When is all of this oil drilling going to lower gas prices? How much will it lower them?

I will begin by admitting that I am a bleeding- heart, crunchy-granola-eating, organic-coffee-drinking, bring-my-own-bags-to-the-grocery-store, tree-hugging liberal. I even carpool to work every day. But I do understand compromise, and I understand the importance of ending US dependence on foreign oil – even if it involves some major environmental policy sacrifices. If it were actually true that opening up protected waters to offshore drilling would make us energy independent within a matter of years, I would yell “GUNG HO!”

However, opening up currently restricted waters to offshore drilling will NOT lesson our dependence on foreign oil and certainly won’t lower gas prices in the short-term.

The oil companies and their political allies hope and fully expect Americans to cave in to fear mongering. They are optimistic that soaring gas prices will convince us that opening ecologically sensitive areas to exploration and drilling will solve our problems – as if opening these lands will magically revolutionize the oil industry and overcome all of the obstacles that have prevented them from producing oil on their current leases!

It takes only a little bit of research to learn that between 1999 and 2007, the federal government dramatically increased the number of drilling permits on land and offshore by 361 percent. Yet this has meant little increase in the production of US oil, and has certainly had ZERO impact on oil prices. In fact as we all know, gas prices have continued to sky-rocket!

Despite the huge increase in drilling permits, oil companies collectively are not producing on 68 million acres, or about three-quarters of the federal lands and waters they currently have under lease.

Why aren’t oil companies exploiting their currently available offshore leases to their fullest extent? The truth is that the constraints on offshore drilling have little to do with the price of oil, but a lot to do with time. Once new leases are available, it can take 5 to 10 years to get to the exploratory drilling phase. Offshore drilling is expensive – tens of millions of dollars for just one exploratory well – so you can’t afford to make any mistakes. Oil companies conduct a lot of seismic analysis to minimize chances of a dry well. All that analysis takes TIME. Plus there are environmental impact statements to file, lawsuits to avoid, and equipment to procure. There is currently a tremendous shortage of drilling rigs and manpower – and that shortage will not go away just because more leases become available. And keep in mind that exploratory drilling is NOT oil production! It can take another five or more years (additional TIME) after drilling a successful exploratory well before getting significant production from the area — and that assumes you didn’t dig a dry well! If you did, then you are probably going to be even more cautious with your next exploratory well (taking even more TIME). And all of this assumes we have developed a pipeline infrastructure for delivering the oil to the refineries once the lease enters the production phase. But the Atlantic Coast lacks such an infrastructure, and who knows how long its construction would take?

Most petroleum experts estimate that perhaps by 2020 we could see some limited production if new offshore leases were opened next year, but most figures point to 2025-2030 as more realistic.

But here’s the real kernel of the issue. Even if all US waters currently off limits to drilling were opened for new leases (including the waters off of California, where drilling would most likely be blocked by strong bipartisan opposition led by Republican Governor Schwarzenegger), the Energy Information Administration estimates that the US might be able to squeeze out an additional 150,000 barrels of oil a day sometime after 2020. That sounds like a lot, right? But keep in mind that the daily world oil production is around 82,532,000 barrels/day, and American consumption is currently at 20,680,000 barrels/day. Even if it were to be achieved tomorrow, this increased production would represent only 0.18 percent of the daily world production, and only 0.73 percent of the oil consumed in the US every day. The Saudis couldn’t stop prices from rising now by announcing that they will add 500,000 barrels of oil a day by the end of this year! So, the reality is that opening up new leases will NOT impact oil prices or reduce our dependence on foreign oil for at last 10 years, and more realistically 15 to 20 years. And the level of increased production from these currently restricted waters would be comparable to the proverbial drop in the bucket in terms of world production and US consumption!

So why the sudden pressure to open restricted waters if there’s nothing to be gained?

Politically, what's happening is simple. The energy companies want to score big before their two guardian angels, President Bush and Vice President Dick Cheney, leave power. With the public pounded by gas prices surpassing $4 a gallon, industry lobbyists see a golden opportunity to dismantle the offshore moratorium. The executive order prohibiting offshore drilling was first issued by President H.W. Bush, Sr., in 1990. It was rescinded by the current President Bush just last month. The Congressional moratorium currently under fire was first enacted during the Reagan administration in 1982.

“Tomorrow I’ll call for lifting the federal moratorium for states that choose to permit exploration,” McCain said on June 16. “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.”

McCain, Bush, and the lobbyists behind them are insinuating is that Americans are just plain stupid – stupid enough to buy the latest snake oil malarkey that offshore drilling will “resolve our energy crisis.” Unfortunately, they’re probably right. A recent Rasmussen Reports telephone survey indicated that sixty-four percent of voters believe it is at least somewhat likely that gas prices will go down if offshore oil drilling is allowed (only 27 percent don’t believe it). Sadly, this is yet another example of the credulity and apathy of the American voter. Rather than assume the personal responsibility to research an issue, most Americans place their trust the media and the self-serving interests large corporations, lobbyists, and PACs, and allow themselves to be hoodwinked in a game of smoke in mirrors.

http://www.eia.doe.gov/

http://resourcescommittee.house.gov/images/stories...

http://www.miamiherald.com/opinion/other-views/sto...

http://www.rasmussenreports.com/public_content/pol...

http://newsfeedresearcher.com/data/articles_b30/id...

Well, on top of all this, please keep in mind that oil produced in the United States goes on the world market at the current price, not directly to America and nobody else. The only way that would happen is if the United States government told all oil drilling, refinery and distribution companies operating in the country that they are now owned by the U.S., thus nationalizing the industry so that we can keep all the oil drilled here, have it refined and delivered at a controlled price (thus having the desired effect). I think we all know this will never happen here. Hell, I'd love to see the government here try to nationalize the largest lobby in the history of mankind even though it's spent 40+ years squabbling over nationalizing the health care industry.

Domestic oil drilling is not a viable answer, either short- or long-term. The only thing it will accomplish is making those involved more wealthy.

not inevitably. What kinfolk drilling will do is placed extra oil on the industry. the different end of the equation is not any depend if call for will enhance, decreases, or keeps to be the comparable. optimistically, we enable kinfolk drilling to not decrease oil expenses, yet to pass far flung from OPEC.

Now