'Snake Oil'
Debunking three 'truths' about offshore drilling

The Washington Post 

Tuesday, August 12, 2008; A12

Link to Article

THE NATURAL Resources Defense Council Action Fund has taken out full-page ads in this newspaper and others to decry offshore drilling for oil as "George W. Bush's Gasoline Price Elixir" that is "100% Snake Oil." The environmental group calls on supporters "to stop the giveaway of our coasts." It is urging visitors to its Web site to send a pre-written letter to their members of Congress that says, "I am not buying the lie . . . that sacrificing the Arctic National Wildlife Refuge and America's coastal waters to oil drilling would make a real difference in gas prices -- either today or twenty years from today!" And the missive adds, "With just three percent of the world's oil reserves, our nation simply doesn't have enough oil to impact the global market or drill our way to lower prices at the pump."

The NRDC's arguments above neatly encapsulate the position taken by environmentalists and other opponents of offshore drilling. And they include a couple of good points. Contrary to the baldly political suggestions regarding lower gasoline prices by President Bush and Sen. John McCain (R-Ariz.), drilling would make no impact on today's pain at the pump because it would be years before any oil flowed from the Outer Continental Shelf. We agree that the Arctic National Wildlife Refuge, with its varied and sensitive ecosystems, should be preserved. In the quest for new sources of energy, there are trade-offs. That pristine area must remain off-limits. But there are three "truths" masquerading as fact among drilling opponents that need to be challenged:

· Drilling is pointless because the United States has only 3 percent of the world's oil reserves. This is a misleading because it refers only to known oil reserves. According to the Interior Department's Minerals Management Service (MMS), while there are an estimated 18 billion barrels of oil in the off-limits portions of the OCS, those estimates were made using old data from now-outdated seismic equipment. In the case of the Atlantic Ocean, the data were collected before Congress imposed a moratorium on offshore drilling in 1981. In 1987, the MMS estimated that there were 9 billion barrels of oil in the Gulf of Mexico. By 2006, after major advances in seismic technology and deepwater drilling techniques, the MMS resource estimate for that area had ballooned to 45 billion barrels. In short, there could be much more oil under the sea than previously known. The demand for energy is going up, not down. And for a long time, even as alternative sources of energy are developed, more oil will be needed.

· The oil companies aren't using the leases they already have. According to the MMS, there were 7,457 active leases as of June 8. Of those, only 1,877 were classified as "producing." As we pointed out in a previous editorial, the five leases that have made up the Shell Perdido project off Galveston since 1996 are not classified as producing. Only when it starts pumping the equivalent of an estimated 130,000 barrels of oil a day at the end of the decade will it be deemed "active." Since 1996, Shell has paid rent on the leases; filed and had approved numerous reports with the MMS, including an environmentally sensitive resource development plan and an oil spill recovery plan that is subject to unannounced practice runs by the MMS; drilled several wells to explore the area at a cost of hundreds of millions of dollars; and started constructing the necessary infrastructure to bring the oil to market. The notion that oil companies are just sitting on oil leases is a myth. With oil prices still above $100 a barrel, that charge never made sense.

· Drilling is environmentally dangerous. Opposition to offshore drilling goes back to 1969, when 80,000 barrels of oil from an offshore oil well blowout washed up on the beaches of Santa Barbara. In 1971, the Interior Department instituted a host of reporting requirements (such as the resource development and oil spill recovery plans mentioned above) and stringent safety measures. Chief among them is a requirement for each well to have an automatic shut-off valve beneath the ocean floor that can also be operated manually. According to the MMS, between 1993 and 2007, there were 651 spills of all sizes at OCS facilities (in federal waters three miles or more offshore) that released 47,800 barrels of oil. With 7.5 billion barrels of oil produced in that time, that equates to 1 barrel of oil spilled per 156,900 barrels produced. That's not to minimize the danger. But no form of energy is perfect or without trade-offs. Besides, if it is acceptable to drill in the Caspian Sea and in developing countries such as Nigeria where environmental concerns are equally important, it's hard to explain why the United States should rule out drilling off its own coasts.

