Menu

Argument: US offshore drilling would hardly lower global oil prices

Issue Report: US offshore oil drilling

Support

“New offshore drilling not a quick fix, analysts say”. Boston.com. 20 June 2008 – And in any case, increased American production from offshore drilling would not necessarily mean lower prices for American consumers because oil is a global commodity whose price is set by global supply and demand.

“Suppose the US produced all its oil domestically,” said Robert Kaufmann, director of the Center for Energy and Environmental Studies at Boston University. “Do you think oil companies would sell oil to US consumers for one cent less than they could get from French consumers? No. Where oil comes from has no effect on price.”


Joseph Romm. “New offshore drilling does little for gas prices.” Forbes. April 2, 2010: “The Obama administration announced Wednesday that it will be approving “significant oil and gas exploration off America’s coasts.”

Last year, the U.S. Energy Information Administration report, “Impact of Limitations on Access to Oil and Natural Gas Resources in the Federal Outer Continental Shelf” analyzed the difference between full offshore drilling (Reference Case) and restriction to offshore drilling (OCS limited case). In 2020, there is no impact on gasoline prices (right hand column). In 2030, US gasoline prices would be three cents a gallon lower. Woohoo!”

Arnold Schwarzenegger said in June 2008, “Politicians have been throwing around all kinds of ideas in response to the skyrocketing energy prices, from the rethinking of nuclear power to pushing biofuels and more renewables and ending the ban on offshore drilling. But anyone who tells you this would bring down gas prices any time soon is blowing smoke.”[1]

Peter Maass a fellow at Harvard’s Kennedy School of Government, New York Times Room for Debate, March 31st, 2010: “drilling to reduce our dependence on foreign oil and reduce gas prices is a charade. President Obama seems well aware of that, in a sense calling the other side’s bluff. With 2 percent of the world reserves, there is no way to extract our way to lower prices or energy independence; the impact will be between “not at all” and “hardly at all.””[2]

“Offshore Drilling is a Dirty Business.” Sierra Club. Opposing Views.com: “Americans are suffering from the high cost of gas, but drilling for lower prices is a fraud.

America consumes one-quarter of the world’s oil but only has 3 percent of its reserves. Opening our fragile coasts to access this small amount of oil simply won’t make a dent in our needs – particularly as we compete with rising demands in China and India .
Furthermore, it could be years before America reaps any benefits from expanded coastal drilling, and even then it will be a matter of cents, not dollars.

According to the Department of Energy, offshore drilling will not impact oil production for ten to twenty years. This means that a decade or two from now, Americans could save somewhere between 3 and 4 cents. Clearly this is too little and too late for Americans that deserve a solution today.”