Posted on
Monday, August 18, 2008
Monday, August 18, 2008
Lack of Action May Spur Oil Production
America's domestic oil production has steadily fallen short of demand in recent years, largely because there are such vast areas that have been designated off limits for drilling.
A particular sore spot is the fact that 85 percent of America's territorial waters are currently off limits to energy exploration and production.
Most Americans want to see that changed and many have called on Congress to take action to make it happen only to see the effort effectively stalled. The obvious reason to boost domestic production is to help increase supply and lower runaway gasoline prices.
An interesting point is that it still could happen if Congress actually does nothing. In fact, the clock is ticking on the congressional moratorium on access to billions of barrels of domestic oil beneath American waters, says Ben Lieberman, energy policy expert at the Heritage Foundation.
President Bush already rescinded the White House prohibition on access to this energy, he noted, so the congressional restrictions are the only thing standing between 19 billion barrels of additional domestic oil and the citizens who need it.
"If Congress does not act to renew these outdated, anti-energy and anti-consumer restrictions, these areas will be opened to exploration and drilling beginning on Oct. 1," Lieberman said. "Some are calling this Energy Freedom Day, and it would be a welcome and long overdue step toward dealing with high gasoline prices."
People might want to know how things got in this shape. Beginning in 1982, Congress restricted more and more areas from exploration and drilling through annual Department of Interior appropriations. DOI has authority over the Outer Continental Shelf, which includes most areas more than three miles offshore.
Through this annual process, Congress chose to deny DOI the funding necessary to conduct leasing of new offshore areas to oil companies, Lieberman explained.
Congress could have, at any time, passed a law permanently putting these areas out of reach, but it chose not to do so, he pointed out. The restrictions must be renewed annually.
As years passed these off-limits areas have grown and now comprise nearly the entire coasts of the Pacific and Atlantic oceans and the eastern Gulf of Mexico. The congressional moratoria have become a standard feature of the annual DOI appropriations' bill.
Until recent years, the restrictions were renewed with little controversy, but the dramatic rise in oil and gasoline prices and the desire to reduce oil imports from unfriendly foreign countries has brought efforts to eliminate them, without success.
Recent DOI estimates are these off-limits offshore areas contain 19.1 billions barrels of oil, the equivalent of 30 years of current imports from Saudi Arabia. It is noted initial energy estimates often prove to be low.
Both the congressional and White House restrictions were first put in place at a time when gasoline was a little more than $1 a gallon and the need for additional domestic oil supplies was not seen as critical, Lieberman pointed out. Times clearly have changed.
Even if Congress does not yield to public opinion and pass a bill that affirmatively opens up these offshore areas, it could accomplish the same end by simply letting the existing restrictions lapse.
Congress has not yet passed its DOI appropriations (or any other appropriations bill) in large part because Republicans insisted on adding amendments to open up the OCS and the Democratic leadership would not allow a vote on them. Current appropriations -- and their restrictions on DOI spending for offshore leasing -- are set to expire on Sept. 30.
The next day, Oct. 1, could then be Energy Freedom Day, Lieberman said.
It would take time for DOI to lease these areas and for energy companies to develop them, but the process could at least begin. Given the strong public support for expanded domestic drilling, it can't start too soon. Democratic leadership no doubt will try to scuttle this approach, too.
Should legislators opt for just allowing congressional restrictions on DOI spending for offshore leasing expire on Sept. 30, however, that would be welcome movement in the right direction.

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