The strongest argument against drilling is that it could distract the country from a pursuit of alternative sources of energy. There's no question that the administration has been lax on that front. True leadership would emphasize both alternative sources and rational approaches to developing oil and natural gas. No, the United States cannot drill its way to energy independence. But with the roaring economies of China and India gobbling up oil in the two countries' latter-day industrial revolutions, the United States can no longer afford to turn its back on finding all the sources of fuel necessary to maintain its economy and its standard of living. What's required is a long-term, comprehensive plan that includes wind, solar, geothermal, biofuels and nuclear -- and that acknowledges that oil and gas will be instrumental to the U.S. economy for many years to come.

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In Case You Missed It: Cartoon Reveals Fallacies of Environmentalists Energy Plans

By Michael Ramirez, Investor's Business Daily’s Pulitzer Prize winning editorial cartoonist.

http://ibdeditorials.com/cartoons.aspx

The Oklahoman- Proposed bill offers marginal wells aid- August 6, 2008

Excerpt: Sen. Jim Inhofe and Rep. Dan Boren have introduced legislation to give tax breaks and regulatory relief for low-producing, or marginal, oil and gas wells. The Oklahoma lawmakers said they want to protect a major source of domestic production. Oklahoma has more than 65,000 marginal wells — producing 10 barrels of oil or less per day — that account for nearly 80 percent of the state's oil production, according to the Oklahoma Marginal Well Commission. Nationwide, according to Inhofe, R-Tulsa, wells producing less than 15 barrels per day accounted for 335 million barrels of oil in 2006. "In my own state of Oklahoma, it is the small independents, basically mom-and-pop operations, that produce the majority of oil and natural gas,"' Inhofe said. Depletion allowance Boren, D-Muskogee, said the bill "ensures that the nation's policies recognize the economic importance and energy contribution of marginal well production."

Excerpt: Oil prices plunged to a three month low Monday, briefly tumbling below $120 a barrel in another huge sell-off after Tropical Storm Edouard seemed less likely to disrupt oil and natural gas output in the Gulf of Mexico.Meanwhile, gasoline prices continued their downward trend, with the common price in Tulsa falling 7 cents from the weekend.Crude’s steep drop — prices fell more than $5 at one point during the day — dragged down other commodities and mimicked the big nosedives of the past three weeks. Also weighing on prices Monday was a report by the Commerce Department that consumer spending after adjusting for inflation fell in June as shoppers dealt with higher prices for gasoline, food and other items. That fed investors’ expectations that a U.S. economic slowdown is sharply curbing U.S. demand for fossil fuels.Light, sweet crude for September delivery fell $3.69, or 2.9 percent, to settle at $121.41 a barrel on the New York Mercantile Exchange. Earlier, prices plummeted to $119.50. Crude has now fallen in six of the last nine sessions.At the pump, a gallon of regular gas fell on average nationwide about half a penny overnight to $3.881.Gas has fallen 5.6 percent since hitting an-all time high above $4 a gallon on July 17, but so far hasn’t kept up with oil’s steep descent, suggesting struggling filling stations are still saddled with gas bought when crude prices were higher.

Excerpt: To deflect "heat" on energy prices in the short term, Pelosi is advocating releasing oil from the Strategic Petroleum Reserve (SPR), which she says "would bring immediate relief within 10 days." Pelosi’s plan is not entirely fanciful. A major release of oil from the SPR could reduce gas prices. Pelosi, however, does not say how much oil she wants to release. And the exact size of the release would directly impact the size of the price relief — and our national security.

