What nation
imposes domestic drilling bans when it has to import oil? In
1982 when the oil price was declining, Congress instituted drilling bans on the outer
continental shelf (OCS) off the Atlantic, Pacific, and Eastern Gulf of Mexico
(GOM) coasts and kept them in place for two and one-half decades while the
price was relatively low. In 2008,
following an oil price spike to nearly $150 per barrel, however, Congress
allowed its drilling moratoria to expire after the Bush Administration ended an
executive drilling moratorium.
As environmental protection, widely cast bans are a blunt instrument. When the price of a resource is low, it may not be worth the effort to conduct case-by-case assessments for granting approval to find and develop deposits whose commercial value may not exceed the cost of regulation and environmental safeguards, but that is not true when the price is high. Today’s high oil price and the very real danger of further price increases justify incurring the administrative, regulatory, and environmental protection costs to safely unlock many of America’s natural resources. In March, the Obama Administration took steps toward two lease sales off the coasts of Alaska and Virginia. Yet after the Macondo well blowout, it not only reversed itself but also extended the no-drill policy to the Western Gulf of Mexico with a formal six-month moratorium in deep water and by slow-rolling drilling permits in shallow water. On October 12, the Administration lifted the deepwater ban, but it is unclear when and at what rate it will reissue permits. A de facto no-drill policy in a volatile oil market would make America’s future energy supply much less secure.
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