With the Bad Economy, the Time For Offshore Drilling is Now


By Ben Lieberman

July, President Bush responded to public anger over $4.00 a gallon
gasoline and rescinded the longstanding executive moratorium on
offshore leasing for oil and natural gas. Congress followed suit by
allowing its own restrictions to lapse on October 1. But now, the Obama
Administration has taken steps to slow down the process of leasing
these areas to energy companies, and some fear that expanded offshore
drilling will be put off indefinitely. Delay would be a mistake and
should be kept to a minimum, as additional domestic oil is still badly


many years, 85 percent of America's territorial waters--including most
of the Pacific, Atlantic, and eastern Gulf of Mexico--were off limits
to oil and natural gas exploration and drilling.[1]
The U.S. is the only nation that has restricted its own energy supply
to this extent. An estimated 19 billion barrels of oil--nearly 30 years
of current imports from Saudi Arabia--as well as substantial natural
gas reserves are estimated to lie beneath these restricted areas.[2] And it should be noted that these initial estimates in under-explored areas tend to be on the low side.

of these restrictions were put in place at the behest of
environmentalists and other drilling opponents in the late 1980s and
1990s, a time when gasoline was cheap and the need for additional
supplies was not seen as great. But they have remained in place in
recent years, even as gasoline hit $2.00 and then $3.00 a gallon and
state-of-the-art drilling technology has amassed a proven record of
reducing the environmental impacts and risk of spills.[3]

when prices hit $4.00 a gallon last summer, a fed-up public clamored
for action, and polls showed more than 2-1 support for offshore
drilling. President Bush and Congress finally listened and belatedly
removed the legal restrictions governing drilling in new offshore areas.

Delay, Baby, Delay

next step in the process is for the Department of the Interior's
Minerals Management Service (MMS) to offer these areas for lease. MMS
took the first step in this process when it published its 2010-2015
Draft Proposed Program on January 21. It included a 60-day period for
comments. Signaling this deadline might be postponed indefinitely,
President Obama's new secretary of the interior, Ken Salazar, announced
that he is extending the comment period by six months and ordered the
agency to gather additional information on the estimated amounts of oil
and natural gas in these offshore areas.[4]

itself, a six-month delay is not unreasonable, but Secretary Salazar's
comments when announcing the change suggest that he may try to drag out
the offshore leasing process much longer than that, and perhaps for the
length of his tenure. First, he mischaracterized the initial proposal,
which MMS formulated prior to Obama taking office, as "a headlong rush
of the worst kind." In reality, the announced 60-day comment period,
far from being a point of no return, was merely the first of several
steps in the energy leasing process. This process already contains
several opportunities for environmentalists, coastal state governments,
or others to weigh in with any objections or concerns. Wanting
additional time for this first step suggests that Salazar may be
launching a strategy of paralysis by analysis.

Further, Salazar
has downplayed the benefits of additional oil, attacking the original
proposal as a "drill-only approach" that excluded offshore renewable
energy sources like wind and wave power. "The Bush Administration was
so intent on opening new areas for oil and gas offshore that it
torpedoed offshore renewable energy efforts," he said. These
statements, in addition to being untrue (the same day the Bush
Administration announced the proposed plan for oil and gas leasing, it
also announced a proposal moving ahead with a major offshore wind
energy project), also make no sense from an energy policy standpoint.
These offshore renewable projects at issue are for electricity (and
very expensive electricity at that) and thus would do nothing to help
America meet its growing need for liquid fuels for its citizen's cars
and trucks. Any Administration attempts to obfuscate the need for more
offshore oil with diversions about these politically correct renewables
will not do the American driving public one bit of good.

"Drill Now" Still a Good Idea

days of $4.00 a gallon gas are gone for now, and with them the
front-burner status of "drill, baby drill." Nonetheless, this is no
time for complacency. The only reason for the sharp drop in oil and
pump prices is a decline in demand due to the recession. But recessions
do not last forever. Unless America begins to take action to increase
supplies, prices will go right back up as soon as the economy turns
around and demand picks up. Further, the process by which energy
companies obtain a lease, explore for oil and gas, and then produce it
takes a number of years to unfold, so the time to start things is now.

Expanded offshore drilling would also create jobs,[5] and
unlike the taxpayer-funded jobs in the proposed stimulus package, the
jobs created by a reinvigorated domestic energy industry would be
well-paying, long-term, and funded entirely by the private sector. And
since the extra energy produced would help bring down future oil and
natural gas prices, it would truly be a win-win for both producers and

Don't Turn Back

this proposal was crafted by the outgoing Bush Administration, the
Obama Administration would do well to continue with it. It sets out a
sensible plan for moving expeditiously but not recklessly toward
leasing new areas. The offshore oil and natural gas leasing process
should not be delayed beyond the six months announced. The American
people would be best served if this process leads expeditiously toward
substantially expanded domestic offshore energy production in the years


of Energy, Energy Information Administration, "Overview of U.S.
Legislation and Regulations Affecting Offshore Natural Gas and Oil
Activity," September 2005, at http://www.eia
(February 19, 2009).

of the Interior, Minerals Management Service, "Report to Congress:
Comprehensive Inventory of U.S. OCS Oil and Natural Gas Resources,
February 2006, p. xii, at http://www.mms.gov/PDFs/2005EPAct/InventoryRTC.pdf (February 19, 2009).

of Energy, Office of Fossil Energy, "Environmental Benefits of Advanced
Oil and Gas Exploration and Production Technology," October 1999, at http://fossil.energy.gov
(February 19, 2009).

[4]Department of the Interior, "Secretary of the Interior Ken Salazar's Statement on Offshore Strategy," February 10, 2009, at http://www.doi.gov/secretary/speeches/021009_speech.html (February 19, 2009).

[5]ICF International, "Strengthening Our Economy: The Untapped U.S. Oil and Gas Resources," December 5, 2008, at http://www.api.org/Newsroom/upload/Access_Study
(February 19, 2009).



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