Excerpt: Asked Sunday why she refused to participate in a debate on increased domestic oil exploration, Pelosi said she refused to "mislead the American people as to thinking it’s going to reduce the price at the pump." This is a common talking point for Pelosi and her global warming alarmist allies. And they almost always cite the same Energy Information Administration study that "any impact on average wellhead prices is expected to be insignificant." But the left, as always, does not tell you the whole story. First of all, the study only looks at possible oil exploration in the Outer Continental Shelf. It does not even consider the combined impact of ANWR and Outer Continental Shelf oil production. Furthermore, the study only analyzes a possible Outer Continental Shelf ban lifting in 2012. Conservatives want to lift the ban today.

Excerpt: AMONG the many milestones in Oklahoma's history of producing crude oil, the first always stands out. And the latest.The first was in 1897, when the state's premiere commercial well was drilled. The latest was in April, when the monthly average price paid to Oklahoma producers topped $100 a barrel for the first time in history.Hasn't oil been selling for $125 a barrel or more? No. Oil has been trading at $125 a barrel or more. That doesn't mean Oklahoma oil producers have been getting that price. Just 10 years ago, the average annual price for Oklahoma crude was just over $13 a barrel. Now that the $100 milestone has been reached, is there cause for celebration?Yes and no. Yes: Like all milestones, this is a historic moment. No: Oil production in Oklahoma is at historic lows. The disconnect side of high oil prices, even in a state connected to oil as much as Oklahoma, is that record prices for oil are being paid as production continues to decline year by year.If state government and the Oklahoma economy were dependent on oil for its petroleum-related income, there'd be little to celebrate. As it is, the dependence is on natural gas, not oil. Oklahoma is fifth in the nation in oil production and third in natural gas.

Excerpt: With the advent of $4-a-gallon gasoline has come a bruising debate in Congress over whether to intensify efforts to drill on federal lands, including part of the Arctic National Wildlife Refuge in Alaska. But while those hoping to lower prices at the pump are clamoring for new oil, most of the new onshore drilling of the past seven years has produced natural gas, not oil. The Bush administration, in its effort to expand energy production, has issued more than three times the number of well-drilling permits on Western lands as in the Clinton administration’s last six years. But oil production in that region during the Bush years is 12 percent below average levels from the Clinton era, according to federal data. Oil production declined over all to an average of 97.9 million barrels annually from 2001 through 2006, compared with average levels of 111.5 million barrels during the Clinton administration. Drilling in the West is more likely to provide natural gas. Natural gas production has increased by 34 percent during President Bush’s term in office, compared with the annual production levels during President Bill Clinton’s term. On federal land in the West, average natural gas production during the first six years of this presidency was 2.4 billion cubic feet annually, up from 1.8 billion, on average, during the previous eight years, federal data show.

The senator is Exhibit A that GOP attacks on Democrats for blocking new development of known U.S. oil reserves are finding their mark. With $4-per-gallon gasoline, Americans want action, not hardheadedness.Until Obama's switch, Democrats had been slow to get the message. Speaker Nancy Pelosi closed down the House of Representatives last week by refusing to permit a vote on drilling. Republicans hung around, demanding a vote. When someone flipped off the lights, they railed at Pelosi in the dark, and they were at it again Monday. Even as the Pelosi Democrats dug in on drilling, Obama shrewdly warmed to the idea. You don't have to be a genius — or covet the White House — to know that when the public favors something 2-to-1, it's better be with the 2 than the 1.

Excerpt: Energized House Republicans believe they have struck political gold with American voters angered by high gas prices through their unusual revolt on the floor, which Democrats on Monday tried to dismiss as a "political stunt." "When we began this on Friday at 11:20 a.m., we didn’t know where it was going to lead," said Rep. Tom Price (Ga.), who has been directing the group of some 30 Republican members who have stayed or returned to D.C. to protest the House’s adjournment.  "But we have been buoyed and heartened by the American people. And what they have said is ‘Thank you for leading’," Price said. He and other Republicans said they would continue to speak from the floor about the need for Congress to act on high gas prices through the August recess — even if no one is watching. C-SPAN cameras have not captured the GOP floor speeches on Monday and Friday, when the protests began, because Congress is adjourned. "There will be many more hours [of speeches] today and throughout the week," Rep. Mike Pence (R-Ind.) said at a midday press conference.

