The oil still floating in the Gulf of Mexico following the April 20 explosion of BP’s Deepwater Horizon drilling rig may well become an environmental and economic disaster of record proportions. However, it is too soon to draw conclusions.
The incessant media and political chatter about the oil spill overlook the broader context and a key culprit: the government. Federal policy of the last 40 years has increasingly denied access to domestic oil resources.
BP is drilling for oil one mile beneath the surface of the Gulf and 50 miles from the coast of Louisiana not because the U.S. has run out of more easily recoverable oil, but because the federal government has erected off-limits signs across energy-rich areas in western states, Alaska, and nearer to shore. BP is operating at a depth, pressure, and temperature challenging the most advanced technology to stop this spill.
Data from the Minerals Management Service of the U.S. Department of Interior (DOI) conservatively estimates that 33 billion barrels of oil have been set off limits by federal policy. Industry experts contend that 112 billion barrels are accessible with existing technology. The U.S. Department of Energy estimates 2 trillion barrels from unconventional oil resources like oil sands and shale oil.
Original government estimates of the oil recoverable from Alaska’s Prudhoe Bay were one billion barrels. Prudhoe already has produced 18 billion barrels and is still going.
If legislation to allow drilling in the Arctic National Wildlife Refuge had overcome a 1995 presidential veto, enough domestic oil to replace imports from Venezuela might be flowing through a pipeline. For three decades, environmentalist opposition has blocked its development – an area comprising only 0.001 percent of the vast 19.5 million acre refuge. Alaska’s Chukchi Sea may hold 77 billion barrels.
The 92 million acres of federal lands in western states also contain valuable oil resources. A 2006 DOI study found that only 25 percent of these lands were open for oil and gas development. Accessibility by federal lease, however, is still subject to restriction or veto by federal environmental laws. Bureau of Land Management data from 2001 to 2004 showed 4,251 protests on 11,886 leases, setting 2 million acres off limits. The United States is the only country in the world that so extensively denies access to energy resources.
Until the BP oil spill, offshore oil development had a stellar environmental record. The 1989 Exxon Valdez spill was from a tanker, not a well head. According to DOI, the spill rate from the more than 4,000 offshore rigs on the Outer Continental Shelf has been 0.001 percent.
Of course, the BP spill demands a scrupulous review of existing regulation, technology, and deepwater risks. But speculative pronouncements about this offshore disaster should not fuel hollow rhetoric about ending U.S. “addiction” to oil. There are no near-term alternatives to petroleum dominance in transportation fuels.
If offshore drilling is further curtailed, environmental risks to Gulf Coast resources would be magnified. Tankers transporting oil to the U.S. have spilled far more oil closer to our shores than offshore rigs.
U.S. oil consumption is not much more today than in 1978, when the U.S. economy was about half the size of today. Market forces have generated remarkable efficiencies. Energy use per dollar of output has declined by 50 percent since 1975. Domestic oil production has declined by more than 1 million barrels per day over the last decade. Less production-not more consumption-is why the U.S. imports 60 percent of oil.
Increasing barriers to domestic oil production as a means of “getting off carbon-rich fuels” is childishly unrealistic and economically destructive. Even after a month of continuous spill, polled majorities still support offshore oil production. The sleeping giant gets it!
And while energy independence is economic folly, reducing the extent of U.S. dependence on imported oil is wise. If the federal government would get out of the way, energy entrepreneurs could likely produce at least the 13 percent of current oil imports from Persian Gulf countries.
Kathleen Hartnett White is Distinguished Senior Fellow in Residence and Director of the Armstrong Center for Energy & the Environment at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin. White is the former Chair of the Texas Commission on Environmental Quality.