Roy Maynard: Early Returns

Congressional Democrats now have their unified response to increasing calls for oil exploration in Alaska and in the waters off our shores: The energy companies, they say, are already sitting on plenty of oil, refusing to recover it.

But is that true?

“Energy companies are not producing oil or gas on 68 million acres of federal land under their control,” claims Congressman Maurice Hinchey, a New York Democrat. “The fact of the matter is Congress has already allowed oil companies to drill, but those companies are refusing to drill because they want to lock up as much federal land as possible and wait for oil to rise to $200 or $300 a barrel so that they can make even greater profits than they are making now.”

Therefore, the Democrats say, there’s no need to allow drilling in the Arctic National Wildlife Refuge and the Outer Continental Shelf, despite the crippling rise of gasoline prices.

“Why should the U.S. government continue to give away precious acres of public land to massive energy companies when they’ve already demonstrated that they will just sit on those acres and not produce oil in a timely fashion?”

The party even advanced a bill last week they called “Use It or Lose It,” which would deny energy companies additional leases until they “demonstrate that they are diligently developing” the leases they already have.

“If they were showing in good faith that they were drilling on some of the 68 million acres they have now, it might change some of our attitudes,” says Sen. Claire McCaskill, D-Mo.

Yet the unified response rings hollow — and untrue. Oil companies — in the business of finding, retrieving and selling petroleum — don’t want to?

The best work debunking the Democrats’ claim comes from the reliable Investors Business Daily.

“This is yet another slander of ‘Big Oil’ by House Speaker Nancy Pelosi — one that has become a major talking point for Democrats in Congress,” the newspaper said in a July 3 editorial. “It’s completely dishonest.”

Oil companies are driven by profits, and they’ve already sunk billions of dollars into those existing leases. And they are drilling — an increase in activity of more than 66 percent since 2000, according to that editorial.

“They are searching for oil even as you read this,” the Daily says. “Some parts of those 68 million acres will have oil, some won’t. But at $145 a barrel, you can bet oil companies have plenty of incentive to find it.”

In fact, I have a friend who supplies oilfield equipment. He says he’s now spending much of his time explaining to customers that he’s having trouble meeting all their pipe needs — the demand is extremely heavy, and the supply is being further limited by a worldwide shortage in steel.

The Daily’s helpful editorial goes on to dispel several more myths.

Can we drill our way out of the energy crisis?

“Actually, we can,” it notes. “Conservative estimates put the total amount of recoverable oil in conventional deposits at about 39 billion barrels. Offshore we have another 89 billion barrels or so. In ANWR, 10 billion.”

That’s not counting the oil shale deposits with an estimated 1 trillion barrels, or natural gas.

As for those who claim additional drilling won’t impact gas prices for years, remember: what’s helping to drive prices upward is the oil futures market.

“Markets would suddenly have to discount future oil prices for the expected gain in oil supply,” the Daily says. “That would cause oil prices, especially in futures markets, to drop.”

Congressional Democrats are already feeling the pressure to allow additional drilling, but so far they’re not budging.

“This call for drilling in areas that are protected is a hoax,” Ms. Pelosi said on Thursday. “It’s an absolute hoax on the part of the Republicans and this Bush administration.”

Roy Maynard
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