Excerpt: Two dozen House Republicans took over the chamber again Monday to continue their talk-a-thon protest of Democratic leaders’ decision to go home for the August recess without a vote on expanding oil and gas drilling. "The microphones aren’t on, the lights are dim, the cameras are off, but we’re here because you’re here," said Rep. Tom Price (R-Ga.), talking to a chamber filled with tour groups.  The Republicans want Speaker Nancy Pelosi (D-Calif.) to call Congress back into session "so we can have a vote on American energy," Price said, and Republicans plan to continue their protest speeches on the House floor at least through the rest of this week. "We are going to stand our ground on behalf of millions of Americans who are tired of talk," Rep. Mike Pence (R-Ind.) said. In a joint memo over the weekend, Minority Leader John Boehner (R-Ohio) and Minority Whip Roy Blunt (R-Mo.) had urged Members to return to the Capitol, although they themselves didn’t show up. "It’s not a request we make lightly. But the American people are suffering," Boehner and Blunt said. "We’ve called on the Speaker to call Congress back into an emergency session this month and schedule a vote on the American Energy Act. We must continue to make a stand until the Speaker complies."

Excerpt: California Democrat Nancy Pelosi may be trying to save the planet — but the rank and file in her party increasingly are just trying to save their political hides when it comes to gas prices as Republicans apply more and more rhetorical muscle. But what looks like intraparty tension on the surface is part of an intentional strategy in which Pelosi takes the heat on energy policy, while behind the scenes she’s encouraging vulnerable Democrats to express their independence if it helps them politically, according to Democratic aides on and off Capitol Hill. Pelosi’s gambit rests on one big assumption: that Democrats will own Washington after the election and will be able to craft a sweeping energy policy that is heavy on conservation and fuel alternatives while allowing for some new oil drilling. Democrats see no need to make major concessions on energy policy with a party poised to lose seats in both chambers in just three months — even if recess-averse Republicans continue to pound away on the issue.

Excerpt: On the other side of the aisle, U.S. Rep. Dan Boren is the one Democrat member of Oklahoma's congressional delegation, making him a member of the majority in a Congress strongly opposed to increased offshore drilling. But Boren is mindful that he represents a state where the oil and gas industry dominates its economy. In the midst of a tumultuous week on Capitol Hill that failed to produce an energy bill the two political parties could agree on, Boren announced his partnership with one of Oklahoma's - and the nation's - most conservative Republican lawmakers, U.S. Sen. James Inhofe, on a bill to support marginal well production. "Every day, hard-working Oklahomans are facing rising costs of energy and our country continues to be dependent on foreign nations for its energy needs," said Boren. "Congress must ensure that we are taking full advantage of every option available to increase our domestic energy supply." Originally published by Janice Francis-Smith.

Excerpt: The fact is, the best, easiest way to boost American investment in alternative fuels and lower our nation's dependence on foreign oil won't cost taxpayers a cent. Democrats in Congress have placed millions of acres of U.S. territory -- far off our coasts, on the remote North Slope of Alaska, and in the Inter-Mountain West -- off limits for energy development. By freeing those domestic resources and increasing the supply of American energy, we can fund development of better solar, wind, biomass and other breakthrough technologies. And House Republicans have a plan to do it -- appropriately titled the American Energy Act, which reflects what we call an "all of the above" energy strategy. If House Speaker Nancy Pelosi (D., Calif.) would allow a vote on our comprehensive energy plan -- a vote House Republicans and hundreds of Americans demanded on the House floor this past Friday, after Congress adjourned, in a historic revolt -- we could create more American jobs, reduce America's energy dependence on nations with ties to global terrorism, cut emissions to promote a healthy environment, and raise our quality of life. And, we could do it without raising taxes -- and even without spending $10 billion.

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