Gas prices, oil production, domestic drilling and the climate are the hot issue this week in the news. George Bush gave a speech yesterday and John McCain and Barack Obama have been sharing their (opposing) views on the issue as well. Everyone seems to have an opinion on these issues, yet most are not based in reality or on those irritating things known as facts.
Before I get into the issue though, you have to realize that George Bush is not who you are going to want to be tuning into to find expert opinions about this.
Just three and half months ago, in a news conference on February 28, there was this exchange (as documented in the Seattle Times story here):
Peter Maer of CBS News Radio asked: “What’s your advice to the average American who is hurting now, facing the prospect of $4-a-gallon gasoline, a lot of people facing … “
“Wait, what did you just say?” the president interrupted. “You’re predicting $4-a-gallon gasoline?”
Maer responded: “A number of analysts are predicting $4-a-gallon gasoline.”
Bush’s rejoinder: “Oh, yeah? That’s interesting. I hadn’t heard that.”
Shortly after that interview gasoline went over $3.00 per gallon and as we are all well aware it now sits over $4.00 per gallon for most of the country. What we can gather is George Bush is more than out of touch and apparently so is everyone who advises him. (An interesting factoid: Gasoline was $1.47 per gallon back in 2000 when Bush took office according to Fuel Gauge Report.)
So anyway, what did President Bush have to say yesterday?
“In the long run, the solution is to reduce demand for oil by promoting alternative energy technologies. My administration has worked with Congress to invest in gas-saving technologies like advanced batteries and hydrogen fuel cells. We’ve mandated a large expansion in the use of alternative fuels. We’ve raised fuel efficiency standards to ambitious new levels. With all these steps, we are bringing America closer to the day when we can end our addiction to oil, which will allow us to become better stewards of the environment.”
This was the Presidents’s cursory introduction that contained the mandatory acknowledgment of a goal of “long run” alternative energy solutions, and then he listed some of the ways that he thinks he has helped towards that goal. He speaks of his “mandated” expansion in alternative fuels which was just a requirement to produce more ethanol fuel which has turned out to be a huge burden as well as a very poor alternative to gasoline. He also points out the raised fuel efficiency standards which were more ‘laughably modest’ than ‘ambitious.’ Lastly, George Bush has been an atrocious steward of the environment and there are many books already written that detail this fact.
Anyway, after getting the formalities out of the way, Bush revealed his true desires and the purpose of his speech.
“In the short run, the American economy will continue to rely largely on oil. And that means we need to increase supply, especially here at home. So my administration has repeatedly called on Congress to expand domestic oil production. Unfortunately, Democrats on Capitol Hill have rejected virtually every proposal — and now Americans are paying the price at the pump for this obstruction. Congress must face a hard reality: Unless Members are willing to accept gas prices at today’s painful levels — or even higher — our nation must produce more oil. And we must start now. So this morning, I ask Democratic Congressional leaders to move forward with four steps to expand American oil and gasoline production.”
The four steps/requests mentioned by the President were:
1. Increased access to the Outer Continental Shelf.
2. To tap into drilling for oil shale.
3. Permission for drilling in the Arctic National Wildlife Refuge (ANWR)
4. To expand and enhance refining capacity.
Ok, what did John McCain have to say on the subject? Well surprise surprise, he agreed with President Bush, saying,
“Tomorrow I’ll call for lifting the federal moratorium for states that choose to permit exploration. I think that this and perhaps providing additional incentives for states to permit exploration off their coasts would be very helpful in the short term in resolving our energy crisis.”
Coincidentally, Maverick John McCain held the opposite position during his run for the presidency in 2000 and Dana Milbank at the Washington Post wrote a good article regarding McCain’s ‘fancy footwork.‘
But anyway, what’s clear is that both men think that the short-run answer to the gas price crisis is to increase drilling and domestic production. Technically President Bush should have put his fourth item at the front of the list because last time the oil price flared up a few years ago, one of the problems was determined to be refining capacity here in the U.S. If refining capacity hasn’t changed, increased oil production will be useless without enough capacity to refine that oil. So, one of his four steps is a pre-cursor to the other three steps being feasible. But, all of that doesn’t even matter because the most important point I can make is that even if there is plenty of refining capacity, none of the drilling in ANWR, OCS or shale will have any impact on domestic production or prices before 2030 according to a study from Bush’s own energy department on the matter.
“The U.S. Energy Information Administration (EIA) recently did a detailed study of the likely outcome of offshore drilling for their Annual Energy Outlook 2007, “Impacts of Increased Access to Oil and Natural Gas Resources in the Lower 48 Federal Outer Continental Shelf (OCS).” The sobering conclusion:
The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030.”
So. BUSH AND MCCAIN’S IDEAS ARE NOT A SHORT-RUN SOLUTION.
