Tuesday, July 08, 2008

No, Don't Drill Here! Don't Drill Now!

I wrote my senators to encourage them to ease up on restrictions to drilling our own oil resources.

Wrote the Republican. Wrote the Democrat.

Got an email back from the Democrat. I imagine it's boilerplate. Perhaps even across the Democratic Senate.

Thank you for contacting me regarding domestic energy production. I appreciate hearing from you and welcome the opportunity to respond.

Our leaders need to be more up-front about what is really going on with energy production in this country. Oil companies already have an opportunity to increase domestic oil supply, but they sit on their hands and ask for more land when there is no evidence that they need it. Approvals for drilling on federal lands are at an all-time high and leasing to areas like the Outer Continental Shelf is already occurring.

Combined, oil and gas companies hold leases to nearly 68 million acres of federal land that they're not using both in Alaska and in the Gulf. This is over 80% of available federal land and the federal government provides these leases at a discount. Congress needs to pass legislation that would force oil companies to fully utilize these existing areas which contain some of the most abundant supply of oil in this country. It only makes sense that they explore and develop the millions of acres they already have access to before Congress permits drilling in new areas.

Energy experts contend opening new areas like the Arctic National Wildlife Refuge would not lower prices at the pump for years and then only by a few cents. Additionally, it would fail to move the country toward energy independence. With only 3 percent of the world’s oil supply and 25 percent of the world’s demand, it is clear America can not drill its way to lower prices. Our country instead needs real solutions to the energy crisis.

Congress, for example, is taking a hard look at oil speculation and whether there should be more regulation in this area to more accurately reflect the rates of supply and demand. This could mean a more fair and reasonable price at the gas pump. I also believe that continued investment in alternative fuels is the best way to reduce America’s addiction to oil and America’s best long-term energy strategy. Unfortunately, some members of Congress continue to block legislation that would help address this crisis and allow our nation become energy independent.

Also, I want to take this opportunity to dispel the myth that appears to be circulating that China has partnered with Cuba to drill off the coast of Florida. Some of my constituents are concerned that this is happening, but there is no offshore drilling venture between Cuba and China at this time.

Again, thank you for contacting me. Please do not hesitate to let me know if I can address any other issue that is important to you.

All best,

Speaking of being up front, why do I get the feeling this is only half of the story?

What evidence is there that there is recoverable oil under the lands currently under exploration leases? Can you point me to a map of this leased land which indicates where, under this 68 million acres land, there are known recoverable oil deposits? I mean deposits that won't cost as much or more to extract than to develop the claim?

We need to drill where the oil is, which for the most part isn't in these leased areas, impressive though they sound. So it'll take a while and the price won't drop much, some say. But this is as much about energy independence as it is about oil prices, probably even more so. I don't know about you, but I plan on being around here in 10 years. If it takes 10 years for that oil to come online, then we'll have that in 10 years. Had we done it in, say, 1998 ... it'd be on line right now. How that doesn't help us move toward energy independence, I can't fathom. It would give us something to use for a few years to buy us the time we need to develop the new technologies into production systems, and it would come from here and not overseas.

As for solutions, I see a lengthy list of things we "can't" do to solve the problem depending on which special interest group you talk to. Then I see a short list of things we wish we could do and are trying to make viable (alternatives other than nuclear) -- but we're not there yet. In the mean time, let's take drilling off the "can't" list because we most certainly can and should.

We may not be able to drill our way out of this, but we cannot "conserve" our way out of it, either. We have to conserve some, diversify our energy sources, as well as utilize what we already have under our noses. We have the technology to drill responsibly. It's done all the time. Drilling is not "the" solution. But it is an important piece of the puzzle.

Ultimately, nuclear and clean coal power is the way out of this for the foreseeable future. But we don't have the capacity it's going to take to charge a fleet of tens of millions of electric cars. It apparently takes 10 years to get from approval of a new nuclear plant to actually getting electricity out of it. This makes it all the more urgent to get moving on short and long term solutions now.

I assume the allusion to accounting for 25% of the world's demand and 3% of the world's population is hinting at some sort of moral assessment of whether or not that should be so. This is an arbitrary judgment Our energy use is a measure of our innovation. It is a measure of our productivity. We aren't the Congo. We have higher standards than that.

Speculators speculate on what prices will be based upon what they see happening. They don't make money by speculating higher. They only make money when they are right about what the market is going to be. They can very well lose their shirts speculating higher. When demand goes up and they can see that supply is going to be hindered, they speculate higher. If we show that we intend to do something about increasing supply, they'll speculate lower. Even if it only keeps prices from rising further rather than actually lowering fuel prices, it would be worth it. (I can't imagine being an independent trucker right now.) But today speculators see world demand continuing to rise (with or without the U.S.) and Congress saying "no, no, no, no, no" to opening avenues to increased supply.

Most of today's energy market problems are at least in large part caused by government over-regulation. That is why I'd like Congress to look very hard at the consequences of our regulations and work with energy companies to come up with solutions. After all, they're people too.

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