Commentary: We Can’t Drill Our Way to Lower Prices
Why put valuable resources at risk for a miniscule benefit that wouldn’t materialize for 20 years?
President George W. Bush announced Monday that he is lifting the presidential moratorium on exploration and drilling on the outer continental shelf. He wants us to believe that offshore drilling is a way to reduce soaring gas prices and decrease America’s reliance on imported oil.
The president’s announcement is sheer political grandstanding and will require further action by the Congress. Unfortunately, it appears as though some members of Congress have decided to reinforce the president’s proposal.
I suggest that President Bush read the National Research Council of the National Academy of Sciences report prepared in 1991 at his father’s request while he was president. That report found that there was insufficient scientific data to permit leasing in sensitive ocean waters. We could not secure adequate protection for the marine environment and drill for oil. President George H.W. Bush became known as the “environmental president” because he initiated the first moratorium.
Because of President Bush’s actions, I have introduced Assembly Joint Resolution 51, which voices the California Legislature’s opposition to further leasing of oil and gas reserves on the outer continental shelf.
AJR 51 strongly opposes lifting the presidential and congressional moratoriums on oil exploration on the outer continental shelf. New drilling would put our coastal environment at risk while providing negligible benefits. According to the Bush administration’s own Energy Information Agency, we wouldn’t see an effect on prices at the pump for 20 years.
Despite having more than doubled the amount of producing oil wells in the past 15 years, gas prices have nearly quadrupled. Since 1994, the amount of wells drilled in U.S. territory has increased from more than 3,000 wells to nearly 9,000 wells. Meanwhile, the average price of gas at the pump has risen from a little more than $1 to more than $4.
Petroleum development on the outer continental shelf of the West Coast would put important segments of our state’s economy at risk. Recreation and tourism-related activities in California’s coastal counties represent more than $12.5 billion in revenues.
California’s fishing and aquaculture industries are estimated to contribute an additional $400 million to the state’s economy. Why should we put valuable natural resources at risk for a miniscule benefit that wouldn’t materialize for 20 years?
Efforts to the lift the moratorium on offshore oil drilling are a cynical ploy to take advantage of the political climate brought on by high energy prices. I strongly urge Congress to oppose the president and his misdirected efforts.
Assemblyman Pedro Nava, D-Santa Barbara, represents the 35th District.
» wrote on 07/15/08 @ 05:30 AM
Pedro points to “political grandstanding” while he himself jumps at the political opportunity to separate his liberal political agenda from that of our President. He is certainly ready for Congress.
Unfortunately, this is just more of the same emotional manipulation you’d expect from Pedro, using tourism and California’s fishing industry as reason enough to not engage in drilling off of California’s coast, when in different circumstances he’d be voting to ban fishing off the coast and eliminating the CO2 emissions that come from tourist’s cars.
The fact is that we have not held our country responsible for drilling for the oil we consume. We’ve relied on other sources from other countries and that needs to change. We need withdraw our dependency on foreign oil, while we ramp up our own domestic production and seek alternative solutions before we run out of what we know we’ve got.
I’m with the President on this one, he should have done this 8 years ago; and as a democrat, Pedro should have said that in his rant against doing the right thing.
» wrote on 07/15/08 @ 05:54 AM
BALONEY
» wrote on 07/15/08 @ 07:13 AM
Yeah and you support nuclear power I bet Pedro? And your car runs on solar power and your lawn is mowed with a wind blown engine..
Talk about political grandstanding.. You and other liberal special interest groups have been riding the Pseudo-Environmentalist position for decades to get you into office and perpetuate our dependance on foreign oil. YOU are part of the reason we are not in a position to solve our own problem.
Somehow you and others think we are going to “upgrade” our global operating system to non-fossil fuels overnight. And where exactly is your solution? If you really think free markets wait 20 years to respond to supply and demand you need to stick your head back up where it was the last 20 years.
Oh by the way, you forgot to include the word “Pristine” in your article..
» wrote on 07/15/08 @ 08:24 AM
Here Here, well said sir, and you do your homework. I am very dissapointed in our little bushman. Everything on the table! Let us break the chain of contempt that grips this governing body.
