Black (Fool’s) Gold
“We’re gonna drill offshore! We’re gonna drill here, and we’re gonna drill now!”
These words, recently expressed by Senator McCain at a motorcycle rally in
South Dakota, represent a major component of Senator McCain’s response to rising gas prices. Opinion polls show most Americans support an increase in offshore oil drilling. Senator Obama, too, has recently softened his earlier resistance to offshore oil drilling, if necessary to enact Democratic-sponsored energy bills. And this past weekend, House Speaker Nancy Pelosi dropped her formerly vehement opposition to offshore drilling in order to get Congress to enact broad energy legislation.
But hold on there prospectors—there is a minor detail that both candidates and the American public seem to be missing: expanding offshore drilling at the levels sought by McCain and Congressional Republicans will have zero short-term impact and negligible long-term impact on gas prices! If the 1981 federal ban on offshore drilling were to be immediately repealed, the Bush Administration’s own Energy Information Administration (EIA) has reported that it will take until 2017 before any oil whatsoever would be generated from new offshore oil leases, and maximum capacity from these new leases will not be realized until 2030. And, even at maximum capacity, additional offshore drilling will net at best an additional 200,000 barrels of oil a day—in contrast to the world’s daily oil output of 85 million barrels. Even those of us without advanced economics degrees can deduce that the total output from offshore drilling will have an infinitesimal impact on global oil prices.
So what we’ve got here is a case of “junk economics”, as Paul Krugman calls it or “snake oil salesmanship of the worst order,” in the words of John Kerry.
All this is juxtaposed by the clear environmental damage offshore drilling will cause, record profits for oil and gas corporations also receiving taxpayer subsidies, as well as the existing oil exploration licenses oil corporations have yet to act upon. Politicians on both sides of the political aisle who are pushing for expanding offshore oil drilling as the solution to today’s high gas prices, therefore, ought to be ashamed of themselves for misleading the public in an effort to capitalize on a hot-button election-year issue. And the American public, of whom 49% believe that increasing offshore drilling will immediately reduce the price at the pump, also ought to be embarrassed for allowing themselves to be misled. In the cautionary words of the Book of Proverbs (1:22-28),
“How long, ye thoughtless, will ye love thoughtlessness? And how long will scorners delight them in scorning, and fools hate knowledge? Because I have called, and ye refused, I have stretched out my hand, and no one attended… I also, in your calamity, will laugh, I will mock when your dread cometh…Then will they call me, but I will not answer, they will seek me earnestly, but they shall not find me.”
But this debate about offshore drilling is only the tip of the rapidly-melting iceberg. The real problem is our continuing failure to formulate a comprehensive, effective energy policy that will reduce our energy costs and our dependence on foreign oil—laudable goals of the pro-drilling camp—but also do so in a way that addresses climate change and other environmental crises. We need massive investment in wind, solar, and other renewable energy sources to increase their efficacy and reduce their costs. And we need serious, national efforts to increase our energy efficiency and conservation. What we don’t need are quixotic increases in offshore drilling. It is high time we stopped acting like petroleum addicts looking for the next quick fix and started acting like informed, responsible citizens.