Also, we can safely say that anyone who says that the U.S. should drill in ANWR to reduce current gas prices does not know what they are talking about.
Does this appear to anyone else to be President Bush ‘the oil man’ chirping up in the eleventh hour of his presidency trying to throw yet another bone to his cronies in the oil business? Forgetting that the President once had a Republican House and Senate, alongside of which he didn’t accomplish any of these things, how absurd can you be to blame current gas prices on Democratic obstruction?
“Unfortunately, Democrats on Capitol Hill have rejected virtually every proposal — and now Americans are paying the price at the pump for this obstruction.”
Yes, according to Bush, who didn’t even know $4 per gallon gas was coming, it is the fault of the Democrat’s obstruction that gas is hurting Americans at the pump and not because of increased demand from India and China, market speculation, turmoil in oil producing countries like Niger, or any of the other factors being talked about by those who know what they are talking about.
Ladies and gentlemen…. The President of the United States!
Ok, so lets give Bush a breather and focus in on the man trying to replace him, John McCain. McCain gave his speech yesterday in front of oil industry executives and business and community leaders in Houston, saying,
“We have proven oil reserves of at least 21 billion barrels in the United States …. But a broad federal moratorium stands in the way of energy exploration and production. And I believe it is time for the federal government to lift these restrictions and to put our own reserves to use.”
McCain also lobbied again for a proposed gas tax holiday which would suspend the 18.4 cent federal tax on gasoline and 24.4 cent diesel tax until Labor Day on September 1. This is the proposal that was already dismissed when Hillary Clinton was pushing hard for it during her campaign.
climateprogress.org said, “The man who would be president has sold out his principles to garner support from the oil industry while achieving no benefit to the American gasoline-consuming public whatsoever even a quarter century from now.”
Barack Obama was quick to ridicule Senator McCain as well, saying in a statement:
“His decision to completely change his position and tell a group of Houston oil executives exactly what they wanted to hear today was the same Washington politics that has prevented us from achieving energy independence for decades.”
Obama also said,
“It’s another example of short-term political posturing from Washington, not the long-term leadership we need to solve our dependence on oil.”
Meanwhile, Obama is supporting a “windfall tax” on oil companies’ record profits and for federal investment of 150 billion dollars over 10 years in renewable and green energies.
Some things to remember that aren’t getting mentioned as much in this debate are the environmental concerns associated with the call for drilling. Pipelines? Shorelines? Tankers? Possible spills? etc.
Another thing to keep in mind is that Americans need a little perspective on these “painful” prices. We are still well below the prices that Europeans are paying. Gas prices in the UK are more than double what we are paying here in the U.S. So, these “painful” prices that are prompting everyone to speak out, and prompting the President to call for these changes aren’t really all that crazy when looking at it from a global perspective.
Yet another thing to think about is the fact that energy companies are not using the federal lands and waters that are already open to drilling. The recent House Natural Resources Committee Majority Staff report entitled, “The Truth About America’s Energy: Big Oil Stockpiles Supplies and Pockets Profits” shows that vast amounts of land that is already open to drilling remains untouched and also that increased domestic drilling activity has not led to lower gasoline prices. The report says,
“In the last four years, the Bureau of Land Management has issued 28,776 permits to drill on public land; yet, in that same time, 18,954 wells were actually drilled. … Of the 47.5 million acres of on-shore federal lands that are currently being leased by oil and gas companies, only about 13 million acres are actually in production, or producing oil and gas. Similar trends are evident offshore as well, where only 10.5 million of the 44 million leased acres are currently producing oil or gas.”
“Since the 1990s, the federal government has consistently encouraged the development of its oil and gas resources and the amount of drilling on federal lands has steadily increased during this time. The number of drilling permits has exploded in recent years, going from 3,802 five years ago to 7,561in 2007.
Between 1999 and 2007, the number of drilling permits issued for development of public lands increased by more than 361%, yet gasoline prices have also risen dramatically (Figure 1) contradicting the argument that more drilling means lower gasoline prices. There is simply no correlation between the two.”
So, before everyone goes crazy about drilling in OCS and ANWR, why not focus the rage on why oil companies are not already drilling on all of this unused land?
Anyway, in conclusion, the answer to the gas price issue is not a quick fix. It is not in drilling in ANWR or OCS. The answer is in renewable energies and green technologies. I don’t doubt that America can come up something greater and better than the oil dependence mess we are entangled in presently. And I don’t doubt that we can do it quickly. If we as Americans can build spaceships that can reach the moon then I am confident we can come up with many viable alternatives to the internal combustion engine and gasoline dependence. The focus smiply needs to be squarely on the correct solution.
Is domestic drilling the correct solution to these gas prices? No.
Photo 1: iStockPhoto
Photo 2: AP Photo | Evan Vucci
Photo 3: my own editing
Photo 4: Getty Images | Chip Somodevilla