» wrote on 07/15/08 @ 09:31 AM
we need a multipronged approach to a long term energy policy that is free of political grandstanding on all sides. Use oil for things that move - gasoline is an incredibly efficient way to package energy. Build clean coal, wind, and nuclear powered plants to generate electricity. Expand drilling from existing platforms. That alone will send a signal to foreign oil producers that should result in some amount of price decrease. Increase exploration and production on US soil and in US waters in order to cut, long term, the proportion of oil we import. Stop the economically absurd subsidies for ethanol from corn - it is a thermodynamically flawed solution - it takes 2 calories of energy to produce enough ethanol to produce 1 calorie of energy.
» wrote on 07/15/08 @ 10:05 AM
Pedro,
How naïve can you be! We need to be doing everything we can to become energy independent. All that talk about how long it will take to bring the new found wells online is rubbish! If the oil & gas were given the permits it could bring on U.S. produced oil & gas in a matter of years. However, buy the time the oil companies got their permits from the Feds, State, local and other numerous governmental agencies it could take 20 years, because you will impede progress every step of the way!
We are now importing more than 60% of our oil & gas needs. We need to increase our domestic production to send a message to OPEC and the other oil producing nations that we can be self sufficient. Additionally, we need to build more nuclear plants and build some more refineries. And, yes I do agree we need to start up new “Green Industries” But please get your head out of the sand and recognize that we need to start at home with what we’ve got. We need the oil from the OSC , ANWR.
Lastly, are you such an elitist that you think it’s OK to drill for oil off the Gulf coast but not OK to drill off the California coast? I used to be a democrat but recently changed thanks to you and our other liberal politicians.
» wrote on 07/15/08 @ 11:43 AM
What baloney. We have 20-200B barrels of oil available and need to reduce dependence on foreign oil. Duh. Imediately upon opening up these sources the price per barrel will drop just because there are more resources in the “pipeline”. Oil dropped $6+ today just on the president’s news. Not to mention additional offshore drilling here in SB will mean cleaner beaches and less oil in the water. Over 95% of the oil in the water and on our beaches is a result of natural seepage. Additional drilling will relieve some of that pressure that is responsible for that natural seepage. Even GOO is now behind additional drilling in our channel.
No brainer to me
» wrote on 07/15/08 @ 11:57 AM
We can’t conserve our way to lower prices either. And besides, aren’t higher prices what Liberals want? Don’t they support high oil prices so that we can save the Earth? Santa Barbara has high housing prices so poor people can’t live there, high gas prices so poor people can’t drive there, and now they want to make sure that it stays that way. Must be nice to be so blessed.
» wrote on 07/15/08 @ 11:59 AM
Those evil speculators!
A day after Bush removed the oil exploration moratorium, I watched him repeat his call for the Democrat Do-Nothing Congress to join him on behalf of consumers. While he was still speaking at the news conference, the crawl at the bottom of the screen was showing crude oil futures dropping by over $9.
Nava, Capps, Oh-bama et al have no clue how a market economy works but oil traders are looking at Bush’s call for more access and are betting that fed-up American consumers will demand that feckless politicians follow his lead. As a result, they’re discounting oil futures and prices are falling. More supply=lower price. Less supply=higher price.
» wrote on 07/15/08 @ 02:21 PM
“Crude oil loses nearly $7 in biggest one-day drop in 17 years” (quote from Marketwatch). Naturally the NY Times and LA Times missed this item which occurred immediately after Bush lifted the exec order restricting offshore drilling. No further comment required.
» wrote on 07/15/08 @ 05:58 PM
“Crude oil loses nearly $7 in biggest one-day drop in 17 years” from Marketwatch. The same day that Bush announced he was rescinding the executive order banning offshore drilling. econ 101. No further comment required.
» wrote on 07/16/08 @ 06:52 AM
Thank God Pedro is only a worthless state assemblyman making worthless resolutions instead of a worthless US congressman (unfortunately we already have one of those in the 23rd district). I would bet the farm that American ingenuity and business would get the oil to market in 10 years or less, and in an environmentally friendly method. We wouldn’t be in this mess if it wasn’t for Nava and his ilk. I’m all for alternative fuels, but they don’t exist yet, or are not yet cost effective, so we need oil now while these fuels are developed or invented. It is laughable that he cites a 15 year old report to back his absurd statements. Yes we can’t drill our way back to $1 a gallon gas, but we could drill our way to gas below $3 a gallon. Get the oil naturally seeping into the ocean off my surfboard and into my gas tank.
