution.
America needs to approach this problem from every angle. Any of these options alone, investing in alternatives, creating business incentives or offshore drilling, will not do enough. There is no reason they should be mutually exclusive; these many issues can be addressed through a comprehensive plan, which must be approached with long term vision. Often the American people cannot foresee the consequences of certain policies, which is one of the reasons they elect representatives to look at the long term issues for them. Senator Obama and Senator McCain both need to realize that the energy policies the next administration supports will take time to have real impact. There are no effective short term solutions to this problem. Short term solutions usually make things more difficult in the long run, causing serious problems to be handed down to the next generation. The candidates need to accept the fact that their policies may not have major impact until they are out of office. They may not even get credit for some of their accomplishments in office, but isn’t the country’s welfare more important than personal credit? It’s time for a comprehensive energy package, and I hope that no matter who wins both Senator Obama and Senator McCain will work hard to make America energy independent.
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