Issue Report: US offshore oil drilling

Is offshore drilling a good idea? Was Obama right to open new drilling in 2010?

Background and context

On March 31st, Barack Obama announced a plan to open significant portions of the Eastern seaboard and the western coast of Florida to offshore oil drilling. This ended two major federal bans that have prevented offshore energy exploration and drilling in the United States. An Executive Moratorium signed in 1990 and a Congressional Moratorium that requires annual renewal. With oil prices at relatively high levels, global crude supplies set to dwindle over time, and accompanying economic difficulties in the United States and elsewhere, many began to call for lifting the offshore drilling ban. Polls show that most Americans favor it. President Bush tried to lift the Executive Moratorium on July 14th, 2008. Yet, Congress would not pass key legislation to enable the action. Under President Barack Obama, the prospects of Congress approving lifting the moratorium seemed more likely, and the debate has continued apace.

Energy crunch: Can offshore drilling help avert an energy crisis?

US offshore oil is significant, can have big market impact

"Our view on energy dependence: Yes, drill offshore for oil, and do many other things, too." USA Today. April 2, 2010

“Critics note that the potential supplies offshore are a tiny part of the world market, but even so the Interior Department’s estimates range from 39 billion to 62 billion barrels of oil. We use 7 billion barrels a year, so if the oil is really there, it could be five to nine years worth. True, robust production wouldn’t kick in for a decade or more. But that same argument helped block action 10 years ago. Domestic gas supplies, meanwhile, are massive and underutilized.”

US offshore drilling will improve confidence, futures, and prices

Martin Sieff. "Analysis: Offshore drilling realities". July 18, 2008

“The very fact that offshore drilling has been approved may have some further positive effect on lowering world oil prices.” Mark Hemingway concludes that President Bush’s announcement that he would life the executive moratorium on oil was the direct cause of a dramatic drop in oil prices from $147 to $132 a barrel in mid July, 2008.[1]Based on this conclusion, if congress were to lift their moratorium, oil prices could be expected to drop even further.

US oil crisis warrants drastic action and offshore oil drilling

"An Outdated Ban". Washington Post. 28 June 2006

“The United Statesis suffering a major energy crisis right now, and we should be drilling in as many places as we can manage. Offshore drilling may be a short-term solution to a long-term energy problem, but if countries like China can already drill and drain our nearby coastal regions of oil and gas deposits, there’s no reason why we shouldn’t save ourselves a few bucks at the gas pump until alternative energy sources are further developed.”

Offshore oil helps mitigate spikes in oil prices

Chris Kahn. "Offshore drilling could soften oil price spikes, not energy costs." The Associated Press. March 1, 2010

“Opening more of America’s coastlines to oil and natural gas drilling won’t cut energy prices anytime soon. And it won’t greatly reduce the country’s dependence on foreign oil. […] But it could […] soften the blow of future price spikes.”

A comprehensive US energy plan must include offshore drilling

"An Outdated Ban". Washington Post. 28 June 2006

“The United Statesis suffering a major energy crisis right now, and we should be drilling in as many places as we can manage. Offshore drilling may be a short-term solution to a long-term energy problem, but if countries like China can already drill and drain our nearby coastal regions of oil and gas deposits, there’s no reason why we shouldn’t save ourselves a few bucks at the gas pump until alternative energy sources are further developed.”

Offshore oil addresses energy shortages better than most renewables

Renewable energy is not yet an adequate alternative to oil. While the transition is made to renewable energy in the long-run, other offshore oil and gas alternatives should be found in the short-to-medium run.

US offshore drilling would hardly lower global oil prices

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!”

Offshore drilling will not affect OPEC's price-setting

Robert Kaufmann, director of the Center for Energy and Environmental Studies at Boston University said, “There’s nothing on the supply side that we can really do to disrupt OPEC’s ability to influence prices.”

Offshore drilling would not help US break its addiction to oil

"Expanded offshore drilling is no answer to our energy crisis". Citizen Times. 16 July 2008

“Bush wants to try to drill our way out of the energy mess he and others tied to the oil industry helped create. The only real hope of energy independence for the United States is to aggressively develop alternatives.”