» wrote on 07/16/08 @ 07:24 PM
Hey Pedro,
We need relief now at the pump. Stop attacking possible solutions and come up with a solution.
» wrote on 07/19/08 @ 12:42 PM
I have worked in the oil services field, and I can assure you that opening up new leases will not do a thing for prices at the pump now, or even in a decade. For your grandchildren, maybe.
There are millions of acres of unused, unexplored even, leases out there already. Adding more will increase the share prices of oil companies, which can say they have more potential future profits. And it will enable the president and his party to look like they’re doing something. But it will not lower the price of gasoline. It takes years to explore, and then there’s a 13 year waiting list for a rig, etc.
Lee Raymond, head of ExxonMobil, attributes $50 per barrel of the recent run-up to speculation. The rest is due to soaring demand from China, India etc.; the fact that the dollar is now historically weak against other currencies and oil is priced in dollars; the fact the Middle East is on a destabilized wartime footing; and the fact that Saudi Arabia’s largest fields are declining in productivity. A shortage of refining capacity, some of it due to Enron-like manipulation, does not help.
» wrote on 07/20/08 @ 05:39 PM
So kill the speculation by increasing drilling and exploration. Immediate gratification is not the point. Speculators bet on futures. More drilling means larger supply in the future. More supply in the future points to lower prices in the future. And much capacity could come on line in months, not years, by increasing drilling on existing platforms.
» wrote on 07/21/08 @ 08:20 AM
Nobody here actually contradicts the facts stated, except to say that drilling impacts the pipeline. Speculators backed off, and we saw a price drop. Opening the National Security Reserve would be far more significant and immediate delta in the supply pipeline, and the President can do that without Congress. Why aren’t all you ‘drill here’ folks on him for that lack of action?
None of you seem to be aware that the companies have over 7000 federal leases in hand right now that they don’t drill. Why are you slamming the oil companies for that lack of action?
All of these ‘actions’ are short term or intermediate at best. The entire potential of US territory reserves won’t add up to a one year supply for the US, and it will take decades to get it. That is according to the industry’s own estimates.
A full spectrum of exploration, including significant federal commitments to by the cleanest domestic energy available, shifting of petroleum incentives to sustainable domestic production and greater tax credits for efficiency, to say nothing of expanding California’s decoupling of production and profit for utilities ( where they make money by helping customers use less energy) to a national policy, are necessary to eliminate energy dependence. Energy independence is a naive and dangerous concept too. Read “Gusher of Lies”. What we want with oil is what we have with salt- a cheap commodity that nobody really cares much about, much less goes to war over. We aren’t ‘salt independent’, nor are we ‘salt dependent’.
» wrote on 07/22/08 @ 07:58 AM
Patrick, I’m truly puzzled. I read in a national media source last week (Newsweek, I think) that there is more oil in shale under Colorado than exists in the entire Saudi Arabian field, and that oil is economic at a minimum price of $80/bbl. But you indicate that the entire supply of oil in US territory is not even a one year supply. Something doesn’t compute. Is there only a one year supply of oil left in the Saudi field? And I’ll say again that in my view it’s not as simple as drill or not drill or any other one-dimensional polarizing position - it’s all of nuclear, clean coal, wind, exploration, and drilling on existing leases. Opening the strategic reserve is the ultimate ultrashort term answer. It’s big bottle - when it’s empty its gone.
» wrote on 07/23/08 @ 07:53 PM
Crude Oil drops another $4 to $124, down from $143 when Bush announced he was lifting the executive order limiting US drilling activity.
» wrote on 07/25/08 @ 07:28 AM
The Liberals are not the sharpest pencils in the box..A
» wrote on 07/26/08 @ 07:23 AM
Every time I read one of these “we can’t drill....” rants it becomes more and more clear that people of your mindset just don’t get it. The crucial part of using our own massive sources of oil is ending our dependence on foreign oil! Yes we need to build wind, gas and nuclear power, and we need more efficient cars, but geeze louise people! Our country depends on the trucks and planes that move goods and food, and people too. Heating oil??? Californians have it easy in that respect, not so in our eastern and northern neighbors. We need U.S. oil to end the stranglehold the middle east has on us at the present, and we need to prepare for the future when/if the middle east can’t or won’t be able to supply resources. It’s about independence and self reliance.
» wrote on 07/27/08 @ 11:10 AM
Pedro,
It is time for you to retire. You just don’t get it.