Today the U.S. has about 22 billion barrels of proven oil reserves that can be legally developed. Yesterday, President Bush lifted just one of the many roadblocks that stand between American consumers and the estimated 19.1 billion barrels of oil in the Outer Continental Shelf that are currently off-limits from production. Bush’s rescinding of his father’s 1990 presidential directive restricting all new offshore exploration and drilling could almost double proven U.S. oil reserves. The next step is getting Congress on board.
Beginning in 1982, Congress restricted more and more offshore areas through annual Department of Interior appropriations. Each year since then, Congress has denied Interior the funding necessary to conduct leasing of new offshore areas. If Congress passes legislation making it clear to world markets that the U.S. is serious about doubling its proven oil reserves, that would lower prices today. As former former Reagan chief economic adviser Martin Feldstein explains:
The relationship between future and current oil prices implies that an expected change in the future price of oil will have an immediate impact on the current price of oil. … [I]ncreasing the expected future supply of oil would also reduce today’s price. That fall in the current price would induce an immediate rise in oil consumption that would be matched by an increase in supply from the OPEC producers and others with some current excess capacity or available inventories.
The problem is that liberals in Congress do not want lower gas prices, increased consumption or increased production. As the Sierra Club’s Carl Pope told the Washington Post: “People who tell us the solution to our problem is drilling offshore are peddling our addiction. The drug is oil, and they don’t want us to get rid of it.” But Pope is a rich man. And liberal Democrats opposed to drilling such as Speaker Nancy Pelosi (D-Calif.) and Sen. Dianne Feinstein (D-Calif.) are rich women who represent wealthy states. They, and their constituents, aren’t hurt by high energy prices as badly as the rest of the country.
Heritage policy analyst Karen Campbell ran the numbers and finds that going from $3- and $4-a-gallon retail to $5- and $6-a-gallon retail for gasoline would significantly affect working-class Americans. If prices continue to rise at an accelerated pace over the course of a year:
- Total employment would decrease by 586,000 jobs.
- Disposable personal income would decrease by $532 billion.
- Personal consumption spending would decrease by $400 billion.
- Personal savings would be spent to help pay the cost.
Contrast those numbers with the extremely low risks from offshore drilling. The National Research Council found that offshore oil and gas drilling was responsible for just 2% of the petroleum in North America’s oceans, compared with 63% from natural seepage and 22% from municipal and industrial waste. Coast Guard reports show the amount of oil spilled in U.S. waters dropped from 3.6 million barrels in the 1970s to less than 500,000 in the 1990s.
A post-Hurricane Katrina study by the Minerals Management Service found that oil spilled from offshore oil facilities in the Gulf of Mexico were “minor due to the downhole safety valves at wells and operating practices conducted by the oil and gas industry,” and that “while cleanup was required, the volume of oil spilled and impacts to shore from offshore infrastructure were categorized as minor.”
- After winning $1.9 million in taxpayer money last year for the Charles B. Rangel Center for Public Service, Ways and Means Chairman Charles Rangel (D-N.Y.) is soliciting donations from corporations with business interests before his panel, hoping to raise $30 million for his new academic center that will house his papers when he retires.
- The D.C. Council may vote on legislation within weeks to comply with the Supreme Court ruling rejecting the city’s handgun ban, but legislation the Council is considering will land the city back in court since it still bans semiautomatic handguns.
- California is poised to become the first state in the nation to ban restaurants and other food facilities from using trans fats, which are known to increase the risk of heart disease, under a bill approved by the state legislature Monday and sent to the governor.
- According to Rasmussen Reports, the number of Americans who believe it is possible for the U.S. to win the War in Iraq has increased 8 points over the past year.
- In a speech to be delivered in Albuquerque, N.M., Sen. John McCain will announce plans today for an Iraq-style “surge” of troops in Afghanistan.