Why Can't We Drill?

I have watched closely the recent case for and against expanding domestic oil production. The Democrats have a carefully constructed set of talking points. How do I know? Because every single Democrat that comes on TV to debate the issue runs through the exact same points. Here they are:

We can’t drill our way out of this problem. This statement is inane on its face. We’ll need supplies of oil for a long time. Any additional domestic production, which will also be new production to the world supply, is better than not having any additional production. Maybe the Democrats are trying to imply that the only energy solution that the GOP supports is drilling for oil – which is absolute nonsense.

We shouldn’t drill in ANWR because it will take 10 years before new oil will be available to the country. Also a silly statement. Are the Democrats suggesting that 1 million barrels of oil a day in new production will not be helpful in 10 years? Would it be better to continue buying oil from Hugo Chavez or the Arab dictators? Are they assuming that 10 years from now that there will be no need for oil in this country? The entire global oil production peaked in 2005 at 85 million barrels a day. 1 million barrels a day is not insignificant.

ANWR is a pristine wilderness that must be protected. ANWR is a vast 19 million acre section of northeastern Alaska. Only a small area in the northeastern corner of ANWR is needed to drill. Current drilling technology is much less invasive and ecologically protective than in the past. The Bush administration has done the homework to confirm that innovative methods of drilling can be used that will have almost no impact on the environment or wildlife in this small corner of ANWR. Anyone who is making this point doesn’t understand the facts, or has some other agenda.

If we were to bring ANWR supplies on-line, it would only reduce gas prices by 1 cent a gallon. I haven’t had a chance to validate this point. Regardless, providing 5% of our needs from a new domestic source certainly is smart. I'm not so worried about lowering the gas price as I am that it will double in 10 years, or sooner, without significant new domestic supply. China, India, and the rest of the emerging markets are going put greater and greater demand pressure on prices for years to come.

Big Oil is sitting on thousands of leases on 68 million acres of federal land and are not drilling on it. Congress needs to pass a “use it or lose” it law in regard to these leases. What is the point of opening up new areas to drilling when they are not even drilling on the land they already have access to? It is true that oil companies have leases on this land, which may or may not turn out to be productive. But having leases on land does not mean a company has an approved permit to drill. The Democrats make sure it is a very difficult and lengthy process to have a permit approved. Environmental groups also file endless lawsuits to block the permits from being approved. So much of this land is not really approved for drilling. Plus, the Democrats’ 10 year argument for ANWR is the same here. The truth is that all of the highest potential areas have been removed from development. For example, in last year’s budget, Congress put in prohibition on developing the most promising oil shale areas – areas that appear to have several more times the oil that Saudi Arabia has – 800 billion barrels in shale oil in the U.S. And “use it or lose it”? How does this solve anything? It you take the lease away they there still is no domestic production. Stupid. And in fact, where permits are grudgingly granted, this land is being developed.

We need a Manhattan Project to develop new sources of alternative energy. Bill Clinton and Al Gore were in power for 8 years and did absolutely nothing about alternative energy. Former Clinton insiders say that Clinton was terrified of offending the Saudis. He wanted them to pump as much oil as possible. The truth is, and I’ve done the homework, that the Bush administration has done more to develop alternative sources of fuel than any other administration. Under the Bush Administration the Department of Energy has thousands of projects underway with private and public organizations to conduct research and solve the intractable problems of alternative energy. Examples include clean coal using carbon sequestration, solar concentraor technology, and hydrogen fuel creation. Bush has pushed for the development of non-food based ethanol, such as switch grass (closer to sugarcane than corn in energy conversion). But Congress, Democrats and Republicans both, have pandered to the corn lobby instead. We are diverting 30% of our corn crop, with huge consequences to the food supply chain, to produce 3% of our “gasoline”. I have not heard a single concrete proposal from the Democrats about what ”Manhattan Project” research needs to be done that is not already being done by the Bush administration.

During the Bush Admission oil prices have surged – which is no surprise since the oil industry wrote the Bush Administration’s energy policy. The Democrats love to point out that the majority of the people that worked with Dick Cheney on the White House’s energy strategy were connected to the oil or energy industry in some way. Really? What experts should we engage to develop an energy strategy? The hospitality and food service industry maybe? Or perhaps some investment bankers? Have you actually read the White House’s energy strategy for our country? I have. It is a comprehensive and balanced plan that focuses heavily on alternative fuels as well as being realistic regarding fossil fuel needs. No one on the talking points circuit, mind you, points to a single action or policy of the Bush Administration that has contributed to the rapid escalation of oil and gas prices. Has Bush caused the surging economies of emerging markets such as China and India, that have pushed oil and commodity demand beyond supply? Of course not. But in the Democrats’ playbook, correlation does equal causation.

The coasts of Florida and California are important to tourism and are environmentally sensitive. The truth is that the drilling is much more environmentally safe than in the past. Today’s ability to drill horizontally opens up all sorts of possibilities. Ultra deep water drilling off of the coast of Brazil has discovered the largest oil reserve in a generation. There has not been a major, or minor, environmental issue in the Gulf of Mexico, the one area where offshore drilling is allowed (so long as it is not off the Florida coast), in decades. Even Katrina did not cause any oil to be spilled from offshore rigs. Plus, these rigs would be so far off the coast as to never be seen by anyone.

There are plenty of off-shore areas available to explore. All of the Atlantic coast, all of the Pacific coast, and one third of the Gulf of Mexico coast is banned from exploration and production. No one has even been allowed to perform a survey of these banned areas in almost 30 years.

The Democrats talking points don’t make any sense if you are semi-intelligent and have some basic understanding of the facts. There are only two possible explanations that I can come up with for the Democrats’ unrelenting obstruction in developing our domestic energy sources (assuming they’re not complete idiots). The first is that they are so obsessed with a fear of global warming that they place this in greater importance than having sufficient energy to grow our economy. The second is that by creating an energy crisis, enough political capital will be created to seize government control of another major segment of the economy, and increase their power as a result.

While #1 is probably in play with some, #2 is almost a certainty. There is more and more talk within the Democratic Party of nationalizing the U.S. oil industry. Of course, “Big Oil” controls less than 5% of the world’s oil reserves. If the oil industry was nationalized, and placed under Democratic control, it is a certainty that we will have even less energy and higher prices. But the Democrats will have the most powerful of all powers – the power to ration. Having done everything possible to block domestic supply, given total control of the country’s oil industry would mean they could reduce it even more.