Greater conservation is more important than offshore oil drilling

Lisa Wangsness. "New offshore drilling not a quick fix, analysts say". 20 June 2008

“Environmentalists argue that the pollution caused by drilling could compromise fragile ecosystems for very little economic benefit when the United States should be focusing on conservation – the cheapest barrel of oil, they like to say, is the one we don’t have to buy – and developing better renewable energy sources.”

Offshore drilling ban is not responsible for rising gas prices

"Expanded offshore drilling is no answer to our energy crisis". Citizen Times. 16 July 2008

“It’s beyond disingenuous to imply, as the president did, that the prohibition on offshore drilling is responsible for the present run-up in gas prices or that allowing offshore drilling would do anything to bring prices down. In 2005 when the Republican-controlled Congress agreed to give more than $14 billion in tax subsidies and increased the number of drilling permits in the U.S., gas was $2.29. Today the national average is about $4.10.”

General statements against offshore oil drilling

Mike Daulton, Audubon's policy director, said in March of 2010

“We urge the Obama administration to focus on clean energy priorities and to protect America’s special places from the risks of oil drilling.

Timing: Would new offshore drilling come soon enough?

Offshore oil still valuable, even if years away

While it may be true that – in a perfect world – it would be better for offshore oil to be available now, it is not true that it would be of no value down the line five, ten, or twenty years from now. In the future, energy needs will have grown, and the supply of traditional sources will have dwindled. In the event that alternative sources have not fully matured to fill the gap, offshore oil will indeed be very important in smoothing the transition to alternative, renewable energy sources.

New offshore oil will take years to come on-line

Lisa Wangsness. "New offshore drilling not a quick fix, analysts say". 20 June 2008

“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.”

Environment: Is offshore drilling consistent with environmental preservation?

Offshore drilling has a very strong environmental record

"Our view on energy dependence." USA Today Editorial. April 2, 2010

“Some of the most ironic objections come from those who say offshore exploration will destroy beaches and coastlines, citing the devastating 1989 Exxon Valdez oil spill in Alaska as an example. The last serious spill from a drilling accident in U.S. waters was in 1969, off Santa Barbara, Calif. But tankers like the Valdez continue to carry the imported oil we’re ruinously addicted to and have gone aground more frequently, more recently and far more disastrously.”

The environmental footprint of offshore drilling is negligible

James Hackett, president & CEO of Anadarko Petroleum, on energy issues, said in an interview with Larry Kudlow, “[We’ve] got a world class project that is the deepest producing well in the history of the world. It’s providing clean, natural gas to America, about 1.5 percent of all of our gas supply. Everyday it’s being provided from a football field and a half sized environmental footprint, a two-hour flight away from the shoreline. So it’s not in any visual contact with any human being. These platforms have gone through 200-year hurricanes, back in 2005, without any environmental consequences. It’s a bit of a fiction hoisted on us by people who don’t know better.”

New technology makes offshore drilling safer than ever

Deroy Murdock. "Offshore oil drilling -- cleaner than Mother Nature." Seattle PI. July 24th, 2008

“Democrats and other environmental naysayers cite the 80,000 barrels that spilled six miles off of Santa Barbara, Calif., inundating beaches and aquatic life. This hydrocarbon Hindenburg haunts the memories of those who witnessed it. […] But this genuine catastrophe occurred in January 1969 — nearly 40 years ago. That era’s drilling technology has gone the way of Flower Power and black-and-white TV. Innovation has boosted the safety and environmental reliability of offshore drilling.”

Environmentally-friendly nations allow offshore drilling

"An Outdated Ban". Washington Post. 28 June 2006

“Canada and Norway, two countries that care about the environment, have allowed offshore drilling for years and do not regret it.”

Directional drilling allows a single well to tap massive reservoirs

Suzanne Sitherwood. "Let coastal states drill offshore if they want to". Journal-Constitution. 17 July 2008

“While some argue that we don’t want to see exploration in these pristine areas, the fact is that with today’s technology, we can sensitively explore through directional drilling about 30,000 acres of surface lands with a single well. Isn’t that a bargain when you calculate the cost to Americans to continue to rely on energy overseas, especially the volatile Mideast?”

Banning offshore drilling forces dangerous tanker transport

"An Outdated Ban". Washington Post. 28 June 2006

“it’s even possible that the drilling ban increases the danger of oil spills in coastal waters: Less local drilling means more incoming traffic from oil tankers, which by some reckonings are riskier.”

If drilling is safe at current sites, why not expand it?

Suzanne Sitherwood. "Let coastal states drill offshore if they want to". For the Journal-Constitution. 17 July 2008

“We are currently exploring in just one narrowly defined area in the Gulf of Mexico. This is where 90 percent of Georgia’s natural gas comes from —- a commodity open to the unpredictability of the storms that occur. So why rule out exploring the rest of the Atlantic? Or all of the Pacific and the coast of Alaska?”

Offshore drilling can be coupled with efficiency policies

Republicans have backed proposals that would allow for more drilling and more funding for renewable energy resources. “We say ‘Yes, we can’ to finding more. We say ‘Yes, we can’ to using less,” said Sen. Lamar Alexander (R-Tenn.).

The three D's: oil rigs drill, drain and devastate.

Drills were made to do three things. Drill, drain, and devastate. Drills drill for oil, drill oil, while devastating the area around it. No matter how advanced technology is used, there will be accidents. Even after years of using electricity and making safety regulations and devices, there are still thousands of electrocution cases each year. This proves that even if advanced safety measures are taken, there will be accidents and tragedies. The drill is just like this. No matter how safe it is made to prevent accidents, it will have accidents. Also, the drilling, draining, and burning it causes is enough to devastate the ecosystem. Why try to deny the truth?

Offshore oil involves leaks, spills, environmental damage

David Ivanovich and Kristen Hays. "Offshore drilling safer, but small spills routine." Houston Chronicle. July 28, 2008

“offshore operators continue to spill thousands of barrels of oil, fuel and chemicals into federal waters each year, government records show. ‘This is not a zero-risk proposition,’ said John Rogers Smith, an associate professor of petroleum engineering at Louisiana State University. […] Offshore operators have had 40 spills greater than 1,000 barrels since 1964, including 13 in the last 10 years, according to data from the U.S. Minerals Management Service, which oversees exploration and production in federal waters. […] Despite the industry’s technological improvements and safety planning, offshore operators have struggled to cope with the hurricanes that blow through the Gulf of Mexico. Seven of the 13 recent larger spills were hurricane related.”

New technology will never eliminate offshore oil leaks/spills

Contrary to the claims of the oil companies new technology has not slowed the pace of major oil spills. Of the 40 offshore oil rig spills exceeding 42,000 gallons since 1964, 13 have occurred within the last 10 years. More than a quarter of all major spills of the last 44 years, have occurred recently. From 1998 through 2007, offshore producers released an average of 6,555 barrels of oil a year, according to the Minerals Management Service. That was 64 percent more than the annual average during the previous 10-year period and these figures do not include the latest spills in the Gulf of Mexico off Louisiana or Australia. This despite the new technology that has been implemented.

Offshore drilling only adds more C02 to atmosphere

"Why explore for oil?" The Economist. April 2nd, 2010

“The fundamental problem is this: there is a finite amount of fossil fuel. The more of it we find and burn, the more carbon we put into the atmosphere, and the more severe the greenhouse effect becomes. Once the carbon is in the atmosphere, it stays there. If we want to limit climate change, what we have to do, one way or another, is to leave fuels in the ground wherever possible, not find and burn them.”

Offshore drilling fluids release toxic chemicals into oceans

Lisa Wangsness. "New offshore drilling not a quick fix, analysts say". 20 June 2008

“Drilling fluids contain toxic chemicals. If oil is found, one of the waste products is briny water that also contains toxic chemicals.”

Noise from offshore drilling can harm sea animals

Lisa Wangsness. "New offshore drilling not a quick fix, analysts say". 20 June 2008

“The noise from drilling could harm some sea animals, such as whales.”

Offshore drilling ban is an important environmental symbol

Arnold Schwarzenegger said in June 2008, “We made a decision a while back to say no drilling off our shores in California, and we are serious about that and we’re not going to change that, no matter who is recommending other things.”

Transporting offshore oil to shores by ship has environmental costs.

These large ships release significant pollution into the oceans, and carry some risk of hitting the shore, and causing a spill.

Transporting offshore oil by pipeline carries environmental risks.

Pipelines from oil rigs to the shore can leak and even burst, releasing very large quantities of oil into the Oceans and onto coastlines.

Natural disasters: Can offshore oil withstand natural disasters like hurricanes?

Offshore drilling rigs are resilient, withstanding even hurricanes

"An Outdated Ban". Washington Post. 28 June 2006

“Offshore oil rigs in the western Gulf of Mexico, one of the exceptions to the ban imposed by Congress, endured Hurricane Katrina without spills.”

Offshore oil rigs are vulnerable to storms

"Offshore Drilling is a Dirty Business." Sierra Club. Opposing

“Offshore drilling operations are particularly vulnerable to storms. The Coast Guard estimates that during Hurricanes Katrina and Rita, roughly 9 million gallons of oil were spilled. And the pipelines, development, and infrastructure that come with drilling scar beaches, disrupt marine life and undermine coastal tourism and fishing economies.”

Production: Will offshore drilling significantly contribute to oil production?

Offshore oil exploration could result in a major find

Mark Hemingway. "Drilling in the Offshore Unleashing the oil companies." National Review. 17 July 2008

“due to restrictions on drilling, much of America’s coastline has never been fully explored, let alone with the latest technologies. Just a few months ago, an oil find was made off the coast of Brazil that might contain 33 billion barrels of oil. Now imagine what a similar find off the coast of America would do for oil prices.”

Offshore drilling is final frontier of oil

A USA Today article published on June 28, 2008, titled “Deepwater oil fields are a final frontier,” notes, “By 2015, Chevron expects deepwater wells to account for one-quarter of offshore oil production vs. 9% today.” The US must recognize this potential, and tap into it by lifting its ban on offshore drilling

There is not enough US offshore oil to make a difference

"Expanded offshore drilling is no answer to our energy crisis". Citizen Times. 16 July 2008

“Consider: According to the Washington Post, the U.S. Geological Survey estimates that there are “undiscovered conventionally recoverable resources” of 17.8 billion barrels in the offshore areas unavailable for drilling. In the oil business, “resources” refers to promising geological structures where the presence of oil remains uncertain. […] No big supply there. […] To put that in perspective, it would satisfy U.S. demand for somewhere in the neighborhood of two to two and one-half years at present consumption rates.”

Oil companies should tap existing reserves before going offshore

"Bush Lifts Ban On Offshore Drilling". CBS. 14 July 2008

“Democrats say they are for drilling, but argue that oil companies aren’t going after the oil where they already have leases. So why open new, protected areas? they ask. Democrats say there are 68 million acres of federal land and waters where oil and gas companies hold leases, but aren’t producing oil.”

Economics: What are the economics of offshore oil drilling?

Offshore drilling is very valuable to the US economy

"EDITORIAL: Obama surrenders gulf oil to Moscow." Washington Times. March 18th, 2010

“Offshore oil production makes economic sense. It creates jobs and helps fulfill America’s vast energy needs. It contributes to the gross domestic product and does not increase the trade deficit. Higher oil supply helps keep a lid on rising prices, and greater American production gives the United States more influence over the global market.”

US offshore drilling threatens vibrant fishing industry

Frances Beinecke is president of the Natural Resources Defense Council. "More Drilling, More Risk." New York Times

“Here’s how we utilize our oceans today: In the U.S. alone, commercial fishing generates more than $103 billion in sales. Ocean-related tourism and recreation are responsible for more than 2 million jobs. In 2000, the U.S. ocean economy created two and a half times the economic output of the farm sector. […] This economic vitality depends upon clean, healthy seas. Despite technological advances, drilling off our coasts still poses grave risks, including accidental and hurricane-related oil spills. The Exxon Valdez spill stretched over 600 miles of Alaskan coastline — a stretch that would cover the eastern coastline from South Carolina to the tip of Florida. That’s a lot of beaches and fishing communities devastated.”

Allowing offshore drilling is all about oil company profits

Sen. Barbara Boxer, D-Calif., chairwoman of the Senate Environment Committee said in July 2008

“This proposal is something you’d expect from an oil company CEO, not the president of the United States. The president is taking special-interest government to a new level and threatening our thriving coastal economy.”

Offshore oil distracts from longer-term renewables industry.

A Center for American Progress study has found that money that goes into the oil sector instead of the clean energy economy means a net loss of 14 jobs per million dollars.

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